THE INTERSECTION OF CONTRACT LAW AND ECONOMICS
AUTHOR – NIKHIL GORAKSH WADGHANE, LLM STUDENT OF DES’S SHRI NAVALMAL FIRODIA LAW COLLEGE PUNE
BEST CITATION – NIKHIL GORAKSH WADGHANE, THE INTERSECTION OF CONTRACT LAW AND ECONOMICS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (3) OF 2026, PG. 547-553, APIS – 3920 – 0001 & ISSN – 2583-2344.
Abstract
“Where promises meet profit, the fusion of contract law and economics shapes the rules of fair trade and market efficiency .”The intersection of contract law and economics emerged in the 20th century, particularly with the rise of the Law and Economics movement in the 1960s. Scholars like Ronald Coase and Guido Calabresi explored how economic principles could be applied to analyse and improve contractual frameworks, focusing on efficiency, transaction costs, and incentives. The intersection of contract law and economics today emphasizes efficiency, risk allocation, and behavioural insights, influencing legal reforms and policy-making worldwide. It plays a key role in shaping modern contract theory, addressing market failures, and enhancing legal predictability .The intersection of contract law and economics explores how economic principles, such as efficiency, incentives, and transaction costs, influence the creation, interpretation, and enforcement of contracts. It seeks to balance legal doctrines with market dynamics, aiming to promote fair agreements while maximizing societal welfare .How can economic principles be effectively integrated into contract law to enhance market efficiency while ensuring fairness and protecting vulnerable parties in contractual relationships The application of economic principles in contract law improves overall market efficiency but may compromise fairness and equitable outcomes for weaker parties. Enacting policies that align economic efficiency with public policy goals in standard-form contracts.This Study aims to analyse the relationship between economic principles and the legal framework governing contracts and To assess the role of economic analysis in shaping contract law doctrines and policies.
Key Words – Contract Law, Economics, Principles, Policy, Intersection.