Economic Theories of Contract and Contract Law, the Catalysts for Economic Development in Ghana through Pareto Distribution of Resources

Abstract

Every economy in the world is deserving of proper and adequate management for sustenance of same with the view to promoting the well being of the citizenry. The economy must be managed to the extent that the citizenry will be free to enter into any bargain of their choice to make a living. It is an undisputable fact that contract is the linchpin of the relationship that exists among the people in the business community. The striving economy has, as its movers and shakers, the people who constitute the business community to move it along. The basis of providing congenial working environment is, among other things, for pareto improvement distribution of resources in order to create wealth among the people whilst poverty is reduced. It is against this backdrop that this paper seeks to analyze the economic theories of contract and contract law to unearth their potentialities as the catalysts for the economic development in Ghana. In so doing, the paper looks at the economic functions of contract law, the default rules, standard form contract, damages and penalty clauses from which to make inferences and draw conclusions.