[In: Volume 6, Gerrit De Geest (ed) Contract Law and Economics]

• accident avoidance 426
• Acemoglu, D. 425
• action-directing action 62
• adaptation
  • autonomous 285–286, 288
  • coordinated 285–286, 288

• add-ons 417
• adhesion contracts see standard form contracts
• Adler, Barry E. 231–2, 236
• administrative control 285
• adverse selection 226
• agency costs and third-party interests 148–9
• agency problems 431
• Aghion, Phillipe, Mathias Dewatripont and Patrick Rey 291, 293, 295
• Aghion, Phillipe and Benjamin Hermalin 196–7
• Aghion, Phillipe and Patrick Bolton 193–5, 324–5
• Aivazian, Varouj A. 447
• Aivazian, Varouj A. et al. 73
• Akerlof, George A. 444
• Albert, Ross A. 458
• aleatory view of negotiations 9, 12, 24
• Allen, D.W. 377
• allocative efficiency 32, 34, 36, 42, 105, 156
• Almond 373
• alternative governance mechanisms 129, 146
• altruism see bequests, altruistic bequests
• ambiguity aversion 200
• anchoring 404
• Anglo-American theory of contract law 9, 80
• Anglo-Canadian law 80, 89, 91, 430
• Anglo-Saxon inheritance 106–7
• annulment of contract 440
• anticipatory repudiation 171
• arbitration 129, 146
• arbitration in franchise agreements 393
• Arlen, Jennifer 405, 408
• Arrondel, L. and A. Lafferère 108
• assets
  • complementary 287
  • specificity 282
  • substitute 287

• assumpsit 455
• asymmetric paternalism 411
• Attorney General v. Blake 466
• at-will termination 353
• at-will, franchise 392
• autonomous adaptation 285–286, 288
• Axiom of Unilateral Action 245–248
• Ayres, I. 197, 363, 371 see Rasmusen, E. and I. Ayres; Ayres, I. and G. Klass
• Ayres, I. and G. Klass 46
• Ayres, Ian and Robert Gertner 226–228, 232, 235–236

• bailout 296–7
• Baldus photographs case 439
• bargaining 249–50, 448
• bargaining power 16, 115–16
• bargaining, revolving-offer 292–3
• Bar-Gill, Oren 120, 230–31, 416–18
• Bar-Gill, Oren and Omri Ben-Shahar 63–4, 69, 71
• barriers to efficient contracts 156–7
• Bartholomew, J. 377
• Barton, John H. 158
• Basu, Kaushik 65
• Bates, T. 389
• Baumol, W.J. 302
• Beales, H. 36
• Beales, J. and T. Muris 351
• Bebchuk, L.A. and Omri Ben-Shahar 10, 12, 17, 19–20, 25, 27
• Bebchuk, L.A. and R.A. Posner 120
• Bebchuk, Lucian Ayre and Steven Shavell 226–228, 232
• Becher, Shmuel I. 122
• p. 472Becker, Gary S. 361
• Becker, Gerry 41 see legal deterrence, theory of
• Becker–Barro model 103
• behavioral approaches to contract law 401–21
• behavioral economics 401–21
• benefit-based liability 465
• Ben-Shahar, Omri 10, 18–19, 25, 40, 131, 144, 426
  • see Bebchuck and Omri Ben-Shahar; Bar-Gill, Oren and Omri Ben-Shahar

• Ben-Shahar, Omri and J.J. White 121
• bequests
  • accidental or unplanned bequests 97–98, 106
  • altruistic bequests 99–100, 106
  • bequests based on pure exchange 101–2
  • capitalist or entrepreneurial bequests 103–4
  • paternalistic bequests 100–101
  • retrospective bequests 101
  • strategic bequests 102–3
  • voluntary or planned bequests 98–103

• Berglöf, E. and G. Roland 297
• Bergstrom, T.C. 108
• Bernheim, B. Douglas et al. 109
• Bernstein, Lisa 146
• best-efforts clause 125, 128, 184
• Betterment Acts 461
• bias 402, 404–406, 408, 410, 413, 416–19
  • status-quo bias 405–406, 413, 419

• Bigelow, J. 266
• bilateral warranty problems 265–266, 268, 273
• Bishop, William 47, 165–166, 168
• Black-Widow effect 360, 369, 371–3
• Blair, R.D. and D.L. Kaserman 390
• Bohlen, F.H. 462
• boilerplate see standard form contracts
• Bolton, P. and M. Whinston 390
• Bolton, Patrick and Mathias Dewatripont 158
• bond, for franchise 392–4
• Bouckaert, B. and G. De Geest 67, 457, 463
• bounded rationality 64, 402–3, 409–10
• Bracewell-Milnes, Barry 104–5
• breach 315–16, 327, 335–336, 341–348, 455–67
  • efficient breach 455, 466

