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Trakman, Leon --- "Pluralism in Contract Law" [2009] UNSWLRS 28

Last Updated: 16 July 2010


Leon Trakman

This paper is forthcoming in 55(1) Buffalo Law Review, December 2010.


This article challenges the use of monist conceptions of contracting that are dominated by such ‘super’ values as the wills, consent or promises of the parties, or the efficiency of their transactions. It argues instead for greater judicial resort to plural theories of contracting by which judges can identify, rank and apply a plurality of legal, cultural, moral and economic values in reaching informed decisions. It concludes that judicial pluralism can lead to a more richly textured and collaborative approach to contracting than under legal monism.

Devised to suit Nineteenth Century values, monist conceptions subject all contract rights to a single ‘super’ or prime value, such as the liberty to contract. Judges express that ‘super’ value through such concepts as the wills of the contracting parties, or through the efficiency of those contracts. The result is a unitary conception of contracting in which judges hold that one value prevails over all others.

This article maintains that these monist conceptions of contracting fail to meet the demands of an increasingly complex legal order. It proposes a working theory of judicial pluralism by which judges can engage a range of values, beyond a single ‘super’ value like liberty to or equality in contracting. It maintains that some courts implicitly resort to such judicial pluralism. It argues further that courts are often best able to identify the plural values that are materially associated with the issues. They are often equipped to rank those plural values in relation to one another; and they have the capacity to apply those values prudentially through a process of deliberative reason. It concludes that further development of judicial pluralism can enrich contract theory in a manner that legal monism has failed to accomplish.

A plural account of contracting must necessary accept that theories of contract are often incongruous, contradictory and sometimes illusive in their application. If a plural approach towards contracting is to take account of such inconsistencies, it ought not to exascerbate them. If pluralism it is to work, it needs to delineate the scope of its own application by identifying competing normative values, the reasons for rejecting some, the means of reconciling others and the virtue of reformulating yet others. What ultimately will commend pluralism is neither its perfection nor its ‘perfectability’, but its capacity to respond instrumentally to disquiet over the deficiencies inhering within monism.
* B.Com., LL.B. (Cape Town) LL.M., S.J.D. (Harvard). Immediate Past Dean and UNSW Professor of Law, University of New South Wales, Sydney, Australia, The author is grateful to Bob Hillman at Cornell Law School, Stewart Macaulay at Wisconsin Law School, Brian Bix at Minnesota Law School for their valuable comments on an earlier draft, to Emily Burke for her assistance, the Social Sciences and Humanities Research Council of Canada for funding the initial research and the University of New South Wales for a decanal leave to write it.

Table of Contents


Theoretical debate over the formation of contracts is legendary.[1] Is the foundation of contracts tied to the subjective wills of parties who make promises to each other, or is it about reasonable inferences arising from promise-bearing conduct that courts impute to the parties? Are promises giving rise to contracts grounded in morality? Is the formation of contacts about regulating contractual rights and duties; or is it about enforcing contracts that are economically efficient?[2]

Most theories of contract formation respond to one or another of these questions, not to all of them. Most of these theories are also expressed through monism. Monism subjects all ‘rights’ and ‘goods’ to a single determinative measure, conceived as a ‘super’ or prime value, such as the liberty of the parties to contract.[3] That value is articulated through the wills, consent, or promises of the parties, or more comprehensively through the utility or efficiency of the contract.[4]

Preference monists prefer different ‘super’ values, so long as their preferred value transcends all ‘lesser’ values.[5] They may also subscribe to a hierarchy of values, such as to a hierarchy of liberty, equality or efficiency in contracting, subject to one ‘super’ value such as the liberty to contract standing at the apex of that hierarchy.[6]

What preference monist conceptions of contracting lack is a sustainable basis for differentiating among ‘super’ values that conflict and collide, such as between liberty to contract and equality in contracting.[7] If judges are concerned primarily with the liberty of the parties to contract, they cannot as readily focus on other values like equality in contracting, other than through the subordination of those values to liberty. If they are engrossed with preserving one ‘super’ value that determines the binding force of contractual promises, they cannot concentrate as readily on moral, political, cultural or legal values that otherwise might circumscribe that ‘super’ value.[8]

Pluralist theories of contracting do not endorse a ‘super’ value, but instead acknowledge a plurality of values that are commensurable or incommensurable with one another according to the contractual context.[9] Decision agents – typically courts – use that pluralism to identify and rank the intensity of plural preferences and apply them through a process of practical reason in reaching appropriate decisions.[10] For example, judges rank values like liberty to and equality in contracting on a ranking scale in which they pay due cognizance to continuing and discontinuing moral, political and cultural values.[11] They analyze those values through a process of practical reason through which they assimilate competing and supporting propositions in order to reach preferred determinations.[12]

As an illustration of different kinds of pluralism at work, judges employ political pluralism to synthesize competing governmental policies over anti-competitive agreements such as ‘judgment sharing agreements’ according to the source, nature and severity of impact of that conduct.[13] They resort to cultural pluralism to analyze emerging and receding socio-cultural attitudes in contracting for cooperation such in regard to duties to keep records, to share information about performance, to permit audits and not hide breaches of contract.[14] They invoke moral pluralism to impose duties of ‘good faith’ on mass suppliers that negotiate preferential terms with multiple order consumers at the expense of one-off end users.[15]

In reaching appropriate legal determinations, they invoke’ decision procedures’ in accordance with rules of evidence to identify and weigh ‘adjudicative’ and ‘social facts’ evidence and in weighing different value preferences.[16] They employ ‘practical reason’ to arrive at prudential determinations, paying due regard to the rights and responsibilities of contracting parties in different political, cultural and economic contexts.[17]

This article seeks to arrive at a complementary approach to judicial pluralism in contracting in which different theories of contracting have an appropriate but not necessarily equal place. In doing so, it identifies different theories of contracting and the extent to which they are deemed to complement or contradict one another, such as when autonomy and community based theories of contracting are deemed to complement or contradict one another. It also suggest ways of reconciling different contract theories, such as by moving along a spectrum from subjective to objective theories of contracting.[18] In so aspiring, the article engages in both the horizontal and the vertical integration of different contract theories. For example, it horizontally integrates rights-based theories of contracting between parties in arms length contracting with communitarian theory directed at redressing bargaining inequalities. It virtically integrates theories of contracting as by identifying when structural inequalities in unconscionable dealings ought to prevail over rights-based theories of contracting. It also resorts to ‘decision procedures’ in assessing the nature, manner of operation and perceived sufficiency of of horizontally and vertically integrating such theories.[19]

The different sections have recurrent themes. For example, in commencing with the wills theory of contracting, the article highlights the capacity of subjective and objective theories of contracting to be horizontally integrated along a spectrum from the subjective wills of the parties to their objective intentions. The section on discrete and relational contracts has the compable aim in assessing how courts horizontally integrate such theories. In contrast, the article evaluates the vertical integration among rights-based and goods-based theories of contracting, including by considering the tension between them and ways of redressing that tension.

The article argues that such a plural approach to contract law is already practiced by judges. It stresses the virtue of decision agents, not limited to courts applying plural values more explicitly, contextually and sometimes tentatively. It proposes that a theory of legal pluralism can significantly inform contract law and practice, without regressing into unbridled relativism, or auguring the ‘death’ of contracts.[20]

The default position in this article is that courts normally are decision agents in common law contracting, subject to two notable exceptions. Legislatures often act as decision agents under theories of contract regulation; while contracting parties are decision agents in theories of contract self-regulation and to varying degrees in relational contracting.

I. From Monism to Pluralism

Monist wills theories of contracting trace back to, among other sources, natural law conceptions of ‘right reason’[21] embodied in modern deontological liberalism.[22] That liberty consists of the right of autonomous individuals to engage in intentional or ‘expressive’ actions as free and voluntary agents, insulated from the invasive action of third parties including public authorities. Courts as decision agents, in turn, are expected to respect the ‘expressive liberty’ of autonomous contracting parties.[23]

A court that endorses legal monism enshrines a ‘super’ or prime value, such as the liberty to contract by placing it at the apex of the judicial ranking system of values. For example, it treats the subjective wills of the parties as its prime value.[24] Alternatively, it adopts other ‘super’ values, such as efficiency in contracting.[25] It then applies that ‘super’ value in deciding whether to enforce a contract according to its assessment of the subjective wills of the parties or the efficiency of their transaction.[26]

A monist court sometimes takes account of such social values as welfare, harmony, solidarity and communality; but it subordinates those values to ‘super’ value based on the wills, consent, or promises of the parties, as explicated through their liberty to contract.[27] For example, a monist court will nullify an unconscionable contract, not primarily because it is unfair in a discrete moral or cultural context, but because it is an affront to the ‘super’ value which that court identifies with the subjective wills or manifest consent of the parties.[28]

Pluralist courts question the primacy of a single monist value, as well as the comprehensive hierarchy of values beneath it. They ultimately decide to enforce the wills, manifest consent or promises of the parties, but only after identifying, ranking and applying those values in light of other values which may, but need not, be commensurate with one another.[29]

As a result, judges who are pluralists decline to treat any one value as inherently or naturally superior to all others. They treat values like the wills of the parties or the efficiency of their contracts not as a priori more fundamental than all other values, but according to how they relate to one another and yet other applicable values.[30] As an illustration, pluralist courts attribute different attributes to ‘rightness’ and ‘fairness’ or ‘goodness’ values in regulating consumer transactions.[31] They identify the ‘rightness’ value of sellers declining to accept product returns against the ‘unfairness’ value of consumers being sold defective products.[32] They weigh the cost of no-return seller policies against the benefit to consumers of discounted prices. They adopt ‘decision procedures’ by which they balance the ‘expectant’ or ‘surprise’ impact of a no-return policy, along with the ‘clarifying’ or ‘confusing’ value of fine print clauses used in ‘click-wrap’ or ‘browse-wrap’ e-sales contracts.[33] They engage in such analyses by reflecting on the ‘autonomy’ value of e-sellers competing over price in e-markets against the ‘care’ value in not selling consumers unsafe products.[34]

Resort to such a plural analysis is not restricted to judicial decision-making. Nor is it expected that plural decision-makers will necessarily concur in otherwise comparable cases.[35] For example, uniform law commissioners prefer to regulate pre-contractual representations by mass sellers differently according to their divergent perceptions of the disempowerment which such representations have upon consumers.[36] They employ different ‘decision procedures’ to assess consumer market reactions to specific kinds of sales practices, for example in regard to the use of guarded disclosure statements. The issue is not that such differences in the processes and results of plural decision-making give rise to unbridled relativism, but that pluralism expand the base of knowledge by which informed decisions can be reached that include differences of opinion.[37]

Monist and pluralist analyses sometimes may lead to the same result. In interpreting the Restatement (Second), a monist court that subscribes to a monist conception of contracting may adopt the parties’ unusual meaning, that all sales contracts exceeding $1,000 be oral and not reduced to writing in accordance with the subjective wills of the parties. A pluralist court may reach the same determination, but only after considering such relational factors as the trust and confidence placed by the parties in each other in contracting and such socio-cultural factors as their respective reputations and goodwill in the industry.[38]

What distinguishes pluralist from monist decision-making is the unwillingness of decision agents like courts to accord primacy to a single value before assessing its commensurability with other values in resolving a dispute. What further differentiates ‘decision procedure’ pluralism from monist procedures is the readiness of pluralist judges to identify a range of ‘rightness’ and ‘goodness’ values, to articulate reasons for ranking them and implying terms into contracts as a result of them.[39]

Any substantive theory of contracting can be conceived through monism or pluralism. For example, both rights-based and goods-based theories of contracting, can be treated as contingent upon a single determinative value, or upon an amalgum of values. These observations notwithstanding, substantive theories of contracting grounded in liberal rights, not limited to the wills theory, are more likely to be conceived in monist terms. Communitarian theories are more likely to be conceived pluralistically. The reason for this difference is significantly historical. The modern law of contracts has evolved largely out of single-minded liberal values, not least of all the autonomy of parties to contract. Communitarian theories have developed somewhat in reaction to liberal contract theory and are often grounded in attempts to reconcile traditional rights based theories with community-based values. Neither conclusion is necessarily so. An implied theory of consent may well engage plural values, while a critical legal theory may reject liberal values in favor of a utopean alternative. What is also likely is that the challenges based by pluralism are more likely to stem from liberal rights based theories of contracting than from communal theories.

