Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 1 of 1
Full-Text Articles in Comparative and Foreign Law
An Experiment On The Role Of Penalty Clauses And The Level Of Legal Remedies For Breach Of Contract On The Prevention Of The Hold-Up Problem In Colombian Contract Law, Juan Antonio Gaviria
An Experiment On The Role Of Penalty Clauses And The Level Of Legal Remedies For Breach Of Contract On The Prevention Of The Hold-Up Problem In Colombian Contract Law, Juan Antonio Gaviria
Richmond Journal of Global Law & Business
This article analyzes the results of an experiment with Colombian students testing the theories thatpenalty clauses and a high level of legal remedies for breach of contract prevent the hold-up problem. While the results of this experiment failed to statistically confirm the predictions of the theory, they did not reject them. Furthermore,the results show that held-up parties were better off after the parties renegotiated the contract when either a penalty clause was provided or the law increased the level of legal remedies in comparison with a benchmark scenario. On the other hand, the results are a contribution to the field …