• Brenner, Gabrielle 108
• Brickley, J.A. 385
• Brickley, J.A. and F.N. Dark 385
• Brickley, J.A., F.H. Dark, and M.S. Weisbach 351
• Brickley, J.A., S. Misra and L. Van Horn 352
• Bridge, M.G. 430
• Brinig, M.F. 374, 376
• Brown, J. 52
• Brownsword, R. 430
• Bruce, Christopher 212
• Buchanan, James and Gordon Tullock 104–5
• Buckley, F.H. 64, 66, 72–3, 442
• bundling 417
• Burrows, Andrew 225
• buy-backs, for franchise 385, 388–9

• Calabresi, G. 429
• Calabresi, G. and J.T. Hirschoff 459
• Calabresi, G. and D. Melamed 363, 429
• Calabresi, Guido and Douglas A. Melamed 68, 70
• calculating damages
  • diminished value 170
  • lost surplus 169–70
  • opportunity cost 170
  • out-of-pocket cost 170
  • substitute price 169
  • see also reliance; restitution; expectation

• Camerer, C. 411
• Campbell, D. and D. Harris 466
• capital-market 384–5
• Carbone, J.R. and M.F. Brinig 371, 373
• Carroll Towing 455
• catchalls 127–128, 131
• cause for entering contract 442
• Caves, R.E. and W.F. Murphy 384
• Chandler v. Webster 219
• characteristics of contracting parties 143–4
• charity 89–90
• p. 473Charpentier, E.M. 429–30
• Che, Y.-K. and D.B. Hausch 244–246, 248
• Che, Yeun-Chu and Chung, Tai-Yeong 189
• Chiappori, P. 322
• Chronopost case 444
• Chu, Cyrus 108
• Chung, Tai-Yeong 189, 193
• civil law of contract 424–50
• civil liability 426
• classic bargain theory 9
• classic economic theory 432
• classical theory of contract 61
• clean break principle 365
• Coase, R.H. 283–4, 328, 336
  • Coase Theorem 161, 432
  • Coasian bargaining 386
  • Coasian solution 466

• cognitive error 198–201
• cognitive psychology 401–21
• cohabitation 360–61, 375–7
• Cohen, George M. 10, 22, 125–51, 432
• Cohen, Lloyd 361–2
• commitment 320–22, 337–338
• common-law marriage 376
• Commons, John R. 282
• comparative institutional analysis 284
• competition 288, 297–298
• competitive equilibrium 258, 261
• complementary assets 287
• completeness of contracts 126–30, 331–3
• Conlisk, J. 407–408
• consensualism 434
• consent, defects of 434
• consequential damages 415
• consideration 80–83, 85–86, 90–94, 443
• constrained choice 62, 64
• consumer biases 416–17
  • exploitation of 418–19

• consumer choice, improvement 419
• consumer contracts 416
• consumer mistakes 417–18
• contextualism 131, 133–4, 136, 141–148
• contra proferentem 122, 138
• contracts
  • annulment 440
  • breach 455–63
  • cause for entering 442
  • error 435–7
  • excusable non-performance 445–6
  • franchise 384–395
  • hardship clause 446
  • holdup problem 239–53, 282, 290, 298
  • incomplete 241, 281, 288–89, 295, 298–300, 314–15, 317, 323, 334–5, 338, 341, 344
  • interpretation 228–41
  • marriage 360–78
  • mistake 435–7, 460
  • modification 73
  • option 239–53, 291–4
  • performance 445–50
  • principal-agent 322
  • public enforcement of 427
  • quasi-contracts 454–67
  • short-term 316–23

• contractual discharge 209, 212–14, 216–19
• contractual mistake and misrepresentation 31–52
• Cooper, R. and T.W. Ross 266–7
• cooperation 300, 314–15, 330–31, 338, 354
• cooperative equilibrium 331, 342
• cooperative investment models of holdup problem 243–7, 315
• cooperative investments 189–90, 344, 346–7
• cooperative specific investment 346
• cooperativeness 221–2
• coordinated adaptation 285–286, 288
• Cooter, R. and T. Ulen 34–5, 57–58, 64–5, 71–2, 429
• Cooter, Robert D. and Melvin Aron Eisenberg 169–166, 173
• Cornu, G. 430
• cost-benefit analysis
  • precontractual investment 12–13, 19

