Common Law Values: The Role of Party Autonomy in Private Law

Abstract

This chapter examines the importance of party autonomy in commercial contracts. The focus is on four areas: implied terms, exclusion clauses, termination clauses and penalties. With little regard to the logic of the end result, the law clearly supports the social value of parties’ freedom to bargain in all four areas other than the penalties jurisdiction. Arguments typically advanced in favour of retaining the penalties jurisdiction are evaluated and found to be unpersuasive. It follows that the only principled response is to abandon the current legal rules on penalties. Here, and more generally, there is already adequate, and principled, protection of party autonomy in the common law’s insistence on proper consent to binding bargains and, in specific instances, in the protective but paternalistic statutory protection of certain specific classes of contracting parties.

Note: This chapter is placed on SSRN with the consent of Hart Publishing. Please cite as S Worthington, ‘Common Law Values: The Role of Party Autonomy in Private Law’ in A Roberston and M Tilbury (eds), The Common Law of Obligations: Divergence and Unity (Hart Publishing, 2015), Ch 14 (forthcoming).

Keywords: party autonomy in private law, penalties, termination clauses, exclusion clauses, implied terms

JEL Classification: K3, K39