Showing papers on "Principal (commercial law) published in 1992"

Gathering Information before Signing a Contract

Abstract: After being offered a contract, an agent has the possibility to observe the state of nature. This enables him to refuse the contract in unfavorable states but burdens him with an observation cost. The authors show that the principal offers a contract in which the agent has no incentive to observe the state of nature and they explore its terms. Later, they show that the principal finds it profitable to organize competition between several agents, even though he has monopoly power and can push a single agent down to his reservation utility. Copyright 1992 by American Economic Association.

Once upon a Time in the West: Direct Effect and the Federalization of EEC Law

Abstract: There is little doubt that the development of direct effect has been one of the most significant achievements of the European Court of Justice (ECJ). This article will seek to explore how and why the ECJ has engaged on this enterprise. Much has been written on the way in which the concept of direct effect has been expanded since its inception.' While this literature contains many useful insights it will be argued that two central aspects of the topic have been insufficiently examined and only partially understood. These topics are of particular interest not only because of their inherent importance, but also because of the more general light which they cast upon endemic problems of public law and the nature of the judicial role. The first of the issues which will be considered concerns the rationale for the introduction of direct effect. Legal systems have two principal mechanisms through which to enforce the norms which comprise the system. They may choose to rely on public enforcement by the state or an organ thereof. To rely solely on this species of enforcement can, however, be inefficient, inefficacious, or both. The reasons for this may differ depending upon the precise legal area which is in question. The difficulties which beset public enforcement in the sphere of antitrust or competition policy may not be the same as those which operate in other contexts. Notwithstanding these differences of detail, it is common for public enforcement per se to generate problems which cause a legal system to supplement it by allowing private actions brought by individuals. The experience within the EEC provides a particularly good example of this

What's Standing After Lujan? Of Citizen Suits, "Injuries," and Article III

Abstract: Who is entitled to sue the government? What kind of injury must they show? This essay explores the history and content of the law of "standing." It turns out that the modern requirement of an "injury in fact" does not fit with the original understanding of the constitution, and that it depends on very contemporary ideas, connected to the original attack on the regulatory state and the New Deal. It also raises quite deep conceptual problems. One of the principal goals of the essay is to resolve those problems and to suggest future directions for the law of standing.

Re-Inventing Rulemaking

Abstract: I have only two principal disagreements with Bob Anthony. First, I believe that a court should not go behind the objective terms of a statement of agency policy to speculate about whether the statement was "really intended" to bind the public. If by its terms an agency's general statement of agency policy is limited to establishing general policies and explicitly states that the policies must be justified de novo in subsequent applications where the policies are challenged, then a court should not invalidate the policies-on the grounds that, contrary to what the agency's statement says it is, the court thinks that it is "really" or "practically" a "non-rule rule" made without benefit of proper rulemaking procedures.1 Second, I believe that courts should not attempt to force all agency policymaking into the mold of notice-and-comment rulemaking. Noticeand-comment does not always provide genuine public participation in legislative rulemaking; it is useful primarily as a record-making device and is generally employed when a rule is in near-final form.

The Comparative Efficacy of Tort Law and Regulation for Environmental Protection

Abstract: During the last two decades those interested in environmental improvement have turned to regulatory agencies, particularly in the U.S. to the federal Environmental Protection Agency, as the principal instrument for achieving their ends. Certainly these regulatory institutions play an important role in deterring the considerable damage done by environmental pollution. But long before the creation of the U.S. Environmental Protection Agency (EPA) or the many state EPA's, and before the principal pollution control statutes were enacted, the common law of tort provided a seemingly powerful set of rights to pollution victims that might also deter damaging pollution discharge. A person was entitled to the enjoyment of his property free from unreasonable interference from pollution, and riparian property owners were entitled to the flow of water undiminished in quantity and quality. This paper considers whether the focus on government regulation by the public and by economists has ignored an important and effective private tool for improving environmental management, and what role tort might play in the future. The paper will review what we know about the performance of the tort system and the regulatory system with regard to their ability to control pollution discharge and to limit the harm that such discharge causes. The review concentrates on the United States, with some consideration of Canada, and on the effectiveness of policy rather than on its economic efficiency.

