George Cohen

Implied Terms and Interpretation in Contract Law

Edward Elgar

UVA Law Faculty Affiliations


This essay will appear as an entry in the forthcoming Encyclopedia of Law and Economics (2d ed.), published by Edward Elgar. The essay surveys the law and economics literature on interpretation and implied terms in contract law, focusing on recent literature. In particular, the essay examines the economic arguments for textualism and contextualism, the two primary methodologies used by courts to determine the intentions of contracting parties with respect to their performance obligations. Topics discussed include complete and incomplete contracts; negotiating, drafting, and litigation costs; superior risk bearer and opportunism approaches; joint fault and multiple contingencies; contracting party characteristics; court competence and error; and agency costs and third party interests.


George M. Cohen, Implied Terms and Interpretation in Contract Law, in Boudewijn Bouckaert & Gerrit De Geest Encyclopedia of Law and Economics, Edward Elgar, 78-99 (2000).

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