Pat Gunn (dachte) wrote,
Pat Gunn

Contract Arity

I've occasionally written about the desirability of default contracts, structured to provide the right financial incentives for all parties in a contract, limit recognisable forms of incorporated injustice, and aimed to limit disparities in negotiating power over the details. The classic example of this would be, for most apartment leases, it would be desirable to structure most kinds of utilities so the landlord and the tenant split the bill; the landlord should retain an interest in the utilities so they still have incentives to maintain/improve any large equipment/structure relevant to the utility (upgrade that heater to a more efficient model; the tenant won't do it), and the tenant should retain an interest so they use the facilities responsibly (close the window and put up plastic so as to minimise heat loss during the winter). Right now it is very difficult to negotiate solutions like these with most landlords and there are a number of other good "default behaviours" that should be in employment contracts ("at will" is far too loose a standard to be fair) and other kinds of negotiations.

The regime pushing for default contracts should probably be given mild nudging; perhaps a tax on assessed value of services for nonstandard contracts, plus of course the (already existing in mild form) expectation that contract terms that are enough against the public interest will not be enforced.

I've recently been wondering if such a tax would adequately address the possible bundling of contracts together to dodge what teeth there are in this enforcement regime; a flat registration fee would be vulnerable to that dodge, perhaps an assessed value focus would not be.

It would also potentially be valuable for all contracts to be by default public/registered (even with a very very light notion of registration), with a similar tax on assessed value for contracts that someone couldn't look up in some database.

I don't anticipate default contracts would eliminate the need for regulation over possible contracts, but they would hopefully provide for a softer way to reign in the things we're not comfortable with actually banning under the moderated form of capitalism this proposal is meant for.

Tags: philosophy

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