Contracts of Adhesion--Some Thoughts about Freedom of Contract

Abstract

WAith the development of a free enterprise system based on an unheard of division of labor, capitalistic society needed a highly elastic legal institution to safeguard the exchange of goods and services on the market. Common law lawyers, responding to this social need, transformed from the clumsy institution that it was in the sixteenth century into a tool of almost unlimited usefulness and pliability. Contract thus became the indispensable instrument of the enterpriser, enabling him to go about his affairs in a rational way. Rational behavior within the context of our culture is only possible if agreements will be respected. It requires that reasonable expectations created by promises receive the protection of the law or else we will suffer the fate of Montesquieu's Troglodytes, who perished because they did not fulfill their promises. This idea permeates our whole law of contracts, the doctrines dealing with their formation, performance, impossibility and damages. Under a free enterprise system rationality of the law of contracts has still another aspect.1 To keep pace with the constant widening of the market the legal system has to place at the disposal of the members of the community an ever increasing number of typical business transactions and regulate their consequences. But the law cannot possibly anticipate the content of an infinite number of atypical transactions into which members of the community may need to enter. Society, therefore, has to give the parties freedom of contract; to accommodate the business community the ceremony necessary to vouch for the deliberate nature of a transaction has to be reduced to the absolute minimum. Furthermore, the rules of the common law of contract have to remain Jus dispositivum-to use the phrase of the Romans; that is, their application has to depend on the intention of the parties or on their neglect to rule otherwise. (If parties to a contract have failed to regulate its consequences in their own way, they will be supposed to have intended the consequences envisaged by the common law.) Beyond that the law cannot go. It has to delegate legislation to the contracting parties. As far as they are concerned, the law of contract has to be of their own making.