Freedom of contract is a principle of law, expressing three related ideas: Parties should be free to choose their contracting partners (“party freedom”), to agree freely on the terms of their agreement (“term freedom”), and where agreements have been freely made, parties should be held to their bargains (“sanctity of contract”). A key contribution of economics to contract law scholarship has been to systematize and rationalize both the principle and its limits in terms of social welfare. This entry provides an overview of the economic justifications and limitations of the principle.
|Title of host publication
|Encyclopedia of Law and Economics
|Alain Marciano, G B Ramello
|Place of Publication
|Number of pages
|E-pub ahead of print - 8 May 2021