Category Archives: Contract
‘“Incomplete Contracts and the Theory of Contract Design”, by Robert Scott and George Triantis’
Economists and lawyers know that almost every contract is incomplete. Contracts routinely omit or leave undefined important terms, and they rarely anticipate every circumstance that might frustrate performance. The reason is simple: It makes little sense to spend $1,000 drafting a provision that has an expected value of only $100. Parties therefore leave lower-value contingencies […]
Kelsey, Chakravarty, Kim and Melkonyan, ‘Investment Incentives under Contractual Unawareness’
ABSTRACT We study investment incentives when contracts do not cover all payoff-relevant contingencies. In a principal-agent model with moral hazard, the agent’s non-contractible investment changes both the distribution over contracted contingencies and the probability of an unforeseen contingency governed by legal default and ex post negotiation. First, we develop a framework separating awareness effects across […]
Rachel Landy, ‘Deal Killers’
ABSTRACT Up to 40% of M&A deals are believed to die during diligence, but there is scant literature examining why – until now. Using original interviews with practitioners, this Article examines what causes buyers of private companies to abandon deals after entering into a nonbinding (but ‘sticky’) preliminary agreement and describes what the lawyer can […]
Jay Feinman, ‘The Purposes of Insurance Law Revisited’
ABSTRACT This paper was presented at a symposium celebrating the illustrious career of Professor Kenneth S Abraham, using as a marker the fortieth anniversary of the publication of his book, Distributing Risk: Insurance, Legal Theory, and Public Policy. The book was a landmark in the study of insurance and insurance law in the United States. […]
‘Your Price May Vary: The FTC’s Personalized-Pricing Puzzle’
A price that knows your name may be creepy. It may also be a bargain. That ambiguity sits at the heart of the Federal Trade Commission’s (FTC) proposed enforcement policy statement on personalized pricing, which opens with a candid admission: The practice is ‘not well understood’, and its effects on consumers remain ‘unclear’. That uncertainty […]
Choi and Kim, ‘The Right to Resell Digital Goods’
ABSTRACT Digital goods are typically sold as durable but non-transferable access rights, with digital rights management (DRM) preventing resale. Should policy restore resale rights? In a two-period model, resale insures early buyers and reallocates copies, but diverts future transactions from the platform. Under independent valuations, the platform never prefers an active secondary market, even when […]
Erik Encarnacion, ‘Discrimination as Bad Faith’
ABSTRACT Courts and commentators often treat antidiscrimination principles as alien to contract law and expressed exclusively by civil rights statutes. This Article argues that the separation is mistaken on contract law’s own terms: a wrongfully discriminatory exercise of contractual discretion is presumptively a violation of the duty of good faith and fair dealing, a mandatory […]
Dov Waisman, ‘Foreseeability and Reasonableness in Promissory Estoppel’
ABSTRACT The law of promissory estoppel contains a little-noticed puzzle relating to the way in which the justifiability of the plaintiff’s reliance is determined in American courts. Many jurisdictions now require the plaintiff asserting a promissory estoppel claim to prove that their reliance on the defendant’s promise was both reasonable and foreseeable. However, there does […]
Jonker and Victoria, ‘Chaos Contracts: Outcome Manipulation in Prediction Markets, and How to Regulate It’
ABSTRACT Prediction markets are ordinarily defended for their ability to aggregate dispersed information into a price that tracks an event’s probability. This defense assumes act-state independence: that trading a contract does not influence the probability of its outcome. Where this assumption doesn’t hold, contracts are act-sensitive, and the price of an event contract is not […]
Katy Barnett, ‘An Excellent Genealogy of the Core Concepts of Indian Contract Law: A Review of Dr Shivprasad Swaminathan’s A Historical Introduction to Indian Contract Law (Routledge 2025)’
ABSTRACT This review discusses Dr Shivprasad Swaminathan’s new book, A Historical Introduction to Indian Contract Law, including his discussion of the history of Indian contract law, formation of contracts, contractual consideration, privity, contractual vitiating factors, frustration, damages and stipulated sums, and unjustified enrichment. As noted in the last chapter of Dr Swaminathan’s book, the discussion […]