A world of risks: about derivative contracts and the economic crisis

Abstract

Derivative contracts are in the crux of the great economic, juridical and political disputes of our times. Their study is therefore a must of all kinds. To do so, we will take into account the documentary analysis using a qualitative analytical approach. These contracts have among other characteristics a conspicuous one: “complexityâ€. Moreover, this quality goes beyond: it´s about a complexity tending to unintelligibility based on the deregulation and the excessive volume of business (more than 10 times the world gross domestic product). These circumstances derive in the necessity of formulating serious objections to the validity of this atypical contract type grounded on the General theory of juridical business: the indeterminacy of the purpose, the error as a vice of consent and a radical alteration of the cause of derivative contracts. Indeed, the complexity of these inhibits the accurate identification of its purpose, the healthy formation of consent of the contracting party and the clear identification of the contractual teleology. Finally, the narrow relation between financial derivatives and economic crisis through history provide elements for us to think that derivative contracts as instruments of speculation are the trigger in a world of risks from the economic and financial point of view. To briefly address the Dutch tulips crisis and the economic crisis started in 2007 that worsens over time, allow us to illustrate this say the least troubling relationship.