Contractualism about Contract Law v.2
Robin Bradley Kar
University of Illinois College of Law
Loyola-LA Legal Studies Paper No. 2007-29
Modern contract theory is in a quandary. Whereas consequentialist theorists typically point to principles of efficiency-maximization to account for the rules of modern contract law, and deontological theorists typically point to considerations of liberty or the ordinary morality of promise-keeping, none provides a satisfying and unified account of three central and highly stable aspects of modern contract law. These are: first, the standard remedies granted for contractual breaches; second, the centrality of the consideration doctrine; and, third, the tension between legal doctrines that require courts to defer to parties' voluntary assent when determining the existence or content of contractual obligations and doctrines that allow courts to police bargains for fairness. In this Article, I argue that contractualism - especially as elaborated in connection with Stephen Darwall's recent work on the second-person standpoint - has the power to harmonize these doctrines.
In most other areas of normative inquiry, contractualism has held a solid place, but the view is conspicuously absent in most theoretical debates about modern contract law. To explain this absence, I canvass a number of reasons why contractualism might appear to be an unpromising theoretical standpoint from which to account for the rules of modern contract law. I argue that these considerations are, however, better understood as placing special constraints on the form that any satisfying contractualism about contract law must take. In the remainder of the Article, I then develop an account that meets these special constraints.
Given the robustness of efficiency-based explanations of contract law doctrine, one important constraint will be that contractualism provide a more robust explanation of doctrine than efficiency theorists can. In the substantive portions of the Article, I therefore argue that there are aspects of the standard contract law remedies - including the expectation damages remedy - that cannot in fact be fully explained or justified in terms of familiar notions like "efficient breach." These same aspects can, however, be accounted for from within the second-person standpoint. If Darwall is right, then this standpoint commits to a contractualist account of what we owe to one another. In the remainder of the Article, I therefore develop a contractualist account of modern contract law that is, I argue, more robust than both current efficiency and promise-based theories - at least in relation to the three central doctrines under discussion.
The resulting view promises to reconcile modern liberalism with a number of modern contract law's puzzling features. It also promises to help us identify the appropriate role and limits of doctrines that allow or require courts to police private bargains for fairness. Together, these facts warrant, at minimum, further time and attention to developing the view and extending it to a broader range of doctrine. Contractualism about Contract Law should - I argue - hold a central place in theoretical discussions of modern contract law.
Number of Pages in PDF File: 127
Keywords: social contract, contract, laissez-faire, welfare, fairness, Rawls, contractualism, unconscionability, market, economics, socialism, capitalism, communism, efficient breach, expectation damages, consideration, promise, Fried, efficiency, second person, Darwall, Scanlon, contract theoryworking papers series
Date posted: June 20, 2007 ; Last revised: January 22, 2009
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