BASIC ELEMENTS

OF LEGAL WRITING

Diterbitkan Oleh
R.A.De.Rozarie
(Anggota Ikatan Penerbit Indonesia)
Jl. Ikan Lumba-Lumba Nomor 40 Surabaya, 60177
Jawa Timur – Negara Kesatuan Republik Indonesia
www.derozarie.co.id – 081333330187/0819671079
 Basic Elements Of Legal Writing
© Juli 2015

Eklektikus: Dr. Fajar Sugianto

Editor: Syofyan Hadi
Master Desain Tata Letak: Eko Puji Sulistyo

Angka Buku Standar Internasional: 9786021176009

Perpustakaan Nasional Republik Indonesia
Katalog Dalam Terbitan

Sebagian atau seluruh isi buku ini dilarang digunakan atau

direproduksi dengan tujuan komersial dalam bentuk apapun tanpa
izin tertulis dari R.A.De.Rozarie kecuali dalam hal penukilan untuk
keperluan artikel atau karangan ilmiah dengan menyebutkan judul
dan penerbit buku ini secara lengkap sebagai sumber referensi.
Terima kasih

PENERBIT PERTAMA DENGAN KODE BATANG UNIK

 CONTENTS

PREFACE iv
INTRODUCTION 1
Part One
BASIC PRINCIPLES FOR LEGAL WRI TI NG
I. FRAMING YOUR THOUGHTS 4
1. Have Something to Say?-Think it Through 4
2. Plan Your Writings 5
II. PHRASING YOUR SENTENCES 7
1. Avoid Useless and Needless Words 7
2. An Ideal Average Sentence: + 20 Words 9
3. Prefer the Active Voice Over the Passive 10
4. Use Parallel Phrasing for Parallel Ideas 10
5. Avoid Multiple Negatives 11
6. Harmonize Details According to Your Objective(s) 12
III. CHOOSING THE WORDS 12
1. Use Jargons Wisely 12
2. Use Strong, Precise Verbs for a Greater Impact 14
3. Turn –ion Words Into Verbs when Underlining to-
pics 16
4. Watch Out for of, Simplify Bloated Phrase 17
5. Avoid Doublets & Triplets when Describe Actions 18
6. Use Parenthetical Shorthand Names when Required
Only 19
7. Do Not Assume Everybody Knows Acronyms 20
8. Speaking ≠ Writing, but Write as You Talk 20

Part Two
BASIC PRINCIPLES FOR LEGAL D RAFTING
I. DRAFT FOR ORDINARY READERS 23
II. ORGANIZE PROVISIONS 24
1. Definitions 26
2. Discriminatory Practices Prohibited 27
3. Scope of Prohibition; Exemptions 27
4. Religious and Nonprofit Organizations 27
5. Penalties 28
III. ORGANIZE DEFINITIONS 29
IV. BREAK DOWN ENUMERATIONS INTO PARAL-
LEL PROVISIONS 29
1. Payment of Reductions in Rates of Return 30
2. Be Wise with Shall 31

i
 3. Minimize Provisos 32
4. Replace and/or if Necessary 33
5. Double Check Plural 34
6. Avoid Word-Numeral Doublets 35
7. Do Not Include the Unknown 36

Part Three
GENERAL PUNCTUATION
I. COMMA
1. Common Misuses 38
2. Common Uses 39
II. SEMICOLON
1. Common Misuses 41
2. Common Uses 41
III. COLON
1. Common Misuses 42
2. Common Uses 42
IV. PARENTHESES
1. Common Misuses 43
2. Common Uses 44
V. EM-DASH OR LONG DASH
1. Common Misuses 45
2. Common Uses 45
VI. EN-DASH OR SHORT DASH
1. Common Misuses 46
2. Common Uses 46
VII. HYPHEN
1. Common Misuses 46
2. Common Uses 47
VIII. QUOTATION MARKS
1. Common Misuses 47
2. Common Uses 47
IX. ELLIPSIS DOTS
1. Common Misuses 49
2. Common Uses 49
X. APOSTROPHE
1. Common Misuses 51
2. Common Uses 51
XI. QUESTION MARK
1. Common Misuses 51
2. Common Uses 51
XII. EXCLAMATION POINT
1. Common Misuses 52
ii
 2. Common Uses 52
XIII. PERIOD
1. Common Misuses 52
2. Common Uses 53
XIV. BRACKETS
1. Common Misuses 54
2. Common Uses 54
XV. SLASH (VIRGULE)
1. Common Misuses 55
2. Common Uses 55

Part Four
BASIC PRINCIPLES FOR DO CUMENT D ESIGN
I. READABLE TYPEFACE 57
1. Readable Typeface is a Must 57
II. CREATING AMPLE 58
1. Section Headings 58
2. Frequent Paragraphing 59
3. Footnote Citations 60
4. Set-off Lists With Hanging Indents and Break Down
Enumerations Into Parallel Provisions 61
III. HIGHLIGHTING IDEAS 63
IV. MAKING A TABLE OF CONTENTS 65
REFERENCES 67

Appendices
Appendix A 69
Fajar Sugianto, The Economic Approach To Law of Indonesia‘s
Economic Performance Through The Rule of Law, Lex Merca-
toria International Journal, 2012.

Appendix B 89
Fajar Sugianto, Intercalating Law As A Tool To Promote Econo-
mic Efficiency In Indonesia, Jurnal Ilmiah Universitas Brawija-
ya, Indonesia, 2013.

Appendix C 110
Legal Memorandum

Appendix D 112
Legal Opinion

iii
 PREFACE

T
his book presents law students of University of 17 Agustus
1945 Surabaya (Untag Surabaya) with a simple and readily
understandable explanation of essential and related legal
writing in Legal English subject. It derives from Garner‘s intellectual
frameworks in Legal Writing in Plain English and my experience in
working with international practicing lawyers, regulators, legislators,
academics, and law enforcers.
The book should serve as an independent explanation of
fundamental Legal English and legal writing in both a practical and a
technical setting. This overview should serve as a guide through the
complex maze of Legal English tossed out in a typical course on legal
writing.
Legal English itself is a broad field. Nearly every universities
and law school subject is covered. I have attempted to treat in
particular detail the subjects that actually engage in more advanced
and more suitable to law students of Untag Surabaya in expanding
their scope of knowledge by emphasizing on legal writing instead of
―conversational‖ and ―grammar‖ elementary teachings. Why?
Because university students, especially students of law faculty of
Untag Surabaya, should not be only inhabited by these two fields
covered in their earlier studies-from elementary to high school, but
deal with more advanced scope of Legal English in university level.
Therefore, this book deals with all of these concerns.
The material presented is collected to prepare law students for
their future profession. As your lecturer, it is my academic duty to do
so. I also would like to share with my students at Untag Surabaya the
enjoyment of having extra knowledge in Legal English that improves
my work at international level. By having this little extra knowledge,
I am having more options, choices, and of course wider network to
work worldwide.
This book covers most of the material in the general Legal
English course offerings. Among these subjects are (a) basic
principles for legal writing, (b) fundamental principles for legal
drafting, (c) principles in legal drafting, and (d) principles for
analytical and persuasive writing (especially in the making of legal

iv
memorandum and legal opinion). These include exercises, both in
individual and groups, and tasks at certain principles that need to be
highlighted. Furthermore, the book contains academic journals and
articles to help learning process.
Finally, this book embodies my teaching philosophy and
experience, years of legal research and writing. I am indebted to
Bryan A. Garner for his intellectual frameworks in Legal Writing in
Plain English, both first and second edition, and Richard K. Neumann
Jr. and Sheila Simon for their broader methods in Legal Writing,
second edition, for the good models I have cited the most. They are
splendid authors and I am delighted to be able to showcase their
work, a genuine thank-you.

Untag Surabaya, Indonesia

June 2015

Dr. Fajar Sugianto

v
 INTRODUCTION

A
s your lecturer, I would like to welcome you to Untag
Surabaya. In Legal English subject, my goals have been to
increase knowledge of legal writing in ways that are concise,
accessible, and occasionally conducive concepts that enhances
learning. I have included several exercises and tasks on the process of
writing, the use of approaches, employing techniques, and formulas.
I have shortly mentioned before that it is my intention to
expand your scope of knowledge in Legal English by concentrating
and emphasizing on legal writing in greater detail. You, both as my
students and law students of Untag Surabaya should not be worrying
about ―conversational‖ and ―grammar‖ anymore. I am absolutely
confident that you have mastered these ―elementary‖ domains
during your earlier studies starting from elementary school to high
school; otherwise you would not have graduated. Therefore, since
you are a university student and have entered formal education to
becoming a scientist-since jurisprudence is indeed a science-I have set
an academic standard at law faculty of Untag Surabaya that normal
university students should be learning in this subject. If you can write
properly, you can speak. Those who claim can speak English but hard
to write, it is a sign of self-denial. I advise you to think carefully
before you say this and try to realize how ridiculous it sounds.
Although legal writing will not be easy, once you become
legal scholars-especially skillful ones on legal writing-your rewards
will be great. This skill determines your carrier and your future
learning in higher academic level. At least in the future, you will be
enjoying for having this knowledge and ability in Legal English as
much as I do in having greater opportunities for career mobility, with
a broad range possibilities worldwide.
Second only to my desire that modern legal scholars must
possess this ability, especially if you care enough about law in
Indonesia. Indonesian law, in a much larger context, too many of
them are influenced and resulted from international strain. With this
extra knowledge, you will be able to explore more on their core and
origins, which are limitless. This kind of academic freedom is the
luxury I would like to inherit. As your lecturer, I am responsible in

1
converting you from ―men of caves‖ to become eligible legal scholars
for the future, for Indonesia‘s sake. Unless you are comfortable for
being someone like a frog trapped inside a coconut shell or katak
dalam tempurung, then you shall never blame on faith or anyone for
the future path you have chosen. Because at the same time you have
denied knowledge as power. There is an old proverb; a bad workman
blames his tools. This clearly shows an excuse for lack of skill and
knowledge for your own work.
In the end, I encourage all my students at Untag Surabaya to
study hard. I am looking forward to meeting you at my class and
welcome all forms of questions and constructive discussion relating
to this subject.

2
Part One
BASIC PRINCIPLES FOR LEGAL WRITING

KNOW THE CONCEPTS BEHIND THE PRINCIPLES

1. The differences between legal English and general English.

2. The objective of writing.
3. Know your readers and to whom you are addressing.
4. Understanding legal terminologies.
5. The use of legal jargons and latin.
6. Practical approaches to maximize your legal writing.
3
I. FRAMING YOUR THOUGHTS
1. Have Something to Say?-Think it Through
The biggest challenge in legal writing is figuring out.
Knowing your purpose is not easy; therefore it is very important to
create aim(s). This can be done in general by mentioning your points
and stating them cogently with adequate reasoning and support.
Here is an approach for a start, the shorter the better. Even you
have points in mind, if you take too long to reach it, you might as
well have no points at all. In other words, best to write 5 powerful
pages instead of 50. Although every law student must read & digest
scads of diffuse writing, it is important to convey fairly straight
forward points. Because diffuse writing is opaque prose that leads to
obscurity.
Example: take a good read of the following and see if you can
follow the court‘s point. What is the Court trying to say? :
And in the outset we may as well be frank enough to confess, and,
indeed, in view of seriousness of the consequences which upon fuller
reflection we find would inevitably result to municipalities in the
matter of street improvements from the conclusion reached and
announced in the former opinion, we are pleased to declare that the
arguments upon rehearing have convinced us that the decision upon
the ultimate question involved here rendered by this court, even if
not faulty in its reasoning from the premises announced or wholly
erroneous in conclusions as to some of the questions incidentally
arising and necessarily legitimate subjects of discussion in the
decision of the main proposition, is, at any rate, one which may,
under the peculiar circumstances of this case, the more justly and at
the same time, upon reasons of equal cogency, be superseded by a
conclusion whose effect cannot be to disturb the integrity of the long
and well-established system for the improvement of streets in the
incorporated cities and towns of California not governed by
freeholders charters.
As a writer, you must insist on never putting your own
readers to this trouble.You will need, then, a penetrating mind as a
reader to cut through verbal voliage. To do so, you will need a
focused mind as a writer to leave aside everything that does not
communicate your ideas. This is one of the most important aspects in
becoming a good lawyer, that is, write effectively.
4
 It is useful to think of writing as a four-step preparations:
1. understanding legal terms and the nature of legal problems;
2. a focused mind communicate your ideas;
3. avoid overgrown verbal foliage; and
4. maintain consistency.

Task:
Search and differentie words of contracts, agreements, and
consensual. Explain briefly how they differ in legal terms (legalese)
and in pain English. How are they associated in Bahasa Indonesia and
bahasa hukum?

2. Plan Your Writings

Writers work differently with different methods. One of them
is these four-step process developed by Betty Sue Flowers1:
1. Madman;
As ideas generator, think of things you want to say as many as
possible as quickly as possible.
2. Architect;
As structure planner, figure out a sensible order for those thoughts,
then outline them systematically.
3. Carpenter;
As a builder: starting from your outline, write out a draft.
4. Judge;
As a checker and decision maker: smoothing over rough
transitions to correcting grammar, spelling, and mistypes.
Each character represents a separate intellectual function. It is
critical to allow the madman to spinout ideas. To frame your
thoughts, nonlinear outlining is suitable for a start.
It starts out placing a shorthand name for the grand theme in
the center. Then you begin adding ideas-themore the better. For every
major idea you have, use a branch off the center circle. For supporting
ideas, try branching off from a major branch. Everything you might
want to mention goes into the outline. Here is an example:

Betty Sue Flowers, Madman, Architect, Carpenter, Judge; Roles and The
1

Writing Process, 44 Proceedings of The Conference of College Teachers of

English, 1979, p. 7-10.
5
 The next step: (1) Order your materials in a logical sequence;
(2) Use chronology when presenting facts; (3) Keep related materials
together; (4) Divide into sections, divide sections into smaller parts as
needed; and (5) Use informative headings for the sections and
subsections.

Task in groups:
Make a nonlinear of Economic Analysis of Law book to improve your
writing projects.

6
(A) Of all documents requested by the Additional Property Seller to
show the Purchaser‘s corporate existence
(B) Execute and deliver the additional bill of sale, assuming the
obligations under the additional contracts from the date of the
additional property closing and the obligation relating to the
physical and environmental condition of the additional property
(C) At the additional property closing, Purchaser and the Additional
Property Seller will execute and deliver an additional closing
statement setting forth the amount held in the additional
property escrow and all prorations, adjustments, and credits to
that escrow, and, if necessary, a post-closing agreement for the
additional property closing for any adjustments based in
estimates that are to be readjusted after the additional property
closing

II. PHRASING YOUR SENTENCES

1. Avoid Useless and Needless Words
Before you are about to write, set three underlying aims, that
is, readers read faster, your clarity is enhanced, and your writing has
greater impact. Always remember that the English language has vast
potential for verbosity too. Nearly two-thirds of the sentence can be
cut with no loss in meaning.
Example of typical legal writing:
It is not necessary that an investment adviser‘s compensation be
paid directly by the person receiving investment advisory services, but only
that the investment adviser receives compensation from some source for his
or her services.
Revised sentence:
Although the investment adviser must be paid, the source of the
payment does not matter.
Another example:
Since, under the Equal Employment Opportunity Association
Guidelines pertaining to sexual harassment, an employer is liable for hostile
environment sexual harassment only if it knew or should have known of the
harassment and failed to take prompt and effective steps to end the
harassment, it is possible for employers to be exonerated from liability for
hostile-environment sexual harassment when sexual harassment has

7
occurred by individuals within an organization, but the organization took
prompt action to prevent further harassment.
Revised sentence:
Equal Employment Opportunity Association Guidelines (EEOA)
Guidelines allow courts to exonerate an employer from liability for hostile-
environment sexual harassment if the employer acts promptly to prevent
further harassment.

Exercises in groups
Delete at least four consecutive words in the following sentences and
replace those words with just one word. You may need to rephrase
ideas and rearrange sentences, but do not change the meaning.
1. Even assuming that the fog caused injury to Anton, Amir had no duty to
prevent that injury because it was idiosyncratic and Amir could not have
been expected to foresee such injury.
2. At no time prior to the initial public offering did the underwriters or any
officers, directors, or employees have knowledge of any facts that would
suggest that ―New Delhi Domestic Airport‖ could not be completed on
schedule and it accordance with specifications.
3. The Business Corporation Law does not address the liability of a foreign
investment corporation to indemnify individuals who are not its
employees.
4. The court examined a number of cases and stated that there appeared to
be only a limited number of instances in which there would exists a duty
to disclose the illegal conduct of persons who, through political
campaigns, seek election to a public office.
5. The Business Corporation Law does not address the liability of a foreign
investment corporation to indemnify individuals who are not its
employees.
6. The court examined a number of cases and stated that there appeared to
be only a limited number of instances in which there would exists a duty
to disclose the illegal conduct of persons who, through political
campaigns, seek election to a public office.
7. The Business Corporation Law does not address whether a Surabaya
corporation can idemnify nonemployees.
8. The court examined many cases and found few that imposed a duty to
disclose the illegal conduct of candidates for elected office.

8
2. An Ideal Average Sentence: + 20 Words
Readability formulas rely so heavily on sentence length.2 At
the beginning of the sentence, keep the subject, the verb, and the
object together. A sentence has two vital elements: A subject and a
predicate. For example: the partnership may buy a bankrupt partner‘s
interest. When you complicate this by separating the vital words and
adding too much detail at once, it becomes:
If any partner becomes a bankrupt partner, the partnership, at its
sole option, exercisable by notice from the managing general partner
(including any newly designated managing general partner) to the bankrupt
partner (or its duly appointed representative) at any time prior to the 180th
day after receipt of notice of the occurrence of the event causing the partner
to become a bankrupt partner, may buy, and upon the exercise of this option
the bankrupt partner or its representative shall sell, the bankrupt partner‘s
partnership interest.
Always remember to manage the length by keeping the
related words together. Put the subject at the beginning so that
readers are able to follow the story in your writing. When you do that,
the new outset becomes:
The partnership may buy any bankrupt partner‘s interest. To
exercise its option to buy, the managing general partner must provide notice
to the bankrupt partner no later than 180 days after receiving notice of the
event that caused the bankruptcy.
You would certainly want to restructure sentences as the
following:
 Ms. Tina, during the course of her struggle to provide for her
children as a single parent, accrued considerable debt to her family
and others
 Plaintiff‘s testimony that he had never had an ankle injury and had
never been treated by a doctor for ankle ailment before this
workplace accident is suspect
 The court, in finding that doctor Whitman was acting more as a
male nurse than a medical doctor in treating Mrs. Emerson, ruled
that an official‘s primary role is not medical professional.

Rudolf Flesh, How to Write in Plain English: A Book For Lawyers and
2

Consumers, 1979, p. 20-27.

9
3. Prefer the Active Voice Over the Passive
Remember it this way: if you are active, yo do things; if you
are passive, things are done to you. In an active-voice construction,
the subject does something. In a passive-voice construction,
something is done to the subject.
Take a look on the following examples.
The Court dismissed the appeal (Active Voice).
The appeal was dismissed by the Court (Passive Voice).
Remember that the use of active and passive may create a
broader interpretation. The first clearly tells us that the Court
did, while the latter indicates the appeal itself was not
credible.

Exercises:
Improve these sentences by changing them to active voice:
1. In 2000, only ten executives were covered by Article 12.
2. Prospective investors are urged to consult their own tax advisers.
3. The 2010 Plan is intended to facilitate key employees in earning a greater
degree of ownership interest in the Company.

4. Use Parallel Phrasing for Parallel Ideas

Legal writing requires details that force you to relate words
together. You should also need to state related ideas in similar
grammatical form. In this case, parallelism harmonizes both your
language and thoughts that transform into informative sentences. For
example:
 The Judges weighed the evidence carefully, skillfully, and wisely.
 The facilities are available to directors, officers, and corporate
counsels.
 The perpetrator drove to Surabaya, changed cars, and dropped the
box on the side of the road outside Ahmad Yani.
 The legal reasoning was long, disorganized, and unpersuasive
For correlative conjunctions, there are four most common
pairs: both... and; either...or; neither...nor; not only...but also. Make sure
that you phrase corresponding ideas within a sentence so that they
correspond grammatically. As law student you need to nurture these
techniques since they show an orderly mind at work.
10
 Compare the following sentences and you will see how useful
these techniques are.
 Domestic violence is a force that causes suffering not only to the
victim of an attack, but it also has detrimental effects on any
children in the same home.
 Domestic violence causes suffering not only to the victim of an
attack but also to any children in the home.

Task:
Revise the following sentences to cure the unparallel phrasing:
1. The Court relied heavily on the District Court‘s statement that the
would-be intervenors retained the right to appear through counsel, to
participate in the fairness hearing, to conduct discovery, and standing to
appeal the Court‘s approval or disapproval of the class-action settlement.
2. Tenant will probably not able to have the lease declared void and
unenforceable for vagueness because it contains all the essential elements
of a lease: a description of the premises, the amount of rent to be paid, the
term of the lease, and identifies the parties.
3. The Younger doctrine also applies to a state civil proceeding that is (1)
ongoing, (2) implicated important state interests, and (3) affords an
adequate opportunity to raise federal claims.

5. Avoid Multiple Negatives

Always remember to keep everything simple. When you have
the chance to recast a negative statement as a positive one without
changing the meaning, take it.
Example of a single negative form:
No more than two guards may be in the court room at a given time.
Example of a single positive form:
Only two guards may be in the court room at a given time.
Example of needless negative:
A member who has no fewer than 25 years of credited service but has
not yet attained the age of 60 years and is not eligible for retirement may not
voluntarily retire without first filling a written application with the board.
Here are some techniques in recasting needless negative.
Change no fewer than to at least, has not attained to is under, may

11
not...without to must, plus few other edits. A much better writing will
be:
Even if you are a member who is not otherwise eligible for retirement,
you may voluntarily retire if you are under the age of 60 and have at least 25
years of credited service. To do this, you must file a written application with
the board.
Please note that these techniques do not work at certain places,
such as hospitality industries, religious places, etc. For an instance,
we often find sign boards written like these. ―Do Not Leave The
Footpath‖ which means do not step, do not enter, keep clean, etc.
―Please Discard Anything Other Than Tissue In The Trash Dispenser‖
which means do not discard tissue

6. Harmonize Details According to Your Objective(s)

Various details create different meanings and objectives both
in Bahasa Indonesia and English. Take a good look at the following
examples:
Example 1:
1. Saya suka makan bakso.
2. Makanan kesukaan saya adalah bakso.
3. Kesukaan saya adalah makan bakso.
The first emphasizes self-description, while the second
underlines the most favorite food. The third sentence describes
favorite activity.
Example 2:
1. Boediyanto died three weeks later in Semarang, Central Java, Indonesia.
2. Boediyanto died in Semarang, Central Java, Indonesia, three weeks later.
3. Three weeks later, while visiting Semarang, Boediyanto died.
Each one of those three sentences above expresses different
meaning with different detail. The first emphasizes the place of death,
while the second emphasizes the time of death. Lastly, the third
emphasizes the death itself.