From Criticism to Construction in Modern Critical Legal Theory

Abstract: The American Critical Legal Studies Movement stands as the most influential critical movement in law since Legal Realism, already exerting a subtle yet pervasive influence on the direction of scholarship in the Anglo-American legal tradition. Yet alongside the emergence of Critical Legal Studies, there is a proliferation of European Critical Theory of law which has its origins in the writings of the contemporary German social theorists Jurgen Habermas and Niklas Luhmann.' The notable characteristic of these modem critical legal theories is their aim to move beyond criticism to the construction of novel conceptions of law which demonstrate the capacity of law both to effect and regulate significant social change. Unlike their predecessors, these modem theorists attempt to show that programmes of social change may be engineered by developing the potential for such change that lies within existing legal rules and doctrines, and not by other non-legal means. Accordingly, this paper does not endeavour to describe the critical element of contemporary critical legal theory but rather to evaluate its success in moving beyond criticism to the required conceptions of law. I shall attempt to show that this reconstructive aim may be accomplished only if two intricate hurdles are overcome. For want of less awkward terms, I call these hurdles 'legal nihilism' and 'circularity'. I shall further contend that the principal solution to these two obstacles is to establish that law has what I shall call 'transformative potential'. The problem of legal nihilism takes two forms.2 Firstly, it manifests itself in a loss of hope in the possibility of moving beyond criticism of law to the creation of a new conception of law. Secondly, it is represented by scepticism of the law's

A Theoretic Analysis of Corporate Auctioneers' Liability Regimes

Abstract: In Schneider v. Lazard Freres & Co. a New York appellate court greatly expanded the liability of investment advisers working as corporate auctioneers. Under this new legal regime, auctioneer/advisers accused of simple negligence are exposed to billions of dollars of potential legal liabilities. This article first reviews the existing law covering auctioneer/advisers and shows that the Schneider decision conflicts with the law governing general auctioneers and with the law governing the role of advisers and directors during the sale of the corporate control. Next, using an auction-theoretic framework, this Article shows that Schneider will likely result in: (1) increased indemnification of auctioneer/advisers by corporations; (2) reduced net proceeds to selling company shareholders when there is a sale of the corporation; (3) increased use of pure cash as means-of-payment in sales of corporations; and (4) fewer sales of corporations. Schneider's net impact therefore is to place shareholders in a less advantageous position than under prior law. To demonstrate these economic effects, the authors employ a combination of principal/agent theory and auction theory. This is natural, for the advisers are hired by the directors to conduct an auction. A simple principle/agent model is the basis for the authors' predictions of indemnification; if indemnification does indeed occur, the selling corporation retains the Schneider liability. Rational bidders for the corporation, knowing they will assume this liability, will lower their bids, and auction theory predicts that the expected high bid will fall by more than the expected Schneider liability.Thus, the net effect on the selling shareholder is negative: the lower price more than offsets expected proceeds from legal suits.

Air and space law : de lege ferenda : essays in honour of Henri A. Wassenbergh

Abstract: Foreword. Preface. Biography of Henri A. Wassenbergh. Principal Publications and Presentations of Henri A. Wassenbergh. Acronyms and Abbreviations. Treaties and other Instruments. Part I: Public Air Law. Part II: Criminal Air Law. Part III: Private Air Law. Part IV: EEC Air Law. Part V: Space Law. Index. Tabula Gratulatoria.

Law Review Usage and Suggestions for Improvement: A Survey of Attorneys, Professors, and Judges

Abstract: It's fashionable to criticize law reviews. In the literature on law reviews, author after author lambastes the journals for their content and their style, and only the rare, obstinate defender attempts to counter the view that the principal medium of legal scholarship does nothing right. The attacks on law reviews are often entertaining, with authors letting loose strings of invectives and snappy prose, elements of style that the critics readily point out are missing from most publications. While this complaint literature may be amusing, and occasionally does ring true, the criticisms inevitably are based on personal views supported solely by anecdotal evidence. No one has systematically asked law review consumers what they think. This survey project attempts to remedy the lack of empirical data. We asked randomly selected attorneys, judges, and law professors a series of

