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Justifying Fair Price Rules in Contract Law

8 Pages Posted: 1 Aug 2015  

Horst Eidenmueller

University of Oxford; European Corporate Governance Institute (ECGI)

Date Written: July 30, 2015

Abstract

This article discusses the introduction of a general “fair price rule” in (European) contract law. According to such a rule, prices that create a “significant imbalance in the parties’ rights and obligations” would not bind the disadvantaged party. Justifying this rule cannot be avoided by holding, as Martijn Hesselink does, that in light of a “reasonable pluralism of worldviews,” the issue is one which a democratically elected lawmaker has to decide. A welfarist (economic) conception of justice best explains the existing (European) rules on contract formation and price, and it also casts a long and dark shadow over a general “fair price rule.”

Keywords: Fair Price Rules, Laesio Enormis, Contract Law, Justice, Efficiency

JEL Classification: K12

Suggested Citation

Eidenmueller, Horst, Justifying Fair Price Rules in Contract Law (July 30, 2015). Available at SSRN: https://ssrn.com/abstract=2638087 or http://dx.doi.org/10.2139/ssrn.2638087

Horst G. M. Eidenmueller (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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