II. Pluralism: Beyond a Wills Theory

In applying monism to a wills theory of contracting, the alternative is between judges upholding or nullifying an agreement in accordance with the subjective wills of the parties.[40] A judge considers the dignity, knowledge, desire, welfare and happiness of the parties, but only as values that are subordinate to their subjective wills.[41] For example, a monist court evaluates the reasonable reliance and unfair surprise of one party as evidence of a ‘defect’ in the subjective wills of the parties, not as part of a further plural inquiry beyond those wills.[42] It concludes that, due to the ‘defect’ in the subjective wills of the parties, there is no contract.[43]

A pluralist court goes further by considering plural values beyond to the subjective wills of the parties. It may start by observing that the parties did not manifest subjective wills; that their subjective wills were incompletely expressed;[44] or that they had different subjective wills. However, it will weigh up the plural alternatives before reaching a decision.[45]

A court that adheres to an objective theory of contracting is sometimes monist and other times pluralist.[46] It is monist in giving objective meaning to the unclearly or incompletely expressed wills of the parties, while continuing to defer to the wills or intention of the parties. It is pluralist in valuing ‘rightness’ and ‘goodness’ values beyond those wills, such as the dignity, knowledge, welfare, or safety of the parties. Both monist and pluralist courts that adopt an objective theory of contracting may determine that the wills of the parties are ill-expressed or are at cross purposes. But the monist would conclude on these bases that there is no binding contract. The pluralist court would decide only after identifying, ranking and applying the plural options.[47]

Monist and pluralist approaches toward the objective theory of contracting can be reconciled by courts adopting a spectrum approach. On one end of the spectrum, the court locate the subjective wills of the parties. On the other end, it reaches a plural determination which transcends their wills. Depending on the nature and length of that continuum, its determination affirms, elaborates upon, discounts, or substitute for the wills of the parties. For example, a court initially gauges the subjective wills of the parties. It augments their wills by determining the reasonable intention of the parties based on their past practices. It imputes an implied covenant to negotiate in good faith to them in the absence of evidence as to their past practices.[48]

The practical difficulty with adopting a spectrum approach towards the subjective and objective theories of contracting is in determining when a court employs an objective theory only to augment the wills of the parties and when it uses it to transcend those wills.[49] A further difficulty is to acknowledge that the purpose of pluralism is not to replicate the wills of the parties. Nor is it to transform an objective theory of contracting into a ‘super’ value that trumps all other values.[50]

III. Reconstituting Consent

An alternative to the wills theory of contracting is for courts as decision agents to enforce contracts to which the contracting parties have expressly or impliedly consented.[51] Courts conceivable opt for a monist or a plural theory of consent.[52] They adopt a monist conception of consent in subscribing to the express or implied consent of the parties.[53] They resort to a pluralist theory of consent by implying mandatory terms into contracts independently of the wills of the parties, for example by declining to enforce warranty exclusion clauses on grounds of the ‘confusion’, ‘surprise’, or ‘hardship’ they will cause one party.[54]

The difference between a monist and a pluralist theory of consent is illustrated by three default rules proposed by Randy Barnett.[55] Under the first default rule, courts implement the parties’ ‘direct consent’ which includes their ‘express’ or ‘implied-in-fact’ consent. Under the second default rule, courts enforce the parties ‘indirect consent’ or ‘implied-in-law’ consent. Under the third default rule, courts apply ‘implied-in-law immutable terms’ which supersede the consent of the parties.[56]

The first two default rules, ‘direct’ and ‘indirect’ consent to contract, are monist because they expect courts to implement the actual or reasonably inferred consent of the parties. The third default rule, ‘implied-in-law immutable terms’ may be pluralistic insofar as a judge adopts efficiency, fairness or other ‘goodness’ values that are incommensurable with the consent of the parties.[57] For example, a court invokes immutable implied-in-law values of ‘fair dealings’ to trump terms to which the parties had expressly agreed on grounds that those express terms are harsh, oppressive, or unusual in the context.[58] A judge also adopts an immutable term to sever a no-return no-warranty clause from a contract on grounds that it incommensurable with the public interest in fair dealings,[59] even though that clause is enforceable on a monist interpretation of the express consent of the parties.[60]

The treatment of immutable implied-in-law terms pluralistically is not without risk. For example, a risk is that a court will pay lip service to an immutable implied-in-law term only to discount it in deference to a monist conception of consent.[61] Conversely, it may adopt an immutable implied-in-law term in order to effectuate a nuanced and pre-selected conception of ‘fairness’.[62] These risks do not inhere in preference pluralism, but in the failure of courts to exercise preferences, or conceivably, in doing so improperly or clandestinely.

Plural decision-making recognizes the importance of consent in contracting, so long as it does not exclude the plural alternatives that supersede consent in particular cases.

IV. Obligation as Checklist or Plurality?

A monist basis for upholding a contract is that the parties are bound by a checklist of legal requirements: an offer and acceptance, a serious intention to contact, valid consideration and the presence of complete, certain and non-illusory terms.[63] As an illustration, a court uses a checklist of requirements to substantiate a single prime value such as the will or consent of the parties. Once that checklist is satisfied, it declares that the contract is legally enforceable.[64]

A problem with decision agents subscribing to a monist checklist of requirements is that they are likely to exclude the assessment of plural values that are external to that checklist. For example, a court declines to take account of an agreement that establishes a clear process for negotiations on grounds that the agreement is pre-contractual; that it does not promise a result; and that it is not encompassed within the contractual checklist. In contrast, courts that adopt a plural theory of contracting offset this problem, for example by stipulating that a party’s reasonable reliance on such negotiations are among the ‘good faith’ values which they ought to consider in determining the nature and terms of a contract.[65]

Judges also invoke ‘decision procedure’ pluralism to weigh checklist requirements, such as by ranking the efficiency value of enforcing marriage agreements against the fairness value of avoiding ‘unfair surprise’ in not enforcing them.[66] Judges also use such ‘decision procedures’ to isolate arbitrary distinctions, such as between the ‘trivial’ and ‘non-trivial’ affairs of a marriage.[67]

The virtue of pluralism is that it enables decision agents to ascribe normative properties to particular items on the checklist, without having to accord primacy to any one item. For example, a pluralist court determines whether an ‘agreement’ entered into during the course of an employment relationship is illusory because it accords undue discretion over work conditions to a supervisor, by taking account of the nature of the relationship between the supervisor and supervisee as well as differences in their cultural, social and educational backgrounds.[68]

Pluralism does not seek explicitly to constrain decision agents who rank a checklist of requirements selectively or who conceal their underlying value preferences. For example, some courts will decline to enforce an agreement between ‘common law’ spouses on grounds of the absence of a serious intention to contract, concealing their moral-religious disdain for such unions. What pluralism provides is an explanatory context in which to identify and critique value preferences including the failure of decision agents to articulate them adequately.[69]

V. Reframing the Bargain

Decision agents that adhere to a monist bargain theory affirms the free choice of the parties in concluding a bargain as a measure of their ‘expressive liberty’.[70] That bargain is enforced so long as it is supported by a benefit or a detriment and has some value.[71] For example, a judge differentiates between contracting for value and gratuitous acts of giving by according primacy to the certainty or efficiency of the bargain over its disproportionate value to one party.[72]

A court that subscribes to a pluralist bargain theory establishes an investigative framework within which to identify, rank and apply plural values to the bargain. For example, it invokes plural values in order to identify and rank evidence of ‘bargaining fairness[73] in deciding whether to enforce a past debt in the absence of new consideration.[74]

Decision agents also subject a pluralist bargain theory to systemic analysis. For example, a legislative committee assesses the per se structural value of regulating particular kinds of bargains, the plural values that ought to be ascribed in establishing a legislative policy governing ‘bargaining fairness’, the principles through which to explicate that policy, and the manner of applying that policy to specific cases.[75]

The risk with a plural bargain theory is that decision agents will subject a bargain to plural values that are somewhat distinct from the bargain of the parties. For example, a court may decline to enforce a ‘bargain’ on grounds that it was not fairly, efficiently, or responsibly ‘bargained’, without paying adequate regard to the bargain itself. If pluralism is to avoid endorsing a restrictive conception of the bargain, it needs to demonstrate that a bargain need not be coincident with either a process or even a result of ‘bargaining’. If pluralism is to avoid the inference that it leads to bargaining indeterminacy – producing a ‘non-theory’ of the bargain -- it needs to delineate the plural perameters of the bargain in light of competing rights-based and goods-based values such as relate to ‘unbargained’ contracts. Pluralism cannot be seen to challenge the paramouncy of a freely concluded bargain without providing a viable means of arriving an alternative constructions of it. Nor is the solution for pluralist courts arbitrarily to ‘make’ bargains for the parties under the guise of pluralism. In fact, plural values directed against ‘unfair surprise’ and ‘confusion’ applies equally to arbitrariness in decision-making as to arbitrariness in contracting. The virtue of pluralism is in providing a context in which to both explain and constrain the exercise of discretion in applying competing values to the bargain.

