Principles of Contract Design
Although transaction lawyers spend much time drafting contracts and related documents, they can contribute very significant value by designing transactions. Transactions should be tailored to the goals and circumstances of each set of parties, but there are some general principles that can guide the design process. This seminar examines some of these principles: such as the use of embedded options in contracts, of third parties, and of tailored procedures for dispute resolution and enforcement. Some of the readings and discussion will be at a fairly high level of abstraction, drawing on economic and sociological theories of contracting. The rest will closer to ground level, looking at particular types of transactions, such as franchising, construction, joint ventures, or start-up financing. We will also look at the process of innovation in contract design, including the role of lawyers and digital document production. Students will be required to write paper for the seminar, and encouraged to focus on a specific type of transaction.