Itisusefultodistinguishtwotypesofcontractualrenegotiation（revision）,:（a）thestateofresourceuse,orallocation,mutuallyagreeduponbythecontractingparties,and（b）（a）throughrenegotiationformoreefficientresourceusemaybenefitallpartiestoacontract,thatis,（b）,however,onepartymustlose.

Considerthecontractualrenegotiationwhichentailsmainlyareallocationofresources;forexample,changesinrelativeproductpriceswhichcallforshiftstodifferentcrops,orinnova,sinceunderfixedrentsthetenantsarelefttomaketheirowndecisionsonresourc,sinceallcontractingpartiesexpecttobenefitfromtherevision,renegurcereallocationintheeventofunsuccessfulrenegotiation.[9]This,togetherwiththemoreplicatedcontractualenforcementrequiredforsharecontracts,explainswhydurationsofshareleasesaregenerallyshorterthanthoseoffixedrent.[10]

Considerfurtherthecontractualrenegotiationwhichentailstherevisionofinedistribution,,changesinrelativeassetpricesofthecontractedresources,acash-rentcontractwithunanticipatedinflation,ordecisionerrorsmadeintheinitialcoed,thatis,thegainereithercannotorwillnotfullypensatetheloserinmakingtherevision,leasetermination（hence,thechoiceofanappropriatelyshortduration）isessential.[11]Again,thiswouldnotbenecessaryiftransactioncostwerezero（evenifunanticipatedeventsoccurindependently）.Intheabsenceoftransactioncost,acontractwouldbedesignedtoallowdaytodaychangesinrentalpayments;withinanyleaseduration,thedistributionofinewouldnotbeheldfixedthroughout.

[1].ThesepercentagesareputedfromDepartmentofRealEstates,ChinaEconomicYearbook（Shanghai:CommercialPress,1935）,www.youxs.org（ibid.）.

[2].AccordingtoasurveyconductedbytheExecutiveYuan（ChangesinLandRights）,coveringfourteenprovincesinChina（1937）,7.,sinceinflationbeganinthesameyear,,seeChangandWang,QuestionsofFarmTenancy,

[3].Seesourcescitedinchapter1,notes10and13.

[4].”long-term”,”PrivatePropertyandtheRelativeCostofTenure,”inThePublicStakeinUnionPower,www.youxs.org（UniversityofVirginia,1959）,www.youxs.org.

[5].Twoindependentsurveys（China,1921-24and1935）revealthat,amongtenantfarms,landownersownedabout60to70percentofthehousingassets;tenantsowneda,StatisticalAnalysis,www.youxs.org.

[6].Chiao,StudyofFarmVillages,www.youxs.org；andChinaEconomicResearchDepartment,SourceMaterials,www.youxs.org.

[7].,”TheProblemofSocialCost,”JournalofLawandEconomics（1960）.

[8].Legalrecordswhichcoverfifty-sixprefecturesinsixprovinces（China,1934-35）revealatotalof124tenancydisputes（mostlyinrentalpayments）,thenumberofdisputesbroughtto,,ChinaEconomicYearbook,（1935）,www.youxs.org；and（1936）,www.youxs.org.

[9].Withleasetermination,forexample,asharetenantwhoalonewantschangesintheproductionplancanrequestafixed-rentcontract,purchasethelandoutright,,furthernegotiationmaystilltakeplaceifonepartywhowantstherevisionpaysthereluctantpartyanamounttomaketherevision”convincing.”

[10].Localitieswithhigherfrequenciesofshareleases（China,1934）,StatisticalAnalysis,www.youxs.org；,table26.

[11].Givenanunexpiredleasewhichfixestherentalrate,

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