Abstract
The use of standard contracts is usually explained by generic transaction costs. In a model where more resourceful parties can distort enforcement, we show that standard contracts reduce enforcement distortions by simplifying judicial interpretation of preset terms, training judges on a subset of admissible evidence. In this setup, the introduction of a standard contract statically expands the volume of trade but it hampers legal and contractual innovation by crowding out the use of non-standard contracts. We rationalize the large scale standardization effort (by commercial codification and private standards) that occurred in Civil and Common Law systems in the XIX century during a period of booming commerce and long distance trade.
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