Transaction costs arising from breaches of legal contracts - The case of judicial breaches of contracts of anticipated sale contracts of soybeans in Brazil.

Abstract

Anticipated sales of commodities reached a significant importance in modern economics. They represent the main mechanism of economic exchange and of guarantee of fulfilment of mutual obligation commitments. In Brazil, the anticipated sale of commodities is one of the main funding mechanisms of agribusiness, particularly for commodities like soybeans and corn. In this scheme, part of the production is bought and paid by the buyer during planting of the crops. Contracts are instruments designed to ensure greater legal certainty to economic transactions. Efficient economies are governed by rules of public and private character, but private arrangements have special focus on these scenarios, and its efficiency is directly proportional to the degree of reliability in fulfiling obligations. Brazil?s agribusiness is one of the economic sectors most susceptible to the effects of judicial decisions, because it is also highly regulated in comparison to other areas like trade and services