Economic Reasoning in Adjudication of Commercial Contractual Disputes in India

Abstract This paper examines the key provisions of Indian contract law with special reference to commercial contracts. We evaluate how the Indian Contract Act and the Specific Relief Act fare on the efficiency criterion in the economic analysis of the law. Further, we discuss whether the Indian courts use economic reasoning while filling up gaps in commercial contracts and choosing a breach remedy. We argue that the law governing commercial contracts has several inbuilt features that are desirable from an efficiency point of view. However, several factors constrain the efficient adjudication of commercial contracts.