Yale Law Library - Reference Blog

Market Damages, Efficient Contracting and the Economic Waste Fallacy

John Nann — Tue, 13 May 2008 16:15:00 GMT

is the title of a new paper by Alan Schwartz and Robert E. Scott (Columbia) posted on SSRN. Here's the paper and here's the abstract:

Market damages - the difference between the market price for goods or services at the time of breach and the contract price - are the best default rule whenever parties trade in thick markets: they induce parties to contract efficiently and to trade if and only if trade is efficient, and they do not create ex ante inefficiencies. Courts commonly overlook these virtues, however, when promisors offer a set of services some of which are not separately priced. For example, a promisor may agree to pay royalties on a mining lease and later to restore the promisee's property. In these cases, courts compare the cost to the promisor of providing the service that was not supplied to the increase in the market value of the promisee/buyer's property had the promisor/seller performed. When the cost of completion is large relative to the "market delta"- the increase in market value - courts concerned to avoid "economic waste" limit the buyer to the market value increase. This concern is misguided. Since the buyer commonly prepays for the service at the ex ante market price, a cost of completion award actually has a restitution element - the prepaid price - and an expectation interest element - the market damages. The failure to recognize the joint nature of cost of completion damages causes courts to deny these damages more frequently than they should. In this paper, we argue that the unappreciated virtues of market based damages justify removing the courts' discretion to deny them no matter how high they appear to be. The rule that denies buyers market damages induces excessive entry into these service markets. Moreover, buyers are under-compensated when they prepay and cannot recover the price paid for the breached services but instead are restricted to the market delta. As a result, too few buyers contract ex ante for the relevant service and surplus maximizing contracts are forgone. Finally, sellers often can take actions in the interim between making the contract and the time for performance of the service that would reduce the service cost to manageable proportions. Sellers are less likely to take these precautions if they are required to pay buyers only the market delta rather than the full performance cost that their actions could have avoided.

SSRN

John Nann — Mon, 12 May 2008 18:22:00 GMT

Another fascinating paper from Professor Hathaway, "The Continuing Influence of the New Haven School." Originally published in 32(2) Yale Journal of International Law in 2007. Here is the abstract:

This Commentary examines the deep and abiding influence of what has been called the New Haven School of international law. It considers the connection between the past and the present the ideas first formulated by Myres S. McDougal and Harold D. Lasswell more than a half-century ago, and those, both near and far, whose work they have influenced.

Paper on SSRN

John Nann — Mon, 12 May 2008 18:16:00 GMT

Professor Hathaway has posted a paper originally published in the journal International Organization in 1998 (v. 52, no. 3) on SSRN, entitled "Positive Feedback: The Impact of Trade Liberalization on Industry Demands for Protection".

Here is the abstract:

This article proposes a theory of dynamic industry preferences and strategies to explain variation in industries' demand for trade protection over time. This theory shows how the characteristics of industries affect their demand for trade policy and how, in turn, trade policy transforms industry characteristics. An important implication of this theory is that trade liberalization tends to reduce, rather than increase, industry demand for protection over the long term. The article begins by developing a static model of industry decision making that illustrates how producers faced with a reduction in trade barriers weigh the costs and benefits of political action and economic adjustment. It then explains how the strategic choices of an industry are determined by key industry characteristics that evolve over time in response to changes in trade policy and market conditions. In particular, it demonstrates that reductions in trade barriers may have a positive feedback effect that dampens rather than amplifies domestic protectionist sentiment. To test this model, the article examines the dramatic postwar transformation of three industries that have historically demanded and received extensive import protection: the footwear, textile, and apparel industries. The article concludes with an assessment of the model and a discussion of its possible implications for our understanding of the politics of trade policy.

Review of Kahn, Out of Eden: Adam and Eve and the Problem of Evil

John Nann — Fri, 09 May 2008 20:41:00 GMT

Nice review in the Times Literary Supplement by John Habgood, the former Archbishop of York:

A book which begins with the sentence “Evil makes us Human” must surely compel attention. This is no ordinary account of what is usually meant by the problem of evil, where the main emphasis is on justifying the ways of God to man. Instead, Paul W. Kahn’s aim is to explore the nature of evil itself. He interprets it, not just as doing or experiencing bad things, but as “a way of being in the world”. Evil, he claims, is about making ourselves the source of our own meaning, a meaning inevitably negated by death, the certainty of which gives urgency and depth to the way life is lived. It is this consciousness of our mortality, and the refusal to accept its implications, which can lead to the worship of false gods. Ascribing ultimate value to what is essentially nothing at all results in what he calls “a pathology of the will”. Personal evil is essentially about wilfulness rather than reason, nor can it be subsumed within our rational understanding. Evil in this sense, as part of our humanity, is not a fashionable concept, but we have good reasons to recognize it, not least in ourselves.
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Faculty Publications

