READINGS IN THE ECONOMICS OF CONTRACT LAW - VICTOR P. GOLDBERG

The book is organized as follows. Parts I and II provide general background.

Part I is primarily concerned with presenting a number of concepts that economists have found useful in analyzing legal issues in general and contracts in particular: relational exchange, transactions costs, adverse selection, moral hazard, and rent seeking.

In Part II we begin the analysis of contract law, emphasizing both the similarity between contract and tort problems and the significance of the fact that contracting parties are often isolated to some degree from market alternatives. It includes a discussion of a well-known, noncontract case, Boomer v. Atlantic Cement Co., to highlight the similarity between contract and tort issues.

Part III concerns some issues regarding damage remedies. The first half develops the notion of a property right in the price as a rationale for enforcing executory agreements. The second focuses on the implications of granting compensation for consequential damages and on the relationship between consequential damages and reliance damages.

Part IV attempts to resolve a difficult problem in contract law: the appropriate treatment of the "lost-volume seller." Part V concerns the specific performance remedy and its close cousin, the cost-of-completion damage remedy.

Part VI is concerned with the exercise of "power" within a contractual relationship and the use of penalties (broadly defined) to influence behavior. Special emphasis is put on the common law's reluctance to enforce penalty clauses.

Part VII considers another area in which courts and legislatures have been reluctant to enforce the terms of contracts: express warranties and disclaimers in standard form contracts.

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