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Joe Smith has been (among other things!) the general counsel of a regional bank, Commissioner of Banks for North Carolina; and the official independent settlement monitor of the National Mortgage Settlement. And Joe has some reflections on these experiences that I recommend reading. One easy way to get started is with his 2026 essay published by The North Carolina Banking Institute.
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A few weeks ago, I got to give a talk at the University of Miami. The focus: six myths about contracts, as many of us teach contract law (or at least as I teach it). The talk was a blast — the faculty at Miami were wonderful and generous, but poked all sorts of big holes in my claims. The broader topic, in a little essay titled "The Form Knows Best" with two superb students (Tara Chowdhury and Faith Chudkowski), was the gravitational pull of the standard form on contract drafting practices. Our abstract:
Law students learn that contracts are carefully negotiated, precisely drafted, and shaped by doctrine. But lawyers tell a different story. This article compares six pillars of contract law with what we heard in over 170 interviews with senior transactional lawyers across M&A, sovereign bonds, and leveraged loans. The result is a gap between the Official Story taught in classrooms and the Unofficial Story told by practitioners—where boilerplate dominates, case law is rarely consulted, and market custom often prevails over rational design. We suggest that many contracts are better understood as historical artifacts—products of inherited forms and production pressure. Or, as one lawyer put it, more Mars Bar than masterpiece. That gap may matter—especially when courts often interpret form as if it reflects intent.
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Many countries have attempted to tap their diasporas by issuing bonds. This has particularly been the case in times of dire need (wars, pandemics, international sanctions, financial crises, and more). Ukraine is the most recent to have attempted to do this and failed. Other recent failures include Pakistan, India, Ethiopia and Greece, some of whom turned to bank deposit schemes when attempts to do full scale bond issuances did not succeed
A superb new paper by Doug Mulliken, motivated by the many failures to issue diaspora bonds, does a deep dive into the one program that has not only been successful, but has remained so for over a seventy-five year period: The Israel Bonds program.
Doug's paper, titled, "It’s not just money; you are investing in your identity”: Israel, the Jewish Diaspora, and the Israel Bonds program,is on ssrn.com.
The abstract reads:
Israel has been selling diaspora bonds for almost as long as the country has been in existence, with the original 1951 Independence Bonds being issued just three years after the State of Israel’s establishment as an independent nation. For over 70 years, both in times of crisis and times of strength, Israel has used the Israel Bonds program to call on the Jewish diaspora — most significantly in the United States but also in Canada and across the world — to provide the country with a layer of financial security that is, in many ways, unprecedented in modern history. The importance of Israel’s diaspora bond sales has evolved over time: it functioned as a load-bearing support of Israel’s economy in the program’s early days when, in the aftermath of World War II, sovereign debt markets had essentially disappeared; it now serves a far more important symbolic function, allowing Jews across the world to develop a connection with Israel by contributing some modest amount to the country’s well-being.
This analysis considers the social and historical context of the Israel Bonds program, taking into consideration the almost emotional connection that the bonds allow members of the Jewish diaspora to feel towards the State of Israel. Most importantly, this study examines the terms of the bonds themselves, comparing both how Israel Bonds mirror traditional Eurobonds and, in particular, how the two types of issuances differ. With this, the analysis hopes to shine a light on an under-studied, but incredibly significant, aspect of Israel’s economic development.
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What could possibly trigger me enough to break a two-year blogging hiatus? A sudden burning desire to consider the difference among budget accountability, debt accountability, and the inane, moronic, irrational, exploding human appendix ****show that is the debt ceiling.
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A long-in-process draft article has just become available to be downloaded and read here. Comments remain welcome. The Weinstein Company bankruptcy features prominently in this draft article.
Every contract in America contains an invisible exception: different enforcement rules apply if a party files for bankruptcy. Overriding state contract law, chapter 11 of the federal Bankruptcy Code gives bankrupt companies enormous flexibility to decide what to do with its pending contracts. Congress provided this controversial tool to chapter 11 debtors to increase the odds that a company can reorganize. To promote this objective while also preventing abuse and protecting stakeholders, Congress embedded this tool and others in an integrated package deal, including creditor voting. The tool was not meant as a standalone benefit for solvent private parties to pluck from the process for their own benefit, like an apple from a tree.
In recent decades, the chapter 11 package deal has been unbundled in practice, typically on grounds of economic urgency. While scholars and policymakers have attended to the quick going-concern sales of companies featured in unbundled bankruptcies, they have not sufficiently explored the challenges associated with a contract-intensive business.
To help fill that gap, this draft article illustrates how the ad hoc procedures used to manage quick sales of contract-intensive businesses can undercut two major chapter 11 objectives: maximizing economic value and fair distribution. They amount to a wholesale delegation of a substantial federal bankruptcy entitlement to a solvent third party. In addition to the impact on economic value and distribution, this draft article also explores a Constitutional problem with this practice: it arguably exceeds the scope of the federal bankruptcy power.
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I've long assumed that law school rankings are very important to law student choices regarding where to attend school. After all, why else would law schools themselves care so much about the rankings — sometimes even hiring and firing deans based on this single variable (my assumption here is the most in the academy don't see there to be much of substance in the rankings — but I may be wrong).
A wonderful new study from Albert Yoon and Jesse Rothstein, "Choice as Revelation" two of my favorite empiricists in the academy (I loved their prior paper about mismatch), challenges the conventional wisdom. As I understand the core finding, students don't attach much difference to small differences in rankings. They care about other things in these choices among close competitors. Strikes me that this is an important finding.
This is not to say that students don't care at all about rankings; they do — especially at the very top (Harvard, Stanford, Yale). After that though, not so much.
