INTRO Dean Heidi Moore Nice analogy between law-and-philosophy and divorced parents. Who will have custody, when the parents are on cool and distant terms? Ulen: "The moderator will make inobtrusive but unmistakeable signs that the time is up." Larry Ribstein CHOICE OF LAW p. 11. Point 2. Is the large proportion of federal cases simply due to the method by which Missouri (CORI) collected cases? O'Hara theory: when a group pushes for a restrictive law, they increase its chance of passage by allowing the escape hatch of contractors being able to choose the law of different states. Waiver Problem: Why not just make the restrictive law a default rule, nonmandatory? That would be a simpler way to get the law passed. Ribstein Theory: Choice-of-law is a way to allow interstate firms to opt out, but not intrastate firms. How many of the restrictive laws are mandatory rules instead of default rules? Robert Sitkoff, r-sitkoff[replaced at to avoid spamming]law.northwestern.edu TRUSTS A trust "separates the benefit of ownership from the burden of control" (Austin Scott treatise). Is trust law really contract law or really property law? (Well, there is specific performance instead of money damages for misconduct.) Unlike in contract law, a new entity is created. You cannot go after the trustee or the beneficiary or the settlor. Well, actually you can, for misconduct, go after the trustee. And perhaps you can go after the beneficiary too, criminally, if Is the beneficiary the residual claimant? Pretty much. But in a sense, the settlor is. He is setting up the trust for some aim. If the trust loses money, his aim is not so well achieved. This idea brings in charitable trusts. Smith sets up a trust to preserve some old trees, with an amount of $50,000. The stock market falls, and the assets fall to $40,000. Smith is a loser (as are the trees). ANd, I guess, the general public is a loser--- that is perhaps a requirement for a charitable trust. A good approach is to look at what the penalties are for misconduct in property, contract, and trusts. Is it easier for the beneficiary to force the trustee to perform particular actions than to remove him? Trustees do simpler things than boards of directors or agents-- they manage assets, not people, ordinarily. So courts can oversee what trustees do better. Trusts are good at dealing with beneficiary residual claimants who have adverse interests. Corporations are perhaps not so good at that. In trust law, the organization can opt out of the duty of loyalty ex ante-- the document can say that the trustee can engage in self- dealing. BUt ex post, the trustee and beneficiary cannot amend the document. In a corporation, the opposite is true. The charter cannot opt out, but the directors can authorize a manager to self-deal. Partof the reason for disclosure in trust law is that if the trustee discloses a lot to the beneficiaries, there is little danger of management secrets leaking out. The organization is simple, and there are few people who get to know the secret. A beneficiary is risk averse; a shareholder is risk-neutral (if diversified). Agents of trusts-- the trustees-- are risk neutral-- their jobs are safe--- but agents of corporations--- executives--- are risk averse. I find this topic very interesting. Here are a few of my papers that touch on the edges of the topic. "A Theory of Trustees, and Other Thoughts," in Public Debt and its Finance in a Model of a Macroeconomic Policy Game: Papers Presented at a Workshop held in Antalya, Turkey on October 10- 11, 1997, , ed. by Tahire Akder. This paper combined a brief description of my work on negotiation with comments on other papers presented on central banking and a new paradigm for thinking of judges and central bankers as trustees working on behalf of beneficiaries as directed by settlors. It has my 4 P's Theory of motivation: Place, Pride, Policy, and Power. Available, including a post-publication postscript adding Principle, in Ascii txt-latex or Acrobat pdf ( http://Php.Indiana.edu/~erasmuse/papers/98.BOOK.trustees.NEW.pdf). ``Stock Banks and Mutual Banks,'' Journal of Law and Economics (October 1988), 31: 395-422. Reprinted in Banking Law Anthology , Volume IV (1988), Bethesda, Md: International Library. Because mutual banks do not allow shareholders to discipline bad managers and so have higher costs, they have been disappearing since bank entry deregulation in the 1980's. They were common before regulation in the 1930's, and are more common in the 19th century. I propose that this is because of the absence of deposit insurance. Depositors wanted safety more than low operating costs, and a mutual manager, in a cushy job he could not lose except by bankrupting his firm, would also value safety. In Ascii-Latex (78K) or Acrobat pdf ( 247K, http://Pacioli.bus.indiana.edu/erasmuse/published/88JLEC.mutual.pdf. ) ROYCE BARONDES, Nyce, and Sanger, barondes[replaced at to avoid spamming]legal-environment.com, cynce[replaced at to avoid spamming]terry.uga.edu, sanger[replaced at to avoid spamming]lsu.edu When does the investment bank choose its law firm? (related to Ribstein and Dau- Schmidt questions). If the issuer realizes there is a lot of bad news, they might say "We'd better get an investment banker