Sarah Dadush (Rutgers Law School): Shared Responsibility in American Contract Law
Conflicts Club
- Datum: 27.06.2023
- Uhrzeit: 14:00
- Ort: Max-Planck-Institut für ausländisches und internationales Privatrecht
Wir möchten wir Sie herzlich zu einem Vortrag aus der (normalerweise internen) Veranstaltungsreihe „Conflicts Club“ am Dienstag, den 27. Juni 2023 um 14:00 Uhr (MESZ) einladen.
Sarah Dadush (Rutgers Law School) wird einen englischen Vortrag zum Thema „Shared Responsibility in American Contract Law“ halten.
About the Speaker:
Sarah Dadush is a Professor of Law at Rutgers Law School where she writes and teaches in the areas of contract law, business and human rights, and consumer law. Her scholarship explores hard and soft law mechanisms for improving the social and environmental performance of multinational corporations.
Professor Dadush is the Founding Director of the Law School's Business and Human Rights Law Program and the Responsible Contracting Project, the mission of which is to improve human rights in supply chains through innovative contracting practices.
She is a leading member of the American Bar Association (ABA) Business Law Section Working Group to Draft Human Rights Protections in International Supply Contracts and its European counterpart, the European Model Contract Clauses for Responsible and Sustainable Supply Chains Working Group. In addition, Professor Dadush is Co-Chair of the Legislative Developments sub-committee of the NYC Bar Association’s Business & Human Rights Committee and Co-Chair of the Responsible Investor Model Clauses sub-committee of the ABA's Corporate Social Responsibility Committee.
Before joining the Rutgers faculty in 2013, Professor Dadush was Legal Counsel for the International Fund for Agricultural Development (IFAD), a specialized agency of the United Nations based in Rome. Prior to that, she was a Fellow at NYU Law School’s Institute for International Law and Justice and an associate attorney at the global law firm, Allen & Overy. She received her J.D. and LL.M. in International and Comparative Law from Duke University School of Law in 2004.
About the topic:
At first blush, the proposition that there is such a thing as shared responsibility in American contract law may sound fanciful, if not absurd. This is because lawyers are taught that contractual responsibilities belong either to one party or the other, not both. Likewise, we are taught that if there is a breach of contract, only one party will be held responsible, not both. By extension, we typically expect that where a breach is found, remedies will flow only in one direction, from the breaching to the non-breaching party, not between them. Thus, the notion that the parties might be contractually responsible not just for their own obligations, but also for those of their counterpart, may seem incoherent and unsettling. And yet, as this Article shows, it is not uncommon for courts to go beyond the express terms of the contract to make the parties share responsibility for the non-performance of one another’s obligations retroactively, after their contract has failed. This is what shared responsibility refers to: each party being responsible, to a greater or lesser degree depending on the circumstances, for the other party’s contractual performance, even in the absence of an express commitment to share responsibility for performance.
This Article traces the appearance of shared responsibility in three areas of contract law familiar to anyone who has taken a first-year contracts course in the U.S.: the contents of the contract, breach, and remedies. It demonstrates that shared responsibility is brought to bear to resolve contract disputes more often and with greater legal effect than might be expected. Indeed, when it enters the judicial analysis, shared responsibility can drastically change the answers to the questions: Who had the obligation to perform? Who breached by not performing? And, last but not least, whose harm should be remedied and how?
Having demonstrated that shared responsibility is a not-uncommon feature of American contract law, this Article argues that courts should consider employing a shared-responsibility bias (“SRB”) more systematically in certain situations. Specifically, courts should be particularly primed to employ the SRB in disputes involving the breakdown of commercial contracts between corporations where (1) there are significant power disparities between the parties, (2) the more powerful party contributed to the breach, even if they did not commit it, and (3) contract failure could generate—or has already generated—high social costs for third parties (e.g., human rights violations, increased public health risks, the sale of socially or environmentally defective goods to consumers). In such situations, the SRB would allocate responsibilities for contract failure not only to sanction opportunistic behavior by the more powerful party, but also mitigate the social costs for third parties. This Article concludes by recommending strategies for courts to employ the SRB ex post and for firms to take the SRB into consideration ex ante, at the contract design stage of their commercial relationships.
