Gordon Smith and Brayden King,
Organizational Perspectives on Contracts,
Available at: https://digitalcommons.law.byu.edu/faculty_scholarship/347
Most written contracts are drafted by lawyers, but legal scholars rarely study contract documents, preferring instead to focus on the legal rules governing contracts. Despite this neglect on the part of the legal academy, empirical studies of contracts have become more common over the past decade. However, the range of questions addressed by these studies is narrow, inspired primarily by economic theories that focus on the role of contracts in mitigating various forms of advantage taking by contracting parties. We believe that legal scholars have something important to add to this scholarly discussion – namely a deep knowledge of contract language, drafting norms, and judicial interpretations – and we contend that economic theories of contracting do not adequately accommodate these potential insights. In this Article, we offer four organizational theories to supplement – and in some instances, perhaps, challenge – the dominant economic accounts. The purpose of this Article is threefold: first, to describe how theoretical perspectives on contracting from law and economics have motivated empirical work on contracts; second, to highlight the dominant role of economic theories in framing empirical work on contracts; and third, to enrich the empirical study of contracts through application of four organizational theories.