Legal Secrets: Equality and Efficiency in the Common Law

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University of Chicago Press, Nov 15, 1988 - Law - 363 pages
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Does the seller of a house have to tell the buyer that the water is turned off twelve hours a day? Does the buyer of a great quantity of tobacco have to inform the seller that the military blockade of the local port, which had depressed tobacco sales and lowered prices, is about to end? Courts say yes in the first case, no in the second. How can we understand the difference in judgments? And what does it say about whether the psychiatrist should disclose to his patient's girlfriend that the patient wants to kill her?

Kim Lane Scheppele answers the question, Which secrets are legal secrets and what makes them so? She challenges the economic theory of law, which argues that judges decide cases in ways that maximize efficiency, and she shows that judges use equality as an important principle in their decisions. In the course of thinking about secrets, Scheppele also explores broader questions about judicial reasoning—how judges find meaning in legal texts and how they infuse every fact summary with the values of their legal culture. Finally, the specific insights about secrecy are shown to be consistent with a general moral theory of law that indicates what the content of law should be if the law is to be legitimate, a theory that sees legal justification as the opportunity to attract consent.

This is more than a book about secrets. It is also a book about the limits of an economic view of law. Ultimately, it is a work in constructive legal theory, one that draws on moral philosophy, sociology, economics, and political theory to develop a new view of legal interpretation and legal morality.
 

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Contents

The Sociology of Secrecy
3
The Trails of Five Secrets
5
The Concept of Secrecy
12
Forms of Secrecy
16
Justifications for Secrets
17
A Note on Lies and HalfTruths
22
Secrets and the Social Distribution of Knowledge
23
The Economic Analysis of Secrecy An Economic Hypothesis
24
Special Confidence
149
The Conduct of the Knowledgeable Party
151
Comparing Economic and Contractarian Theories of Nondisclosure and Fraud
161
Legitimate Nondisclosure and Equal Access to Information
167
Understanding Privacy
179
Secrecy and Privacy Secrets in the Shadow of Privacy
181
Privacy Claims and Standing to Sue
187
Threshold Rules and Direct Secrets
191

An Overview
25
The Law and Economics of Secrecy
31
Efficient Secrets
41
Secrecy and Strategy
43
The Social Context of Strategic Secrets
45
The Costs of SecretKeeping in a Reactive World
48
Developing a New Jurisprudence
55
A Contractarian Theory of Law
57
Consent as a Basis for Legal Morality
60
How Consent Works
63
Those Who Choose
66
Holistic or Piecemeal
68
Negative and Positive Contractarianism
69
Direct Secrets
70
Serial and Shared Secrets
79
Contractarianism and Utilitarianism
83
A Theory of Legal Interpretation The Mutual Construction of Facts and Rules
86
The Need for a Theory of Interpretation
88
The Interpretive Theory of The Economic Analysis of Law
91
A Theory of Legal Interpretation
94
Implications for the Study of Law
103
How Law Is Not Like Literature
105
Understanding Fraud
109
The Nondisclosure Puzzle and Equal Access to Information
111
When the Buyer Knows More than the Seller
112
When the Seller Knows More than the Buyer
115
Equal Access as a Theory of the Doctrine of Nondisclosure
119
Comparing Contractarian and Economic Theories
124
Legally Relevant Facts in Fraud Cases
127
Buyer and Seller
130
Equal or Superior Means of Knowledge
134
The Relation of the Parties to Each Other
138
The Nature of the Agreement
143
Direct Secrets
198
Serial Secrets
204
Overdisclosure
206
Identification
211
Confidential Relations
222
A Note on Secondhand Secrets
226
Trade Secrets as Corporate Privacy
231
Secrecy
232
Investment
236
Confidential Relations
240
Independent Discovery
245
Comparing Economic and Contractarian Theories of Privacy
248
A Contractarian Theory of Privacy
258
Understanding Implied Warranties
267
The Rule and Reality of Caveat Emptor in New York State 18041900
269
Caveat Emptor as Legal Puzzle
271
Core Applications of the Doctrine of Caveat Emptor
275
The Original Exceptions to the Caveat Emptor Rule
280
18251900
285
The Executory Contract 18401900
287
18601900
291
Economic and Contractarian Theories of Implied Warranty
292
Concluding
299
The Logic of Legal Secrets
301
Toward a Contractarian Theory of Law
308
Toward a Constitutional Jurisprudence
316
An Introduction for Social Scientists
321
References
329
Table of Cases
339
Index of Names
349
Subject Index
353
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About the author (1988)

Kim Lane Scheppele is assistant professor of political science, assistant research scientist in the Institute of Public Policy Studies, and adjunct assistant professor of law at the University of Michigan. She is the coauthor of Crime and Punishment: Changing Attitudes in America and is cofounder of the Conference Group on Jurisprudence and Public Law.

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