Variation in Boilerplate: Rational Design or Random Mutation?

Choi, Stephen J.; Gulati, G. Mitu; Scott, Robert E.

doi:10.1093/aler/ahx019

Cited by 11 publications

(5 citation statements)

References 14 publications

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“…In such a market, one would expect to see a substantial amount of contract stickiness, where inefficient terms are retained longer than they should because of the value of sticking to the standard form. Research into sovereign bonds confirms the stickiness phenomenon, where it often takes a substantial effort from official sector institutions to induce market-wide change (Choi & Gulati 2004;Choi, Gulati & Scott 2018).…”

Section: 31mentioning

confidence: 99%

“…Yet, small variations in wording across contracts is common (Weidemaier 2008). For every single provision in the supposedly standard sovereign bonds, one can find small wording variance across deals-in the same rating class-at any given point in time (Choi, Gulati & Scott 2018;Choi, Gulati & Scott 2021). And in a world where the judges in the two primary jurisdictions under whose laws sovereign bonds are governed follow plain meaning or strict textualism in interpreting contracts, small wording variations can have huge implications.…”

Section: 31mentioning

confidence: 99%

“…Research suggests, however, that harmful mutations abound and that many do not disappear over time (Scott, Choi & Gulati 2022). Some even spread and mutate further (Choi, Gulati & Scott 2018). These findings lead to more questions: Why does this happen?…”

Section: Mutationsmentioning

confidence: 99%

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Sovereign Debt Puzzles

Bolton,

Gulati,

Panizza

2023

Annu. Rev. Financ. Econ.

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We review the state of the sovereign debt literature and point out that the canonical model of sovereign debt cannot be easily reconciled with several facts about sovereign debt pricing and servicing. We identify and classify more than 20 puzzles. Some are well-known and documented, others are less so and are sometimes based on anecdotal evidence. We classify these puzzles into three categories: puzzles about how sovereigns issue debt; puzzles about the pricing of sovereign debt; and puzzles about sovereign default and the working out of defaults. We conclude by suggesting possible avenues for new research aimed at reconciling theory with what we observe in the real world.

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Section: 31mentioning

confidence: 99%

Section: 31mentioning

confidence: 99%

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Sovereign Debt Puzzles

Bolton,

Gulati,

Panizza

2023

Annu. Rev. Financ. Econ.

Self Cite

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“…Coase's work, “The Problem of Social Cost” (Coase 1960), has laid the fundamental ground for the transaction cost theories. His work has later been refined by the American economist Oliver Williamson continuing the work on Transaction Cost Economics and receiving, as Coase did, the Nobel Prize for his achievements in 2009 (Williamson 2009).…”

Section: Introductionmentioning

confidence: 99%

“…Based on the economic literature and transaction cost theories (Coase 1960, 1–44; Scott and Triantis 2005, 190, 2006, 814), the legal design is expected to decrease opportunity and transaction costs because it brings information in a comprehensible form into the negotiation and the following contractual operations. The legal design reduces the time necessary for negotiations; it saves in the complaint, legal, and other procedural, as well the administrative costs.…”

Section: Introductionmentioning

confidence: 99%

Legal design in commercial contracting and business sustainability New legal quality metrics standards

Nousiainen

2022

Journal of Strategic Contracting and Negotiation

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There is surely room for improvement in commercial contracting practice. The current contracting evolution often leads to a situation where contracts become increasingly and may be needlessly, complex. The paper discusses how complex contracts evolve and how the proposed legal design approach can bring comprehensibility for tackling complexity in contracting. This approach is providing for various benefits and incentives, such as business sustainability, reduced transaction costs, and competitive business advantage. A novel legal quality metric is introduced. This metric will foster the measuring of quality in the legal profession. The metric, comprehensibility, would better serve both lawyers and clients in measuring the true quality of legal services, processes, and products – than the often used, easily misleading metrics such as time spent, cases won, and hours billed. Through this innovative approach to legal quality metrics, the paper will bring further understanding of the impact of comprehensibility in commercial contracting.

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Sovereign defaults in court

Schumacher

Trebesch

Enderlein

2021

Journal of International Economics

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For centuries, defaulting governments were immune from legal action by foreign creditors. This paper shows that this is no longer the case. Building a dataset covering four decades, we find that creditor lawsuits have become an increasingly common feature of sovereign debt markets. The legal developments have strengthened the hands of creditors and raised the cost of default for debtors. We show that legal disputes in the US and the UK disrupt government access to international capital markets, as foreign courts can impose a financial embargo on sovereigns. The findings are consistent with theoretical models with creditor sanctions and suggest that sovereign debt is becoming more enforceable. We discuss how the threat of litigation affects debt management, government willingness to pay, and the resolution of debt crises.

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Variation in Boilerplate: Rational Design or Random Mutation?

Cited by 11 publications

References 14 publications

Sovereign Debt Puzzles

Sovereign Debt Puzzles

Legal design in commercial contracting and business sustainability New legal quality metrics standards

Sovereign defaults in court

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