Here’s yet another Ruminations blog posting without a conclusion. We call that Ruminating. Almost all of our readers operate within a contractarian society. Yes, our agreements are governed by a set of laws, but not like a lot of other places. There is a saying that in the United States, “everything which is not prohibited is allowed,” while in Germany, “everything which is not allowed is prohibited.” Freedom of contract is great, but how should it work in practice?
We’ve observed that, for the most part, agreements, such as leases and purchase contracts, verbose and comprehensive (and those two are not inextricably entwined) as they most often are, really recite the reasonable expectations of the parties. And, those reasonable expectations are based on what each party thinks is “market” or “fair.” Yes, each side sees industry wide or local customs and practices through a biased (and wishful) set of eyes, but there are remarkably few places where their expectations are truly divergent. Ruminations feels comfortable in writing that because market expectations also include business terms known to be “open for discussion, ones that could go either way.” [Read more…]