Bargaining with Uncertainty, Moral Hazard and Sunk Costs: A Default Rule for Precontractual Negotiations

Drawing from a model of bargaining behavior based on transaction cost economics, relational theories of contract,23 Williamsonian models of contracting behavior, and other economic insights, this Article argues that achieving the optimal solution for the complexities of bargaining relationships demands the adoption of a new legal default rule. This new default rule should have two aspects: First, the law should substantively recognize an implicit bargain, even in the absence of explicitly reciprocal communications. Second, the law should impose an obligation to perform that incorporates the terms of the parties\u27 unexpressed, implicit bargain