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Law needs to be economically analyzed and it will play a fundamental role in future legal studies. This will give lawyers a common platform to correspond across national barriers by giving them common structure for thinking. The economic investigation to forecast different legal rules is known to be Positive Law and Economics. This branch of economics has professed to illustrate the change and development of legal rules. Then there is Normative Law and economics which helps in making policies on the basis of results of various policies. The principal on which Normative Law and economics is based is known as Locative efficiency. Pareto efficiency is many times used by law and economics scholars because it helps in understanding the legal rules basic and to come up with laws which do not hamper a person’s progress because of progress of some other person. This subject also establishes a deep understanding between economics and legal doctrines. Law and economics has developed in a variety of directions. One important trend has been the application of game theory to legal problems. Other developments have been the incorporation of behavioral economics into economic analysis of law, and the increasing use of statistical and econometrics techniques. Within the legal academy, the term socio-economic has been applied to economic approaches that are self-consciously broader than the neoclassical tradition.

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