Over the last several decades, courts and legal scholars have struggled with whether or when to consider boilerplate text as contract. Recent attempts to draw all boilerplate text into “contract” ...seek to end that struggle but have shifted contract law away from its traditional focus on enforcing parties’ actual agreements and common understandings. This has required a series of ad hoc “fixes” to contract law reminiscent of the medieval use of “epicycles” to try to square geocentric theories of planetary motion with recalcitrant observations of a nongeocentric universe. This shift has been transforming the meanings of contract law’s central concepts. We view the shift as an undiagnosed paradigm slip, resulting in a generalized theory of “contract” as a mere assumption of risk that allows private obligations to be created unilaterally without reaching the actual agreements required by core contract law principles. Some now call this new sort of obligation “contract.” But it is pseudo-contract, resembling contract without fulfilling its necessary conditions of validity. The recent paradigm slip into pseudo-contract raises a complex blend of linguistic, factual, conceptual, practical, normative, and doctrinal problems. Under the mantle of “contract,” the problems of pseudo-contract have remained largely hidden. In this Article we expose these problems and develop a more nuanced and coherent method of analysis - shared meaning analysis - that courts and other legal analysts can use to determine when any particular piece of boilerplate text does, or does not, contribute an actual term to a contract. Because facts about language have received insufficient attention in discussions of how boilerplate text may (or may not) contribute to contract meaning, we launch our analysis by developing several seminal insights into the dependence of meaning on social cooperation from the language philosopher Paul Grice. Drawing on his insights into language, we develop a contemporary definition of the shared meaning of a contract (or the “common meaning of the parties”) as that meaning that is most consistent with the presupposition that both parties were using language cooperatively to contract. We then offer a simple conceptual test that courts can use to discern this shared meaning, distinguish contractual from noncontractual uses of boilerplate text, and prevent contract from slipping into pseudo-contract. We pay particular attention to diagnosing deceptive or misleading uses of boilerplate text. Using examples ranging widely from clickwrap consumer contracts to high-end boilerplate contracts between sophisticated parties, we show how shared meaning analysis applies generally to many varieties of contract.
We develop a sovereign debt model with heterogeneous creditors (private and official) where the probability of default depends on both the level and the composition of debt. Higher exposure to ...official lenders improves incentives to repay due to more severe sanctions but it is also costly because it lowers the value of the sovereign's default option. The model can account for the co-existence of private and official lending, the time variation in their shares in total debt as well as the low rates charged on both. It also produces intertwined default and debt-composition choices.
•Sovereign debt composition depends on size of total borrowing needs.•Provision of official credit makes private credit safer.•Debt overhang matters for sovereign's debt portfolio decision.•Official lending lowers the value of the sovereign's default option.
Resumen El discurso de la gobernanza fomenta la producción de modalidades regulativas de alcance global a partir de lógicas diferentes a la del mercado y a la del Estado. Los promotores de los ...modelos de Cláusulas de Acción Colectiva (CACs) de 2014 señalaron que la matriz política que los diseñó se construyó en buena medida sobre la base de la experiencia de la reforma contractual precedente (2001-2003); ahora bien, también advirtieron de su carácter innovador. Este artículo compara las matrices políticas de las que emergieron las CACs 2003 y 2014 mostrando quiénes participaron en ellas y cómo se articularon. El análisis muestra empíricamente que en ambos procesos se involucraron prácticamente los mismos agentes, aunque a partir de una dinámica de cooperación diferente: los rasgos típicos-ideales de la gobernanza se visualizan más en la segunda que en la primera experiencia. Sin embargo y a contramano de lo que postulan sus promotores, se argumenta que se trata en los dos casos de formas de gobernanza imperfecta que excluyen estratégicamente de los procesos de producción de estas normativas globales a aquellos agentes con potencialidad para disputar el poder a las elites que dominan el mercado de deuda soberana desde la década de los años 1970/1980.
Abstract The governance discourse encourages the production of regulative modalities of global scope from different logics from that of the market and of the state. The promoters of the Collective Action Clauses (CACs) models of 2014 recognized that the political matrix from which these models emerged was largely constructed over the basis of the contractual reform previous experience (2001-2003); but also, they warned of its innovative nature. This article compares the political matrices from which the CACs 2003 and 2014 emerged showing who participated in them and how their participants were articulated. The analysis shows empirically that in both processes were involved practically the same agents, albeit by means of a different cooperation dynamics: the typical-ideal characteristics of governance can be visualized in the second experience more than in the first one. However, and contrary to what its proponents postulate, it is argued in this paper that the two cases put in movement imperfect governance forms that strategically exclude from the processes of production of these global norms those agents with potential to dispute the power of the elites that dominate the sovereign debt market since the 1970s/1980s.
