The Right to Justification of Contract

• DOI: http://doi.org/10.1111/raju.12287
• Date: 01 June 2020
• Published date: 01 June 2020
• Author: Martijn W. Hesselink

© (2020) John Wiley & Sons Ltd.

Ratio Juris. Vol. 33 No. 2 June 2020 (196–222)

The Right to Justification of Contract

MARTIJN W. HESSELINK*

Abstract. This paper defends a right to the justification of contract, with reciprocal and general

reasons, and explores its main implications for the law of contract and its theory. It argues that

the leading essentialist and other monist contract theories, offering blueprints for an ideal con-

tract law based on the alleged ultimate value or essential characteristic of contract law, cannot

justify the basic structure of contract law. Instead, it argues, a critical discourse theory of con-

tract can contribute to the realisation of the right to justification of contract by exposing patterns

of contractual injustice, in particular exploitation and domination by contract, that contract law

can and should prevent.

1. Contract Law and the Right to Justification

Contracts play important roles in our lives. The omnipresence of contracts often

goes unnoticed. However, imagine for a moment what a society devoid of contracts

would look like, or how a person’s life in our society today would go if she chose

henceforward to refrain from concluding any contracts. We depend on contracts for

our food, housing, jobs, health care, transport, social media, and being a couple (in

some cases), among many other things. These contracts, in turn, depend, at least

to a degree, on their legal recognition and enforceability. Therefore, most likely our

society would also be an entirely different one—and our lives would be quite differ-

ent too—if contracts were not legally binding. Similarly, our lives, our society, and

our markets might change a great deal if the content of our contract law became a

radically different one. This would be the case, for example, if from now on contracts

were enforceable only if they contained a fair price, or if the categorical protection of

certain types of typically weaker contracting parties (e.g., employees, tenants, con-

sumers, and patients) was abolished.

This raises the fundamental question of why we have contract law: What justifies

the legally binding force of contract? Put in more practical terms, why does the law

provide remedies for breach of contract, in particular expectation remedies, which

force the party in breach to actually perform the contract or to pay damages in lieu of

* Paper presented at the Law and Justice across Borders workshop at the University of Amsterdam,

the law faculty seminar at the European University Institute in Florence, and the Edmond J.

Safra Center for Ethics at Tel-Aviv University. I am most grateful to Nik de Boer, Hanoch Dagan,

Iris van Domselaar, Rainer Forst, Neha Jain, Mirthe Jiwa, Yifat Naftali, and Lyn Tjon Soei Len for

their valuable comments.

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Ratio Juris, Vol. 33, No. 2 © (2020) John Wiley & Sons Ltd.

The Right to Justication of Contract

performance?1 That has been the core question of normative contract theory.2 And

different answers to that foundational question may lead to different answers to

more specific questions, such as, which contracts the law should recognise and en-

force, with what remedies contracts should be enforced, et cetera. These questions are

particularly pressing, not only because contracts can bring so many good things to

our lives, but also because contractual relationships may bring misery and abuse too,

for example in the case of contractual exploitation and domination. Think only of the

abuses occurring in certain international supply chains, in which every link is consti-

tuted by a contract.

Most leading contemporary contract theories are either (ethically) monist or

(metaphysically) essentialist. Ethically monist theories understand contract law as

promoting the good of the parties or of society at large, with reference to an ultimate

value (e.g., autonomy, solidarity, or efficiency). Metaphysically essentialist theories

proclaim contract law’s essential nature, with reference to an element or characteris-

tic deemed essential—i.e., without which contract law would no longer be contract

law—as opposed to merely accidental, contingent features. Some theories combine

ethical and metaphysical claims, arguing that a certain value is the essential value of

the law of contract. Others find the essence of contract in morality (i.e., in the right, as

opposed to the good).3 Thus, we find theories claiming that contract is essentially

about autonomy—understood variously as promise-keeping (Fried 1981), consent

(Barnett 1986), independence (Ripstein 2009, esp. chap. 5), self-authorship (Dagan

2013; Kimel 2003), self-determination (Gutmann 2013b, 3, 12), or choice (Dagan and

Heller 2017)—efficiency (see, e.g., Cooter and Ulen 2012, chap. 8; Katz 2014; Shavell

2004, pt. III), solidarity and collaboration (Jamin 2001; Lurger 1998; Markovits 2004,

1421), corrective justice (Gordley 2001; Weinrib 2012), or tradition (Zimmermann

2011).

This state of affairs would not pose any problems if the world was organised as

in Lukes’s (2009) philosophical satire The Curious Enlightenment of Professor Caritat,

where all the utilitarians lived in Utilitaria, the communitarians in Communitaria, the

libertarians in Libertaria, and—who knows—the liberal perfectionists in Daganistan

1 In the civil law tradition, the primary obligation is specific performance, with expectation

damages constituting only a secondary obligation, while in common law jurisdictions, expecta-

tion damages are the ordinary remedy, specific performance being available only as an excep-

tional remedy.

2 Cf. the famous challenge by L. L. Fuller and William R. Perdue (1936 and 1937): “why should

a promise which has not been relied on ever be enforced at all, whether by a decree of specific

performance or by an award of damages?” (Fuller and Perdue 1936, 57). Why indeed is it not

enough for the law to compensate the obligee (“promisee”) for any loss she sustains due to the

detrimental reliance on the contract (negative interest)? Peter Benson (2019, 8), recently took the

Fuller and Perdue challenge explicitly as the starting point of his transfer theory of contract.

3 I will use the familiar distinction, with regard to practical questions and discourses (i.e., about

what to do), into ethical and moral ones. Ethical questions and discourses are concerned with the

good (i.e., about how to live a good life) and refer to the values held by the relevant individual or

community. Moral questions and discourses are concerned with questions of the right (i.e., about

what we owe to each other) and refer to rights and norms (esp. norms of justice and human rights),

which are universal. While in practice (for example in a democratic debate) these two different

types of questions, discourses, and justificatory contexts may frequently overlap in part, the dis-

tinction is nevertheless an important one, because it can contribute to clarity in the debate and it

may inform critique (e.g., where a moral claim is denied merely on ethical grounds). See, e.g.,

Dworkin 2011, 13; Habermas 1996, 4.2.2. Against such “segregation,” see Taylor 1989, 3.2 and 3.3.