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Cserne, Péter --- "Duress" [2011] ELECD 121; in De Geest, Gerrit (ed), "Contract Law and Economics" (Edward Elgar Publishing, 2011)

Book Title: Contract Law and Economics

Editor(s): De Geest, Gerrit

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206008

Section: Chapter 4

Section Title: Duress

Author(s): Cserne, Péter

Number of pages: 23

Extract:

4 Duress
Péter Cserne


1. Introduction: Economists Learning from Law?
In the law of contracts, duress is an excuse for non-performance. Virtually
all modern legal systems provide that a party who concluded a contract
under unacceptable pressure has a right to refuse performance or, if he has
already performed, a right to restitution. In short, victims of contractual
duress are allowed to avoid the offending agreement.
The purpose of this chapter is to provide an overview of the economic
analysis of contractual duress. The focus will be on the distinctive features
of the economic perspective on the duress doctrine, as developed in the
theoretical literature of law and economics. Before discussing the results of
economic analysis, the legal background and some non-economic theories
of duress are briefly presented. This detour may be justified by an argu-
ment put forward by Robert Cooter and Thomas Ulen in the introductory
chapter of their textbook. As they argue, the voluntariness of contracts is
a subject on which economists should learn from the law.

[E]conomists frequently extol the virtues of voluntary exchange, but economics
does not have a detailed account of what it means for exchange to be volun-
tary. . . . [C]ontract law has a complex, well-articulated theory of volition. If
economists will listen to what the law has to teach them, they will find their
models being drawn closer to reality. (Cooter and Ulen, 2008: 12)

Although this gesture of two economists towards lawyers is to be appre-
...