• Cour de cassation 438–436, 444
• court competence and error 145–146
• covenant marriage 363
• Craswell, Richard 10, 12–16, 23, 26–7, 41, 44–5, 63–4, 69–71, 159, 166
• credence properties 256
• credibility 69
• p. 474Cserne, Péter 57–79
  • see Cserne, Péter and Szalai, Akos

• Cserne, Peter and Szalai, Akos 72–3

• Dagan, H., 457, 461
• Dailami, M. and R. Hauswald 334
• Dam, K.W. 425
• damage provisions 180, 182
• damages limitations 216–17
• damnum absque injuria 455–456
• Darby, M. and E. Karny 256
• Davis, G., S. Cretney and J. Collins 372
• Davis, Kevin E. 117
• Dawson, John P. 60, 340, 456, 464
• De Geest, Gerrit 109, 429, 443
  • see Bouckaert, Boudewijn and Gerrit De Geest; De Geest, Gerrit and Roger Van den Bergh

• De Geest, Gerrit and Roger Van den Bergh 58
• debiasing 417
• decision-making strategies 402–4
• default preference 405–406, 419
• default rules 428
  • default versus mandatory rules 135–7
  • majoritarian 412–13
  • non-enforcement 413–14
  • tailored 413–14

• defects of consent 434, 441
• deferred reciprocity 101
• definiteness 316–17, 340
• Del Granado, J.J. 434
• Deutch, Sinai 122
• Dewatripont, M. and E. Maskin 296–7
• Dewatripont, Mathias see Bolton, Patrick and Mathias Dewatripont
• Dickinson, K. 461
• Directive on unfair terms 430, 443, 445
• discount rate 272–3
• disgorgement remedies 464–466
• diversified investments 384
• divorce 360–78
  • fault 360
  • no-fault 360, 362–4

• Dixit, A.K. 432
• Dnes, A. 363, 374, 377, 390, 392–3
• Dnes, A. and N. Garoupa 388
• Dnes, A. and R. Rowthorn 360–61
• Dobbs, D.B. 455
• double bind effect 76
• downstream markets 326
• Draft Common Frame of Reference 437
• Drahozal, C.R. and K.N. Hylton 393
• dual distribution 388–9
• duress 57–79
  • contract modification 73
  • economic duress 66, 75–76
  • engineered vs. non-engineered 66, 68, 71
  • necessity 71–2

• Dutch Civil Code 434, 443, 445
• Dutta, S. and S. Reichelstein 318, 321
• duty to inform 437, 440
• duty to rescue 456–60
• dynamic commitment 295–298

• EC Directive 274
• economics of governance 281
• Edelman, J.J. 464
• Edlin, A. and B. Hermalin 251
• Edlin, Aaron S. and Alan Schwartz 162, 179, 188
• Edlin, Aaron S. and Reichelstein, Stephen 188
• efficient breaches 455, 466
• efficient contracts and efficient nonperformance 155–156, 185
• efficient information exchange 11, 23–4
• efficient rate of precaution 235
• Eidenmuller, Horst 59, 62
• Eisenberg, M. 35, 199, 234–5, 414, 448–9, 466
• Ellison, G. 417
• Emons, W. 266, 268
• endowment effect 405–406, 409
• English law 430
• Epstein, Richard A. 74, 407, 454, 456
• equal division inheritance 106–10
• equilibrium 248–50, 253, 267, 299–300
  • strategies 249
  • cooperative 331
  • perfect 292–3

• error in contract 435–7
• p. 475Esposto, Alfredo G. 64, 66
• estate tax 104–106
• European Commission 339
• Evans, R.B. 248–50, 253
• excusable non-performance of contract 445–446
• expectation 92, 158–9, 186–7, 347
• experience properties 256
• exploitation of nonreaders 119–20
• ex post mechanisms 287–9, 291, 294–5, 301
• express invocation 220–21

• failure to read 118
• Farnsworth, E.A. 9–10, 12–13, 24, 26, 370, 466
• fault divorce 360
• fiduciary contracts 133, 140
• Fischhoff, B. 404
• force majeure 445–446
• foreseeability 225–38
• formalism see textualism
• formation defences 61, 74–5
• formulation error 129
• Fragonard case 439
• franchise
  • arbitration 393
  • at-will 392
  • bond 392–4
  • buy-backs 385
  • contracts 384–395
  • franchising 351–3
  • free riding 391
  • hostages 392–4
  • inter-satellite transfers 388
  • monitoring 386–7
  • resale price maintenance 390–91
  • restrictive covenants 393
  • royalties 385
  • search-cost theory 389
  • sunk investments 394
  • switching-cost 391
  • termination provisions 386, 392
  • tie-ins 391
  • vertical restrictions 390–91

