In legal theory, a default rule is a rule of law that can be superseded by a contract, trust, will, or other legally effective agreement. Contract law, for example, can be divided into two kinds of rules: default rules and mandatory rules. Whereas the default rules can be modified by agreement of the parties, mandatory rules will be enforced, even if the parties to a contract attempt to override or modify them. One of the most important debates in contract theory concerns the proper role or purpose of default rules.
The idea of a default rule in contract law is sometimes connected to the notion of a complete contract. In contract theory, a complete contract is a complex the fully specifies the rights and duties of the parties to the contract for all possible future states of the world. An incomplete contract, therefore, contains gaps. Some contract theorists argue that default rules fill in the gaps in incomplete contracts.
References
Randy Barnett, The Sound of Silence: Default Rules and Contractual Consent (http://randybarnett.com/sound.htm), 78 Virginia Law Review 821 (1992).
With regard to immutable rules, the disagreement among academics is not over this abstract theory, but whether in particular contexts parentalistic concerns or externalities are sufficiently great to justify the use of immutable rules.
To this end, we introduce the concept of "penalty defaults." Penalty defaults are designed to give at least one party to the contract an incentive to contract around the defaultrule and therefore to choose affirmatively the contract provision they prefer.
In choosing among defaultrules, lawmakers should be sensitive to the costs of contracting around, and the costs of failing to contract around, particular defaults.
Each rule is a rule of inference such that if the expressions above the line (the premises) can be established, then the expressions below the line (the conclusion) may be asserted.
Default theory is an attempt to formally capture the idea that a set of beliefs may permit certain conclusions to be drawn even though these conclusions are not logically implied by the current set of beliefs.
This defaultrule is applicable if we can prove from our beliefs that John is an American and an adult, and believing that there is some car that is owned by John does no't lead to an inconsistency.
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