American Business Law Journal最新文献

It is common knowledge that climate change concerns have prompted countries around the world to plan for a reduction in their fossil fuel dependencies. Yet while much attention has been placed on new low-carbon sources of energy such as wind, solar, and nuclear, comparatively little focus has centered on the commodity inputs, critical metals, needed to create this clean energy. In this article, we argue that at the heart of the energy transition is a commodities transition, representing an unprecedented international reliance on critical metals, which have traditionally been capricious commodities traded in global markets. Indeed, nations around the world have begun to stockpile these geographically concentrated, geopolitically potent materials which are poised to take center stage. This critical commodities transition accompanying the energy transition is underappreciated in the legal scholarship despite its widespread implications for many areas, including financial regulation. We use the story of the London Metal Exchange's March 2022 nickel debacle to turn a spotlight on this development and to highlight several areas of existing regulatory frameworks in derivatives markets that are ripe for reexamination given this commodities evolution. In doing so, this article sets the stage for a research agenda that will examine how regulators and financial innovators can build strong metal markets to enable secure metals supply chains and to provide the basis for a sustainable energy transition.

The recurrent series of crises demonstrates that supply chains are frequently susceptible to disruption. It is imperative they adapt to evolving economic, ecological, social, and geopolitical circumstances. Economists and management scholars have introduced contract governance models that facilitate adaptation and collaboration; however, these models have been largely ignored in the legal field. This article addresses a significant gap in the existing literature on commercial contracts, which is currently fragmented between legal, economic, and organizational perspectives. The article proposes a functional, proactive contracting framework focused on joint value creation. The framework integrates insights from transaction cost economics, relational contract theory, relational view, functional contracting, proactive contracting, and legal design. It provides an instrument for contracting parties to co-create contracts that enhance performance, reduce transaction costs, devise contingency plans, and utilize contracts as user-centric tools to support relational governance practices and sustainability. A case study on Finnish Alliance Model Contract Clauses demonstrates the benefits of this approach in fostering more collaborative and resilient commercial contracts.

The growing prevalence and magnitude of climate-related natural disasters are perpetuating a climate debt trap in which recovery costs compound over time, progressively eroding the capacity of governments to obtain financing to respond to them. How can countries participating in global financial markets respond? This article focuses on natural disaster clauses in sovereign debt contracts, which enable a national government to temporarily suspend payments to its creditors when a natural disaster strikes the country. Natural disaster clauses are analyzed and critiqued as an example of contract innovation amidst ongoing debates about legal reform of the global financial system in response to climate change.

The national pension debt and COVID crises have collided. Post-pandemic economic decline has escalated existing financial strains on state and local pension plans, impacting workers and the public welfare. With unfunded obligations exceeding one trillion dollars, many of these plans are in jeopardy. But the movement to reform government pension contracts has yet to adopt an anchoring idea, leaving judicial decisions in disarray and policymakers without guidance about how to shore up troubled retirement systems. The crux of the problem is the many meanings of contract under state and US Contract Clauses that prevent pension reform. This Essay endorses a promising path forward—contract minimalism. “Contract minimalism” concentrates on the duration of government pension contracts. It posits that public and private employment law should be treated the same. Like its private law counterpart, public sector employment at-will ought to consist of a daily contract interval. A contract-a-day concept entitles employers to change the plan prospectively, with employees receiving a proportionate share of benefits for work performed. Just as several agreements safeguard salaries for labor, they should also mirror the protection afforded to deferred benefits like pensions. Contract minimalism additionally puts public and private sector employers on the same legal footing as to the authority to change pension plan terms. Thus, it aligns public pension benefits with overlapping fields of law, placing them on a firm conceptual foundation. The minimalist approach also has the advantage over approaches that are insufficiently attentive to scarce government resources or employee old-age security. By protecting pension benefits early and incrementally, it advances a middle path with fairer, more coherent results. In the present post-pandemic era of hard choices, minimalism provides an equilibrium between the over- and under-protection of pension benefits.

The Community Reinvestment Act (CRA) was passed in 1977 as a response to redlining, the systemic discrimination against loan applicants who resided in predominantly Black neighborhoods. In enacting the CRA, Congress found that banks have a “continuing and affirmative obligation” to help meet the credit needs of the communities in which they are chartered. To that end, the CRA requires bank regulators to rate the record of each bank in fulfilling these obligations. While much has changed since 1977, some things have not. Financial services are now provided by a much broader set of entities including financial technology (fintech) firms, yet the CRA's mandates still just apply to banks. In addition, while the demographic compositions of neighborhoods have changed since 1977, Black applicants are still 2.5 times more likely than White applicants to be rejected for a home loan. On October 24, 2023, the banking agencies jointly issued final rules to “strengthen and modernize” the agencies' CRA regulations. While the updated rules do inject more objectivity in order to address persistent concerns about CRA ratings inflation, we contend that further amendments are needed to account for what has changed and what has not changed since its original enactment. In this article, we argue that the CRA continues to be a worthwhile endeavor, as it addresses gaps left by fair lending laws. To further its impact and address its many shortcomings though, we contend the CRA should be amended to also apply to nonbanks that provide financial services, to counter discrimination more directly, and to calculate CRA ratings more objectively.

