Contract Theory and the Limits of Contract Law
Contract law has neither a complete descriptive theory, explaining what the law is, nor a complete normative theory, explaining what the law should be. These gaps are unsurprising given the traditional definition of contract as embracing all promises that the law will enforce. Even a theory of contract law that focuses only on the enforcement of bargains must still consider the entire continuum from standard form contracts between firms and consumers to commercial contracts between business firms. No descriptive theory has yet explained a law of contract that comprehends such a broad domain. Normative theories that are grounded in a single norm -- such as autonomy or efficiency -- also have foundered over the heterogeneity of contractual contexts to which the theory is to apply. Pluralist theories attempt to respond to the difficulty that unitary normative theories pose by urging courts to pursue efficiency, fairness, good faith and the protection of individual autonomy. Such theories need, but so far lack, a meta principle that tells which of these goals should be decisive when they conflict. We attempt to make progress here with a more modest approach -- to set out and defend a normative theory to guide decisionmakers in the regulation of business contracts.
|Date of creation:|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.law.yale.edu/outside/html/home/index.htm|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Schmitz, Patrick W, 2001.
"The Hold-up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory,"
Bulletin of Economic Research,
Wiley Blackwell, vol. 53(1), pages 1-17, January.
- Schmitz, Patrick W., 2001. "The Hold-Up Problem and Incomplete Contracts: A Survey of Recent Topics in Contract Theory," MPRA Paper 12562, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:bep:yaloln:yale_lepp-1011. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If references are entirely missing, you can add them using this form.