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Bargaining With Uncertainty, Moral Hazard And Sunk Costs: A Default Rule For Precontractual Negotiations, Juliet P. Kostritsky
Bargaining With Uncertainty, Moral Hazard And Sunk Costs: A Default Rule For Precontractual Negotiations, Juliet P. Kostritsky
Faculty Publications
Drawing from a model of bargaining behavior based on transaction cost economics, relational theories of contract,23 Williamsonian models of contracting behavior, and other economic insights, this Article argues that achieving the optimal solution for the complexities of bargaining relationships demands the adoption of a new legal default rule. This new default rule should have two aspects: First, the law should substantively recognize an implicit bargain, even in the absence of explicitly reciprocal communications. Second, the law should impose an obligation to perform that incorporates the terms of the parties' unexpressed, implicit bargain.
Looking For Default Rule Legitimacy In All The Wrong Places: A Critique Of The Authority Of Contract Model And The Coordination Principle Proposed By Professor Burto, Juliet P. Kostritsky
Looking For Default Rule Legitimacy In All The Wrong Places: A Critique Of The Authority Of Contract Model And The Coordination Principle Proposed By Professor Burto, Juliet P. Kostritsky
Faculty Publications
A central question of contract law remains: when should the law supply a term not expressly agreed to? Many scholars have addressed that question, yet the justification for law- supplied terms often remains unconvincing. Because many proposals to supply terms do not incorporate a comparative frameworkfor assessing the costs and benefits of legal interventions, they are incompletely justifled. This Article proposes that a comparative net benefit approach (developed in institutional economics to explain private arrangements) be adapted and expanded to resolve fundamental issues of legal intervention. This Article uses that framework to critique the (1) hypothetical bargain and (2) Ayres/Gertner …