Why Autonomy Must Be Contract’s Ultimate Value

30 Pages Posted: 28 Dec 2018 Last revised: 5 Feb 2019

See all articles by Hanoch Dagan

Hanoch Dagan

Tel Aviv University - Buchmann Faculty of Law

Michael Heller

Columbia University - Columbia Law School

Date Written: December 12, 2018

Abstract

In “The Choice Theory of Contracts”, we develop a liberal theory of contract law. One core task of the book was to persuade advocates of economic analysis that they must situate their enterprise within our liberal framework. Autonomy, rightly understood, is the telos of contract.

Oren Bar-Gill pushes back strongly in “Choice Theory and the Economic Analysis of Contracts”. He offers a penetrating – perhaps devastating – critique of our approach. Bar-Gill notes the substantial convergence between choice theory and a welfarist view. If he is right, then what does choice theory add?

Our task in Part I of this Essay is to demonstrate that welfare economics cannot simply absorb contractual autonomy. We show that choice theory has irreducible normative and reformist value along the four dimensions that are core to Bar-Gill’s critique: (a) contract’s regard for the future self, (b) the special role it ascribes to relational justice, (c) its distinction between utility and community, and (d) its prescription of intra-sphere multiplicity. We go further: welfare economics is indefensible without autonomy as its foundation.

Parts II and III respond to sharp critiques of “Choice Theory” by Yotam Kaplan, Prince Saprai, Ronit Levine-Schnur, Sharon Shakargy, and Ohad Somech. We discuss the proper place of contract values besides autonomy in a liberal contract law; explore the distinctive role contract plays in a liberal polity; and show how intra-sphere contract type multiplicity limits, rather than augments, state power.

Since publishing “Choice Theory”, we have engaged dozens of critiques, including the six in this Volume. All this rigorous debate confirms for us one core point: contract’s ultimate value must be autonomy, properly refined. It cannot be welfare. Nor can foundational value pluralism possibly suffice. Autonomy justifies contract.

Suggested Citation

Dagan, Hanoch and Heller, Michael, Why Autonomy Must Be Contract’s Ultimate Value (December 12, 2018). Jerusalem Rev. Legal Stud. (2019, Forthcoming); Columbia Public Law Research Paper No. 14-615; Columbia Law and Economics Working Paper No. 600. Available at SSRN: https://ssrn.com/abstract=3299829

Hanoch Dagan (Contact Author)

Tel Aviv University - Buchmann Faculty of Law ( email )

Ramat Aviv
Tel Aviv 69978, IL
Israel
+972 3 640 7302 (Phone)

Michael Heller

Columbia University - Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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