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Winter 2023 Course

Contract Design


Exam Type: No Exam

Student Welcome Video

Good contracts create value by giving parties the right incentives to achieve their goals. A sophisticated contract designer scrutinizes the economic situation in which parties find themselves and tailors the contract to the challenges at hand. We draw from insights, for which more than half a dozen Nobel Prizes in Economics were awarded in the past two decades, and transfer them to the art of writing real-world contracts. Contract Design will provide you with analytical tools that are invaluable to transactional lawyers, business leaders, and startup founders.

In preparation of class you will watch a series of videos (about 15 minutes each) that we produced for this course. These videos introduce you to key concepts of economic, behavioral, and experimental contract theory. We will cover topics such as moral hazard, adverse selection, elicitation mechanisms, relationship-specific investments, and relational contracting. However, this course prioritizes applications of contract design. We will use class time to discuss real-world case studies, ranging from purchases & sales of assets, oil & gas exploration, movie production & distribution, construction & development, M&A deals, to executive compensation and many other types of transactions.

Note that this is NOT a legal drafting class that focuses on contractual language. Instead, in Contract Design you will learn what the content of a contract should be so that parties can reach their goals.