'Sanctions affect prices and prices affect behaviour’ Why? Economics provides a scientific theory to predict the effects of legal sanctions on behaviour. In addition to a scientific theory of behaviour, economics also provides a useful normative standard for evaluating law and policy. Laws are not just arcane technical arguments. They are instruments for achieving important social goals. In order to know the effects of laws on those goals, judges and other law-makers must have a method of evaluating effects of laws on important social values. Economics predicts the effects of policies on efficiency and distribution. Economic analysis often takes for granted such legal institutions as property and contract, which dramatically affect the economy. Keeping in view of changing socio-economic, technical, scientific, management and legal environment, in developing countries like India, there is a need for enhancement of knowledge among academicians, industrialists and policy makers in the interdisciplinary field of “Law and Economics"