The Default Rule Paradigm and the Limits of Contract Law

Abstract

Default rule analysis has become a central feature of modem contracts scholarship. This scholarship is illuminating but less helpful than it could be for two reasons: first, there are several types of default rules but the literature does not distinguish adequately among them; second, legal' institutions vary in their ability to write helpful defaults but the question which institution should create what kind of rule has not been seriously asked. This essay addresses both deficiencies.