Sarah Dadush (Rutgers Law School) wird einen englischen Vortrag zum Thema „Shared Responsibility in American Contract Law“ halten.
About the Speaker:
Sarah Dadush is a Professor of Law at Rutgers Law School where she writes and teaches in the areas of contract law, business and human rights, and consumer law. Her scholarship explores hard and soft law mechanisms for improving the social and environmental performance of multinational corporations.
Professor Dadush is the Founding Director of the Law School's Business and Human Rights Law Program and the Responsible Contracting Project, the mission of which is to improve human rights in supply chains through innovative contracting practices.
She is a leading member of the American Bar Association (ABA) Business Law Section Working Group to Draft Human Rights Protections in International Supply Contracts and its European counterpart, the European Model Contract Clauses for Responsible and Sustainable Supply Chains Working Group. In addition, Professor Dadush is Co-Chair of the Legislative Developments sub-committee of the NYC Bar Association’s Business & Human Rights Committee and Co-Chair of the Responsible Investor Model Clauses sub-committee of the ABA's Corporate Social Responsibility Committee.
Before joining the Rutgers faculty in 2013, Professor Dadush was Legal Counsel for the International Fund for Agricultural Development (IFAD), a specialized agency of the United Nations based in Rome. Prior to that, she was a Fellow at NYU Law School’s Institute for International Law and Justice and an associate attorney at the global law firm, Allen & Overy. She received her J.D. and LL.M. in International and Comparative Law from Duke University School of Law in 2004.
About the topic:
At first blush, the proposition that there is such a thing as shared responsibility in American contract law may sound fanciful, if not absurd. This is because lawyers are taught that contractual responsibilities belong either to one party or the other, not both. Likewise, we are taught that if there is a breach of contract, only one party will be held responsible, not both. By extension, we typically expect that where a breach is found, remedies will flow only in one direction, from the breaching to the non-breaching party, not between them. Thus, the notion that the parties might be contractually responsible not just for their own obligations, but also for those of their counterpart, may seem incoherent and unsettling. And yet, as this Article shows, it is not uncommon for courts to go beyond the express terms of the contract to make the parties share responsibility for the non-performance of one another’s obligations retroactively, after their contract has failed. This is what shared responsibility refers to: each party being responsible, to a greater or lesser degree depending on the circumstances, for the other party’s contractual performance, even in the absence of an express commitment to share responsibility for performance.
This Article traces the appearance of shared responsibility in three areas of contract law familiar to anyone who has taken a first-year contracts course in the U.S.: the contents of the contract, breach, and remedies. It demonstrates that shared responsibility is brought to bear to resolve contract disputes more often and with greater legal effect than might be expected. Indeed, when it enters the judicial analysis, shared responsibility can drastically change the answers to the questions: Who had the obligation to perform? Who breached by not performing? And, last but not least, whose harm should be remedied and how?
Having demonstrated that shared responsibility is a not-uncommon feature of American contract law, this Article argues that courts should consider employing a shared-responsibility bias (“SRB”) more systematically in certain situations. Specifically, courts should be particularly primed to employ the SRB in disputes involving the breakdown of commercial contracts between corporations where (1) there are significant power disparities between the parties, (2) the more powerful party contributed to the breach, even if they did not commit it, and (3) contract failure could generate—or has already generated—high social costs for third parties (e.g., human rights violations, increased public health risks, the sale of socially or environmentally defective goods to consumers). In such situations, the SRB would allocate responsibilities for contract failure not only to sanction opportunistic behavior by the more powerful party, but also mitigate the social costs for third parties. This Article concludes by recommending strategies for courts to employ the SRB ex post and for firms to take the SRB into consideration ex ante, at the contract design stage of their commercial relationships.