A party dissatisfied with the contractual performance of a counterparty is typically able to pursue a variety of legal recourses. Within this apparent variety lurk two fundamental alternatives. The aggrieved party may (i) 'affirm' the contract and seek money damages or specific performance; or...

Contract law and the economics of contract have, for the most part, developed independently of each other. In this essay, we briefly review the notion of a contract from the perspective of lawyer, and then use this framework to organize the economics literature on contract. The title, Contracts...

Neither marriage nor a legally enforceable contract serves any useful purpose if the parties have access to a perfect credit market. In the presence of credit rationing, the parties may not reach an agreement. If they do, the agreement will be inefficient and give one party more utility than the...