Deconstructing Derivatives Transactions : Has Contract Law Become Destabilised

A deconstructive study of derivatives transactions reveals that a standard interpretation of derivatives contracts seems to be lacking, even though such contracts are manifested in the form of standard contracts. In addition, these contracts are not optimally complete on their own, and are not secure and stable because they cannot guarantee enforcement by the courts. This is a disturbing issue because security of contract is the fundamental essence of contract law. Furthermore, some of the contracts contain elements of illegality that society has become “blinded” to because they have been taken for granted by the courts and society alike. Deconstruction helps us to re-examine the “dominant social vision” and enables us to alter that “vision” to a more accurate and balanced one by highlighting the alternative side of the prevailing view. Derivatives transactions go against the fundamentals of contract theory: broadly speaking, the nature of derivatives transactions border upon instability, illegality, unpredictability, non-enforceability and incompleteness. And the acceptance of this as the norm, by the courts and by society, suggests the creation of a new contract theory, encompassing these polarised new values