The reform of insurance warranties: a behavioural economics perspective
The reform of insurance warranties: a behavioural economics perspective
Lawyers when off duty, recognise that the way in which choices are presented matter to the decisions that people make. A critical leader piece (whether in The Guardian or The Telegraph) on the framing of the question to decide Scottish independence would fit comfortably with this world view, and be considered unremarkable. However, suggest that the manner in which a commercial law statute is presented would have a similar effect on their drafting of a contract, and brows would furl. However, contracting behaviour in key insurance markets cannot be explained by reference to our standard model of economic rationality. This piece applies the behavioural economies of Nudge to the default rule for breach of insurance warranty, and in particular to the attempts to mitigate the strict default by means of the 'held covered' clause. What emerges is substantial evidence of behavioural influence on contracting and a call for a non-directive statutory design.
breach of warranty, economics and law, marine insurance, privity of contract
118-137
Davey, James
6fe8c2ef-5959-4877-94a5-a55098975daa
2013
Davey, James
6fe8c2ef-5959-4877-94a5-a55098975daa
Davey, James
(2013)
The reform of insurance warranties: a behavioural economics perspective.
Journal of Business Law, 2013 (1), .
Abstract
Lawyers when off duty, recognise that the way in which choices are presented matter to the decisions that people make. A critical leader piece (whether in The Guardian or The Telegraph) on the framing of the question to decide Scottish independence would fit comfortably with this world view, and be considered unremarkable. However, suggest that the manner in which a commercial law statute is presented would have a similar effect on their drafting of a contract, and brows would furl. However, contracting behaviour in key insurance markets cannot be explained by reference to our standard model of economic rationality. This piece applies the behavioural economies of Nudge to the default rule for breach of insurance warranty, and in particular to the attempts to mitigate the strict default by means of the 'held covered' clause. What emerges is substantial evidence of behavioural influence on contracting and a call for a non-directive statutory design.
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The reform of insurance warranties a behavioural economics perspective
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Published date: 2013
Keywords:
breach of warranty, economics and law, marine insurance, privity of contract
Organisations:
Southampton Law School
Identifiers
Local EPrints ID: 374356
URI: http://eprints.soton.ac.uk/id/eprint/374356
ISSN: 0021-9460
PURE UUID: de4497f7-323a-4eea-b6e7-ec86889c1986
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Date deposited: 13 Feb 2015 12:13
Last modified: 15 Mar 2024 05:13
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Author:
James Davey
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