Putting Freedom of Contract in its Place

Abstract

I develop a novel, rights-based conception of contract—the “democratic conception”—that can deliver a justification for granting a sphere of freedom to contracting parties while setting principled limits on that grant. It justifies doctrines—including the penalty doctrine, the doctrine of substantial performance, a robust doctrine of changed circumstances, and a robust doctrine of unconscionability—that an influential group of contract theorists argue set unprincipled limits on the parties’ equal procedural freedom. My account shows how these doctrines can be rendered compatible with a robust principle of freedom of contract that is grounded in the parties’ rights.

Keywords: penalty doctrine, contract law, justice, rights, normative uncertainty