It takes some effort to formally write, review, and sign contracts. And to have courts enforce them. So it makes sense to not bother for deals that are too small, or that are observed and repeated enough for reputation or repeated play incentives to be sufficient. But we have a few big deals in life where these don’t apply, and yet we still don’t tend to write explicit formal contracts, nor allow negotiated exceptions.
I'm having a hard time following the 'thus' in "Thus it makes sense..." in your reasoning in the last paragraph. Is this an accurate understanding:
For each contract C, you want laws to talk about it. Laws can't say something specific about each contract directly, so they say something about the type. Partition each contract into types, so Type(C) = T for some T. Each type T has a law corresponding to it, Law(T).
In business, there are many different types T1 T2 T3 ... T500 etc. If you change the law for one slyly, say T2, you only manage to effect Law(T2), which only effects the small number of contracts in T2, not all of them.
Now in personal matters, there are as many contracts, but way fewer types, say only T1 and T2, that's it. So if you change Law(T2), a lot more contracts get affected, some of which might have benefited you, in their original moral form! So don't contractify them, lest someone else explode your many contracts by slyly adjusting the entire type themselves.
The contract between the Jews and their god is based rather obviously on suzerainty treaties in the ancient Near East. With Yahweh standing in for a powerful empire like Egypt, the Hittites, or Assyria. This was long before the Jews were known as merchants or traders and they were in fact much less of those things than their neighbors, like the Phoenicians.
If marriage contracts support your theory that depends on if they existed during Second Temple Judaism, which once again was a religion practiced by a not so mercantile people, or if it is a later development of the Medieval era. Something I am ignorant of.
Contract terms are themselves explicit. If people don't want to indicate what they're trying to maximize, a contract term indicating that would be counterproductive.
I'm saying that explicit contracts are more acceptable when people are trying to explicitly maximize something. So a business contract can cover certain cases because people know those are likely to affect profits.
I used to habitually blame all problems on Jews. For instance if confronted by this article I would say "well, the obvious explanation is that the Jews are trying to undermine marriages among the goyim in order to suppress the fertility of the white race." It was an easier way of looking at the world, you never had to think deeply about problems because you always knew the underlying cause even if you hadn't yet sketched out the mechanism.
I eventually grew out of that and now I consider myself to be a philo-Semite.
Many, perhaps most, business contracts are unnecessary.
Think about the paperwork you sign when you rent a car - nobody reads those things, nor does the contract address much in the way of the real issues in the relationship. The expectations for the rental are generally crystal clear to both parties without the contract, and disputes are almost always resolved by direct negotiations without resort to courts or the terms of the contract.
The contract exists to cover the asses of the rental firm's managers. To be able to say to investors and regulators and senior managers that all the legal i's have been dotted, and t's crossed. To satisfy the demands of the in-house legal counsel who sees their job as being to think up the most absurd and extreme edge cases, and draft language to cover those cases. And those edge cases virtually never come up - and if they did come up without a written contact, a court would likely dictate an outcome not wildly different from what happens with the contract.
In our company we routinely do projects that cost 6-figure amounts, and part of my job is to negotiate the contracts that cover these. I've been doing this for 12 years - I am not a lawyer. Our customers are firms ranging across the size spectrum (1 person to 100,000+ people).
The larger the firm, the longer and more detailed the contract. Part of my job is to negotiate terms that ensure that we do EXACTLY the same thing as we'd do if there were nothing more than a handshake. I'm successful in this 99.8% of the time. (The other 0.2% we have no deal.)
I am convinced these contracts exist because lawyers create their own demand. They think up the most extreme imaginable edge cases, then convince management that they will be liable for failure of due diligence if they don't have a written contract addressing those edge cases. Which requires more lawyers to draft and negotiate - who think up more edge cases. Etc.
Because of the usual agency problems, management spends lots of owner money protecting their own candy asses against these mostly imaginary, and in any case small, risks.
