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The color of law: an economic theory of legal boundaries

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  • Thomas Miceli

Abstract

This paper presents an economic theory of property, tort, and contract law based on the goal of efficiently governing economic exchange relationships. In the theory, legal boundaries emerge endogenously in response to exogenous differences in the nature of the underlying transaction concerning the possible existence of unforeseen or non-contractible contingencies, and/or the desire of one of the parties to make non-salvageable investments prior to trade. The analysis asks whether, in this context, the transaction is best governed by property, tort, or contract principles. The conclusions are illustrated by a discussion of several cases that occupy the “boundaries” between the various areas. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Thomas Miceli, 2014. "The color of law: an economic theory of legal boundaries," European Journal of Law and Economics, Springer, vol. 38(2), pages 185-209, October.
    • Handle: RePEc:kap:ejlwec:v:38:y:2014:i:2:p:185-209
    DOI: 10.1007/s10657-014-9452-1
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    References listed on IDEAS

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    1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, April.
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    More about this item

    Keywords

    Property; Torts; Contracts; Legal boundaries; K10; K11; K12; K13;
    All these keywords.

    JEL classification:

    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics

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