D. Gordon Smith,
The "Branding Effect" of Contracts,
12 HARV. NEGOT. L. REV.,
Available at: http://digitalcommons.law.byu.edu/faculty_scholarship/39
branding, contracts, opportunism
In his case study of the MasterCard IPO and its predecessor piece on the Google IPO, Victor Fleischer claims to find evidence of a branding effect of legal infrastructure. The branding effect is not aimed at reducing the potential for opportunism by a counterparty to a contract, but rather at increasing the attractiveness of a product to present and future users or improving the image of a company in the eyes of regulators, judges, and juries. In this essay commenting on Fleischer's work, I endorse the notion that deal structures have branding effects and position Fleischer's work within a larger stream of scholarship that focuses on the substantive terms of contracts rather than on contract doctrine or dispute resolution in various contractual settings. In addition, I offer a few refinements to Fleischer's notion of branding effect.
For the Conference on Case Studies and Negotiations, sponsored by Harvard Law School, Cambridge, Massachusetts on April 26, 2006.