III. CHOOSING THE WORDS

1. Use Jargons Wisely
Every profession has its own jargon. Medical doctors use the
word etiology for ―cause‖. Police officers use the word engaging in foot
pursuit for ―running after‖ or ―chase‖. Other legal profession refers to
12
word such as stated for ―said‖ and initiated an exchange for ―started
to...‖. Whatever the jargons are, remember to maintain consistency,
develop simplicity, and do not tolerate useless or unnecessary jargons.
Among the extreme legalism examples are these:
A. Habeas Corpus ad Subjiciendum

Legalism Plain English

Anent About
Dehors the record Outside the record
Inter sese Among themselves
Motion for vacatur Motion to vacate
Sub suo periculo At one‘s own peril

B. Other Common Legalisms

Legalism Plain English

As to About, of, by, for, in
Bring an action against Sue
Herein In this ... (agreement)
Inasmuch as Since, because
Not less than At least

Most standard contracts have produced inefficient and

unnecessary contents, inconsistency use of terms. In the following
example, the drafter has produced an unnecessarily opaque tounge-
twister:
The Undersigned hereby extends said lien on said property until said
indebtedness and Loan Agreement/Note as so modified and extended
has been fully paid, and agrees that such modification shall in no
manner affect or impair said Loan Agreement/Note or the lien
securing same and that said lien shall not in any manner be waived,
the purpose of this instrument being simply to extend or modify the
time or manner of payment of said Loan Agreement Note and
indebtedness and to carry forward the lien securing same, which is
hereby acknowledged by the Undersigned to be valid and subsisting.
With a little effort and by giving ―the Undersigned‖ a name
(one of the party), it is possible to simplify to this:

13
 Abdul extends the lien until the Note, as modified, has been fully
paid. The modification does not affect any other terms of the Note or the lien,
both of which otherwise remain in force.

Task:
Translate the following passages into plain English:
1. A prehearing conference was held on July 15, 2000, and the result of said
conference was that ABC was given an extension of time until August 6
to respond to XYZ motion. ABC subsequently failed to file any response
there to.
2. In the event that any employee is requested to testify in any judicial or
administrative proceeding, said party will give the company prompt
notice of such request in order that the company may seek an appropriate
protective order.
3. The Court asks whether the plaintiff is guilty of unreasonable delay in
asserting its rights. Such determination is committed to the trial court‘s
sound discretion. The emphasis is on the reasonableness of the delay, not
the length of such delay.
4. Subsequent to the Bank‘s dishonor and return of the forged check, the
District Attorney served the aforementioned subpoena upon the Bank and
directed the Bank to deliver to his office forthwith, upon receipt, at any
time and from time to time, any and all bank checks, cashier's checks, and
similar items stolen in the robbery that transpired on July 2, 2012.

2. Use Strong, Precise Verbs for a Greater Impact

The English language actually has eight be-verbs, they are : is,
are, was, were, been, being, be, and am. This section focuses on the big
four (is, are, was, and were) in order to improve your sentences by
removing them. Because in general, relying too much on be-verbs
weakens the force of your verb.Therefore, start to minimize them
despite a few notable exceptions. In short, highlight and use them
wisely.
Here are two examples that show how be-verbs weaken your
writing.
 If there is information to which the company has reasonable access,
the designated witness is to review it so that the witness is
prepared on all matters of question.

14
  Affecting vitally the problem of the burden of proof is the doctrine
of presumptions, a presumption occurs in legal terminology when
the fact-trier, whether a court or a jury is required from the proof
of one fact to assume some other fact not directly testified to. A
well-known example is the presumption that a person is dead after
seven years without being heard from.
We can recast each of those passages with better verbs:
 If the company has reasonable access to information, the designated
witness must review it to prepare for all matters of questioning.
 The doctrine of presumption vitally affects the burden-of-proof
issue. A presumption occurs in legal terminology when the fact-
trier, whether a court or a jury, must deduce from one fact yet
another that no one has testified about directly. For example, the
law presumes that a person has died if that person has been absent
for seven years without being heard from.

Exercises:
Rewrite the following sentences to eliminate the be-verbs.
1. Jones is in agreement with Smith.
2. The professional fees in this project are entirely dependent upon the
planning techniques that the client is in favor of implementing.
3. The judge is of the opinion that it is within sound judicial discretion to
determine whether, once the claim is asserted, the crime-fraud exception
is applicable.
4. Where there is no express agreement, it is ordinarily taken that the
authority was to last for what was a reasonable time in light of all
circumstances.

15
Task:
Rewrite the following passages to eliminate the be-verbs.
1. There was no light-duty work that was available at the company. The
company‘s actions were hardly discriminatory when there was no
showing that the company was practicing any type of discriminatory
preference.
2. Several members were in attendance, and those present were in
agreement that the board‘s action was violative of the bylaws.
3. This evidence is indicate that the company was desirous of creating a
monopoly with the operating system.
4. Since there is a limited number of persons with the requisite skills, it is
increasingly difficult for the company to hire personnel who are qualified.

3. Turn –ion Words Into Verbs when Underlining Topics

Avoid using words ending in –ion to describe what people do.
There is the long way of saying things and there is the short way. The
long way uses weak verbs and abstract nouns ending in –ion. The
short wat uses a single forthright verb that makes your writing much
less abstract. Therefore, it becomes much easier for your readers to
visualize what you are talking about. In short, be alert to words
ending in –ion. When you can, edit them out.
Examples on turning –ion words into strong verbs:
› Someone was in violation of the law.
» Someone has violated the law.
› He provides an illustration of it.
» He illustrates something else.
› The lawyer has made the decision to undertake the representation of the
defendant.
» The lawyer has decided to represent the defendant.

Useless -ionwords Better wording

Are in mitigation of Mitigate
Conduct an examination of Examine
Make a accommodation for Accommodate
Make provision for Provide for
Provide a description of Describe

16
 Take into consideration Consider

However, there are two exceptions. First, when referring –ion

words as a procedure, such as, mediation, negotiation, conciliation,
etc. Second, as holistic explanations, such as transformation,
legalization, etc.

Task:
Improve the following passages by changing all but one or two of the
–ion words. Do any –ion words need to say?
1. An interested party may make an application for a modification or
revocation of an antidumping order (or termination of a suspension
agreement) in conjunction with an annual administrative review. A
revocation application will normally receive no consideration by the
board unless there have been no sales at less than fair value for a period of
at least three consecutive years.
2. The determination that reasonable grounds exist for the revocation of
parole should first be made by someone directly involved in the case. Yet
we need make no assumptions in arriving at the conclusion that this
preliminary evaluation, and any recommendations resulting there from,
should be in the hands of someone not directly involved.

4. Watch Out for of, Simplify Bloated Phrase

In working to shorten sentences phrase by phrase, you will
need to edit phrases that bloat legal writing. Simplicity in your
writing increases readability.
Bloated Phrase Normal Expression
An adequate number of Enough
A number of Many, several
A sufficient number of Enough
During such time as While
During the course of During
For the reason that Because
In the event that If
Is able to Can
Notwithstanding Although

17
 On a daily basis Daily
Prior to Before
Subsequent to After
The majority of Most
Until such time as Until

Exercises:
Revise these sentences to minimize prepositions.
1. Agus knew of the existence of the access port of the computer.
2. This Court did no error in issuing its order of dismissal of the claims of
Plaintiff.
3. Courts have identified a number of factors as relevant to a determination
of whether the defendant‘s use of another‘s registered trademark is likely
to cause a state of confusion, mistake, or deception.
4. One way in which a private party can act preemptively to protect the
enforceability of the rest of the provisions of a contract, in the face of one
void provision, is to insert a severability clause.
5. Any waiver of any of the provisions of this Agreement by any party shall
be binding only if set forth in an instrument signed on behalf of that
party.

5. Avoid Doublets & Triplets when Describe Actions

The main idea of your legal writing is not to say something is
as many ways as you can, but to say it as well as you can. To avoid
needless repitition, beware of synonyms.
Examples of needless repetition in doublets and triplets:
 Alienate, transfer, and convey (transfer suffices).
 Due and payable (due suffices).
 Give, devise, and bequeath (give suffices).
 Indemnify, hold harmless, and save harmless (indemnify suffices).
 Last will and testament (will suffices)3.
Examples of needless repetition in synonyms:
 Particular ≈ specific ≈ precise ≈ definite ≈ unusual ≈ uncommon ≈
unique ≈ selective.

Corey Sandler, Janice Keefee, Legal Words You Should Know, Avon,
3

Massachusetts, 2009, p. 15, 168, 206, 243.

18
 Sign ≈ indication ≈ token ≈ manifestation ≈ omen ≈ notice ≈ cue ≈
symbol ≈ character ≈ logo ≈ endorse ≈ validate ≈ certify.4

Task:
Compose each of the following synonyms into complete sentences;
1. Regulation ≈ rule ≈ order ≈ statute ≈ command.
2. Error ≈ mistake ≈ inaccuracy ≈ miscalculation ≈ blunder ≈ fallacy ≈
misconception.
3. Partnership ≈ cooperation ≈ association ≈ collaboration ≈ coalition ≈
alliance ≈ relationship ≈ connection ≈ corporation ≈ business ≈ company
≈ consortium ≈ syndicate.
4. Justice ≈ fairness ≈ equality ≈ impartiality ≈ honesty ≈ morality ≈
validity ≈ legitimacy.
5. Certainty ≈ sureness ≈ positiveness ≈ conviction ≈ confidence ≈
inevitability.

6. Use Parenthetical Shorthand Names when Required Only

Although parenthetical shorthand names are handy, use them
only when you really them and there is possibility of confusion.
Example of typical shorthand in legal writing:
A powerful Russian industrialist named Mikhail Khodorkovsky
(hereinafter ―the Industrialist‖ or ―Khodorkovsky‖), whose empire
(hereinafter ―the Khodorkovsky Empire‖) is under investigation in the
money-laundering inquiry (hereinafter ―the Inquiry‖) at the Bank of New
York (hereinafter ―the Bank‖), ...
Effective use of parenthetical shorthand:
Globel Mattingly (―Mattingly‖), shareholder on behalf of Allied
Ready Mix Company, Inc. (―Allied‖), and Jefferson Equipment Company,
Inc. (―Jefferson‖), has appealed from a nunc pro tunc order (the ―Nunc Pro
Tunc Order‖) of the Jefferson Circuit Court (the ―Court‖) in this
stockholder derivative action (the ―Action‖)...

4Maurice Waite, Oxford Paperback Thesaurus, Oxford University Press,

Great Britain, 2006, p. 600, 757.
19
 Examples of the use of parenthetical shorthand to avoid
confusion:
 Signed originally in 1948, the General Agreement on Tariffs and
Trade (―GATT‖) promotes international trade by lowering import
duties. These will affect tariffs and trade as commonly practiced.
 Portland Credit Corporation (―Portland Credit‖) has sued
Portland Credit Engineering Corporation (―PC Engineering‖) for
trademark infringement.

7. Do Not Assume Everybody Knows Acronyms

Even for long-established and well-known ones, i.e.: ATM
Cards, GM Cars, IBM Computers, etc.
Acronyms are shortcuts for the writer, not the reader. If you
care about your reader‘s convenience, you will translate ideas into
ordinary words that more readers can understand.

Individuals
In a given law journal, find a passage that contains no (less)
acronyms. Pick out one section and revise it to maximize the
acronyms. Make them useful and helpful

In groups:
Each group has to find at least 20 international legal acronyms. State
their origins, and each 20 findings of a group cannot be the same with
other groups.

8. Speaking ≠ Writing, but Write as You Talk

The best approach in writing is to be relaxed and natural. The
key is ―speakable‖. This shows that you are comfortable with your
own writing.
Example of typical legal writing:
If the employee feels that an interview with the immediate supervisor
would be unsatisfactory, he/she or his/her representative may, in the first
instance, present his grievance to the next supervisor in line.
Speakable sentence:
If you feel that your supervisor will not handle your case fairly, you
may go directly to your supervisor‘s supervisor.

20
 More examples of common use of openers and closers from
letters:
 Enclosed please find the following documents.
Speakable form: Here are the four documents you requested.
 Pursuant to your instructions, I met with Roger Smith today regarding
the above- referenced cause.
Speakable form: As you requested, I met with Roger Smith Today.
 Please be advised that the discovery cutoff in the above-referenced cause is
Monday, March 20
Speakable form: The discovery cutoff in this case in Monday, March 20.
 Pursuant to my conversation with Alex in your office on today‘s date, I
contacted the trustee
Speakable form: After talking with Alex in your office this morning, I
called the trustee.
 Thank you in advance for your courtesy and cooperation in this regard.
Please do not hesitate to contact me should you have any questions
regarding this request.
 Speakable form: Thank you. If you have any questions, please call.

Task:
In a given law article, find a medium to long paragraph that strikes
you as particularly unspeakable. Revise them and set out a bulleted
list of reasons why you consider it fifficult to read aloud.

21
Part Two
BASIC PRINCIPLES FOR LEGAL DRAFTING

KNOW THE CONCEPTS BEHIND THE PRINCIPLES

1. Knowing ―the audience rule‖ (addressing your writing).

2. Use of reference material.
3. Introduction of context.
4. Description of facts in chronological order.
5. Enhancing clarity.
6. Understanding legal terminologies.
7. Techniques for editing and re-reading.
22
I. DRAFT FOR ORDINARY READERS
Here are some opinions on how legal writing should be
addressed to ordinary readers.
―The simplest English is the best for legislation. Sentences should
be short. Long words should be avoided. Do not use one word more
than is necessary to make the meaning clear. The drafter should
bear in mind that his act is supposed to be read and understood by
the plain man‖.5
―... Duty to be completed and exact will require only short and
ordinary words, and short, or at least simple, sentences. The
language of lawyers need not, as Coode remarked of the statutes, be
―intricate and barbarous‖6.
―The most competent version of language and legal drafting is that
version which enables the message to be grasped readily, without
difficulty and confusion‖7.
―... complexity intensifies the risk of error in the drafting and the
risk of different interpretations in the reading‖.8
―Plain language and precision are complementary goals, not
antagonists. The choice between clarity and precision is usually a
false choice. If anything, plain language is more precise that
traditional legal writing because it uncovers the ambiguities and
errors that traditional style, with all its excesses, tends to hide‖.9
Examples on typical legal writing:
1. Nothing expressed or implied in this Agreement is intended or shall be
construed to give to any person or entity, other than the parties and the
Buyer‘s permitted assignees, any rights or remedies under or by reason of
this Agreement.
2. The Corporation and the Executive explicitly agree that this agreement
has been negotiated by each at arm‘s length and that legal counsel for
both parties have had a full and fair opportunity to revise the Agreement
so that any court will fully enforce it as written.

5 Alison Russell, Legislative Drafting and Forms, 4th ed. 1938, p. 12.
6 J.K. Aitken, The Elements of Drafting, 5th ed. 1976, p. 55-56.
7 Robert Eagleson, Efficiency in Legal Drafting, in Essays on Legislative

Drafting 13, 1988, p. 13.

8 Peter Siviglia, Writing Contracts, Carolina Academic Press, 1996, p. 73.
9 Joseph Kimble, Writing for Dollars; Writing to Please, Scribes J. Legal

Writing, 1997, p. 1-2.

23
 In order to maximize readability, it will be better if they are
written in plain English without changing their meanings. Always
remember the biggest aim in writing is to increase readability.
1. Nothing in this Agreement gives anyone, other than the parties and the
Buyer‘s permitted assignees, any rights or remedies under the Agreement.
2. The Corporation and the Executive agree that they have negotiated this
Agreement at arm‘s length and that legal counsel for both parties have
had an adequate opportunity to revise this Agreement so that any court
will fully enforce it as written.

Exercise:
Revise the following passage.
The employee explicitly acknowledges that the agreement not to compete, set
forth above, is ancillary to an otherwise enforceable agreement and is
supported by independent valuable consideration as required by the law. The
employee further agrees that the limitations as to time, geographical area,
and the scope of activity to be restrained are reasonable and do not impose
any greater restraint than is reasonably necessary to protect the the goodwill
and the other business interests of the employee.

II. ORGANIZE PROVISIONS

There are three basic steps to organize provisions. Firstly, put
the more general important before the less important. Secondly, put
the broadly applicable before the narrowly applicable. Lastly, put the
rules before exceptions.
Take a good read at the following example – a statue dealing
with discriminatory housing practices . As you read it, try to figure
out the drafter‘s method of organizing the material.

New Delhi Fair Housing Commission-Title X-Enforcement, Penal-

ties
AN ACT empowering the New Delhi Fair Housing
Commission to impose civil penalties and enforce by judicial
power provisions of Title X.
Be it enacted by the Senate and the House of Representatives in
General Court assembled, and by the authority of the same, as
follows:

24
SECTION 1. The following words used in this Act shall have
the following meanings:
―Aggrieved person‖ means any person who claims to have
been injured by a discriminatory housing practice or believes
such person will be injured by a discriminatory housing
practice that is about to occur.
―Commission‖ means the New Delhi Fair Housing
Commission.
―Housing accommodations‖ means any building, structure or
portion thereof which is used or occupied or is intended,
arranged or designed to be used or occupied as the home,
residence or sleeping place of one or more human beings and
any vacant land which is offered for sale or lease for the
construction or location thereon of any such building,
structure or portion thereof.
―Person‖ includes one or more individuals, partnerships,
associations, corporations, legal representatives, trustees,
trustees in bankruptcy, receivers, and the commonwealth and
all political subdivisions and boards or commissions thereof.
―Source income‖ shall not include income derived from
criminal activity.
SECTION 2. Subject to the provisions of section five, classes
protected by this Act shall include race, color, religious creed,
marital status, handicap, military status, children, national
origin, sex, age, ancestry, sexual orientation and source of
income.
SECTION 3. All housing accommodations in the city of New
Delhi shall be subject to this Act, except as hereinafter
provided. Nothing in this Act shall apply to housing
accommodations which are specifically exempted from
coverage by this Act. Nothing in this Act shall apply to the
leasing or rental to two or fewer roomers, boarders, or lodgers
who rent a unit in a licensed lodging house.
SECTION 4. Nothing in this Act shall prohibit a religious
organization, association or society, or any nonprofit
institution or organization operated, supervised, or controlled
by or in conjunction with a religious organization, association,

25
 or society, from limiting the sale, rental or occupancy of
housing accommodations which it owns or operates for other
than a commercial purpose to persons of the same religion, or
from giving preference to such persons unless membership in
such religion is restricted on account of race, color, marital
status, handicap, military status, children, national origin, sex,
age, ancestry, sexual orientation or source of income.
SECTION 5. In the society of New Delhi, discriminatory
housing practices are prohibited, provided, however, that no
practice shall be prohibited hereunder unless such practice is
also prohibited by the federal Fair Housing Act or chapter one
hundred and fifty-one B of the National Laws.
SECTION 6. Any persons who violated the provisions of this
Act as to discriminatory housing practices shall pursuant to
the provisions of section seven, be subject to orders,
temporary, equitable and legal, including compensatory
damages, punitive damages or civil penalties and attorney‘s
fees and costs.

Now, compare the above example with the following

provisions. When provisions are well-organized, they are easier to
understand. Few changes are made by using headings and fixing
various sentence-level problems.

New Delhi Housing Fair Commission-Title X-Enforcement and Pe-

nalties
This Act empowers the New Delhi Fair Housing Commission
to impose civil penalties for discriminatory housing practices
and to enforce the judicial power of Title X.
The Legislative enacts the following:
1. Definitions
(1) ―Housing accommodation‖ means any building, structure,
or portion of a building or structure that is used or
occupied or is intended, arranged, or designed to be used
or occupied as the home, residence, or sleeping place of one
or more human beings, including any vacant land that is

26
 offered for sale or lease for the construction or location of
such a building or structure.
(2) ―Persons‖ includes one or more individuals, partnerships,
associations, corporations, legal representatives, trustees in
bankruptcy, and receivers, as well as the commonwealth
and all political subdivisions and boards or commissions of
the commonwealth.
(3) ―Source income‖ does not include income derived from
criminal activity.

2. Discriminatory Practices Prohibited

In the city of New Delhi, discriminatory housing practices are
prohibited to the greatest extent that they are prohibited by
the federal Fair Housing Act of the National Laws. Classes
protected by this Act include those based on race, color,
religious creed, marital status, handicap, military status,
parental status, national origin, sex, age, ancestry, sexual
orientation, and source of income.

3. Scope of Prohibition; Exemptions

All housing accommodations in the city of New Delhi are
subject to this Act. But nothing in the Act applies to housing
accommodations that are specifically exempted from coverage
of this Act. Nothing in this Act applies to the leasing or rental
to two or fewer roomers, boarders, or lodgers who rent a unit
in a licensed lodging house.

4. Religious and Nonprofit Organizations

Nothing in this Act prohibits a religious organizations or any
nonprofit organization operated or supervised by a religious
organization from limiting the sale, rental, or occupancy of
housing accommodations that it owns or operates for other
than a commercial purpose to persons of the same religion, or
from giving preference to those persons, unless membership
in the religion is restricted on account race, color, marital
status, handicap, military status, parental status, national

27
 origin, sex, age, ancestry, sexual orientation, or source of
income.

5. Penalties
Any person who violates this Act is subject to court orders-
temporary, equitable, and legal-including compensatory
damages, punitive damages, and civil penalties, as well as
attorney‘s fees and costs.

Task:
Reorganize the following paragraph. Group the sentences according
to whether they: (1) specify the purpose of the letter, (2) state a buyer
commitment, or (3) clarify the limitations of the letter.
Create a new introductory paragraph, and then create three
paragraphs numbered (1), (2), and (3).

No sale or purchase agreement nor contract of sale is intended hereby until

ABC Company (Buyer) and XYZ Company (Seller) negotiate and agree to
the final terms and conditions of a Sale-and-Purchase Agreement. Buyer
shall exercise its best efforts toward securing such commitments from high-
quality department and specialty stores as are essential to establishment,
construction, and operation of a regional mall. For the 200 acres of land in
the House Survey, Abstract 247, the total consideration to be paid by Buyer
to Seller, in cash, shall be equal to the product of Five and 50/100 American
Dollars (US$5.50) multiplied by the total number of square feet within the
boundaries of the land, in accordance with the terms and conditions that
shall be contained in a subsequent. Sale-and-Purchase Agreement mutually
acceptable to be and executed by Buyer and Seller within sixty (60) days
from the date hereof. Buyer shall exercise its best efforts to enter into the
Sale-and –Purchase Agreement within the stated time period. In the event
Buyer and Seller cannot come to final agreement on the terms and
conditions of a Sale-and-Purchase Agreement within sixty (60) days from
the date hereof, this letter of commitment shall be null and void and neither
party shall have any liabilities or obligations to the other.