Enterprise Liability and Insider Trading

Abstract: I PREFACEIn an inconspicuous clause of the Insider Trading and Securities Fraud Enforcement Act of 1988 (ITSFEA),(1) the securities industry won for itself an immunity that will be the envy of other industries that are afflicted with statutory liabilities for pollution, unsafe products, ad other harms In private suits for violations of this Act, employers are not liable for offenses of their employees if the employers acted in good faith and did not induce the violations(2) I will call this the rule of "rebuttable liability"This novel provision rejected not only the rules of liability that most federal courts had applied under the principal Securities Acts,(3) but also a centuries-old tradition of the common law of torts(4) It was, moreover, hard to reconcile with Congress' professed purpose in enacting ITSFEA to provide "greater deterrence, detection and punishment of violations of insider trading"(5)Under traditional tort law, which most federal courts apply to liabilities under the Securities Acts, employers are liable for the frauds of their employees committed within the scope of their employment or authority without regard to the guilt or innocence of their employers(6) Federal court decisions in the decades preceding adoption of the Securities Acts had imposed liability on employers for their agents' frauds, even in cries that a Restatement Reporter found extreme(7) The governing principle has been called "vicarious liability,"(8) "respondeat superior,"(9) and most recently "enterprise liability"(10)ITSFEA's rejection of one of the axioms of tort law suggests a number of questions Is the rebuttable liability principle more suitable than enterprise liability for insider trading offenses, or for securities frauds in general? If so, is it preferable for torts in general? Or is it, on the other hand, a gift to the securities industry that was slipped into ITSFEA without adequate consideration or justification?In approaching these questions, I will start by reviewing the triumph of enterprise liability in Anglo-American tort law, and compare it with various forms of rebuttable liability that exist in foreign law (Part II) I will then review the rivalry between the two systems of liability in securities law that flourished in federal courts until 1990 (Part III) This review will be followed by an analysis of the commands and implications of ITSFEA (Part IV), after which I will speculate on the consequences of the choice between the two systems of liability (Part V) I will conclude with some guesses about the next steps in the rivalry between these principles (Part VI)I will not, however, revisit the perennial dispute between defenders and denunciators of insider trading(11) Rather, I will address the means of effectuating the policies against insider trading that have flourished in federal courts since 1946 and have been emphatically endorsed by Congress in the Insider Trading Sanctions Act of 1984 (ITSA)(12) and the Insider Trading and Securities Fraud Enforcement Act of 1988 (ITSFEA)(13)II ENTERPRISE LIABILITY IN OTHER CONTEXTSA THE PREVALENCE OF ENTERPRISE LIABILITYThe radical significance of excluding enterprise liability from suits on account of insider trading gains perspective when viewed in the light of the principle's conquest of other areas of tort law Enterprise liability was unknown to the sophisticated legal system of ancient Rome and to the cruder system of medieval England Under those regimes, employers were generally liable only for their personal misdeeds, as explained by Oliver Wendell Holmes, Jr, in his classic history of agency(14) But the common law switched, about three centuries ago, to a principle that imposed liability on employers for the torts of their employees and agents committed in the course of their employment or authority, regardless of the employers' fault(15) The principle was applied to frauds as well as to physical injuries …

