The Choice of Paradigm for Theory of Contract: Reflections on the Relational Model

Abstract

The article comments on the supposed need for a paradigm for the theory of contract, primarily by way of engaging with the most prominent source of late of calls for a paradigm shift in contract theory, the relational theory of contract. The article distinguishes between an empirical, a doctrinal-prescriptive and a theoretical-analytical line of argument as offered by relational theory. With regard to the first line of argument, the article argues that the thought that contract law already is ‘relationally constituted’ is informed by a misunderstanding of the available alternatives to relational theory. With regard to the second line of argument, the article argues that the incorporation of relational norms into the law, although occasionally desirable, is not the only way nor always the best way to sustain the relational contract, and explores the proposition that, at times, the law best supports valuable social practices by refraining from absorbing their constitutive norms. Finally, by way of drawing an analogy with a putative relational theory of promise, the article offers an objection to the thesis that the key to a sound theoretical grasp of the nature of contract and its social role lies in the adoption of the relational paradigm.