- Standardized Enforcement: Access to Justice vs. Legal Innovation
- Number of pages
- Amsterdam: Amsterdam Center for Law & Economics
- Amsterdam Center for Law & Economics Working Paper
- Volume | Edition (Serie)
- Document type
- Working paper
- Faculty of Economics and Business (FEB)
- Amsterdam Business School Research Institute (ABS-RI)
The use of standard contracts is usually explained by generic transaction costs. In a model where more resourceful parties can distort enforcement, we show that standard contracts reduce enforcement distortions by simplifying judicial interpretation of preset terms, training judges on a subset of admissible evidence. In this setup, the introduction of a standard contract statically expands the volume of trade but it hampers legal and contractual innovation by crowding out the use of non-standard contracts. We rationalize the large scale standardization effort (by commercial codification and private standards) that occurred in Civil and Common Law systems in the XIX century during a period of booming commerce and long distance trade.
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- April 1, 2009
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