Default Rules Research Articles

A Tale of Too Many Doctrines: Supervening Impossibility and the Sale of Goods

Contracts for the sale of goods contain three default rules addressing the problem of supervening impossibility: sections 7 and 20 of the Sale of Goods Act 1979 and the doctrine of frustration. This article uses a legal historical method to examine why this is the case and what the relationship between these rules is. It contends that the current approach is the accidental result of a series of historical contingencies and argues that it is unsatisfactory for several reasons. It then offers suggestions as to how the law might be rationalised. On a broader level, the inquiry provides a lens through which the wider history of supervening impossibility in English contract law can be explored. The article argues that our current conceptualisation of the law prior to 1863 is fundamentally flawed, and that this inhibits our understanding of how the earlier law both shaped and confused the development of a more general doctrine of supervening impossibility.

The Regulatory Offence Revolution in Criminal Justice: The Choice Architecture of Regulatory Offences

Courts, scholars, and lawyers tend to overlook one of the most salient features that differentiate crimes and regulatory offences: choice architecture. The concept of “choice architecture” refers to how the presentation of options shapes decision-making. This article argues that crimes and regulatory offences employ different forms of choice architecture in the criminal justice process. It advances three core arguments. First, in the charging and plea phase, regulatory prosecutions nudge defendants to plead guilty by default, while criminal prosecutions automatically enrol defendants into non-guilty pleas. Second, when assessing culpability (or moral fault), regulatory prosecutions incorporate inculpatory default rules that presume guilt and foster efficiency. In contrast, criminal prosecutions incorporate exculpatory default rules that presume innocence and aim to prevent wrongful convictions. Third, in the context of sentencing, impecunious defendants who are charged with a regulatory offence must often opt in to receive a proportionate sanction. Outside of mandatory minimum sentencing contexts, defendants who are charged with a crime enrol into a sentencing scheme that considers proportionality constraints by default. Ultimately, this article deepens our understanding of the different choice architecture that governs crimes and regulatory offences, and lays the foundation for future scholarship that explores the criminal justice system’s choice architecture more generally.

Overcoming Language Barriers in Contracts – A South African Perspective

Language forms the basis of written contracts, but the use of language may also function as a barrier to contracting parties, particularly when the parties are not proficient in the commercial language of choice, such as English in the case of South Africa. The plain language movement and specifically legislative interventions have placed significant pressure on lawmakers to reform the use of traditional legal English, and consequently, traditional drafting styles. However, many contracts continue to exhibit convoluted language, legalese and poor visual appeal, which ultimately functions as a language barrier for many people. This article examines the various language barriers that exist in contracts from a South African perspective. It does so by assessing the barriers that exist under first, the common law (or the so-called default rules), second, the use of standard contracts, and third, the resistance to the use of plain language as well as the limited application of existing plain language legislation in certain types of contractual engagements. The author proposes dismantling the language barriers by adopting both textual and visual communication devices in order to achieve clear and comprehensible language in all types of contracts. Furthermore, it is suggested that such communication devices should not necessarily be limited to consumer contracts that are legislatively required to comply with plain language requirements. It is only by dismantling existing language barriers that social justice within contracts can be achieved in a society with diverse language proficiencies, such as South Africa. Therein, this article offers insights that are relevant not only within the South African context but also for countries that may face similar language barriers characterised by multiple languages and varying language proficiencies within their populations.

Exploring boundary conditions of the single-code/default strategy in pigeons.

