Prominent analyses of contractual default rules are ex ante in orientation. According to economic accounts, default rules, like the rules of contract interpretation, should be designed to further the substantive objective of social welfare maximization either by filling gaps with terms that maximize the parties’ joint welfare or by giving parties incentives to write such […]

Payday loans continue to be a commonly used yet controversial source of credit for low-income consumers. Regulation of this market must balance the beneficial uses of payday lending with harmful, inefficient uses that exacerbate financial hardship. The best way to strike this balance, we argue, is to regulate at the margin—that is, experiment with different […]

This essay defends Alan Schwartz’s intellectual project of liberalizing contract law among commercial parties by integrating consequentialist and deontological perspectives. It responds to two major critiques of Schwartz’s assumptions: the “rationality objection,” which argues that not all merchants are truly sophisticated and therefore require paternalistic protection; and the “moralist objection,” which holds that some transactions […]

When many plaintiffs sue a single defendant, each plaintiff’s decision to settle affects what the others can recover. The existing literature shows how defendants can exploit this interdependence; we show that plaintiffs can also be exploited by their fellow plaintiffs, depending on how settlement negotiations are structured. We examine formal models of various settlement postures […]

Inspired by Alan Schwartz’s contractarian approach to business law, we provide a framework for determining when corporate stakeholders should be able to opt out of legal rules in order to advance social goals beyond wealth maximization. We argue that, under this Schwartzian framework, shareholders and other corporate decisionmakers would be able to credibly opt out […]

The growing prevalence of controlling shareholders and new forms of shareholder control in large public companies poses a serious dilemma for corporate law—particularly in Delaware, the longstanding jurisdiction of choice for such firms. On the one hand, allowing controlling shareholders to act unfettered runs counter to corporate law’s classic board-centric governance model and its policy […]

Many market participants believe that Chapter 11 has increasingly become more expensive. Using a new dataset detailing the fees paid to the debtor’s lead law firm in large bankruptcy cases filed between 2004 and 2022, I find evidence that this is true. On average, Chapter 11 fees consumed four times as much of a debtor’s […]

Emerging technologies for the automatic enforcement of contracts, conventionally referred to as smart contracts, have the potential to realize Professor Alan Schwartz’s ideal of an efficient contract law for sophisticated parties, as they reduce the cost of textualist enforcement, added contingencies, and privately-provided templates, and offer a way to get around mandatory rules relating to […]