Economic Analysis of Incomplete Contracts

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. Since the sales contract is representative in contract law, effectively supplementing the contractual loopholes it contains also helps to explain the basic concepts of law and economics. Therefore, this book provides a relatively comprehensive analysis of it, 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 the case of breach of contract, it examines the degree to which the principle of priority of specific performance and the principle of priority of damages respect the market mechanism under 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.