Economic Analysis of Incomplete Contracts - Academic Writings of Nankai University Law School

Author: Jia Jinghua
Publisher:
Publish Date: 2006-11-01
Features: This book begins with an introduction to the incomplete contracts theory in economics, exploring its origins, economic rationality, and its limitations. It lays the foundation for the theory of incomplete contracts in law. To "convert" incomplete contracts into complete ones, it is necessary to abstract the objective and subjective environments upon which complete contracts rely, ensuring that practical normative standards are provided for parties to achieve complete goals under incomplete contract conditions, thereby effectively allocating the differences between the two. Since sales contracts are representative in contract law, effectively supplementing the contract loopholes within them also helps to explain the basic concepts of law and economics. Therefore, this book provides a relatively comprehensive analysis of them, while also offering corresponding references for filling other types of contracts. In contract performance, this book compares the owner-centric and delivery-centric approaches to risk allocation in terms of transaction costs, advocating for a clear "standard of actual control realization." In breach of contract, it examines the degree to which the principle of priority of specific performance and the principle of priority of damages respect market mechanisms, using the assumption of economic man. It also conducts an efficiency analysis of punitive damages and effective breach, concluding that transaction security is superior to transaction fairness.