Common use of S S Clause in Contracts

S S. 21In calculating the settlement for any given rule we assume that (2) holds and hence that is given by (3). This is because as we saw in Proposition 1 if (2) is violated then does not file against and the game terminates immediately. the settlement is S(Φ ) = I + β p cT − (1 − β) (1 − p) cT (7) Under the Plaintiff Biased Rule, denoted ΦP , the Plaintiff pays cˆTP if he loses, and pays nothing otherwise. In this case, we have cPT = (1 − p)cˆPT the settlement is and cDT = pcˆPT + cˆDT and, using (3), S(ΦP ) = I + β (pcˆTP + cˆTD) − (1 − β)(1 − p) cˆPT (8) Under the Defendant Biased Rule, denoted ΦD, the Defendant pays cˆTD if he loses, and pays nothing otherwise. In this case, we have cPT = cˆPT + (1 − p)cˆTD and cTD = pcˆDT and, using (3), the settlement is S(ΦD) = I + β pcˆDT − (1 − β) [cˆPT + (1 − p)cˆDT ] (9)

S S. 21In calculating the settlement for any given rule we assume that (21) holds and hence that is given by (32). This is because as we saw in Proposition 1 if (21) is violated then does not file against and the game terminates immediately. the settlement is S(Φ ) = I + β p cT − (1 − β) (1 − p) cT (76) Under the Plaintiff Biased Rule, denoted ΦP , the Plaintiff pays cˆTP if he loses, and pays nothing otherwise. In this case, we have cPT = (1 − p)cˆPT p)cˆFT the settlement is and cDT = pcˆPT + cˆDT and, using (32), S(ΦP ) = I + β (pcˆTP + cˆTDcˆTD ) − (1 − β)(1 − p) cˆPT (8) 7) Under the Defendant Biased Rule, denoted ΦD, the Defendant pays cˆTD if he loses, and pays nothing otherwise. In this case, we have cPT = cˆPT + (1 − p)cˆTD and cTD = pcˆDT and, using (32), the settlement is S(ΦD) = I + β pcˆDT pcˆQT − (1 − β) [cˆPT cˆFT + (1 − p)cˆDT ] (9)8)