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Elasticity, Incompleteness, and Constitutive Rules
The CLS Blue Sky Blog (2013)
  • Osny da Silva Filho
  • Bruno Meyerhof Salama
Abstract
In A legal theory of finance, Katharina Pistor outlines a theory designed to deal with the law-finance paradox, that is, the observation that when “the full force of law is relaxed or suspended to take account of changes in circumstances” – precisely to avoid bringing down the financial system –, “the credibility law lends to finance in the first place is undermined” (Pistor, 2013: 323). In building her argument, Pistor advances the concept of law’s elasticity, which she defines as “the probability that ex ante legal commitments will be relaxed or suspended in the future” (2013: 320). The present comment suggests that the concept of law’s elasticity serves not only to ground a legal theory of finance, but also to highlight the limits of one of the most disseminated abstractions concerning the practice and the regulation of contracts in general, namely the theory of incomplete contracts.
Keywords
  • Legal Theory of Finance,
  • Elasticity,
  • Law,
  • Finance,
  • Law and Economics
Publication Date
July 31, 2013
Citation Information
SILVA FILHO, Osny da; SALAMA, Bruno. Elasticity, Incompleteness, and Constitutive Rules. The CLS Blue Sky Blog, 30 de julho de 2013. Disponível em: https://works.bepress.com/bruno_meyerhof_salama/82/. Acesso em XX.XX.XXXX. __________ Silva Filho, Osny da; Salama, Bruno. Elasticity, Incompleteness, and Constitutive Rules. The CLS Blue Sky Blog, July 30, 2013. Available at: https://works.bepress.com/bruno_meyerhof_salama/82/. [Accessed Day Mo. Year]