VI. The Moral Dimensions of a Promise

Decision agents that subscribe to moral monism adopt a prime moral value that trumps all other values.[76] For example, judges ground promises in the ‘rightness’ of respecting one’s promises, or in the ‘goodness’ or fairness of doing so. They express these two moral values variably, such as in terms of liberty, dignity, mutual respect, compliance, cooperation, or comity.[77]

At least four moral bases compete for recognition in determining whether a promise ought to be legally binding. Firstly, courts enforce promises to which parties have morally bound themselves. Basing contractual promises on the free will of the parties replicates the wills theory of contracting. Parties are bound by promises which they have freely and voluntarily assumed.[78] Secondly, courts enforce promises to protect the reasonable reliance of those who may be detrimentally impacted by the failure of a party to keep such a promise. A reliance based theory of promise represents the counterside to a free will theory of contracting. Parties are bound for conducting themselves in a manner upon which other parties may reasonably rely.[79] These first two bases are appropriately summarized as binding a party for having “intentionally invoked a convention whose function is to give grounds – moral grounds – for another to expect the promised performance.”[80]

Thirdly, courts force parties to keep their promises, not only as a measure of honor, respect and deference to their promises, but also to maintain moral order in and respect for civil society. This approach collapses the traditional separation between law and social morality. For example, an undertaking binding in morality is rendered binding in law even though legal consideration for that promise is past.[81] Fourthly, courts subject those who fail to keep their promises to moral-legal consequences.[82] Those legal consequences vary from compensating parties who suffer losses arising from that default, to extracting retribution on account of it, to deterring future default, to seeking to achieve some other moral-legal end that may transcend contract law.[83]

Under moral monism, any one of these moral values serves as the ‘super’ value that is used to determine whether a promise ought to be legally binding. Any one moral value also excludes other values, not limited to values grounded in morality.[84] For example, a court subscribing to moral liberalism can insist that honoring promises in a society of free and voluntary moral agents resides at the apex of the legal order to which other moral values are subordinated.[85]

A problem with moral monism is that it invites courts to establish a moral hierarchy, such as the moral superiority of ‘keeping one’s word’ to which they subject other moral values. A difficulty with this approach is in the choice of one prime moral value among competing alternatives not limited to moral options in the absence of a reasoned explanation for that choice. Keeping one’s word ought to be determinative, but not when doing so is impeded by unforeseen circumstances arising beyond that party’s control. Transforming a moral obligation to pay for past gratuitous services may undermine rather than promote social morality if the promise is extracted by duress.[86]

A related concern is when a court unduly simplifies its account of morality to avoid moral-legal deliberation. For example, it decides that a promise is binding because of consent to it, relegating ‘contract as promise’ into a proxy for a monist wills or consent theory of contracting. The wills or consent of the parties renders the contract binding.[87] A court that subscribes to moral monism also marginalizes ‘fairness’ values. For example, it declares a promise binding to protect the reasonable reliance of the promissee, rendering the ‘promise’ into little more than the moral reframing of promissory estoppel.[88]

Under a theory of moral pluralism, moral decision making derives, not from the supremacy of one prime moral value over all others, but by identifying, ranking and weighing a plurality of moral values in reaching moral sustainable decisions. Such a plural assessment includes recognition of the ‘rightness’ of keeping one’s promises and the ‘goodness’ value of not enforcing promises that ‘unfairly surprise’, or cause ‘undue hardship’ to one party. For example, a court declines to enforce a complex liquidated damage clause in a contract, not simply because it ‘looks like’ a penalty, but because of its ‘confusion’, ‘surprise’ and ‘hardship’ impact on one party.[89]

A concern about courts applying moral pluralism to the formation of contracts is the risk of judicial reasoning regressing into endless discourse over the relative weight of contractual ‘righteousness’ or ‘virtue’. If a promise becomes captive to the vagaries of judicial belief, faith, decency, honor, courage, or some other conception of the ‘right’ or the ‘good’, moral abstractions triumph, leading to formless decisions.[90] Courts as decision agents reach an infinite range of moral determinations, beyond deterring unconscionable contracting or restoring the rights of minority parties in de facto segregated industries. They declare promises binding based on incongruous judicial conceptions of distributive, punitive, corrective and restorative justice.[91] The result is a perception of morality run amuck and contract law along with it.[92] Pluralism cannot provide an a priori account that a single theory of justice ought to apply in all cases any more than rights-based and goods-based theories can do so without being subject to conceptual and functional challenge. The alternative in which courts adopt a default theory of justice framed in compensatory, deterrent or retributive terms is that carving out exceptions to the default theory are likely to be challenging than endorsing it. What pluralism offers is a framework within which to consider the conceptual alternatives as well as their practical implications. For example, if the issue is about the enforceability of a sale of body parts for research, a plural analysis provides a context in which to evaluate the relative weight of a corrective, deterrence, or distributive treatment of such sales. Such a plural inquiry cannot eliminate the moral nature of such pervasive questions as to whether it is per se‘immoral’ to sell body parts.

An illustration of moral indeterminacy is apparent in the Restatement (Second) of Contracts, in stipulating that reliance upon a promise should be ‘reasonable justice requires’.[93] In the absence of a sustained plural analysis, the moral dimension of reasonableness ‘as justice requires’ invites an infinite array of judicial possibilities. The result is to recast the objective moral person into a legally indeterminate person.[94]

One response is that moral indeterminacy is implicit in any effort to attribute a moral dimension to promises. Exploring different moral possibilities is precisely what moral pluralism seeks to achieve. The objectively ‘moral’ person is someone who, through the act of promising, is bound by the dictates of conscience to act justly, build relations of trust with others and contribute to a defensible moral ‘good’. Moral pluralism is a means by which courts can assess those moral values. It is also a medium through which they can be applied in a practically reasonable manner in order to determine whether or not to enforce promises in law.[95]

VII. Self- or Public Regulation?

A theory of contract regulation entails self-regulation by the parties, regulation by public authorities, or some blend of the two. [96] In issue is why, when and how self- and public regulation applies to contracting, how they interact, who decides and according to what criteria.[97]

A theory of self-regulation in contracting is usually monist. For example, the assumption in a liberal society is that contracting parties ought to be free to regulate their own affairs by their own means, such as according to their wills, consent, or promises.[98] However, their self-regulation is also conceivably based on a plurality of values including their knowledge, desire, dignity, character, solidarity, reputation and sense of community, beyond their unitary wills, consent, or promises.[99]

The public regulation of contracts is grounded on the virtue of regulating contracts by public authorities, varying from legislators to administrative agencies and courts of law. Public regulation can be based on monist or pluralist values. As an illustration, a legislature subscribes to regulatory monism in declaring illegal the sale of flick-blade or swish-blade knives to minors on grounds of public interest in deterring their access to dangerous weapons. That regulation is conceived in monist terms, as an instrument of deterrence that transcends all other purposes. [100]

The more complex is the malady, purpose and response to the issues that are subject to regulation, the more likely are regulators to engage in plural analyses.[101] As an illustration, uniform law commissioners identify a variety of concerns in responding to the security, reliability and fairness of particular kinds of e-market transactions such as relate to end user e-consumers. In designing appropriate regulatory schemes, they balance competing values such as preserving free market e-commerce and regulatory measures directed at redressing contract practices which they consider inefficient, or unfair, or both.[102] For example, they study systemic concerns relating to confusing or incomplete product description clauses in categories of e-contracts; they explore different regulatory policies in response to those inadequacies; and they establish applicable principles, rules and templates by which to implement those policies. Courts, in turn, apply such regulatory schemes both in accordance with those legislative guidelines and through common law instruments. For example, they employ traditional principles of economic duress,[103] applicable standards of procedural and substantive unconscionability,[104] and rules of construction like the contra proferentem rule selectively.[105] If the legislative guidelines so direct, or the adjudicative and social context so demonstrate, judges impute immutable implied-in-law into contracts based on values of fairness, evenhandedness, and social justice.[106]

A plural theory of public regulation does not propose that legislatures and courts engage in extra-ordinary inquiry beyond their regulatory mandate. What it does envisage is that they transparently assess the malady being investigated, the purposes being sought and competing plural means of redressing that malady. In effect, pluralism is an instrument by which they can better inform inquiry into the values that motivate their regulatory actions, that help them to resolve contests among plural values and that assist them in choosing among values including among those that otherwise may be incommensurable. Consider the example of a court faced with a contest between autonomy values that favor self-regulation and solidarity values that justify judicial regulation of a warranty exclusion clause in an unbargained discount contract. One pluralist court upholds the exclusion clause on the horizontally integrated ground that both parties implicitly agreed not to dicker over terms in return for the discounted price. Another nullifies the no-warranty clause on the vertically integrated ground that the surprise and hardship value of enforcing the clause outweighs the autonomy value of the buyer ‘consenting’ to it. In so deciding, each accords different qualitative weight to rights-based and goods-based arguments. For example, the court that enforces the exclusion clause concludes that the discounted price is ultimately determinative on consensual or market efficiency grounds. The court that nullifies the clause nullifies the exclusion of warranty protection on grounds that the social inefficiency or inequity of the clause excees its market value. The value of such a plural inquiry is in focusing on complex phenomenon. These includeparty-specific factors such as the significance of e-sellers having deeper pockets, more bargaining leverage and greater legal sophistication than e-buyers.[107] They encompass issues relating to price and non-price competition, such as alleged market dysfunctionalities arising from the sale of complex products like computers, the recurrence of product defects, and the peculiarities of risk avoidance provisions in contracts under scrutiny.[108]

Plural regulators are likely to appreciate choices among regulatory means and ends are open-ended and that one-size-fits-all regulatory regimes will probably fail. They appreciate the need to accord different weights to value policies in otherwise similar contexts, such as in weighing the need to preserve market consistency, promote security in transacting, implement regulatory reviews, and scrutinize levels of market compliance. They also recognize value contestations, such as over whether to regulate ‘straight-jacket’ clauses prohibiting class actions against e-sellers or clauses mandating arbitration in the e-seller’s home state.[109] In reaching such determinations, they also consider countervailing factors such as the extent to which e-buyers have access to consumer protection and public advocacy measures, fast-track arbitration and affordable class actions.[110]

Plural analysis highlights differences in perspectives. It helps to arrive at unanimity among regulators over the nature and form of regulation to adopt. It also may impede consensus as when regulators diverge over the suitability of particular regulatory measures, ‘decision procedures’ by which to implement them,[111] and the timing and extent of such reform measures.[112] Illustrating such divergences among regulators was the failure of the Uniform Computer Information Transactions Act (UCITA), devised by the Commissioners on Uniform State Law, to secure state endorsement beyond Maryland and Virginia.[113] In contention, among other factors, were differences among states over the manner in which to regulate such e-contracts as ‘click-wrap’ and browse-wrap e-contracts,[114] and how to regulate clauses within them such as those that limit the product liability of e-suppliers.[115]

What a plural analysis adds to the public regulation of contracts are different perspectives on governance frameworks. It also encourages a reflective assessment of prior regulatory measures to determine whether those measures satisfied their plural purposes and how to modify them in response to their perceived deficiencies.[116]

VIII. From Discrete Transactions to Relational Contracts

A distinction is sometimes drawn between discrete transactions and relational contracts.[117] Discrete transactions resemble ‘classical’ agreements in which the parties engage in one-off transactions that are monist in nature. What you see is what you get, a hermetically sealed unitary theory of contracting grounded in the wills, intention, or consent of the parties. The discrete transaction includes all the applicable terms and conditions of the agreement between the parties.[118]

Relational contracts involve ongoing dealings between parties including the impact of changes in their contractual relationships, such as arise from modifications over time and space in the nature of the goods, the quantity, price and terms of delivery. Analyses of relational contexts also include consideration of the cultural backgrounds, political affiliations and socio-economic situation of the parties.[119]

It is arguable that discrete transactions and relational contracts are both monist. The supposition is that both are explicated through a monist conception of consent, although relational consent is more widely conceived than discrete consent. The result is that the court’s role is merely to determine the nature of consent according to its place on a continuum from discrete transactions to relational contracts.[120] According to this approach, a court treats consent as the applicable ‘super’ value, albeit supported by a hierarchy of lesser values and by greater reliance on cooperative dealings between the parties at the relational end of the spectrum.[121]

