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47 Hastings L.J. 635 (1995-1996)
Not My Brother's Keeper: The Inability of an Informed Minority to Correct for Imperfect Information

handle is hein.journals/hastlj47 and id is 663 raw text is: Not My Brother's Keeper: The Inability of an Informed Minority to Correct for Imperfect Information by R. TED CRUZ* and JEFFREY J. I-INCK** Introduction In contract law, the defenders of the market champion freedom of contract and the rights of parties to be bound and to bind others by their consensual commitments. Critics of the market look instead to notions of justice and fairness, as determined by the courts. In tort law, market defenders advocate liability for fault, not merely for exist- ence, and usually defend the right to contract for more or less tort liability. The critics, in turn, see ignorance and exploitation, so they urge risk distribution brought about by blanket liability imposed by law, regardless of attempts to contract otherwise. As is no doubt clear, we are in sympathy with the defenders of the market; we have more faith in the autonomy and creativity of indi- viduals than in the enlightened wisdom of the collective. Yet, in as- sessing the arguments used by both sides, we have encountered a tool of the defenders that is faulty. Because silence would be counter-pro- ductive, this article instead exposes that weakness. The market defenders' faulty tool is the informed minority argu- ment. It arises both in contract and in tort law as a response to the problem of imperfect information. In contract, there are often certain terms that are latent, particularly in standard form contracts. These typically fine-print terms are frequently not read by those that sign the * A.B., Princeton University; J.D., Harvard Law School; John M. Olin Fellow in Law & Economics, Harvard Law School; Law Clerk, The Honorable J. Michael Luttig, United States Court of Appeals for the Fourth Circuit, 1995-96; Law Clerk, The Honorable William H. Rehnquist, Chief Justice of the United States, October Term 1996. ** B.A., Northwestern University; J.D., Harvard Law School; John M. Olin Fellow in Law & Economics, Harvard Law School; Associate, McKinsey & Company. The authors would like to thank the John M. Olin Foundation for its financial support in preparing this article and Professors Steven Shavell and Jon Hanson for their guidance and encouragement. [6351