John Nann — Fri, 09 May 2008 20:35:00 GMT

Three recent law review articles by members of the faculty:

Ian Ayres and Gideon Parchomovsky, Tradable Patent Rights, 60 Stan. L. Rev. 863 (2007)

Daniel Markovits, Luck Egalitarianism and Political Solidarity, 9 Theoretical Inquiries L. 271 (2008)

Judith Resnik, No Daubert Hearing Necessary: The Extraordinary Expertise of Margaret Berger, 16 J.L. & Pol'y 6 (2007)

Law Day, May 1st 2008

ct286 — Thu, 01 May 2008 16:44:00 GMT

The theme of this year's Law Day, "The Rule of Law: Foundation for Communities of Opportunity and Equity," recognizes the fundamental role that the rule of law plays in preserving liberty in our Nation and in all free societies. View President Bush's proclamation here.

Law Professor Accuses Students of Defamation

ct286 — Thu, 01 May 2008 14:52:00 GMT

By LYNNLEY BROWNING, New York Times.
Published: May 1, 2008.

At the University of Arkansas in Little Rock, a law professor has sued two of his students, alleging that they defamed him by unfairly describing him as a racist. Read more here.

Were patent appeals judges unconstitutionally appointed?

ct286 — Mon, 28 Apr 2008 13:42:00 GMT

The U.S. Patent and Trademark Office may have a major problem on its hands -- the possibly unconstitutional appointment of nearly two-thirds of its patent appeals judges. Read more about this case here.

Translogic Technology, a company whose patent was rejected, is raising this issue in a petition to the U.S. Supreme Court. A copy of the petition is available for viewing at the Law Library Reference Desk.

Lawyers Open Their File Cabinets for a Web Resource

ct286 — Mon, 28 Apr 2008 13:24:00 GMT

By ANNE EISENBERG, New York Times

Published: April 27, 2008.

Services are appearing on the Web that may make it easier for consumers to do their own preliminary homework on legal issues before seeking professional help. Read more here.

House Hearing on Executive Branch Electronic Communications Preservation

ct286 — Fri, 25 Apr 2008 13:31:00 GMT

The House Oversight and Government Reform’s Subcommittee on Information Policy, Census, and National Archives held a hearing yesterday to address the Electronic Communications Preservation Act (H.R. 5811), sponsored by Chairman of the Committee Henry Waxman (D-CA-30), Chairman of the Subcommittee Wm. Lacy Clay (D-MO-1), and Rep. Paul Hodes (D-NH-2). The bill directs the Archivist of the United States to establish standards for the capture, management, retrieval, and preservation of White House e-mails and other electronic communications. The Committee’s Press Release, summary of the bill, and full text of the bill is available here. Transcripts from the hearing are posted here.

Under the Federal Records Act, the National Archives and Records Administration (NARA) is responsible for assisting Federal agencies in maintaining adequate and proper documentation of federal records. Given the increased use of electronic communications, federal agencies are potentially creating (and discarding) messages that have the status of federal records. According to a new report issued by the Government Accountability Office (GAO), when GAO reviewed the e-mail management practices of four senior agencies officials they found that, although the agencies’ e-mail records management policies addressed the regulatory requirements, these requirements were not always met for the senior officials.

New SSRN Working Paper

John Nann — Thu, 24 Apr 2008 20:32:00 GMT

Dan Kahan, Cultural Cognition as a Conception of the Cultural Theory of Risk

Abstract: Cultural cognition refers to the tendency of individuals to form beliefs about societal dangers that reflect and reinforce their commitments to particular visions of the ideal society. Cultural cognition is one of a variety of approaches designed to empirically test the cultural theory of risk associated with Mary Douglas and Aaron Wildavsky. This commentary discusses the distinctive features of cultural cognition as a conception of cultural theory, including its cultural worldview measures; its emphasis on social psychological mechanisms that connect individuals' risk perceptions to their cultural outlooks; and its practical goal of enabling self-conscious management of popular risk perceptions in the interest of promoting scientifically sound public policies that are congenial to persons of diverse outlooks.

Military Tribunals

John Nann — Wed, 23 Apr 2008 15:38:00 GMT

The Law Library of Congress is hosting two articles by Louis Fisher on Constitutional problems raised by the military commissions/tribunals authorized by President Bush. The site also provides reference to two book-length treatments of the subject by Fisher.

