Contracts of Adhesion ·A form contract It pays Avis to design efficient terms So constraints on what the court will enforce make both parties worse off Why does Avis not bargain over each contract? That would increase transaction costs And make it easier for their employees to accept bribes for better terms
Contracts of Adhesion • A form contract • It pays Avis to design efficient terms • So constraints on what the court will enforce make both parties worse off • Why does Avis not bargain over each contract? • That would increase transaction costs • And make it easier for their employees to accept bribes for better terms
Is there a contract? Formalities so we and the court know if there is The doctrine of consideration ·Lost cats I post a reward offer,you find the cat and return it,not knowing of the reward When you find out,can you collect the reward? If you can,I will be less likely to post a reward,but... If you see a lost cat you will be more likely to try to locate the owner,because there might be a reward you don't know about Medical services for an unconscious victim Charging for them is a negative Pigouvian tax We don't usually have those for services,because a property rule works better But if I am unconscious I can't agree to hire you
Is there a contract? • Formalities so we and the court know if there is • The doctrine of consideration • Lost cats • I post a reward offer, you find the cat and return it, not knowing of the reward • When you find out, can you collect the reward? • If you can, I will be less likely to post a reward, but … • If you see a lost cat you will be more likely to try to locate the owner, because there might be a reward you don’t know about • Medical services for an unconscious victim • Charging for them is a negative Pigouvian tax • We don’t usually have those for services, because a property rule works better • But if I am unconscious I can’t agree to hire you