We use interviews with corporate lawyers and a data set of contracts to explore an elite area of legal practice: sovereign bond lending. Sovereign debt lawyers work at prestigious global law firms, yet the contracts they produce include some terms that defy explanation. Lawyers often account for the existence of these terms through origin myths. Focusing on one contract term, the pari passu clause, we explore two puzzling aspects of these myths. First, we demonstrate that the myths are inaccurate as to both the clause's origin and the role of lawyers in contract drafting. Second, the myths often are unflattering, inaccurately portraying lawyers as engaged in little more than rote copying. We probe this disjuncture between the myths and lawyers' actual practices and explore why contracts origin myths might hold such appeal for this elite segment of the bar.
In order to. .. [prevent future crises], standardized and identical collective action clauses (CACs) will be included. .. in the terms and conditions of all new euro area government bonds. .. ."-Statement by the Eurogroup, November 28, 2010 1 "CACs. Why'd it have to be CACs?"
Sovereign loans involve complex but largely standardized contracts, and these include some terms that no one understands. Lawyers often account for the existence of these terms through origin myths. Focusing on one contract term, the pari passu clause, this article explores two puzzling aspects of these myths. First, it demonstrates that the myths are inaccurate as to both the clause's origin and the role of lawyers in contract drafting. Second, the myths often are unflattering, inaccurately portraying lawyers as engaged in little more than rote copying. The article probes this disjunction between the myths and lawyers' actual practices and explores why contracts origin myths might hold such appeal for this elite segment of the bar.
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