ABSTRACT
A. Introduction Contracts play a celebrated role within law and economics, which generally deems voluntary transactions to be effi cient. As the reader now knows, private agreements can enhance social welfare by transferring scarce resources to higher-value uses and by coordinating economic activity. Nevertheless, the law restricts private contract in a number of important ways. As Parts 3 and 5 explore, the law respectively criminalises and declines to enforce certain agreements that have as their object or effect the infl iction of harm on third parties. This chapter addresses a particular form of ineffi cient contract: namely, one into which companies enter to suppress competition. Why are such arrangements ineffi cient when the Coase Theorem would seem to predict the effi ciency of private agreements?