28
III. ORGANIZE DEFINITIONS
Where is the right place for definitions? Is it at the beginning
or in a schedule at the end? Or should they be placed in the context?
Definitions are clarifiers, not the opposite. There are some
basic approaches to organize definitions in your drafting:
 if the document contains three to four pages, put the
definitions at the beginning;
 if more than 10 pages, place them in the context;
 if more than 20 pages, put them specifically in a schedule;
 always remember: organize from the most to least
important; and
 do not let definitions strip the important information from
relevant provisions.

IV. BREAK DOWN ENUMERATIONS INTO PARALLEL PROVI-

SIONS
Drafting a legal document usually contains lists, especially
statutes and contracts, often long ones. These lists are the main cause
of overlong sentence. First thing you need to do is to break them up –
remember the purpose of maximizing readability.
Here is an example of troubled drafting that effects your
readers‘ readability.
In the event that by reason of any change in applicable law or
regulation or in the interpretation thereof by any governmental
authority charged with the administration, application or
interpretation thereof, or by reason of any requirement or directive
(whether or not having the force of law) of any governmental
authority, occurring after the date hereof: (i) the Bank should with
respect to the Agreement, be subject to any tax, levy, impost, charge,
fee, duty, deduction, or withholding of any kind whatsoever (other
than any change which affects solely the taxation of the total income
of the Bank), or (ii) any change should occur in the taxation of the
Bank with respect to the principal of interest payable under the
Agreement (other than any change which affects solely the taxation
of the total income of the Bank), or (iii) any reserve requirements
should be imposed on the commitments to lend; and if any of the
above-mentioned measures should result in an increase in the cost to
the Bank of making or maintaining its Advances or commitments to
29
 lend hereunder or a reduction in the amount of principal or interest
received or receivable by the Bank in respect thereof, then upon
notification and demand being made by the Bank for such additional
cost or reduction, the Borrower shall pay to the Bank, upon demand
being made by the Bank, such additional cost or reduction in rate of
return; provided, however, that the Borrower shall not be responsible
for any such cost or reduction that may accrue to the Bank with
respect to the period between the occurrence of the event which gave
raise to such cost or reduction and the date on which notification is
given by the Bank to the Borrower.
A major fix is mostly about finding enumerated items,
breaking them out into subparts, and then ensuring that the passage
remains readable still. When you do it carefully, you have a
presentable piece of writing:
1. Payment of Reductions in Rates of Return
a. Borrower’s Obligation
The Borrower must, on demand, pay the Bank both (1) and (2)
are met:
 the law or a governmental directive, either literally or as applied,
changes in a way that:
(a) increases the Bank‘s costs in making or maintaining its
advances or lending commitments; or
(b) reduces the principal or interest receivable by the Bank; and
 any of the following occurs:
(a) the Bank becomes-with respect to the Agreement-subject to a
tax, levy, impost, charge, fee, duty, deduction, or withholding
of any kind whatever (other than a change that effects solely
the tax on the Bank‘s total income);
(b) a change occurs in the Bank‘s taxes relating to the principal or
interest payable under the Agreement (other than a change
that affects solely the tax on the Bank‘s total income); or
(c) a reserve requirement is imposed on the commitments to lend.

b. Exceptions to Borrower’s Obligations

The Borrower is not responsible for a cost or reduction that
accrues to the Bank during the period between the triggering event
and the date when the Bank gives the Borrower notice.

30
2. Be Wise with Shall
Generally, shall means may, will, and is. The use of shall in
English gramar belongs to future tense, i.e.: ―Shall we...?‖
In just about most legal documents and every jurisdiction,
shall is mandatory that means must ≈ will ≈ is/are ≈ is obligated ≈
agree(s) to ≈ undertake(s) to ≈ has the responsibility to. Having this
said, in general shall opposes permissive while in legal writing shall is
supposed to mean ―has a duty to‖.
Here are some examples:
 Each corporate officer in attendance shall sign the official register
at the annual meeting.
 Nothing in this Agreement shall be construed to make the Owners
partners or joint venturers...
 Neither the Purchaser nor any Employer shall discriminate against
any employee or applicant for employment on the basis of race,
religion,...
 Neither party shall assign this Agreement, directly or indirectly,
without the prior written consent of the other party.

Words in legal writing require accuracy. Does the use of shall

from the last example really show accuracy in legal writing? No. It
clearly shows that neither party is allowed to (that is, may) assign it,
not must as a compulsory contractual duty.

Exercises:
Edit the following sentences for clarity by replacing the shalls.
1. Escrow Agent shall be entitled to receive an annual fee in accordance
with standard charges for services to be rendered hereunder.
2. Each member shall have the right to sell, give, or bequeath all or any part
of his membership interest to any other member without restriction of
any kind.
3. The occurrence of any one or more of the following shall constitute an
event of default: (a) Borrower shall fail to pay any installment of
principal or interest on an advance.

31
Task:
Do the same at the following sentences.
1. After completion of Buyer‘s work, Seller shall have the duty to restore the
area to its former condition,as it was before the Buyer‘s entry into the
area.
2. The sender shall have fully complied with the requirement to send notice
when the sender obtains electronic information and receiver‘s actual data.

3. Minimize Provisos
The phrase of provided that has major problems. Its meaning is
often unclear; creating conditions, exceptions, add-on, etc. Therefore,
it is commonly ambiguous because it means if, except, also. For
clarity‘s sake, please find a clearer wording.
Examples of provisos:
 Provided that the Issuing Bank has received an Inspection Report,
the Purchase Price will be released upon the earliest occurrence of
one of the following: ...
 Neither party assign this Agreement without the prior written
consent of the other party; provided, however, that Publisher may
assign its rights and obligations under this Agreement without the
prior written consent of Author to any person or entity that
acquires all or substantially all the business or assets of Publisher.
Clearer drafting:
 If the Issuing Bank receives an Inspection Report, the Purchase
Price must be released upon the earlier of: ...
 Neither party may assign this Agreement without the prior
written consent of the other party. But without the prior written
consent of Author, Publisher may assign its rights and obligations
under this Agreement to any person or entity that acquires all or
substantially all of Publisher‘s business or asset.

32
Exercises in groups:
Revise the following passages to eliminate the provisos:
1. If ABC annual requirements for steel closure sheet fall below the 40-
trillion-Rupiah minimum, ABC will purchase and XYZ Coal Company
will supply all of ABC‘s volume requirements; provided, however, that
ABC may have reasonable trial quantities supplied by an alternate
source.
2. If in the absence of a protective order ABC is nonetheless compelled by
court order to disclose protected information, ABC may disclose it
without liability hereunder; provided, however, that ABC gives XYZ
written notice of the information to be disclosed as far in advance of its
disclosure as practicable and that ABC use its best efforts to obtain
assurances that the protected information will be accorded confidential
treatment; and provided further, that ABC will furnish only that portion
of the protected information that is legally required.

4. Replace and/or if Necessary

And/or is handy. If you don‘t know what you really want to
write, it can be positively dangerous. About half the time, and/or
means or, other than that, it means just and. Replace it with either and
or or only when necessary.
Examples of and/or from transactional documents:
 Seller provides no warranty as to the nature, accuracy, and/or
continued access to the Internet images provided under this
agreement. [read or]
 Each party will inform the other if it becomes aware of the
infringement by a third party under any claim of a patent that
issues on joint inventions and/or sole inventions. If litigation
occurs under any joint invention and/or sole invention, and both
parties are necessary parties to the litigation, then each party will
pay its own costs. [read or]
 All applicable taxes will apply to cash awards received and/or
options exercised by ABC. [read and]
 The deliverables are XYZ‘s property, and XYZ may use and/or
duplicate them in its normal business operations. [read and]

33
Exercises in group(s):
Analyze the following signs. Edit them according to the nature of the
situation. Be prepared for an open discussion.

―NO FOOD OR DRINK ALLOWED‖

―LAWYERS AND LAW STUDENTS ARE NOT ALLOWED

BEYOND THIS POINT‖

5. Double Check Plural

Make sure that it really is necessary over the singular, and
vice versa. They create broader interpretation. Thus, always make
sure you know what they mean and you also need to visualize their
impact on your writing.
Examples:
―Lawyers and law students are not allowed beyond this point‖ ≈ 1
lawyer and 1 law student are allowed.
―Fireworks are forbidden‖≈ a single firework is tolerable.

Individual exercises:
Edit the following sentences to change the plural to singular when
appropriate.
1. Employees who have earned more than 25 credits are eligible for positions
under Title VIII.
2. The police is responsible for issuing all the permits listed in this section.
3. Students are expected to fulfill a seventy percent attendance requirement
at any subject to avoid an automatic fail.

Task:
Do the same with the following passages.
1. All the shareholders of the corporation have only one vote.
2. If the appealing parties have not satisfied the requisites for appeals, their
appeals will be dismissed.
3. When issues raised by the pleadings are tried by the express or implied
consent of the parties, they must be treated in all respects as if they had
not been raised by the pleadings.

34
6. Avoid Word-Numeral Doublets
Word-numeral doublets are a safeguard against mistypes. In
checks, they help in cases of alteration and illegible handwriting. At
least, the illiterate cat read the numbers and they prevent
discrepancies in numbers.
In order to maximize readability, prefer numerals, not words,
to denote amounts since numerals are more economical.When
doublets are compulsory, be consistent and know the nature of the
wording in proper writing.
Please note that the numeral writing in Bahasa Indonesia and in
English are completely different, especially the use of coma and
period.
Example:
 $ 100.000,00 (according to Ejaan Yang Disempurnakan (EYD))
 $ 100,000.00
Examples of common misuses word-numeral doublets:
 $ 100,000.00 (one hundred thousand dollars only).
 $100,000.50 (one hundred thousand dollars and fifty cents).
Proper word-numeral doublets:
 $100,000.00 (one hundred thousand and no/100 dollars) – not one
hundred thousand and 00/100 dollars.
 $100,000.50 (one hundred thousand and 50/100 dollars).
On typical legal writing, we often find passages like the
following:
 ABC agrees to pay XYZ two hundred thousand dollars ($200,000)
within seven (7) days after the execution of this agreement.
 The parties have agreed that for purposes of this contract, the
current fair market value of the property is Three Hundred Eighty-
Nine Million and Six Hundred Sixty-Seven Thousand Rupiahs
(Rp. 389.667.000).
Better writing:
 ABC must pay XYZ $200,000 within seven days after this
agreement is signed.
 For purposes of this contract, the current fair market value of the
property is Rp. 389.667.000.
You can apply the same method on previous principles on
legal writing in terms of arranging word-numeral doublets by simply

35
organize the more important numbers first to the less important.
Important numbers are written double, while the unimportant ones
get singled.

7. Do Not Include the Unknown

If you don‘t understand a form provision, or don‘t understand
why it has to be included in your document, first, try diligently to
gain that understanding. Second, if you still can‘t understand it, cut it.
Always remember, know your own writing. Otherwise, it will
come back to bite you in some way-especially in a contract. Even if
you do know it, you must be prepared for counter argument
resulting from your writing. Thus, rather than leaving something in
and creating greater gap, you are better off deleting it. It is also
important to double-check your writing before you can safely
conclude that there isn‘t any.

36
Part Three
GENERAL PUNCTUA TION

KNOW THE CONCEPTS BEHIND THE PRINCIPLES

1. Practical guidance on how to punctuate.

2. The proper use of punctuation.
3. Detecting common uses and misuses.
4. Punctuation as signal for readers how to smoothly move through
your sentences.
5. Achieving emphasis and clarity.
37
I. COMMA
1. Common Misuses
i. A comma between a subject and its verb.
Examples:
 The use of the terms ―irrebuttable presumption‖ and ―conclusive
presumption‖, should be discontinued as useless and confusing.
 The use of the terms ―irrebuttable presumption‖ and
―conclusive presumption‖ should be discontinued as useless
and confusing.
 In that case, male teachers in a church-operated school, received a
head-of-family salary supplement that was not provided to female
heads of households.
 In that case, male teachers in a church-operated school
received a head-of-family salary supplement that was not
provided to female heads of households.

Exercises:
An insurance carrier or a union or union inspector, may be held liable under
traditional torts concepts for the negligent performance of such an inspection

ii. A comma to set off a quotation that blends into the rest of the
sentence.
Examples:
 If one doctrine is more deeply rooted than any other constitutional
adjudication, it is that the Constitution Court, ―will not pass on
questions of constitutionality unless such adjudication is
unavoidable.‖
 If one doctrine is more deeply rooted than any other
constitutional adjudication, it is that the Constitution Court
―will not pass on questions of constitutionality unless such
adjudication is unavoidable.‖

Exercises:
In lease cases the related doctrine of constructive eviction has been held,
―broad enough to include many different situations where the whole or a
substantial part of the premises is rendered unfit for the purpose for which it
was leased‖.

38
 iii. Commas to set off an adverb that needs emphasis.
Examples:
 Defendants are, therefore, entitled to qualified immunity.
 Defendants are therefore entitled to qualified immunity.
 We, nevertheless, wanted to bring this to the Court‘s attention.
 We nevertheless wanted to bring this to the Court‘s attention.

iv. A comma in the second part of a compound predicate.

 A good brief should address all the issues, and analyze them
intelligently.
 No comma before the and because brief is the subject of
analyze.
 After surgery to his ankle in May 2012, Benny was first given
light-duty assignment as a production planner, but then was laid
off in March 2013.
 No comma before the but because Benny is the subject of was
laid off.

v. A comma as if it was a strong mark.

 One could view attendance at the football game as an alternative
promise by A, however, it seems readily apparent that this
alternative is not a promise for which B has bargained.
 One could view attendance at the football game as an
alternative promise by A; however, it seems readily apparent
that this alternative is not a promise for which B has
bargained.
 One could view attendance at the football game as an
alternative promise by A. But it seems readily apparent that
this alternative is not a promise for which B has bargained.

2. Common Uses
i. Use a comma when joining two independent clauses with a
coordinating conjunction (such as and, but, or, nor, yet, or so).
Examples:
 The United States of America is a common-law country, and
its judges are common-law judges.
 About a dozen lawyers were in the room together, and the
discussion was complete and candid.
39
ii. Use a comma after a transitional word or phrase, an
introductory phrase, and a subordinate clause.
Examples:
 Significantly, Abdul has not filed a cross-appeal.
[Transitional word].
 In the appeal, the majority opinion pointed out that experts
frequently rely on sales when appraising the value of
property. [Introductory phrase].
 When the court addresses the question of ambiguity, it must
focus on the contractual language itself. [Subordinate clause].

iii. Use commas to mark the beginning and end of phrase or clause.
Examples:
 A police officer, who is trained to overcome resistance, is
likely to escalate force until arrestee cannot escape without
using deadly force.
 Another authority, the court, has picked up some of the slack.

iv. Use commas to separate items in a series.

Examples:
 The term of Rechtsstaat is designed to protect, maintain, and
enforce the equality before the law.
 The scientific methods have proved extraordinary useful in
matters involving radar, ballistics, handwriting, intoxication,
and paternity.

v. Use a comma to distinguish indirect from direct speech.

Examples:
 Justice Nyoman ended by saying, ―The decision is an act not
of judicial judgment, but political will.‖
 ―Today, social workers provide a significant amount of
mental-health treatment,‖ wrote Mr. Jaya.

vi. Use a comma to separate adjectives in parallel fashion.

When and could appear between the adjectives without
changing the meaning of the sentence
Examples:

40
  That is a simplistic, fallacious conclusion.
 Slamet is a reserved, cautious person.

vii. Use commas to separate the parts of full dates and addresses.
But: (a) omit comma before a ZIP Code; (b) when writing just
the month and the year; (c) omit comma after the year (full
dates) if the date is an adjective.
Examples:
 Since July 20, 1999, Samuel has lived at 33 Raya Nginden,
Surabaya, East Java 20553.
 Puji wrote to them in April 2000 but never again.
 The court refused to reconsider its February 12, 2008 order.

II. SEMICOLON
1. Common Misuses
A semicolon where a colon is need.
Examples:
 Dear Sarah;
 Dear Sarah:
 Two major reforms took place; the overhaul of no-fault insurance and
the enhanced oversight of insurance companies.
 Two major reforms took place: the overhaul of no-fault
insurance and the enhanced oversight of insurance companies.

2. Common Uses
i. Use a semicolon to unite two short, closely connected sentences
Examples:
 The top court has tremendous discretion; it can usually
decide which cases to hear and which to reject.
 One side must make an offer; the other side must accept it.

ii. Use a semicolon to separate items in a list or series.

When: (a) single element contains an internal comma, (b) the
enumeration follows a colon, and (c) the items are broken into
subparagraphs.
Examples:

41
  The suspects live in four cities: Banjarmasin, South Borneo;
Balikpapan, East Borneo; Surabaya, East Java; and Semarang,
Central Java.
 A law student must understand: (1) ... knowledge of the law;
(2) ... total obedience to the law; and (3) ... moral and
integrity.
 To establish causation and intention in breach of contract
cases, the plaintiff is generally required to show that:
- the plaintiff was ...;
- the plaintiff was ...; and
- the defendant knew that ...

III. COLON
1. Common Misuses
A colon is used to introduce a quotation or list that blends in the
sentences.
Examples:
 The real issue in cybercrime is what has been called: ―one of the most
difficult problems in criminal procedure today.‖
 The real issue in cybercrime is what has been called ―one of the
most difficult problems in criminal procedure today.‖

2. Common Uses
i. Use a colon to link two separate clause or phrases.
- ONLY when you need to indicate a step forward from the first
to the second; and
- when the second part explains the first part.
Examples:
 After two hours, they reconciled: the manager apologized,
and the owner rehired her with a Rp. 500.000 raise.
 A trademark can be understood as an advertising idea: it is a
way of marking goods so that they will be identified with a
particular source.
 Even the stipulation did not extinguish ABC‘s uncertainty
about what it was buying: the precise scope of XYZ‘s
compensatory and other duties remained in doubt.

42
 ii. Use a colon to introduce a list (enumerated or broken down
into subparagraphs).
Examples:
 A law student must understand: (1) ... knowledge of the law;
(2) ... total obedience to the law; and (3) ... moral and
integrity.
 To establish causation and intention in breach of contract
cases, the plaintiff is generally required to show that:
(a) the plaintiff was ...;
(b) the plaintiff was ...; and
(c) the defendant knew that ...

iii. Use a colon to introduce a wholly self-contained quotation,

especially a long one.
Examples:
 In response to public worker on pay rise, the East Java
governor substantially codified the Peraturan Daerah in
statutory form: it is an affirmative request to ...
 Kompas Daily‘s May 1 report states: ―if persons who wear
near the warehouse at the time of the fire accident can be
shown to have .....‖

iv. Use a colon after the salutation in correspondence.

Some informal letters accept a comma.
Examples:
 Dear Judge Suhartono:
 Dear Prof. Abu Bakar:

IV. PARENTHESES
1. Common Misuses
Understood as another way of expressing the or.
Examples:
 ABC agrees to pay XYZ two hundred thousand dollars ($200,000)
within seven (7) days after the execution of this agreement.
 The parties have agreed that for purposes of this contract, the current
fair market value of the property is Three Hundred Eighty-Nine
Million and Six Hundred Sixty-Seven Thousand Rupiahs (Rp.
389.667.000).
43
2. Common Uses
i. Use parentheses to set off an inserted phrase, clause, or
sentence to create broader understanding.
Examples:
 If we increase the punishment, some people (not everybody)
will stop doing the deed from fear of punishment.
 Once a child is born alive (assuming that the wife does not
die in child-birth), the husband‘s shared freehold is
converted into a life estate.
 Toyota and Samsung, if they were Indonesian companies,
would have hundreds of lawyers on their payroll at their
back. (Maybe their Indonesian subsidiaries do).

ii. Use parentheses around numbers or letters when listing items

in text.
Examples:
 A law student must understand: (1) ... knowledge of the law;
(2) ... total obedience to the law; and (3) ... moral and
integrity.
 To establish causation and intention in breach of contract
cases, the plaintiff is generally required to show that:
(a) the plaintiff was ...;
(b) the plaintiff was ...; and
(c) the defendant knew that ...

iii. Use parentheses to introduce shorthand names.

Examples:
 Globel Mattingly (―Mattingly‖), shareholder on behalf of
Allied Ready Mix Company, Inc. (―Allied‖), and Jefferson
Equipment Company, Inc. (―Jefferson‖), has appealed from a
nunc pro tunc order (the ―Nunc Pro Tunc Order‖) of the
Jefferson Circuit Court (the ―Court‖) in this stockholder
derivative action (the ―Action‖)...
 Signed originally in 1948, the General Agreement on Tariffs
and Trade (―the Agreement‖) promotes international trade
by lowering import duties. These will affect tariffs and trade
as commonly practiced.

44
  Portland Credit Corporation (―Portland Credit‖) has sued
Portland Credit Engineering Corporation (―PC
Engineering‖) for trademark infringement...

V. EM-DASH OR LONG DASH

1. Common Misuses
i. Use more than two em-dashes in a sentences.
Example:
 Normally there is no difficulty in ascertaining who is entitled to
the property-but there is difficulty-for example, because it isn‘t
known whether a missing beneficiary is alive or dead-the court may
authorize the representative to...
 Normally there is no difficulty in ascertaining who is entitled
to the property. But there is difficulty-for example, because it
isn‘t known whether a missing beneficiary is alive or dead-
the court may authorize the representative to...

2. Common Uses
i. Use a pair of em-dashes to set off an inserted phrase because it
needs to go in the sentence without changing grammar often.
Examples:
 The Indonesian Declaration of Independence, in its
expressive force binding all ―governments‖—national, state,
county, and city—doesn‘t declare itself to be the ―law‖.
 The plaintiffs here—two young children and their parents—
have sued the bank for violations of their constitutional
rights.

ii. Use a pair of em-dashes to set off a parenthetical phrase that

needs to be highlighted.
Examples:
 Economic Analysis of Law—the heart of the legal field we
call Law and Economics—is basically rooted in orthodox
jurisprudence.
 The enumerated human rights found in the Constitution—
the first amendments—are insufficient to distribute overall
freedom of the people.

45
 iii. Use an em-dash to tack on an important element.
Examples:
 Repeat offenders now have to stay longer in jail to do their
sentences—a stronger attempt to enforce legal certainty.
 In 1998, it was reported that about 200,000 illegal abortion
activities supported by illegal medical doctors—more than
the combine illegal drug and rape cases.

