Risk Allocation And Prevention Through Law

The space and resources are limited in the world, which were occupied by some people who have different goals. In order to avoid using the violence to resolve the contradiction directly, for uses the resources effectively. The law, as a system of social arrangement in a modern society, is used to regulate people's behavior and maintain the normal association or transaction order. Because of the existence of transaction risk, the legal system has entrusted an important mission: control transaction risk.Based on this kind of understanding, this thesis runs through a main clue that is control transaction risk in the realization of the law. Using many analytic methods, from the law and economics, the sociology of law and other subjects, examines the function and limitation of law in control the transaction risk, which gives the direction to improve our law. This thesis thought we should rely on the research of the law and economics, the new institutional economics and the sociology of law. Studying the law from the real person, gives a core of the whole law that is encouraging not forcing to build legal system. In such an idea, the thesis adopts a new empirical analysis. Through the typical cases, this paper abstracts the general principles of risk control by law, and thought effective innovation of the law and its related system are the effective way to reach the control risk. Around this theme, the thesis divides into five parts to discuss:The introduction begins a question which producing by use the limited resources for the purpose of people conflict. Then leading to that law is an important way to solve the question. Through the existence of transaction risk, the paper gives a simple understanding of the function of law in control risk, which explain it's questions to be discussed in advance , the structure and the analysis method. Chapter one first gives a new understanding of the relationship between contract and transaction through analyzing the concept. In other words, the contract is an important form of organized transaction. So it has linked the transaction and the contract, which lay the foundation of the following discussions. Next through a typical case, this thesis puts forward and analyses what is the transaction risk or the hidden danger of contract, as well as the reason of why exists transaction risk, which leave the space for legal intervention. Finally through analyzing the function of the contract law in the transaction risk control, this thesis points out an important mission about the contract law: control transaction risk.Follow above, chapter two explains our country's present situation of the contract law and its theory research in allocate, prevent and control risk. This thesis first begins our country's present legal system, taking the external and"divide the section type"measures in control risk, and then discusses the detail of related law and its function of control risk. As well as control the transaction risk and protect the rights of parties by law, which because the lack of idea in the control risk of"perfect"contract. Next, from the control risk's influence of contract theory transformation, the paper examine the disadvantage in control risk the contract law which bases on traditional contract theory, as well as the contract theory transforms from the complete contract to incomplete contract, the man from a rational person to a contract person, from incomplete contract theory to completes and contractual relationships, from competition to cooperation. This influences to build the perfect contract law risk in control risk system. Then the paper points out to realize the incompleteness of the contract, it may reduce the supra-rational in the research, and made our research focus on how to choose the more available alternative institutional arrangements, rather than trying to build a set of ideals or copy the theoretical structure. Finally, because allocate and control risk is a dynamic process and runs through legal operation and the realization of law. Therefore, we should adopt the system related to the legal arrangement and changing the scattered, static and single tactics to the systematic, dynamic and all-round strategy in the whole process.Under the disadvantages of our country's present contract law and its theory research in control transaction risk, chapter three further proposes the question about"the control how to become possible". This thesis first cuts into from a typical case in Anglo-American Law, with the Law and Economics research, using several main principles about risk allocation. From the empirical perspective, the paper concludes two main principles about risk allocation, namely, an effective legal rule always should put the loss in which have the advantages to control the incidents, that is puts the motive to the best or the most advantage side, so made the income maximization; Or else, undertakes the risk by the smallest cost, namely the effective system should appear the smallest risk fund, or after losses occurs it can undertake by the person who can use the smallest cost to fill, then through the negotiations system put this kind of cost in the contact transaction, thus causing the whole economic benefit maximization. Next, from the function in control risk---as a risk control law, the thesis summaries the influence and significance of the front analysis to build reasonable control risk system. Then point out, in order to use the smallest cost to control transaction risk, the effective system should make the allocation of legal rights and obligations reasonable. So it can provide the effective encouragement and the right active motivation. And ultimately, the paper set the foot in innovating the contract law and its related system in the end. Therefore, it could echo the beginning question about how to control. Finally, this thesis gives the enlightenment about building an effective risk control system of law through summarizing the front analysis, in which mainly from the practical legislative ideas, individual and collective rationality coordinated institutional arrangements, as well as function-oriented of the legal application to put forward several proposals about reconstruction of effective legal system for the risk allocation and control.The conclusion has made the further summary above. Finally obtains: The law point out a direction about people's behavior through its encouraging system and restraint function, to increase people's anticipating and reduce the transaction cost, stopping the risk. When occur the accident, the legal rules may help us to decide who should pay. In other words, the legal rules can allocate the risk. Look from the motive allocation of effective control risk, the law should stipulate who must afford the responsibilities, which usually afford by having the advantages to control the risk or the lower lost person. The goal will realize or not which is decided by the effective innovation about institutional arrangement of law. As we have always emphasized, the law should make good incentive rather than a force system as its core idea when to make a institutional arrangement of law or to make its function display. In this aspect, the new institutional economics has given the more enlightenment about its research.