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Law and the Balance of Power

Law and the Balance of Power: The Automobile Manufacturers and their Dealers

Stewart Macaulay
Copyright Date: 1966
Published by: Russell Sage Foundation
Pages: 244
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  • Book Info
    Law and the Balance of Power
    Book Description:

    Stewart Macaulay teaches contracts at the University of Wisconsin Law School and is interested in the part the legal system plays in implementing, regulating, and hindering economic relationships, and how it does these things. This book is a descriptive analysis of organizational change that has resulted from automobile dealers' attempts to find a legal remedy for what they consider unfair practices of the manufacturers. It advances our understanding of the limitations and the positive functions of formal rules in the regulation of human conduct, and shows how informal procedures can develop as a result of pressure for changes in the formal rules.

    eISBN: 978-1-61044-373-9
    Subjects: Law, Business, Sociology

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. Foreword
    (pp. xi-xii)
    Willard Hurst

    This is a book for anyone interested in law as part of the living processes of the society. As such, it is a book for the imaginative practicing lawyer and for the realistic scholar. As such, too, it is a book not just for scholars of law but also for all social scientists interested in the roles of the market and of the modern big business corporation, whether the focus be primarily on resource allocation or on the organization of power.

    The special contributions of Professor Macaulay’s book grow out of the range of his hypotheses and his raw materials....

  4. Preface
    (pp. xiii-xiv)
    Leonard S. Cottrell Jr.
  5. Author’s Preface
    (pp. xv-xx)
    S. M.
  6. 1. Introduction
    (pp. 1-4)

    This book is about business relationships between the major American automobile manufacturers and their dealers—in a very nonlegal sense, their “contracts.” Although these relationships are intrinsically interesting to me, I am concerned with them for several other reasons. First, I will deal with an extensive lobbying effort by the automobile dealers that has produced hearings, statutes, and administrative agencies on federal and state levels, all of which were supposed to change the way the manufacturers and dealers did business with one another. One of my concerns will be the consequences of this use of almost the total legal system...

  7. 2. The Nature of the Dealers’ Problems: The Setting for Legal Warfare
    (pp. 5-21)

    In this section we will consider how problems are both avoided and created in the manufacturer-dealer relationship and how those that do arise are solved privately without resort to outside forces such as publicity or law. We will also survey what the dealers viewed as major wrongs committed by the manufacturers and for which the dealers had no remedies. This information should help to explain why the dealers turned to the legal system for assistance in changing their relationships with the manufacturers, some of the purposes of the statutes and cases that were the result of this appeal to the...

  8. 3. Attempted Solutions: Individual Lawsuits, Collective Bargaining, and an Appeal to the Legal System for Changes in the Rules
    (pp. 22-163)

    In the process of changing the nature of a relationship through the use of the legal system there is a pattern which involves a typical sequence of stages.69In the first stage, individuals seek relief by taking their case to an agency of government. While usually individuals go to court, at times they will turn to an attorney general’s office or a regulatory agency. However, usually the individual will fail if the problem requires significant changes in the law. Even if he wins, he may do so in a way that promises little to others in similar situations or his...

  9. 4. The Consequences of the Dealers’ Appeal to the Legal System
    (pp. 164-188)

    Hearings have been held; statutes have been passed, construed, and administered; and the manufacturers have created their own internal “due process” systems. What difference has it made? The answer involves assessing gains and costs, and the balance may look different from the position of dealers, manufacturers, and consumers of motor vehicles. Even these categories may be too crude; the balance of gains to costs may differ for metropolitan and rural dealers, for General Motors and American Motors, and for law professors who trade in cars every five to ten years and the Hertz car rental system.

    This study has listed...

  10. 5. Some Conclusions and Observations
    (pp. 189-207)

    The organized dealers are a “special interest group” which has achieved some success in solving its problems by using the legal system. One usually thinks of special interest legislation as fencing in a group to protect it from competition. For example, this is the effect of many fair trade laws and much occupational licensing.847The dealers’ efforts may have had some anticompetitive effects; but, as we have seen in the discussion of the construction of the Good Faith Act, the administration of the state statutes, and in the operation of private systems, the impacts of other values such as efficiency,...

  11. Appendix A: Notes to Table 1
    (pp. 208-209)
  12. Appendix B: Notes to Table 2
    (pp. 210-216)
  13. Index
    (pp. 217-224)