VI. EN-DASH OR SHORT DASH

1. Common Misuses
An en-dash in place of a hyphen or and em-dash.
Example:
 The city council upheld the wage—and—hour laws.
 The city council upheld the wage-and-hour laws

2. Common Uses
Use an en-dash as an equivalent of to (as when showing a span of
pages), to express difference as united element, and to denote a
pairing.
Examples:
 p. 121-35.
 Love-hate relationship.
 Supply-demand curves.
 Contract-economics principles.

VII. HYPHEN
1. Common Misuses
A hyphen used after a prefix.
Example:
 The co-defendant was a non-practicing attorney.
 The codefendant was a nonpracticing attorney.
Unless:
(a) the primary word is capitalized (non-Marxist);
(b) the prefix is a part of a noun phrase (non-contract-law-doctrine,
take-it-or-leave-it-contract); or
(c) the form has a different meaning (prejudicial vs. pre-judicial).

46
2. Common Uses
i. Use a hyphen to connect the parts of a phrasal adjective.
 Examples (Phrases whose words function together to clarify
or modify noun):
 Not all standard contract forms (take-it-or-leave-it basis) are
bad in business activities.
 First-year law students are sometimes unready for their end-
of-year doldrums.

ii. Use a hyphen when spelling out fractions

Examples:
 One-third of those present concurred.
 Three-fifths of the punitive damages were eliminated by
remittitur.

VIII. QUOTATION MARKS

1. Common Misuses
i. Quotation marks for phrasal adjective.
Examples:
 This ―declining interest rate‖ scenario seems unlikely.
 This declining-interest-rate scenario seems unlikely.
 According to the ―fraud on the market‖ theory, if the market itself...
 According to the fraud-on-the-market theory, if the market
itself...

ii. Quotation marks to emphasize a word.

Examples:
 Do Not ―Enter‖.
 Do Not Enter.
 There is not ―any‖ evidence found in this case.
 There is not any evidence found in this case.

2. Common Uses
i. Use quotation marks to quote a passage of 50 or fewer words.
Examples:
 The bank supervisor told him that he would be ―out the
door‖ if he complained one more time about SOP. (The
writer is quoting the supervisor).
47
  Alan called the exhibition ―disgusting‖ and the painting
―obscene‖ before leaving the class. (The writer is quoting
Alan).
 Justice Powell wrote: ―The Government, as an employer
must have wide discretion and control over the management
of its personnel and internal affairs.‖

ii. Use quotation marks when providing definition, or referring to

a word as a word or a phrase.
Examples:
 ―Joinder‖ means ―the uniting of parties or claims in a single
lawsuit‖.
 The word ―malice‖ contains an ambiguity.

iii. Use quotation marks when you mean ―so-called‖ or ―self-

styled‖.
In some cases, quotation marks are used to question the
accuracy of the word(s).
Examples:
 Certain forms of contracts have been described as ―illusory
promises.‖ (So-called)
 Professor ABC is another ―GBHN‖ in the University of XYZ.
(Self-styled).
 Judge Agus claimed that he only followed the true doctrine
of the rule of law. But there is no specific and definite origin
of the ―true‖ doctrine to be discovered; no particular
definition can be described as ―the rule of law‖. (Questioning
the accuracy of the words).

iv. Quotation marks are traditionally used for titles of movies,

songs, books, articles, journals, etc.
Examples:
 In the screenplay ―The Gate,‖ Martin obtains information
from an elderly retired police officer who sells sandwiches.
 In his article entitled ―The Problems of Social Cost,‖ Coase
argues that the practice of law must be elaborated with
economics.

48
 v. Use single quotation marks for quoted words within quotation.
Example:
 Judge Posner has observed of Justice Holmes: ―His starting
point was awareness that ‗the provisions of the Constitution
are not mathematical formulas having their essence in their
form; they are organic living institutions transplanted from
English soil.‘ ‖ (The writer quotes Holmes‘s words in
addition to Posner‘s.)

vi. Place them correctly in relation to other punctuation:

- periods and commas go inside;
- colons and semicolons go outside; and
- question marks and exclamation points go either inside or
outside depending on whether they are part of the quoted
matter.
Examples:
 The police officer testified that Agus seemed ―nervous,‖
adding that ...
 Did Peter really attribute the decline to ―poor sales
projections‖? But Mike asked, ―Did I really say that?‖

IX. ELLIPSIS DOTS

1. Common Misuses
i. Understood as pauses in texted dialog.
Examples:
 A: ―How do you describe the prime suspect?‖
B: ―I remember the prime suspect as a male African-American at late
40‘s... Dark hair... Weighted about.... (and so on).
 A: ―How do you describe the prime suspect?‖
B: ―I remember the prime suspect as a male African-American
at late 40‘s (paused) Dark hair (long paused) Weighted about...
(and so on).

2. Common Uses
i. Use three ellipsis dots to denote that you have omitted
something from within a sentence.
Examples:

49
  A law student must understand: (1) ... knowledge of the law;
(2) ... total obedience to the law; and (3) ... moral and
integrity.
 Statutes in most countries...require the employer to pay the
employee starting at the minimum wage.
 the original: Statutes in most countries with but a few
exceptions, require the employer to pay the employee
starting at the minimum wage.

ii. Use four dots—three dots plus a period—when omitting

something at the end of a sentences.
Examples:
 (C). Deliver a certificate of good standing, a certificate of
Purchaser‘s corporate existence, and copies of all documents
requested by the Additional Property Seller ....;
 The original: (C). Deliver a certificate of good standing, a
certificate of Purchaser‘s corporate existence, and copies of
all documents requested by the Additional Property Seller to
show the Purchaser‘s corporate existence;
 Remember: A space goes before the first dot.

iii. Use four dots—three dots plus a period—when omitting

something, but the quotation continues.
Examples:
 ―A prehearing conference was held on July 15, 2000, and the
result of said conference was that ABC was given an
extension of time until August 6.... [A]BC subsequently
failed to file any response thereto.
 The original: ―A prehearing conference was held on July 15,
2000, and the result of said conference was that ABC was
given an extension of time until August 6 to respond to XYZ
motion. ABC subsequently failed to file any response
thereto.‖
 Remember: No space goes before the first dot.

50
X. APOSTROPHE
1. Common Misuses
Although an apostrophe is commonly used to form a plural, don‘t
drop necessary ones as you may change the entire meaning.
Examples:
 Mr. ABC then visited one of the hotels many shops.
 Mr. ABC then visited one of the hotel‘s many shops.

Differentiate the following:

The Smith‘s will attend the Jones‘ open house.
The Smiths will attend the Joneses‘ open house.

2. Common Uses
i. Use an apostrophe to indicate the possessive case.
Examples:
 The district court‘s refusal to give a requested additional
evidence is reviewed for an abuse of discretion.
 He insisted that he had no knowledge of the marijuana
concealed in the truck‘s gas tank.
 His main responsibility was to handle both agencies‘
telephone calls.
ii. Use an apostrophe to mark the omission of one or more
characters.
Examples:
 You won‘t drive the nail straight if you don‘t hold it straight.
 Back in the late‘60s, the law was mysterious.

XI. QUESTION MARK

1. Common Misuses
A question mark after an indirect question.
Example:
 She asked whether anyone present had seen the accident?
 She asked whether anyone present had seen the accident.

2. Common Use
A question mark after a direct question.
Examples:

51
  Does it make sense to talk about evolutionary change in the
history of law?
 When is there no right answer to a definition of law?

XII. EXCLAMATION POINT

1. Common Misuses
A exclamation point is used to express your own surprise or
amazement.
Examples:
 Yet they can‘t support this argument!
 Yet they can‘t support this argument.
 On Kijima case, despite this overwhelming evidence, the court held
otherwise!
 On Kijima case, despite this overwhelming evidence, the court
held otherwise.

2. Common Use
Use an exclamation point when quoting someone else, and after an
exclamatory word, phrase, or sentence.
Examples:
 Within seconds, there were cries: ―Help! Man down!‖
 Before the fight begins, the first suspect shouted, ―Get out of
here before I call the cops!‖

XIII. PERIOD
1. Common Misuses
i. A period is placed to manipulate lengthiness and overs
contentiousness writing.
Example:
 Since, under the Equal Employment Opportunity Association
Guidelines pertaining to sexual harassment, an employer is liable
for hostile environment sexual harassment only if it knew or
should have known of the harassment and failed to take prompt and
effective steps to end the harassment. It is possible for employers to
be exonerated from liability for hostile-environment sexual
harassment when sexual harassment has occurred by individuals
within an organization, but the organization took prompt action to

52
 prevent further harassment. (A period in this paragraph is
useless and does not simplify the writing).
 EEOA Guidelines allow courts to exonerate an employer
from liability for hostile-environment sexual harassment if
the employer acts promptly to prevent further harassment.

2. Common Uses
i. Use a period to end a sentence.
Example:
 At no time prior to the initial public offering did the
underwriters or any officers, directors, or employees have
knowledge of any facts that would suggest that New Delhi
Domestic Airport could not be completed on schedule and it
accordance with specifications.
 The partnership may buy any bankrupt partner‘s interest. To
exercise its option to buy, the managing general partner
must provide notice to the bankrupt partner no later than
180 days after receiving notice of the event that caused the
bankruptcy.

ii. Use a period to indicate abbreviations.

Example:
 Mr., Ms., Mrs., etc.
 This theory was first put forward by Dr. Jürgen Schafer.
 Though he had a Ph.D., he preferred to be called ―Mr. Tirto‖.

iii. Outside or inside parentheses/brackets.

Outside means when enclosing only part of a sentence, while
inside means when enclosing a complete sentence.
Example:
 The Court has upheld a statute prohibiting local casinos
from advertising in a way that encourages residents to visit
the casinos (as opposed to encourage tourists).
 The Court has upheld a statute prohibiting local casinos
from advertising in a way that encourages residents to visit
the casinos. (This statute would be presumed by law to
protect greater monetary damage.) Actual damages may be

53
 awarded not only for economic losses but also for injury to
residents‘s reputation in the community and for personal
humiliation and distress.

XIV. BRACKETS
1. Common Misuses
i. Brackets in place of ellipsis dots.
Example:
 Statutes in most countries [ ] require the employer to pay the
employee starting at the minimum wage.
 Statutes in most countries...require the employer to pay the
employee starting at the minimum wage.
 The original: Statutes in most countries with but a few
exceptions, require the employer to pay the employee
starting at the minimum wage.

2. Common Uses
Use a pair of brackets when:
Supplying translations; example:
 The action arose ex delicto (in tort), not ex contractu (from a
contract).
Substituting subject and object; example:
 And in the outset (the court) may as well be frank enough to
confess, and, indeed, in view of seriousness of the consequences
which upon fuller reflection we find would inevitably result to
municipalities in the matter of street improvements from the
conclusion... (the court=we).
Changing any character; example:
 This court did no error in issuing its order of dismissal of the
claims of Plaintiff. It also cautioned that ―[c]ourts have
identified a number of factors as relevant to a determination of
whether the defendant‘s use of another‘s registered trademark
is likely to cause a state of confusion, mistake, or deception.‖ (in
quoted material, Court began the sentence and was uppercase.)
Deleting a part of a word; example:
 This court did no error in issuing its order of dismissal of the
claim[] of Plaintiff. It also cautioned that ―[c]ourts have

54
 identified a number of factors as relevant to a determination of
whether the defendant‘s use of another‘s registered trademark
is likely to cause a state of confusion, mistake, or deception.‖ (in
quoted actually used the form claims.)

XV. SLASH (VIRGULE)

1. Common Misuses
A slash is placed when en-dash or a hyphen would suffice.
Examples:
 An essential element of the employer/employee relationship was
lacking.
 An essential element of the employer-employee relationship
was lacking. (The employer and the employee aren‘t the same.)
 The lawyer/consultant worked for the company for no more than two
months.
 The lawyer-consultant worked for the company for no more
than two months. (Lawyer and consultant refer to a single
person.)

2. Common Uses
i. Use a slash to separate the numerator from the denominator in
a fraction.
Examples:
 ¼
 24/7
 15/365

ii. In informal writing, a slash is a shorthand signal for ―per‖:

$100/hour; 2,000 units/year.

iii. To separate elements in a date: 17/07/76.

iv. To separate alternatives (but remember to avoid and/or): The

January/February issue is devoted to drafting better corporate
documents.

55
Part Four
BASIC PRINCIPLES FOR DOCUMENT DESIGN

KNOW THE CONCEPTS BEHIND THE PRINCIPLES

1. General guidance on how to design a legal document.

2. Readable typeface for legal document.
3. Creating ample, highlighting ideas, and making a table of content
in your writing.
4. Knowing the basic functions in headings, paragraphing, and
footnote citations.
56
I. READABLE TYPEFACE
1. Readable Typeface is a Must
In order to maximize readability, your readers must never
have trouble in reading your document. The use of font face plays a
major role in readability. A legal document does not concern with
how lovely your font face is. What really matter is your readers can
read and understand the whole point of your writing. Unreadable
font face discourages your readers to read the whole document. Once
your readers are discouraged, you have missed the main core of
writing.
Examples of unreadable font face:
 LICENSEE agrees to pay the LICENSOR two hundred
thousand American dollars (US$200,000) within seven (7)
days after the execution of this agreement.
 LICENSEE agrees to pay the LICENSOR two hundred
thousand American dollars (US$200,000) within seven (7)
days after the execution of this agreement.
 LICENSEE agrees to pay the LICENSOR two hundred
thousand American dollars (US$200,000) within seven (7)
days after the execution of this agreement.
See how troublesome they are to read. When you apply some
of the most common use font face, your readers can read faster and
better.
 LICENSEE agrees to pay the LICENSOR two hundred
thousand American dollars (US$200,000) within seven (7)
days after the execution of this agreement.  (Book Antiqua
font face)
 LICENSEE agrees to pay the LICENSOR two hundred
thousand American dollars (US$200,000) within seven (7)
days after the execution of this agreement.  (Arial font
face)
 LICENSEE agrees to pay the LICENSOR two hundred
thousand American dollars (US$200,000) within seven (7)
days after the execution of this agreement. (Times New
Roman)

57
II. CREATING AMPLE
1. Section Headings
Devide the document into sections, and divide sections into
smaller parts as needed. Use informative headings for the sections
and subsections. Once you have determined the necessary order of
your document, you should divide it into discret, recognizable parts.
Headings have many functions:
 They help you organize your thoughts into categories;
 They give readers their bearing at a glance;
 They provide visual to your pages;
 They signal transitions;
 When collected into a table of contents, they provide a
roadmap for the whole writing/document
Example on a typical legal document:
5.1 Upon the additional property closing, the Purchaser will:
(A) authorize the title company to release the additional
property escrow funds to the Additional Property Seller;
(B) execute and deliver such documents as may be reasonably
required by the Additional Property Seller or the title
company;
(C) deliver a certificate of good standing, a certificate of
Purchaser‘s corporate existence, and copies of all
documents requested by the Additional Property Seller to
show the Purchaser‘s corporate existence;
(D) execute and deliver the additional bill of sale, assuming the
obligations under the additional contracts from the date of
the additional property closing and the obligation relating
to the physical and environmental condition of the
additional property;
(E) at additional property closing, Purchaser and the
Additional Property Seller will execute and deliver an
additional closing statement setting forth the amount held
in the additional property escrow and all prorations,
adjustments, and credits to that escrow, and if necessary, a
post-closing agreement for the additional property closing
for any adjustments based on estimates that are to be
readjusted after the additional property closing.

58
 Look what happens when you put a heading on the
paragraph and a few edit that made (E) belongs to other provision:
5.1 Purchaser’s Obligations upon Closing. Upon the additional
property closing, the Purchaser will:
(A) authorize the title company to release the additional
property escrow funds to the Additional Property
Seller;
(B) execute and deliver such documents as may be
reasonably required by the Additional Property Seller
or the title company;
(C) deliver a certificate of good standing, a certificate of
Purchaser‘s corporate existence, and copies of all
documents requested by the Additional Property Seller
to show the Purchaser‘s corporate existence;
(D) execute and deliver the additional bill of sale,
assuming the obligations under the additional
contracts from the date of the additional property
closing and the obligation relating to the physical and
environmental condition of the additional property;
(E) at additional property closing, Purchaser and the Additional
Property Seller will execute and deliver an additional
closing statement setting forth the amount held in the
additional property escrow and all prorations, adjustments,
and credits to that escrow, and if necessary, a post-closing
agreement for the additional property closing for any
adjustments based on estimates that are to be readjusted
after the additional property closing.

2. Frequent Paragraphing
Vary the length of your paragraphs, but generally keep them
short. There is nothing wrong with an occasional one-sentenced
paragraph.
During 20th century, paragraphs tended to get shorter. The
following table showing average numbers of words per paragraph
that illustrate the trend:

59
 Writer Average Words per Paragraph
James Bradley Thayer (1990)10 655
Oliver Wendell Holmes (1909)11 270
James Barr Ames (1913)12 217
William F. Walsh (1930)13 286
Benjamin Cardozo (1939)14 322
Richard A. Posner (1977)15 153
Michael E. Tigar (1993)16 74
Karen Gross (1997)17 116
Charles Alan Wright (1999)18 84

3. Footnote Citations
At times, footnotes have been used as literacy device and for
additional information or explanatory notes that might be too
digressive for the main context. In academic usage, citational
footnotes create second narrative that significantly important to your
writing. Here are some basic functions to using citational footnotes:
 stay focus on what you are saying;
 able to create more fully developed paragraphs;
 able to use greater variety in sentence patterns;
 highlighting important parts of your analysis;
 citations are relatively harmless;
 pages end up looking significantly cleaner.

10 James Bradley Thayer, Unilateral Mistake and Unjust Enrichment as a

Ground for the Avoidance of Legal Transactions, Harvard Legal Essays, 1934.
11 Oliver Wendell Holmes, Holdsworth‘s English Law, Collected Legal

Papers, 1920.
12 James Barr Ames, Two Theories of Considerations, Lectures on Legal

History, 1913.
13 William F. Walsh, A Treatise on Equity, Harvard Law Review, 1930.
14 Benjamin N. Cardozo, Law and Literature, Harvard Law Review,

1939.
15 Richard A. Posner, Economic Analysis of the Law, Harvard Law

Review, 1977.
16 Michael E. Tigar, Federal Appeals, Harvard Law Review, 1993.
17 Karen Gross, Failure ad Forgiveness: Rebalancing the Bankruptcy System,

Harvard Law Review, 1997.

18 Charles Alan Wright, Federal Practice and Procedure, Harvard Law

Review, 1999.
60
 Exercise:
Analyze all footnote citations in EAL book.

4. Set-off Lists with Hanging Indents and Break Down Enumera-

tions Into Parallel Provisions
In general, compressed printed pages discourage readers. You
need some methods to break up passage. Many techniques can be
employed. Let‘s take a good look at the following dense provisions:
In the event that by reason of any change in applicable law or
regulation or in the interpretation thereof by any governmental authority
charged with the administration, application or interpretation thereof, or by
reason of any requirement or directive (whether or not having the force of
law) of any governmental authority, occurring after the date hereof: (i) the
Bank should with respect to the Agreement, be subject to any tax, levy,
impost, charge, fee, duty, deduction, or withholding of any kind whatsoever
(other than any change which affects solely the taxation of the total income of
the Bank), or (ii) any change should occur in the taxation of the Bank with
respect to the principal of interest payable under the Agreement (other than
any change which affects solely the taxation of the total income of the Bank),
or (iii) any reserve requirements should be imposed on the commitments to
lend; and if any of the above-mentioned measures should result in an
increase in the cost to the Bank of making or maintaining its Advances or
commitments to lend hereunder or a reduction in the amount of principal or
interest received or receivable by the Bank in respect thereof, then upon
notification and demand being made by the Bank for such additional cost or
reduction, the Borrower shall pay to the Bank, upon demand being made by
the Bank, such additional cost or reduction in rate of return; provided,
however, that the Borrower shall not be responsible for any such cost or
reduction that may accrue to the Bank with respect to the period between the
occurrence of the event which gave raise to such cost or reduction and the
date on which notification is given by the Bank to the Borrower.

61
 Now, compare with the following. You will certainly find it
somewhat easier to figure out their structure:
11.3 Payment of Reductions in Rates of Return
(A) Borrower’s Obligations. The Borrower must, on
demand, pay the Bank both (1) and (2) are met:
(1) the law or a governmental directive, either
literally or as applied, changes in a way that:
(a) increases the Bank‘s costs in making or
maintaining its advances or lending
commitments; or
(b) reduces the principal or interest receivable by
the Bank; and
(2) any of the following occurs:
(a) the Bank becomes-with respect to the
Agreement-subject to a tax, levy, impost,
charge, fee, duty, deduction, or withholding
of any kind whatever (other than a change
that effects solely the tax on the Bank‘s total
income);
(b) a change occurs in the Bank‘s taxes relating to
the principal or interest payable under the
Agreement (other than a change that affects
solely the tax on the Bank‘s total income); or
(c) a reserve requirement is imposed on the
commitments to lend.
(B) Exceptions to Borrower’s Obligations. The Borrower
is not responsible for a cost or reduction that accrues to
the Bank during the period between the triggering
event and the date when the Bank gives the Borrower
notice.

Exercise in groups:
Fix the following contractual paragraph by using the applied
technique. Make corrections if needed.
2.3 Termination Fees Payable by ABC. The Merger Agreement
obligates ABC to pay XYZ an Initial Termination Fee if (a) (i)
XYZ terminates the Merger Agreement because of either a

62
 Withdrawal by ABC or ABC‘s failure to comply (and to cure such
noncompliance within 30 days‘ notice of the same) with certain
Merger Agreement covenants relating to the holding of a
stockholders meeting, the solicitation of proxies with respect to the
ABC Proposal, and the filling of certain documents with the 123
Good Offices, (ii) ABC terminates the Merger Agreement prior to
the approval of ABC Proposal by the ABC stockholders, upon ABC
having received an Acquisition Proposal and the ABC Board
having concluded that its fiduciary obligations under applicable
law require that such Acquisition Proposal be accepted, or (iii)
either party terminates the Merger Agreement because of the
failure of ABC to obtain stockholder approval for the Merger
Agreement and the transactions contemplated thereby at a duly
held stockholders‘ meeting, and (b) at the same time of such
termination or prior to the meeting of the ABC stockholders there
has been an Acquisition Proposal involving ABC or certain of its
significant subsidiaries (whether or not such offer has been rejected
or withdrawn prior to the time of such termination or of the
meeting).

