In many settings, human beings are boundedly rational. A distinctive and insufficiently explored legal response to bounded rationality is to attempt to debias through law by steering people in more rational directions. In many domains, existing legal analyses emphasize the alternative approach...

Contracts have traditionally been regarded as means of individual commitment. This article offers a broader vision, viewing contracts as potential means of bilateral commitment as well. Drawing on a burgeoning literature in economics, this article explains that commitment to stick with an...

In some exceptional circumstances, a restitution rule entitles parties that unilaterally confer a benefit on another party to recover the estimated value of the benefit. Usually, however, the law applies a mutual consent rule under which providers of a benefit cannot obtain any recovery without...

During contractual negotiations, parties often make reliance expenditures that would increase the surplus should a contract be made. This paper analyzes decisions to invest in precontractual reliance under alternative legal regimes. Investments in reliance will be socially suboptimal in the...

Negative-expected-value (NEV) suits are ones in which the expected litigation costs exceed the expected judgment. This article offers a new theory for the credibility and success of plaintiffs with NEV suits. The theory is based on recognizing that litigation costs are generally not incurred all...

When plaintiffs cannot predict the outcome of litigation with certainty, neither the American rule (each litigant bears its own litigation expenses) nor the British rule (the losing litigant pays the attorneys' fees of the winning litigant) would induce optimal decisions to bring suit....

Under an "offer-of-settlement" rule, a party to a lawsuit may make a special offer to settle with the other party, such that if the other party rejects this offer, then this offer becomes part of the record in the case and may affect the allocation of litigation costs. Specifically, if the...