The central theme of this book is that an economic framework – incorporating such concepts as information asymmetry, moral hazard, and adaptation to changed circumstances – is appropriate for contract interpretation, analyzing contract disputes, and developing contract doctrine. The value of the approach is demonstrated through the close analysis of major contract cases. In many of the cases, had the court (and the litigators) understood the economic context, the analysis and results would have been very different.
Topics and some representative cases include "consideration" (Wood v. Lucy, Lady Duff-Gordon), "interpretation" (Bloor v. Falstaff and Columbia Nitrogen v. Royster), "remedies" (Campbell v. Wentz, Tongish v. Thomas, and Parker v. Twentieth Century Fox), and "excuse" (Alcoa v. Essex). Professor Douglas Baird of the University of Chicago Law School said the book "ought to be read by everyone who teaches contract law in an American law school. Even more important, it ought to be read by every lawyer who writes or negotiates contracts."