who has a really good lawyer!" p. 15. I wouldn't say the financial statistics are worse at measuring quality--- they are better. What you want, though is not profitability---which does depend on cutting costs-- but revenue-- which reflects what the customer pays. If you use an average over time, you will take care of the contingency fee problem, since success and failure should average out across the years. Prestige among lawyers is different, and you are right to measure it separately. You should have a table showing the top 20 firms' prestige and revenue per lawyer. Also, show some summary statistics--- quartiles, median, mean, and correlation between prestige and revenue. You find that if a more prestigious law firm is used, the IPO price falls from the first estimate to the actual price, right? This needs to be combined with the factoid that IPO's rise a lot in price the first month. This implies that using a good law firm results in less accurate, more severe, underpricing. This becomes part of the puzzle of why issuers hire helpers that reduce the price they get for their stock. The beauty pageants might be a good subject for study in themselves. Why do issuers overprice the companies there? What they are trying to do is hire an investment bank. Will a more valuable issuer get a better deal from an investment bank? It is not clear why it should. The lowest investment-bank fees should be required of the easiest issuers to sell. Those would be the simplest companies, with the most easily understood accounts. Are investment banks paid a percentage of the issue? That would be strange since it would not necessarily correspond with the IB's cost. LEE FENNELL ON SUBDIVISION COVENANTS I don't see that uniformity is any problem at all. Why would the developer require the covenant if people didn't want it? If people don't read the covenants, the developers would not put them in, because they would not increase the sale price. If people do read them, then developers must think customers like them. Psychological arguments are easy to make in any direction one wants. Here's one for *requiring* covenants. The prospective homebuyer falls in love with the house and neighborhood based on the way it looks now, and doesn't realize that it could look very different 20 years from now. So we need covenants which keep it looking exactly the same forever. That example also points out why it is not entirely relevant that people do not read the covenants, or read them late. People see the results of the covenants-- mowed lawns, no gnomes, etc-- and like them. Very likely, if they like their neighbor to have a mowed lawn, they would not mind being required to mow their own. For any kind of covenant, in attacking it you have to explain why the developer put it in in the first place. The developer, after all, wants to please the customer. Thus, if the developer puts in a covenant saying you cannot boil potatoes in your kitchen, it must be that he thinks most people don't, for whatever reason, like their neighbors boiling potatoes. Pretty much all your explanations apply to zoning too, right? And a fortiori, because zoning Enforcement is something to think about a lot. Who enforces, in theory and practice, and how costly is it? Very possibly, the covenant serves just as a guideline, an announced social norm. It is costly to hire a lawyer to get a gnome removed. But if there is a covenant, and somebody puts out a gnome, the neighbors, who would otherwise be too shy to object, even though all are really bothered, might be emboldened. STAKE ON VOTING 2 voters would pay $500 for a streetlight, 3 would pay $300 to stop it. System 1. Majority vote. System 2(SMith): Everybody pays. The Nays get their $300 back, plus an extra $300 each. THen the remaining $100 is split evenly. If reporting is strategic, though, then there will be frequent misreporting, and because of incomplete information, sometimes the efficient result will not be achieved. System 3. The "Groves Mechanism" also is related to your scheme. Sometimes people speak of the "Clarke-Groves Mechanism". Losers pay nothing. Decisive winners pay the amount by which they are decisive. The amounts are thrown away. In the example, each Yea pays $400, because each is decisive (it would have been 500-900 otherwise) and the amount is $400. This is a "dominant-strategy mechanism" because it is a weakly dominant strategy to report one's true valuation (weakly, because small misreports might be known to make no difference to the result). The point that the costs are low if there are lots of voters is very important. A numerical example would help there. The revote point is a good one. Also, malice would create big problems. A malicious neighbor could introduce a proposal solely to get his neighbors taxed. Suppose each person had his own proposal. Ah-- the problem is that each person has a ranking of ALL the proposals. So really each voter must vote an amount on each of the N proposals. That is what you clarified after we turned in our votes. At the Law-and-Econ Lunch in Indiana, we talked about whether it was important to be able to cast negative votes on the proposals. I forget what we resolved. DANA PRECAUTIONARY PRINCIPLE This sounds like the general