Larry E. Ribstein and Erin O'Hara
- Published in print:
- 2009
- Published Online:
- May 2009
- ISBN:
- 9780195312898
- eISBN:
- 9780199871025
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195312898.001.0001
- Subject:
- Political Science, American Politics
Cheaper transportation, faster communication, and lowered trade barriers have made people, firms, and their assets much more mobile. This increasing mobility has strained traditional notions that ...
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Cheaper transportation, faster communication, and lowered trade barriers have made people, firms, and their assets much more mobile. This increasing mobility has strained traditional notions that laws operate within geographic borders. Instead, some nations find their laws powerless to control or regulate behavior, while others pass laws that have profound effects on assets and activities worldwide. Today, states increasingly act as hawkers of legal rules in a market for law where people and firms often can shop for those regimes that they find most desirable. A California resident can incorporate her shipping business in Delaware, register her ships in Panama, hire her employees from Hong Kong, place her earnings in an asset-protection trust formed in the Cayman Islands, and enter into a same-sex marriage in Massachusetts or Canada, and in doing so, she can enjoy the California sunshine while at least potentially avoiding many facets of the state's laws. The law market carries the promise of improving our lives as well as the quality of the laws that govern us because it helps to discipline interest group attempts to pass laws that impose costs on society. But the law market also threatens governments' ability to protect its citizens from harmful private conduct. Given this trade-off, the book argues that simple contractual choice-of-law rules can help maximize the beneficial effects of the law market while tempering its costs. This approach often is superior to attempts to federalize legal rules in the United States or to harmonize legal rules across nations. Moreover, lawmakers have powerful incentives to enforce parties' bargains regarding the applicable law in order to attract or retain mobile firms and residents. The book shows how their insights and recommendations apply across a wide variety of legal problems, including corporate governance, securities, franchise, trust, property, marriage, living will, surrogacy, and general contract regulations. This book therefore provides a useful template for analyzing the role of law in an increasingly mobile world.Less
Cheaper transportation, faster communication, and lowered trade barriers have made people, firms, and their assets much more mobile. This increasing mobility has strained traditional notions that laws operate within geographic borders. Instead, some nations find their laws powerless to control or regulate behavior, while others pass laws that have profound effects on assets and activities worldwide. Today, states increasingly act as hawkers of legal rules in a market for law where people and firms often can shop for those regimes that they find most desirable. A California resident can incorporate her shipping business in Delaware, register her ships in Panama, hire her employees from Hong Kong, place her earnings in an asset-protection trust formed in the Cayman Islands, and enter into a same-sex marriage in Massachusetts or Canada, and in doing so, she can enjoy the California sunshine while at least potentially avoiding many facets of the state's laws.
The law market carries the promise of improving our lives as well as the quality of the laws that govern us because it helps to discipline interest group attempts to pass laws that impose costs on society. But the law market also threatens governments' ability to protect its citizens from harmful private conduct. Given this trade-off, the book argues that simple contractual choice-of-law rules can help maximize the beneficial effects of the law market while tempering its costs. This approach often is superior to attempts to federalize legal rules in the United States or to harmonize legal rules across nations. Moreover, lawmakers have powerful incentives to enforce parties' bargains regarding the applicable law in order to attract or retain mobile firms and residents.
The book shows how their insights and recommendations apply across a wide variety of legal problems, including corporate governance, securities, franchise, trust, property, marriage, living will, surrogacy, and general contract regulations. This book therefore provides a useful template for analyzing the role of law in an increasingly mobile world.
