Contracts as Plans
Willamette University College of Law
FSU College of Law, Public Law Research Paper No. 303
University of Illinois Law Review, Vol. 2009, No. 2
This paper offers an original theory of contract law that draws from recent work in the philosophy of action and legal theory. Human beings are essentially planning creatures. Making plans and following through with them is crucial to everyday practical reasoning both for individuals acting alone and individuals acting together. This somewhat intuitive point was not fully appreciated in the philosophy of action as recently as twenty years ago, when Michael Bratman began to point out the inadequacies of the then-dominant view of rationality. Recently, Scott Shapiro has been applying Bratman's insights on practical reasoning to debates in legal theory to great effect, developing what he calls the planning theory of law. According to the planning theory, laws are plans for citizens, developed and applied by legal institutions to solve coordination problems that result from individuals living together in otherwise unplanned communities.
In this paper, I propose a new theory of contract law informed by these insights. First I will survey the current leading theories of contract and explain why a new theory is needed. Then I will argue that viewing contracts as plans designed to solve a particular coordination problem better accounts for how we are able to make exchanges over time even in situations where the parties involved might otherwise not be able to trust one another. A planning theory of contract law takes the view that whatever ends a society might want to achieve, those ends are more likely to be achieved if the parties have the ability to create contracts, that is, to adopt legally obligatory plans to make exchanges. The theory does not seek to justify a particular body of contract law. Rather, as I will argue, it explains the fundamental doctrines of our current law better than do the presently available theories.
Once we view contracts as plans, it becomes clear that a better understanding of planning will give us a better understanding of contract law. It follows that advances in the philosophy of practical reasoning as it treats plans will give us insight into contract law. In the final part of the paper, I will show how these insights go beyond an accurate description of the established central doctrines of contract law and can lead to a better resolution of more controversial issues. For now I will be limited to offering a few indicative examples that offer suggestions for further study. At the very least, I hope to establish that contract scholars should pay attention to scholarship on practical reasoning just as they have long studied moral philosophy and economics.
Number of Pages in PDF File: 62
Date posted: February 26, 2008 ; Last revised: March 17, 2009