idea of conservatism. Start with a cleaner, bolder, statement of the principle. "If we know what happens if we take action A, but we aren' sure what happens if we take action B and very bad things might happen, we should choose option A." For example,suppose we know that we will end up $10 billion dollars poorer if we ban freon, but if we don't ban it maybe the atmosphere will evaporate and we will lose $900 billion. We should ban freon. Option value is an important idea to consider. Suppose if we take action A, we can reverse it later (we can later legalize freon again), but we can't reverse action B. That makes action A much more attractive, because we can reverse it later if new information comes in or conditions change. A different argument for conservatism is in my paper in JEMS. Its idea could be adapted for politics instead of business. ``Managerial Conservatism and Rational Information Acquisition, '' Journal of Economics and Management Strategy (Spring 1992), 1: 175- 202. Conservative managerial behavior can be rational and profit- maximizing. If the valuation of innovations contains white noise and the status quo would be preferred to random innovation, then any innovation that does not appear to be substantially better than the status quo should be rejected. The more successful the firm, the higher the threshold for accepting innovation should be, and the greater the conservative bias. Other things equal, more successful firms will spend less on research, adopt fewer innovations, and be less likely to advance the industry 's best practice. In Ascii txt- Latex (76K) or Acrobat pdf ( 278K, http://Pacioli.bus.indiana.edu/erasmuse/published/92JEMS.conservatism.pdf). Psychological explanations should only be used in specific applications. It is too easy to toss the explanations around in general; the explanation will only look silly or convincing if it is applied to a context. Then we know what people's psychology we are talking about, how much attention they are paying, how easy the law is to understand, etc. And we can apply evidence--stated motivations, arguments that are made with intent to persuade, and so forth. Thus, we should not say that people are myopic, so we should protect the environment more. It is just as easy to say that people don't understand discounting or large numbers of dollars in costs, so we should protect the environment less. Better: "Voters are myopic, which is why the Clean Air Amendments of 1991 were not more stringent." Or, compare global warming to toxic wastes--- not as specific, but at least we can get some grip on it. I suggest dropping the present paper and writing one on a very specific issue-- genetically modified crops, or the Kyoto Treaty. The Precautionary Principle in international law looks to me like a precursor of the Hand Rule for negligence--- a groping towards cost-benefit analysis. Or, as Cole said, maybe it is just rhetoric. (Cole just brought up the Hand Rule as I was typing the last sentence.) Note that the Precautionary Principle applies ot social change. Should we legalize marijuana or prostitution? Should we allow a lot more immigration? Etcetera. DRAHOZAL on ARBITRATORS drahozal[replaced at to avoid spamming]ku.edu, Find ordinary-language names for the variables rather than computer names, even if you use the computer names in running the regressions. There is a good working paper by Marcel Kahan and coauthor Ehud, forthcoming in Stanford LR, on competition between states for corporate charters. It looks at the dollar value of benefits to the states, and finds it small. Table 5. How many countries have 0 arbitrators from them? If many, you should use a tobit regression (to be strictly correct, you should do it anyway, since the disturbances can't drive the value of the dependent variable below zero). You should check for outliers. Are there a few (say, 3) countries driving the results? COLE ON IN REM VS. IN PERSONAM John Hart, Colonial Land Use and its Significance for Modern Takings Doctrine, 109 HLR 1252 (1996). In rem rights can be enforced against the world; in personam only against a particular person. In law-and-econ, there actually is a property/contract right distinction. But it is not the one just mentioned. Rather, it is the Calabresi-Melamed distinction between specific performance and damages. Would we say that a right to damages from Joe because he hit me with his car is an In Personam right? It seems so, under both definitions. How about the right to recover a car from Luke if he stole the car from me? That is in rem under the econ definition, since what I have a right to is the car, not money damages. Under the world/person distinction, it is in personam. Or is it? I have the right to recover it only from Luke, but it is the same remedy as I would have had against any thief. What does it mean that I have a right to my car? The answer is that it gives me the right to exclude, by self help force, other people from using it. That is in the in rem right. Once Luke steals it, I have two rights. One is my in rem right--I still get to use it. The other is the in personam right-- to get it back from Luke. p. 9. It is quite possible that what was an in rem right in 1800 was an in personam right in 1300. Both