Rational parties enter into a contract if the agreement is mutually beneficial. However, after the contract is formed …, changes to the costs and/or benefits of performance may render the original contract undesirable. In this paper, we carry out … contractual obligations. After entering into a contract, experimental subjects observe symmetrical changes to the original costs …

Under common law, the standard remedy for breach of contract is expectation damages. Under continental law, the … experimental methods to test whether knowing that non-fulfilment will only lead to damages deters mutually beneficial trade. The …

This chapter surveys major issues arising in the economic analysis of contract law. It begins with an introductory … 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 …

Contract law affects behavior not just directly, by ordering damages, but also indirectly, by providing information on … business with the disputants going forward. Contract law thus affects behavior by shaping reputations and facilitating market … discipline. This Article examines contract law’s liability standards, defenses, and remedies doctrines from an information …

about the asset? How do the disclosure rules of contract law influence the investigation decision? Shavell (1994) showed …-disclosure rule, which requires disclosure of material information, but only after the contract is concluded. We show that this rule … can be more efficient than both voluntary disclosure and mandatory (pre-contract) disclosure …

If a seller delivers a good non-conforming to contract, European and US warranty law allows consumers to choose between … use non-conformity as a pretext for getting rid of a contract he no longer wants. We show that this possibility of …

Neoclassical economic theory seems to aptly characterize contract law’s essence. Contracts enable two parties to reach … the achievement of economic efficiency serves as contract law’s major goal. This article, however, examines an alternative … hypothesis, that contract law is about enforcing inefficient bargains in order to provide enough security to facilitate …

the parties to the contract. It will then turn to so-called 'secondary rules' of construction relating to exclusions for …

This paper develops a game-theoretic model of a contract between a creditor and a debtor where equilibrium depends on … the damage rule chosen for breach-of-contract situations, the use of impossibility-of-performance excuses and the level of … legal contract enforceability. We find that, under perfect legal enforceability, the different alternative damage rules …