Freedom Of Agreements

Economics has studied contractual freedom in the field of contract theory. According to the coase theorem, contractual freedom without transaction fees is advantageous. If two rational parties voluntarily enter into a contract, they must be (at least weak) better off than without a contract. The parties will agree on a contract that will maximize the overall surplus they can generate. Therefore, restrictions on the category of enforceable contracts can only reduce the overall surplus. However, the prohibition of certain contracts may be advantageous if transaction costs are incurred. For example, Spier and Whinston (1995) have shown that non-application of a contract between two parties may be desirable if the contract has negative external repercussions on a third party (who does not participate in the contract due to transaction costs). They were considered binding on anyone who took them without objection. No one is opposed to that. He never let them down or knew what was inside them. No matter how unreasonable they were, he was bound. All this was done in the name of “freedom of contract”.

But freedom was entirely on the side of the large group that had the use of the printing press. No freedom for the little man who took the ticket, the purchase order or the invoice. The great worry told me, “Take it or don`t do it.” The little man had no choice but to take it. Big business was able and freed itself from its responsibility in its own interest, regardless of the little man. It was getting through again and again. When the courts told the large group, “You have to say it in plain language,” the large group did not hesitate to do so. .

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