The legal rules of contracts and corporations can be divided into two distinct classes. Similarly, most corporate statutes require that stockholders elect directors annually but allow the articles of incorporation to contract around the default rule of straight voting. In contrast, the common law prerequisite of consideration is largely an immutable rule that parties cannot contractually abrogate. There is surprising consensus among academics at an abstract level on two normative bases for immutability.
Immutable rules displace freedom of contract.
Immutability is justified only if unregulated contracting would be socially deleterious because parties internal or external to the contract cannot adequately protect themselves. 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. When the preconditions for immutability are not present, the normative legal analysis devolves to the choice of a default rule. Yet academics have paid little attention about how to choose among possible default rules. Economists seem to believe that, even if lawmakers choose the wrong default, at worst there will be increased transaction costs of a second order of magnitude.