A contrary approach is that discrete transactions and relational contracts are fundamentally different in kind. Discrete transactional are monist, whereas relational contracts are pluralist. A discrete transaction is formed at the precise moment at which the parties consent, namely, at the moment of their accord and satisfaction.[122] The nature of consent in a relational contract may change over the course of a continually changing relationship.[123]

The argument that an analysis of relational contracts is pluralist includes evidence of judges identifying, weighing and applying ‘rightness’ and ‘goodness’ values to contract relationships.[124] For example, judges devise ‘decision procedures’ to identify the cultural, economic and political nature of an evolving relationship, such as the changing rights and duties of parties to long-term supply contracts within volatile markets.[125] They resort to relational pluralism including through their reluctance to rely on the wills or consent of the parties, their avoidance of a ‘single moment’ at which a contract is concluded, and their analyses on changes in the wills and consent of the parties over the course of their contractual relationship.[126]

Pluralist decision agents are also likely to resist monist measures which they consider ill-fitting in relational contexts.[127] For example, they identify and weigh an amalgam of values varying from the mutual trust, confidence, goodwill and reputations of the parties at different stages of their relationship, rather than insist on the priority of their wills or express promises over those values. They also take account of changes in the past behavioral attitudes and practices of the parties, such as response to transportation bottlenecks that impede prompt delivery.[128]

Take Westinghouse’s celebrated commercial impracticability case in 1981.[129] Westinghouse, a long-term supplier of uranium, sought an excuse from its uranium supply contracts on grounds of unforeseen increases in prices arising beyond its control.[130] The parties initially attempted negotiations to resolve their conflict over the terms of supply and the price. They subsequently resorted to protracted litigation; the court appointed a special master to try to broker a resolution between them which the court, in effect adopted as its decision.[131]

An argument in support of a court adhering to a monist analysis in such a case is that the parties consented at the outset to the terms and conditions contained in their supply contract. They subsequently disputed whether the supplier was entitled to an excuse from performance under section 2-615 of the Uniform Commercial Code [UCC].[132] They litigated to resolve that dispute in light of their pre-existing supply agreement and the application of the UCC.[133]

An argument in support of the court adopting a plural analysis is that the litigation was not about the discrete price and supply terms to which the parties had initially agreed. It was about the court brokering a practical, efficient and fair solution based on the ongoing relationship between them within a volatile macro-political and economic environment.[134] However much the judicial remedy co-opted the parties’ value preferences, the court’s determination was not grounded in their original wills, promise, or consent, but in intervening plural values reflecting changes in their contractual relationship.[135]

Both monist and pluralist approaches to relational contracting have their pitfalls. A court that declines to consider the post-contractual preferences of the parties so as not to circumvent their original wills or consent can be challenged for temerity.[136] A court that incorporates their post-contractual preferences into its decisions can be accused of being unduly audacious.[137] The overriding issue is neither the temerity of judges in preserving the original wills or consent of the parties, nor their audacity in deferring to the post-contractual negotiations of the parties. In issue are the normative values which judges attribute to complex commercial relationships in weighing changing party attitudes and practices within dynamic markets. A court that appoints a special master to pinpoint the post-contractual preferences of the parties also helps a court draw inferences about changes in the trust, confidence, solidarity and goodwill of the parties in deciding their case.

A plural analysis does not require that courts broker party-to-party settlements to litigation. It can indicate, to the contrary, that party-to-party facilitation is counter productive. Key issue to consider in reaching such a determination include, among others: the risk of a further breakdown in trust and confidence between the parties; the risk of party-to-party ‘negotiations’ becoming protracted; the prospect of bullying by one party; and the interest of a court in reaching an ‘independent’ decision in such sensitive sectors as environmental and industrial disputes.

IX. The Limits of Efficiency

Almost a legend in its own time is the idealized value of ’efficiency’ in contracting.[138] Ascribed to ‘Law and Economics’, a contract is efficient when it maximizes upon profits or produces benefits that outweigh its costs.[139] Expressed in contractual terms, parties benefit most by concluding efficient – optimal or profitable -- contracts.[140] Such ’efficiency’ is usually ascribed to neo-liberal principles grounded in free market economics and rooted in utilitarian philosophy.[141]

‘Law and Economics’ is founded on preference monism. A single but comprehensive value – efficiency – is conceived as determinative in contracting. The guiding assumption is that courts attribute different properties to efficiency, so long as efficiency serves as the determinative ‘super’ value.[142]

A further free market assumption is that parties to a contract are presumed to make efficient choices within competitive markets in order to maximize benefits and minimize costs. As Richard Epstein proclaimed: “surely all transactions made in organized markets at competitive prices must go unquestioned, for to hold one of these exchanges suspect would be to strike down all identical transactions."[143]

A less self-evident converse assumption is that, in markets that are not organized and in which prices are not competitively determined, courts are more likely to question the utility, costs and benefits of the exchange between the parties. Their purpose, again, is to promote efficient transacting, but by taking into account that a party in an imperfect market may be ‘misled ... as to the true benefits and costs of the deal’.[144]

Courts subscribing to an efficiency analysis presuppose that they are required to redress the costs of inefficient contracting.[145] They devise default rules that minimize on opportunistic behavior, that discourage one party from exerting improper pressure on another,[146] that cure market disruptions,[147] and that elaborate on contractual conditions the parties failed to consider themselves.[148] Evidence of courts addressing these party-to-party costs include, among other factors, a judicial reference to cost inefficiencies in contracting. It also reflects the transaction and opportunity costs and benefits of a party exploiting a bargaining advantage at the expense of the other.[149]

A central problem with applying monism to efficiency in contracting is the hazard that courts will construe efficiency as a ‘super’ value to which all incommensurable values are subordinated.[150] The problem is not in asserting that a court should avoid reaching an efficient outcome, but rather that it ought not to do so when that outcome is outweighed by countervailing values such as unfair surprise to the promisee. As an illustration, a court enforces a warranty limitation clause on rights-based grounds not limited to efficiency that the clause is validated by the discount price paid by the buyer. More contentiously, another court determines that the ‘inequity’ to the buyer of being denied warranty protection on a defective product is outweighed by the risk that buyer assumed in purchasing at a discount. The normative choice is not between one court making an ex ante choice between an efficient outcome and the other trying to avoid unfair surprise to the promisee. The choice is in determining whether these values are reconcilable through a process of horizontal integration and failing that, whether the value of efficiency ought to outweigh the avoidance of unfair surprise in reaching a vertically integrated result.[151]

A court that resorts to plural analysis is likely to question whether an ‘efficient choice’ is also a ‘fair choice’.[152] It is likely to do so, not as a sub-set within an efficiency analysis, but by recognizing that a ‘fair’ choice may but need not be commensurate with an efficient one.[153]

Take the example of a party who opportunistically takes advantage of the liabilities of a debt ridden patent holder to buy a patented drug for an exclusive life-saving drug at a bargain basement price. Assume that the buyer’s aim is to corner the drug market and to double the retail price of the drug. Assume, too, that the purchase was efficient for the buyer acting as a “self-interested egoist who maximizes utility”;[154] that the original patent holder would have become bankrupt but for the sale of the patent; that the patent buyer was opportunistic in taking advantage of the seller’s financial plight to secure the patent at half its market value; and that doubling the market price increased health hazards to patients who could no longer afford to buy the drug.[155]

Under a monist Law and Economics analysis, the value of efficiency is paramount; other values are subordinated to it. If the purchase of the patent is efficient, other values based on equity between the parties and the public interest in an affordable drug are not determinative except as subsets of efficiency. Now assume that a monist court contends that its efficiency analysis actually encompasses such equitable and public interests. The risk is that, in reducing such values to costs and benefits, or some other measure of efficiency, it will extend the efficiency analysis selectively to include some equity and fairness values, while excluding others. For example, one judge justifies the efficiency of the patent sale on grounds that, had the sale not occurred, the patent seller would have gone insolvent and the drug would have been withdrawn from the market. It uses that efficiency rationale to trump any inequity to the seller arising from the sale. It also invokes efficiency to legitimate the buyer doubling the price of the drug on grounds that, had it not bought the patent, all drug users would have been denied access to a drug that was no longer available.[156]

Assume now that another court adopts a pluralistic view, taking account of commensurable and incommensurable values on their own terms, not by treating them as subsets of efficiency. So conceived, it considers that that, however efficient the sale is for the patent purchaser, it is inequitable for the beleaguered patent seller; or that it leads to an “impoverished pre-social conception of human life” in being unaffordable for most patients.[157] That court may ultimately reach the same determination as the court adhering to an efficiency analysis; but only if the plural analysis justifies that determination.

What pluralism adds to the analysis is a framework for assessing the legitimacy of the patent sale that is wider than the framework provided by efficiency. For example, the plural framework enables decision agents to explore a wider range of reasons for their decisions than under an efficiency analysis. It also helps them reach ‘winner-take-some’ rather than ‘winner-take-all’ remedies that better accord with plural values, such as specifying steps for increases in the price of the drug. It also encourages both contract and law reform resulting from a comprehensive plural analysis of the issues.

The problem with a law and economics approach to pluralism is the tendency to adopt an efficient process or outcome as the implicit – or explicit – attribute of a plural analysis. This is not to claim that an efficiency analysis cannot be pluralist, but rather than the default position, more often than not, is likely to be monist not pluralist in character.

‘Law and Economics’ is not without a response to these plural challenges.[158] As the ‘second wave’ of ‘Law and Economics’ recognizes, a comprehensive cost-benefit analysis may take account of values like corrective and distributive justice without subjecting them to narrow conceptions of profit maximization.[159] In effect, the efficiency of the sale of the patent drug is treated as efficient depending on how it is weighed in light of the equitable interests of the patent seller in the first instance;[160] and the cost to drug users as a further inquiry.[161] The problem with this ‘second wave’ of efficiency analysis is that it may produce a variant of preference monism in which goods-based values are discounted on the a priori grounds that that are not as valuable as efficiency. Whether or not efficiency ultimately ought to prevail should arise ex posteriori in light of other values that simply may not be commensurate with efficiency.[162]

The alternative is to subscribe to preference pluralism in which no one value is valued more than all others. No particular value, like efficiency, need be stretched beyond its reasonable limits; and other plural values need not be discounted.[163]

X Unitary or Plural Rationality?