To investigate the extent of adoption of more efficient coding strategies, pigeons learned, in three experiments, a symbolic matching-to-sample task that featured an asymmetric sample-comparison mapping. In all experiments, one comparison was correct following one of the samples (one-to-one mapping), and another comparison was correct following the remaining samples (many-to-one mapping). The experiments differed in sample number; Experiment 1 featured three samples, Experiment 2 five samples, and Experiment 3 seven samples. Our goal was to assess the adoption of a single-code/default coding strategy, which establishes two response rules: one rule specific to the sample mapped one-to-one (the single code), and another rule to be applied following any other sample (the default rule). Alternatively, the animals could establish more response rules, one per sample. Thus, the single-code/default strategy allows learning a task via a reduced number of response rules, and the more samples are mapped many-to-one, the greater the savings it allows. As such, the three experiments should progressively be more amenable to the adoption of this strategy. Overall, the adoption of a single-code/default strategy was not widespread. When taken together with previous results, the present study suggests that the amount of training may affect the coding strategy pigeons adopt. Additionally, our results underscore that individual differences are a fundamental aspect to consider when studying learning flexibility.

Morphological processing across the adult lifespan: a tale of gains and losses

Despite increasing research on language in aging, age effects on morphological processing have received comparatively little attention. Some previous evidence suggests that while regular morphology (e.g., walk-walked) may remain relatively stable in older age, irregular morphology (e.g., bring-brought) shows signs of age-related decreases in processing efficiency. However, the underlying reasons for these declines are unclear. The current study sought to investigate the cognitive underpinnings of age-related effects on German noun plurals: default plurals (posited to follow a default rule [e.g., Zebra-Zebras 'zebra(s)']) and predictable and unpredictable non-default plurals (closed class plurals, in which the plural is either phonologically predictable from the singular [e.g., Flasche-Flaschen 'bottle(s)'] or unpredictable [e.g., Nest-Nester 'nest(s)']). In a cross-modal priming experiment, 283 healthy German native speakers (aged 18–91 years) performed lexical decisions on singular nouns which take different types of plural affixes, and which were primed by either their plural form ("morphological condition") or an unrelated noun ("unrelated condition"). Additionally, several cognitive abilities (declarative, procedural, and working memory, interference control, processing speed) were tested to assess their mediating role for morphological processing. The results revealed distinct developmental trajectories for default versus non-default plurals: priming effects (unrelated-morphological condition) for predictable and unpredictable non-default plurals decreased with increasing age, with age-related declines in declarative memory mediating these declines. In contrast, priming effects for default plurals increased with increasing age. Although the reasons for this increase remain to be clarified, we suggest lifelong experience with the computation of these forms as a possible mechanism.

Financial market regulation and private law: a new frontier of transnational commercial law

Abstract Global financial markets are among the most extensively regulated markets in the world economy. This poses significant challenges from a private law perspective when regulatory rules interfere with private rights and obligations. This article examines the potential of transnational commercial law (TCL) to provide for a private law framework suited to the regulatory reality in global financial markets. The article finds that, while regulatory aspects are generally excluded from TCL instruments, notable exceptions to this general rule occur. Based on an analysis of the approaches undertaken in the Unidroit Convention of Substantive Rules for Intermediated Securities (Geneva Convention), including the accompanying Legislative Guide, the Unidroit Principles on the Operation of Close-Out Netting Provisions and the UNCITRAL Model Law on Secured Transactions, the article maps out three methods that allow for a reconciliation of private and regulatory rules: (i) the adoption of a flexible private law system including default and conflict rules; (ii) the use of opening clauses to allow deviations from TCL rules in accordance with international regulatory standards; and (iii) a codificatory approach through the development of a comprehensive and systematic legal framework consisting of both private law and regulatory rules. Finally, the article addresses potential obstacles and objections that future TCL instruments will face when addressing regulatory aspects. Overall, the article argues that an efficient financial market requires a foreseeable set of private law rules that—considering the continuous expansion of regulatory law—must address the pressing issues deriving from the interrelation of regulation and private law. However, the adaption of TCL instruments should be limited to common-sense financial market regulation that, even if differing from State to State, generally follows globally shared regulatory goals.

Logic-Based Explainable and Incremental Machine Learning

Mainstream machine learning methods lack interpretability, explainability, incrementality, and data-economy. We propose using logic programming (LP) to rectify these problems. We discuss the FOLD family of rule-based machine learning algorithms that learn models from relational datasets as a set of default rules. These models are competitive with state-of-the-art machine learning systems in terms of accuracy and execution efficiency. We also motivate how logic programming can be useful for theory revision and explanation based learning.