• fraud 436–7
• free riding 431, 391
• free riding, franchise 391
• French Civil Code 429, 435, 441–3, 445–446
• French inheritance law 107–108
• French law 107–108, 429, 431, 435, 441–3, 445–448
• Friedman, David D. 164
• Friedman, Milton 64
• Friedmann, Daniel 161, 163
• frustration of purpose 219
• Fudenberg, D. 299, 317
• Fudenberg, D., B. Holstrom, P. Milgrom 317–18
• Fuller, Lon 81–2
• Fuller, Lon and William Perdue 159, 170
• Fumagalli, C. and M. Motta 326

• Gabaix, Xavier and D. Laibson 121, 417
• Gallin, N.T. and N.A. Lutz 388
• Gal-Or, E. 262
• Garvin, L.T. 415–16
• Geis, George S. 132, 229, 233–4
• Gergen, M. 460
• German Civil Code 429, 434, 443
• Giesel, Grace M. 75
• gifts, wills, and inheritance law 94–114
• Gillette, Clayton P. 118–24
• Gilson, R.J. 330–31, 336
• Goebel v. Linn 446–7
• Goetz, C.J. and Scott, R.E. 13, 117, 155, 172–3, 182–3, 226
• Goff, Lord R. and G.H. Jones 457
• Goldberg, Victor P. 140, 145, 218–19, 337
• Golden Rule 101
• good faith 14, 22, 60, 125, 128, 132, 135, 140, 143, 145, 184, 429–33
• Goode, R. 430
• Gordon, W. 464
• governance mechanisms 283–286
• governance structure 222
• Graham, Daniel A. and Ellen R. Pierce 73
• gratuitous promises 80–94
• greener grass effect 360, 368, 372
• Grosskopf, O. and B. Medina 10, 27–28, 37
• Grossman, S.J. 259, 262
• Grossman, S.J. and O. Hart 350
• Grossman, Hart and Moore 290
• Guthrie et al. 200

• p. 476Haanappel, P.P.C. and E. Mackaay 429
• Hadfield, Gillian K. 145
• Hadley v. Baxendale 225–38
• Hale, Robert L. 75
• Hand, Learned 455
• hardship clause 446
• harm-based liability 465
• Harris, D. and D. Tallon 450
• Hart, O. and J. Moore 241–248, 289–91, 299, 350
• Hasen, R.L. 459
• Hatzis, A.N. 445
• Hatzis, Aristides N. and Eleni Zervogianni 74
• Havighurst, Harold C. 81–2
• Henningsen 115
• Hermalin, Benjamin E. et al. 65–66, 73–4, 128, 289
• Hershovitz, S. 458
• Hesselink, M.W. 429
• heuristics 402, 404–406 408
• hidden actions 298–9, 301
• hierarchical governance 284–286, 297
• Hill v. Gateway 2000 118
• Hillman, R.A. 414–15
• Hirshleifer, H. 34–5
• Hochster v. De La Tour 171
• holdout problem 431
• holdup problem 239–53, 282, 290, 298, 315, 318, 327, 329–30, 336–7, 348, 431
• Holström, B. and J. Roberts 328
• horizontal free riding 385
• hostages, in franchising 392–4
• Hoy, F. 389
• Huber, P.K. 461
• human capital 301, 327, 348
• Hviid, Morton 227
• hybrid governance 284–9, 295, 297–9, 301–2
• hybrid investments 344

• Iacobucci, E. 391
• imperfect information 64, 67
• impossibility and impracticability 207–24
• incentive intensity 285, 299
• incentives
  • communication 227–9
  • disclosure and information acquisition 32–4
  • formation 163–4
  • holdup 68
  • incentive-based theories of duress 65–7
  • incentives to bequests 99–100
  • negotiating 12, 24–26
  • performance 155

• incentives and contract length 322
• incomplete contracts 130–32, 216–17, 241, 281, 288–9, 295, 298–300, 314–15, 317, 323, 334–5, 338, 341, 344
• incomplete divesture 460–64
• incomplete information 319
• indifference curve 258, 260, 264, 465
• indifference principle 448–9
• information
  • acquisition 33–4, 37
  • asymmetric information 129, 117–18, 122, 135, 140, 143–4, 197–9, 212, 228, 298, 318–19, 325, 338
  • disclosure, voluntary 36–38
  • incentives to acquire information 32–4, 226
  • productive and redistributive information 34–5
  • renegotiation 220
  • transfer 259

