Fairness and the Law of Contract

47 Pages Posted: 8 Feb 2019

See all articles by James Gordley

James Gordley

Tulane University Law School

Hao Jiang

City University of Hong Kong School of Law; Tulane Law School

Date Written: January 28, 2019

Abstract

Relief is given for severely unfair contracts, and yet there is no generally accepted explanation of what makes a contract unfair. Neither is there a generally accepted explanation of why contracts should be enforced. The explanation popular in the 19th century was that contracts should be enforced because the parties expressed their will to be bound. According to the members of the law and economics movement, they should be enforced because it is efficient to do so. Neither the will theorists nor the partisans of economic analysis can accommodate the concept of fairness. For that reason, their explanations of why contracts should be enforced are flawed. Contracts should be enforceable when they are fair. That principle explains not only the doctrine of unconscionability but the doctrines that traditionally determine when a contract is to be enforced such as consideration, impracticability, mistake, and frustration of purpose.

Keywords: Fairness Theory of Contract Law, Will Theory, Law and Economics, Voluntary Commutative Justice

Suggested Citation

Gordley, James Russell and Jiang, Hao, Fairness and the Law of Contract (January 28, 2019). Available at SSRN: https://ssrn.com/abstract=3324001 or http://dx.doi.org/10.2139/ssrn.3324001

James Russell Gordley

Tulane University Law School ( email )

6329 Freret Street
New Orleans, LA 70118
United States

Hao Jiang (Contact Author)

City University of Hong Kong School of Law ( email )

5/F Yeung Kin Man Building G-5360
Tat Chee Ave
Kowloon, Kowloon
Hong Kong

Tulane Law School ( email )

6329 Freret St.
New Orleans, LA Louisiana 70118
United States

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