Wednesday, March 22, 2017
8:30 AM - 9:30 AM
This lecture will analyze and explain how framework contracts are new governance structures, offering firms a competitive edge in an increasingly competitive global economy.
Scholars tie their development to the de-verticalization of the firm and the new production economy, one in which firms are choosing to enter into master supply agreements with external firms to leverage the expertise of others and lower costs rather than producing the goods needed for production internally.
These framework contracts raise a number of important issues for contracts lawyers and scholars. Are these agreements enforceable when they are entered into? Does the law (including Article 2) need to be revised to take account of these agreements? Does the law matter or are these agreements mainly a way to “leave space” for informal enforcement? When does legal enforcement of these agreements matter and why do parties enter into these agreements that are, at least at signing, non-enforceable due to the absence of a quantity term?
Ideally, these agreements offer many advantages. Parties enter these agreements to control contractual hazards, seeking high quality goods with less shirking and innovation from suppliers to meet changing demands all within an abbreviated time schedule due to “just in time production.” These framework contracts represent proactive ways to solve problems before they materialize.
Lawyers advising clients on these agreements should realize that they are subject to the same stresses as any other exchange agreement. Lawyers can learn from these failures to enhance their advice to clients entering master supply agreements.
Juliet P. Kostritsky
Everett D. & Eugenia S. McCurdy Professor of Contract Law
Juliet Kostritsky teaches contracts, sales, advanced contracts, law and business, and commercial paper at Case Western Reserve University School of Law. She joined the law school in 1984 after practicing in New York with Milbank, Tweed, Hadley & McCloy.
Kostritsky is a member of the American Law Institute (ALI). Her works in progress include “Efficient Contextualism” (co-authored with Peter M. Gerhart) and “Finding a Trend Toward Delaware as the Choice of Law in Merger Agreements” co-authored with Wojbor Woyczynski, Kyle Chen and Ben Robertson.
She has been selected as teacher of the year for the 1L class five times (2001, 2002, 2004, 2007 and 2013) and honored by Case Western Reserve University Alumni Association’s Board of Directors for her teaching in 2003).
Kostritsky's most recent article “The Law and Economics of Norms” appears at: 48 Texas Journal of International Law 465 (2013). She presented the solicited paper at a conference, “Is there Such a Thing as Custom in Modern European Law,” at the University of Texas School of Law in April 2012. In 2011, she presented “Contract Interpretation: Judicial Rule Not Party Choice” in the United Kingdom at Sheffield at a conference sponsored by the Society of Legal Scholars Symposium. Two other recent articles include: “Contract as Promise and Contract Interpretation,” solicited for the Suffolk Law School Symposium dedicated to Charles Fried (45 Suffolk Law Review 873 (2012)), and “Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value.”
Her article “Uncertainty, Reliance, Preliminary Negotiations and the Hold Up Problem” was accepted for presentation by the American Law & Economics Association and presented at ALEA’s annual meeting May 16-17, 2008, 91 SMU Law Review 1377 (2008). Her article "Plain Meaning vs. Broad Interpretation: How the Risk of Opportunism Defeats a Unitary Default Rule for Interpretation" was accepted by the American Law and Economics Association and presented paper at Harvard Law School on May 6, 2007 it was published in the Kentucky Law Journal.
Another paper was solicited for a symposium on “Freedom from Contract” sponsored by the John M. Olin Center for Law and Economics, the Contract Enrichment Fund, and the Wisconsin Law Review was published as “Taxonomy for Justifying Legal Intervention in an Imperfect World: What To Do When the Parties Have Not Achieved Bargains or Have Drafted Incomplete Contracts" in the 2004 Wisconsin Law Review. Further publications include: "Judicial Incorporation of Trade Usages: A Functional Solution to the Opportunism Problem” (Connecticut Law Review 2006), "The Rise and Fall of Promissory Estoppel or is Promissory Estoppel Really as Unsuccessful as Scholars Say It Is: A New Look at the Data, and "When Should Contract Law Supply A Liability Rule of Term? Framing a Principle of Unification for Contracts."
The City Club of Cleveland
850 Euclid Avenue
Cleveland, Ohio 44114