Contract as Voluntary Commutative Justice

77 Pages Posted: 8 Feb 2019 Last revised: 2 Jan 2021

See all articles by James Gordley

James Gordley

Tulane University Law School

Hao Jiang

Bocconi University - Department of Law

Date Written: January 28, 2019


Whenever a court enforces a bargain, it does so against someone who regrets having made it. Why should he be bound? Our thesis is that, in principle, a contract of exchange should be enforced when it is economically fair and voluntary. It is economically fair when the performance that each party is to make is equivalent in economic value to the one that he is to receive. It is voluntary when each party receives something that he deems to be of greater personal value to him than what he gives in return. If not, he should only be bound when it would be economically unfair to the other party to release him. Our theory is a modern version of Aristotle’s description of contract as voluntary commutative justice. We show how that idea can be made precise using the insights of modern economics. We show how it can explain the principal legal doctrines that govern when a contract of exchange is enforced: unconscionability, liquidated damages, consideration, impracticability, mistake and frustration of purpose.

Keywords: Aristotle, Will Theory, Law and Economics, Voluntary Commutative Justice

Suggested Citation

Gordley, James Russell and Jiang, Hao, Contract as Voluntary Commutative Justice (January 28, 2019). Tulane Public Law Research Paper No. 19-3, 2020 Michigan State Law Review 725, Available at SSRN: or

James Russell Gordley

Tulane University Law School ( email )

6329 Freret Street
New Orleans, LA 70118
United States

Hao Jiang (Contact Author)

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, Milan 20136


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