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.