Risk and Uncertainty Program TITLE: A matter of interpretation: ambiguous contracts and liquidated damages AUTHORS:

TITLE: A Matter of Interpretation: Ambiguous Contracts and Liquidated Damages Authors:

We focus on syntactic aspects of differential awareness that give rise to contractual disputes. Boundedly rational parties use a common language, but do not share a common understanding of the world, leading to ambiguity in both syntactic and semantic forms. In contractual relationships, ambiguity leads to disagreement and disputes. We show that the agents may prefer simpler less ambiguous cont...

A matter of interpretation: Ambiguous contracts and liquidated damages

A Matter of Interpretation: Bargaining over Ambiguous Contracts

We present a formal treatment of contracting in the face of ambiguity. The central idea is that boundedly rational individuals will not always interpret the same situation in the same way. More speci cally, even with well de ned contracts, the precise actions to be taken by each party to the contract might be disputable. Taking this potential for dispute into account, we analyze the e ects of a...

An Austrian Perspective on the Law of Liquidated Damages: the Case for an All-enforcement Rule

At common law, courts will not enforce liquidated damages clauses unless the stipulated sum bears a reasonable relation to either the anticipated or actual losses that result from breach. Penalty clauses, intended to compel performance, are per se unenforceable. Commentators have set forth arguments both for and against this common-law rule on the basis of efficiency. One of the main principles...

O-14: General Governing Rules of ART Contracts Involving Third Parties

Background: ART contracts involving third parties have been created while clinical reproductive treatments are globally widespread. Iran is pioneer in applying these treatments in middle-east due to shii’at jurisprudence prescribing them. This key role in region, has raised Iranian jurists’ responsibility in developing a legal system regarding administration of ART. The most significant part of...