ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Tuesday, November 12, 2013

Coase and Contracts: What To Do?


When teaching contracts I deal with a delimma. I feel that any law student who graduates and could not carry on a cocktail  party discussion about the Coase Theorem has been short changed.  There are many places in a contracts class where one might address the theorem. (Of course maybe we all assume someone else will do it.)  In fact, if one teaches Walgreen Co. v. Sara Creek Property, you almost have to go out of your way to avoid discussing it even if you do not name it.  Specific performance generally invites discussion of the Theorem. It also comes up, if you want it to, any time you ask the class how the parties could avoid an issue. In effect, the could bargain around many problems.  

The problem is that, once mentioned, how do you keep it from showing up repeatedly on final exam essay answers?  It might legitimately come up in a policy discussion about specific performance but I am pretty sure I have never asked a question that would call for that analysis. It is less pesky than "good faith" and "unconscionability" which tend to worm their way into any answers the students find complicated.

In fact, when teaching anything (for me that means copyright, antitrust. law and economics, and contracts) there are many pieces of information that you may feel make for a better educated law student.  Once you mention them they will find their way into exam answer because, well . . . . that's what students do. So how do you enlighten them in a way that rounds them out without also signaling that they need to cram the information into their exam answer?

 [Jeffrey L. Harrison]

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I too have struggled to introduce theoretical perspectives as well as policy perspectives into the first-year contracts course in a way that students can digest and assimilate. My imperfect solution to the problem you have identified is to always have a policy question on my exams. The format is basically a variation on the following:

The essay portion of my exam consists of one fact pattern, followed by one or two standard law school exam questions, which I expect the students to answer in IRAC format. I then say that the judge/arbiter/law firm partner wants a better understanding of the policy objectives informing a particular rule of law or an alternative rule that a court might consider in order to do justice to the parties, to establish a rule that will be more fair in the aggregate or that will create incentives for desirable behavior. In short, I ask the students to tell me about the law in their answers to the IRAC questions and to address policy considerations in the final question.

Posted by: Jeremy Telman | Nov 12, 2013 4:12:15 PM

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