Economic Analysis of Private Law in Taiwan: A Return to the Private Autonomy Principle

Abstract While the private autonomy is the principle of private law, the standard law and economics has modelled private law as regulatory instruments for correcting market failures. The development of economic analysis of private law in Taiwan, however, has mostly avoided this methodological mistake. In property law, people need rights in rem to show their trading partners and other parties what exact rights they hold. In contract law, a conception of penalty or sticky defaults would increase judges’ cognitive burdens without any benefits therefrom. In tort law, the deterrence model does not fit the law while the risk-allocating model does much better. In legal reasoning, a consent-based conception of legal system rather than legal effectiveness test should be the criteria for applying and enacting law. A judges-centered legal policy-making approach is mission impossible in scientifically studying Taiwan’s private law which is rules-based.