Research Handbook on International and Comparative Sale of Goods Law
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Research Handbook on International and Comparative Sale of Goods Law

Edited by Djakhongir Saidov

This thorough and detailed Research Handbook explores the complexity of governance of sales contracts in the modern world. It examines many topical aspects of sales law and practice, with considerable emphasis being placed on the diversity of: commercial and transactional contexts; in which sales contracts are made and performed, including digital technologies, long-term contracts and global supply chains and sources governing such contracts, particularly those emanating from commercial players, such as standard form contracts, trade usages and trade terms. Written by leading experts from an international and comparative perspective, the Research Handbook is relevant to anyone with an interest in commercial sales and contract law.
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Chapter 8: Are commercial standard form sales contracts efficient?

Clayton P Gillette

Abstract

Most analyses of standard form contracts focus on the consumer setting. The underlying assumption is that standard forms in the commercial context reflect efficient terms, because sophisticated parties operating in relatively thick markets would assign transactional costs and risks in a way that is consistent with each party’s capacity to bear them. This chapter discusses multiple sources of inefficiency in the setting of commercial standard form contracts, ranging from market failures to failure to read to parties’ incentives in the drafting process. The chapter also suggests that some clauses that may appear to be inefficient, such as ostensibly vague terms and under-enforced terms, in fact reflect efficient risk allocations. Finally, the chapter discusses some strategies for dealing with potential inefficiency, such as regulation and interpretation.

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