Lisa Bernstein, ‘Black Hole Apparitions’

Introduction
… This Comment focuses on the authors’ proposed doctrinal solution to the black hole problem, which seeks to eliminate any inquiry into ‘subjective intent’ when courts are faced with the task of interpreting a black hole. It explores the conceptual and practical challenges of implementing the authors’ proposal and then questions whether legal reform is really needed to deal with the black hole problem. Part I identifies several common ways that standardized contract provisions that are often indistinguishable from true black holes may arise. It suggests that any doctrinal solution to the black hole problem will have to either reliably distinguish real black holes from these relatively common ‘black hole apparitions’, or be desirable when applied to both types of provisions. Part II describes the proposed reform and explores the practical barriers to implementing it. Along the way it also sketches out several alternative avenues for solving the problems evidenced in the pari passu saga. It suggests that these avenues, while more limited in scope than the authors’ proposed reform, may turn out to be more feasible and less costly to implement. Part III questions whether any doctrinal or other solution to the so-called black hole problem can be justified on the basis of the lessons learned from the pari passu saga alone, given that other markets have been able to overcome collective action problems and adopt and amend standard-form contracts through processes that have tended to work more quickly and less contentiously over time. Finally, Part IV concludes by suggesting that the interpretive approach adopted by the Second Circuit in NML might be a passably good response to the black hole problem writ large.

Lisa Bernstein, Black Hole Apparitions, 67 Duke Law Journal Online 102-121 (December 2017).

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