Filling gap in incomplete contracts: an economic theory of default rules

  title={Filling gap in incomplete contracts: an economic theory of default rules},
  author={Ian Ayres and Robert H. Gertner},
The legal rules of contracts and corporations can be divided into two distinct classes. The larger class consists of "default" rules that parties can contract around by prior agreement, while the smaller, but important, class consists of "immutable" rules that parties cannot change by contractual agreement.' Default rules fill the gaps in incomplete contracts; they govern unless the parties contract around them. Immutable rules cannot be contracted around; they govern even if the parties… 

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