The abstract reads:
Education is a credence good. While the virtues of education are widely embraced, its qualities are difficult to discern, even among its consumers. The sizeable and increasing cost of tuition – as in the case of U.S. law schools – only add to the stakes. In response, law school rankings have emerged, with the purported goal to help students make more informed choices. While these rankings have generated both interest and debate, an important question has remained unanswered: how do prospective law students perceive these schools? Drawing upon data provided by the Law School Admissions Council (LSAC), we analyze the universe of law school applications for the period 1989 through 2017, creating a revealed preference ranking of law schools based solely on where applicants choose to matriculate given their offers of admission. We find that applicants strongly prefer Yale, Stanford, and Harvard, and to a lesser extent other schools in the top 20, but do not draw such sharp distinctions outside of these schools. For all but the very top schools, we cannot rule out that schools adjacent in the rankings are equally preferred by admitted students. We also separately analyze the application, admission, and matriculation stages of the law school matching process. Applicants apply broadly, we find, but that admissions and matriculation decisions hew closely to academic indicators. Our revealed preference rankings are similar those of the U.S. News law rankings at the top but bear little resemblance for the remaining schools. Our rankings offer a compelling alternative to commercial rankings, which are opaque and highly manipulatable. Our analyses also highlight the limitations of ordinal rankings, which by themselves can suggest meaningful differences amongst alternatives where they do not exist.
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Last year, when I was in zoom teaching hell and desperately looking for videos or podcasts with my contracts heroes to try and give my students a window into the magic of contract law and theory, I was unable to find anything at all that I could use for class from Bob Scott and Jody Kraus. Lots of erudite law journal articles, yes. But I hate lengthy law review articles. I wanted to hear them talk and answer questions.
My prayers have been answered, thanks to Felipe Jimenez's wonderful Private Law Podcast (here). The episode posted today is about Bob and Jody's wonderful and special collaboration that has given the world of contract law so much. And Felipe is brilliant in his gentle but insightful questioning (as an aside, if you are a fan of contracts theory, you might also like the episode with Brian Bix; I loved it).
Thank you, Felipe. Thank you, Bob and Jody.
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I'm writing to second Melissa's wonderful post (below) on Afra Afsharipour's recent article. My thanks to Melissa for pointing out this super piece.
There is a rich literature on the question of the gender gap in the legal profession, with wonderful work by scholars such as Elizabeth Gorman, Ronit Dinotvitzer, Fiona Kay, Joyce Sperling and others. One of the gaps in this literature that I've found over the years though is the lack of in-depth analyses of particular practice areas or individual firms. Many of the analyses look at the gender gaps in the fractions of law students, junior associates and partners and stop there (I am guilty as charged on this). But, of course, we know (or at least suspect) that there is likely tremendous variation across fields. Understanding that variation might help us better understand what causes the gender gap and how to remedy it.
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I’ve been doing some reading on officer and director fiduciary duties to creditors, and I am surprised that how much the academic and practitioner consensus seems to have settled on the notion that, in light of the Delaware caselaw following Gheewalla, it is essentially impossible for creditors to bring a fiduciary action against a board. Namely, because Delaware caselaw has held that such claims are derivative (with all the procedural limits thereon) and have narrowed the duty to apply, if at all, to cases of actual insolvency, most claims will not be viable. Moreover, most authors implicitly assume that these claims are subject to the internal affairs doctrine (i.e., that they are subject to Delaware law no matter where the case is brought).
That analysis seems right to me only if we are sure that these sorts of claims arise out of the corporate form. But if creditor fiduciary duty claims instead arise out the debtor-creditor relationship itself, then it is not clear to me Delaware gets to decide these issues. Indeed, more often New York would seem to provide the relevant law (if the debtor-creditor relationship is subject to New York law). Of course, some might argue that the debtor-creditor relationship is purely contractual, but it strikes me that the source of these claims is a greatly under-discussed issue.
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Cathy Hwang and Matt Jennejohn, two of the brightest young stars of the contract world, just put up a paper summarizing their view of one of the exciting new directions that contract research is taking. They describe it as the study of contractual complexity ("The New Research on Contractual Complexity", is their title). But I don't like the term "contractual complexity" at all, since I simply cannot take seriously the idea that anything that lawyers do is all that complex. Convoluted, confused and obscure, yes. But complex? Hell no. What I see their wonderful paper as being about is the new research on the production of contracts. As they point out, it all starts from the foundations laid in a set of important papers by the brilliant Barak Richman. Barak has long been puzzled as to why contract scholars have generally had little interest in how contracts are produced — even though key assumptions about the production process form the backbone for theories and doctrines of contract interpretation (something that contract scholars, old and new, do care deeply about).
And now we have an entire cool new set of papers by folks like Rob Anderson, Jeff Manns, Dave Hoffman, Tess-Wilkinson Ryan, Michelle Boardman, Julian Nyarko, John Coyle, Mark Weidemaier, Adam Badawi, Elisabeth de Fontenay, Anna Gelpern and, of course, Cathy and Matt (and more). Some using fancy empirical techniques well beyond my capacity (yes, those are complex), others use cool experiments (again, complex and beyond my skill level) and still others use interviews (yup, complex).
Three cheers for the study of how contracts are produced — complex ones, confused ones and all the rest.
The ssrn link to Cathy and Matt's paper from the Capital Markets Law Journal is here:
Their abstract reads:
In the last few years, the academic literature has begun catching up with private practice. In this essay, we review the growing literature on contractual complexity and outline its key insights for contract design and enforcement. Our purview is broad, capturing new theories and new empirical tools that have recently been developed to understand contractual complexity. We also propose avenues for future research, which we extend as an invitation to academics and practitioners as an opportunity to further the collective knowledge in this field.