years, it is clear which it is, but the law itself changed, and there is no problem with the definition. Promissory note problem. The Numerus Clausus argument of Merrill and Smith does not depend on the in rem/in personam distinction. Consider this. Suppose the market's valuation of a company's stock depends heavily on what its supply contracts say. This provides an argument for regulating the kinds of supply contracts, to reduce valuation costs. The question is really whether it is worth dividing up rights into two categories, and if so, why do it? KYSAR on PRODUCT LIABILITY dak39[replaced at to avoid spamming]cornell.edu An alternative explanation of why courts ignore the 3rd Restatement is that they also ignored the 2nd Restatement, and the reason they adopted strict liability was Traynor's Escola decision. They follow judges rather than ALI reporters. A third theory is just that judges like strict liability for policy reasons. Ah-- I think was confused about your paper. It is not about strict liability, maybe. It is about expectations. Some hypotheticals would help. Well, I guess the Escola case does it. Eric buys a coke. It explodes, not due to any inefficient design by the seller, but by chance. Under "consumer expectations" he can sue. Under Restatement 3rd, he cannot. There is no problem of measuring consumer expectations here. Or, how about this hypothetical: Eric goes bungee jumping. He expects it to be dangerous. This particular site, though, would be very safe ordinarily, and is dangerous because of inefficient and defective design. He recovers under Restatement 3rd. He does not recover under "consumer expectations". Analyzing this formally might be useful. If the seller pays cost C, it can reduce expected damage by f(C) from its base level of R, where f'>0, f''<0. Consumers expect the damage to be S, which does not necessarily equal either R or R-f(C). The price of the product is fixed at P. The behavioral market demand curve is M - g(S); the marginal benefit demand curve is M-g(f(C)), where g'>0, g''<0. Actually, even in the Escola case, if we apply consumer expectations, it might be that consumers would admit to belief in a 1 in 10,000 probability that a coke bottle would explode, and the plaintiff then would lose. "self-executing". what does that mean? POSNER LAWS OF WAR I like the "irrationality" theory, even though you slighted it. BUt call it an "agency" theory. Neither side likes it when a soldier rapes a civilian (ordinarily, in modern times). The soldier is distracted and has some probailtiyof being killed or injured by the woman's relatives. So it is good for both sides for this kind of event to be reported to the soldier's superior. And neither side wants soldiers to burn down buildings for fun. Looting has, in fact, had important effects in war. In the Civil War, more than once, if I remember rightly, a southern victory had its impact blunted because the hungry soldiers stopped to loot. That won't explain most of the law of war, of course. p. 10. It must be relevant that in WWII the Germans treated American and British prisoners much better than Russian prisoners. How did they treat French prisoners? THe French were beaten, so the Germans did not have to fear retaliation. The technologies which are limited by the laws of war are not the most expensive items. Poison gas, dum-dums. Maybe weapons in satellites fit your theory, though. The 1920s naval treaty does too. A puzzle is why bombing civilians was not successfully controlled in WW II. Maybe not. At the time, it was thought, mistakenly, that such bombing would help win the war. 1934 (or maybe 33?): Roosevelt proposed to ban tanks and heavy artillery. Nobody agreed but Hitler, who made one of his most notable speeches endorsing it. When nobody else endorsed it, Hitler said that Germany, therefore, should be allowed to have the same weapons as any other country, and soon repudiated the relevant sections of the Versailles Treaty. Roosevelt was aiming his proposal at voters contributors (the Democrats were the war party then) and Hitler was aiming his proposal at his voters (yes, they were relevant then) and at voters in France and the UK. MCADAMS AND GINSBURG. EXPRESSIVE INTERNATIONAL LAW Respecting boundaries is an example of an international law that works. Most of the time, even countries that are on very bad terms do respect the border. It is a coordination device. Violating it for trivial benefit is not worth doing, given the existence of the convention. Such boundaries need not be the official ones, though. COnsider India- China, Korea- Korea, Cyprus-Cyprus. I wouldn't say that players with imperfect information who reach a Hawk-Hawk outcome are off the equilibrium path. THey both may have made rational, payoff- maximizing decisions ex ante given their info-- they were just wrong, as it turned out. Richard didn't come back to Icelandic law. There, the purpose of hte courts was to establish (a) what happened, and (b) whether it was against the law. (Actually, I guess that is the purpose of the courts anywhere.) International courts could do that too. For the analogy to hold, judgements should be enforced by the parties, and resistance to enforcement should be the subject of a new suit. Also, the