Contractual breaches and sentences dispersion

The problems which have motivated a study and this article were the contractual breaches during an expressive increase of price and their judicial decisions. Descriptive and econometric analysis have been carried out on 161 appeal judicial decisions of Goiás Court of Justice (Brazil) and a quantitative survey was done with 70 farmers. The study has supported the hypothesis that a weak judiciary increases transaction costs and decreases the economic development rate. A large dispersion of court decisions was found between the first and appeal decision, as well inside the same level. The use of the concept of “social role of contract” inserted a high degree of instability in contracts the effects of court decisions could be realized such as more requirements of warranties and the reduction in the number of contracts. Those soybean producers who did not breach their contracts also have been negatively affected by the strategic reactions of trading and industries.

soybean contracts; judicial decisions; institutional environmental

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