26 Pages Posted: 1 Feb 2003
Business contracts have been reviled since before the Marx Brothers' infamous 'there ain't no Sanity Clause' sketch as being replete with duplicative, cumbersome, inartful, and sometimes imprecise language. My article seeks to understand why practice apparently hasn't made perfect - why business contracts are not as clear, and only as long, as would seem to be optimal. I argue that the contract production process combines rational, and what some would consider irrational, elements to create a serviceable, but arguably second-best, product. I discuss dynamics of law firms and their clients that contribute to the continuing viability of an 'imperfect product.'
JEL Classification: L2, K22, L14
Suggested Citation: Suggested Citation