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Unpublished Paper
Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value
ExpressO (2010)
  • Juliet P Kostritsky, Case Western Reserve
Abstract
• The Article offers a theory of judicial intervention and interpretation in Contracts. It posits that the principal objective of courts interpreting, supplementing, or overriding terms is to ask whether such intervention can serve the broad objective of maximizing gains from trade while minimizing transaction costs and the costs of opportunism, collectively, an interpretive risk. It offers an economic rationale for a broad approach to interpretation and explores several examples from Contract law where courts depart from the parties’ textual choices and follow the theory suggested in this Article. These examples directly challenge the theory of the new formalists.
Keywords
  • interpretive risk,
  • opportunism,
  • default rules,
  • textualism,
  • interpretation,
  • cost
Disciplines
Publication Date
February 15, 2010
Citation Information
Juliet P Kostritsky. "Interpretive Risk and Contract Interpretation: A Suggested Approach for Maximizing Value" ExpressO (2010)
Available at: http://works.bepress.com/juliet_kostritsky/16/