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Behavioral Contract Law

  • Thomas S. Ulen EMAIL logo
Published/Copyright: December 13, 2021
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Abstract

This article explores some behavioral findings that are relevant to three areas of contract: formation, performance, and remedies. I compare the rational choice theory analysis of various aspects of contract law with how behavioral findings lead to a change in our understanding of that area of law. A penultimate section considers several criticisms of behavioral economics. A concluding section calls for altering some settled understandings of contract law to accommodate behavioral results and for further research about some still uncertain aspects of contracting.

JEL Codes: K10; K12

Corresponding author: Thomas S. Ulen, Swanlund Chair Emeritus, University of Illinois, Urbana, Champaign, IL, USA; Professor Emeritus of Law, University of Illinois College of Law, Champaign, IL, USA; and Fellow of the Hagler Advanced Studies Institute, Texas A&M University, College Station, TX, USA, E-mail:

Acknowledgments

I would like to thank my friend Francesco Parisi for inviting me to participate in this symposium. I also want to thank my friend and neighbor Andrew Troutt. Andrew negotiates, helps draft, and monitors multi-million-dollar contracts for a large international company. In numerous conversations he has illustrated many of the insights of the behavioral contract literature at play in his work. I also want to thank Ian Ayres, Bob Cooter, Ben Depoorter, Nuno Garoupa, Sven Hoeppner, Russell Korobkin, Richard McAdams, Greg Mitchell, Eric Posner, Doron Teichman, and Tess Wilkinson-Ryan for their comments and suggestions on an earlier version of this article. I want to single out Mel Eisenberg for a remarkably thoughtful long set of comments to which I owe a separate article, not just my heartfelt thanks. I also owe a very big thank you to Jeanette Sayre, who edited the article with great care and effort

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Published Online: 2021-12-13

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