A monist conception of rationality holds that a prescribed process of rationality is itself a ‘super’ value by which decision agents like courts identify, rank and weigh other values in reaching decisions. Most prominent among monist conceptions of rationality is utilitarianism in which the purpose is to arrive at the greatest happiness of the greatest number through a rational process that maximizes upon utility, or in ‘Law and Economics’ terms, that promotes efficiency.[164]

Unlike a monist conception of rationality, a court adhering to plural rationality does not treat a ‘super’ rational process leading to a decision as inherently more rational than all other rational processes.[165] For example, it uses different processes of rational reasoning as well as disparate plural measures to determine when to enforce a promise in contract,[166] when to uphold a transaction as efficient, and when to construe a contract term as fair.[167] In so employing ‘preference rationality’, it arrives at different value choices including by adopting an amalgam of values.[168]

Courts that subscribe to preference rationality ultimately accord higher worth to one value, such as efficiency, than to others. However, that preference stems, not from the a priori primacy of one value as arises under preference monism, but from rationally assessing it in light of the rational alternatives that includes other ‘rightness’ and ‘fairness’ values. For example, a judge who seeks to determine a ‘just price’ in a discrete transaction employs different rational processes to assess how that price was set,[169] how it compares to the price of comparable products, and how to regulate a predatory price in a particular market.[170] Its preference for a particular model of pricing stems, not from the per se efficiency of that preference, but from a rational assessment of it in light of market conditions, cost-price correlations, competitor pricing and perceptions of market abuse, among other factors.[171] Its choice, in identifing and ranking plural alternatives, is also not arbitrary. It identifies prevailing monetary policies including regulations directed at redressing predatory prices. It considers policies aimed at compensating for and deterring aberrant pricing practices. It uses positive economics to assess how such prices are set, and behavioral studies to assess their market impact.[172] It monitors compliance with applicable pricing regulations on a case by case or systemic basis.[173]

A criticism is that such a rational process is subject to manipulation in order to arrive at a preferred result that are rational only because the presiding judge so asserts.[174] A related criticism is that such rational processes leads to judicial indeterminacy, not determinacy.[175]

Blaming preference rationality for indeterminacy fails to recognize its intrinsic value in assisting judges to decide complex cases through a more comprehensive synthesis of plural values than is considered by preference monists.[176] For example, preference rationality helps judges to assess the process and results of bargaining, and to arrive at rational alternatives in policing and enforcing perceived limitations in boilerplate ‘bargains’.[177] Courts also use rational processes to appraise plural alternatives, such as by analyzing ‘patterns’ of party practice, taking account of account of such factors as the age, gender, education and wealth of the parties.[178]

Preference rationality also aid courts in reaching rational, as distinct from rationalized results. Courts also use it to explain and respond to such issues as irregular price ‘spikes’ in target markets, and to determine the ‘just price’.[179]

XI. Functionalism as Decision Procedure Pluralism

Functionalism defines contracts, not in terms of its constituent elements, but according to its causes and effects such as the causal relationship between the state of mind and behavior of contracting parties.[180] For example, functionalists not limited to courts, use empiricism and logic to determine the causal relationship between the intentions of parties and their non-contractual behavior.[181] They utilize behavioral science, psychology and sociology to identify, verify, or reify normative suppositions about such behavior and positive economics to measure behavioral patterns in family, employment and other contexts.[182] Behavioral scientists employ empirical studies to assess particular kinds of non-contractual behavior such as in informal ‘trust building’ operating outside the purview of contracts.[183] Judges admit ‘social fact’ evidence to determine the causal connection between education, professional background and employment history and patterns of trust building between contracting parties.[184]

Functionalism assist decision agents to better understand contractual behavior, such as when business relations are more likely to be concluded informally, when parties dispense with formal contracts crafted by lawyers, and how they settle differences through informal negotiations.[185] Empirical and analytical functionalism also help to understand how regulatory measures work, such as schemes to monitor and redress anti-competitive behavior in selected industries.[186]

Functional study is not invariably value neutral. Decision agents can employ it as much to affirm, as to test, value hypotheses about the causal relationship between the intention of the parties and patterns of contractual behavior. At its worst, functional analysis is dressed up to validate pre-determined normative ideologies, or degenerate into “highly amorphous sociological inquiry” with dubious and instrumental ends.[187] It is expensive, self-justifying and irrational; and it leads to inconclusive or unreliable results. It also gives rise to lingering doubts about whether empiricists have asked the ‘right’ questions.[188]

At its best, functional analysis identifies values and test suppositions such as relate to contractual behavior without becoming captive to those values or suppositions. It assist in determining the reasons for the breakdown in trust building between parties engaged in non-contractual dealings, the probable reasons for their resort to formalized contracts and their rationale for pursuing litigation. It assists decision agents to devise different measures to direct, guide, or channel contractual behavior depending on the behavioral context.[189]

How well a functional study works in practice depends on such factors as the complexity of the behavior under analysis, the suppositions underlying the study, the analysis used; the result reached; and its perceived reliability. Functional study can assume that contracting parties in like situations may act alike; but it cannot account for the inner states of mind of those parties that are not demonstrated through rational or empirical study of their behavior.

XII. Construing Commensurable and Incommensurable Values

An interpretative theory of contracting holds that the formation of contracts is determined primarily through a process of interpretation, or more expansively, through contract construction.[190] The interpretation of a contract is grounded in monism when a court interprets a contract in accordance with ‘super’ values, such as the ‘wills’ or ‘consent’ of the parties,[191] or more comprehensively, by construing that contract according to their utility or efficiency.[192] A courts adopts monist ‘decision procedure’ by interpreting the ‘plain word’ of contracts to reflect the subjective wills of the parties through the literal words they have used.[193]

In contrast, judges interpret contracts in light of plural values.[194] For example, they rely on plural conceptions of ‘good faith’ and ‘fair dealings’ beyond the intention-bearing conduct of the parties.[195] They construe the ‘true meaning’ of a contract expansively in accordance with plural conceptions of dependability, responsibility and accountability in relational contracting, beyond the ‘plain word’ meaning of a contract.[196]

In practice, judges can commence using monist methods of interpretation and conclude with plural constructions.[197] For example, they start by interpreting ‘whole agreement clauses’ in contracts as ‘fully integrated’ in expressing the wills, consent or promises of the parties; and admit extrinsic evidence only to clarify ambiguities in those contracts.[198] They progress to ‘fill gaps’ in those contracts by taking account of the course of dealings[199] and performance of the parties,[200] the ‘network effect’ of the conduct of the parties,[201] and by imputing industry norms to them.[202] They conclude by constructed judicial boundaries between self-interest and altruism in imposing good faith duties on those parties.[203]

Courts also adopt traditional or progressive methods of ‘filling gaps’ in contracts. For example, they commence with the monist assumption that contracts have lacunae or ‘gaps’ which courts need to ‘fill’ to clarify or complete the intention of the parties.[204] They progress to ‘fill gaps’ on grounds of fairness that go beyond clarifying ambiguities or completing inchoate terms in contracts.[205]

There is nothing extraordinary about decision agents employing divergent methods of ‘gap filling’ in constructing contracts. The trepidation is over the reasons for, nature of and justifiability of ‘gap filling’ in discrete cases. Those that adhere to one-dimensional conceptions of monism such as the subjective wills of the parties decline to ‘fill gaps’ in contracts on deterministic grounds that courts should not ‘make contracts’ at variance with the wills of the parties.[206] Those that are ambivalent about open textured methods of contract construction claim that they are merely clarifying or completing the intention of the parties, whereas their decisions may reflect plural values that abandon those intentions.[207] Those that are self-avowedly deterministic justify imputing terms into contracts on ‘rightness’ and ‘fairness’ grounds that realign contracts around communal as distinct from party-to-party values, or the converse.[208] Those that legitimate their plural constructions around contract terminology use legal fictions to hypothecate the intention of the parties in a manner that bears no reasonable relationship to the state of mind of those parties.[209] The result is a morass of methods of interpretation that courts conceive of inconsistently and apply unpredictably.

What pluralism offers is an interpretative platform along which courts identify the plural alternatives as well as provide reasons for exercising preferences among them in construing contracts. That pluralism leads to divergent constructions of those contracts affirms the value of open-textured contracting. It also encourages exploration into the multifaceted nature of contracting in which parties have credible cultural, economic or social reasons for filling gaps in their agreements themselves. For example, they have greater faith in their capacity to resolve their differences through mutual trust than in courts filling gaps in their contracts on efficiency, equitable or other grounds.[210]

XIII. Beyond Critical Analysis

Critical social, race and feminist scholars attack neo-classical theories of contracting for relying on self-serving liberal values.[211] They challenge liberal courts for enshrining the right of the atomized individual to act as a free, efficient, rational and functional agent;[212] for transforming ‘private’ rights to contract into benefits for the moneyed elite;[213] for undermining the enterprise bargaining needs of the working poor in the corporate interest; for disempowering women and minorities in commercial relations; and for artificially differentiating between private rights to contract and the public good.[214]

Critical scholars also confront the judiciary for raising legal form over legal substance;[215] for using paternalistic principles of contract law to mask substantive inequalities between the parties;[216] for invoking self-serving contract procedures to perpetuate systemic disadvantages; [217] for recasting a ‘reasonable white male person’ into a ‘reasonable person’ standard ; [218] and for falsely equating that standard with the fair treatment of those whom it disenfranchises.[219]

Critical scholars also confront the restrictive nature of plural preferences.[220] For example, they question judicial pluralists for aligning private rights to contract with a ‘plural good’ which is no greater than the sum of liberal privileges within it.[221] They challenge law reform proponents for invoking procedural rights selectively in order to perpetuate ‘private’ rights to contract at the expense of communal values.[222] They confront post-legal realists for allowing themselves to be co-opted by mainstream liberal thought;[223] and they attribute the indeterminacy of contract law in part to pluralist courts that avoid transgressing beyond pre-set liberal boundaries.[224]

Critical scholars have a legitimate quarrel with judicial reliance on monist and pluralist contract theories that originate in legal liberalism. Judges who adopt monist conceptions based on the wills, consent, or promises of contracting parties accord priority to individual rights at the expense of countervailing social, economic and political values.[225] Courts that orient preference pluralism around ‘rightness’ more than ‘goodness’ values perpetuate the liberal status quo, ignoring the extent to which contracts ought to be instruments of solidarity and community.[226]

What Critical Scholars have not adequately acknowledged is the extent to which statutes and judicial precedents have enhanced plural conceptions of equality in the intersection of cultural differences. However marginal these achievements are, they have given at least some protection to select classes of employees and consumers, women and visible minorities.[227]

Critical Scholarship’s nihilist critique has also failed to produce a viable alternative to the judicial application of pluralism to contracts, other than through utopian idealism.[228] The utopian conception of ‘the good’ to which some critical theorists subscribe may be virtuous, but it may also regress into the preferred idealism of some theorists at the expense of others.[229]

XIV. Cultural Pluralism

Cultural pluralism is about acknowledging the cultural background and life experiences which particular groups such as religious, cultural, political, economic communities share.[230] It is about the impact which their different backgrounds and life experiences have upon their individual practices,[231] such as the impact their religious affiliations have on marriage contracting, or on agreements between spiritual leaders and congregants.[232] Cultural pluralism is also concerned with fostering cultural inclusivity, such as by using collaborative law to resolve family contract disputes between parties who are willing to work together to resolve differences,[233] and by applying principles of restorative justice to heal cultural-ethnic differences.[234]

Cultural pluralism is not an all purpose solvent for every contractual ill. It helps to understand historical-cultural developments, such as the influence of Nineteenth Century liberal values on freedom of contract and the impact of Twentieth Century consumer-welfare upon the ‘adhesion contract’.[235] It responds to the intersection of differences among cultures, such as through ‘connecting factors’ that link individuals to voluntary associations with competing attitudes towards ‘trust building’.[236]

