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The Law Of Duress And The Economics Of Credible Threats, Oren Bar-Gill, Omri Ben-Shahar
The Law Of Duress And The Economics Of Credible Threats, Oren Bar-Gill, Omri Ben-Shahar
Articles
This paper argues that enforcement of an agreement, reached under a threat to refrain from dealing, should be conditioned solely on the threat's credibility. When a credible threat exists, enforcement promotes social welfare and the threatened party's interests. If agreements backed by credible threats were not enforceable, the threatening party would not extort them and would instead refrain from deaing-to the threatened party's detriment. The doctrine of duress, which invalidates such agreements, hurts the coerced party. By denying enforcement when a credible threat exists, the duress doctrine precludes the threatened party from making the commitment necessary to reach agreement. Paradoxically, …
The Economics Of Form And Substance In Contract Interpretation, Avery W. Katz
The Economics Of Form And Substance In Contract Interpretation, Avery W. Katz
Faculty Scholarship
For over a century, legal commentators have debated the relative merits of formal and substantive approaches to the interpretation of contracts; in recent years, the debate has increasingly been conducted in the language of the economic approach to contract law. While this new wave of scholarship has been relatively successful in relating the traditional debates over formalism to specific transactional and institutional problems such as imperfect information, it has been less productive in terms of generating useful legal or policy recommendations. This Essay proposes a different approach: one that focuses on private rather than public legal decisionmakers as its primary …