I've also noticed that customers where the management owns the firm are happy to do business with little or no concern about contracts (we've been in business 12 years and have a reputation to lose).
The old story about the small town lawyer who was starving until a 2nd lawyer moved into town is real.
See Judaism!Jewish marriage contracts are basically normal contracts. Usually pro-forma, but with actual negotiation of default penalties. Jewish religious claims involve specific successful negotiations with God. Your foreskin for inclusive fitness. Adherence to commandments for the land of Israel...And people who want to disrespect, hurt and tax Jews or businesses have historically found that not working out for them in the long run.
You would probably find more curiosity about these parallels fruitful.
My wife and I actually did write a marriage contract (around our 10th anniversary), and it did do just a tiny bit of good. But we realized pretty soon that even after 10 years of marriage there was a lot that we didn't understand about what our expectations and roles were. What we wrote down didn't do a great job of capturing what we wanted it to.
In some sense, marriage roles are so well understood that we don't have to write them down. Some aspects of contract law are like that, too. On the other hand, the things about marriage that aren't understood or are specific to each couple are extremely hard to articulate.
I suppose this could be framed as a costly contract (i.e., people don't write marriage contracts because writing a useful one takes years and years of focused effort). Perhaps by the time all that effort is put in, the writing is unnecessary.
Maybe another thing is that contracts only make sense in the context of an enforcement scheme. Who is going to interpret the contract. In a marriage, the two people generally don't have a disinterested third party to determine whose interpretation of the contract makes sense. Maybe writing contracts only makes sense in the context of some kind of judge.
"Thus it makes sense that it is mainly in business relations that we usually pay the many real costs to create formal explicit contracts."
The problem with this is that the stakes are so high in a marriage for our personal happiness that we should be willing to pay high costs if it did any good. So my theory of marriage contracts isn't that they cost too much, it's that they don't improve marriage.
I would think one relevant issue would be that business are explicitly profit-oriented, and thus can have deals crafted toward optimizing that. In other areas there's no other measurement it's assumed anyone is trying to maximize.
I'm having a hard time following the 'thus' in "Thus it makes sense..." in your reasoning in the last paragraph. Is this an accurate understanding:
For each contract C, you want laws to talk about it. Laws can't say something specific about each contract directly, so they say something about the type. Partition each contract into types, so Type(C) = T for some T. Each type T has a law corresponding to it, Law(T).
In business, there are many different types T1 T2 T3 ... T500 etc. If you change the law for one slyly, say T2, you only manage to effect Law(T2), which only effects the small number of contracts in T2, not all of them.
Now in personal matters, there are as many contracts, but way fewer types, say only T1 and T2, that's it. So if you change Law(T2), a lot more contracts get affected, some of which might have benefited you, in their original moral form! So don't contractify them, lest someone else explode your many contracts by slyly adjusting the entire type themselves.
The contract between the Jews and their god is based rather obviously on suzerainty treaties in the ancient Near East. With Yahweh standing in for a powerful empire like Egypt, the Hittites, or Assyria. This was long before the Jews were known as merchants or traders and they were in fact much less of those things than their neighbors, like the Phoenicians.
If marriage contracts support your theory that depends on if they existed during Second Temple Judaism, which once again was a religion practiced by a not so mercantile people, or if it is a later development of the Medieval era. Something I am ignorant of.
Contract terms are themselves explicit. If people don't want to indicate what they're trying to maximize, a contract term indicating that would be counterproductive.
What is the connection between explicitness of goals and of contract terms?
I'm saying that explicit contracts are more acceptable when people are trying to explicitly maximize something. So a business contract can cover certain cases because people know those are likely to affect profits.
I used to habitually blame all problems on Jews. For instance if confronted by this article I would say "well, the obvious explanation is that the Jews are trying to undermine marriages among the goyim in order to suppress the fertility of the white race." It was an easier way of looking at the world, you never had to think deeply about problems because you always knew the underlying cause even if you hadn't yet sketched out the mechanism.
