Foundations of American Contract Law

Abstract

Abstract This book reconsiders the foundations of American contract law by clarifying the meaning of fairness and choice. It shows how these ideas were muddled with the rise of voluntarism and conceptualism in the nineteenth century. Contract was defined in terms of the will of the parties, even though parties were often bound by terms to which they had not consciously assented; at other times, they were not bound by the harsh terms to which they had assented. Rules were formulated without regard to the purposes that contract law serves. Current theory and practice recognize these problems but cannot resolve them because they lack a clear idea of fairness in exchange. They approach them by manipulating the idea of choice, or by creating exceptions to previously accepted rules, or by introducing vaguely conceived policy considerations. Economic approaches entirely disregard fairness. This book revives a pre-nineteenth-century idea of fairness in exchange. This idea is consistent with modern economic thought and can reconcile concerns about fairness, party autonomy, and the purposes of contract for the parties as well as for society. The book presents an account of contract law that is principled, comprehensive, systematic, and operational in the sense that it explains or criticizes what courts actually do. It seeks to explain the enforceability of contracts, unconscionability, the effect of mistake, and changed circumstances, and problems of assent, interpretation, good faith, and remedies.