The Relational Constitution of Agreement (1)

Abstract

Abstract An essential element of the market economy’s claim to legitimacy is that it is a system of consumer sovereignty. This claim is fundamentally challenged by various forms of the argument that it is business organisations, rather than consumers, which ultimately determine the pattern of production and consumption in the market economies. A principal regulatory function of the law of contract is to ensure that when a consumer reveals her or his preferences by making a choice to exchange, the exchange is a product of her or his agreement. This cannot be a question of supplying ever increasing information, but must be a question of bracketing off many potential issues in order to make choice possible. The law of contract principally does this through the implication of terms in fact. Focusing on the principal terms implied in sales of goods, it is shown that these impose moral obligations on seller’s to satisfy the reasonable demands of consumers. Far from being a market of caveat emptor in which the business seller can pursue profit in a solipsistically self-interested manner, satisfaction of the conditions of welfare enhancing exchange means that the general market economy is an economy of caveat venditor.