Contract asymmetry (law & economics, Common Law) [De.: Vertrag Asymmetrie, Fr.: asymétrie du contrat, Gr.: Ασυμμετρία σύμβασηs] (See also : contract theory, agent theory, information asymmetry, economics of information, incomplete contracts) = the unequal bargaining power of the contracting parties, in cases when one side is better informed than the other. Contract asymmetry may increase the economic efficiency of the transaction for the more informed parties, which is opposed to the notion of the social welfare of the contract. If the contracting parties are asymmetrically informed, courts may improve the contractual outcome by penalising parties who engage in force and/or fraud, or impose other restrictions on contracts by modifying or refusing to enforce certain contractual terms, in order to increase the contracts welfare.

Useful links

Legislation - Proposal for a Regulation Of The European Parliament and of The Council on a Common European Sales Law, Brussels, 11.10.2011, COM(2011) 635 final [English] - Report from the Commission - Second Progress Report on The Common Frame of Reference, Brussels, 25.7.2007, COM(2007) 447 final [English] - Communication from The Commission to the European Parliament And The Council, European Contract Law and the revision of the acquis : the way forward, Brussels, 11.10.2004, COM(2004) 651 final [English] - The Uniform Commercial Law (USA) [English] - Guiding Principles of European Contract Law (PECL) [English] - The new and reformed French contract law [French] – German civil law [German]

Case Law -  United States, District Court of Maryland, 200 North Gilmor, LLC  v. Capital One, National Association, 2012, 863 F. Supp. 2d 480 - United States, Court of Appeals New York, CBS, Inc. v. Ziff-Davis Publishing Co., 1990, 553 N.E. 2d 997 - United States, District Court E.D. Pennsylvania, Dastgheib v. Genentech, Inc., 2006, 457 F. Supp. 2d 536

Online Publications – Aghion, P., Holden, R., (2011), Incomplete Contracts and the Theory of the Firm: What Have We Learned over the Past 25 Years?, Journal of Economic Perspectives, Vol. 25, n° 2, pp. 181–197 - Craswell R., 2002, In That Case, What Is the Question? Economics and the Demands of Contract Theory, The Yale Law Journal, vol.112, n°4, January 2003, pp. 903-924 - Halonen-Akatwijuka, M., Hart, O., 2013, More is less: why parties may deliberately write incomplete contracts, Working Paper 19001, National Bureau of Economic Research - Markovits, D., 2015, Theories of the Common Law of Contracts, The Stanford Encyclopedia of Philosophy, Edward N. Zalta (ed.) - Posner, E., 2002, Economic Analysis of Contract Law after Three Decades: Success or Failure?, John M.Olin Law & Economics Paper n° 146 (2nd series), University of Chicago-Law School


Barnett, E., Oman, N., 2016, Contracts: Cases and Doctrine, (6th edition), United States, Wolters Kluwer, Aspen casebook series

Bolton, P., Dewatripont, M., 2005, Contract Theory, United Kingdom, Cambridge-MIT Press

Errante, E., 2001, The Anglo-American law of contracts, France, LGDJ-Jupiter

Franz, W., 2000, Ökonomische Analyse von Verträgen, Germany, Mohr Siebeck, Wirtschaftswissenschaftliches Seminar Ottobeuren, Bd 29

Larouche, P., Chirico, F., (ed.) 2010,  Economic analysis of the DCFR: the work of the Economic Impact Group within the CoPECL, (DCFR= Draft Common Frame of Reference, CoPECL = Common Principles of European Contract Law), Germany, Sellier European Law Publishers

Macho-Stadler, I., Pérez-Castrillo, J.D., 2001, An Introduction to the Economics of Information. Incentives and Contracts, (2nd edition), United Kingdom, Oxford University Press

Shavell, S., 2007, Contractual Hold-Up and Legal Intervention, Journal of Legal Studies, vol. 36, pp. 325-350

Ulloa-Moreira, N., 2004, Introduction du concept américain des contrats incomplets en droit civil français, Global Jurist Topics, 4(3), pp. 1-46

Williamson, O. E., 1985, The Economic Institutions of Capitalism: Firms, Markets, Relational Contracting, United States, NY: The Free Press

By Vasiliki Fasoula