• information-forcing default 228–9
• institutional competence 69–70
• institutional economics 297, 432
• intentional ambiguity 129, 226–7
• inter vivos transfers 97, 99, 105
• interpretation and implied terms in contract law 125–51
• interpretation of contracts 338–41
• inter-satellite transfers, of franchises 388
• investment 240–45, 248–52, 262, 265, 282, 290–91, 293–4, 296–7, 314, 318, 323, 326–34, 336–7, 343–9, 384
  • cooperative 344, 346–7
  • diversified 384
  • hybrid 344
  • selfish 344–5
  • sequential 250–51
  • p. 477simultaneous 250
  • specific 314, 318, 326–33, 336–7, 343–348

• Issacharaoff, S. 408–9, 411

• Jackson, Thomas H. 171
• Johnston, J.S. 10, 19, 24, 119, 227, 232
• joint fault and multiple contingencies 142–3
• Jolls, Christine 37, 374, 442
• Jolls, C. and C.R. Sunstein 410
• Jolls, C., C.R. Sunstein and R. Thaler 401–2
• Joskow, Paul 210–12, 292, 328, 330, 335

• Kahneman, D., J.L. Knetsch and R. Thaler 405
• Kaldor-Hicks efficiency 363, 456, 460
• Kaldor-Hicks test see allocative efficiency
• Kambhu, J. 266, 268
• Kaplow, L. and S. Shavell 289
• Katz, A. 13, 15–16, 26, 117, 141, 143
  • see Hermalin, Benjamin E. et al.

• Keily, T. 430
• Kennedy, Duncan 61, 64
• Klass, G. see Ayres, I. and G. Klass
• Klausner, Michael 117
• Klein, B. 119, 282, 362, 392
• Klein, B. and L.F. Saft 391
• Klein, B., R.G. Crawford, and A.A. Alchain 350
• Klick, J., B. Kobayashi and L. Ribstein 352, 386
• Knetsch, J. 367
• Knight, F.H. 282, 301
• Kornhauser, Lewis 117
• Korobkin, R. 120, 406, 413–14, 416–17
• Korobkin, R. and T. Ulen 401, 403, 407–10, 413–14, 418–19
• Kostritsky, J.P. 10, 14, 22–3, 142
• Kötz, Hein 58–60, 443
• Krell v. Henry 207–208, 213, 219
• Kronman, Anthony T. 33–4, 64, 66, 165, 448
• Kull, Andrew 82–3, 168, 462–4, 466

• La Porta, R. 425
• Laffont, Jean-Jacques and David Martimort 158
• Lafontaine, F. 385, 388–90
• Lafontaine, F. and K. Shaw 352, 389
• Lafontaine, F. and M. Slade 350
• Landes, W. and R. Posner 45–46, 458
• Lando, H. and C. Rose 450
• Langevoort, D.C. 401
• least-cost-avoider 15–16, 22
• Leff, Arthur A. 122
• legal deterrence, theory of 41–2
• lésion 64, 440–42
• Levmore, S. 457–9
• liability, benefit-based 465
• liability, harm-based 465
• liability, limitation clauses 443
• libertarian paternalism 412, 420
• limitation clause on liability 443
• linguistic over-determination 289
• Lipshaw, Jeffrey 130, 139
• liquidated damages 166–7, 178, 414–15, 445
• literalism see texualism
• Litvinoff, S. 429
• Loasby, B. 287
• Long, R.A. 457
• long-term contracts 208, 210, 217–19, 221, 223, 281–302, 314–54
• Lyon, T.P. and E. Rasmusen 245–248

• Macaulay, Stewart 218, 374
• Mackaay, E. 425, 430
• Mackaay, E. and V. Leblanc 433
• Macneil, Ian R. 163, 374–5
• Mahoney, Paul G. 41, 155–77, 166
• majoritarian default rule 228–30, 412–13
• mandatory rescue 458
• mandatory rule 428
• mandatory warranties 428
• Mann, D.P. and J.P. Wissink 266, 268
• Mann, R.J. 19, 120
• marital
  • assets 362
  • breach 363–78
  • breach remedies 366–71

• market
  • downstream markets 326
  • equilibrium 260
  • p. 478failure 117–18, 122
  • governance 284–286, 297

• Marotta-Wurgler, Florencia 121–2
• marriage
  • contracts 360–78
  • modification of contract 374
  • partnership model 371
  • post-nuptial agreements 375
  • pre-nuptial agreements 375
  • same-sex 377

