Abstract:Coase Neutrality Theorem offers a theoretical support for the theory of free exchange based on the principle of Pareto advocated by neo-classical economics, but Coase Neutrality Theorem itself owns obvious limitation both in practical application and theoretical logic. First, it mainly meets the logical analysis in two parties, while not considering the plight of core allocation in more than two parties. Second, it does not consider the capability difference of transaction because of fortune, which is about the feasibility of transaction. Third, it does not consider that preference is depended on environment, which is about the inclination of transaction. Taking an example of considering the capability difference of transaction, it will result in the higher allocation efficiency for resource if the original property rights are given to the poor in a society with zero transaction costs and free-exchange. Obviously, it is a revolution to the Coase Neutrality Theorem. Through analyzing the logical defects of Coase Neutrality Theorem, this paper reveals the basic obstacle for the extension of spontaneous market order.