Readings in the Economics of Contract Law

This collection brings together some of the main contributions to an important area of this work, the economics of contract law.

Victor P. Goldberg (Edited by)

9780521349208, Cambridge University Press

Paperback, published 1 June 1982

268 pages
23 x 15.2 x 1.8 cm, 0.41 kg

Economic analysis is being applied by scholars to an increasing range of legal problems. This collection brings together some of the main contributions to an important area of this work, the economics of contract law. The essays and illuminating notes, questions, and introductions provided by the editor outline the Law and Economics framework for analyzing contractual relationships. The first two parts of the book present a number of useful concepts - adverse selection, moral hazard, and rent seeking - and a general way of thinking about the economics of contracting and contract law. The remainder of the book considers a wide range of topics and issues. The recurring theme is that contracting parties want to assign the responsibility for adjusting to particular contingencies to the party best able to control the costs of adjustment. The adjustment problem is exacerbated by the fact that the parties might engage in various types of strategic behavior, such as opportunism, moral hazard, and rent-seeking. Many contract law doctrines can best be understood as attempts to replicate how reasonable parties might resolve this adjustment problem.

Part 1. Some Preliminaries: 1. Non-contractual relations in business: a preliminary study Stewart Macaulay
2. Relational exchange: economics and complex contracts Victor P. Goldberg
3. Production functions, transactions costs, and the new institutionalism Victor P. Goldberg
4. The market for 'lemons': quality uncertainty and the market mechanism George A. Akerlof
5. A treatise on the law of marine insurance and general average, volume 1 Theophilus Parsons
6. The economics of moral hazard: comment Mark V. Pauly
7. The economics of moral hazard: further comment Kenneth J. Arrow
8. Efficient rent seeking Gordon Tullock
Questions and notes on rent seeking
Part II. Contract Law and the Least Cost Avoider: 9. Unity in tort, contract, and property: the model of precaution Robert Cooter
10. The mitigation principle: toward a general theory of contractual obligation (1) Charles J. Goetz and Robert E. Scott
11. Relational exchange, contract law and the Boomer problem (1) Victor P. Goldberg
Questions and notes on the least cost avoider
Part III. The Expectation Interest, the Reliance Interest and Consequential Damages: A. Property in Price
12. The reliance interest in contract damages Lon Fuller and William Perdue
13. Note on price information and enforcement of the expectation interest Victor P. Goldberg
Questions and notes on protecting the property interest in the price
B. Reliance and Consequential Damages
14. The contract-tort boundary and the economics of insurance William Bishop
15. Notes on the reliance interest Robert Birmingham
Questions and notes on fault, consequential damages and reliance
Part IV. The Lost-Volume Seller Puzzle: 16. An economic analysis of the lost-volume retail seller Victor P. Goldberg
Questions and notes on the seller's lost profits
Part V. Specific Performance and the Cost of Completion: 17. The choice of remedy for breach of contract William Bishop
18. Relational exchange, contract law and the Boomer problem Victor P. Goldberg
19. Cost of completion or diminution in market value: the relevance of subjective value Timothy J. Muris
Questions and notes on specific performance and cost of completion
Part VI. Power, Governance and the Penalty Clause Puzzle: 20. Transaction cost determinants of 'unfair' contractual arrangements Benjamin Klein
21. A relational exchange perspective on the employment relationship Victor P. Goldberg
22. Liquidated damages versus penalties: sense or nonsense? Kenneth W. Clarkson, Rober Leroy Miller and Timothy J. Muris
23. Further thoughts on penalty clauses Victor P. Goldberg
Questions and notes on power and penalty clauses
Part VII. Standard Forms and Warranties: 24. Institutional change and the quasi-invisible hand Victor P. Goldberg
25. A theory of the consumer product warranty George L. Priest
Questions and notes on warranties
Part VIII. Duress, Preexisting Duty and Good Faith Modification: 26. Duress by economic pressure John Dalzell
27. Gratuitous promises in economics and law Richard A. Posner
28. The mitigation principle: toward a general theory of contractual obligation Charles J. Goetz and Robert E. Scott
29. The law of contract modifications: the uncertain quest for a benchmark of enforceability Varouj A. Aivazian, Michael J. Trebilcock and Michael Penny
Questions and notes on duress
Part IX. Impossibility, Related Doctrines and Price Adjustment: 30. Impossibility and related doctrines in contract law: an economic analysis Richard A. Posner and Andrew M. Rosenfield
31. Impossibility and related excuses Victor P. Goldberg
32. Price adjustment in long-term contracts Victor P. Goldberg
Questions and notes on impossibility and price adjustment
References
Indexes.

Subject Areas: Economic theory & philosophy [KCA]