Economics as Context for Contract Law

Framing Contract Law: An Economic Perspective. Victor Goldberg. Harvard, 2006. Pp vii, 411.

Of the many legends echoing across the generations at The University of Chicago Law School, one of the more famous involves a course in antitrust taught in the early 1950s. The story is usually told the same way: Dean Edward Levi had decided to spice up his class by collaborating with an economist from across the quad. From Monday to Thursday, Levi would go through a collection of antitrust cases to synthesize disparate holdings and celebrate the collective wisdom of lawmakers. Then, every Friday, Aaron Director would walk into the classroom and use economics to rip apart everything taught over the past week. Levi would promptly engage Director in debate, to the general amusement of most students. More than fifty years later, I think we can safely say that Director usually held the upper hand—by the end of class, even the great orator Levi reportedly had to resort to poking fun at Director’s mustache in the face of the economist’s inexorable logic. In any case, substantive antitrust law has never been the same since. Victor Goldberg, a leading figure in the economic analysis of contract law, seeks to spark a similar revolution with his latest book, Framing Contract Law.