The Expanding Circle of Contract Law

Stellenbosch Law Review, 2016

Maastricht European Private Law Institute Working Paper No. 2016/03

17 Pages Posted: 2 Sep 2016 Last revised: 21 Sep 2016

See all articles by Jan M. Smits

Jan M. Smits

Maastricht University Faculty of Law

Date Written: September 1, 2016


People and corporations are increasingly held liable in private law for the external effects of their actions, in particular in cases that involve some fundamental aspect of “justice” such as severe violations of labour standards or threats to the environment. These public interests are traditionally guarded by the state, but are now increasingly enforced by private individuals, in particular in cross-border situations where the injustice takes place in a “far-away” country. This contribution explores what is the potential of contract law in dealing with “private law justice across borders.” It asks whether the doctrine of privity of contract should be traded in for an approach that better takes the externalities of contracts into account. It is argued that current contract law is ill-suited to deal with this challenge and should adopt new techniques to expand the circle of people contract law seeks to protect.

Keywords: Contracts and third parties, Privity, Violability, Global justice, Corporate Social Responsibility, Foreign direct liability claims, Externalities, far-away countries

Suggested Citation

Smits, Jan M., The Expanding Circle of Contract Law (September 1, 2016). Stellenbosch Law Review, 2016, Maastricht European Private Law Institute Working Paper No. 2016/03, Available at SSRN: or

Jan M. Smits (Contact Author)

Maastricht University Faculty of Law ( email )

P.O. Box 616
Maastricht, NL-6200 MD


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