“Standard form contracts are known to be ‘sticky’: Although sophisticated commercial parties should be expected to update their contracts whenever doing so increases contract value, research has shown that this does not always occur. Terms that resist change, even when updating would be value enhancing, are ‘sticky’. Stickiness, however, is not a general phenomenon – while some terms, like pari passu clauses in sovereign bond agreements, are resistant to change, even in the face of unfavourable judicial rulings, others are rapidly updated. In our recent paper, ‘Learning in Standard Form Contracts: Theory and Evidence’, we provide a novel account that explains why some terms are sticky, and others are not. The paper goes on to examine this theoretical account using a large, hand collected data set of online standard form contracts and empirical support for it …” (more)
[Florencia Marotta-Wurgler and Giuseppe Dari-Mattiacci, Oxford Business Law Blog, 15 January]
First posted 2019-01-15 15:19:54
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