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dc.contributor.authorBebchuk, Lucian Arye
dc.contributor.authorBen-Shahar, Omri
dc.date.accessioned2013-12-10T14:07:53Z
dc.date.issued2001
dc.identifier.citationLucian A. Bebchuk & Omri Ben-Shahar, Precontractual Reliance, 30 J. Legal Stud. 423 (2001).en_US
dc.identifier.issn0047-2530en_US
dc.identifier.urihttp://nrs.harvard.edu/urn-3:HUL.InstRepos:11363039
dc.description.abstractDuring contractual negotiation, parties often make (reliance) expenditures that would increase the surplus should a contract be made. This paper analyzes decisions to invest in pre-contractual reliance under alternative legal regimes. Investments in reliance will be socially suboptimal in the absence of any pre-contractual liability - and will be socially excessive under strict liability for all reliance expenditures. Given the results for these polar cases, we focus on exploring how "intermediate" liability rules could be best designed to induce efficient reliance decisions. One of our results indicates that the case for liability is shown to be stronger when a party retracts from terms that it has proposed or from preliminary understandings reached by the parties. Our results have implications, which we discuss, for various contract doctrines and debates. Finally, we show that pre-contractual liability does not necessarily have an overall adverse effect on parties' decisions to enter into contractual negotiations.en_US
dc.language.isoen_USen_US
dc.publisherUniversity of Chicago Pressen_US
dash.licenseMETA_ONLY
dc.titlePrecontractual Relianceen_US
dc.typeJournal Articleen_US
dc.description.versionVersion of Recorden_US
dc.relation.journalJournal of Legal Studiesen_US
dash.depositing.authorBebchuk, Lucian Arye
dash.embargo.until10000-01-01
dash.contributor.affiliatedBebchuk, Lucian


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