Law and economics methods and techniques in contract law

Mitja Kovač

Chapter 7 in Research Methods for Contract Law and Scholarship, 2025, pp 158-183 from Edward Elgar Publishing

Abstract: This chapter offers a synthesis of the normative and positive law and economics methodology as applied to contract law. It begins with a brief historical narrative explaining how the current state of contract law and economics scholarship evolved, including the incorporation of behavioural economics insights on non-rational behaviour into a field that had previously been predicated on assumptions of rationality. It then provides an overview of the economic concepts of rationality, risk-allocation, transaction cost phenomena, incentives, information asymmetries, and market failures. Next, this chapter provides an overview of contract theory and of comparative contract law and economics, and how these are employed in contract law. Finally, the chapter describes and assesses the main limitations and future potential of the contract law and economics approach.

Keywords: Methodology; Contract law and economics; Contract theory; Behavioural contract law and economics; Limitations (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035316465
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