On Mon, 21 Aug 1995, Bill Stewart wrote:
can be substantial even if the suit is bogus.) Under what conditions do you expect somebody to sue a CA?
CA certifies key saying that holder has corporate power to enter into deals upto $1million. Keyholder commits fraud, arguably outside corparate powers. CA certifies you are Jack Ripper based on phony id. In fact you are Sam Spade. CA sued for recovery of ensuing fraud. CA certifies that a document is authentic and time-stamps it. Lawyers did not do due dilligence, books were cooked, everyone who touches document gets sued. In each of these cases, if the CA did exactly what it promises and no more, it (arguably) deserves a way to short-circuit the suit, thus keeping its costs down. Since (in the absence of any rules given the newness of the technology) it is very likely that a rich CA would get nuisance suits every time a deal in which it particiapted went sour, the absence of rules will either raise costs CAs have to charge (e.g. to buy insurance) or will keep rich folk out of the industry (which isn't good either, since you want CAs to buy security and to last). Thus the need for clear liability rules. A. Michael Froomkin | +1 (305) 284-4285; +1 (305) 284-6506 (fax) Associate Professor of Law | mfroomki@umiami.ir.miami.edu U. Miami School of Law | P.O. Box 248087 | It's hot here. And humid. Coral Gables, FL 33124 USA | See http://www-swiss.ai.mit.edu/6095/articles/froomkin-metaphor/text.html and http://www.law.cornell.edu/jol/froomkin.htm