Core versus Non-Core Terms and Legal Controls over Consumer Contract Terms: (Bad) Lessons from Europe?

2019 ◽  
Vol 15 (2) ◽  
pp. 177-194 ◽  
Author(s):  
Fernando Gómez Pomar
Keyword(s):  
Consumer Welfare ◽  
Empirical Literature ◽  
Market Forces ◽  
Consumer Contract ◽  
Legal Regime ◽  
General Picture ◽  
Legal Standards ◽  
Ex Post ◽  
Consumer Contracts ◽  
Legal Controls

Abstract Not all contract terms pose the same perils for efficient contracting and for consumer welfare. EU Law and the laws of many Member States make a distinction between core and non-core contract terms and tend to exempt the former from the ex-post substantive unfairness review to which the latter are subject to. By reviewing how the CJEU and European legal commentators have justified and construed the terms of Art. 4(2) of Directive 93/13 we may obtain a general picture of the analytical underpinnings deployed to provide useful content to that provision. The prevailing European approach is (unsurprisingly, perhaps) predominantly legalistic and uninterested in empirics. The CJEU analysis remains (unsurprisingly, perhaps) immune to the implications from the theoretical and empirical literature that economics and Law & Economics has produced in order to understand how market forces and other non-legal incentives for contract quality interact with ex post controls implemented by courts and based on broad legal standards. The ALI Restatement on Consumer Contracts may cogently make use of that input in crafting a less formalistic legal regime.

Reviews and Self-Selection Bias with Operational Implications

2021 ◽  
Author(s):  
Ningyuan Chen ◽  
Anran Li ◽  
Kalyan Talluri
Keyword(s):  
Selection Bias ◽  
Operations Management ◽  
Choice Model ◽  
Theoretical Models ◽  
Empirical Literature ◽  
Service Firms ◽  
Performance Review ◽  
Self Selection ◽  
Ex Post ◽  
Biased Ratings

Reviews for products and services written by previous consumers have become an influential input to the purchase decision of customers. Many service businesses monitor the reviews closely for feedback as well as detecting service flaws, and they have become part of the performance review for service managers with rewards tied to improvement in the aggregate rating. Many empirical papers have documented a bias in the aggregate ratings, arising because of customers’ inherent self-selection in their choices and bounded rationality in evaluating previous reviews. Although there is a vast empirical literature analyzing reviews, theoretical models that try to isolate and explain the bias in ratings are relatively few. Assuming consumers simply substitute the average rating that they see as a proxy for quality, we give a precise characterization of the self-selection bias on ratings of an assortment of products when consumers confound ex ante innate preferences for a product or service with ex post experience and service quality and do not separate the two. We develop a parsimonious choice model for consumer purchase decisions and show that the mechanism leads to an upward bias, which is more pronounced for niche products. Based on our theoretical characterization, we study the effect on pricing and assortment decisions of the firm when potential customers purchase based on the biased ratings. Our results give insights into how quality, prices, and customer feedback are intricately tied together for service firms. This paper was accepted by David Simchi-Levi, operations management.

The Right of Overflight above International Straits

2015 ◽  
Vol 52 ◽  
pp. 35-76 ◽  
Author(s):  
SUZANNE LALONDE
Keyword(s):  
United Nations ◽  
Legal Status ◽  
Law Of The Sea ◽  
Legal Regime ◽  
Northwest Passage ◽  
Legal Standards ◽  
Maritime Navigation ◽  
The Subject ◽  
United Nations Convention ◽  
The Right

AbstractThe legal status of the Northwest Passage (NWP) has been the subject of much debate in academic, government, and media circles. To date, much of this discussion has centred on the legal regime governing maritime navigation. However, the question of whether the NWP is subject to guaranteed freedoms or Canada’s unqualified sovereign control also involves the right of overflight. This article investigates the circumstances that led to the inclusion of the freedom of overflight in Part III of the United Nations Convention on the Law of the Sea. It then highlights some of the legal standards that would govern air navigation if the NWP were to be considered an international strait.

scholarly journals The Standardization of Islamic Financial Law: Lawmaking in Modern Financial Markets

2019 ◽  
Vol 67 (4) ◽  
pp. 825-860 ◽  
Author(s):  
Jonathan Ercanbrack
Keyword(s):  
United Arab Emirates ◽  
Global Economy ◽  
Standard Form ◽  
Standard Setting ◽  
Market Forces ◽  
Primary Role ◽  
Legal Systems ◽  
Commercial Practice ◽  
Legal Standards

