Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Contract, Freedom of

  • Péter CserneEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_538

Abstract

Freedom of contract is a principle of law, expressing three related ideas: parties should be free to choose their contracting partners (“party freedom”), to agree freely on the terms of their agreement (“term freedom”), and where agreements have been freely made, parties should be held to their bargains (“sanctity of contract”). This entry provides an overview of the economic justifications and limitations of this principle.

This is a preview of subscription content, log in to check access.

References

  1. Akerlof GA (1970) The market for lemons: quality uncertainty and the market mechanism. Quarterly J of Economics 84:488–500CrossRefGoogle Scholar
  2. Basu K (2007) Coercion, contract and the limits of the market. Soc Choice Welfare 29:559–579CrossRefGoogle Scholar
  3. Brownsword R (2006) Freedom of contract. In: Brownsword R (ed) Contract law. Themes for the twenty-first century, 2nd edn. Oxford University Press, Oxford, pp 46–70Google Scholar
  4. Buckley FH (2005) Just exchange: a theory of contract. Routledge, LondonGoogle Scholar
  5. Cooter R, Ulen T (2008) Law and economics, 5th edn. Pearson Education, BostonGoogle Scholar
  6. Cooter R, Ulen T (2012) Law and economics, 6th edn. Pearson Education, BostonGoogle Scholar
  7. Craswell R (2000) Freedom of contract. In: Posner E (ed) Chicago lectures in law and economics. Foundation Press, New York, pp 81–103Google Scholar
  8. Cserne P (2012) Freedom of contract and paternalism. Prospects and limits of an economic approach. Palgrave, New YorkGoogle Scholar
  9. Dagan H, Heller MA (2013) Freedom of contracts. Columbia law and economics working paper no. 458. Available at SSRN. http://ssrn.com/abstract=2325254
  10. Decock W (2013) Theologians and contract law. The moral transformation of the Ius Commune (ca. 1500–1650). Martinus Nijhoff, LeidenGoogle Scholar
  11. Dixit A (2004) Lawlessness and economics. Alternative modes of governance. Princeton University Press, PrincetonGoogle Scholar
  12. Feldman Y (2002) Control or security: a therapeutic approach to the freedom of contract. Touro L Rev 18:503–562Google Scholar
  13. Gordley J (1991) The philosophical origins of modern contract doctrine. Clarendon, OxfordGoogle Scholar
  14. Hatzis AN (2006) The negative externalities of immorality: the case of same-sex marriage. Skepsis 17:52–65Google Scholar
  15. Hermalin BE, Katz AW, Craswell R (2007) Contract Law. In: Polinsky AM, Shavell S (eds) The handbook of law & economics, vol 1. Elsevier, Amsterdam, pp 3–136Google Scholar
  16. Kennedy D (1982) Distributive and paternalist motives in contract and tort law, with special reference to compulsory terms and unequal bargaining power. Maryland Law Rev 41:563–658Google Scholar
  17. Mill JS (1848) Principles of political economy with some of their applications to social philosophy. http://www.econlib.org/library/Mill/mlP.html
  18. Persky J (1993) Consumer sovereignty. J Econom Perspect 7:183–191CrossRefGoogle Scholar
  19. Piccione M, Rubinstein A (2007) Equilibrium in the jungle. Econom J 117:883–896Google Scholar
  20. Pincione G (2008) Welfare, autonomy, and contractual freedom. In: White MD (ed) Theoretical foundations of law and economics. Cambridge University Press, Cambridge, pp 214–233CrossRefGoogle Scholar
  21. Posner EA (1995) Contract law in the welfare state: a defense of the unconscionability doctrine, usury laws, and related limitations on freedom of contract. J Legal Stud 24:283–319CrossRefGoogle Scholar
  22. Shavell S (2004) The foundations of economic analysis of law. Harvard University Press, CambridgeGoogle Scholar
  23. Tirole J (1992) Comments. In: Werin L, Wijkander H (eds) Contract economics. Basil Blackwell, Oxford, pp 109–113Google Scholar
  24. Trebilcock MJ (1993) The limits of freedom of contract. Harvard University Press, CambridgeGoogle Scholar

Further Reading

  1. Atiyah PS (1979) The rise and fall of freedom of contract. Clarendon, OxfordGoogle Scholar
  2. Ben-Shahar O (ed) (2004) Symposium on freedom from contract. Wisconsin Law Rev 2004:261–836Google Scholar
  3. Buckley FH (ed) (1999) The fall and rise of freedom of contract. Duke University Press, DurhamGoogle Scholar
  4. Craswell R (2001) Two economic theories of enforcing promises. In: Benson P (ed) The theory of contract law: new essays. Cambridge University Press, Cambridge, pp 19–44CrossRefGoogle Scholar
  5. Kerber W, Vanberg V (2001) Constitutional aspects of party autonomy and its limits: the perspective of constitutional economics. In: Grundmann S, Kerber W, Weatherhill S (eds) Party autonomy and the role of information in the internal market. De Gruyter, Berlin, pp 49–79Google Scholar
  6. Kronman AT, Posner RA (1979) The economics of contract law. Little & Brown, BostonGoogle Scholar
  7. Schwartz A, Scott RE (2003) Contract theory and the limit of contract law. Yale Law J 113:541–619CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.University of HullHullUK