procedure should not require the consent of both parties. (If it does, then as Tom Ginsburg said, we are getting closer to arbitration--albeit without courts and executive to enforce the arbitration clause.) Ah-- the WTO fits Iceland perfectly, as came up in the discussion of Dan Cole's comment. Countries bring complaints, the WTO judges the case, and the WTO tells the winning party what it can do that would ordinarily be illegal as a result of its victory. Maybe US courts are not always so different. Can I go to court to get your debt to me acknowledged, and then (but only then) go and seize your car to satisfy the debt? (and then the debtor is in big trouble if he resists violently) (Declaratory judgement) Do courts in practice ever punish someone for the contempt of not paying the judgements against them? The bourgeois strategy seems relevant to this paper. An unrelated but interesting point--- does a large fraction of international law lawsuits settle after filing but before a decision is rendered? I like to say that one function of criminal courts is stigmatization (besides retribution, deterrence, rehab, incapacitation). Stigma and Self-Fulfilling Expectations of Criminality , Journal of Law and Economics 39: 519-544 (October 1996). GEORGAKOPOULOS; THINKING History and quantification are not in contradiction, are they? History is the finding out of what happened. What happened can include the length of reigns, the number of people killed in battles, or, more subjectively, the importance of presidents. I think maybe data such as the path of wheat prices in England was developed by historians, not economists. No theory was needed for that. Wolfram. I wonder if maybe htere aren't problems htat are solvable, but not in just 10 billion years at 1000 computations per second, and that it is proved that this is so for ANY possible solution method, not just for the ones we have discovered so far. Lindgren: Do we want to label Friedman and Schwartz's Monetary History of the US as history, or as economics? George Stigler was an expert in the history of thought in economics. He did straight history: who believed what first, and why they believed it, with what is correct being tangential. I don't know why he liked that subject. (Also, maybe he didn't do intellectual history much, except for the calendars with historical figures in economics, after 1955 or so.) BRINIG ON MISTREATMENT OF THE ELDERLY Iowa reminds me of Japan. Japan has low crime rates, but it has an even lower number of prosecutors per capita compared to the US. So Japan does not do well at punishing murder, for example. This may be rational-- crime is not a big problem, for other reasons, so the government does not invest a lot of resources in going after it. Further comments, on looking at the paper: p. 1. "like" should be "such as". p. 2. The Buchanan paragraph could be dropped; primogeniture seems unrelated to abuse. p. 5. Quasi-rents are widely misunderstood. A rent is a return to a factor that is fixed in supply in the short run and the long run-- e.g., land. If the rent is reduced, the quantity supplied of the factor does not change. A quasi-rent is a return to a factor that is fixed in supply in the short run but not in the long run--e.g., machinery. If the quasi- rent is reduced, the quantity supplied of the factor does not change in the short run, but it does change in the long run. Thus, quasi- rents are part of producer surplus, not consumer surplus. They are returns to investment. If I pay a million dollars for machinery today, and the machinery lasts 5 years, then I will be earning quasi rents on that machinery for 5 years, and will keep operating it for those 5 years, even if demand falls sharply and unexpectedtly, but that does not mean machinery is an especially good investment. p. 8. On children supporting their indigent parents: I wondered here what the common law said and what happened historically. You talk about the Poor Laws in footnote 34, but maybe that should be moved up to here. p. 12. A graphic would work better than a table for this data. p. 13. "Elder abuse" needs defining early in the paper. p. 20. Drop the words "For example". p. 27. Are standard deviations worth reporting? What do the stars mean? LINDGREN ON LIBERALISM INDEX What single question correlates best with liberalism? Which 3? How good a fit do they have? A different approach: use non-belief variables too-- sex, age, education, etc. You could get a better fit by including them, so it is a better index, in the easiest to understand sense. But of course we wonder about an index that says a person is conservative because he is elderly and male rather than because of his beliefs. Why do we wonder about that? Why use a salient version, with questions on the military, etc.? --- that defeats the purpose, which is to get a reliable index that correlates with self-identification. It woudl be interesting to correlate the results with Myers-Briggs. Why does ambiguity in the questions matter? Conceivably, a question could be better if it is ambiguous than if it is not, because how a person INTERPRETS the question correlates well with his liberalism. Your question-writing problem seems to be that the general population interprets questions