Innovation is usually framed in terms of expanding the knowledge frontier or the commercialization of new ideas. However, it is much more than that. Innovation is also about providing greater well-being for society and the various stakeholders that support a firm's efforts to innovate. This article examines the paradoxical status of innovation and its related legal domain of intellectual property rights, which largely exists beyond the purview of corporate social responsibility (CSR) theory, practice, and discourse. To address this conceptual deficiency, this article interlinks intellectual property, innovation, and CSR to offer three contributions. First, this article provides a working definition of the various stakeholders that must be identified to define CSR goals related to innovation. A critical aspect of CSR is the identification of relevant stakeholders. Second, this article discusses how established CSR approaches will accommodate these innovation stakeholders. Third, this article introduces and positions the managerial strategy of open innovation as a feasible and desirable approach that ethically recognizes, engages, and balances the interests of innovation stakeholders with the interests held by the firm and society. The normative argument made is that the firm's fiduciary leaders have an ethical obligation to pursue open innovation practices as a default norm to achieve the best CSR results for the firm and its various innovation stakeholders.

The literature on stakeholder theory has largely ignored the difficult and central issue of how judges and firms should resolve disputes among stakeholders. When the issue is addressed, focus has largely been on the potential for management to use stakeholder theory as cover for rent-seeking or on disputes between classes of stakeholders. Sharply underappreciated is the potential for disparate interests within a stakeholder class. That potential is particularly acute due to a (largely education-driven) stark and growing class divide in the United States. There is a substantial difference between the interests of a highly educated professional and managerial elite and a pink-collar and blue-collar working class who mostly do not hold 4-year degrees. Despite their smaller numbers, the professional and managerial elite will frequently win out in intra-stakeholder disputes with working-class stakeholders due to their greater status, power, and influence. Because this class divide is cultural, social, and political, as well as economic, these disputes will go beyond financial pie-splitting to culture war issues. This threatens to be destabilizing for both the republic and individual firms and undermines both the practical and ethical arguments for the stakeholder theory.

Law and strategy (LAS)—the study of the law's role in competitive advantage—has developed rapidly and with substantial promise for over 20 years. However, at this critical juncture in its development, the LAS literature lacks both a systematic review of its impact and an organized call for future research. To fill this scholarly gap, this article reports two citation analysis studies that identify the overall impact of the literature as well as the specific influence of seminal articles in the field. We find that LAS is widely cited, has a substantial and diverse disciplinary reach, and, crucially, that the influence of its seminal works has not faded over time. Building on these findings, we recommend pathways for future LAS research, including more cross-disciplinary scholarship, a closer engagement with the related stream of proactive law, a deeper inquiry into ethics, more systematic theory-building and empirical work, and a global perspective that tests the boundaries of LAS beyond fully developed markets. We conclude that LAS has a promising future with the potential for a wide range of applications that address significant challenges facing law and business.

Should a court ever second-guess a contract, ignoring what the parties said and imposing something different? Contractual purists insist that the answer is no. But the messy nature of reality counsels otherwise. We have long appreciated that creating a “complete” contract, one that efficiently treats every potentially relevant contingency, is impossible. In particular, systematic risks that affect the entire economy fall beyond contract's realistic reach. When such events occur, they upset contractual frameworks, leaving parties shackled with obligations suited to a world that never came to be. At least in that context, second-guessing is vital. And that second-guessing can be understood according to a concept called anticontract. When systematic risks fundamentally upend contractual frameworks, this inversion of contract's basic principles paradoxically fulfills contract's goals. Anticontract does the opposite of all that contract law does: it adjusts rather than enforces; it looks ex post rather than ex ante; it prioritizes the public rather than the parties; and it provides no general rules, only particular results. It operates, in short, irregularly rather than regularly. In the face of realized systematic risks, anticontract thus paradoxically fulfills contract's goals by doing contract's opposite. In so doing, it redistributes losses to those most able to bear them at the microlevel, curing macroeconomic ills at their source. In essence, it creates social insurance for systematic risks that private contract cannot manage. In all this, anticontract can be understood as an instance of a broader phenomenon, the completion of law through equity. Anticontract thus represents an important way to understand the limits of contract and when to violate the principles of contract law.

Much like traditional credit scoring, decentralized credit scoring calculates a borrower's creditworthiness, but the fully automated process is executed on the blockchain by Decentralized Finance (DeFi) platforms. Originally, DeFi emerged as an alternative to the centralized traditional finance (TradFi) system; however, decentralized credit scoring combines DeFi data and traditional data that include a wide range of information sources, from traditional credit reports to social media information. Despite their fairness-oriented narrative, an examination of the business models of the protocols and entities operating in this space reveals that these hybrid scores are subject to the same algorithmic distortions that have been observed in traditional and alternative credit scoring models. Moreover, decentralized credit scores present their own distinctive set of fairness issues. Particularly, both upgrade to smart contracts and their reliance on external algorithms, known as oracles, which feed outside data, introduce heightened potential for error and bias in the credit scoring process. These “black box 3.0” issues can result in opaque automation of biased processes and perpetuate social injustices, requiring regulatory intervention to strengthen the linkage points between DeFi and TradFi and better protect consumers from the black box 3.0 consequences of decentralized credit scores.