Important points:
 In legal writing, it is very important to ensure that your readers
reach the main verb early on. That way, the structure of the
sentence becomes transparent.
 Don‘t stick too much on having the main verb come after the list.
 Core parts of the English sentence are the subject and the verb
(sometimes an object).
 Main purpose: readability

III. HIGHLIGHTING IDEAS

When you need to highlight important points in a list, there is
a better way than to use a series of bullets dots. They certainly take
the reader‘s eye from one point to the next.
Here is an example highlighting ideas with attention-getters,
such as bullets:
The most advisable form of entity for organization of activities
related to the Law of the Republic of Indonesia number 40 year of 2007 in
Indonesia depends on the purpose for the entity, and especially on whether
63
there are short-term or long-term plans for the national affiliates to be used
as vehicles for directly profiting Mr. ABC or other investors and sports
personalities involved. In order to definitively respond to this item, we would
need more information as to the business plans in the Republic of Indonesia.
For example, what are the business objectives of the affiliate in Indonesia?
How exactly will the organization obtain its financial resources? Will it
actually have revenues, and if so from what sources? Are merchandise sales
contemplated, or will the organization limit itself to providing services? To
what extent will the entity actually organize and administer athletic events,
as opposed to merely promoting the new sport? To what extent will
educational activities or facilitating cultural exchanges be parts of the
entity‘s purposes? What other activities are planned?
See what a bulleted list can do:
What organizational structure to devise for the sport in the Republic
of Indonesia depends on the business objectives that Mr. ABC envisions.
Perhaps the chief question is: Does he have short-term or long-term plans for
having the national affiliated directly profit himself or other investors and
sports personalities? But to address even this question, we need more
information about his business plans in Indonesia. For example:
 What specifically are his business goals for the Indonesia affiliate?
 How will the entity be financed?
 Will it actually have revenues? If so, from what sources?
 Does Mr. ABC contemplate having the entity sell merchandise, or
will he limit it to providing services?
 To what extent will the entity actually organize and administer
athletic events as opposed to simply promoting the new sport?
 To what extent will educational activities, such as facilitating
cultural exchanges, be part of the entity‘s purposes?
 What other activities are planned?

The most common way to emphasize text is underline, or else

capitalize all the characters. This section introduces new ways of
doing it.
But first, avoid using all capitals. Second, try not to use initial
capitals, even for the purpose of highlighting ideas and emphasizing
texts. When they come in large number, the eyes tend to weaken.
Here is an example on all capitals passage:

64
 NEITHER THE LAW AND HUMAN RIGHTS MINISTRY
NOR STATE INSTITUTIONS HAS APPROVED THESE
CERTIFICATES OR PERMITS THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. IT IS ILLEGAL FOR ANYONE
TO TELL YOU OTHERWISE.
Even in initial capitals, there is little improvement in
readability.
Neither The Law And Human Rights Ministry Nor State
Institutions Has Approved These Certificates Or Permits That This
Prospectus Is accurate Or Complete. It Is Illegal For Anyone To Tell
You Otherwise.
You would be better-off using ordinary boldface type:
Neither the Law and Human Rights Ministry nor state
institutions has approved these certificates or permits that
this prospectus is accurate or complete. It is illegal for
anyone to tell you otherwise.
Or use a box to putting the highlighted text, like this:

Neither the Law and Human Rights Ministry nor state institutions
has approved these certificates or permits that this prospectus is
accurate or complete. It is illegal for anyone to tell you otherwise.

Or combine boldface type and a box:

Neither the Law and Human Rights Ministry nor state institutions
has approved these certificates or permits that this prospectus is
accurate or complete. It is illegal for anyone to tell you otherwise.

IV. MAKING A TABLE OF CONTENTS

Ideally, a two-page document does not need a table of
contents. Anything beyond six pages, typically benefits from a table
of contents, provided if it is well organize and has good headings.
Examples:
Table of Contents
I. Preliminary Statement 1
II. Statement Regarding Oral Argument 3
III. Table of Authorities 5
65
IV. Statement of Facts 7
V. Argument 9
VI. Conclusion 13

If you are drafting a complex contract that consists of

numerous pages, try a table of content to assist your readers like the
one below. This comes from an asset-purchase agreement.
Asset Purchase Agreement
1. Purchase and Sale of Assets; Assumption of Liabilities 1
1.1 Purchase and Sale of Assets 1
1.2 Consideration 3
1.3 Tax Allocation 7
1.4 Adjustments to purchase Price 9

2. Seller’s Representation and Warranties 14

2.1 Authorization and Execution 17
2.2 Financial Statements 20
2.3 Assurance and 22
2.4 Product 24
2.5 Fees, Commissions, and Expenses 28
2.6 Full Disclosure 31

3. Buyer’s Representations and Warranties 33

3.1 Authorization and Execution 35
3.2 Buyer‘s Organization 39
3.3 Accuracy of Information 41
3.4 Fees, Commissions, and 43
And so on

Task:
In groups: Find a 10-25-page contract that has no table of
contents. Make one for it. Make corrections when needed.
Bring copies for other group(s). Be prepared to discuss
whether your outline would result in major edits.

66
 REFERENCES

Aitken, J.K. The Elements of Drafting, 5th Edition, 1976.

Ames, James Barr, Two Theories of Considerations, Lectures on Legal
History, 1913.
Cardozo, Benjamin N., Law and Literature, Harvard Law Review, 1939.
Coase, Ronald H., The Problem of Social Cost, The Journal of Law and
Economics, Vol. III, The University of Chicago Press, 1960.
Eagleson, Robert, Efficiency in Legal Drafting, in Essays on Legislative
Drafting 13, 1988.
Flesh, Rudolf, How to Write in Plain English: A Book For Lawyers and
Consumers, 1979.
Flowers, Betty Sue, Madman, Architect, Carpenter, Judge; Roles and The
Writing Process, 44 Proceedings of The Conference of College
Teachers of English, 1979
Garner, Bryan, Black‘s Law Dictionary, 8th Edition, Thomson West,
2004.
_____________, Legal Writing in Plain English, The University of
Chicago Press, 2001.
Gross, Karen, Failure ad Forgiveness: Rebalancing the Bankruptcy System,
Harvard Law Review, 1997.
Holmes, Oliver Wendell, Holdsworth‘s English Law, Collected Legal
Papers, 1920.
Kimble, Joseph, Writing for Dollars; Writing to Please, Scribes J. Legal
Writing, 1997.
Munzer, Stephen R. & Nickel, James W. Does the Constitution Mean
What It Always Meant?, Vol. VII, No. 7, Colombia Law Review,
1977.
Neumann, Richard K., Legal Writing, 2nd Edition, Aspen Coursebook
Series, Wolters Kluwer, 2011.
Posner, Richard A., Economic Analysis of the Law, Harvard Law
Review, 1977.
Russell, Alison Legislative Drafting and Forms, 4th ed. 1938.
Sandler, Corey & Keefee, Janice Legal Words You Should Know, Avon,
Massachusetts, 2009.
Siviglia, Peter, Writing Contracts, Carolina Academic Press, 1996.

67
Sugianto, Fajar, Economic Analysis of Law, Seri I: Pengantar, Kencana
Prenada Media Group, 2013.
_____________, Economic Approach To Law, Seri II: Pendekatan
Ekonomi Kepada Hukum, Kencana Prenada Media Group,
2013.
_____________, Intercalating Law As A Tool To Promote Economic
Efficiency In Indonesia, Jurnal Ilmiah Universitas Brawijaya,
Indonesia, 2013.
_____________, The Economic Approach To Law of Indonesia‘s Economic
Performance Through The Rule of Law, Lex Mercatoria
International Journal, 2012.
Thayer, James Bradley, Unilateral Mistake and Unjust Enrichment as a
Ground for the Avoidance of Legal Transactions, Harvard Legal
Essays, 1934.
Tigar, Michael E., Federal Appeals, Harvard Law Review, 1993.
Waite, Maurice, Oxford Paperback Thesaurus, Oxford University Press,
Great Britain, 2006.
Walsh, William F., A Treatise on Equity, Harvard Law Review, 1930.
Wright, Charles Alan, Federal Practice and Procedure, Harvard Law
Review, 1999.

68
 THE ECONOMIC APPROACH TO LAW OF INDONESIA’S
ECONOMIC PERFORMANCE THROUGH
THE RULE OF LAW19

Fajar Sugianto20
1. Introduction
Like many sciences in their early life, the field of law and
economics or as it is more commonly called, ―economic analysis of
law‖, had much force and little form when hundreds of scholars
began developing this interdisciplinary field of legal studies. The
field of economic analysis of law may be said to have begun with
Bentham who focused on social welfare. As utilitarian, he
emphasised his analysis on human behaviour in the face of legal
incentives and evaluated its outcomes mainly on torts, criminal law,
and some important analysis of property law and legal process. His
works were left essentially unimproved until the 1960s when the
substance of economic analysis of law was reinspired by four
important contributions: Coase's article on externalities and legal
liability, Becker's article on crime and law enforcement, Calabresi's
articles and book on accident law, and Posner's general text book on
Economic Analysis of Law and his establishment of the Journal of Legal
Studies. These indicate that research and development in economic
analysis of law has been active since the 1970s and its study keeps on
receiving academic recognition as a major discipline in jurisprudence
as well as an independent program study at universities around the
world.
In the intervening years, legal theories has accepted many
economics concepts, such as incentive effects, opportunity costs,
transaction costs, free-riding, regulatory capture, and so forth. More
recently, economists have realised that effective property and
contract rights are fundamental to economic growth and its
development. Many economists have also become aware of the

19 The original version of this paper was submitted to Lex Mercatoria

International Journal on July 2012. Reproduced by the writer for education
purpose only.
20 Lecturer at University of 17 Agustus 1945 Surabaya, Indonesia and

advocate at Indonesian Advocates Association (PERADI-Perhimpunan

Advokat Indonesia).
69
importance of the rule of law that plays a vital role in economic
performance. For a nation, the formulation and regulation of the rule
of law determine its economic performance final result. This
realisation has opened economics to legal concepts.
These two developments-the greater use of economics to
examine the law and vice versa- have brought the two fields of law
and economics closer together. In its origin, the core of economic
analysis of law is defined by the law rather by some predetermined
field of economics. Even in the central areas of economic analysis of
law-such as the economic analysis of property rights, contracts, torts,
corporate and tax law, they are well-constructed by the foundation of
jurisprudence. The jurisprudence itself, like any other inter-
dependant science, had convicted that economics is a powerful tool
for analysing a vast range of legal questions, especially its various
principles can be used to law by approaching them to concrete legal
problems.
In terms of the rule of law, the economic approach to law
generally seeks to answer two basic questions. Namely, what are the
effects of legal rules on the behaviour of relevant actors? And are
these effects of legal rules socially desirable? The approach employed
in law and economics that is commonly used in economic analysis of
law: the behaviour of individuals and collective is described
assuming that they are rational and forward looking, and the idea of
welfare economics is adopted to assess social desirability .

2. The Approach
The basic assumption of economics, even in law activities that
involves social interactions is that people are rational and forward
looking. Meaning that people always demand and use any available
resources to meet their needs. In fact, what we want exceeds with
what available no matter how wealthy or poor we are as individuals
or even as a nation. The people‘s infinite need of satisfaction is a
predictable consequence of the gap between desirability and
resources availability. The need to satisfy themselves often refers as
profit maximisation in both non-monetary and or monetary
satisfaction. This demand and need to maximise profit is an
observable trait of human behaviour in economics, while law

70
generally regulate and justify human behaviour to maximise society‘s
wealth.
If lawmakers ask, ―How will a sanction affect human
behaviour?‖, then economists may consider legal sanctions look like
prices. People presumably respond to these sanctions as much as they
respond to prices. Therefore, economics in this case provides a
scientific theory to predict the effects of legal sanctions on behaviour.
Therefore, it can be said that economics provides a behavioural
theory to predict how people respond to law. The use of this theory
and its fundamental concepts help us to understand in evaluating law.
The approach enables lawmakers to understand a broader domain of
the law as the enterprise of subjecting human behaviour. If law
indeed is the enterprise of subjecting human behaviour to the
governance of rules, it is sine qua non of the successful working of law
that people should have knowledge of law and should have
confidence in it21. How law can do its duty to achieve all its purposes
without knowing an economic fact that the poor is ruled by a system
which he neither understand nor trusts. In a country like ours which
is governed by the rule of law, it is essential that the law must
become community property to maximize overall social utility 22.
Posner describes such ability that law can provide is the
economic conception of justice. In Indonesia, this conception can be
blended equally with the doctrine of the Rechtsstaat which protects
individual rights as well as upholds sovereignty23. In various ways,
but essentially with the same object, the idea of Rechtsstaat has been
put forward by Friedmann. He clarified that the term of Rechtsstaat
implying the limitation of the state power by the rule of law, is
closely associated, if not actually identified, with the rise of
individualism. The spiritual revolution of the Renaissance and

21 Foreword from P.N. Bhagwati, M.J. Anthony. Law for the Layman,

HPB, New Delhi, 2008, p. viii.

22 Wayne Morisson. Jurisprudence-from the Greeks to Post Modernity,

Cavendish Publishing, UK, 2002, reprinted and translated by Zhang Wan

Hong, p. 190.
23 Chapter 1, article 1; The 1945 Constitution of the Republic of

Indonesia-as amended by the First Amendment of 1999, the Second

Amendment of 2000, the Third Amendment of 2001 and the Fourth
Amendment of 2002.
71
Reformation and the economic emergence of a prosperous, trading
middle class, developed parallel claims of the individual to legal
recognition. He also sees that the struggle between individual right
and authority of the community has been a basic theme of political as
well as legal theory. The struggle is largely, but not always, parallel to
that between absolutism and democracy; to a certain extent it is also
parallel to the issue of nationalism versus internationalism24.
For Indonesia in this case, nationalism refers to Indonesia‘s
economic growth and stability through the rule of law, and
internationalism relates to the nation‘s adequacy to accommodate
and to compete in the era of globalisation as applied to the world
economy. Globalisation is understood here to mean major increases
in worldwide trade and exchanges in an increasingly open,
integrated, and borderless international economy25. At this stage, the
desire and struggle had made economics became one of the most
useful parts of behavioural science to law by understanding the
economic nature of human being as economic actor and nation‘s
human capital. For the nation, it gives the nation a thoroughly
convincing roadmap for nation‘s economic success.

24 W. Friedmann. Legal Theory, Fourth Edition, Stevens & Sons

Limited, London, 1960, p. 546-547.
25 I shall offer some common perceptions about globalisation in order

to limit the understanding of its term that whether one sees globalisation as
a negative or positive development. First, it must be generally accepted that
globalisation has clearly changed the world system that creates
opportunities and challenges. Thus, it is clear that every elements of every
nations that have led to globalisation are very (or force to be) active.
Second, globalisation has had significant impacts on all economies of
the world with various effects. It effects on almost everything they have, i.e.
production of goods and services, employment of labour and production
process, affects investment in both physical and in human capital, etc. These
effects have one thing in common which is the emergence on efficiency,
productivity, and competitiveness broadly.
Third, globalisation has led to growing competition on a global basis.
Some have called this ―the age of competence‖ which underscoring the
importance of law in every national economy, because legal system and
legal rules are considered to be one of the nation‘s products that show
productivity in economic market as well as guarantying condusive
investment climate and healthy economic environment. At this point, law
and economics views legal rules as one of important tools to achieve nation‘s
economic success.
72
2.1 The Nature of Economic Reasoning
In the globalisation era, laws are forced and challenged to be
able to adapt. Not only from economists, but lawyers also are hungry
for the primacy of efficiency and start to duplicate the way most
economists think, such as, in explicating efficiency and
progressiveness of the rule of law. Many of them start to realise that
the existence of the law –ideally-should be efficient, effectively
applied, and growing progressively. Law and jurisprudence do not
recognise these economic concepts as vast as economics does.
Therefore, if there is any lawyers start to link between these two, then
it is the time to notice what the economics has to offer. These
economic concepts are like legal doctrines, related and complemented
each other, and most importantly, neither one of them can solve a
single problem holistically.
It can be said that the movement of law and economics applies
economic theory and method to the practice of law. It claims the tools
of economic reasoning offer the best possibility for justified and
consistent legal practices. It is one of the dominant theories of
jurisprudence.
The law and economics movement provides a general theory
of law as well as conceptual tools for the clarification and
improvement of its practices. The general theory is that law is best
viewed as a social tool that promotes economic efficiency. With
economic approach, efficiency is an ideal model that guides legal
practice. In terms of the rule of law, law and economics considers
how efficient rules produce the quality of law. It is simply because
efficiency derives effectiveness, effectiveness produces quality, and
quality defines clarity. Clarity in law helps us to understand how the
rule of law should be applied to improve market conditions in return.
Unlike the time, long time ago when rules were applied by the rulers
who were uncertain about the effect to the citizen who forced to
comply whatever they were and wherever the law might have led
them to. With the help from economics, law as we know it today
never have to be that way ever again. Law and economics offers an
efficient framework to model effective legal outcome, and common
purposes to widely unify disparate areas of legal activities.

73
2.2 Some Fundamental Economic Concepts
Experts in law and economics have a slight different use of
fundamental economics concepts. Posner emphasises on value, utility,
and efficiency, while Cooter and Ulen explore more on
microeconomic theories such as supply-demand, market equilibrium,
game theory, profits and growth, and so on. Most Pejovich‘s law and
economics explication are based on game theory, scarcity and
transaction costs, resources, and trade. Regardless of these differences,
they are aiming at the same target which is to understand the
compass of the law.
In order to answer two basic questions as mentioned earlier,
in this case concerning Indonesia‘s economic performance through
the rule of law, I shall employ some fundamental economics concepts
which broaden the fields of law and behavioural economics. Namely:
the concept of rationality, choice, value, efficiency, utility, and game
theory.
The concept of rationality is the main framework analysis in
understanding human behaviour. The basic assumption is people are
rational maximiser of their satisfaction, their activities involve choice.
They are able to calculate (based on their rationality) what to choose
in order to achieve the best outcome and it can be said that these
decisions to be rational. Because of most people are rational, and
rationality requires maximisation, an economic actor can rank
alternatives that become their next-best alternative choices.
Another common way of understanding this conception of
rational behaviour is by recognising that people choose alternatives
that are the most well- suited to fulfilling their needs. Here is another
economic fact, most people want far more than their current
resources allow them to have. This is scarcity: people wanting more
than can be satisfied with available resources. Scarcity forces people
to make the most valuable choices. This emphasises that had people
not made the ―right‖ choice they did, they would have then chosen
the next best alternative. The definition of ―right‖ choice is varying
from one individual to another, again, based on their rationality and
needs. Having said this, the right choices in economic activities are
closely-related to the most valuable ends.

74
 As rational maximisers, people tend to accomplish their
objectives in the most efficient way. Economists have several distinct
definitions of efficiency. For simplicity‘s sake, I have also adopted
Pareto efficiency theory of economics which generally concerns the
satisfaction of individual preferences as one of the most applied
efficiency concept in the field of law and economics. Garner splits
Pareto efficiency into two kinds, first kind is Pareto superiority as an
economic situation in which an exchange can be made that benefits
someone and injures no one. When such exchange can no longer be
made, the situation becomes the second kind that is Pareto optimality:
an economic situation in which no person can be made better off
without making someone else worse off. 26
There is a vital connection between efficiency and utility. For
most economic actors, utility reflects beneficiary and meritorious of
economic goods. If a person believes that his act was successfully
efficient, at the same time he/she concluded the result to be
satisfactory. Again, a satisfactory result signifies both in monetary
and or non-monetary outcome.
The utility concept is used in different sense for economists
and for utilitarian. According to Posner, utility in economics is
commonly used to distinguished an uncertain cost or benefit from a
certain one. Utility also commonly called as an expected utility, in
this sense is tangled with the concept of risk. Utility in the sense used
by philosophers of utilitarianism, meaning happiness.27
Game theory basically is the study of how people behave in
situations where one‘s action may affect the reaction of others. These
situations are like games in that people must decide upon strategy.
Game theory has far wider applications, some economics experts say
to be the theory of coordination. Wessels describes that game theory
extends the tools of economic analysis to any situation where humans
have to coordinate their actions with one another, whether in the
family, in the workplace, in social groups or among nations. He
extends his view toward game theory that an important feature of

26 Bryan A. Garner. Black Law Dictionary, 8th edition, Thompson West

Group, USA,2004, p. 1147.
27 Richard A. Posner. Economic Analysis of Law, seventh edition, Aspen

Publishers, New York, 2007, p. 10-12.

75
game theory is that people are rational in making their choices (that is,
their preferences are well ordered). A second key feature is that a
person has to take into account the reaction of others.28 At this point, I
trust that people need a dominant strategy that is a strategy better
than other‘s strategy regardless of what the others in the game do. It
drives people come to cooperate with each other in a positive-sum
game.
By knowing these fundamental concepts can help us to view
an economic performance through the rule of law. First, how
rationality affects people‘s behaviour within legal situations. Second,
how collective behaviour should have an effect on legal rules. Third,
understanding and planning strategic actions in the legal context.

3. The Importance of the Rule of Law

3.1. Some History
I consider some history what seem to me to be important
historical journey for the rule of law as we know it today.
a. Chapter 39 and 40 of Magna Carta 1215.
39. No free man shall be seized or imprisoned or stripped of his
rights or possessions, or outlawed or exiled, or deprived of his
standing in any other way, nor will be proceed with force against
him, or send others to do so, except by the lawful judgement of his
equals or by the law of the land.
40. To one will we sell, to no one deny delay right or justice.
b. Habeas corpus as the challenge to unlawful detention.
c. The ending of torture.
In England, Act of Union 1707, in France, torture was ended in
1789. Some parts of Italy between 1786 and 1859; in Netherlands it
was ended sometime between 1787 and 1798. Denmark eliminated
the practice in 1771.
d. The Petition of Right 1628.
Clause VIII concluded:
They do therefore humbly pray your most excellent majesty that
no man hereafter be compelled to make or yield any gift, loan,
benevolence, tax or such like charge without common consent by

28 Walter J. Wessels. Economics, Barron‘s Educational Series, USA,

2006, p. 440-441.
76
 act of parliament, and that none be called to make answer or take
such oath or to give attendance or be confined or otherwise
molested or disquieted concerning the same or for refusal thereof.
And that no freemen in any such manner as is before mentioned
be imprisoned or detained. And that your Majesty would be
pleased to remove the said soldiers and mariners, and that your
people may not be so burdened in time to come...
e. The Constitution of the United States of America.
It has been said that the Constitution of the United States of
America was a crucial turning point in the history of the rule of
law.
Article VI:
This Constitution, and the Laws of the United States which shall
be made in pursuance thereof; and all Treaties made, or which
shall be made, under the Authority of the United States, shall be
the supreme Law of the Land; and the Judges in every State shall
be bound thereby, any Thing in the Constitution or Laws of any
State to the Contrary notwithstanding.
f. The Universal Declaration of Human Rights.
The Universal Declaration of Human Rights adopted by the
General Assembly of United Nations in Paris on December 10,
1948. It soon became the role model which stirred the International
Covenant on Economic, Social and Political Rights 1966, the
International Covenant on the Elimination of All Forms of Racial
Discrimination 1966, the European Convention on Human Rights
1950, the Arab Convention on Human Rights 1994, and so on.
g. As for Indonesia, the 1945 Constitution of the Republic of
Indonesia (Undang-Undang Dasar 1945) guarantees equal
protection of the laws. It also claims its power to provide proper
relationship between government and its citizens. It has been said
that the Constitution is tailored to the particular circumstances of
different communities, as it will serve better the purpose for which
it was designed, that is, to serve the common good.
- Section I declares form of the state and sovereignty.
- Section X protects citizens and residents rights.
- Section XA protects fundamental human rights.
- Section XIV guarantees economy and social welfare.

