Costs and Benefits of a Legal System based on Standards: an economic analysis of objective good faith

Flavianne Fernanda Bitencourt Nóbrega


This paper develops a cost-benefit analysis of opting for a legal system based mainly on standards, identifying and systematizing the potential consequences of that choice. For this purpose, it is investigated the contribution of Law and Economics framework concerning the dichotomy of rules versus standards. It was observed that the choice of a legal system based on standards reveals a preference for a more decentralized model, which prioritizes the judge and not the legislature as law producer. Regarding the standard adjudication, the efficient allocation of human capital in low-income and high income matters. The German experience with the objective good faith was used as a test case to comprehend the costs and benefits concerning the choice of a standard-based system. Finally, we identify the challenge and costs of the efficient adjudication of the standard in the Brazilian legal system.


Rules; Standards; Good Faith General Clause; Cost-benefit analysis; Judicial adjudication


Economic Analysis of Law Review  -  ISSN 2178-0587

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