Cultural pluralism also provides a better grasp of the technological, linguistic, psychological and sociological backgrounds of parties, such as in distinguishing between e-merchants and e-consumers[237] and between e-consumers and e-merchant consumers.[238] It also assists in assessing the ‘free’, ‘fair’, ‘efficient’ and ‘rational’ behavior of parties within discrete cultural settings such as in emerging e-markets.[239]

Cultural pluralism faces two particular challenges in relation to contracts. The first is in weighing, ranking and applying cultural traits to distinctive kinds of contractual and non-contractual behavior.[240] The second is in recognizing the influence that the cultural-religious backgrounds and life experiences of decision agents have upon their decisions.[241]

Cultural pluralism does not have glib solutions to these concerns, but it does have responses. Decision agents can use anthropological and interdisciplinary studies to confirm the nature and significance of cultural change. They can vigilantly redress cultural myopia, not least of all their own. But one should not blithely assume that historical-cultural study will invariably be illuminating, or that it will neutralize cultural bias in decision making.[242]

What cultural pluralism can do for contract law is help decision-makers identify the impact of emerging and receding cultural traits upon contractual behavior, such as in considering the impact that ‘new’ Twenty First Century e-merchants have had upon advertising, pre-contractual representations and warranty clauses in emerging areas of contract law.[243] It can aid decision-agents to arrive at culturally sensitive responses non-price competition such as within discount e-markets.[244] It can encourage them to weigh cultural values in a palpable manner, including by acknowledging their own cultural predilections and different perspectives.[245]


This article challenges the application of intractable conceptions of monism to the formation of contracts and argues for greater resort to judicial pluralism. If monism is about enforcing the free, efficient, or rational choices of individual contractors, pluralism is about courts being willing to value the cultural background and life experiences of those who make those choices. If contract formation is about judges preserving the reasonable expectations of the parties, cultural pluralism is about courts considering the socio-economic, political and cultural context in which those expectations arise.[246]

The article disputes the presuppositon that pluralism in contracts leads to a non-theory in which all theoretical postulations are treated as incommensurable with one another, leading to contract nihilism. The purpose of pluralism is not to dismiss all, or even any, contract theory out of hand. Its purpose is to encourage exploration over the manner in and extent to which different substantive theories of contracting are conceived as exclusive, or complementary to one another. Included in such an analysis is the prospect of pluralism endorsing, refining, and sometimes rejecting approaches towards contract law that fail to engage fully with pertinent plural values. Pluralism does not seek to accomplish these ends through the radical transformation of contract law, but through an incremental assessment of its operation in often complex and contradictory real world contexts.

Judicial pluralism in particular is about resisting the polarization that arises from monism. It is about courts juxtapose contractual consent against no-consent, promise against no-promise and will against no-will approaches to contracting. It is concerned with recognizing how judges apply plural values to contracting through prudential wisdom and practical reason. It is about how they reach determinations in light of the background and life experiences of contracting parties, not by vaporizing those values within a unitary theory of contracting.

The resilience in judges applying pluralism to contracting ultimately depends on two bulwark principles. The first is that no one set of plural values ought to be treated is a priori more fundamental than all others. The second is that choosing among plural values requires an informed appraisal of their differences rather than an arbitrary election among them. Satisfying these two principles will determine the future of judicial pluralism in contracting and in some ways, the future of contracting itself.