77
3.2. Law as an Autonomous Practice
Most accepted theories of jurisprudence look to reveal the
crucial or definitive aspects of the foundation of law. The term of law
and jurisprudence have been used diversely at different period of
times. Even today, their uses are ranging from the description to the
knowledge of law, to more specific explanation in answering legal
problems.
In recent times, law students may find law and jurisprudence
hard to articulate because of their scope of analysis range over many
different subjects and lay on many other disciplines, such as
sociology, politics, economics, and so on, which surprisingly be
considered as having little to do with law and legal study. What
comes harder is that there is still a group of legal scholars who
believes that jurisprudence is the only key to solve legal problems. As
much as I expect the same, it is way too hard to deny that
jurisprudence as social science, like any other sciences, is best
identified and well-explained with the help from other disciplines
which complemented to one another.
These issues of legalism may be brought from two of the most
influential theorists, that is to say Legal Positivism and Dworkin‘s
Law as Integrity. Despite on all what they disagree and agreed upon,
both wanting the same thing aiming at the same target, which is
creating law to dispense justice in social practice. Why do we have to
put so much effort in separating legal and non-legal form? Attacking
the same social study from another angle while what really matter is
producing sufficient law that applicable in current legal practices. At
the end, there is no such thing as pure legal practices, muddle with
the tainted soul of politics, displaced by entrepreneurs who suffer
from the law‘s assertiveness, and many more. Even the idea of justice
and legal certainty (which are pure fabrication of jurisprudence) in
Indonesia, in enforcing the eradication of corruption may seem a bit
too hard to choose. Which seems to be worse, convicting a wrong
person or failing to punish one? Maybe there is nothing wrong with
this question in the eyes of young idealists. I suppose they will not
make some sacrifice of principles, most probably their answer is
―both‖. Everybody would love to have the law that serves that way,
functioning as it is. But when rationality comes, the question of

78
applicability arrises. Troubled legal system? Limitation of law? Clash
of legal doctrines?. This leads to the fact that law and jurisprudence
alone cannot solve this problem without knowing another dimension
of law which other disciplines may explain better.
Such fusion of horizons does not necessarily focus on law‘s
weaknesses or searching its limitation, but to place law at the current
situation to do its duty. In modern society, law may turn out to be
autonomous when every single living individual becomes clear that it
is not always about legal doctrines nor legal system but the
foundation of a fair and just society, a guarantee of responsible
government, one of the main facilitator to nation‘s economic
performance and a vital contributor to nation‘s economic stability.

3.3. Law as a Tool to Promote Economic Efficiency

Instead following the never-ending path in the jurisprudence,
I advocate that law is best understood as a tool to promote economic
efficiency. Once succeeded, it can be used to maintain Indonesia‘s
economic growth and to achieve economic success. It is important for
the law to define the core aspects of proper legal practice in economic
performance in order to amplify the function of law and the nation‘s
main objectives.
But, how can the institution (of law) encourage efficient
transactions? I.e. avoiding market failure from the existence of
monopolies. Although the idea of monopoly may seem unjust for
most idealists, in this case law can be functioned as a tool to ensure
that monopoly practices are not always bad. Law may offer a solution
that monopoly practices in certain sectors are allowed when it comes
to the interest of people and regarding to the national security.
Another important area that law shall function to ensure
economically efficient transaction is the performance of contracts. At
this point, Indonesian legal system is challenged to function
efficiently in order to accommodate and corporate with both national
and international interest. National interest range from traditional
(private) transactions which based on adat recht, the national law, and
the Islamic law, while international interest may need to cover the
legal standing of lex mercatoria. From economics point of view, both
sides requires one thing in common, that is the flexibility of the law

79
and reasonably reliable legal system which protects all forms of
bargaining.
Therefore, Indonesian laws need to promote economic
efficiency in at least two ways: structure the law in order to remove
impediments that encourages private bargaining; and structure the
law to minimise the harm caused by failures in private bargaining29.
When private bargaining fails, the laws should be allocated to those
who value them the most. By some token, the primacy of efficiency
helps to harmonise the practice of law with other social practices.
When such law exists, it does function as a social tool aiming at the
promotion of economic efficiency that goes well with other social
practices.
From the movement of law and economics, it shall be
concluded to answer first basic question that it plays a major role in
creating and operating the law so that the rule of law can actually
distribute justice which becomes an economic standard. Of course the
idea of justice according to most legal positivists differ from
economics perspective, but again, the idea of economic justice help to
bring clarity of purpose in legal practices. Posner proposes that the
economic approaches not only encourage law to perform economic
efficiency, but these approaches enable the law to be seen, grasped,
and studied as a system-a system that economic analysis can
illuminate, reveal as coherent, and in places improve30.

3.4. Some Fundamental Principles

Economic legal principles produce quality which demonstrate
dimension of the law, so that they can scale both legal and economics
elements in every principle. Some experts consider principles are the
building blocks to the foundation of law. In terms of the rule of law in
Indonesia, legal principles does not exists only to indicate their
objectives and should not be viewed as buoys, but efficient legal
principles should at least, first, constitute the very ground of legal
binding (effective enforcement). Second, bonding the interests and
goals of the state‘s sovereignty and the people (equilibrium). Third,

29 These models are also known as Normative Coase and Hobbes

Theorem.
30 Posner, loc cit, p. xxi.

80
organise gap-filling (reliability). Fourth, culturing legal awareness
(maximise rationality). Fifth, promoting the nature of law by
regulating rule-based regulations (utility calculus).
From law and economics point of view, the rule of law should
stipulate remedy, that is punishment and rewards as incesntive to
alter behaviour. As a consequence of being Rechstaat, Indonesia
should not only focuses on enforcing the law but rewarding
obedience. Remedy in the rule of law also encourages society to
achieve economic efficiency and creates observance from the quality
of the rule of law that government depends.
I have adopted some fundamental principles which reflect the
quality of the rule of law. Bringing up the idea of a quality may seem
a bit too good to be true. However, in order to model strategic action
in creating efficient rules of law, I shall embark from Fuller‘s
argument. He argued that there are eight principles of proper law
making:
1. there must be rules;
2. the rules must be prospective and not retrospective;
3. the rules must be published;
4. the rules must be intelligible;
5. the rules must not be contradictory;
6. compliance with rules must be possible;
7. the rules must not be constantly changing; and
8. there must be a congruency between the rules as declared
and published and the actions of officials responsible for
the application and enforcement of such rules.31
Hart sees three main problems in most laws, that is, the
problem of uncertainty, the problem of the static nature of laws, and
the problem of inefficiency.32 Bingham suggests his basic principles of
the rule of law:
1. the law must be accessible and so far as possible intelligible,
clear and predictable;
2. questions of legal right and liability should ordinarily be
resolved by application of the law and not the exercise of
discretion;

31 Morison, Wayne, loc cit, p. 156-160.

32 Ibid., p. 130.
81
 3. the laws of the land should apply equally to all, save to the
extent that objective difference justify differentiation;
4. ministers and public officers at all levels must exercise the
powers conferred on them in good faith, fairly, for the
purpose for which the powers were conferred, without
exceeding the limits of such powers and not unreasonably;
5. the law must afford adequate protection of fundamental
human rights;
6. means must be provided for resolving without prohibitive
cost or inordinate delay, bona fide civil disputes which the
parties themselves are unable to resolve;
7. adjudicative procedures provided by the State should be
fair;
8. the rule of law requires compliance by the state with its
obligations in international law as in national law.33
He quotes34:
‗The Rule of Law is the foundation of a civilised society. It
establishes a transparent process accessible and equal to all. It
ensures adherence to principles that both liberate and protect. The
IBA calls upon all countries to respect these fundamental principles.
It also calls upon its members to speak out in support of the Rule of
Law within their respective communities‖. September 2005, the
Council of the International Bar Association.

The Rule of Law concept, in essence, embodies a number of

important inter-related ideas. First, there should be clear limits to
the power of the state. A government exercise its authority through
publicly disclosed laws that are adopted and enforced by an
independent judiciary in accordance with established and accepted
procedures. Secondly, no one is above the law; there is equality
before the law. Thirdly, there must be protection of the rights of the
individual.
In modern society, the value of the Rule of Law is that it is essential
for good governance. Governments must govern in accordance with
established laws and conventions and not in an arbitrary manner.

33 Tom Bingham, The Rule of Law, Penguin Books, London, 2010, p. 37-
119.
34 Ibid., p. 171-174.
82
 The law must set out legitimate expectations about what is
acceptable behaviour and conduct of both the governed and the
government. This is important: the law must apply equally to the
government and individual citizens. Mr. S. Jayakumar, Deputy
Prime Minister, Co-ordinating Minister for National Security
and Minister for Law of Singapore.
Judge Hisashi Owada of International Court of Justice listed
components of the rule of law: restraint on state autonomy in inter-
state relations; the supremacy of the law; equality before the law;
separation of powers; the independence of the judiciary; the
international rule of law in relation to the individual.
Sternford Moyo, former president of the Law Society of
Zimbabwe, drew attention to a declaration on the rule of law made
by the International Commission of Jurists at Athens in 1955. It
provided that:
1. the State is subject to the law;
2. governments should respect the rights of individuals under
the Rule of Law and provide effective means for their
enforcement;
3. judges should be guided by the Rule of Law, protect and
enforce it without fear or favour and resist any
encroachment by governments or political parties in their
independence as judges;
4. lawyers of the world should preserve the independence of
their profession, assert the rights of an individual under the
Rule of Law and insist that every accused is accorded a fair
trial.
Bingham concluded that the concept of the rule of law is not
fixed for all time. Some countries do not subscribe to it fully, and
some subscribe only in name, if that. Even those who do subscribe to
it find it difficult to apply all its precepts quite all the time. But in a
world divided by differences of nationality, race, colour, religion and
wealth it is one of the greatest unifying factors, perhaps the greatest,
the nearest we are likely to approach to a universal secular religion. It
remains an ideal, but an ideal worth striving for, in the interests of
good government and peace, at home and in the world at large.

83
 In Indonesia, although the concept of the rule of law have
been set through the Law of the Republic of Indonesia Number 12
year of 2011 concerning the Formation of Statutes (Undang-Undang
Nomor 12 Tahun 2011 tentang Pembentukan Peraturan Perundang-
Undangan), which stated basic principles in regulating the rule of law,
new economic principles continue to develop.
According to it, the basic principles that the rule shall posses at least:
1. clarity of purpose;
2. institutional or accurate forming institutions;
3. correspondence between forms and content material;
4. executable;
5. efficiency and utility;
6. clarity of formulation;
7. impartiality.
Another principles like transparency, accountability, and
equity are importantly emphasised in formulating and performing
the law of the Republic of Indonesia Number 40 year of 2007
concerning Limited Company. This due to the increase role of
business entities both nationally and internationally in promoting
economic growth and development in Indonesia, resulted from the
globalisation insistence that requires the performance of good
governance.
Still looking at Indonesia‘s attempt in boosting economic
growth through the eradication of corruption. The principle of legal
certainty, proportionality and public interest are employed in the law
of Republic of Indonesia Number 20 year of 2001 (Undang-Undang
Republik Indonesia Nomor 20 Tahun 2001). To support this, a special
commission (Komisi Pemberantasan Korupsi – Corruption Eradication
Commission) had been established with extensive authority which
stipulated in the law of Republic Indonesia Number 30 year of 2002.
In terms of economic performance at regions, the law of
district autonomy has been established mainly regulates on how to
pass or carry out regulations in conducting good governance with
basic principles, namely: terminology clarity, recognisable, equality,
legal certainty, and law enforcement.
As social welfare in Indonesia, the state defines it as the
fulfilment of conditions of material, spiritual and social needs of

84
citizens in order to live well and be able to develop themselves so that
they can perform their social function. The state is fully committed to
be responsible for the implementation of social welfare which aiming
at: improving the level of social welfare, quality, and survival;
restoring social functions in order to achieve self-sufficiency;
improving social resilience in preventing and dealing with social
welfare; increasing the capacity, interests, and social responsibilities
institutionally and socially sustainable; increasing the capacity and
public participation in the implementation of social; and improving
the quality of management of social welfare 35. In order to fulfil these
credible commitments, the applied principles in the law of the
Republic of Indonesia Number 11 year of 2009 on Social Welfare are:
solidarity, justice, expediency, integrity, partnership, transparency,
accountability, participation, professionalism, and sustainability.
According to Supancana, Indonesia‘s reformation era since
late 1990‘s is the new era in regulatory reform. Although the process
has not always been conducted in systematic ways, Indonesia has
started to adopt tools in order to create efficient regulatory, such as
RIA (Regulatory Impact Analysis), ROCCIPI (Rule, Opportunity,
Capacity, Communication, Interest, Process and Ideology), Fishbone,
MAPP (Model Analisis Peraturan Perundang-undangan – Laws and
Regulations Model of Analysis).36

4. Conclusion
It can be said that Indonesia in general, has begun to apply
essential economic approaches in formulating legal policies. These
are fine aspirations, and aspirations without action are worthless. As
law and human evolved, we are enjoined to be doers, not viewers, or
even worse, exploiters who wreck the system. For a start, it is a good

35 Compare with Pigou‘s aim of welfare: To ascertain how far the free

play of self-interest, acting under the existing legal system, tends to distribute the
country‘s resources in the way most favorable to the production of a large national
dividend, and how far it is feasible for State action to improve upon ‗natural‘
tendencies.
A.C. Pigou, The Economics of Welfare (4th edition) 1932. Ronald H.
Coase, The Problem of Social Cost, Journal of Law and Economics, vol.3, The
University of Chicago Press, 1960, p. 29.
36 I.B.R. Supancana. Berbagai Perspektif Harmonisasi Hukum Nasional dan

Hukum Internasional, Penerbit Universitas Atma Jaya, 2012, p. 1-12.

85
start. Indonesia is starting to understand the necessities in planning
strategic actions in the legal context in order to achieve economic
success. Although for some people, law may –still- seem like a bunch
of mystery of rules or technical argument, but it is an undeniable fact
that economics provide normative standard for evaluating law and
policy. When analysed economically, law can be transformed into
instruments for achieving important social goals, and yes it is socially
desirable.
I don‘t find it hard at all accepting an academic fact that the
economic approach to law can determine the quality of law and
suggests what counts as ―law‖. It also gives a thoroughly convincing
map for the nation to be capable of, not only accommodating and
facilitating economics needs, but to improving its practices in the
globalisation era. The primacy of efficiency that economics presented
provides a general framework to model effective legal outcome and
common purposes to unify areas of legal activities. Indeed, it is an
important part of Indonesia‘s plans for economic success that the
country can establish predictable and stable legal regimes.

86
 REFERENCES

Antony, M.J. Law for the Layman,HPB, New Delhi, 2008.

Bingham, Tom. The Rule of Law, Penguin Books, London, 2010.
Burns, Peter. The Leiden Legacy; Concepts of Law in Indonesia, KTLV
Press, Netherlands, 2004.
Calabresi, Guido. Some Thoughts on Risk Distribution and the Law of
Torts, Yale Law Journal, USA, 1961.
Coase, R.H. The Problem of Social Cost, The Journal of Law and
Economics, Vol.III, The University of Chicago Press, 1960.
__________. The Firm, the Market and the Law, The University of
Chicago Press, 1988.
Cooter, Robert. How the Law Circumvents Starrett‘s Nonconvexity,
Vol. 22, Journal of Economic Theory, University of
California, Berkeley, 1980.
Cooter, Robert & Ulen, Thomas. Law & Economics, 5th edition,
Pearson Addison Wesley, London, 2008.
Farnsworth, Ward. The Legal Analyst; A Toolkit for Thinking About
the Law, University of Chicago Press, 2007.
Friedman, David D. Law's Order, Princeton University Press, 2000.
Friedmann, W. Legal Theory, Fourth Edition, Stevens & Sons Limited,
London, 1960.
Garner, Brian A. Black Law Dictionary, 8th edition, Thompson West
Group, USA, 2004.
Holmes, Oliver Wendell, Jr. The Common Law, The John Harvard
Library, USA, 2009
Morrison, Wayne. Jurisprudence-from the Greeks to Post Modernity,
Cavendish Publishing, UK, 2002 - reprinted and translated by
Zhang Wan Hong.
Pejovich, Svetozar. Law, Informal Rules and Economic Performance,
EE, USA, 2008.
Polinsky, Mitchell. An Introduction to Law and Economics, 3rd
Edition, Aspen Publishing, 2003.
Posner, Richard A. Economic Analysis of Law, seventh edition, Aspen
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________________. How Judges Think, Harvard University Press,
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87
Seidman, Robert. S, The Satate, Law, and Development, St. Martins,
USA, 1978.
Supancana, I.B.R. (2012), Berbagai Perspektif Harmonisasi Hukum
Nasional dan Hukum Internasional, Penerbit Universitas Atma
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Wessels, Walter J. Economics, Barron‘s Educational Series, USA, 2006.

88
INTERCALATING LAW AS A TOOL TO PROMOTE ECONOMIC
EFFICIENCY IN INDONESIA37

Fajar Sugianto38

Abstract
Indonesia as a Rechtsstaat like any other developing countries,
its society is based on patterns and economic classes, overall
obedience to the law is not easy. In heterogeneous society formed of
groups based on religion, race, language, and wealth, it is one of the
most difficult unifying factors in terms of compliance with the law.
Conflict of interest tend to make any law may be resisted. As a
consequence being a Rechtsstaat, the greatest difficulty is to produce
efficient legal outcomes and consistency of legal practice. The efficacy
of law transforms into a legal ―menu‖ that provides alternatives to
choose from according to people‘s preferences, when to pick on legal
certainty (veritas) and when to elect justice (justitia). This indicates
that law is no longer functioning in subjecting human behaviour and
also shows disparity in legal practice which encourages inconsistency.
At this point, the law and economics offers economic efficiency as a
framework to model effective legal outcome and common purposes
to widely unify disparate areas of legal activities. The primacy of
efficiency helps to harmonise the practice of law with social practices.
When such law exists, it does function as a social tool aiming at the
promotion of economic efficiency that goes well with other social
practices.
Indonesian heterogeneous societies, like any other societies in
any other countries are complex. Law deals with complex social, and
conflicting societies apply law as a powerful instrument of regulation
and control. Although law acts as an independent agent to facilitate
their complexity, with economic approach, efficiency is an ideal

37
The original and unedited version of this paper was submitted to
legal journal of Brawijaya University. Reproduced by the writer for
academic purpose only.
38
Lecturer at Law Faculty of University of 17 Agustus 1945 Surabaya,
Indonesia and advocate at Indonesian Advocates Association (PERADI-
Perhimpunan Advokat Indonesia).
89
model that guides legal practice. It is because most people as homo
economicus (except children and the profoundly retarded) in all of
their activities has one thing in common, that is the need for
efficiency, perhaps efficiency is the nearest we are likely to approach
to a universal secular ―religion‖. Efficiency in law simplifies how law
works in different society, especially in heterogeneous communities.
This approach does not reduce law to economics (or vice versa, for
that matter), it claims simply that law and economics have a lot to
learn from one another.
Keywords: economic efficiency, consistent legal practices, law and
economics.

I. Introduction
Indonesia as a Rechtsstaat seems to be having typical
difficulties in legal practice both in attaining justice (justitia) and
enforcing the rule of law (veritas) at the same time. As a consequence
being a Rechtsstaat, the greatest difficulty is to produce efficient legal
outcomes and consistency of legal practice.
In general, a Rechtsstaat guarantees equality before the law as
well as providing equal protection, protects individual rights and
upholds sovereignty. According to the Constitution of the Republic of
Indonesia (Undang-Undang Dasar 1945), Indonesia must be able to
produce these two legal outcomes together, that is in dispensing
justice and providing legal certainties. As a result, this ideology of the
Constitution cannot be realised and had produced greater impacts to
the law. The efficacy of law transforms into a legal ―menu‖ that
provides alternatives and varieties to choose from according to
people‘s preferences. Legal practitioners seem to have plenty of
choices, when to choose the rule of law and when to elect justice. In
terms of obeying the law, it seems to offer some sort of freedom in
understanding the law, when to interpret them dogmatically, when
to identify them with theoretical perspectives, and when to build up
philosophical analysis. Even in forming legal reasoning and
organising legal standing, the law seems to justify the sacrifices of
principles, such as: morality, but on the other hand, there will be
times to ask for it. These indicate that law is no longer functioning in
subjecting human behaviour. Furthermore, these also show disparity

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in legal practice which encourages inconsistency. At this point, the
law and economics offers economic efficiency as a framework to
model effective legal outcome and common purposes to widely unify
disparate areas of legal activities. By some token, the primacy of
efficiency helps to harmonise the practice of law with social practices.
When such law exists, it does function as a social tool aiming at the
promotion of economic efficiency that goes well with other social
practices. To understand this concept, it is important to view some
dimensions of law in Indonesia as systems and methods that
commonly practiced.

