Regulating Contracts

Regulating Contracts

Regulating Contracts

Regulating Contracts


Using an interdisciplinary approach involving economics, sociology, and law, Regulating Contracts explores fundamental questions about contracts and legal regulation. What kind of social relation do contracts create, or, more precisely, how do contracts cover social interaction? How are contractual relations or more generally markets constructed? Does the law play a significant role in contractual practices, and in particular what do lawyers, courts, and legal sanctions contribute to the contractual social order? For what distributive purposes does the law attempt regulation? The controversial conclusions of this study suggest that the law plays an insignificant role in the construction of markets, and that law and lawyers could provide better assistance by using indeterminate regulation that permits the recontextualization of legal reasoning. Legal regulation of contracts concerned with redistributive tasks, such as redress of unfairness, countering unjust power relations, and access to justice, is evaluated both with respect to the objectives of regulation and the search for the most efficient and efficacious form of regulation.


A year or more ago I commenced a short essay to answer a question which had been intriguing me as a lawyer interested in the law of contract. I wondered what lawyers might learn from the insights provided by empirical studies of contractual practices. I was sceptical that lawyers might learn anything useful, because contract law has traditionally been much more engaged with positioning itself with respect to the ruling political theories of the age. As I pursued this question, however, I became persuaded that lawyers could profit from these empirical studies. The essay became longer as I tried to draw out the implications, especially by exploring the insight that the law thinks about contractual relations in ways which differ from the framework in which the parties to the contract themselves perceive their relations.

As the essay evolved, it became apparent that in fact I was attempting to bring together three discordant academic discourses--economics, sociology, and law,--each of which contained its unique insights and misperceptions about contractual behaviour and the construction of markets. The ambition of the essay became more challenging, as I sought to construct a genuine interdisciplinary approach, in which the whole range of social sciences could be brought to bear on the topic of regulating contractual relations. This approach requires asking the question what each discipline may learn from the others. Instead of a one way street flowing from social science to law, it became a tripartite conversation, between sociology, economics and law. Each discipline instructed and criticised the others. By the time this dialogue had been pursued to the limits of my imagination and the publisher's patience, the short essay had turned into the present tome.

I hope that the outcome will profit readers from a broad range of social sciences. Economists may discover convincing evidence that contractual behaviour cannot be adequately be explained by reference solely to self- interested materialistic behaviour. Sociologists may realise that subtle economic accounts of rational conduct may explain far more behaviour in the construction of markets than they might have expected. Lawyers can learn from both, but also explain that the design of regulation is both a complex task and one which has implications for contractual behaviour.

Nevertheless, my original interest in what lawyers may learn from the (other) social sciences remains the key ingredient in each chapter. Legal regulation is regarded as an instrumental activity, which creates rules, standards, and enforcement mechanisms in the pursuit of particular . . .

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