KATHMANDU UNIVERSITY SCHOOL OF LAW, KUSL

BEc,LL.B Semester - VII

Course Syllabus

Course Title Economic Analysis of Law

Course Code LEAL 457
Credit Hours Three 3
The objective of this course is to acquaint the students with the application of economic
Course theory (specifically microeconomic theory) to the analysis of law. Economic concepts are
Objective used to explain the effects of laws, to assess which legal rules are economically efficient,
and to predict which legal rules will be promulgated. There are two major approaches. The
first is based on the application of the methods and theories of neoclassical economics to
the positive and normative analysis of the law. The second approach focuses on an
institutional analysis of law and legal institutions, with a broader focus on economic,
political, and social outcomes. The course will build on Microeconomics (BECO 121 &
BECO 211), Contract Law (LCON 161), Torts and Consumer Protection Law (LCPT 231),
and Nepalese Legal System, Reasoning Skills and Logic (LRSK 233) which the students
have completed in earlier semesters.
Learning Unit
Learning Unit 1. An Introduction to Law and Economics
One Net contact What is the economic analysis of law? the primacy of efficiency over distribution in
hours 8 hours. analyzing private law, why should lawyers study economics? why should economists study
law? A brief reflection on microeconomic theory, and a brief introduction to law and legal
institutions.

Learning Unit 2. Economics, Property and Property Law

Two 2.1 An Economic Theory of Property: The legal concept of property, bargaining theory, the
Net contact hours origins of the institution of property: a thought experiment, an economic theory of property,
8 hours. how are property rights protected? what can be privately owned? public and private goods,
what may owners do with their property? Distribution of property.
2.2 Economics of Property Law: what can be privately owned? how are property rights
 established and verified? what may owners do with their property? what are the remedies
for the violation of property rights?
Learning Unit 3. Economics, Tort Law and Contract
Three 3.1 An Economic Theory of Tort Law: defining tort law, an economic theory of tort liability.
Net contact hours 3.2 Topics in the Economics of Tort Liability: extending the economic model, computing
8 hours. damages, an empirical assessment of the tort liability system.

Learning Unit 4. An Economic Theory of Contract Law

Four 4.1 An Economic Theory of Contract Law: bargain theory: an introduction to contracts, an
Net contact hours economic theory of contract enforcement, an economic theory of contract remedies,
8 hours. economic interpretation of contracts, relational contracts: the economics of the long-run.
4.2 Topics in the Economics of Contract Law: remedies as Incentives, formation defenses
and performance excuses.
Learning Unit 5. An Economic Theory of Legal process
Five 5.1 An Economic Theory of the Legal Process: The goal of the legal process: minimizing
Net contact hours social costs, why sue? exchange of information, settlement bargaining, trial and appeals.
8 hours 5.2 Topics in the Economics of the Legal Process: complaints, lawyers, nuisances, and
other issues in the legal process, an empirical assessment of the legal process.
Learning Unit 6. Economic Theory of Crime and Punishment
Six 6.1 An Economic Theory of Crime and Punishment: the traditional theory of criminal law,
Net contact hours an economic theory of crime and punishment,
8 hours. 6.2 Topics in the Economics of Crime and Punishment: crime and punishment, does
punishment deter crime? efficient punishment, the death penalty, the economics of
addictive drugs and crime, the economics of handgun control, explaining the decline in
crime.

Total Contact 48 Hours (excluding assessment, assignment and final examinations

Hours
Basic Text Robert Cooter & Thomas Ulen, Law and Economics (6th ed.)(Boston: Addison-Wesley,
2012)
Further Readings Richard Posner, Economic Analysis of Law (9th ed.) (Wolters Kluwer Law & Business,
2014)
Evaluation In-semester evaluation 50 %
Scheme End-semester evaluation 50 %
Total 100 %