II. Existing Systems

A. National Law
National law refers as a set of rules that govern the patterns of
behaviour in a given society. Beyond this, however, there are serious
conditions after reformation era as a new era in regulatory reform in
Indonesia. Although the aim of reformation since late 1990‘s was
mainly to promote and speed-up democratisation, reformation
resulted in hyper-regulated, overlapping, contradicting, inconsistent,
unsynchronised and inharmonious, sectoral, and creating multi-
interpretation in laws. According to Supancana, hyper-regulated or
overregulated can be seen in the fact that at national level only. The
number of regulations covering from constitution, laws, government
regulations, and presidential regulations have reached almost 20.000
regulations. This number excluded regulations at ministerial or sect
oral level. The number of regulations from 33 provincial governments
and 491 regency/mayoralty reached about 18.000 regulations and still
growing. He also emphasises that in many occasions, those
regulations are overlapping. Sometimes the similar issues are
regulated by many different regulations. This may be caused from
unclear division of main functions of governmental institutions and
also conflict of interest. Contradiction among regulations also happen
both vertically (between central and local regulations) and
horizontally (between sectors). He concluded that these create

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inconsistencies which derive inharmonious and unsynchronised
conditions.39
At present times, Indonesia is starting to understand the
necessities in planning strategic actions in the legal context in order to
achieve economic success that the country can establish predictable
and stable legal regimes. This effort can be seen from the actualisation
of statutory laws such as the Law of the Republic of Indonesia
Number 12 year of 2011 concerning the Formation of Statutes
(Undang-Undang Nomor 12 Tahun 2011 tentang Pembentukan Peraturan
Perundang-Undangan), which stated basic principles in regulating the
rule of law. Namely: clarity of purpose; institutional or accurate
forming institutions; correspondence between forms and content
material; executable; efficiency and utility; clarity of formulation;
impartiality.
Other principles like transparency, accountability, and equity
are importantly outlined in formulating and performing the law of
the Republic of Indonesia Number 40 year of 2007 concerning
Limited Company. This due to the increase role of business entities
both nationally and internationally in promoting economic growth
and development in Indonesia, resulted from the globalisation
insistence that requires the performance of good governance.
Still looking at Indonesia‘s attempt in achieving economic
success through the eradication of corruption. The principle of legal
certainty, proportionality and public interest are employed in the law
of Republic of Indonesia Number 20 year of 2001 (Undang-Undang
Republik Indonesia Nomor 20 Tahun 2001). To support this, a special
commission (Komisi Pemberantasan Korupsi – Corruption Eradication
Commission) had been established with extensive authority which
stipulated in the law of Republic Indonesia Number 30 year of 2002.
Furthermore, in terms of economic performance at regions,
the law of district autonomy has been established mainly regulates on
how to pass or carry out regulations in conducting good governance
with basic principles, namely: terminology clarity, recognisable,
equality, legal certainty, and law enforcement.

I.B.R Supancana. Berbagai Perspektif Harmonisasi Hukum Nasional dan

39

Hukum Internasional, Penerbit Universitas Atma Jaya, Jakarta, 2012, p. 1-4.

92
 These realisations show that economics principles can be used
to law by simply asking what effects do laws have? And given the
effects of laws, which are socially best? Such questions about the
influence and desirability of laws have been investigated by legal
scholars and economists in a new, rigorous, and systematic manner
since the 1970s. Their approach, called economic, is widely
considered to be intellectually compelling and to have revolutionised
thinking about the law.40
Law and economics radically transformed legal thinking.
Traditional forms of legal practitioners were mostly backward-
looking. One reasoned from ―legal menu‖ to decide present disputes,
seemingly without much concern (at least explicitly) for the effect
today's decision would have on future behaviour. Yet, law is
necessarily forward-looking. To be sure, a major function of our legal
system is to resolve present disputes, but law's principal function is
to regulate future behaviour. The law and economics movement
succeeded because it recognised that legal practitioners cannot
administer justitia or veritas solely retrospectively. They must also
consider what rules their decisions will create to guide the behaviour
of other actors in the future. The genius of law and economics was
giving judges a systematic mechanism for predicting how rules will
affect behaviour. Moreover, Law and economics is a branch of
jurisprudence that aims to frame legal questions in terms of economic
efficiency. While some maintain that legal questions can purely be
reduced to economic ones, the more conservative stance that
economics can describe at least part of the legal question.

B. Customary Law
With the total area of 1,904,569 square kilometres, Indonesia
consists of 34 provinces with population of over 248,000,000 people.
Across its many islands, it also consists of hundreds of ethnic groups,
mainly: Javanese 40.6%, Sundanese 15%, Madurese 3.3%,
Minangkabau 2.7%, Betawi 2.4%, Bugis 2.4%, Banten 2%, Banjar 1.7%,
other or unspecified 29.9% (2000 census). These ethnic groups have
their own customary practices (adatrecht) which are recognised and

40Steven Shavell. Foundations of Economic Analysis of Law, Belknap

Harvard, Mass., 2004.
93
protected by the law. When it comes to a change through the law, it is
difficult to achieve where desired change would come into conflict
with customary practices, more so when they have religious or deep
rooted social significance41 . So far, no establishment ever be made
(and probably never will) to appoint which ethnic groups is credible
enough to be a national standard in terms of formulating the law to
subject Indonesians in general.
For Dayak tribe (Borneo island aborigines), it is their custom
to host and held gambling not only during traditional ceremonies but
also gambling became daily errand, while national law (and probably
most laws) aim at controlling gambling as it considers to be unlawful
act. For most Papuans, the law however failed to influence their
attitude to liquor consumptions because consuming alcohol is
considered legal according to the Papuans customary law.
Another difficulty is found when these ethnic groups show
various psychological factors, that is habit. There is an old saying:
―Habits die hard‖, and habits often act as resistant to change whether
a law is morally good or whether it promotes social welfare. In this
case, habits may not only have the effect of preventing a legal
measure but delaying effect. This is ignorance, because they have
traditional beliefs, and their social values are often differ from one
ethnic to another. When a national law limits long-established
practices or behaviours, certain groups that feels threaten will likely
disfavour such a law. It can be said that ignorance and obedience to
the laws may look the same for them as long as not breaking national
laws.

C. Islamic Law
Indonesia is the home to the world‘s largest Muslim
population with total of 86.1% population (2000 census). This makes
Islamic law in most occasions play a major role both in regulating and
implementing the law.
According to Kamali, law in the Islamic legal order is part of a
wider normative system- Shariah which refers to commands,
prohibitions, guidance and principles that God has addresses to

Burton Wright and John Weiss. Social Problems, Little Brown and
41

Company, Boston, 1980, p. 8.

94
mankind pertaining to their conduct in this world and in the next.
The rules of Shariah mainly consist of two categories: ibadat
(devotional matters) and muamalat (civil transactions). The first
category basically consists of fundamental rules which subjecting
human to the relationship with the Creator, whereas the second is
concerned with relations between man and his fellow human beings42.
Out of the general body of Shariah have been derived a large
number of rules in respond to human needs, social progress, and
change. The rules have their source in ijma (consensus of opinion
among jurist)43. The bulk of the Islamic law has been built up by the
exercise of ijtihad (juristic interpretation and construction) which have
to be in consonance with the Quran, the Sunnah, and supported by
ijma.44
The nature of Islamic law shaped majority of Indonesians (or
probably for most Muslims) how they see a ―law‖. Although the
main objective of both Islamic law and national law is generally to
regulate and subjecting human behaviour, there are significant
differences between the two. According to Hamid, distinction
between Islamic law and human law45:
a. Islamic law derives its sources, authority and validity from the
Quran which embodies the instructions and commandments of
God, and the Sunnah, which consists of divinely inspired acts and
teachings of the Prophet. Human law is laid down, or recognised,
by an individual or a group of individuals in who lies for the time
being the political power in society. Non-Islamic law and legal
systems, are thus the creation of human will.
b. Islamic law to the extent it is contained in the Quran and the
Sunnah, is permanent and unchangeable. Human law is
changeable, and is changed by an individual or a group of

42 Muhammad Hasim Kamali. Source, Nature and Objectives of Shariah.

The Islamic Quarterly, Vol.XXXIII, Number 4, 1988, p. 215.

43 Ibid, p. 219.
44 Muhammad Hashim Kamali. Shariah and the Challenge of Modernity‘,

Jurnal JKIM, Vol.2, 994, p. 3.

45 Abdul Hamid. The Islamic Theory of International Relations: New

Directions for Islamic Methodology, Herndon: International Institute of Islamic

Thought, 1987, p. 55-57.
95
 individuals in whom the political power is for the time being
vested.
c. Islamic law, which in its pure form is divine law, is distinct from
human law in that it has its own ethical norms of good and bad,
right and wrong, virtue and vice. In many cases what is regarded
as good by a human law may be regarded an evil in Islamic law.
For example, sexual relationship between two unmarried persons
is not allowed by Islamic law though non-Islamic legal systems
permit them as part of individual freedom.
d. The sanction behind human law is the threat of punishment,
which may vary in degree and form from one society to another.
Islamic law imposes an additional sanction for disobedience to law.
To obey the law is part of faith and religious duty. A Muslim will
accountable before God on the Day of Judgement for his acts and
omissions.

D. Duty to Obey the Existing Systems

The issue of obedience may be brought from two of the most
influential theorists, that is to say Legal Positivism and Dworkin‘s
Law as Integrity. Austin 46argued that we obey the law because we
fear we will be punished. He emphasised that law is what is
commanded by the sovereign authority in the society and that the
commands are backed by the ever present threat of sanctions.
It is true that an oppressive regime might secure obedience to
its dictates by creating conditions of terror in which fear becomes the
foremost reason for obeying the law. But in democratic societies like
in Indonesia, the legal and political systems are founded on defined
constitutional principles and the source of law is traceable in
legitimate authority. Weber ads that there are limitations on the
coercive power of law. The desire to avoid legal coercion is but one of
many motives for law-abiding behaviour, one that increases the
probability of conformity but does not guarantee it47. However, it is
not always the fear that motivates people to obey the law. One may
view the system and its function quite differently from others,

John Austin. Lectures on Jurisprudence, John Murray, London, 1832.

46

Max Weber. Law in Economy and Society, edited by Max Rheinstein,

47

Cambridge, Mass.: Harvard University Press, 1954.

96
dictated by his preferences. There are factors that limit the
compliance with law, such as social factors, psychological factors, and
cultural factors which are briefly considered earlier. At most, such
laws in Indonesia allow lawmakers to predict that certain forms of
behaviour will conform to the requirements of legal rules.
Another view is that law has essential moral content, a duty to
obey the law. Moral and social rules, though less explicit and less
formal in their nature and content, also play a significant role in
society‘s efforts to force them to follow a certain course of conduct.
One reason for obedience to law at this point is the respect of people
in a society whose submit themselves to legitimate authority. Having
this said that this kind of obedience motivates most individuals
accept the law has the right to regulate behaviour and should be
obeyed. That is why this type of viewers desire the law must come
from the people to the people, thus the law earns respect for its social
status and it is obeyed because it is the people‘s law.
Indonesia like any other developing countries, its society is
based on patterns and economic classes, overall obedience to the law
is not easy. In heterogeneous society formed of groups based on
religion, race, language, and wealth, it is one of the most difficult
unifying factors in terms of compliance with the law. Conflict of
interest tend to make any law may be resisted.
In terms of obeying the Islamic law, there are few
fundamental duties on which Islam is founded:
1. The belief in one God-the belief that God alone is the Creator,
Ruler, Controller and Sustainer of all that exists 48. The universe
exists and functions because God so wills. God exercises power on
this earth over those whom He has created in it. He alone is
Sovereign and the Master of man‘s destiny. Only He can guide
man through the course of life and instruct him regarding what is
good and evil. God is the ultimate Law-Giver, and man can make
law only subject to the Supreme Law of God.49

48 Quran; 6:73; 13:16; 20:8; 7:54; 32:5; 2:107; 25:2.

49 Ibid, 35:3; 60:58; 6:164.
97
2. Prophet Muhammad is the last of the messengers sent by God to
mankind. God‘s message took two forms: the Quran and the
Sunnah.50
3. The belief in the hereafter (Akhirah). The time is fixed by God.
Everyone on the Day of Judgement will be called upon to render a
complete account of his or her acts and omissions.51

III. Existing Functions

A. Law as a Method of Conflict Resolution
Societies evolve, they experience change and grow. They
create policies, rules, even ethics/culture that continuously develop
and change. Some groups of society tend to change more rapidly than
those who likely more primitive and traditional. National law in
primitive and simple societies (such societies have in fact existed and
exist now), may be taken to refer entirely different things when
compared to law in a modern society. Most likely they organise their
life in compliance with their rules which are simple, easily
identifiable, and their limited understanding of justice. For instance
something is legal only if it is just, therefore, something is not law if it
is unjust. On the other hand, communities in a modern society do not
merely follow the fixed routines of the past but have goals toward
which they strive, and they intend to accept diversity.
If there is social life, there will be conflict. Indonesian
heterogeneous societies, like any other societies in any other countries
are complex. Law deals with complex social, and conflicting societies
apply law as a powerful instrument of regulation and control. In fact,
law acts as an independent agent to facilitate their complexity. They
belief in the capacity of law as a method of conflict resolution.
In terms of conflict resolution, law performs some functions:
a. Law provides legal means by which all forms of conflicts must be
settled by providing legal procedures that regulate the ways in
which rights and liabilities can be protected and imposed by
officials to conclude claims of the conflicting parties.

50 Ibid, 42:13; 15:9; 85:21-22; 3:84; 98:1-2; 53:2-4.

51 Ibid, 19:85-86.
98
b. The judicial systems are backed-up by enforcement machineries
that enable parties to create binding orders and binding force of
law.
c. Law creates protections that encourage parties to enter into
interactions in reliance of law‘s ability to defend their interests.
d. Law creates legal effect that breaches and unlawful act will be
enforced or compensated.
e. By settling a dispute, law prevents future disputes from arising
and inhibits further unregulated conflicts.
f. (National and Islamic) law can be transformed into an
independent agent which facilitate and integrate the nature of
problems.
g. The availability of (legal) institutions for dispute settlement
decreases the use of unlawful force/violent between conflicting
parties, such as duelling, feuding, thuggery, and public shaming.

B. Law as a Mechanism of Social Control

The Constitution of the Republic of Indonesia guarantees
equal protection of the laws. It also claims its power to provide
proper relationship between government and its citizens. It has been
said that the Constitution is tailored to the particular circumstances of
different communities, as it will serve better the purpose for which it
was designed, that is, to serve the common good. As the supreme law,
it confers fundamental principles that contain mechanism of power
control for the protection of the interests and liberties of the citizens.
Controls become increasingly important as groups of society
are created on the basis of professions, values, ideologies and other
distinctive characteristics. In order to establish social control, the
Constitution protects human right (Chapter XA). For instance, Article
28J organises social control as:
Article 28J:
i. Every person shall have the duty to respect the human rights of
others in the orderly life of the community, nation and state.
ii. In exercising his/her rights and freedoms, every person shall have
the duty to accept the restrictions established by law for the sole
purposes of guaranteeing the recognition and respect of the rights
and freedoms of others and of satisfying just demands based upon

99
 considerations of morality, religious values, security and public
order in a democratic society.
Furthermore, Article 28E regulates:
(1) Every person shall be free to choose and to practice the religion
of his/her choice, to choose one's education, to choose one's
employment, to choose one's citizenship, and to choose one's
place of residence within the state territory, to leave it and to
subsequently return to it.
(2) Every person shall have the right to the freedom to believe
his/her faith, and to express his/her views and thoughts, in
accordance with his/her conscience.
(3) Every person shall have the right to the freedom to associate, to
assemble and to express opinions.
Article 28H:
(1) Every person shall have the right to live in physical and spiritual
prosperity, to have a home and to enjoy a good and healthy
environment, and shall have the right to obtain medical care.
(2) Every person shall have the right to receive facilitation and special
treatment to have the same opportunity and benefit in order to
achieve equality and fairness.
(3) Every person shall have the right to social security in order to
develop oneself fully as a dignified human being.
(4) Every person shall have the right to own personal property, and
such property may not be unjustly held possession of by any party.
Another some fundamental principles are governed in Chapter
I that declares form of the state and sovereignty, Chapter X that
protects citizens and residents rights, Chapter XIII about education,
and Chapter XIV that guarantees economy and social welfare.

C. Law as an Instrument of Social Change

Both of the Constitution and most ordinary Indonesian
statutory laws aimed to achieve one common goal that is social
welfare and national economy. The Constitution guarantees social
welfare (Chapter XIV, Article 34):
(1) Impoverished persons and abandoned children shall be taken care
of by the State.

100
(2) The state shall develop a system of social security for all of the
people and shall empower the inadequate and underprivileged in
society in accordance with human dignity.
(3) The state shall have the obligation to provide sufficient medical
and public service facilities.
(4) Further provisions in relation to the implementation of this Article
shall be regulated by law.
In order to fulfil these credible commitments, the Law of
Republic of Indonesia Number 11 year of 2009 concerning on Social
Welfare clearly defines social welfare as the fulfilment of conditions
of material, spiritual and social needs of citizens in order to live well
and be able to develop themselves so that they can perform their
social function. The state is fully committed to be responsible for the
implementation of social welfare which aiming at: improving the
level of social welfare, quality, and survival; restoring social functions
in order to achieve self-sufficiency; improving social resilience in
preventing and dealing with social welfare; increasing the capacity,
interests, and social responsibilities institutionally and socially
sustainable; increasing the capacity and public participation in the
implementation of social; and improving the quality of management
of social welfare52.

IV. Efficacy of the Primacy of Efficiency

A. The Economic Approach to Law.
Legal practitioners may tend to think of law as a means
(solely) of securing legal certainty or dispensing justice, unaware that
law also provides a complex structure of what economists would call
"incentives" which promote what economists would call "efficiency".
A perfect example of an efficiency improvement is where a firm
produces harmful effluents that contribute to polluting the natural

52 Compare with Pigou‘s aim of welfare: To ascertain how far the free
play of self-interest, acting under the existing legal system, tends to distribute the
country‘s resources in the way most favorable to the production of a large national
dividend, and how far it is feasible for State action to improve upon ‗natural‘
tendencies.
A.C. Pigou, The Economics of Welfare (4th edition) 1932. Ronald H.
Coase, The Problem of Social Cost, Journal of Law and Economics, vol.3, The
University of Chicago Press, 1960, p. 29.
101
environment. A firm that releases harmful effluents can simply be
prevented from doing so, thus likely leading to the closing of the firm.
However, if the cost to society from, say, a ton of effluent can be
accurately measured, the firm can be asked either to pay a price per
ton of effluent equal to this cost or cease production. The firm can
then find a profit-maximising level of effluent production, and if
profits are positive at this level, the new situation, with a lower level
of effluent and a tax on the effluent, may be more efficient than either
the original situation or simply closing down the firm53.
From Law and Economics point of view, law does not merely
force people to follow a certain course of conduct or simply urge
social change/control by its authority to act as a binding force, but it
employs a variety of means of altering human behaviour. The basic
assumption of economics, even in law activities that involves social
interactions is that people are rational and forward looking. Meaning
that people always demand and use any available resources to meet
their needs. In fact, what we want exceeds with what available no
matter how wealthy or poor we are as individuals or even as a nation.
The people‘s infinite need of satisfaction is a predictable consequence
of the gap between desirability and resources availability. The need
to satisfy themselves often refers as profit maximisation in both non-
monetary and or monetary satisfaction. This demand and need to
maximise profit is an observable trait of human behaviour in
economics, while law generally regulate and justify human behaviour
to maximise society‘s wealth.
If lawmakers ask, ―How will a sanction affect human
behaviour?‖, then economists may consider legal sanctions look like
prices. People presumably respond to these sanctions as much as they
respond to prices. Economics in this case provides a scientific theory
to predict the effects of legal sanctions on behaviour. Therefore, it can
be said that economics provides a behavioural theory to predict how
people respond to law. The use of this theory and its fundamental
concepts help us to understand in evaluating law. The approach
enables lawmakers to understand a broader domain of the law as the
enterprise of subjecting human behaviour. If law indeed is the

53Coase, R.H., The Firm, The Market, and The Law, The University of
Chicaga Press, USA, 1988.
102
enterprise of subjecting human behaviour to the governance of rules,
it is sine qua non of the successful working of law that people should
have knowledge of law and should have confidence in it54. How law
can do its duty to achieve all its purposes without knowing an
economic fact that the poor is ruled by a system which he neither
understand nor trusts. In a country like ours which is governed by
the rule of law, it is essential that the law must become community
property to maximize overall social utility55. Posner describes such
ability that law can provide is the economic conception of justice. In
Indonesia, this conception can be blended equally with the doctrine
of the Rechtsstaat which protects individual rights as well as upholds
sovereignty to provide social welfare.56
Having said this, economics plays a major role in creating and
operating the law so that the law can actually distribute justice which
becomes an economic standard. Of course the idea of justice
according to most legal positivists differ from economics perspective,
but again, the idea of economic justice help to bring clarity of purpose
in legal practices.
The law and economics movement provides a general theory
of law as well as conceptual tools for the clarification and
improvement of its practices. The general theory is that law is best
viewed as a social tool that promotes economic efficiency. With
economic approach, efficiency is an ideal model that guides legal
practice. Why? Because most people as homo economicus (except
children and the profoundly retarded) in all of their activities have
one thing in common, that is the need for efficiency, perhaps
efficiency is the nearest we are likely to approach to a universal
secular ―religion‖. Efficiency in law simplifies how law works in

54 Foreword from P.N. Bhagwati, M.J. Anthony. Law for the Layman,

HPB, New Delhi, 2008, p. viii.

55 Wayne Morisson. Jurisprudence-from the Greeks to Post Modernity,

Cavendish Publishing, UK, 2002, reprinted and translated by Zhang Wan

Hong, p. 190.
56 Chapter 1, article 1; The 1945 Constitution of the Republic of

Indonesia-as amended by the First Amendment of 1999, the Second

Amendment of 2000, the Third Amendment of 2001 and the Fourth
Amendment of 2002.
103
different society, especially in heterogeneous communities. The
concept of efficiency is outlined generally at the following section.

