Misunderstandings between Contracting Parties: Towards an Optimally Simple Legal Doctrine
| Author | Gerrit de Geest,Bart de Moor,Ben Depoorter |
| Published date | 01 June 2002 |
| Date | 01 June 2002 |
| DOI | 10.1177/1023263X0200900203 |
| Subject Matter | Article |
Gerrit de Geest
Bart de Moor
Ben Depoorter∗
9 MJ 2 (2002) 161
Misunderstandings between Contracting Parties: Towards an
Optimally Simple Legal Doctrine
§ 1. Introduction
In an ideal world a contract is based on the ‘meeting of minds’ of both contracting
parties. Two parties are fully informed on the content of the contract and have exactly
the same object and clauses in mind.
Unfortunately, in practice, this process of communication often runs into difficulties.
Various types of misunderstanding may arise. One of the parties may believe that the
contract was concluded, whereas the other party assumes it has made an offer without
commitment. One party thinks that he sold object A while the other party intended to
buy object B. One party believes that the contract contains a liability exemption,
whereas the other party is unaware of this.
In European legal systems, these communication problems are dealt with under a
complex set of doctrines and rules. Under Belgian law, for instance, misunderstandings
are dealt with under a number of doctrinal headings: mistake preventing the contract,
the doctrine of legitimate expectation, the transformation of rights, the interpretation of
contracts, and the rules on tacit acceptance.
In this article, we propose a new, simple, accurate and unifying doctrine: ‘the least cost
avoider of misunderstandings’ doctrine. This doctrine is inspired by the law and
economics research of Calabresi,1 Posner,2 Van den Bergh3 and De Geest.4 5 We will
* Gerrit De Geest, Economic Institute/CIAV, Utrecht University, and School of Law, Ghent University.
Email: g.degeest@econ.uu.nl. Correspondence: Kromme Nieuwegracht 22, 3512 HH Utrecht; Bart De
Moor, School of Law, Ghent University, and Laga, Philippe & Partners law firm, Brussels. Email:
bart.demoor@rug.ac.be; Ben Depoorter, School of Law, Ghent University. Email:
ben.depoorter@rug.ac.be.
Æ
Misunderstandings between contracting parties
162 9 MJ 2 (2002)
elaborate this doctrine and show that it explains current Belgian law in a simpler and
more accurate way than the competing set of five doctrines.
Although only Belgian law is taken as an illustration, the point we want to make in this
article is more fundamental. Very often legal systems use all kinds of different legal
doctrinal solutions where the bottom line in terms of incentives is usually relatively
simple. In that respect, our approach can be seen as an example of how law and
economics could contribute to the process of European legal integration.
§ 2. Methodological Remarks
The type of research questions addressed in this paper differ substantially from
mainstream law and economics articles. Our purpose is to initiate one of the first
attempts towards a new ‘research program’ (in a ‘Lakatosian’ definition). It also differs
from traditional doctrinal analysis or mainstream contemporary comparative law. Hence
there is a danger that our analysis will be misunderstood by law and economics scholars
as well as comparative lawyers. Therefore, we must address a number of
methodological questions first.
We do not purport to develop a proposal to change the law (‘de lege ferenda’, cf.
normative law and economics). Rather, we attempt to describe existing law (‘de lege
lata’, cf. positive law and economics), while at the same time using new concepts and
formulations to describe this existing law.
A legal doctrine is a scientific theory on the law. It is a coherent set of concepts and
rules that describes legal reality. A legal doctrine is the equivalent of a ‘law’ in natural
sciences, like Newton’s law of falling bodies. Such a ‘law’ compresses hundreds of
observations into one formula. A legal doctrine compresses hundreds of cases and
Æ
This article builds further on De Geest, G. and B. De Moor, ‘Misverstanden tussen partijen over wat is
afgesproken: aanzet tot een “least cost avoider”-doctrine’, 36 Tijdschrift voor Privaatrecht (1999), 701-
777. The authors would like to thank Matthias E. Storme, Walter De Bondt, Hans-Bernd Schäfer and an
anonymous referee for helpful suggestions and comments on earlier drafts and Steven Vanholme for
research assistance.
1. G. Calabresi, The Costs of Accidents: A Legal and Economic Analysis, (Yale University Press, 1970).
2. R.A. Posner, Economic Analysis of Law, (Little Brown, 1977).
3. R. van den Bergh, ‘Wat is rechtseconomie’, in E.H. Hondius, J.J. Schippers and J.J. Siegers (eds.),
Rechtseconomie en recht, (Tjeenk Willink, 1991), 9-49.
4. G. De G eest, Economische analyse van het contracten- en quasi-contracten recht: een onderzoek naar de
wetenschappelijke waarde van de rechtseconomie, (Maklu, 1994).
5. Besides , there is some economic literature on specific aspects, e.g. Avery W. Katz, ‘Transaction Costs and
the Legal Mechanics of Exchange: When Should Silence in the Face of an Offer Be Construed as
Acceptance?’, 9 Journal of Law, Economics and Organization (1993), 77-97 (on the doctrine of silent
acceptance); Charles J. Goetz and Robert E. Scott, , ‘The Limits of Expanded Cho ice: An Analysis of the
Interactions between Express and Implied Contract Terms’, 73 California Law Review (1985), 261-322
(on rules of interpretation).
To continue reading
Request your trial