Undermining Justice: The Two Rises of Freedom of Contract and the Fall of Equity

Canadian Journal of Comparative and Contemporary Law (2016)

Southwestern Law School Research Paper No. 2016-8

64 Pages Posted: 3 Aug 2016 Last revised: 5 Dec 2016

Date Written: August 1, 2016

Abstract

This article explores a crucial moment in American legal history, known as the Lochner era, in which the rise of freedom of contract was sharp enough to defeat equity concerns, and then argues that a second rise of the freedom of contract has recently been developed by the Supreme Court in the domain of arbitration agreements. It contends that this second rise is not only a revival of Lochnerism but also, and more so, what the article names “neoliberal-Lochnerism”: a process of legal dissemination of neoliberal common sense outside of the world of contracts. Via close reading of leading recent cases, the article demonstrates that the genus of arbitration agreements now allowed by the US Supreme Court represents an assault on fairness, morality, and justice that is larger than the eye can see at first glance. The result, it is argued, is “law without equity”, a form of neoliberal jurisprudence that allows, and even incentivizes, humans who have accumulated enough power to act opportunistically. Without equity’s restraining power, the article concludes, those possessing a combination of economic means, political influence, and intellectual sophistication can and will exploit the legal rules to undermine justice.

Keywords: Neoliberalism, Justice Scalia, Arbitration, Freedom of Contract, Rhetoric, Equity

JEL Classification: K12, K41

Suggested Citation

Keren, Hila, Undermining Justice: The Two Rises of Freedom of Contract and the Fall of Equity (August 1, 2016). Canadian Journal of Comparative and Contemporary Law (2016); Southwestern Law School Research Paper No. 2016-8. Available at SSRN: https://ssrn.com/abstract=2817167

Hila Keren (Contact Author)

Southwestern Law School ( email )

3050 Wilshire Blvd.
Los Angeles, CA 90010
United States

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