Medical practice The implied understanding between physician and Pt that the former provides the best possible care in a truthful and timely fashion, in exchange for the latter's trust. See Doctor-patient relationship.
It seems clear that the involuntary nature of the tort transaction makes hypothetical contract analysis appropriate, as there is no actual contract to analyze.
Thus, hypothetical contract analysis indicates that, for mass tort bankruptcies that involve serious injuries to at least some claimants, fairness requires equal treatment of claimants regardless of the timing of their claims.
Even though prospective tort claimants in a hypothetical contract setting would prefer a compensation scheme that treats present and future claimants equally, current mass tort bankruptcy practice favors present claimants over future claimants, distributing to present claimants a disproportionate share of the debtor's assets.
In order to treat claimants fairly--in the sense of treating them according to a rule to which they would subscribe in the hypothetical contract setting--the proposed trust shares must include an interest term.
In any event, and more importantly, Shiffrin questions the central claim that the agreed terms of the hypothetical contract would specify performance in a contingency if and only if its cost to the seller is less than its value to the buyer.
Also, I observe that had I made a different definition of the hypothetical contract, under which nonperformance would be accompanied by the payment of money by the seller, my conclusion about the agreed upon conditions of performance would be the same.
Hypothetical contract theorists are divided, however, with respect to such idiosyncratic preferences as the preference to benefit from one's own efforts rather than from the unsolicited efforts of others.
The restrictive approach insists that the hypothetical contract story be premised upon the value of individual liberty and suggests that abandoning the subjective utility calculus in favor of an objective standard of cost-benefit analysis violates this value.
It also requires exploring the (weak) sense in which the court-imposed contract is hypothetical in cases of good samaritan intervention where the two conditions of the hypothetical contract theory are fulfilled.
Thus, for example, there has been some resistance m which I find convincing -- to using a hypothetical contract as justification for the normative desirability of wealth maximization.