• Martimort, David see Laffont, Jean-Jacques and David Martimort
• Martin, R.E. 388–9
• Marvel, H. 391
• Maskin, E. and J. Moore 289
• Maskin, Eric and Jean Tirole 191
• material adverse change 184
• Mathewson, G.F. and R.A. Winter 385–7
• Matouschek, N. and I. Rasul 362
• Mattei, U. 445
• Maxcy, J.G., R.D. Fort and A.C. Krautmann 324
• McInnes, M. 464
• Mechoulan, S. 362
• Medina, B. see Grosskopf, O. and B. Medina
• Melamed, Douglas A. see Calabresi, Guido, and Dougas A. Melamed
• Ménard, C. 283, 286–7
• Miceli, T.J. 374
• Milhaupt, C.J. and K. Pistor 425
• Millon, D. 413
• Mineral Park 208
• Minkler, A. 389
• minoritarian default rule 229
• misperception-based pricing 417
• misrepresentation 437
  • fraudulent misrepresentation 31, 41–46
  • innocent misrepresentation 31, 50–52
  • masqueraders 87
  • negligent misrepresentation 31, 47–50
  • optimal level of care 47–48
  • promissory representations 46

• Missouri Furnace v. Cochran 171
• mistake 31, 37–9, 61, 64, 460–61, 435–7
  • cross-purpose mistakes 40
  • consumer 417–18

• mitigation of damages 449
• modification of contracts 59, 93
• modification of marriage contracts 374
• money damages 239
• money-back warranties 256
• monitoring, of franchise 386–7
• monopoly 64, 71, 73, 116–17
• Moore, J. and R. Repullo 289
• moral consideration 94
• moral hazard 289, 295, 298, 301, 321–2, 337, 386, 394, 431, 436, 446
• multidimensional pricing 418
• Muris, Timothy J. 73, 140
• Muthoo, A. 292
• mutual assent, mutual consent 18–19, 61, 122

• Napoleonic inheritance 106–7
• Nash 267, 289, 299
• need-based remedy for marital breach 372–3
• negative externalities 64
• negotiorum gestio 456
• neoclassical economics 282, 284, 287
• Netherlands Civil Code 445
• no-fault divorce 360, 362–4
• Nöldeke, G. and K.M. Schmidt 241–3, 250–51, 294
• Noll, J. 266
• nominal consideration 91
• non-compete 341, 348–9
• non-cooperative game 288
• non-enforcement default rules 413–14
• non-performance 341–3, 445–446
• non-rational behavior 402, 410
• Norton, S.W. 385
• no-trade penalty or outcome 191
• Nozick, Robert 62

• objective good faith 430
• OECD 106, 110
• offer of reward 433
• Ogus, Anthony 32
• old-age security 101–2
• opportunistic behavior 11, 20–23, 40–41, 73–4, 139–42, 159, 166, 168–9, 174, 221–2, 431–3, 436, 442, 449
• optimal damage measure 26–7, 163
• p. 479optimal default cap 230–31
• optimal precision 234
• option contracts 239–53, 291–4
• organizational costs 385
• Ourliac, P. and J. de Malafosse 431
• outside option model 293
• over-investment 11–12, 18, 27–28, 322–3, 348–9

• Palmer, G.E. 464
• Pareto principle 67, 76, 101, 156
• Parkman, A. 363
• parol evidence rule 126, 134, 137, 141
• partial performance 167, 170
• partnership model of marriage 371
• paternalism 410–12, 420
  • asymmetric 411
  • libertarian 412, 420

• penalties for failure to rescue 458
• penalty
  • clauses 187, 190, 193–5, 293, 444–5
  • doctrine 414–15
  • defaults 226–30, 232, 235–236

• perfect equilibrium game 292
• perfect tender rule 168–9
• performance of contract 445–50
• Perloff, Jeffrey M. 212
• Petty, A.R. 464
• Pierce, Ellen R. see Graham, Daniel A. and Ellen R. Pierce
• Pineau, J. 430–31
• plain meaning rule 134, 138
• Poitevin, M. 325
• pooling resources 287, 297
• Popenhoe, D. 377
• Porat, A. 458
• Posner, Eric 228–9, 233, 415
• Posner, Richard A. 65, 74, 133–4, 140, 209–12, 362, 408–9, 429, 447, 455, 463, 466
  • see Landes, W. and R. Posner

• post-nuptial agreements 375
• Poussin case 437–9
• precontractual liability 9–28
• preliminary agreement 13–14
• Prentice, Robert A. 80–95
• pre-nuptial agreements 375
• price adjustments 216–17
• price reduction warranties 256, 274
• pricing, multidimensional 418
• Priest, George L. 168, 265, 428
• primogeniture 108
• principal-agent contracts 322
• prisoner’s dilemma 220, 299–300
• private ordering paradigm 63–5
• Probert, R. and J. Miles 361, 376
• Probst, Thomas 58
• product complexity models of holdup problem 243–7
• profit-sharing agreements 385, 387
• promissory estoppel
  • bargaining power 16
  • classic bargain theory 9–10
  • opportunism deterrence 23
  • optimal damage measure 26
  • protection during negotiations 13, 20
  • trust protection 21