Management strategy evaluation of harvest control rules for Pacific Herring in Prince William Sound, Alaska

Abstract Management strategy evaluation (MSE) provides a mechanism to test the relative performance of alternative management strategies on a fishery. For Pacific herring in Prince William Sound, Alaska, no directed fisheries have occurred in over 30 years, providing an opportunity to evaluate potential management strategies before a fishery is opened. Here we evaluate and compare 10 harvest control rules (HCRs) ranging from simple threshold rules to rules accounting for population age structure, biomass trends, and weight distribution using an MSE integrated with a fully Bayesian stock assessment estimation model. We developed a utility function that shows simple threshold HCRs outperform the more complex rules, especially for catch stability. According to this utility function, the best rule had a lower limit threshold than the current default rule, while the worst rule had a higher limit threshold. Our simulations demonstrate that sufficient computing power exists for MSEs based on Bayesian estimation methods, thus opening a pathway for MSEs to simulation test probabilistic control rules, which provide a buffer against scientific uncertainty and should reduce the risk of overfishing.

Peripheral Detention, Transfer, and Access to the Courts

In the last forty years, immigration detention in the U.S. has grown exponentially, largely concentrated in the southern states and outside of the country’s metropoles. In turn, federal immigration officials routinely transfer immigrants from their communities to remote jails and prisons hundreds, if not thousands, of miles away, often in jurisdictions where the law is more favorable to the government. These transfers are conducted without notice or process and frequently occur on weekends or in the predawn hours, when offices are closed and interested parties are lucky to access voicemail. Federal immigration officials’ use of peripheral detention and transfer significantly affects immigrants’ access to the courts and their ability to raise detention challenges. Lurking beneath these issues lies a seemingly technical Supreme Court decision relied on by the government to seek dismissal of habeas actions filed by immigrant petitioners who have been ferried to faraway jails and prisons. In Rumsfeld v. Padilla, the Supreme Court held that the “default rule” in a habeas action challenging present physical confinement is that it must be brought in a petitioner’s “district of confinement” and that a petitioner can only name a single respondent: their “immediate custodian.” However, the history and development of immigration detention and of the habeas statute offer important insights into present debates about the primacy of Padilla in the context of transfer. A mining of these histories unravels the foundational premises on which Padilla relied and encourages us to question mechanical rules that silo immigrant habeas actions in faraway fora, away from evidence, witnesses, community, counsel, and the events giving rise to the detentions themselves.

Digital Cloning of the Dead: Exploring the Optimal Default Rule

Abstract We conducted a survey experiment in the U.S. to analyze how the consent or dissent of a deceased individual influences the social acceptability of digital resurrection. The results showed a substantial relative treatment effect of consent versus dissent, with a 2-point difference in acceptability on a 5-point scale. When the deceased had consented, 58 % of respondents viewed digital resurrection as socially acceptable, whereas this number was only 3 % when the deceased had dissented. These findings suggest that relevant legal regulations should respect the decision of the deceased. Our study then explored the optimal default rule using observational research: 59 % of respondents were against the idea of their own digital resurrection. An opt-in rule seems socially desirable, where the default is the prohibition of digital resurrection, and exceptions allow it only with consent from the deceased.

Changes and Reactions in the Fundamental Issues of Hungarian Company Law – Contributions to International Trends in Legal Regulation, Liability and Corporate Governance1

Throughout the first decades of the 21st century there have been numerous traditional and modern impacts on Hungarian company law. As a result of the codification of Hungarian civil law, the Civil Code of 2013 incorporated the previously effective substantive legal regulations of company law. Prior to this, Hungarian company law had undergone several modifications, beginning with the change of regime in 1989, through the years of its preparation to join the European Union, and during the initial phases of digitalization. Some more recent influences are, on the one hand, either international in origin (for instance: corporate governance, compliance), or, on the other hand, approaches taken from the legal debates on company law, which have evolved with the development of the law. Modern results demand both reconsideration and synthesis, in order to enable company law to fulfil its duties and achieve its purpose. Company law, corporate governance, mandatory and default rules, liability of director, liability of member, Hungary, Hungarian Civil Code, comply or explain, invalidity of memorandum of association, business association.