Abstract The project to standardize the commercial elements of the sharia as undertaken by standard-setting bodies, such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), is a lawmaking effort that is incentivized by market forces and the interaction of municipal legal systems. This Article examines the ways in which these factors contribute to the development of private Islamic legal standards, and in doing so, contribute to an emergent legal architecture that is integrated within the global economy. Contrary to the primary role assigned in existing analyses to sharia scholars and sharia supervisory boards, the Article shows that the processes that determine the composition of Islamic financial law (IFL) highlight the starkly reduced role of jurists in developing law in accordance with the traditional methodology (usul al-fiqh). Such analyses have failed to consider the standardization effort as a lawmaking project driven by market forces, which must be realized if authentic sharia principles are to be given effect. Therefore, examination of these market-led processes and their contribution to the creation of Islamic standards is essential for understanding what standardization means in relation to the fulfillment of Islamic principles and whether a high degree of standardization is desirable. First, the Article examines the role of interpretation, which highlights the methodological challenges of the standardization project. Second, the Article investigates the AAOIFI’s standard-setting efforts, including the methods of standardization, its market- and law-driven incentives, and the status of standardization efforts including the madhahib (schools of law)’s differences of legal thought. Third, an analysis of the interaction of IFL and the law of municipal legal systems (the United Arab Emirates, England and Wales, and Malaysia) highlights the legal incentivization for developing sharia standards. Finally, an analysis of the commercial practice of IFL, particularly in retail markets, demonstrates commercial law’s trend toward standardized contractual practices. Market forces compel the use of standard-form documentation, comprising standards that reflect the commercial practice of law firms and corporations.

scholarly journals Consumer contracts in the European Court of Justice case law. Latest trends = Los contratos de consumo en la jurisprudencia del TJUE. Últimas tendencias

2020 ◽  
Vol 12 (1) ◽  
pp. 86
Author(s):  
Alfonso-Luis Calvo Caravaca
Keyword(s):  
International Law ◽  
Case Law ◽  
Private International Law ◽  
Consumer Contract ◽  
Mass Consumption ◽  
Cross Border ◽  
European Court ◽  
Social Landscape ◽  
Consumer Contracts ◽  
Private Individual

Abstract: The concept of “consumer” is, in theory, a restrictive concept. However, the ECJ has now extended it to cases in which a private individual has gone on to practice as a professional in an manifest, public and conspicuous manner. Judgment ECJ 25 January 2018, C-498/16, Facebook proves it. In relation to consumers of financial products, the ECJ skillfully pulls strings in the context of art. 7.2 BR I-bis; however, that norm is totally insensitive with regards to the consumer. The future is stepping forward towards online mass consumption, and in the present virtual social landscape it is necessary for the ECJ to open up new ways of protecting the consumer that keep up with times. In this context, it is necessary that future amendments to the Brussels I-bis Regulation incorporate the concepts that the ECJ has created in relation to jurisdiction in the cross-border consumer sector: the concepts of “act of consumption”, “consumer”, “professional”, and “directed activity”, for example, should stop being jurisprudential concepts to become legal concepts.Keywords: act of consumption, consumer, consumer contract, cross-border consumer sector, directed activity, dual contracts with both private and professional purpose, (international) jurisdiction, Private International Law, professional.Resumen: El concepto de “consumidor” es, en teoría, un concepto restrictivo. Sin embargo, el TJUE lo ha extendido a casos en los que un particular, en el momento presente, ha pasado a ejercer como profesional de manera evidente, pública y notoria. La STJUE 25 enero 2018, C-498/16, Facebook, es la prueba. En relación con los consumidores de productos financieros, el TJUE mueve sus hilos con destreza en el contexto del art. 7.2 RB I-bis, pero este precepto es totalmente insensible al consumidor. El futuro camina digitalmente hacia un consumo masivo online y en dicho paisaje social virtual es necesario que el TJUE abra vías de protección al consumidor de un modo evolutivo. En dicho contexto, es preciso que futuras reformas del Reglamento Bruselas I-bis incorporen los conceptos que el TJUE ha creado en relación con la competencia judicial en el sector del consumo transfronterizo: los conceptos de “acto de consumo”, “consumidor”, “profesional”, y “actividad dirigida”, por ejemplo, deberían dejar de ser conceptos jurisprudenciales para pasar a ser conceptos legales.Palabras clave: acto de consumo, competencia judicial internacional, consumidor, consumo transfronterizo, contrato de consumidores, contratos con doble finalidad profesional y privada, Derecho internacional privado, profesional, actividad dirigida.

No Alarms and Many Surprises: Salience as a Basis For Excessive Pricing Intervention in an Antitrust Context

2020 ◽  
Vol 16 (4) ◽  
pp. 552-571
Author(s):  
Omar Vásquez Duque
Keyword(s):  
Market Failure ◽  
Market Forces ◽  
Costs And Benefits ◽  
Product Complexity ◽  
Comparison Shopping ◽  
Product Features ◽  
Real Price ◽  
Ex Post ◽  
Lock In ◽  
Typical Consumer

Abstract This article explores how consumers’ bounded rationality can justify antitrust intervention when a firm becomes a monopoly and exploits a product attribute that was not policed by market forces when there was competition for the market. Behavioral economics predicts product complexity leads consumer demand to be a function of salient costs and benefits rather than of actual costs and benefits of products. The divergence between the former and the latter hinders and distorts competition. In fact, comparison shopping is costlier, and sellers can backload part of their prices to nonsalient product attributes. Consumers perceive only a distorted lower price by focusing on salient product features, which leaves room for inefficient matching and opportunistic behavior given the risk of ex post exploitation. These are behavioral limits of competition. In this work, I argue that when (i) there is a lock-in problem, (ii) consumers do not control the probability of triggering a hidden price, and (iii) a typical consumer could not have reasonably expected to find such a hidden price, antitrust intervention would not only deter ex post exploitation but would also enhance competition on the real price of goods. Antitrust would correct a behavioral market failure.

