Is Fiduciary Law Efficient? A Preliminary Analysis

Leonard Rotman


The fiduciary concept has been described in many different ways over the years. However, one adjective that is seldom, if ever, used to describe it is “efficient.” Notions of efficiency in law are generally associated with the Law and Economics movement. Law and Economics understandings of the fiduciary concept ascribe to it a rather limited role, regarding it as a gap filler for incomplete contracts. This paper contends that the fiduciary concept is efficient, but that its efficiency looks to different standards than Law and Economics benchmarks, The paper illustrates that there are a variety of reasons why the fiduciary concept ought to be regarded as efficient, not the least of which is the creation of norms that provide a greater measure of certainty in actions and expectation in important social and economic interactions of high trust and confidence.


Fiduciary Law; Contract Law

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