Default Mandatory And Altering Rules In Contract Law Need For A Systematic Approach In India

Abstract

The view that contract law can be looked at as default, mandatory and altering rules (Default Rules Doctrine) has been in vogue for more than three decades. The evolution of contract law in the West can be seen in three stages from the perspective of the Default Rules Doctrine. In the first stage, the question was whether a rule should be mandatory or not. Contract law scholars (and practitioners) engaged in a discussion as to whether a particular rule should be designed as a mandatory rule or freedom should be given to parties to contract around it. At the cost of reductionism and generalisation, if a period could be pointed out, contract law scholars engaged in this debate up to 1989. The inflection point was the paper penned by Ian Ayres and Robert Gertner and published in 1989 in the Yale Law Journal. newlineThereafter, contract theory was occupied with the question that if a rule should not be mandatory how should it be designed? Several hundreds of articles were written on how default rules should be designed. The third stage, being the current one, is concerned with how contract parties should contract around the default rule. This stage was concerned with the question as to the design of altering rules. The inflection point was Ian Ayres paper Regulating Opt-Out; An Economic Theory of Altering Rules published in 2012. newline newline