[Aman Bahl, a student at the Maharashtra National Law University, Nagpur, reviews how present-day contract law is influenced by economics and how this is different from the nineteenth century, in light of Sugata Bag’s book.]
The economic analysis of law as it existed in the nineteenth century, and as it is apprehended in the twenty-first century, displays a few similarities but many differences. The fundamental similarity between these centuries is that the law comprises predominantly of contracts. The many disparities in this law influence the behaviour of its legal subjects in order to achieve particular ends. The economic analysis of Contract Law is often understood as a functional branch of Law and Economics. It is also recognized as an amalgamation of two individual and far-reaching branches, the Theories of Contract, and the Economics of Contract Law. Professor Bag in his book “The Economic Analysis of Contract Law” brings these emerging interpretations to light. In view of these constants and changes, this article reviews the position of contract law with regard to economics. It discusses the various illustrations and models mentioned by him in his book, and also brings to light the importance of his work in bringing intelligent and thought-provoking arguments to classroom discussion, thereby going a long way in bridging the gap between economics and law.