Property Rules and Liability Rules in Unconscionability and Related Doctrines

Little attention has been paid to the distinction between refusing to let one party enforce any obligations whatsoever, as opposed to refusing to let that party enforce any obligations except those the court considers reasonable - that is, to a distinction between property rules and liability rules....

Full description

Saved in:
Bibliographic Details
Published in:The University of Chicago law review 1993-01, Vol.60 (1), p.1-65
Main Author: Craswell, Richard
Format: Article
Language:English
Subjects:
Commercial law
Contract enforcement
Contract law
Contract theory
Contracts
Duress
Economic theory
Financial liabilities
Law
Legal consent
Liabilities
Liability
Monopoly
Property Law
Property rights
Real estate
Rule of law
Settlements & damages
Unconscionability
United States
Citations: Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Little attention has been paid to the distinction between refusing to let one party enforce any obligations whatsoever, as opposed to refusing to let that party enforce any obligations except those the court considers reasonable - that is, to a distinction between property rules and liability rules. The choice between property rules and liability rules should depend on the cost of overcoming the impediment to consent that provides the reason for invalidating the first party's contract. If the impediment can be easily overcome, protecting the 2nd party with a property rule will usually be appropriate. If the impediment cannot be overcome or can be overcome only at great expense, if the 2nd party is to be protected at all it will usually be better to adopt a liability rule. Moreover, the choice between either of these options and enforcing the first party's contract automatically without any judicial scrutiny of its reasonableness should depend on whether the best alternative to automatic enforcement is a property rule or a liability rule.
ISSN:0041-9494
1939-859X
DOI:10.2307/1600031