James J. White

Boilerplate and Economic Power in Auto Manufacturing Contracts

This article studies the standard form contracts used by automobile manufacturers to purchase auto parts. It explores how the contracts reflect divisions of bargaining power, asymmetric information, problems of hold-up and renegotiation, and market competition. Based on interviews with representatives of buyers and suppliers, the article also describes the process of drafting the forms, the negotiation over price and other terms in the shadow of these forms, and the opportunities for non-drafters to extract improved terms. Some of the main lessons are: (i) The terms of the contracts and the bidding process prevent ex-post hold-up by suppliers (in contrast to the claims made by Benjamin Klein and others based on the GM/Fisher Body contract); (ii) There is surprisingly little ad-hoc tailoring of terms, even when such tailoring can increase the surplus from the deal; (iii) Internal organization structures are harnessed effectively to secure favorable bargaining outcomes; (iv) There is a significant variation between the standard forms utilized by the big automakers, in some of the most important aspects of the deals. This variation suggests that some of the terms are inefficient.

A Footnote for Jack Dawson

Jack Dawson, known to many at Michigan as Black Jack, taught at the Law School from 1927 to 1958. Much of his work was published in the Michigan Law Review, where he served as a student editor during the 1923-24 academic year. We revisit his work and provide a footnote to his elegant writing on mistake and supervening events. In Part I, we talk a little about Jack the man. In Part II, we recite the nature and significance of his scholarly work. Part III deals briefly with the cases decided in the last twenty years by American courts on impracticability, impossibility, mistake and frustration of purpose. We focus particularly on the afterlife of the notorious Alcoa case that was the subject of Jacks last articles. Part IV concludes with some speculation on the reasons for the different responses of German and American courts to claims of mistake or supervening events.

Scholarly Books: What, To Whom and Why

mission. In certain arenas, tracing an idea from its origins to its ultimate application is straightforward. For example, the evolution of Germanys Schlieffen plan for invading France can be traced with little difficulty from the circumstances responsible for its birth, through years of refinement, to its eventual application in World War I.1 The development and acceptance of a medical innovation such as a new drug or type of treatment provides another useful illustration. One can easily reach back to an innovations origins in basic scientific research and development and trace its progress through applied research, clinical investigation and gradual acceptance by practitioners.2 In contrast, the progress from idea to act in the law is obscure and difficult to trace.3 It is often impossible even to reach agreement whether a