I eventually grew out of that and now I consider myself to be a philo-Semite.
Many, perhaps most, business contracts are unnecessary.
Think about the paperwork you sign when you rent a car - nobody reads those things, nor does the contract address much in the way of the real issues in the relationship. The expectations for the rental are generally crystal clear to both parties without the contract, and disputes are almost always resolved by direct negotiations without resort to courts or the terms of the contract.
The contract exists to cover the asses of the rental firm's managers. To be able to say to investors and regulators and senior managers that all the legal i's have been dotted, and t's crossed. To satisfy the demands of the in-house legal counsel who sees their job as being to think up the most absurd and extreme edge cases, and draft language to cover those cases. And those edge cases virtually never come up - and if they did come up without a written contact, a court would likely dictate an outcome not wildly different from what happens with the contract.
In our company we routinely do projects that cost 6-figure amounts, and part of my job is to negotiate the contracts that cover these. I've been doing this for 12 years - I am not a lawyer. Our customers are firms ranging across the size spectrum (1 person to 100,000+ people).
The larger the firm, the longer and more detailed the contract. Part of my job is to negotiate terms that ensure that we do EXACTLY the same thing as we'd do if there were nothing more than a handshake. I'm successful in this 99.8% of the time. (The other 0.2% we have no deal.)
I am convinced these contracts exist because lawyers create their own demand. They think up the most extreme imaginable edge cases, then convince management that they will be liable for failure of due diligence if they don't have a written contract addressing those edge cases. Which requires more lawyers to draft and negotiate - who think up more edge cases. Etc.
Because of the usual agency problems, management spends lots of owner money protecting their own candy asses against these mostly imaginary, and in any case small, risks.
I've also noticed that customers where the management owns the firm are happy to do business with little or no concern about contracts (we've been in business 12 years and have a reputation to lose).
The old story about the small town lawyer who was starving until a 2nd lawyer moved into town is real.
Perhaps Jews more often served in complex business roles, and so allowed contract thinking to more infuse the rest of their lives.
See Judaism!Jewish marriage contracts are basically normal contracts. Usually pro-forma, but with actual negotiation of default penalties. Jewish religious claims involve specific successful negotiations with God. Your foreskin for inclusive fitness. Adherence to commandments for the land of Israel...And people who want to disrespect, hurt and tax Jews or businesses have historically found that not working out for them in the long run.
You would probably find more curiosity about these parallels fruitful.
My wife and I actually did write a marriage contract (around our 10th anniversary), and it did do just a tiny bit of good. But we realized pretty soon that even after 10 years of marriage there was a lot that we didn't understand about what our expectations and roles were. What we wrote down didn't do a great job of capturing what we wanted it to.
In some sense, marriage roles are so well understood that we don't have to write them down. Some aspects of contract law are like that, too. On the other hand, the things about marriage that aren't understood or are specific to each couple are extremely hard to articulate.
I suppose this could be framed as a costly contract (i.e., people don't write marriage contracts because writing a useful one takes years and years of focused effort). Perhaps by the time all that effort is put in, the writing is unnecessary.
Maybe another thing is that contracts only make sense in the context of an enforcement scheme. Who is going to interpret the contract. In a marriage, the two people generally don't have a disinterested third party to determine whose interpretation of the contract makes sense. Maybe writing contracts only makes sense in the context of some kind of judge.
But then you need a theory of why contracts don't help there, compared to other places.
"Thus it makes sense that it is mainly in business relations that we usually pay the many real costs to create formal explicit contracts."
The problem with this is that the stakes are so high in a marriage for our personal happiness that we should be willing to pay high costs if it did any good. So my theory of marriage contracts isn't that they cost too much, it's that they don't improve marriage.
But contracts rarely refer to any optimizing measures.
I would think one relevant issue would be that business are explicitly profit-oriented, and thus can have deals crafted toward optimizing that. In other areas there's no other measurement it's assumed anyone is trying to maximize.