Contracts, trial time, and inflation : LUSENET : Lessig's Contracts : One Thread

I was just curious, appropos of very little:

Given the average length of time between infraction and trial, what allowance is made for inflation? I understand that the court granted 8% interest in Batsakis, but what about other instances--especially those in which the process takes a great deal of time, during periods of high inflation?



-- Anonymous, September 22, 1998


This is only a not-so-educated gues, but didn't the Ct. in Batsakis maintain an 8% interest rate (as the contract required) until the principal (spelling?) of the loan was paid off, at which point interest on the accrued interest would be 6%. It seems to me that perhaps the court utilizes something akin to the prevailing market interest rate. Or maybe not...


-- Anonymous, September 22, 1998

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