Contract Regulation, With and Without the State: Ruminations on Rules and Their Sources

Abstract

This paper, commenting on the work of Jýrgen Basedow, addresses the legal regulation of economic relations in the context of globalization. The paper applies the idea of the mixed jurisdiction, traditionally focused on legal systems that partake of both the common law and the civil law, to the complex of privately made law and publicly made law that governs contemporary economic relations. Differing criteria that might be used to assess and choose between competing rules or competing systems of rule generation are evaluated, and normative considerations are raised. The paper proposes a model to demonstrate how privately made law, though generated by and adopted in the marketplace, can nevertheless be inefficient economically and questionable politically. The conclusion offers the musical metaphor of a trill to appreciate the dynamics involved in regulating economic relations in a world where rules may come from several states or from private entities.

Keywords: Contracts, Letters of Credit, Global Legal Pluralism, Mixed Jurisdictions

JEL Classification: K12, K20, K33, K40