B. Some Fundamental Concepts

In order understand the compass of law as the enterprise of
subjecting human behaviour I shall employ some fundamental
economics concepts which broaden the fields of law and behavioural
economics. Namely: the concept of rationality, choice, value,
efficiency, utility, and game theory.
The concept of rationality is the main framework analysis in
understanding human behaviour. The basic assumption is people are
rational maximizer of their satisfaction, their activities involve choice.
They are able to calculate (based on their rationality) what to choose
in order to achieve the best outcome and it can be said that these
decisions to be rational. Because of most people are rational, and
rationality requires maximisation, an economic actor can rank
alternatives that become their next-best alternative choices.
Another common way of understanding this conception of
rational behaviour is by recognising that people choose alternatives
that are the most well- suited to fulfilling their needs. Here is another
economic fact, most people want far more than their current
resources allow them to have. This is scarcity: people wanting more
than can be satisfied with available resources. Scarcity forces people
to make the most valuable choices. This emphasises that had people
not made the ―right‖ choice they did, they would have then chosen
the next best alternative. The definition of ―right‖ choice is varying
from one individual to another, again, based on their rationality and
needs. Having said this, the right choices in economic activities are
closely-related to the most valuable ends.
As rational maximizer, people tend to accomplish their
objectives in the most efficient way. Economists have several distinct
definitions of efficiency. For simplicity‘s sake, I have also adopted
Pareto efficiency theory of economics which generally concerns the
satisfaction of individual preferences as one of the most applied
efficiency concept in the field of law and economics. Garner splits
Pareto efficiency into two kinds, first kind is Pareto superiority as an
economic situation in which an exchange can be made that benefits

104
someone and injures no one. When such exchange can no longer be
made, the situation becomes the second kind that is Pareto optimality:
an economic situation in which no person can be made better off
without making someone else worse off. 57
There is a vital connection between efficiency and utility. For
most economic actors, utility reflects beneficiary and meritorious of
economic goods. If a person believes that his act was successfully
efficient, at the same time he/she concluded the result to be
satisfactory. Again, a satisfactory result signifies both in monetary
and or non-monetary outcome.
The utility concept is used in different sense for economists
and for utilitarian. According to Posner, utility in economics is
commonly used to distinguished an uncertain cost or benefit from a
certain one. Utility also commonly called as an expected utility, in
this sense is tangled with the concept of risk. Utility in the sense used
by philosophers of utilitarianism, meaning happiness.58
Game theory basically is the study of how people behave in
situations where one‘s action may affect the reaction of others. These
situations are like games in that people must decide upon strategy.
Game theory has far wider applications, some economics experts say
to be the theory of coordination. Wessels describes that game theory
extends the tools of economic analysis to any situation where humans
have to coordinate their actions with one another, whether in the
family, in the workplace, in social groups or among nations. He
extends his view toward game theory that an important feature of
game theory is that people are rational in making their choices (that is,
their preferences are well ordered). A second key feature is that a
person has to take into account the reaction of others.59 At this point, I
trust that people need a dominant strategy that is a strategy better
than other‘s strategy regardless of what the others in the game do. It
drives people come to cooperate with each other in a positive-sum
game.

57 Bryan A. Garner. Black Law Dictionary, 8th edition, Thompson West

Group, USA, 2004, p. 1147.
58 Richard A. Posner. Economic Analysis of Law, seventh edition, Aspen

Publishers, New York, 2007, p. 10-12.

59 Walter J. Wessels. Economics, Barron‘s Educational Series, USA,

2006, p. 440-441.
105
 By knowing these fundamental concepts help us to view the
work of law. First, how rationality affects people‘s behaviour within
legal situations. Second, how collective behaviour should have an
effect on legal rules. Third, understanding and planning strategic
actions in the legal context.

C. Law as a Tool to Promote Economic Efficiency

I advocate that law is best understood as a tool to promote
economic efficiency. Once succeeded, it can be used to maintain
Indonesia‘s economic growth and to achieve economic success as
well as to establish social welfare. It is important for the law to define
the core aspects of proper legal practice in economic performance in
order to amplify the function of law and the nation‘s main objectives.
But, how can the institution (of law) encourage efficient
transactions? Here are some examples. Note that legislative law is
often inefficient. A free market in body parts is illegal in virtually
every country around the world. This creates huge inefficiencies. For
instance, thousands die each year waiting for kidney transplants from
compatible donors, but it is illegal to buy a kidney from a healthy
person who would love to sell it. Donor sperms and eggs are illegal
to be used in IVF (In Vitro Fertilisation) treatment even for those who
suffer from serious infertility problems that require more advance
medical assistance. I am sure there are plenty of infertile married
couple who would be willing to do almost anything to have a baby of
their own, who most probably will value the presence of the baby,
while there is too little effort from the law to deal with illegal
abortion and unwanted birth. But these efficiency enhancing
exchanges are forbidden by the law. If these issues were left to
economic efficiency, such exchanges should be allowed, and I cannot
see why law cannot accept an academic fact that (if law indeed a
science), medical science in this case, provide scientific explanations
the need for those who need medical treatment.
Laws in Indonesia need to promote economic efficiency in at
least two ways: structure the law in order to remove impediments
that encourage private bargaining which based on customary
practices that promote economic efficiency; and structure the law to
minimise the harm caused by failures in private bargaining (practices

106
that discourage economic efficiency)60. When private bargaining fails,
the laws should be allocated to those who value them the most. This
is the efficacy of law as a tool to promote economic efficiency.

V. Conclusion
In recent times, Indonesian law students may find law and
jurisprudence hard to articulate because of their scope of analysis
range over many different subjects and lay on many other disciplines,
such as sociology, politics, economics, and so on, which surprisingly
be considered as having little to do with law and legal study. What
comes harder is that there is still a group of legal scholars who
believes that jurisprudence is the only key to solve legal problems.
There are a number of practitioners and jurists who still believe that
law has nothing to do with economics. As much as I desire the
capability of law to solve its own problems with its own ―key‖, it is
too hard to deny that jurisprudence as social science, like any other
sciences, is best identified and well-explained with the help from
other disciplines which complemented to one another.
The movement of law and economics applies economic theory
and method to the practice of law. It claims the tools of economic
reasoning offer the best possibility for justified and consistent legal
practices. It is one of the dominant theories of jurisprudence.
By some token, the primacy of efficiency helps to harmonise
the practice of law between justitia and veritas. When such law exists,
it does function as a social tool aiming at the promotion of economic
efficiency that goes well with other social practices. This can be
considered as law that fits Indonesia.

60These models are also known as Normative Coase and Hobbes

Theorem.
107
 REFERENCES

Abdul Hamid, 1987, The Islamic Theory of International Relations: New

Directions for Islamic Methodology, Herndon: International
Institute of Islamic Thought.
Antony, M.J, 2008, Law for the Layman, HPB, New Delhi, 2008.
Austin, John, 1832, Lectures on Jurisprudence, London: John Murray.
Bingham, Tom, 2010, The Rule of Law, Penguin Books, London.
Burns, Peter, 2004, The Leiden Legacy; Concepts of Law in Indonesia,
KTLV Press, Netherlands.
Coase, R.H., 1960, The Problem of Social Cost, The Journal of Law
and Economics, Vol.III, The University of Chicago Press.
__________., 1988, The Firm, the Market and the Law, The
University of Chicago Press.
Cooter, Robert & Ulen, Thomas, 2008, Law & Economics, 5th edition,
Pearson Addison Wesley, London.
Cooter, Robert, 1980, How the Law Circumvents Starrett‘s
Nonconvexity, Vol. 22, Journal of Economic Theory,
University of California, Berkeley.
Dominick, Salvatore & Eugene, Diulio, 2003, Principles of Economics,
Mc. Graw Hill, USA.
Friedman, David D., 2000, Law's Order, Princeton University
Press.
Friedmann, W., 1960, Legal Theory, Fourth Edition, Stevens & Sons
Limited, London.
Garner, Brian A., 2004, Black‘s Law Dictionary, 8th edition, Thompson
West Group, USA.
Kamali, Muhammad Hashim, 1994, Shariah and the Challenge of
Modernity‘, Journal JKIM, Vol.2.
___________________________, 1988, Source, Nature and Objectives of
Shariah. The Islamic Quarterly, Vol.XXXIII, Number 4.
Morrison, Wayne, 2002, Jurisprudence-from the Greeks to Post Modernity,
Cavendish Publishing, UK, (reprinted and translated by
Zhang Wan Hong).
Pejovich, Svetozar, 2008, Law, Informal Rules and Economic
Performance, EE, USA.

108
Polinsky, Mitchell A., 2011, An Introduction to Law and Economics,
Wolters Kluwer, Aspen Publishing.
Posner, Richard A., 2007, Economic Analysis of Law, seventh edition,
Aspen Publishers, New York.
Shavell, Steven, 2004, Foundations of Economic Analysis of Law, Belknap
Press of Harvard University Press, USA.
Sunstein Cass R., 2007, Behavioral Law & Economics, Cambridge
University Press, USA.
Seidman, Robert. S., 1978, The Satate, Law, and Development, St.
Martins, USA.
Sugianto, Fajar, 2013, The Economic Analysis of Law, Seri I Pengantar,
Seri Analisis Ke-ekonomian Tentang Hukum, Prenada Media
Group, Jakarta.
Supancana, I.B.R., 2012, Berbagai Perspektif Harmonisasi Hukum
Nasional dan Hukum Internasional, Penerbit Universitas Atma
Jaya, Jakarta.
Weber, Max, 1954, Law in Economy and Society, edited by Max
Rheinstein, Cambridge, Mass.: Harvard University Press.
Wessels, Walter J., 2006, Economics, Barron‘s Educational Series, USA.
Wright, Burton and Weiss, John, 1980, Social Problems, Little Brown
and Company, Boston.

109
 LEGAL MEMORANDUM
To : Partner
From : Associate
Date :
Re : Kentaro Ichigawa – Landlord-Tenant Dispute; Eviction Suit

Questions Presented
1. Shinjuku Heights Twin Tower Lease Provisions. Kentaro
Ichigawa signed a lease containing several vague clauses,
including one that requires him to obey all rules of the building
and to cooperate fully with the building management. Do vague
provisions such as that one make the lease void and
unenforceable?
Short Answer: No. A lease is enforceable if it describes the
premises, identifies the parties, states the
duration of the lease and rental amounts, and is
signed by both parties. If those elements are
present in the lease, other vague provisions will
not render the lease unenforceable.

2. Housing-Code Violations. Ichigawa apartment has several

housing-code violations: a hole in the bedroom floor, mice
infestation, and a continually malfunctioning toilet. What is the
effect of these violations on the landlord‘s ability to collect back
rent?
Short Answer: If the defects existed when Ichigawa signed the
lease, then the landlord won‘t be able to collect
back rent. But rather than being free from all
obligations, Ichigawa will be treated as a tenant
at sufferance who must pay the fair rental value
of the housing, given its condition.

3. Eviction-Suit Defenses. The landlord has sued for eviction,

claiming that Ichigawa has violated various lease terms. What are
Ichigawa‘s possible defenses or counterclaims?
Short Answer: Ichigawa may seek abatement of any rent paid in
excess of the fair rental value of the premises – a

110
remedy in the nature or recoupment. In the
alternative, he may seek damages for breach of
the implied warranty of habitability – a remedy
that is considered a positive counterclaim. The
distinction can be important because only in the
action for damages can the tenant recover money,
as opposed to merely reducing the landlord‘s
recovery.

111
 LEGAL OPINION

DEFINING EXPRESSIVE THEORY OF PUNISHMENT TOWARD

TRADITIONAL OPTIMAL PUNISHMENT OF CRIMINAL LAW

I. STATEMENT OF THE ISSUES

In general criminal law perspective, someone commits a crime,
he is arrested and punished. That is the legal consequence to him,
hence a reason not to commit the crime. Seen from this perspective,
the explanation of universal criminal law is simple: it is a way of
enforcing rules. In my opinion, there are two common models for
criminal law: enough punishment always to deter and enough
punishment to eliminate all offenses.
A good legal system requires good enforcement. To deter
crime, we must catch offenders and punish them. But both activities
are costly, so we should take those cost into account in deciding what
punishment to impose. From time to time, the reason we do not catch
all offenders is that doing so would cost more than it is worth. Part of
the cost would be in extra police and courts. Part of it would be in the
punishment of innocent defendants. A standard of proof low enough
to convict everyone who is guilty will also convict some who are not.
Meanwhile, in Law and Economics perspective there is a
concept known as efficient punishment to determine how efficient a
punishment on the convicted person. This concept derives from the
expressive law theories. Expressive law theories revisit the traditional
price theory conceptions of law as an incentive mechanism,
developing a richer theory of how legal rules can affect human
behavior. According to this theory, the expression of values is an
important function played by the law (Cooter, 1998). Through
expression the law can trigger the emergence of other incentives by
the internalization of the values it embodies. Expressive laws affect
behavior, not by threatening sanctions or promising rewards but by
changing individual preferences, and in some cases, by affecting
social norms and values.
Having this said, there are three central issues to consider:
A. Issue 1

112
 What is the central concept to the study of Law and
Economics toward theory of punishment?
B. Issue 2
How to distinguish expressive law theories of punishment from
traditional theories?
C. Issue 3
How to justify expressive theory punishment as traditional
optimal punishment in the court of justice?

II. DISCUSSION
2.1 Material Facts
Incentives as the central concept:
The concept of incentives is central to virtually any study in
Law and Economics. The fields of Law and Economics could indeed
be described as the theory of incentives. The economic analysis of law
builds on the premise that law affects human choice by creating
external incentives and promoting the individual internalization of
the values expressed by the law. According to the literature on the
economics of deterrence, legal rules can create incentives by affecting
the relative cost of alternative behavioral choices. For example, by
imposing and enforcing a fine for a given illegal activity, the law
raises the ―price‖ of this activity relative to others, which may lead to
a substitution effect. Price theory models of deterrence focus on the
role of law as an instrument for creating external incentives, such as
taxes, sanctions, and rewards. When these incentives are at work, the
law may modify observed patterns of behavior while leaving
individual preference undisturbed. Expressive law, social response
theories, expressive theory of punishment, efficiency, and
countervailing norms are important ingredients for a more complete
understanding of the role of law in affecting behavior in terms of
punishment which described as the following.

Expressive law:
As mentioned earlier that expressive laws affect behavior, not
by threatening sanctions or promising rewards but by changing
individual preferences. This distinguishes expressive law theories
from traditional theories, focused as they are on the role of law as an

113
instrument for creating external incentives, such as taxes, sanctions,
and rewards. According to expressive law theories, internalized rules
may trigger private enforcement mechanisms and change observed
patterns of behavior even in the absence of other external incentives.
According to this literature, private enforcement mechanisms include
three main interrelated situations, known as first-party (the rule
violator), second-party (its victim), and third-party enforcement
(other than the first and second). These three interrelated mechanisms
are important ingredients of expressive effects of law.
First-party enforcement is a concept based on the idea that law
abidance triggers first party enforcement mechanisms, meaning that,
independently of the content of the law. Violations of legal
commands become subjectively more costly. A sense of guilt and
shame at committing illegal actions are examples of first-party
enforcement. In other words, first-party enforcement requires no
outlays of resources for monitoring and enforcement.
Second party enforcement can be carried out through the
withdrawal of future cooperation and reputational and social
sanctions and also through self-help and reprisal. In the absence of
legal enforcement, people will engage in second-party enforcement
against their violators, even when it is not cost-effective to do so.
People demonstrate distaste for wrongful behavior and a willingness
to punish violators of shared norms, even when punishment is
materially costly and there are no plausible future benefits from so
behaving (Gintis, 2000).
Third-party enforcement refers to situations in which
punishment is carried out in a decentralized fashion by third-party
members of society. In this context, third-party members include all
members of community other that the rule violator (the first party),
its victim (the second party), and those formally entrusted with law
enforcement (central law enforcers). The law and its enforcement act
as a signal for others witnessing violations, empowering members of
a community to exert third-party enforcement against violators under
the form of social sanctions and reprobations.

114
Expressive theory of punishment:
Scholars have long debated the justifications for and purposes
of criminal punishment. One explanation for punishment is the
expressive theory of punishment. This holds that punishment holds a
largely a communicative purpose (Davis, 1991). Criminal punishment
serves to condemn a criminal morality for his or her acts. This moral
condemnation happens in plain sight of the rest of the world (Bennett,
2011) and produces effects that exceeded the cost imposed by the
sanction. Legal sanctions no longer operate as a ―price‖ attached to a
given behavior, but produce additional effects through expression
and internalization (Cooter, 1998). Punishment rebukes the criminal
for his or her sanctions in the eyes of society at large. Scholars
disagree about whether this communicative function is right in and of
itself and is focused backward on the crime and the criminal (Bennett,
2011), or whether it is focused toward the future and results in
desirable consequences (Duff and Green, 2011). Other scholars argue
that a democratic state lacks the type of political and moral authority
needed to justify condemnatory punishment.

Efficiency:
Much of the economic analysis of law is informed by the goal
of promoting efficiency. Several competing definitions of efficiency
are utilized, including the notions of Pareto efficiency, Kaldor-Hicks
efficiency, Nash efficiency, and Rawlsian maximin efficiency.
Although in some situations these alternative criteria of efficiency
lead to similar normative results, in most applications the choice of a
specific criterion of efficiency drives most of the prescriptive results.
Hence, the methodological choice in efficiency analysis carries
important ideological significance. The concept of efficiency as a
normative criterion should be distinguished from the concept of cost-
effectiveness as an instrumental criterion. When used normatively,
the efficiency criterion guides policy choices. Cost-effectiveness
analysis takes the policy goal as given and is used as an instrument of
cost minimization in the implementation of the policy objectives. The
instrumental use of cost-effectiveness is therefore less controversial,
and is accepted even by scholars who do not endorse the normative
use of economic analysis.

115
Countervailing norms:
Social reaction may boost or weaken the effects of legal
enforcement-that is punishment in this case. A legal rule and its
enforcement may be perceived as unfair in two alternative ways:
excess or defect. A law fails in excess when it punishes conduct
perceived as harmless or socially desirable; it fails in defect when it
fails to provide adequate punishment for harmful and undesirable
behavior. Legitimacy is undermined when the content of the law
departs from social norms, be they based on moral, ethical, or merely
cultural values. According to countervailing norms, absent such
initial alignment between legal rules and social values, expressed
social opinion and reaction to unjust laws may undermine the effect
of legal incentives. In short, a high number of people opposing the
law may reinforce or weaken its deterrent effect, depending on
whether the law falls short or in excess of current social values.

2.2 Argument
Enforcement costs:
To deter crime, we must catch offenders and punish them. But
both activities are costly, so we should take those cost into account in
deciding what punishment to impose. The cost per offense usually
increases with both probability of apprehension and severity of
punishment, so a higher expected punishment costs more per offense
to impose. It may sometimes, however, cost less in total, since a
higher punishment will deter some offenses, and offenses that are
deterred do not have to be punished.
It is obvious why the cost per offense increase with probability
of apprehension: It takes more police to catch 50 murderers out of a
100 than to catch 25, and it takes more prosecutors and court time to
convict them. To see why it also increases with the severity of the
punishment, it is worth thinking a little more about punishment cost.
When a convicted criminal pays a thousand dollar fine to the
state, the cost to him, which is what gives the punishment its
deterrent effect, is a thousand dollars, but the net cost is zero. Every
dollar the criminal loses the state collects. Punishment cost defined as
the difference between the cost of punishment imposes on the
criminal and the benefit it provides to others, is zero.

116
 Suppose the criminal cannot pay enough to provide the
amount of deterrence we want to impose. Instead of fining him, we
imprison him for a year, which is equivalent from his standpoint, to
say, a ten thousand dollar fine the punishment costs him ten
thousand dollars, but the enforcement system receives nothing.
Instead the rest of us must spend money in tax, say another ten
thousand dollars, to run the prison. The net cost of the punishment,
the criminal‘s loss plus the enforcement system‘s loss, is twenty
thousand dollars. It is as if he had paid a fine of ten thousand dollars
but we had collected a fine of minus ten thousand.
As we increase the size of the punishment we wish to impose,
the number of offenders who can pay it as a fine decreases, so we
tend to shift to more costly punishments such as imprisonment.
Hence increasing the severity of the punishment typically increases
the punishment cost per offense punished.

Distinctive theories:
The next question to discuss is how much deterrence that
should be. How many offenses should be deter, and how many
should we fail to deter? It is inefficient for me to steal a television set
that is worth five hundred dollars to you and only four hundred
dollars to me. But it is still more inefficient to prevent me stealing the
set if the cost of doing so is two hundred dollars spent on police,
courts, and prisons. The rule ―prevent all inefficient offenses and only
inefficient offenses‖ is correct only if doing so is costless. The correct
rule in the more general case is to prevent an offense if and only if the
net cost from the offense occurring is greater than the cost of
preventing it. The economic reason we do not increase the
punishment for murder may be, and probably is, that although we
would like to prevent more murders than we do prevent, the cost of
doing so is more than we are willing to pay.
Higher expected punishment deters some offenses. Increasing
the expected punishment reduces total enforcement and punishment
cost. The additional cost of deterring by increasing expected
punishment is negative, making it efficient to prevent not only all
inefficient offenses but some efficient ones as well in order to save the
cost of punishing them. In the extreme one could imagine a society

117
where the penalty for shoplifting was death, with the result that there
were no shoplifters and nobody ever had to be executed.

Justification:
Any theory of crime must answer two questions: ―What acts
should be punished?‖ and ―To what extent?‖ The first question asks
for the distinguishing criteria of a crime, and the second one question
asks to calibrate punishment. A theory of crime must provide
predictions about the effect of alternative criminal policies on crime
rates and other policy values. I argue that the moral theory weakens
the important questions or gives the wrong answers when applied to
details of crime policy. Therefore, I propose four important aspects to
consider in determining criteria of a crime in the court of justice. First,
the criminal intent. Develop this concept with the idea of mens rea in
knowing the distinctive between intentional harm and accidental.
Second, public harm and public prosecution. It reveals the nature of
the harms and views how crime harms the public. The traditional
theory of public harm justifies punishing attempts to cause harm,
even when they fail (ex ante punishment). Third, the standard of proof.
In a criminal action in common law countries, the prosecutor must
prove the case beyond a reasonable doubt. Satisfying a standard of proof
increases expected punishment. Fourth, the punishment. It can be
constructed by using the following formulas:

 Framing the net damage:

Net damage=damage to victim-gain to criminal.
 Marginal offense:
Gain to criminal=expected punishment.
 Hence:
Net damage=damage to victim-expected punishment.
 For optimal punishment:
Cost of deterring one more offense=Net damage=damage to victim-
expected punishment.
 Framing expected punishment:
Expected punishment=damage to victim-cost of deterring one more
offense.

118
III. CONCLUSION
I began this legal opinion with a short discussion of the
traditional characteristics of a crime, then recast the theories of crime
in terms of theory of criminal behavior. These theories hold that
rational criminals compare the benefits of crime with the expected
punishment imposed by the criminal justice system. I conclude that
these theories can be applied in the court of justice to develop a
theory of optimal punishment, based upon the goal of minimizing the
sum of the social harm caused by crime and the cost of deterring it.

119
 REFERENCES

Bennet, Christopher. 2011. ―Expressive punishment and

political authority,‖ 8 Ohio State Journal of Criminal Law 285-301.
Cooter, Robert D. 1998. ―Expressive law and economics,‖ 27
Journal of Legal Studies 585-608.
Davis, Michael. 1991. ―Criminal desert, harm, and fairness,‖
Israel Law Review 524-48.
Duff, R. Anthony, and Stuart P. Green. 2011. ―Introduction:
searching for foundations,‖ Philosophical Foundations of Criminal Law,
1-19. Oxford University Press.
Gintis, Herbert. 2000. ―Strong reciprocity and human
sociality,‖ 206 Journal Theoretical Biology 169-79.

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