The private and the social functions of contracts and of contract law are examined in this entry. In section 1, on the … basic theory of contracts, the topics considered include contract formation, why contract enforcement is valuable, the … of contract are discussed …

This Article offers a novel interpretation of contract law, which I call “Contract as Empowerment”. On this view …, contract law is neither a mere mechanism to promote efficiency nor a mere reflection of any familiar moral norm — such as norms … of promise keeping, property, or corrective justice. Contract law is instead a mechanism of empowerment: it empowers …

I analyze a model in which a principal offers a contract to an agent and can influence the agent's marginal return of …

cost. The robust contract generates a seemingly excessive pay-performance sensitivity. The worst-case effort cost is high … contract is misspecified, i.e., when he is offered the robust contract, but his true effort cost is constant. I find that …

principal is ambiguity averse, and designs a contract which is robust to the worst case effort cost process. Ambiguity divides … the contract into two regions. After sufficiently high performance, the agent reaches the over-compensation region, where … he receives excessive benefits compared to the contract without ambiguity, while after low performance, he enters the …

I analyze a model in which a principal offers a contract to an agent and can influence the agent’s marginal return of …