ISO GPS and ASME GDT standards – differences and similarities in definitions of measurands

Geometrical tolerances as tricky measurands are indicated. Crucial differences between the ISO and ASME geometrical tolerancing standards are discussed. It is demonstrated that, in many cases, both systems have different default rules. Moreover, for some identical graphical indications, interpretations are different. On the other hand, the standards contain similar arrangements in many cases. It is underlined that nowadays, due to the progressing globalisation, it is necessary to know these standards, bearing in mind that suppliers or customers specify requirements according to provisions from particular standards implemented in their companies. The above justifies the need for research exploring differences and similarities in both systems of standards. It is shown that the ISO GPS system standards, due to default independency principle, prefer to set production as cheaply as possible, while ASME, due to default provisions ( e.g. Rule #1, simultaneous requirement) puts stress on controlling product geometry more strictly, which is sometimes unnecessary.

The Behavioral Foundations of Default Effects: Theory and Evidence from Medicare Part D.

We show in two natural experiments that default rules in Medicare Part D have large, persistent effects on enrollment and drug utilization of low-income beneficiaries. The implications of this phenomenon for welfare and optimal policy depend on the sensitivity of passivity to the value of the default option. Using random assignment to default options, we show that beneficiary passivity is extremely insensitive, even when enrolling in the default option would result in substantial drug consumption losses. A third natural experiment suggests that variation in active choice is driven by random transitory shocks rather than the inherent attentiveness of some beneficiaries.

IP Law and Policy for the Data Economy in the EU

Abstract The current policy vision for Europe’s digital future centres around facilitating the availability of data by means of data access, sharing, and portability rights. In the existing legal framework, such rights are already foreseen in different legal instruments. In actual practice, however, (horizontal) data sharing is governed in the first place by contracts. Currently, well-established business practices and non-mandatory model contract terms are lacking. To reduce transaction costs and chilling effects in the sector, the main task would therefore be to provide a set of non-mandatory default rules or soft-law model contracts. The database maker’s sui generis right or trade secrets protection, mainstays of this area, have the potential to aggravate access problems and hamper efficient access and portability regimes. While the Trade Secrets Directive as a very modern and necessarily flexible instrument, on principle, is rather well-equipped for achieving balanced results, the Database Directive is in imminent need of reform, in particular as even the Data Act Proposal leaves many issues of the database sui generis right unsolved.

Virtual(-only) shareholders' meetings in Italian listed companies: quo vadis?

The article focuses on the legacy, if any, once the pandemic crisis is over, of the Italian emergency legislation re: the participation in the shareholders' meeting by means of telecommunications, with particular attention to the regulation of listed companies. Specifically, the topic of virtual(-only) meetings is addressed with a view both to investigating the reasons for their scarce use by Italian listed issuers, and to understanding whether the ability to intervene remotely can become a default rule in Italy. To this end, after analyzing the peculiarities of the Italian legal system – which, de facto, have limited the "virtualization" of the meetings, given that, inter alia, in the absence of a specific express provision in the by-laws, a virtual-only meeting appears not to be admissible under Italian law –, possible solutions de lege ferenda that may justify a "generalized" regime of virtual meetings in the Italian system will be illustrated.

