Modern
contract theory is in a quandary. Whereas consequentialist theorists
typically point to principles of efficiency-maximization to account for
the rules of modern contract law, and deontological theorists typically
point to considerations of liberty or the ordinary morality of
promise-keeping, none provides a satisfying and unified account of
three central and highly stable aspects of modern contract law. These
are: first, the standard remedies granted for contractual breaches;
second, the centrality of the consideration doctrine; and, third, the
tension between legal doctrines that require courts to defer to
parties’ voluntary assent when determining the existence or content of
contractual obligations and doctrines that allow courts to police
bargains for fairness. In this Article, I argue that contractualism -
especially as elaborated in connection with Stephen Darwall’s recent
work on the second-person standpoint – has the power to harmonize these
doctrines.

In most other areas of normative inquiry,
contractualism has held a solid place, but the view is conspicuously
absent in most theoretical debates about modern contract law. To
explain this absence, I canvass a number of reasons why contractualism
might appear to be an unpromising theoretical standpoint from which to
account for the rules of modern contract law. I argue that these
considerations are, however, better understood as placing special
constraints on the form that any satisfying contractualism about
contract law must take. In the remainder of the Article, I then develop
an account that meets these special constraints.

Given the
robustness of efficiency-based explanations of contract law doctrine,
one important constraint will be that contractualism provide a more
robust explanation of doctrine than efficiency theorists can. In the
substantive portions of the Article, I therefore argue that there are
aspects of the standard contract law remedies – including the
expectation damages remedy – that cannot in fact be fully explained or
justified in terms of familiar notions like "efficient breach." These
same aspects can, however, be accounted for from within the
second-person standpoint. If Darwall is right, then this standpoint
commits to a contractualist account of what we owe to one another. In
the remainder of the Article, I therefore develop a contractualist
account of modern contract law that is, I argue, more robust than both
current efficiency and promise-based theories – at least in relation to
the three central doctrines under discussion.

The resulting
view promises to reconcile modern liberalism with a number of modern
contract law’s puzzling features. It also promises to help us identify
the appropriate role and limits of doctrines that allow or require
courts to police private bargains for fairness. Together, these facts
warrant, at minimum, further time and attention to developing the view
and extending it to a broader range of doctrine. Contractualism about
Contract Law should – I argue – hold a central place in theoretical
discussions of modern contract law.

Highly recommended!

Source: Lawrence Solum