Analysis On Freedom Of Contract: From The Perspective Of Institutional Economics

This thesis is explored by applying the basic theory and the methodology of Institutional Economics. As we all know, what characterized the Institutional Economics is its particular theories, which is not only the exact reflections of life model, but also focus on the positive analysis towards our practical life. Therefore, this thesis make a deep study of freedom of contract not from the perspective of listing historical documents, but from the angle of Institutional Economics. Based on the methodology of Institutional Economics, the thesis, by revealing the four elements of the contract(mutual assent, choice, status, and controlling ability) stemming from the society, and analyzing the inner nature of the contract, deduces the practical vision of freedom of contract under the conditions of the egoism, the limited information, the uncertain future, and the incomplete contract. The above analysis not only makes us be able to make a detailed research more positively on contractual freedom, but also contributes to the construction of the contractlized thinking way of private law by displaying the function of contractual freedom on government, order, anatomy, and institution , and so on,. This thesis includes the following chapter.Chapter 1 is about the analysis on the conception of the contract in freedom of contract. If we intend to make a deep study of the topic about freedom of contract, what we have to do first is to discuss the conception of the contract. This chapter presents the difference of conception of contract in common law system and civil law system, and point out that definition of contract in law come from the conception of contract in practical life. The conception of contract in practical life contains more significant meanings than the conception of contract in law does. That is why we should notice the conception of contract in practical life. Furthermore, it is the contractual actions in practical life, usually taking the form of breaching law, that generally advance the development of law of contract. Sequentially, the chapter, from the view of society, analyzed the following inner element of contract: mutual assent, choice, status, and controlling ability. Why, you may wonder, should we take the above angle to research it? Just because contractual intercourse is usually influenced by society, and the influence from society usually affect the people's choice in contract. In addition, the chapter discusses the issue of why human beings need contract. By introducing and using the theoretical mode of North, the chapter argues that the appearance of contract is not the result of rational choice, but that of compromising with each other. The chapter further explains the economical reasons why human beings would like to make contractual intercourse. That is only because contract can help people to achieve their utility. This utility, however, make people easily ignore the passive influence exerted by inner elements of contract. In fact, the contract is not always based on equal status. Some of inner elements in contract, such as controlling ability and so on, promote the exploitation in the contract. As a result, the freedom and the contract will be in the situation of dilemma: the contract, a tool of helping people to gain freedom and profits, probably become the one which prevent people from achieving freedom and profits.Chapter 2 deals with the image of Economic Man under freedom of contract and the practical vision in society. The hypothesis about human nature in institution is so important that it deeply affect the efficiency of the application of institution. The inspection to the image of human nature, in my opinion, will help us to deepen our understanding to freedom of contract. So, the discussion about the self-interest, which is the fundamental image of Economic Man, is displayed here at first. The self-interest embodies a theoretical abstraction and a deep thinking to the research of contract. Beginning with the thoughts of Hobbes and Adam Smith, this chapter argued how...