Mental Representation of Multiple Default Plurals: Evidence from the Adaptation of English Loanwords in Arabic

The present work argues for the existence of multiple default regularities of plural formation in Arabic. As evidenced in the corpus of loanword adaptation in Jordanian Arabic, this study calls for a reassessment of the treatment of idiosyncratic plural forms in the mental lexicon. This investigation is in line with the dual mechanism theory where both memory and rule are active, but with more reliance on the default rule (feminine sound plural –aat) over memory (broken plural patterns). This avoidance of broken plural, which is less predictable and less transparent, is explained by a limited mental lexicon that defines such loanwords and thus blocks a successful mapping of the broken plural’s inflection in the memory. The failure of broken plural retrieval, especially with words that do not match the canonical root system (tri-consonantal), calls for the application of the default feminine sound plural, the most productive, transparent, and regular formation. As a result, frequency and memory association predicted by prosodic similarity between loanwords and the broken plural patterns do not contribute to avoiding the default -aat overgeneralization in the short term.

Fixing Reasonable Expectations in European Contract Law

Abstract The reasonable expectations standard permeates European contract law. An influential objection against reasonable expectations, related to it being formulated as a standard, is its apparent vagueness: it does not sufficiently specify its criteria, and is thus redundant in providing guidance for individuals’ behaviour. This article argues that European contract law clarifies the content of reasonable expectations by identifying different grounds for them – mandatory rules, action-based rules, default rules, indicative rules, industry-related rules and (unregulated) practices – and establishing a relatively structured hierarchy between them. For this reason, the standard of reasonable expectations contributes to effective guidance for the behaviour of subjects of European contract law.

Pay or nudge employees into change? A theoretical and experimental investigation of the effect of nudging for organizational change

AbstractOrganizational change often fails due to employees' resistance to change resulting in unforeseen expenses, delays, or other disruptions in organizations. In our experiment, we compare behavioral interventions—a pro‐change default rule and a pro‐change recommendation—with a costly pay raise to foster supportive behavior. In regard to the pure nudge used (default), we support its effectiveness in enhancing change‐related success. In line with our model and based on the assumption of low decision confidence in change settings, we find that a preference nudge (recommendation) lacks a corresponding effect. In addition, we find that a pay raise has a positive effect that is likely to be triggered by positive reciprocity. If this pay raise fails to materialize, we report supporting evidence for negative reciprocity. We compare the effect sizes for these nudges and the pay raise and provide insights for the relative cost‐effectiveness of such nudges compared to a pay raise for organizational change. We conclude with managerial implications.

Through the normative prism: a critical appraisal of the PICC’s provisions on anticipatory non-performance

Abstract The position of the Unidroit Principles of International Commercial Contracts (PICC) as a potential unifying influence and resource within the global competitive market for law is indelibly linked to the justifiability and desirability of the black letter rules embodied in the instrument. This article critically analyses the PICC’s provisions on anticipatory non-performance using two common law-oriented normative paradigms: economic efficiency and relational norms. It argues that the PICC’s remedial scheme for anticipatory non-performance satisfies the normative prescriptions of economic analysis of law in that the self-help measures available represent majoritarian default rules and facilitate early mitigation of loss, thereby maximizing the parties’ net exchange surplus. Furthermore, the article contends that the PICC’s remedial scheme is sensitive to the relational nature of commercial contracts such that it fosters the parties’ commitment, communication, cooperation, and trust, which are vital values in developing and maintaining relational assets.

The Evolution of Corporate Law in the Arab World: The Everlasting Grip of the State

Abstract This article explores the evolution of corporate laws in major Arab economies with emphasis on the role of state in these laws. The article argues that the dominance of the state in these laws is reflected in the absence of substantial number of default rules. These laws are overwhelmed with mandatory rules that are undermining the freedom of parties in companies to structure and manage their companies effectively. The policy background that led to the current Arab corporate laws is also analysed in this paper as the paternalistic nature of Arab states has shaped the policies that led to the current corporate laws in the Arab world. The interventionist nature of political and economic systems in the Arab world is also reflected in their corporate laws. The article argues for the need to reform current corporate laws in the Arab world and liberate these laws from their paternalistic nature and move forward with more enabling rules and empowering freedom of contract to become the governing philosophy of these laws.