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Full-Text Articles in Law
Reference Points And Contract Interpretation: An Empirical Examination, Doron Teichman
Reference Points And Contract Interpretation: An Empirical Examination, Doron Teichman
Doron Teichman
This Article focuses on the influence of framing on contract-interpretation decisions. A large body of both psychological and economic studies suggests that people treat payoffs framed as gains and payoffs framed as losses distinctly. Building on these studies, we hypothesize that contract interpretation decisions will be affected by the way in which they are framed. More specifically, we expect that promisors will tend to adopt a more self-serving interpretation when they are making decisions in the domain of losses. To test this prediction, we run a series of three experiments that are all based on a between-subject design. The first …
Are All Contractual Obligations Created Equal?, Doron Teichman, Yuval Feldman
Are All Contractual Obligations Created Equal?, Doron Teichman, Yuval Feldman
Doron Teichman
At the core of the economic analysis of contract law lies the concept of options. According to this concept, parties are expected to perform their contractual duties if, and only if, the legal price of breach (i.e. damages) is lower than the cost of performance. This Article challenges this concept, and shows that peoples’ performance decisions are driven by non-instrumental forces such as moral commitments, social norms, and motivated reasoning. To demonstrate this point, this Article presents a series of three experimental surveys that measure and compare participants’ attitudes toward breaching a contract. Participants answered questions in the context of …