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One-Sided Contracts in Competitive Consumer Markets

By Lucian A. Bebchuk and Richard A. Posner

Abstract

The usual assumption in economic analysis of law is that in a competitive market without informational asymmetries, the terms of contracts between sellers and buyers will be optimal-that is, that any deviation from these terms would impose expected costs on one party that exceed benefits to the other. But could there be cases in which one-sided contracts containing terms that impose a greater expected cost on one side than benefit on the other-would be found in competitive markets even in the absence of fraud, prohibitive information costs, or other market imperfections? That is the possibility we explore in this Article

Topics: Boilerplate: Foundations of Market Contracts Symposium, Reputation, Buyers, Sellers, Asymmetry, Consumers, One-sided contracts, Adhesion contracts, Consumer Protection Law, Contracts, Law and Economics
Publisher: University of Michigan Law School Scholarship Repository
Year: 2006
OAI identifier: oai:repository.law.umich.edu:mlr-1528
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