• Prosser, W. and W. Keeton 459
• public enforcement of contracts 427
• public order 428

• quality premiums 273
• quasi-contracts 167, 454–67
• quasi-rents 323, 327, 343
• Quebec Civil Code 429, 434–5, 441–3, 445–446, 448
• Quebec Consumer Protection Act 442

• Rachlinsky, J.J. 412, 415
• Radin, Margaret 76
• Rasmusen, E. and I. Ayres 38–9
• Rasmusen, E. see Rasmusen, E. and I. Ayres
• Rasmusen, E.B., J.M. Ramseyer and J.S. Wiley Jr. 325
• rational choice theory 401–2, 407–408
• redistributive equity 105
• refinance 296–298
• regret contingency 155–156
• relational contracting 289, 295, 299–300, 314
• relation-specific investments 12, 14, 20, 22
• reliance 10, 156–7, 159–64, 168–70, 455
  • bargaining power and timing 15
  • bilateral reliance 17
  • fraudulent misrepresentation 44–5
  • gift promises inducing reliance 89
  • liability regimes 17–18
  • p. 480optimal investments 13
  • precontractual reliance 11–13
  • unilateral reliance 14–16
  • see optimal damage measure

• reliance damages 345–346
• reliance damages for marital breach 366–9
• remedies 155–77, 315–16, 335, 341–348, 345–346, 437, 454
• remedies for marital breach 366–73
• renegotiation 156, 161, 163–166, 188–90, 240–53, 291–5, 298–9, 316, 318–22, 327, 333–338, 344, 346–9
• Renner, Shirley 217
• repeat players 115–16
• repeated hidden action 281
• replacement warranties 256
• reputation 129–30, 220, 269–72
• reputational equilibrium 270
• resale price maintenance, franchise 390–91
• rescission 35–36, 167–9
• rescue 454, 456–7
• Restatement (Second) of Contracts 208, 430
• 175(1) 58
• Restatement (Third) of Restitution 466
• restitution 57, 67, 159–60, 167–9, 174, 347, 454–458, 461–3
• restitution damages for marital breach 369–71
• restrictive covenants in franchise agreements 393
• revolving-offer bargaining 292–3
• reward, offer of 433
• risk and contract length 322
• Roe, M.J. 425
• Roe, M.J. and J.I. Siegel 425
• Rolland, L. 430
• Rosenfield, Andrew 209–12
• Rosental, P.A. 108
• Rowthorn, R. 362
• royalties, of franchise 385
• Rubin, P.H. 384–5, 387, 459–60
• Rubinstein equilibrium 249
• Rubinstein-Stahl 292
• rule of absolute liability 207

• Saiman, C. 457
• same-sex marriage 377
• Samuelson, W. and R. Zeckerhauser 405
• sanctions 155
• satisficing 403
• Savage, L.J. 282, 301
• Schmitz, Patrick W. 190–91
• Schwartz, A. and R.E. Scott 10, 13, 14, 25, 27, 128, 134, 136, 142–5, 340
• Schwartz, Alan 74, 184–5
  • see Schwartz, A. and R.E. Scott; Edlin, Aaron S. and Alan Schwartz

• Schwartz, Alan and Louis L. Wilde 118–19
• Schweizer, Urs 162–3
• Scott, E.S. and R.E. Scott 375
• Scott, R.E. 10, 219–20, 339
  • see Schwartz, A. and R.E. Scott; Goetz, C.J. and R.E Scott.

