Coercion, Contract and the Limits of the Market

  title={Coercion, Contract and the Limits of the Market},
  author={Kaushik Basu},
  journal={Law \& Economics eJournal},
  • K. Basu
  • Published 1 January 2006
  • Economics
  • Law & Economics eJournal
It is a widely accepted principle of economics that if two or more adults voluntarily agree to a contract or an exchange that has no negative fall-out on others, then the government should not stop such a contract. This is often called the 'principle of free contract' (PFC). There is a body of writing in economics which upholds the PFC. Yet, this ubiquitous principle is ill-defined and full of ambiguities. For instance, since it refers to voluntary choice, its proper use presumes an… 
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