Economics and Law of Contracts

Code:

2ECON13

Acronym:

EDC

Keywords
Classification	Keyword
OFICIAL	Economics

Instance: 2017/2018 - 2S

Active?	Yes
Responsible unit:	Agrupamento Científico de Economia
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	12	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

Portuguese

Objectives

This course intends to analyze, from the economic and from the legal point of view,  the contract. It is therefore intended to discuss the formation of contractual relations. In particular, the construction, validity, effects and transmission of contracts. Emphasis is given to problems that frequently arise in environments where there are information asymmetries between the contracting parties, which apply (for example) to financial economics, labor economics and health economics.

Learning outcomes and competences

Knowledge of the economic and legal issues related to the realization of contracts.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Basic knowledge of microeconomics.

Program

1. Introduction to the Economics of Contracts
1.1. Contracts with complete information
1.2. Contracts under uncertainty
1.3. Principal-Agent model
1.4. Contracts with asymmetric information
1.4.1. Moral hazard
1.4.2. Adverse selection
1.4.3. Signalling
1.5. Other topics in contract theory 

2. Introduction to the Law of Contracts
2.1. Definition and scope
2.2. Formation of contracts: special reference to the pre-contractual phase
2.3. Elements of the Contract: agreement; cause or motive.
2.4. Validity
2.5. Effects
2.6. Transmission, Modification and Extinction: the special case of unfulfilment
2.7. The Duty of Information: its importance to the formation and execution of the contract

 

Mandatory literature

Laffont Jean-Jacques; The^theory of incentives. ISBN: 0-691-09184-6
Macho-Stadler, Inês. and J. David Pérez-Castrillo ; An introduction to the economics of information: incentives and contracts, Oxford University Press , 2001
Andreu Mas-Colell, Michael D. Whinston e Jerry R. Green; Microeconomic Theory, Oxford University Press, 1995. ISBN: 978-0-19-507340-9
Engrácia Antunes, José A.; Direito dos Contratos Comerciais, Almedina, 2009

Complementary Bibliography

Patrick Bolton e Mathias Dewatripont; Contract Theory, MIT Press, 2005. ISBN: 978-0-262-02576-8
Tirole, Jean ; The theory of industrial organization, MIT Press, 1989
Galvão Telles, Inocêncio ; Manual dos Contratos em Geral, Coimbra Editora, 2002

Teaching methods and learning activities

The course consists of a set of lectures.

There are two modules: (1) Economics of Contracts (2/3 of the classes); and (2) Law of Contracts (1/3 of the classes).

Evaluation Type

Distributed evaluation without final exam

Assessment Components

Designation	Weight (%)
Participação presencial	0,00
Teste	44,00
Trabalho escrito	56,00
Total:	100,00

Calculation formula of final grade

Distributed evaluation in the Module of Economics of Contracts:

(67%) Written exam (april 3rd)
(33%) Group assignment (april 10th)

Distributed evaluation in the Module of Law of Contracts:

(50%) Resolution of a practical case
(50%) Critical commentary

The final grade is calculated as the weighted average of the grades obtained in the modules of Economics of Contracts (67%) and Law of Contracts (33%).