Richard Moorhead, ‘It’s the system, stupid?’

“Mitu Gulati and Robert E Scott’s new book, The Three and a Half Minute Transaction: Boilerplate and the Limits of Contract Design examines the pari passu clause, a clause designed to ensure a debtor’s creditors rank against each other equally. It asks why a standard clause in cross-border financial contracts remained in sovereign debt contracts after a well-known but minor judgment in a Belgian court suggested that the clause should be amended or removed. The book reveals that the majority of practitioners designing and drafting these contracts did not have a coherent and consistent explanation of the origin, purpose, or meaning of the term in sovereign debt contracts …” (more)

[Richard Moorhead, JOTWELL, 22 November]

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