The Selling Real Estate Broker and the Purchaser: Assessing the Relationship

Abstract: I. INTRODUCTION Residential real property sellers have traditionally employed licensed real estate brokers(1) to find suitable purchasers for their properties. In a typical real estate transaction, the broker and the seller enter into an agency relationship through written agreement, thus creating a fiduciary relationship between the seller, as principal, and the broker, as agent. On the basis of this fiduciary relationship, the broker is required to act with utmost good faith toward the seller in protecting the seller's best interests.(2) While the broker's duty to the seller is clearly recognized, an increasing number of courts have also recognized a legal duty owed by the broker to the purchaser.(3) The uncertainty of the exact nature of the relationship between the selling broker and the purchaser has been confusing to those in the real estate industry as well as to the general public. Understandably, the broker is uncertain as to his duties because of the legal predicament in which he finds himself. The broker is obviously aware that as the seller's agent he owes a fiduciary duty to the seller. In addition, the broker is becoming aware of a duty he owes to the purchaser--a duty which remains unclear but appears to be expanding. Both the broker and the prospective purchaser need direction in understanding the precise nature of the broker's duties. This comment analyzes this broker/purchaser relationship. Part II reviews existing agency law applicable to a selling broker and explains how this law is reflected in a broker's relationship with a purchaser. Part II also discusses possible problem areas arising out of the establishment of an agency relationship between the selling broker and the purchaser, including the need to rely on the court to find an agency relationship, dual agency, and subagency in Multiple Listing Service transactions. Part III reviews the duties owed by the selling broker to the purchaser absent the establishment of an agency relationship. In conclusion, Part IV proposes not only that the broker be required to disclose to prospective purchasers that he is in a fiduciary relationship with the seller, but also that the broker be required to conduct a diligent inspection of the property and disclose any material defects to the purchaser. II. AN AGENCY RELATIONSHIP? A. ELEMENTS OF AN AGENCY RELATIONSHIP An agency relationship generally arises when (1) one party manifests its intention that another shall act on its behalf; (2) the other party consents to such relationship; and (3) the party for whom the other acts has the right to control the ultimate direction of the cooperative effort.(4) The first element is the principal's manifestation of his intent that the agent act for him.(5) In the typical agency relationship, one authorizes another to act on his behalf either by written or spoken words or by conduct through which another may reasonably believe that such authorization to act was given.(6) The second element requires that the agent accept responsibility to act for the principal.(7) No specific words are necessary to find such an acceptance. If the principal communicates to the purported agent his desire that the agent act on his behalf, and the agent subsequently acts as requested without expressly accepting the responsibility, the principal may reasonably infer from these actions that the agent acted on the principal's behalf.(8) The final element requires that the principal has the right to control the direction of the cooperative effort.(9) Though the principal may exercise the right to control either before the agent acts, at the time the agent acts, or at both times, the principal need not exercise this right at all.(10) To establish an agency relationship, the principal needs only to exhibit the right to control the ultimate direction of the cooperative effort, not a specific act As a result, the principal may have no control over the actual physical acts of an agent. …

Substance abuse countermeasures for the railroad industry

Abstract: Rule G is the prohibition contained in railroad operating rules which forbids employees from using, possessing or being under the influence of intoxicants or other drugs while on duty or subject to duty. Maturation of chemical testing technologies offered promise that the looseness might be removed from carrier enforcement of Rule G, and the legal climate seemed conducive to a more or less direct Federal role in the process. The principal alternate model for addressing the problem was through employee assistance programs, which provided help to employees of the major railroads who were affected by chemical dependencies. As this paper describes, both of these models were to be employed. A third model was to be born in the private sector--albeit with public endorsement and support--out of the struggle to define a fair and effective regime.

The Model Law in Hong Kong – Two Years On

Abstract: THE UNCITRAL Model Law came into force in Hong Kong on 6 April 1990. Before it was enacted, fears were expressed that the Courts would be beset with applications involving the construction of the Model Law, especially Article I which deals with its applicability. These fears have, thus far, proved groundless and the purpose of this article is to examine briefly why that is so and then to consider such authorities on the Model Law as there have been. There would appear to be two reasons why the Courts have not been over-troubled so far. First, the transitional provisions ensure that many arbitration agreements still fall to be considered under the old law. The second reason is that the Model Law itself is fairly straightforward in language and may not at any time give rise to any serious problems. Section 26 of the Arbitration (Amendment) (No. 2.) Ordinance 19891 provides that the Model Law does not apply to arbitrations in respect of agreements entered into before 6 April 1990. In such cases, the principal Ordinance (i.e. the law prior to this Ordinance) continues to apply as if the 1989 (No. 2.) Ordinance had not been enacted. In this connection it is important to bear in mind that the Arbitration (Amendment) (No. 1.) Ordinance 1989 which provides for a complete ‘open house’ with regard to legal representation in both domestic and international arbitrations in Hong Kong forms part of the principal' Ordinance for this purpose. In cases where the Agreement is entered into before 6 April 1990 but the arbitration commences after that date the position is the same except that three provisions in the 1989 (No. 2.) Ordinance do apply but none of these relate to the Model Law. These three exceptions relate to reporting restrictions, conciliation and the …

Unconscionable And Misleading Conduct: How The Trade Practices Act Is Used And The Duty To Advise

