SUMMARY
A model of pseudoelasticity in shape memory alloys is developed within the incremental energy minimization framework. Three constitutive functions are involved: the Helmholtz free energy and rate‐independent dissipation that enter incrementally the minimized energy function, and the constraint function that defines the limit transformation strains. The proposed implementation is based on a unified augmented Lagrangian treatment of both the constitutive constraints and nonsmooth dissipation function. A methodology for easy reformulation of the model from the small‐strain to finite‐deformation regime is presented. Finite element computations demonstrate robustness of the finite‐strain version of the model and illustrate the effects of tension–compression asymmetry and transversal isotropy of the surface of limit transformation strains. Copyright © 2012 John Wiley & Sons, Ltd.