Contract is Not Promise; Contract is Consent

In the 1980s, Charles Fried was right to focus on what was missing from both the “death of contract” and “law and economics” approaches to contract law: the internal morality of contract. But he focused on the wrong morality. Rather than embodying the morality of promise-keeping, the enforcement of contracts can best be explained and justified as a product of the parties’ consent to be legally bound. In this essay, I observe that, in Contract as Promise, Fried himself admits that the “promise principle” cannot explain or justify two features that are at the core of contract law: the objective theory of assent and the content of most “gap fillers” or default rules of contract law. After summarizing how consent to contract accounts for both, I explain that, whereas the morality of promise-keeping is best considered within the realm of ethics — or private morality — legally enforcing the consent of the parties is a requirement of justice — or public morality

The license/contract dichotomy in open licenses: a comparative analysis

The paper looks at the legal nature of so-called open licenses – agreements designed to provide permissions to users and publishers through “some rights reserved” clauses. The article starts with the assertion that copyright licenses are contracts in Civil Law jurisdictions, and looks at the opposing views and practice in Common Law jurisdictions. The article particularly looks at recent case law in the United States which deals specifically with the issue, and concludes that there is now a clear jurisdictional split between both traditions on whether these licenses are contracts

Short-term or long-term contracts? - A rent-seeking perspective

In this paper, .rms engage in rent seeking in order to be assigned a governmental contract. We analyze how a change in the contract length a¤ects the .rms. rent-seeking behavior. A longer contract leads to more rent seeking at a contract assignment stage, as the .rms value the contract higher. On the other hand, the contract has to be assigned less often, which of course leads to less rent seeking. Finally, a longer contract makes a possible cooperation between the .rms solving the rent-seeking problem more difficult to sustain

The Effect of Player Performance on Free Agency Contract Value in Major League Baseball

This study estimates the effect of player performance on free agency contract values in Major League Baseball (MLB). We hypothesize that performance, as measured by Wins Above Replacement (WAR), has a positive effect on the contract value. To test this, we specify and estimate a linear regression for contract value as a function of current and lagged WAR values and other control variables. Using data from 82 major league position players during the 2013 and 2014 seasons, our results indicate that the current and lagged values of WAR have a significant, positive effect on contract value. Among the control variables, the contract length has a significant, positive effect on the contract value. The model is used to predict free agent contract values set during the 2015 off-season. This prediction for 25 players has an average error of 35%, without systematic over-or under-prediction

Intent to Contract

There is a remarkable difference between black-letter contract laws of the United States and England. In England, the existence of a contract is supposedly conditioned on the parties\u27 intent to be legally bound, while section 21 of the Second Restatement of Contracts states that [n]either real nor apparent intention that a promise be legally binding is essential to the formation of a contract. There are also differences within U.S. law on the issue. While section 21 describes courts\u27 approach to most contracts, the parties\u27 intent to contact can be a condition of validity of preliminary agreements, domestic agreements and social arrangements, reporters’ promises of confidentiality to sources, and gratuitous promises. This Article develops an analytic framework for evaluating these rules and examines their relationship to the broader principles that animate contract law. Rules that condition contractual liability on proof of contractual intent must include rules for interpreting that intent. Those interpretive rules will include both interpretive defaults and rules for what it takes to opt-out of the default. By adjusting these default and opt-out rules, the law can achieve different balances between the duty-imposing and power-conferring functions of contract law, or among the various reasons for enforcement. This is demonstrated by an analysis of the rules for gratuitous promises, preliminary agreements, spousal agreements and reporters\u27 confidentiality promises. The results of that analysis include a new argument for the Model Written Obligations Act; a critique of Alan Schwartz and Robert Scott\u27s proposal preliminary agreements and a recommended alternative to it; and recommended changes to the rules for agreements between spouses. Attention to intent to contract requirements also indicates an overlooked aspect of how the enforcement of contracts affects extralegal norms and relationships of trust. Interpretive rules that require parties who want, or who do not want, legal liability expressly to say so are particularly likely to interfere with or erode extralegal forms trust that otherwise create value in transactions