The Law and Economics of Contract Interpretation

@article{Posner2004TheLA,
  title={The Law and Economics of Contract Interpretation},
  author={Richard A. Posner},
  journal={Texas Law Review},
  year={2004},
  volume={83},
  pages={1581}
}
  • R. Posner
  • Published 1 November 2004
  • Economics
  • Texas Law Review
Contract interpretation is an understudied topic in the economic analysis of contract law. This paper combines simple formal analysis of the tradeoffs involved in interpretation with applications to the principal doctrines of contract interpretation, including the four corners rule, mutual mistake, contra proferentum, and what I call the (informal but very important) rule of extrinsic nonevidence. Gap filling is distinguished, and the relativity of interpretive doctrine to the interpretive… 

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