Comparative Contract Law & Economics

Abstract

This work is a search for deeper understanding of established differences and similarities among compared legal systems. The application of economically inspired optimal model rule as a uniform term of comparison provides additional insights into some of the most often discussed legal issues. The assessed topics of pre-contractual duties of disclosure, the phenomena of unforeseen contingencies and the unilateral termination of contracts has triggered the attention of both legal and the law and economics’ scholars and are generally considered as one of the several persisting legal puzzles. While surveying law and economics’ literature and systematizing into the economically inspired optimal model rules used as uniform terms of comparisons the real driving force behind legal changes appear as evident. The fruitfulness of approach appears in the objective evaluation framework which enabled all consequent results. Analysis shows that in all three comparative essays following conclusions appear repeatedly in an unprecedented form. (1) All three assessments reveal that compared legal systems differ less than comparatists tend to believe. (2) Provided comparisons surprisingly reveal a growing trend from inefficient towards efficient legal practices. In other words, assessments reveal that legal systems invariably tend towards efficiency. (3) All comparisons reveal wealth maximization as the main driving force behind the judicial decision making. (4) In all examinations economically inspired optimal model rule provides an objective framework for explaining inconsistencies or similarities, and an objective justification for certain statutory provisions or decisions, where doctrinal justification failed. (5) All assessments also offer path for statutory reform. Upon those findings one may argue that indeed the main driving force behind legal changes in contract law is the economics, i.e. the wealth maximization. Moreover, the economically inspired objective evaluation method enriches traditional comparative contract law by enabling further qualitative assessment, previously left to the subjective intuitions or even to a majoritarian voting of comparatists. It offers ample opportunities for further research and for “better” law making, legislation and jurisprudence. Actually, it enables comparative contract law to offer clear-cut, objective recommendations on the possible improvements of legal rules or decisions, and to provide an objective, from national law separated evaluation on which law, doctrine and decision is a “better” one.