abstract title: modify and terminate the contract if financial impossibility the financial performance impossible of the contract set forth because of the financial inability of one who undertake stems from external factors and attributing to the contracting parties is impossible. in the event of financial impossibility the present procedures (based on existing regulation) the possibility of th...

Abstract The discussion on Taiwan's status under the United Nations Convention Contracts for International Sale of Goods (CISG) has picked up steam. After providing some historical background, it is argued that neither doctrinal nor policy arguments can support application to Taiwanese parties. Drawing case law in context other uniform treaties, article concludes approbation CISG by People's Re...

We study a T -period contracting problem where performance evaluations are subjective and private. We find that the principal should punish the agent if he performs poorly in the future even when the evaluations were good in the past, and, at the same time, the agent should be given opportunities to make up for poor performance in the past by performing better in the future. Thus, optimal incen...

Bilateral procurement contracts in the electricity industry use fixed unit prices to settle payments and deliveries. This type of purchasing arrangement creates perverse production incentives and ignores dynamic uncertainties that are inherent in electricity markets. We consider a continuous-time contracting environment, in which the electricity price is modeled as a mean reversion jump diffusi...

D development of an innovative product there is often considerable uncertainty about component production cost, and it is of interest for both the manufacturer and the supplier to engage in a collaborative effort to reduce this uncertainty and lower the expected cost. Despite the obvious benefits this brings, the supplier may be reluctant to collaborate as he fears revealing his proprietary cos...

While a key function of contracts is to provide incentives, the incentives of judges to enforce the terms of a contract have rarely been examined. This paper develops a simple model of judicial agency in which judges are corrupt and can be bribed by contracting parties. Higher-powered contracts expose contracting parties to more frequent and more severe corruption, which in turn lessens the inc...

We provide experimental evidence that contractual incompleteness, i.e., the absence of third party enforcement of workers’ effort or the quality of the good traded, causes a fundamental change in the nature of market interactions. If contracts are complete the vast majority of trades are initiated by public offers. Most trades take place in one-shot transactions and the contracting parties are ...

I analyze a simple model of hold-up with asymmetric information at the contracting stage. I show that contractual signalling and e¢ ciency of investment can con‡ict if only quantity is contractible. This is because contracted quantity encourages investment in the relationship but also signals information. This con‡ict generates ine¢ cient equilibria in terms of investment. Contracting on exclus...

This chapter examines the economic arguments for textualism and contextualism, the two primary methodologies used by courts to determine the intentions of contracting parties with respect to their performance obligations. Textualism, which is rooted in the idea of complete contracting, calls for a more restrictive approach to implied terms and interpretation than contextualism, which is rooted ...

How does imperfect contractibility of preferences in‡uence the governance of a contractual relationship? We analyze a two-party decision-making problem where the optimal decision is unknown at the time of contracting. In consequence, instead of contracting on the decision directly, the parties need to design a contract that will induce good decision-making in the future. We examine how environm...