Resumo O discurso da governança fomenta a produção de modalidades regulatórias de alcance global por meio de lógicas diferentes daquelas do mercado e do Estado. Os promotores dos modelos de Cláusulas de Ação Coletivas (CACs) de 2014 indicaram que a matriz política que projetou tais modelos foi construída em grande medida com base na experiência de reforma contratual anterior (2001-2003); contudo, eles também advertiram seu caráter inovador. Este artigo compara as matrizes políticas das quais emergiram as CACs 2003 e 2014, mostrando quem participou delas e como se articulou. A análise mostra empiricamente que em ambos os processos estavam envolvidos, praticamente, os mesmos agentes, embora a partir de uma dinâmica de cooperação diferente: as características típicas/ideais da governança se exibem mais na segunda do que na primeira experiência. No entanto, e contrariamente ao que postulam seus promotores, argumenta-se que se trata, nos dois casos, de formas de governança imperfeitas, que excluem estrategicamente dos processos de produção dessas regulamentações globais aqueles agentes com potencialidade de desafiar o poder das elites que dominam o mercado de dívida soberana desde as décadas de 1970/1980.
This article focuses on the implementation of a stay of individual enforcement actions in corporate restructuring proceedings. The authors analyse the general goals of a stay of individual ...enforcement actions in restructuring proceedings by considering, for instance, the economic reasons for such a stay, when it should be applicable, and the exceptions that should be established for its application. The Directive on restructuring and insolvency, adopted on 20 June 2019, reforms the regulation of a stay of individual enforcement actions in Member States of the European Union, aims to increase the efficiency of restructuring proceedings by providing legal instruments to facilitate a debtor’s negotiation of a restructuring plan, and provides certain rules as to how a debtor’s assets should be protected during these negotiations. Namely, a stay of individual enforcement actions and the protection of essential executory contracts should protect a debtor and ensure the equality of all creditors (pari passu) during the negotiation of a restructuring plan. However, in practice these goals result in less protection – especially for ordinary creditors. The authors analyse which aspects of a stay of individual enforcement actions are harmonized under the Directive on restructuring and insolvency, and whether they are sufficient to ensure the effective negotiation of a restructuring plan. Nevertheless, a fair balance between the interests of the debtor and their creditors should be ensured in restructuring proceedings, and the authors assess whether or not such a balance is established.
This new book considers sovereign debt from the perspectives of English and US law. In addition to conflict of laws and jurisdiction, the author covers a whole panoply of issues, such as the ..."champerty defence", collective action clauses, and sovereign immunity. The author also makes a number of innovative policy proposals, for instance on the interpretation of pari passu clauses. Given the wide range of cases and literature used and the depth of analysis, this will certainly become an authoritative book of reference on sovereign defaults.
There is academic unanimity concerning the fact that the equity market does not function at the lower end. Risks are too high and not rewarded by sufficient return. Hence, companies looking for small ...amounts of money in the seed or early stage phase do not find it. This paper argues that second- and third-round financing, even though less risky, has also become problematic, especially in Europe. While start-ups are confronted with the small equity gap at seed and early stage, scale-ups are also confronted with an equity gap at later stages. A holistic policy, not focused on a specific stage of investment, should therefore replace a targeted one. The paper shows that in this context a government-backed debt-financing instrument delivers better value for public money than a fund-of-funds approach and increases the efficiency of the latter.
Sovereign debt restructurings may experience marginal changes as a result of recent modifications in contractual terms being incorporated into new bond issues, but for the most part they will likely ...resemble what has generally worked so well in recent decades to the satisfaction of most governments and private creditors. The statutory reforms that have been proposed to date are highly unlikely to gain traction for a variety of reasons, including the prospect that they would have been stymied when confronted with a rogue sovereign debtor such as Argentina.
The decision of the US Supreme Court rendered in NML v. Argentina has enabled the vulture funds to enforce in full their claims against the payments to be made by Argentina in favour of those holders ...who had tendered their bonds under a previous exchange offer. This scenario may have a disruptive impact on the functioning of the financial markets and endanger the restructuring processes of sovereign debt. The race to the courts by the vulture funds could be stopped under the UNCTAD Principles on Responsible Financing where the behaviour of those creditors who acquire debt instruments of sovereigns in distress and remain aloof from a restructuring to secure preferential treatment is marked as abusive. Unfortunately, so far the legal status of this abusive behaviour is unable to overturn the interpretation of the pari passu clause under New York law given by the US Federal Courts which stands at the base of the problem. To overcome this impasse the suggestion is to insert in the UN proposal of a multilateral legal framework for sovereign restructuring processes a specific provision qualifying as overriding a mandatory restructuring plan approved through a certain quorum which has received certification by the IMF. This qualification would serve the purpose of applying the plan to all creditors, and not just to those who register under the process. Moreover, this qualification would be considered as part of the public policy of the states participating to the UN proposal so as to block the enforcement of judgments rendered in non-participating fora.
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