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75 Nw. U. L. Rev. 1018 (1980-1981)
Economic Analysis of Contractual Relations: Its Shortfalls and the Need for a Rich Classificatory Apparatus

handle is hein.journals/illlr75 and id is 1028 raw text is: Copyright 198! by Northwestern University School of Law Printed in U.S.A. Northwestern University Law Review Vol. 75, No. 6 ECONOMIC ANALYSIS OF CONTRACTUAL RELATIONS: ITS SHORTFALLS AND THE NEED FOR A RICH CLASSIFICATORY APPARATUS * Ian R. Macneil** I. INTRODUCTION ............................................ 1019 II. NEOCLASSICAL MICROECONOMIC MODEL, TRANSACTION COSTS, AND RELATIONAL CONTRACT ..................... 1021 III. DISCRETE TRANSACTIONS AND MODERN CONTRACTUAL RELATIONS ................................................ 1025 A. Commencement, Duration, and Termination ........... 1027 B. Measurement and Specociy .......................... 1028 C. Planning .............................................. 1029 D. Sharing versus Dividing Benefits and Burdens ......... 1031 E. Interdependence, Future Cooperation, and Solidarity... 1032 F. Personal Relations and Numbers ...................... 1034 G. Power: Unilateral and Bilateral ...................... 1036 IV. NEOCLASSICAL MICROECONOMIC ANALYSIS OF CONTRACTUAL RELATIONS ................................ 1039 A. Commencement, Duration, and Termination ........... 1041 * Williamson, Transaction-Cost Economics.- The Governance of Contractual Relations, 22 J.L. & ECON. 233, 236 (1979). ** John Henry Wigmore Professor of Law, Northwestern University. B.A., University of Ver- mont, 1950; J.D., Harvard University, 1955. This article is a combination and revision of an essay in ESSAYS IN LAW AND ECONOMICS (P. Burrows & C. Veljanovski eds. 1981), and of Power, Contract, and the Economic Model, 14 J. ECON. ISSUEs 909 (1980). Reproduced by permission, with all rights reserved. A number of works on economic analysis with a bearing on the subject of this article have come to hand too late to influence this article. I particularly regret having been unable to examine carefully the wealth of thought in Symposium on Efficiency as a Social Concern, 8 HOFSTRA L. REv. 485 (1980) and Carroll, Two Games That Illustrate Some Problems Concerning Economic A4nalysis of Legal Problems, 53 S. CAL. L. REV. 1371 (1980). This article was written in considerable part while I was enjoying the physical and collegial hospitality of the Faculty of Law, University of Edinburgh, as an Honorary Fellow, during a sabbatical leave from Cornell Law School, and supported in part by a Guggenheim Fellowship. Bless them all! I am greatly indebted to the following who kindly read various drafts and offered helpful criticism: Richard Adelstein, Victor Goldberg, Donald Harris, George Hay, S. Todd Lowry, Ste- phen Presser, Warren Samuels, Cento Veljanovski, and Oliver Williamson. 101.8

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