Contract Law and Regulation

This chapter argues that a more sustained attention to the relationship between contract law and regulation provides insights that risk being overlooked by an exclusive focus on one branch. While not pretending to explore all the facets of such an interplay, this chapter tries to shed light on the parallel dynamics of contract rules devised for traditional bilateral relationships and contract rules applied in regulated markets. Section II discusses attempts to classify the relationship between contract law and regulation. It suggests that the core issue is how to identify a set of rules that can be labelled regulatory contract law. Section III turns its attention to rule-making processes and tries to identify the main features of regulatory contract law in the European Union and the United States. Section IV deals with enforcement mechanisms and compares them across the two branches. Section V draws on examples from Brazil and China to understand what is the role played by regulatory contract law outside the Western legal tradition. Section VI identifies the most important policy choices to be made when using regulatory contract law. Section VII summarizes the analysis.