differently from subpopulations such as law professors. Law professors see "the government in Washington" and think the question is about federalism and states rights, while most people slide over the distinction between federal and state government. This provides a reason for giving different subpopulations different phrasing to try to get at the same question. It's a very tough problem. Please do send me a copy of the paper when it is written. The methodology interests me. RASMUSEN ON AGENCY http://php.indiana.edu/~erasmuse/papers/agency.pdf Ihave to ask your indulgence. We have had a number of papers at an early stage, which is fine. The paper I will give is more polished, but my presentation will not be. Let me exlain. I am very glad that Nick gave out the awards last night. As you may recall, I won the best paper award. That made me ask: What paper DID I give last year? My answer--the paper you have now. So I decied to give a different paepr--one on agency, which is under revision for ALER. It is interesting to compare agency problems in economics and in law. The economics agent is lazy and sluggish. Theproblem is to gt him doing things. The agent in law is hyperactive. He crashes the company car into schoolbuses, or places orders for a thousand tons of useless steel to be delivered to his compnay, or embezzlers company funds. Scholars are much too busy to spend their time reading books,a nd especially last chapters of books. Division of Power--within the executive, not just between branches. THe US executive branch may or may not have a "unitary executive"-- see S. Calabresi. State governments definitely divide the executive, though. Think about remedies. Why does estoppel have a different remedy? Is expectations damages a good remedy or not? Does it matter what doctrine judges use so long as they get the right answer? Nick is interested in the 3rd Restatement of Agency. Ask Jeff about the January 2003 Gruter meeting in DC. Dell has a good lightweight laptop. Jim Lindgren has one. Ribstein comments: With respect to your agency paper, my current summary of agency law is in Section 8.01 of my casebook. This summary is similar to what it has been since around 1983, always relying on a cheaper-cost-avoider analysis. The current draft of the forthcoming 4th edition is on my webpage, address below (although the Illinois website seems to be down at the moment), pp. 297-300. See also section 2.01. I discuss Watteau v. Fenwick in n. 4 on p. 30, dealing with undisclosed principals. There's a longer discussion of agency law in my book Unincorporated Business Associations (second ed. 2000). Although the scope of the undisclosed principal's authority is similar to the inherent authority of a general agent, so that the case's language has sometimes been cited on this point, the basis of the authority is completely different. Since you're trying to explain legal rules with your analysis, I think you need to be careful about these sometimes subtle differences between the rules to avoid irrelevance. Barondes comments: It is a jury question (a question of fact to be decided by a jury) whether an estoppel exists. I also strongly suspect it is also a jury question whether there is apparent authority (although I am not sure). It seems to me that it might be problematic to provide a jury with instructions on the existence of an agency relationship based on which party is the least-cost risk avoider. I would think having categories, as in the current law, would be more helpful to a jury-- they are likely not to understand your more elegant formulation. A second, related, point, is that having some categories would make some litigation more efficient, in the sense of preventing the introduction of evidence that would just confuse a jury. Where there has been actual or implied authority, the principal should be bound, as that was what the principal intended, regardless of the level of incompetence of the principal. Consider the movie Forrest Gump. When Forrest Gump hires someone who is also not competent as an agent, Forrest should be bound by the acts of the agent, I would think, even if it might be more costly, or perhaps impossible, for Forrest to prevent the malfeasance. Third, it seems to me that there are really two levels of abstraction that the law has to address--to what extent does the law incorporate the particulars of the parties in determining which party is the least-cost risk avoider. Consider, for example, a very incompetent principal who hires a manager to run his tavern--one for whom it is very costly to confirm that his agents act in the desired fashion. It may in some circumstances be less costly for the third party to prevent the malfeasance of the agent. Although I have never taught agency, I gather that this principal who is not competent would lose; that he is not competent would not prevent the creation of apparent authority. So, a "least cost risk avoider" rule of law would have to have at least two components: one addressing a high level of abstraction (lack of detail about the parties) and one addressing a fine level of detail. If you put that together with another rule about actual authority, you now have three different rules--approaching what the law currently does.