Dividing the Surplus upon Termination: The Case of Relational Contracts

摘要

Law and economics scholars often criticize courts and legislators for adopting an ex post perspective on contractual disputes. The gist of such criticism is that courts and legislators tend to concentrate on the parties' relative positions after a dispute arises, rather than on their interests and incentives at the time of forming and performing the contract. The case at hand, the division of the surplus that remains after the termination of relational contracts, seems like another easy target for such an attack.