Preventive Law - Some Theoretical and Practical Aspects
Soili Nysten-Haarala
L.L.D. Professor of Commercial Law
University of Lapland, Finland
Research Scholar
International Institute of Applied Systems Analysis, Laxenburg, Austria
No university teacher can escape the fact that practice differs from theoretical aspects of
law. Law students soon notice the gap between theory and practice and demand for
practical knowledge. But, what is this mysterious practical knowledge, which students
require? Many students seem to think that they need this knowledge for winning their
cases in courtrooms. This is, however, a narrow understanding of legal practice. Lawyers
are also needed in business cooperation and to avoid disputes in courtrooms.
My own experience of preventive law is limited in contract law. Good contracting was
the theme of my PhD. In business the most important part of contract law is not the law
cases, but how to make good and well-functioning contracts, which do not have to be
disputed in courtrooms. In a PhD. theory cannot be ignored.. Both American and
Scandinavian realism has been accused of only criticizing but not presenting new
theoretical approaches. My opinion is that since realism admits that law has behavioral
and other aspects outside traditional legal studies, the theory for practical and preventive
law could be found on a multidiciplinary basis. Therefore I chose Oliver E. Williamson's
transaction cost economics and his idea of governance of contracts as a theoretical
framework for my study of contract law and contracting. Oliver E. Williamson's theory
combines Ronald Coase's transaction cost economics with Macauley's and Macneil's
relational contracting as well as behavioral organizational studies of Herbert Simon.
For me it was quite unexpected that my own relatives, who work as small entrepreneurs,
had no difficulties in understanding the basic idea of my theoretical study. On the other
hand it was a disappointment for me that many legal scholars did not understand the idea
at all. For them my study remained outside legal studies. The point of view of the courts
is so much the standpoint of legal studies, that other approaches to legal issues appear
strange to traditional legal professors.
Law should not be diminished into studies of court cases. Even if cases are important for
lawyers in courtrooms, legal thinking should not rest only on rules, which are drawn from
the rare cases, which end up into courts. General rules should not be drawn up on the
basis of these marginal cases. The ordinary application of law, which does not produce
court cases, should not be excluded from legal studies. If other broader approaches are
rejected, contract law may soon work only with questions of minor importance in its own
little world, the sphere of which is constantly diminishing. Other wider approaches,
which aim at understanding law under the auspices of private governance, could narrow
the gap between legal reasoning and the real world of contracting.
Preventive law has an important role in both broadening legal theory and spreading good
legal practices. Therefore a center for preventive law is needed and is going to have an
open and deep sea to plough. Globalization makes experience of lawyers in different
countries necessary to compare. Comparison then poses the question of the role of legal
cultures and mentalities. These international aspects widen the field of preventive law
and enable more innovative results in both theory and practice.
As a law teacher I have to admit that I have not been successful enough in including
preventive law in legal studies of my own faculty. Even if students are interested, there
are not enough resources to allocate in preventive law studies. The major problem is that
the preventive standpoint has to be added on more traditional studies. It requires a lot of
cooperation with business lawyers and a commitment from the faculty. One teacher
preaching about the preventive point of view without adequate study material and time to
allocate for practical studies does not yet make any big difference. There has to be
cooperation, a network of preventive law interested lawyers.
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