"Agreeing to Disagree": Filling Gaps in Deliberately Incomplete Contracts
AbstractThis Article develops a new standard for gap filling in incomplete contracts. It focuses on an important class of situations in which parties leave their agreement deliberately incomplete, with the intent to further negotiate and resolve the remaining issues. In these situations, neither the traditional no-enforcement result nor the usual gap filling approaches accord with the parties' partial consent. Instead, the Article develops the concept of pro-defendant gap-fillers, under which each party is granted an option to enforce the transaction supplemented with terms most favorable (within reason) to the other party. A deliberately incomplete contract with pro-defendant gap fillers transforms into two complete contracts, each favorable to a different party, with each party entitled to enforce only the contract favorable to her opponent. Under this approach, partial consent gives rise to a correspondingly intermediate burden of liability. The Article demonstrates that this regime promotes the interests of negotiating parties who enter agreements-to-agree. It also identifies various doctrinal practices that already incorporate the pro-defendant gap filling logic.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Michigan John M. Olin Center for Law & Economics in its series University of Michigan John M. Olin Center for Law & Economics Working Paper Series with number umichlwps-1001.
Date of creation:
Date of revision:
Contact details of provider:
Web page: http://www.law.umich.edu/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-26 (All new papers)
- NEP-LAW-2004-07-26 (Law & Economics)
- NEP-REG-2004-07-26 (Regulation)
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).
If references are entirely missing, you can add them using this form.