Applying Economics Theory to International Business Transaction Law and International Private Law

Abstract

This article applies contract theory to the international business transaction and private law context. This article first shows that a complete contract only exists in theory, and all existing international business contracts are incomplete in nature due to high transaction costs associated with contracting. Then, the article employs marginal analysis to show the optimum level of incompleteness in international business contracts. This article applies contract theory to the international business transaction and private law context. This article first shows that a complete contract only exists in theory, and all existing international business contracts are incomplete in nature due to high transaction costs associated with contracting. Then, the article employs marginal analysis to show the optimum level of incompleteness in international business contracts