[1] On this theoretical debate, see e.g. Nathan B. Oman, A Pragmatic Defense of Contract Law, 98 Geo. L. J.77 (2009); Daniel L.O’Neill, Mary Lyndon Shanley and Iris Marion Young, Illusion of consent (2008); Steven J. Barton, Elements of Contract Interpretation, chs.2-3 (2008); Francis H. Buckley, Just Exchange: A Theory of Contract (2005); M. P. Ellinghaus and E.W.Wright, Models of Contract Law: An Empirical Evaluation of their Utility (2005); Stephen A. Smith, Contract Theory (2004); Francis H. Buckley, ed., The Rise and Fall of Freedom of Contract (1999); Leon E. Trakman, Contracts: Legal, in 3(8) Int’l Encyc. Soc. & Behav. Sciences, 102 (2001); R.A. Hillman, The Richness of Contract Law: An Analysis and Critique of Contemporary Theories of Contract Law 1997); McHale Trebilcock, The Limits of Freedom of Contract (1993); James Gordley, The Philosophical Origins of Modern Contract Doctrine (1991). On the international dimensions of this debate, see Paul Schiff Berman, The New Legal Pluralism, 9 Annual Rev. Law & Soc. Sc. 225 (2009); P.S. Berman, Global Legal Pluralism (2007) 80 S. Cal. L. Rev. 1155.
[2] On the wills theory of contracting, see infra Section II. On consent theories of contracting, see infra Section III. On moral theories of contracting, see infra Section VI. On efficiency theories of contracting, see infra Section IX. On the proposition that the moral basis of a contract is based on the consent of the parties to exercise rights and assume duties, see Randy E. Barnett, A Consent Theory of Contract, 86 Colum. L. Rev. 269 (1986). On public policy rationale behind legally binding promises, see R.A. Buckley, Illegality and Public Policy (2002); M. Furmston, Cheshire, Fifoot and Furmston, Law of Contract 449 (14th ed., 2001); Leon E. Trakman, The Effect of Illegality in the Law of Contract: Suggestions for Reform, 55 Can. Bar Rev. 627 (1977). See generally Charles L. Knapp, Rules of Contract Law, chs.1-2 (2009); Richard Stone, The Modern Law of Contract, ch.1 (2009). For a useful index and digest of writings on contract law, see Adam Kramer, Contract Law (2010).
[3] Monism has a lengthy history. For example, the first issue of the philosophical journal, “The Monist”, was published in 1881. See further
[4] These monist conceptions are all, to a lesser or greater extent, rights based theories of contracting in that they focus on the rights and duties of the contracting parties, as distinct from community values or responsibilities beyond those rights. See Leon E. Trakman and Sean Gatien, Rights and Responsibilities (1999). On a ‘rights based’ theory of contracting based on private property, see Andrew S. Gold, A Property Theory of Contract, 103 Nw U. L. Rev. 1 (2009).
[5] Preference monism entails a preference for values that are commensurable and able to be harmoniously integrated. On preference monism in utilitarian philosophy, see e.g. J.B. Schoeewind and Dale. E. Miller, eds, Utilitarianism in the Basic Writings of John Stuart Mill 241 (2002). On the hierarchical ordering of values in monism as distinct from pluralism, see e.g. William A. Galston, Liberal Pluralism 6 (2002).
[6] On an all-encompassing monist philosophy of justice, see e.g. John Rawls, A Theory of Justice (1971). On monist wills, consent and promise theories of contracting, see infra Sections II, III and VI respectively. On monist utility and efficiency theories, see infra Section IX. But cf. Ronald Dworkin, Sovereign Virtue: The Theory and Practice of Equality 4-5 (2000).
[7] For a classical treatment of this conflict between liberty and equality, see Isaiah Berlin, Four Essays on Liberty (1969). For a critique of monism generally, see Galston, supra n. 5, at 8.
[8] On this preoccupation with why a promise is legally enforceable, Mel Eisenberg once proclaimed: “A promise, as such, is not legally enforceable. The first great question of contract law, therefore, is what kinds of promises should be enforced." See M. Eisenberg, The Principles of Consideration, 67 Cornell L. Rev. 640 (1982). See too Omri Ben-Shahar & Lisa Bernstein, The Secrecy Interest in Contract Law, 109 Yale L.J.1885 (2000). Most theories of judging are grounded either in legal positivism or in legal realism, not legal pluralism. On a blend between legal formalism and legal realism, referred to as “realistic formalism”, see Chris Guthrie, Jeffrey J. Rachlinski and Andrew J. Wistrich, Blinking on the Bench: How Judges Decide Cases, 93 Cornell L. Rev.1 (2007). But see David Dyzenhaus, The Very Idea of a Judge (2010) 60 Toronto L. J. 61; Neil Duxbury, Lord Wright and Innovative Traditionalism, (2009) 59 Toronto L.J. 265. See further infra Section XIV.
[9] On such commensurable and incommensurable values, see e.g. David Wiggins, Incommensurability, Incomparability: Four Proposals in Ruth Chang, Incommensurability, Incomparability and Practical Reasons (1997); Bernard Williams, Moral Luck (1981); Michael Stoker, Plural and Conflict Values (1990).
[10] This combination of deliberative practical reason and prudential wisdom is expressed here through the conception of “preference pluralism”. See infra nn.12 and 17. On measuring the intensity of plural preferences, see Daphna Lewinsohn-Zamir, Identifying Intense Preferences, 94 Cornell L. Rev. 1391 (2009).
[11] For the view that liberty and equality are fundamentally in conflict, see Berlin, supra n.7. On moral pluralism, see .e.g. Ruth Chang, ed, Putting Together Morality and Well-Being, in P. Bauman and M. Beltzer, eds., Practical Conflict (2004); John Kekes, The Morality of Pluralism (1993); Charles E. Larmore, Patterns of Moral Complexity (1987). On cultural pluralism including the treatment of emerging and receding cultural values, see infra Section XIV.
[12] Such ‘preference pluralism’ is distinguished from ‘foundational pluralism’ in not accepting that one value may prevail over all others, for example, that liberty to contract may prevail over equality or efficiency in contracting. It is arguable that a ‘normative pluralist’ may also be a ‘foundational monist’ in expressing a preference for both different kinds of values such as liberty and equality (normative or preference pluralism) but also for a ‘super’ value among those values (foundational monism). For classical commentary on ‘normative’ and ‘preference pluralism’, see G.E. Moore, Principia Ethica (1903). On ‘foundational pluralism’, see e.g. Judith Jarvis Thomson, The Right and the Good, 94 J. Phil. 273, 275-76 (1997).
[13] “Sharing agreements’ are instruments firms use to agree to contribute to antitrust penalties if one party is subsequently held liable; in effect constituting a co-insurance contributory scheme. On the extent to which such agreements undermine antitrust regulatory policy, see Christopher R. Leslie, Judgment-Sharing Agreements, 58 Duke L. J. 747 (2009). On a response to the illegality of ‘lockout agreements’ by which a party agrees not to deal with a third party, see Barak D. Richman, The Antitrust of Reputation Mechanisms: Institutional Economics and Concerted Refusals to Deal, 95 Va. L. Rev. 325 (2009). On political pluralism particularly in relation to ‘public’ cultures, see Michael Walzer, Spheres of Justice: A Defense of Pluralism and Equality (1984).
[14] See e.g. Gregory Klass, Contracting for Cooperation in Recovery, 117 Yale J. J 2 (2007). On arguments for using liquidated damages clauses to discourage uncooperative behavior, see Tess Wilkinson-Ryan, Do Liquidated Damages Encourage Breach? A Psychological Inquiry, 108 Mich. L. Rev. 633 (2010). For an argument in favour of negative damages, see Barry E. Adler, Efficient Breach Theory through the Looking Glass, 83 N.Y.U. L. Rev. 1679 (2008).
[15] On such implied terms under a ‘consent theory’ of contracting, see infra Section III. On the complexity of moral pluralism, see e.g Henry S. Richardson & Melissa S. Williams, Moral Universalism and Pluralism (2008); P.Baumann and M. Betlzer, supra n. 11; T. Chappell, Understanding Human Goods (1998); L.Becker, Places for Pluralism" 102 ethics 707-719 (1992); C. Larmore, Patterns of Moral Complexity (1987); C. Gowans ed., Moral Dilemmas (1987).
[16] On ‘decision procedure’ pluralism, see infra text accompanying n. 37. On ‘social fact’ evidence, see infra n. 184. On the application of decision procedures to cultural pluralism, see infra Section XIV.
[17] On ‘practical reason’ in making normative choices among incommensurable values, see Joseph Raz, Incommensurability Agency in Chang supra n. 9. See too Joseph Raz, Engaging Reason: On the Theory of Value and Action 48-49 (1999). ["If of the options available to agents in typical situations of choice and decision, several are incommensurate, then reason can neither determine nor completely explain their choices or actions".] It is arguable that Raz’s imputation of ‘practical reason’ to rational choice is reductionist. A more accurate descriptor of the normative choice among incommensurable values is practical reason grounded in preference pluralism. Exercising preferences among plural alternatives are practical reasons for those choices. For a plural account of ‘duty’ and ‘power’ expressed through a ‘compound rule’ in contract law, see Gregory Klass, Three Pictures of Contract: Duty, Power, and Compound Rule, 83 N.Y.U. L.Rev.1726 (2008). On a plural theory of rights and responsibilities, see Trakman and Gatien, Rights and Responsibilities, chs.1-2, supra note 4.
[18] See e.g. infra Section II.
[19] On a different conception of vertical and horizontal integration, see Nathan Oman, Unity and Pluralism in Contract Law, Nathan Oman, Unity and Pluralism in Contract Law 103 Mich. L. Rev. 1483 (2005).
[20] This plural conception is distinguishable from the late Grant Gilmore’s conception of the ‘death’ of contract arising, inter alia, from the alleged erosion of consent in contracting and the growth of tort-based ‘fault’ as a substitute value determinant. See Grant Gilmore, The Death of Contract (1974). Contestations around plural values in contracting is a challenge for contract law which is quite different from its conceptual or normative death. See further infra esp. Sections VII-X.
[21] On the (natural law) liberal roots of deontological liberalism in the formation of contracts, see Christopher Wolfe, Natural Law Liberalism (2006); John Rawls, The Law of Peoples (1999); Patrick S. Atiyah, The Rise and Fall of Freedom of Contract (1979).
[22] Deontological liberalism relies on rights that inhere in individuals, rather than in ‘goods’ that are shared. Such a conception is monist in subscribing to unitary values that are identified with the liberal or ‘autonomy’ rights of individuals, such as their rights to contract. See Leon E. Trakman & Sean Gatien, Rights and Responsibilities, supra n. 4, Chapter 2.
[23] On “expressive liberty” as a balance between outward existence and inner conceptions of value, see William A. Galston, Liberal Purposes: Goods, Virtues and Diversity in the Liberal State 10 (1991). On the normative relationship between love and liberalism in Judeo-Christian values see Paul A. Kahn, Putting Liberalism in Its Place (2008). See further Section VII.
[24] “According to the classical view, the law of contract gives expression to and protects the will of the parties, for the will is something inherently worthy of respect." See Cohen, The Basis of Contract, 46 Harv. L. Rev. 553, 575 (1933). On the genesis of this classical view, see Frederick Pollock & Franklin Strawn Dickson, Principles of Contract (1888). See further infra Sections II, III and VI.
[25] See further infra Section IX.
[26] Parties who freely conclude contracts are legally ‘bound by their pacts’: pacta sunt servanda. On the ancient origins of this concept, see Paradine v. Jane (1647) Aleyn 26.
[27] On the predominance of the liberty to contract, see e.g. Buckley, Just Exchange, supra n. 1, at 17 and 27. See further Jason W. Neyers, Richard Bronaugh and Stephen G.A. Patel, Exploring Contract Law (2009).
[28] For classical commentary on ‘contracts of adhesion’, see E.W. Patterson, The Delivery of a Life Insurance Policy, 33 Harv. L. Rev.198 (1919); Friedrich Kessler, Contracts of Adhesion—Some Thoughts about Freedom of Contract, 43 Colum. L. Rev. 629, 642 (1943); Frederick Kessler, The Protection of the Consumer under Modern Sales Law, Part 1: A Comparative Study, 262 Yale L. J. (1964).
[29] On such a pluralist approach, see infra Section II. On ‘the good’, see e.g. Fred Feldman, Pleasure and the Good Life (2004); Christine Swanton, Virtue Ethics: A Pluralistic View (2003). See too Berlin, supra n. 7.
[30] On these values, see e.g. Thomson, supra n. 12; Trakman and Gatien, 4ghts and Responsibilities, chs.1-2, supra n. 4.
[31] Preference pluralists – like preference monists -- treat ‘goodness’ as a value with different qualitative attributes. However, unlike preferential monists, preferential pluralists do not treat one conception of ‘goodness’ as inherently superior to all others. On preference monists, see text accompanying n. 4. On a preference pluralist perspective in law, see Joseph Raz, Engaging Reason, supra n. 17, at 46-67. On the ranking of emerging values, see infra Section XIV.
[32] See infra n. 36.
[33] On ‘click-wrap’ and ‘browse-wrap’ contracts, see infra n. 114. On ‘consent’ to standard form contracts, see Barnett, Consenting to Form Contracts, 71 Fordham L.Rev.627, 637 (2002).
[34] On the intersection between contracts and torts in products liability cases, see infra n. 83. On contract-as-product, as distinct from contract-as-consent, see Radin, infra n. 60.
[35] On the bases for theoretical disagreements in legal positivism in particular, see Brian Leiter, Explaining Theoretical Differences, 76 Chi. L. Rev. 1216 (2010); Scott J. Shapiro, The ‘Hart-Dworkin’ Debate: A Short Guide for the Perplexed, in Arthur Ripstein, ed, Ronald Dworkin 22, 49 (2007).
[36] The case for courts injecting plural standards of fairness into contracts is reinforced in transactions involving structural bargaining disparities between parties. See e.g. Andrew Phang, Doctrine and Fairness in the Law of Contracts, 29 Leg. Stud. 534 (2009); Michael I. Meyerson, The Reunification of Contract Law: The Objective Theory of Consumer Form Contracts, 47 U. Miami L. Rev. 1263, 1270 (1993). Such judicial construction is most evident, historically, in the law of insurance contracting. See e.g. 2 Allan D. Windt, Insurance Claims & Disputes: Representation of Companies and Insureds
§ 9 (5th ed. 2007); Roger C. Henderson, The Doctrine of Reasonable Expectations in Insurance Law After Two Decades, 51 Ohio St. L.J. 823 (1990); Kenneth S. Abraham, Judge-Made Law and Judge-Made Insurance: Honoring the Reasonable Expectations of the Insured, 67 Va. L. Rev. 1151 (1981); Robert E. Keeton, Insurance Law Rights at Variance with Policy Provisions, 83 Harv. L. Rev. 961 (1970).
