Law and Social Norms in Contractual Relationships

Authors

• Oskari Juurikkala

Abstract

Law is important – but not as important as many lawyers believe. Evidence from di erent countries demonstrates that businessmen rely more on social norms than on legal rights and duties. Sometimes law is even deliberately avoided. Social norms and informal practices can also be enforced through a variety of non-legal sanctions. Law is still relevant, especially in non-continuous relation- ships and so-called end-game situations. But legal norms are most relevant and e cient when they are well-aligned with social norms.