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Assignment for Next Class Agenda for 18th Class Handouts Slides Utility versus individual rights Gould Virus Introduction to theories of adjudication Assignment for Next Class Readings ##20, 22-23 (pp. 117-32, 134-42) pp. 142-43, Qs 7 (WG3), 8 (WG4), 11 (WG1), 12 (WG2) on pp. 142-43 , 9

Last Class – Information 2 primary information problems Moral hazard. Incentive problem after contract entered into Adverse selection – Lack of information before contract entered into Principal-agent problem Context in which moral hazard or adverse selection often occurs Gilson Lawyer as Transactions Cost Engineer Contracts address and lessen information problems Good lawyers can draft clauses that make deals Representations and warranties lessen adverse selection Covenants and conditions lessen moral hazard Earn out provisions overcome disagreements relating to valuation (adverse selection) Incentivize good behavior during transition (moral hazard) King v Burwell Adverse selection provides reason to interpret “exchange established by the State” to include exchanges established by the federal government

Conflict Between Utility and Rights Trolley problem. Trolley is hurtling toward 5 workmen. Driver can avoid killing 5 by turning trolley, but doing so will kill 1. Is it permissible for the driver to turn? Is it morally required? Transplant problem. 5 people will die if they don’t get organ transplants. Only way do so is to harvest organs from young man who comes in for check-up. Doing so would kill him. Would it be permissible for surgeon to kill young man to save 5 people who need organ transplants?

Questions on Rights What do you think is the right thing to do in the Trolley case? Why? What do you think is the right thing to do in the Transplant case? Why? P. 312 Question 7 Until recently, California law mandated vaccination of children, but exempted children based on their parents’ religious or “personal” beliefs. A recent law eliminated those exemptions. Both the former and current law allow exemption for children with medical conditions that make vaccination unsafe. What do you think is better, former or current law? Why? Can you think of a law that is better than both former and current law? Why? Gould Virus

Theories of Adjudication Formalism Legal reasoning is primarily logical reasoning Judges should not rely on moral or policy reasoning Realism Logical reasoning cannot answer many legal questions Legal reasoning does and must incorporate moral and policy reasoning Natural Law Legal reasoning does and should incorporate unenacted principles These principles are part of the legal system and distinct from policy reasoning Class list for preferences and sign in Digital voice recorder Nameplates and marker Handouts of PowerPoint slides IP chart