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Contract as Convention


F. H. Buckley


George Mason University School of Law

January 19, 2011

George Mason Law & Economics Research Paper No. 11-03

Abstract:     
Contract theory is a curiously neglected field. While the efficiency of contract law rules has received much attention, the same cannot be said of the more basic question why contracts should be enforced. The reliance and autonomy explanations which contract theorists most frequently offer are moreover unpersuasive. Reliance theories would ground relief on detrimental reliance, and fail to explain why promisees should be given an incentive to rely. Autonomy theories misfire by failing to account for the conventional nature of promissory institutions, and do not explain why they ought to exist, as opposed to any number of other conventions (or games) one might imagine. In their place I propose a conventional explanation of contractual institutions that is derived from David Hume’s analysis of promising. Unlike Hume, however, I argue that promissory theories are incomplete without a principle of fidelity linking a promisor to the institution; and I offer a positional explanation for such a duty.

Number of Pages in PDF File: 27

Keywords: Adam Smith, beneficial, breach, brute, circularity, commitment, communitarianism, credible, duties, economics, facts, fairness, institutional, intentions, John Searle, nonobservance, normative powers, ontology, psychic costs, Rawls, regularities, statements, Thomas Hobbes, trust, utilitarianism

JEL Classification: K12

working papers series





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Date posted: January 16, 2011 ; Last revised: February 1, 2011

Suggested Citation

Buckley, F. H., Contract as Convention (January 19, 2011). George Mason Law & Economics Research Paper No. 11-03. Available at SSRN: http://ssrn.com/abstract=1740686 or http://dx.doi.org/10.2139/ssrn.1740686

Contact Information

Francis (Frank) H. Buckley (Contact Author)
George Mason University School of Law ( email )
3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-8028 (Phone)
703-993-8088 (Fax)
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