This study investigates contracting mechanisms in situations of opportunistic disputes between organizations. We specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. We use a unique data...

The following case study investigates the contract enforcement institutions that enable German customers to purchase software in Asia and Eastern Europe. The case study shows that nation-states are hardly able to generate a legal "shadow" for cross-border business relations. The same holds true...

When investments are non-verifiable, inducing cooperative investments with simple contracts may not be as difficult as previously thought. Indeed, modeling “expectation damages” close to legal practice, we show that the commonly applied remedy of US contract law induces the first best. Yet,...

This paper examines the main possible rationales for judicial control of unfair contract terms (unequal bargaining, distributive justice, market failure, paternalism, the ethos of the market, comparative law, and the nature of an optional instrument) and concludes that none of them requires a...

If a seller delivers a good non-conforming to contract, European and US warranty law allows consumers to choose between some money transfer and termination. Termination rights are, however, widely criticized, mainly for fear that the buyer may use non-conformity as a pretext for getting rid of a...

When investments are non-verifiable, inducing cooperative investments with simple contracts may not be as difficult as previously thought. Indeed, modeling 'expectation damages' close to legal practice, we show that the default remedy of contract law induces the first best. Yet, in order to...

Firms that engage in long-term bilateral relationships with their buyers or suppliers are usually required to make relationship-specific investments. We examine how the values of these long-term specific investments are affected by the quality of governmental contract enforcement. We find that...

This article interrogates certain presuppositions of consumer law and policy discourse, chiefly through the lens of Macneil's 'essential contract theory,' in particular his proposed contract norms. Three presuppositions are posited and then discussed in turn. The author concludes that the...

Do contractual frictions matter when firms are engaged in repeated interactions? This paper argues that long-term relationships, which allow firms to (partly) overcome the static costs associated with low contractibility, will under certain circumstances create dynamic inefficiencies. We...