New Article

John Nann — Mon, 21 Apr 2008 18:34:00 GMT

A new article by a member of our faculty has come to our attention. Here is the opening:

In December 2006, the British Serious Fraud Office (SFO) closed an investigation into a case that has become a vexing test for the emerging international anti-corruption regime. The centerpiece of this regime is the Anti-Bribery Convention negotiated under the auspices of the Organisation for Economic Co-operation and Development (OECD). The Convention—to which Britain is a party—requires the State Parties to outlaw overseas bribery. In closing the investigation into corruption involving a large defense procurement contract (dubbed Al Yamamah or “the dove”), the SFO and the Attorney General cited national security concerns.

Susan Rose-Ackerman and Benjamin Billa, Treaties and National Security, 40 N.Y.U. J. Int'l L. & Pol. 437 (2008).

The NYU Journal of Law and Politics has more (the whole article :-)).

Info you need about the law library this summer

ct286 — Sat, 19 Apr 2008 00:29:00 GMT

The Yale Law Library Reference Department is hosting two brief, convenient and informative Out-the-Door sessions. Come get the information you need about using the law library – and what the library staff can do for you – this summer. The half-hour sessions are very informal. Just show up, pick up a handout, ask questions, and get answers. You’ll be in and out in about half an hour.

The schedule is:

Session One:

4/24/2008 11:30 a.m. to 12:00 p.m. SLB Room 109

Session Two:
4/25/2008 10:10 a.m. 10:40 p.m. SLB Room 109

You don’t need to sign up -- just show up. We hope to see you next Thursday or Friday of next week!

New paper

John Nann — Thu, 17 Apr 2008 19:16:00 GMT

Professor Siegel has posted on SSRN a version of a paper to be published in the Duke Law Journal. The paper is entitled: "The Right's Reasons: Constitutional Conflict and the Spread of Woman-Protective Antiabortion Argument". Here is the abstract:

"This Lecture investigates the social movement dynamics that produced woman-protective antiabortion argument. The Lecture explores the political conditions under which leaders of the antiabortion movement began to supplement or even to supplant the constitutional argument abortion kills a baby with a new argument, abortion hurts women - a claim that achieved widespread public notice with the Supreme Court's 2007 decision in Gonzales v. Carhart.

The Lecture's genealogy of a social movement claim begins in the 1980s, when members of the antiabortion movement asserted that abortion subjects women to regret, trauma, and psychological illness, a condition they termed post-abortion syndrome (PAS). My story then follows changes in the abortion-harms-women claim as it was transformed from PAS - a therapeutic discourse initially employed to dissuade women from having abortions and to recruit women to the antiabortion cause - into woman-protective antiabortion argument (WPAA), a political discourse forged in the heat of social movement conflict that sought to persuade audiences outside the movement's ranks in electoral campaigns and in constitutional litigation.

Whereas PAS grew up as a mobilizing discourse deployed primarily among women volunteers and clients in the antiabortion movement's crisis pregnancy network - a context in which abortion-hurts-women testimonials had important expressive functions - WPAA took shape in political contexts in which the abortion-hurts-women argument had important strategic functions. In the 1990s, antiabortion advocates sought to explain to audiences that ambivalently supported the abortion right why women would benefit from legal restrictions on abortion. As they did so, they fused PAS claims and stories with traditional gender-paternalist argument, justifying restrictions on women's agency as needed to protect women from male coercion and to free women to be mothers. As a political discourse designed to rebut feminist, pro-choice claims, WPAA came to internalize elements of the very arguments it sought to counter - fusing the public health, trauma, and survivors idiom of PAS with the idiom of the late twentieth-century feminist and abortion-rights movements. As the Lecture shows, social movement mobilization, conflict, and coalition each played a role in the evolution and spread of the woman-protective antiabortion argument, in the process forging new and distinctly modern ways to talk about the right to life and the role morality of motherhood in the therapeutic, public health, and political rights idiom of late twentieth-century America.

The Lecture concludes by considering the new gender-paternalist justifications for abortion restrictions discussed in Carhart. With the spread of woman-protective antiabortion argument and its seductively modern justifications for using law to impose motherhood on women, Justice Kennedy and the nation will once again have to decide - not only how to balance the liberty of the pregnant woman against the state interest in protecting potential life - but more fundamentally, about the kind of women that constitutional guarantees of liberty and equality protect. This question is far from abstract, as South Dakota once again considers whether to adopt an abortion ban, justified by fetal-protective and woman-protective argument, in the 2008 elections."