Contract law has long suffered from an institutional problem: Which legal institution can best create an efficient law for commercial contracts that can overcome “obsolescence”—the persistence of rules that only solve yesterday’s contracting problems? Until the early twentieth century, contract law was largely created by common law courts. The law’s default rules were efficient when created, and courts updated them as commerce changed....
Contract Law
When private parties perform contracts, the public bears some of the costs. But what happens when society confronts unexpected contractual risks? During the COVID-19 pandemic, completing particular contracts—such as following through with weddings, conferences, and other large gatherings—will greatly increase the risk of rapidly spreading disease. A close reading of past cases illustrates that when social hazards sharply increase after formation,...