Private Law Theory

ABSTRACT
Capital markets deals, like many kinds of business transactions, are built on a foundation of copied and recycled language – what many call boilerplate. Regulators and the bar periodically call for less reliance on boilerplate, but despite these pressures, boilerplate remains a fixture of ever-growing securities disclosures. This Article explores why boilerplate persists and how it affects investors, showing that boilerplate may have a more complex role than commonly recognized. This Article does so by developing a theory on the effect of boilerplate in securities disclosure – a context that is little studied despite a wealth of literature on boilerplate in other settings – and analyzes disclosure empirically using language processing techniques on a dataset of initial public offering disclosure spanning twenty years, from 1996 to 2015. The data shows that in the aggregate, the use of boilerplate is associated with some efficiency gains …

McClane, Jeremy, Boilerplate and the Impact of Disclosure in Securities Dealmaking (February 6, 2019). Vanderbilt Law Review, volume 72, no 1, 2019.

First posted 2019-06-02 09:46:30