Enforcement of Foreign Judgment in E-Commerce Consumer Contracts In Malaysia: Issues and Challenges

2015 ◽  
Vol 12 (2) ◽  
pp. 67
Author(s):  
Shazanah Sarwar Khan ◽  
SHEELA JAYABALAN
Keyword(s):  
Electronic Commerce ◽  
Consumer Protection ◽  
Convenient Method ◽  
Consumer Contract ◽  
Conflict Of Laws ◽  
Online Transactions ◽  
Goods And Services ◽  
Consumer Contracts ◽  
Foreign Judgment

Electronic commerce or e-commerce is gaining momentum in Malaysia. Consumers are finding transacting online to be a convenient method especially to buy goods and services. As online transactions involve transborder commerce, disputes are inevitable. As such the question of conflict of laws arises, one of which involves enforcement of foreign judgement. Even though there is a law regulating enforcement of foreign judgement in Malaysia, however it does not take into consideration consumer protection. Adapting doctrinal research, this article discusses issues and challenges arising in the enforcement of foreign judgement in e-commerce consumer contracts in Malaysia. Keywords: Enforcement of Foreign Judgement, Reciprocal Enforcement of Foreign Judgement Act 1958, Brussels I Regulation, E-Commerce Consumer Contract

Debt Covenants and Corporate Governance

2019 ◽  
Vol 11 (1) ◽  
pp. 197-219 ◽  
Author(s):  
Sudheer Chava ◽  
Shunlan Fang ◽  
Praveen Kumar ◽  
Saumya Prabhat
Keyword(s):  
Empirical Studies ◽  
Empirical Literature ◽  
Future Research ◽  
Debt Covenants ◽  
Corporate Policies ◽  
Ex Post ◽  
Trade Offs ◽  
Ex Ante ◽  
The Impact ◽  
Covenant Violations

We review the recent theoretical and empirical literature on debt covenants with a particular focus on how creditor governance after covenant violations can influence the borrower's corporate policies. From the theoretical literature, we identify the key trade-offs that help explain the observed heterogeneity in covenant types, inclusion, likelihood of violation, and postviolation renegotiation flexibility. Empirically, we first review the literature that deals with ex ante evidence on covenant design and the various factors that influence covenant design; we next review the ex post evidence on the impact of technical covenant violations on the borrower. We then discuss limitations of the existing theoretical and empirical studies and conclude with some directions for future research in this burgeoning area.

scholarly journals Animals in the system of objects of civil rights

2020 ◽  
Vol 2020 (1) ◽  
pp. 81-85
Author(s):  
Sergey Tychinin ◽  
Ekaterina Koroleva
Keyword(s):  
Civil Rights ◽  
Natural Habitat ◽  
Practical Importance ◽  
Legal Framework ◽  
Legal Regulation ◽  
Wild Animals ◽  
Unified Approach ◽  
Legal Regime ◽  
Legal Standards

In the article, the authors pay attention to the place and significance of animals in the system of civil rights objects. The article provides a General analysis of legal acts that fix the specifics of the legal regime of animals. The article analyzes the specifics of the legal regime of animals. Special attention is paid to the analysis of the place of animals in the system of civil rights objects. The authors raise the issue of the absence of a unified concept of an animal in the current legislation, and also draw attention to the lack of a unified approach to the classification of animals, which may be of practical importance when applying legal standards in the field under consideration. The authors analyze the features of legal regulation of the involvement of wild animals and animals removed from their natural habitat. The authors conclude that there is currently a fairly logical and consistent legal framework in place for wild animals, but due attention is notpaid to the specifics of the legal regime for animals removed from their natural habitat. The article attempts to determine the types of animals whose legal regime features are provided for in the current legislation. The article indicates that new regulatory legal acts are currently being adopted on the treatment of animals, in particular, the concept of potentially dangerous dogs has been introduced into legal circulation.

The Business Transformation and Enterprise Architecture Framework

2018 ◽  
pp. 1-22 ◽  
Author(s):  
Antoine Trad ◽  
Damir Kalpić
Keyword(s):  
Global Economy ◽  
Enterprise Architecture ◽  
Planning Process ◽  
Business Transformation ◽  
Legal Standards ◽  
Business Environments ◽  
Architecture Framework ◽  
Related Risk ◽  
Enterprise Architecture Framework ◽  
Legal Controls

Business transformation projects and enterprise architecture projects for enterprises' business and their financial strategic planning process are essential to prepare the enterprise to integrate the local and the global economies in a sustainable and iterative way. The needed strategy for the integration of financial-engineering-related risk and legal controls is fundamental for its long-term vision and business longevity. Probably because of the ongoing financial uncertainty, these finance-related risks and legal standards are not mature and are even chaotic, so these facts can damage the business transformation project or an enterprise architecture project, and they may disable the traditional business environments to be a part and to compete with the networked global economy.

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