The present paper provides an economic analysis of vicarious liability that takes information rents and monitoring costs to be borne by the principal explicitly into account. In the presence of information rents or if the principal is wealth constrained herself, vicarious liability need not...

Contract law is usually perceived as a strict liability system. When a promisor fails to perform he is held liable even if he is without fault. If, however, an unusual contingency has arisen he may be excused from performing provided that he has taken reasonable precautions. For a setting with...

Under the but-for requirement of causation, a tort injurer cannot be held liable for more than the difference between the loss the victim would have suffered if the injurer had not been negligent, and the loss actually suffered by the victim. We ask whether this causation requirement yields...