Abstract: Section 52 of the Trade Practices Act 1974 (Cth), in contrast with most obfuscatory legislative drafting, is simplicity itself. The Section says that: A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 52 has no criminal sanction. Its sanctions are damages, injunction and the granting of a wide range of "other orders" under s.87 of the Act. Other more specific sections of the Act, in particular s.53 and s.53a, which involve conduct which would, in all usual circumstances, also infringe s.52, give rise to both civil and criminal sanctions. One of the most relevant aspects of s.52 is that it impacts not only on the principal offender but upon those who aid and abet or counsel or procure a breach of the section or who are "knowingly concerned" in such a breach. Usually this means that not only is a company liable for misleading or deceptive conduct engaged in by it but also the Director, Officer or Employee involved in such conduct is personally liable for its consequences. The writer has elsewhere described s.52 as a section which has changed the length of the Chancellor's Foot in but Twenty Three Words, such has been its impact in the fields of tort, contract and in areas as diverse as company law and defamation. Allied with the topic of misleading or deceptive conduct is that of "unconscionable conduct" - a concept stemming from the 1983 High Court decision in Amadio and codified in various similar but slightly differing statutes, the most well known of which is s.52a of the Trade Practices Act.

The Survival of Civil Law in North America: The Case of Louisiana

Abstract: There are legitimate historical reasons for speaking seriously about a civil law heritage in Louisiana. French and Spanish civilian influences permeated the Louisiana Civil Code when it was first enacted in 1808. The current status of the civil law in Louisiana, however, is problematic; the American common law methodology has made significant inroads into the operation of the current legal system. Separated from its parenting source by geography, time, and culture, Louisiana civil law has become an ill-defined civilian entity that, in reality, is more of a common law process with civil law trappings. The civil law nonetheless has a destiny in Louisiana and other American jurisdictions. The development of international trade and commerce creates a global need to accommodate and merge different legal traditions. The future mission of the civil law in North America may reside in its ability to provide a sensible procedural and substantive model of law for the resolution of international commercial disputes.The internationalization of law and legal practice offers an opportunity to update, adjust, and adapt Louisiana's civil law heritage to the realities of contemporary society and to resurrect it from the ashes of historical memory. The national and international legitimacy of Louisiana civil law lies in its comparative law role as a means of bridging the gap between the two principal Western legal traditions. The familiarity with opposing legal concepts and methodology and the academic sophistication in teaching different branches of law could make Louisiana a training ground for American and European lawyers who wish to engage in the practice of transnational commercial law.

Authority and Necessity in the Law of Agency

Abstract: The rules relating to agency of necessity are culled from so many disparate sources that it has proved consistently impossible to forge the law into one coherent body of doctrine. ' The origins of this agency are found in the authority of the shipmaster to act in emergencies as agent of the shipowner in order to preserve the ship and her cargo, and the acceptor of a bill of exchange for the honour of the drawer who has an entitlement to be reimbursed by the person for whom he pays. The rules have been extended to encompass carriers of goods by land faced with crises and also apply, but with less certainty, to other bailees. The deserted wife's right to pledge her husband's credit for necessaries was, formerly, drawn within agency of necessity and, currently, agency arising from cohabitation is within this category. Finally, clinging most precariously to the rules of necessity is the troublesome area corresponding to the Roman law classifilcation of negotiorum gestio.2 This unwieldy conglomerate has little in common, ranging as it does from commercial agency relationships rooted in formal contracts between principal and agent, to negotiorum gestio where strangers intervene on behalf of others without even the latters' consent. It is oiEten assurhed that it is an emergency affecting the principal which provides the lowest common denominator of these situations, but even this notion is not comprehensive as, in the deserted wife's agency, the necessity is patently her own, not that of her principal. Not surprisingly, agency of necessity remains fragmented and bound loosely by the practical conditions which render it operative, viz there must be a necessitous situation, communication with the principal must be impracticable and the agent must act bonafide in his principal's best interests. Overall, there has been a marked reluctance to extend the notion of necessity beyond the recognised categories.3 It would thus seem to be a reasonable assumption, at least in situations where there is an explicit pre-existing agency relationship, that this apparently immutable doctrine would have substantial theoretical foundations. In fact, even within a contractual agency the juridical basis of agency of necessity remains indistinct. Unfortunately, whilst the recent litigation in Industrie Chimiche Italia Centrale and Cerealfin SA v Alexander G. Tsavliris & Sons Maritime Co (The Choko Star)4 settles a practical