• Scott, Robert E. and George G. Triantis 159–60
• screening mechanisms 297
• seal 91
• search properties 256
• search-cost theory, of franchise 389
• Segal, I. 244–5, 247–248
• Segal, I. and M.D. Whinston 325
• selfish investments 344–5
• Selten, R. 292
• sequential contracting behavior 121
• sequential investment 250–51
• Shaked, A. and J. Sutton 246–248, 250, 252
• Shavell, Steven 49, 65–66, 68–9, 71–2, 127, 156, 158, 162, 175, 345
• Shell, R.G. 10, 21–2
• Sherwin, E. 461
• shirking 385, 431
• short-term contracts 316–23
• shrouded attributes 417
• signaling equilibrium 197–198
• Silver, C. 456
• Simon, Herbert 217, 402
• simultaneous investment 250
• Singer, J. 371
• Slovic and Lichtenstein 404
• Smith, V. 361
• Smith, J. and R. Smith 39
• p. 481Smith, Lionel 461
• Smythe, Donald J. 207–24
• social welfare 290–91, 294, 299–300
• soft-budget constraint syndrome 289, 295–298
• Sovern, J. 419
• specific investments 314, 318, 326–33, 336–7, 343–348
• specific performance 164–166, 239, 294, 342, 348, 448–50
• Spence, M. 259, 262
• Spitzer, M. and E. Hoffman 407
• standard form contracts 115–24
• status-quo bias 405–406, 413, 419
• Statute of Frauds 463
• Step-Saver Data Systems, Inc. v. Wyse Technology 118
• Stewart, Hamish 61, 63, 67
• stickiness 232–3
• Stigler, G. 42
• stipulated damages 180, 182–4, 186, 189, 194–5, 198–202
• stochastic damages 231–2
• Stole, Lars A. 184–5
• Stolle, Dennis P. and A.J. Slain 118
• subjective good faith 430
• subsequent improvement warranties 256, 274
• substitute assets 287
• Suez Canal cases 213, 219
• sunk cost effect 418
• sunk investments, of franchise 394
• Sunstein, C.R. 401, 410
• Sunstein, C.R. and R.H. Thaler 412, 419–20
• superior risk bearer 131, 137–9, 142
• suppletive law 428, 446
• switching-cost, of franchise 391
• Sykes, Alan O. 213–14
• Szalai, Akos see Cserne, Péter and Szalai, Akos

• tailored default rules 226, 413–14
• taxing bequests see estate tax
• Taylor v. Caldwell 207
• Taylor, James Stacey 63
• termination at will 353
• termination provisions, of franchise 386, 392
• Tesler, L. 391
• textualism 128, 131, 133, 136, 142–9, 434
• Thaler, R. 405–406, 418
• Thompson, R.S. 388–9
• threat of violence or fear 440
• tie-ins, franchise 391
• timing of foreseeability determination 234–5
• Tirole, J. 295
• Tomes, Nigel 107–108
• total and partial breach 167
• trading opportunity 246–9, 252–3
• transaction cost theory 115–16, 282, 287, 330–31, 350, 384–5, 392
• transferable control 295
• Trebilcock, Michael 366, 429
• Trebilcock, Michael J. 63–4, 67, 76
  • see Aivazian, Varouj A. et al. 73

• Triantis, George G. 73, 214–16 see also Scott, Robert E. and George G. Triantis
• Trimarchi, Pietro 216–17
• Tullock, Gordon see Buchanan, James and Gordon Tullock
• Tversky, A. and D. Kahneman 404, 406
• typology of default rules 229

• UCC Article 2 93, 179–80, 208
• Ulen, T. 408 see also Cooter, R. and T. Ulen
• unconscionability 60, 64, 74, 417, 430
• underinvestment 294–5, 323
• undue influence 58–61
• unforeseeability 446–7
• Unidroit Principles of International Commercial Contracts 430
• Uniform Written Obligations Act 91
• unjust enrichment 439, 454–67
• unverifiable information 181–4, 186–188, 190, 192
• use-pattern mistakes 418

• valuation 290
• van Wijck, Peter 225–38
• verifiability of non-performance 341–3
• vertical disintegration 330
• vertical integration 328–9, 350
• vertical restrictions to franchising 390–91
• p. 482Vienna Sales Convention 430
• volition, theory of 57
• voluntariness 57–58, 61–2, 64, 67, 70–71, 74–5
• Von Neumann, J. and O. Morgenstern 282
• von Thadden, E. 298

• Wade, J.W. 457
• Walt, Steven 178–206, 216
• warranties 256–74
  • mandatory 428
  • money-back 256
  • price reduction 256, 274
  • replacement 256
  • subsequent improvement 256, 274

• Wehrt, K. 269
• Weinrib, E.J. 460
• Weitzman, L.J. 371
• Westinghouse case 210–11
• White, Michelle 213
• Wickelgren, A.L. 246–248
• will theory see classical theory of contract
• Williams, D. 352
• Williamson, O.E. 217–18, 283–286, 321, 327, 350, 374, 393, 432
• Wils, W. 19–20
• Windsperger, Cochet and Ehrmann 394
• Wittman, D. 427, 429, 432–4, 457, 459, 465
• Wonnell, Christopher T. 36, 38, 67, 455–7, 462

• Zervogianni, Eleni see Hatzis, Aristides N. and Eleni Zervogianni
• Zhou, Q. 32–3, 36, 38, 41, 43–46, 31–52
• Zimmerman, R. 433