LEGS, or "Law-Engaged Graduate Students," meets during the academic year to discuss a work in progress by one of our Graduate Associates. Academic papers, dissertation proposals, and dissertation chapters have been presented at these meetings, to an audience of fellow graduate students.
Abstract: "Current contract law does not—and perhaps cannot—provide sufficient incentives for parties to write efficient contracts. Parties invest in contract-writing to bring clarity to the contract. Contractual terms create valuable certainty, which are both non-rivalrous and non-excludable as between the parties to the contract. A well-known feature of such goods is that parties systematically under-invest in their creation. In the case of contracts, this means all contracts are inefficiently under-specified, leaving inefficient uncertainty over obligations. This insight provides further justification for practical common contract law devices such as “gap-filling” default rules, industry standards, fee shifting, and formalism requirements in the Statute of Frauds and the U.C.C.
I offer an additional suggestion to alleviate the under-investment problem. If both sides are made responsible for both parties’ litigation costs, this increases contract-writing incentives for both parties. The extra litigation costs can be paid to the court and used to fund meritorious cases and improve access to justice. This “everybody pays” proposal may be worth further exploration as an alternative to the traditional American rule vs. English rule debate as a means of limiting nuisance suits."
Ben Johnson is a third year PhD student in the Politics program. He generally works on judicial politics and ideal point estimation. After completing his J.D. at Yale in 2010, he practiced law in Dallas before coming to Princeton. He hopes to someday teach fed courts and procedure. Ben and his wife Bethanne leave Thursday for their annual pilgrimage to the Yale Law Revue.