Social Norms and Default Rules Analysis
![handle is hein.journals/scid3 and id is 71 raw text is: SOCIAL NORMS AND DEFAULT
RULES ANALYSIS
LISA BERNSTEIN*
This comment explores how the insights of relational contract
theory can be integrated into the analytic framework of default rules
analysis (DRA). It rejects Jay Feinman's contention that using a
relational approach... would [necessarily] ask different questions,,-
and argues that social norms and other aspects of the contracting con-
text that are of central importance to relational theory are directly
relevant to the questions and concerns2 that are at the heart of two of
the leading academic approaches to DRA:3 the consent theory articu-
lated by Barnett4 and the economic approach developed by Ayres and
* Associate Professor, Boston University School of Law. I would like to thank Ian
Ayres, Randy Barnett, Edward Bernstein, Robert Bone, Joseph Brodley, David Charny, Daniel
Klerman, Robert Merges, Mark Petit, Matthew Spitzer, Manuel Utset and Todd Rakoff.
1. Jay M. Feinman, Relational Contract and Default Rules, 3 S. CAL. IuTmpisc. L. 43,43
(1993).
2. Ibis comment does not take issue with Richard Craswell's observation that relational
scholars and law-and-economics scholars tend to be interested in different questions. See Rich-
ard Craswell, The Relational Move. Some Questions from Law and Economics, 3 S. CAT.
IT-Nrmsc. L. 91, 91 (1993). Rather, it argues that many aspects of contracting relationships
that are of interest to relational scholars, are, in many transactional settings, directly relevant to
the questions and concerns that are of interest to law-and-economics scholars.
3. This comment discusses DRA solely in the context of a negotiated business transaction.
But see infra note 78. Although the DRA literature sometimes focuses on corporate law and
products liability, many of the issues discussed in this comment would be analyzed differently in
these contexts. In many areas of corporate governance, collective action problems prevent
shareholders from bargaining with management. Similarly, in the products liability context, one
party to the transaction tends to have vastly inferior information, and collective action problems
effectively prevent meaningful negotiation. Consequently, the justifications for using a hypo-
thetical bargain approach to gap filling in these contexts may be stronger than they are in the
context of a negotiated business transaction. Se e.g., Frank H. Easterbrook & Daniel R. Fis-
chel, Corporate Control Transactions, 91 YALr LJ. 698,702 (1982) (suggesting that the fiduciary
duty that managers owe investors should reflect the hypothetical bargain that managers and
investors would have struck had they been able to costlessly negotiate with one another free of
collective action problems); Alan Schwartz, Proposals for Products Liability Reform: A Theoreti-
cal Synthesis, 97 YALE L. 353,361 (1988) (suggesting that products liability legislation should
be modeled on the hypothetical contract that fully informed consumers would bargain for if they
could do so costlessly).
4. See Randy E. Barnett, The Sound of Silence: Default Rules and Contractual Consent, 78
VA. L. Rnv. 821 (1992).](ViewImageLocal?handle=hein.journals/scid3&div=11&collection=&method=preview&ext=.png&size=3)
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