ABSTRACT
This chapter explores the inherent tension between regulatory contract law, understood as the instrumental use of private law to achieve exogenous social, economic, or environmental goals, and the mobility of legal subjects in a globalised legal order. Utilising the conceptual framework of a ‘market for contract law’, the analysis distinguishes between demand-side regulatory arbitrage, where private actors exploit the high elasticity of contract law to minimise regulatory costs, and supply-side regulatory competition, where states act as producers of legal rules. The chapter identifies a structural paradox: the more a jurisdiction employs contract law for regulatory purposes, the greater the incentive it creates for parties to exit that regime, potentially undermining the very policy objectives the law seeks to advance. However, the analysis suggests that a ‘race to the bottom’ in regulatory standards as integral parts of contract law is not inevitable. It argues that jurisdictions are shifting from adaptive competition ‘on the merits’ toward strategies of ‘market access bundling’, effectively constraining the elasticity of demand by conditioning market entry on regulatory compliance.
Stark, Johanna, Regulatory Competition and Regulatory Contract Law (September 14, 2026), Working Paper of the Max Planck Institute for Tax Law and Public Finance No 2026-11.
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