ESTABLISHING A NEW LEGAL MODEL FOR THE GOVERNANCE OF CONTRACTUAL JOINT VENTURES THROUGH THE APPLICATION OF RATIONAL CHOICE THEORY

Abstract

The purpose of this thesis is to rationalise the law on contractual joint ventures, in the sense of rendering it consistent with its own fundamental tenets and declared objectives. The declared objective of contract law is to give effect to the intentions of reasonable persons, whom the law presumes to be self-interested by default. To this end, this thesis argues for a new legal model to govern the contractual (project-specific) joint venture, which centres on the joint venture contract but is fundamentally augmented through the application of default, mutually binding, fiduciary duties. By applying David Gauthier’s take on rational choice theory in the context of cooperation, the thesis demonstrates that submitting to default duties of this type is the long-term utility maximising strategy for self-interested commercial parties who have chosen to cooperate. For this reason, it argues that English law should imply fiduciary duties into the joint venture contract by default on the basis that this is what the co-venturers would have intended had they properly reflected on what their long-term self-interest requires.