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PéterCserne1,ÁkosSzalai2
ONTHENECESSITYOFNECESSITY:
ANECONOMICANALYSISOFCONTRACTS
CONCLUDEDINASITUATIONOFNEED
1.INTRODUCTION
Necessityasalegaltermfiguresinmanydifferentareasofthelaw.Incriminallaw,it
referstocaseswhenoneispermittedorexcusedtodowhatotherwisewouldbeaseri-
ouscrime.Forinstance,whenonesaveshisownlifeinanextremeemergencybykill-
inganinnocentother,necessitymayprovideamoralandeventuallyalsoalegalexcuse
forhim(Cohen,1985;Ghanayim,2006).Inconstitutionallawnecessityisapartofthe
testthatsomeconstitutionalcourtsapplyindecidingwhethertoallowthelimitation
offundamentalrightsforthebenefitofotherrightsorinterests.Ininternationalcon-
stitutionalandcriminallaw,itiscurrentlyheavilydebatedwhetherthestate,i.e.public
officialsandinstitutionsshouldbeallowedtoinvokenecessityinordertolegitimately
exercisesomeexceptionalpowers.Forinstance,itisoftenwithreferenceto“necessi-
ty”or“emergency”thatgovernmentsorofficialsattempttojustifyemployingtorture,
steppingbeyondcertainproceduralrulesinthenameof“higherinterests”orstopping
therepaymentofsovereigndebts.
Privatelawrulesalsorefertonecessityinvariouscontexts.Intortlawinthenarrow
sense,thedoctrineofnecessityreferstothequestionwhetheronehastocompensate
fordamagescausedwhileexercisingself-helpinemergency(Symposium,2006;Viss-
cher,2008).Moregenerally,innon-contractualcontextsnecessityconcernssituations
wheretheinjurerbreachesadutyandcauseslossestothevictimbuttheharmiseither
notregardedasbeingcausedunlawfullyoratanyratedamagesarenotduebecausethe
dutywascancelledbyaninterestofahigherorder.Thestandardexampleiswhensome-
bodyforcesthedoorofanemptyhouseinordertofindshelteragainstaheavystorm.
Asforcontracts,whenanofferismadeoranagreementisreachedinasituation
whenoneofthepartiesisin“necessity”inthesenseofhavinginadequatealternatives
thequestionariseswhethercourtsshouldconsidertheagreementasavalidcontract,
modifyitorinvalidateit.Inmanynationalcontractlawspromisesmadeunderneces-
sityareeithervoidorvoidableorthepartyclaimingthathisvulnerabilitywasexploit-
edmayseekajudicialmodificationofthecontract.
Thispaperprovidesaneconomicanalysisofsuchtransactions.Inordertogivean
ideaofwhattypeofcasesmightbeconcernedwestartwithbrieflymentioningafew
possiblescenarios(Trebilcock,1993:chapter2).(1)Thehighwaymancase:creation
andexploitationoflife-threateningrisks.Amuggerholdsupapasser-byconfronting
himwiththeproposition:CYourmoneyoryourlife’andthepasser-bycommitshim-
selftohandoverthemoney.(2)Thetugandthefounderingshipcase:exploitationbut
1TilburgLawandEconomicsCentre,Tilburg,TheNetherlands.
2CorvinusUniversityFacultyofEconomics,Budapest,Hungary.
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