Epistemology at the Marketplace
Abstract
People acquire knowledge from others, but the epistemic impact of the laws governing marketplace transactions is not directly studied. This Article groups together contract, agency, partnership, and corporate law as voluntary exchange law in order to assess its impact on our ability to acquire knowledge qua justified true beliefs (plus) from others. The Article concludes that the right to recover contractual liabilities increases people’s ability to acquire knowledge, but so do rules that impose limited liability and legal personhood on non-human entities. For exchanges outside the open markets and within units of organization, this Article concludes that, under certain conditions, fiduciary arrangements provide epistemic advantages even when any individual fact statement given by a fiduciary is epistemically inferior as compared to the same statement given contractually and considered alone.
A Systems Theory of Good Faith
Abstract
Both the Uniform Commercial Code (UCC) and the Restatement (Second) of Contracts recognize the duty of good faith and fair dealing as a foundational principle of American contract law. Yet courts interpret this duty more narrowly than these texts suggest. Broader conceptions have met resistance, with some decisions warning that the “vaguely moralistic overtones” of good faith risk conflating contracts with fiduciary relationships or demanding unwarranted “equitable fairness. ” In the scholarly literature, this narrow view is frequently defended in the name of contractual freedom, with the argument that displaying good faith is simply “to recognize the authority of the contract. ” This Article challenges this narrow conception of the duty by drawing on systems theory, which highlights the complex interactions between legal relationships and doctrinal structures. It argues that this narrow perspective overlooks the connection between microlevel contractual interactions and macrolevel legal ordering, an essential link for designing a meaningful duty of good faith. Through a critical analysis of a case adopting a narrow view of the duty, the Article further advances a system-oriented account of good faith, conceiving it as a normatively grounded mechanism for promoting cooperation and curbing opportunism in contractual relationships. The systems theory perspective, attentive to both micro and macro dynamics, helps address concerns about judicial overreach and party autonomy, but without transforming contract law into fiduciary law. Reconceived in this way, good faith can better fulfill its normative and functional promise, fostering a contracting environment in which agreements can thrive.
The Past, Present, and Future of Universal Opt-Out Mechanisms
Abstract
Suppose that a consumer has the legal right to opt out of receiving certain communications, being tracked across the Internet by advertisers, or having their personal data transferred from one company to another. Should the consumer be able to exercise a one-time universal opt-out that effectively binds all similarly situated companies with whom the consumer does business? Or must the consumer invoke their opt-out right repeatedly, communicating their preference to each potential transaction partner individually? This question arises in numerous different privacy contexts and elsewhere. In many instances, the answer to this procedural question of whether universal opt-out mechanisms are an option is substantively decisive because it is unreasonably burdensome for consumers to play opt-out Whac-a-Mole. Perhaps surprisingly, however, privacy law does not answer the question consistently across contexts, with the legal regime sometimes facilitating universal opt-outs (or universal opt-ins) and other times thwarting them. This article examines the privacy law contexts where universal opt-out rights do exist and those where they don’t presently exist but ought to. It identifies the factors that dictate when permitting universal opt-outs is appropriate and has been largely successful, explains why efforts to establish universal opt-out mechanisms have failed in seemingly promising contexts, analyzes the recent rise and successful implementation of private sector universal opt-out mechanisms, and points to instances where facilitating universal opt-outs and opt-ins may be an appropriate legal or market reform.
A Kalshi Contract on the Legality of Kalshi Contracts
Abstract
Kalshi is currently embroiled in “a ferocious legal battle over whether states or federal agencies should police prediction markets.” This note proposes that Kalshi list a “Kalshi Sports Legality” contract indexed to the outcome of United States Supreme Court litigation addressing whether Kalshi’s sports-indexed contracts are federally regulated in a manner that preempts state law. Kalshi has previously listed at least 16 contracts indexed to Supreme Court determinations. No rule or regulation prevents Kalshi from listing the proposed contract. The proposed contract would provide a market estimate of the probability that the Supreme Court rules that Kalshi’s sports-indexed contracts are legal. The contract would thereby create valuable hedging opportunities for Kalshi investors. It would also create hedging value for Kalshi customers who might lose access to Kalshi markets. These hedging rationales are more substantial than rationales Kalshi presents to support other Kalshi contracts, such as contracts indexed to parlays or to specific in-game events, such as whether the first play in a football game leads to a touchdown.