Contract Law

Benjamin Hermalin, Avery W. Katz and Richard Craswell

Chapter 01 in Handbook of Law and Economics, 2007, vol. 1, pp 3-138 from Elsevier

Abstract: This chapter surveys major issues arising in the economic analysis of contract law. It begins with an introductory discussion of scope and methodology, and then addresses four main topics that correspond to the major doctrinal divisions of the law of contracts. These divisions include freedom of contract (the extent of private power to create binding obligations), formation of contracts (the procedural mechanics of exchange, and the rules that govern pre-contractual behavior), contract interpretation (the consequences that follow when agreements are ambiguous or incomplete), and enforcement of contractual obligations (the choice between private and public enforcement, and the legal remedies that follow from breach of contract). In each of these sections, we provide an economic analysis of relevant legal rules and institutions, and of the connections between legal arrangements and corresponding topics in microeconomic theory, such as welfare economics and the theory of contracts.

Keywords: freedom of contract; Coase Theorem; contract formation; incomplete contracts; breach of contract; remedies for breach (search for similar items in EconPapers)
JEL-codes: K (search for similar items in EconPapers)
Date: 2007
ISBN: 978-0-444-512-352
References: Add references at CitEc
Citations: View citations in EconPapers (6)

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