VERIFICATION IN CONTRACTS WITH RANDOM CHANGES IN QUALITY

Many goods and services are subject to random changes in quality during the time between sale and delivery, resulting in markets characterized by lemons-market equilibria. We examine two forms of costly verification, ex post inspection and ex ante certification. In equilibrium, ex post verification is used to verify buyers' reports of low quality, while ex ante certification is used to verify sellers' shipments of high quality. Ex post inspection allows buyers to earn rents; in some circumstances, ex ante certification allows sellers to earn rents. One would expect buyers to prefer ex post inspection while sellers prefer ex ante certification.Marketing,

Defining Agency and Its Scope (II)

Fiduciary law necessarily raises issues of delineation and demarcation, which this paper demonstrates through examples involving common-law agents. Serving as an agent, and thus as a fiduciary, does not necessarily mean that agency law prescribes all duties that the agent owes the principal. The agent may have rights external to the relationship that the agent may exercise, distinct from the duty of loyalty owed the principal. When an agent acts outside the bounds of an agency relationship, the principal’s consent is not requisite to conduct that would constitute disloyalty within the bounds of the agency relationship. The paper illustrates the significance of this point through a series of examples drawn from a range of contexts, including auctions of art objects. Prior scholarship neglects the implications of demarcations that define the scope of an agency relationship and of fiduciary relationships more generically. More generally or theoretically, the paper examines the qualities of fiduciary duty as a default rule, arguing that the relative “stickiness” of the default varies. Agency law contains two different kinds of altering rules—necessary and sufficient conditions to vary a default rule—consisting of agreements that define the scope of the agent’s representative role on behalf of the principal, and consent by the principal to actions by the agent within that scope that relieve the agent of liability for breach of fiduciary duty, which impose significantly different requisites. The basic distinction between agreement and consent has parallels elsewhere in agency law; for example, ratification, like consent, requires specificity because to be legally effective ratification requires that the principal know, as a matter of historical fact, what the agent has done. Agreement, on the other hand, requires less specificity, comparable to manifestations that confer actual authority on an agent which necessarily does not require that the principal foresee all actions that the agent may take that fall within the scope of the grant of authority. And ratification, like effective consent, is a matter of historical fact, not hypothesis. These implications follow because agency law, by positioning an agent as the principal’s representative for purposes of legally-salient interactions with third parties and facts about the world, frames the agent as an extension of the principal, not the principal’s substitute

Buyback and return policies for a book publishing firm = Egy könyvkiadó vállalat visszavásárlási stratégiája

A dolgozat célja egy vállalati gyakorlatból származó eset elemzése. Egy könyvkiadót tekintünk. A kiadó kapcsolatban van kis- és nagykereskedőkkel, valamint a fogyasztók egy csoportjával is vannak kapcsolatai. A könyvkiadók projekt rendszerben működnek. A kiadó azzal a problémával szembesül, hogy hogyan ossza el egy frissen kiadott és nyomtatott könyv példányszámait a kis- és nagykereskedők között, valamint mekkora példányszámot tároljon maga a fogyasztók közvetlen kielégítésére. A kiadóról feltételezzük, hogy visszavásárlási szerződése van a kereskedőkkel. A könyv iránti kereslet nem ismert, de becsülhető. A kis- és nagykereskedők maximalizálják a nyereségüket. = The aim of the paper is to analyze a practical real world problem. A publishing house is given. The publishing firm has contacts to a number of wholesaler / retailer enterprises and direct contact to customers to satisfy the market demand. The book publishers work in a project industry. The publisher faces with the problem how to allocate the stocks of a given, newly published book to the wholesaler and retailer, and to hold some copies to satisfy the customers direct from the publisher. The publisher has a buyback option. The distribution of the demand is unknown, but it can be estimated. The wholesaler / retailer maximize the profits. The problem can be modeled as a one-warehouse and N-retailer supply chain with not identical demand distribution. The model can be transformed in a game theory problem. It is assumed that the demand distribution follows a Poisson distribution

Some considerations on accounting for pawnshops in Romania

Because of the financial and economic crisis that has affected Romania since October 2008, many people do no longer qualify for the bank loans they need to finance their investments or daily expenses. The alternative could be getting the money by pledging a personal good (especially jewelries) to a pawnshop. According to Romanian laws, pawnshops are non-banking financial institutions that offer monetary loans in exchange for movable assets that are pledged by the customers. They are organized as commercial companies and are supervised by the National Bank of Romania, being recorded into the Entry Register held by this institution. Nonetheless, the pawnshops do not apply accounting rules available for credit institutions, but they prepare the financial statements according to the regulation applied by commercial companies. The paper addresses the peculiarities of the pawnshops’ activities in terms of legal, fiscal and accounting aspects. By giving a practical example, the paper emphasizes the application of the specific Romanian legislation, taking into account three different scenarios. The paper discusses the fiscal aspects (mainly the value added tax) that rise from the sell of the items or the cashing of the interest and loan.pawn contract, pawned items, loan, interest

Report on a Right of Use for Collateral Takers and Custodians

The Report on a Right of Use for Collateral Takers and Custodians examines on what basis collateral takers can dispose of the assets of collateral providers, and custodians of those of their clients. The report describes the current legal practice in the USA, Denmark, The Netherlands, Germany, Italy and the UK. It critically examines legislative initiatives by UNIDROIT (Project on Harmonised Substantive Rules regarding Securities Held with an Intermediary) and in the European Union (Collateral Directive, Investment Services Directive). The report contains a Tax Appendix.collateral, right of use, repo, securities lending, derivatives

Quality control in non-staple food markets: Evidence from India

"Using original data collected about growers, traders, processors, markets, and village communities, we compare the situation in four states – Tamil Nadu, Uttar Pradesh, Maharashtra, and Orissa. We examine the way that information about crop attributes is conveyed (or not) along the value chain. We also document the infrastructure available at the level of the market. We find that little information circulates about unobservable crop characteristics. Growers receive a price premium when they dry, grade, and pack their produce, but we find no evidence that information about crop health and safety or agricultural practices circulates through the value chain or that growers are encouraged to follow specific agricultural practices for quality purposes. Market infrastructure is deficient regarding sanitation, with few public toilets, inadequate drainage, and no coordinated pest control." from Authors' AbstractFood marketing, Food safety, Food quality, Value chain,

New Concepts in Customer and Territorial Restrictions—The Schwinn and Sealy Doctrines

Recent Supreme Court decisions in United States v. Arnold, Schwinn & Company and United States v. Sealy, Incorporated have raised new questions concerning the legality of customer and territorial restrictions imposed on dealers, distributors, franchisees, and licensees by manufacturers. In this article the author analyzes these cases and concludes that attacks on customer and territorial restrictions will be more effective in the future and, to avoid government prosecution and treble damage actions by private litigants, businessmen and lawyers should be cautious in the use of such restraints