[37] On ‘decision procedure’ pluralism, see e.g. R.E. Bales, Act-utilitarianism: Account of Right-Making Characteristics or Decision-Making Procedures? 8 Am. Phil. Q. 257 (1971). Courts may also employ ‘covering values’ as the framework in which they weigh and sort plural values. See e.g. Ruth Chang, Putting Together Morality and Well-Being, in P. Baumann and M. Betzler, supra n. 15, at 114. See further infra Section XI.
[38] On trust building as an instrument in interpreting the intention of parties to contract, see Gregory Klass, Intent to Contract, 95 Va. L. Rev. 1437 (2009).
[39] For arguments in favor of implying ‘fairness’ values into contracts in cases of commercial impracticability, see Leon E. Trakman, Winner Take Some: Loss Sharing and Commercial Impracticability, 69 Minn. L.Rev.471 (1985) [hereinafter ‘Winner take Some’]. For arguments in favor of imputing efficiency values to such contracts, see Sheldon Halpern, Application of the Doctrine of Commercial Impracticability, 135 U. Pa. L. Rev. 1123 (1987) at 1133. On implied-in-fact and implied-by-law values in the consent to contract, see infra Section III.
[40] On the wills theory in contracts, see e.g. Buckley, Just Exchange, supra n. 1, 27. On the evolution of the wills theory of contracts in Continental European philosophical and legal thought, see James Gordley, Philosophical Origins, supra n. 1, ch.7.
[41] A plural assessment of values may help to extend monist values. Cf. Joseph Raz who holds that “the will is the ability to choose and perform intentional actions.” Joseph Raz, Engaging Reason, supra n. 17, at 47.
[42] Such a ‘vice’ or ‘defect’ negates the wills of the parties and therefore does not conflict with a subjective wills theory. See further infra Section V. See too Stephen J. Smith, Contracting under Pressure: A Theory of Duress, 56 Camb. L. J. 343 (1997).
[43] The contradictory subjective wills of the parties is illustrated in classic English case of Raffles v Wichelhaus, Ct. of Exchq, 159 Eng. Rep.375 [1864]. There, the parties agreed upon a shipment ex peerless; but each had a different ship, ‘Peerless’, in mind. The court concluded, inter alia, that the parties lacked consensus ad idem.
[44] As Judge Skelly Wright once stated in Transatlantic Financing Corp.[1966] USCADC 243; , 363 F.2d 312, 318–19 (D.C. Cir. 1966) a case on commercial impracticability arising from the 1966 Suez Canal closure: “Parties to a contract are not always able to provide for all the possibilities of which they are aware, sometimes because they cannot agree, often simply because they are too busy”.
[45] The Civil law may be more responsive to plural theory than the common law in being less preoccupied with rights based theories of contracting grounded in the liberty to contract. See generally James Gordley, The Enforceability of Contracts in European Law (2001); Larry D. Dimatteo, Contract Theory: The Evolution of Contractual Intent, 22 (1998). But see Peter Benson, The Theory of Contract Law: New Essays (2001).
[46] See e.g. Joseph M. Perillo, The Origins of the Objective Theory of Contract Formation and Interpretation, 69 Fordham L. Rev. 427 (2000);
[47] The absence of the perfected wills of the parties is central to an objective theory of contracting, whether or not it is grounded in monism or pluralism. See Steven J. Barton, Elements Of Contract Interpretation, chs.2-3, supra n.2. See too F.D. Rose, Consensus ad idem: Essays in Honour of Guenter Treitel, 56 Camb. L.J. 231 (1997).
[48] In progressing along this continuum, a wills theory of contracting can be recast into an implied consent theory. See further infra Section III. On Barnett’s ‘default rules’ in the formation of contracts, see Randy E. Barnett, The Sound of Silence: Default Rules and Contractual Consent, 78 Va.L.Rev.821 (1992). On an implied covenant of good faith, see infra n. 184.
[49] For classical commentary on the extent to which an objective theory of contracting supplements or contradicts a subjective theory of contracting, See Restatement (Second) Of Contracts, § 2 comment b (1979); E. Allen Farnsworth, Contracts § 3.6, 114 (1982); Ian R.MacNeil, Restatement (Second) of Contracts and Presentiation, 60 Va.L.Rev.589 (1974).
[50] The plural nature of the objective theory of contracting is best illustrated through moral pluralism. See e.g. infra Section VI.
[51] A leading proponent of a consent theory of contracting is Randy Barnett. See Barnett,
A Consent Theory of Contract, supra n. 2, 309-310.
[52] See further Barnett, supra n. 2, 305, 331. On ‘contract as promise’, see infra Section VI.
[53] In subscribing to an objective measure of consent, Randy Barnett emphasizes the difficulty in ascertaining the subjective state of mind of the parties. But he does not see anything contradictory between his conception of objective consent and consent as a subjective measure of agreement. See Barnett, supra n. 2, at 305-310.
[54] See e.g. Barnett, id. 327. On the ‘irrelevance’ of consumer ‘confusion’, see Mark A. Lemley and Mark McKenna, Irrelevant Confusion, 62 Stan. L. Rev. 413 (2010).
[55] Id. 318-19. On monist liberal theories of contracting grounded in default rules, see Russell Korobkin, The Status Quo Bias and Contract Default Rules, 83 Cornell L. Rev. 608, 611–12 (1998). But see W. David Slawson, Binding Promises: The Late 20th-Century Reformation of Contract Law 21 (1996).
[56] On these default rules, see Barnett, supra n. 2, at 308-310, 318-19.
[57] Id. See too Barnett, The Sound of Silence, supra n. 48, at 827-8. It is arguable that all three default rules in consent theory, including immutable implied-in-law consent, are monist in that they each subscribe to unitary values. Even immutable implied-in-law values may draw upon a single unitary conception of public value that trumps all other values.
[58] Id. See Barnett, Consenting to Form Contracts, supra n. 33, at 637.
[59] For example, a court may construe an unreasonable price term in a contract restrictively on grounds that the values of commercial expediency and fairness may transcend the express or inferred consent of the parties. § 2–305 of the UCC, notably, provides that courts can imply terms in contracts of sale, including by establishing a reasonable market price which may take account of plural values beyond the consent of the parties. See further Lickley v. Max Herbold, Inc, 984 P.2d 697 (Idaho 1999); Koch Hydrocarbon Co. v. MDU Resources Group, [1993] USCA8 419; 988 F.2d 1529, 1534 (8th Cir.1993).
[60] See e.g. Margaret Jane Radin, Contract Formation - Assent: Humans, Computers, and Binding Commitment, 75 Ind. L. J. 1125, 1125 (2000). Radin distinguishes between the "contract-as-consent" model which "involves the meeting of the minds between two humans" from the "contract-as-product" model involving standards prescribed by legislatures, industry-agreed standardizations and standards set by technical bodies such as the Institute of Electrical and Electronic Engineers.)
[61] On such ‘expressive liberty’, see Galston, supra n. 23.
[62] On the tendency of modern common law judges to objectify consent, see e.g. W. David Slawson, Binding Promises supra n. 55, ch.1.
[63] For Williston’s comments on such a conceptual checklist in the law of sales, see e.g. Samuel Williston, The Law of Sales in the Proposed Uniform Commercial Code, 63 Harv. L.Rev.56 (1950).
[64] On values that are ranked below a single ‘super’ value under legal monism, see supra Section II.
[65] On such good faith duties in contract, see e.g. A. Berg Promises to Negotiate in Good Faith, 119 Law Q. Rev. 357, 363 (2003); Reinhard Zimmermann and Simon Whittaker, eds, Good faith in European Contract Law (2000); R. Brownsword, N. Hird And G. Howell, Good Faith in Contract 32 (1998); Steven J. Burton and Eric G. Anderson, Contractual Good Faith: Performance, Breach And Enforcement 30 (1995). See further infra nn.184 and 203.
[66] On ‘decision procedure’ pluralism, see supra n. 37 and infra Section XI.
[67] See e.g. Balfour v Balfour [1919] 2 KB 571 [construing a maintenance agreement between spouses as a ‘trivial affair of marriage’ and not a contract]. On gender stereotyping in employment and family contracts and conflicts, see Julie C. Suk, Are Gender Stereotypes Bad for Women? Rethinking Antidiscrimination Law and Work-Family Conflict, 110 Colum. L. Rev. (forthcoming, 2010). See further infra Section VI.
[68] The assumption that an agreement is illusory is questionable even on unitary grounds. For example, the party exercising the discretion may be perceived to be unfairly disadvantaged morally. But what if the other party accepts that discretion as a hazard of doing business, as when a seller of property agrees to the buyer’s exercise of discretion not to secure a mortgage which the buyer considers to be unsatisfactory? Cf. Robert Hillman, The Richness of Contract Law, supra n. 1, at 40.
[69] See further Robert Hillman, The Crisis in Modern Contract Theory 67, 71-74 Tex. L. Rev.103 (1988). On traditional circumspection about the virtue of a free-standing conception of a ‘serious intention to contract’, see e.g. Samuel Williston, The Law of Sales in the Proposed Uniform Commercial Code, supra n. 63.
[70] On free choice as a measure of ‘expressive liberty’, see supra n. 23.
[71] Nominal value is ascribed to the so-called ‘peppercorn theory’, that even a mere peppercorn may be considered to have value. See further Robert A. Prentice, Law and Gratuitous Promise, 2007 U. Ill. L. Rev. 881 (2007); Chitty on Contracts, Hugh Beale s.27 (30th ed, 2008).
[72] On the distinction between so-called ‘bargained’ and ‘unbargained’ contracts, see Robert A. Pollak, Bargaining Around the Hearth, 116 Yale L.J. Pocket Part 414 (2007) For a challenge to ‘consensus ad idem’ in so-called ‘unbargained contracts’ see Joshua A.T. Fairfield, The Search Interest in Contract, 92 Iowa L.Rev.1237 (2007). For historical reflection on the ‘value’ of consideration as a bargained-for-exchange, see I. Patterson, An Apology for Consideration, 58 Colum.L.Rev.929, 952-3 (1958).
[73] See e.g. Mary Becker and Randy E. Barnett, Beyond Reliance: Promissory Estoppel, Contract Formalities and Misrepresentation, 15 Hofstra L. Rev. 445 (1987). See too Kevin M. Teeven, ‘Origins of Promissory Estoppel: Justifiable Reliance and Commercial Uncertainty before Williston's Restatement 34 U. Memphis L. Rev. 499 (2004). For arguments that reliance based theories of consent are overstated, see Cohen, The Basis of Contract, supra n. 24, at 579.
[74] On categories in which judges allegedly uphold contracts in the absence of a ‘bargained for exchange’ see Charles Fried, Contract As Promise 28 (4th ed., 2006). Fried identifies four such categories: include, inter alia, promises to keep an offer open, promises to release a debt, promises to modify a duty and promises to pay for past benefits or favors.
[75] On the relationship between the bargain and the normative structure of a contract, see David Charny, Hypothetical Bargains: The Normative Structure of Contract Interpretation, 89 Mich. L. Rev.1815 (1991). But cf. Eisenberg, The Bargain Principle and its Limits, 95 Harv. L. Rev. 741 at 785, n.121 (1982). On the regulation of e-consumer transactions, see infra nn. 238 and 242.
[76] Arguably, a promise that is grounded in morality supersedes the traditional separation between law and morality by which analytical positivists hold that only legal promises are enforceable. On historic debate over the permanent separation between law and morality between H.L.A. Hart (favoring the separation) and Lon Fuller (challenging it), see H.L.A. Hart, Positivism and the Separation of Law and Morals, 71 Harv.L.Rev.593 (1958); Lon L. Fuller, Positivism and Fidelity to Law: A Reply to Professor Hart, 71 Harv.L.Rev.630-72 (1958). See too Leslie Green, Positivism and the Inseparability of Law and Morals, 83 N.Y.U. L.Rev.1035 (2008); Jeremy Waldron, Positivism and Legality: Hart’s Equivocal Response to Fuller, 83 N.Y.U. L. Rev. 1135 (2008); Brian Leiter, Legal Realism and Legal Positivism Reconsidered, 111 Ethics, 278 (2001).
[77] On the moral foundation of promises, see esp. Stephen A. Smith, Contract Theory (2004). On the moral foundations of freedom of contract in moral philosophy, see e.g. Henry Mather, Contract Law and Morality (1999); Patrick Atiyah, The Rise and Fall of Freedom of Contract, supra n. 21; David Hume, An Inquiry Concerning the Principles of Morals 30 (1st ed., 1957).
[78] This moral foundation is closely identified with a wills theory of contracting. See e.g. Anthony Kronman, A New Champion for the Wills Theory (Book Review), 91 Yale L.J. 404, 404 (1981), supra n. 86. On the theoretical underpinnings of binding promises in contract law, see W. David Slawson, supra n. 55; Richard Craswell, Contract Law, Default Rules and the Philosophy of Promising 88 Mich. L.Rev. (1989). For a classical treatment of moral pluralism, see G.E.Moore, Principia Ethica (1903). See too Kekes, supra n. 11; Larmore, supra n. 11.
[79] On such ‘detrimental reliance’ see supra n. 73 and text accompanying n. 87.
[80] See Charles Fried, Contract As Promise, supra n. 74, at 16. But see Seana Shiffrin, Why Breach of Contract May Be Immoral[2009] MichLawRw 35; , 107 Mich. L. Rev. 1551 (2009). But see Richard Crasswell, Contract Law, Default Rules, and the Philosophy of Promising, 88 Mich.L.Rev.489 (1989); Green, Is an Offer Always a Promise? 23 U. Ill. L. Rev.95, 95-7 (1928).
[81] On debate over the separation between law and morals, see supra note 79. On the duty to redress social disorder, see Frank Hearn, Moral Order and Social Disorder (197); David Selbourne, The Principles of Duty: An Essay on the Foundation of the Civic Order (1994).
[82] But see Stephen J. Smith, Performance, Punishment, and the Nature of Contractual Obligation, 60 Mod. L. Rev. 360 (1997). See too e.g. Jack Beatson and Daniel Friedmann, Good Faith and Fault in Contract Law (1997).
[83] On the intersection of fault in tort and contract law, see e.g. Daniel Schwarcz, A Products Liability Theory for the Judicial Regulation of Insurance Policies, 48 William & Mary. L. Rev 1389 (2007); Peter W. Huber, Liability: The Legal Revolution and Its Consequences (1990). See too Jay Feinman, Critical Approaches to Contract Law, 30 UCLA.L.Rev.829, 834 (1983) [“[c]ontract law is like tort law and judicial action is like legislative action: all necessarily involve public policy judgments in imposing legal liability.”]
[84] On the range of bases for promises in moral theory, see e.g. Buckley, Just Exchange, supra n. 1, ch.4 (‘Fidelity to Promising’); Andrew Robertson, The Law of Obligations 93 (2004); Patrick Atiyah, Promises, Morals and Law 177 (1981). On an attempt to reconcile moral rights and economic efficiency theories of contracting under a unifying theory of liberty, see Nathan Oman, Unity and Pluralism in Contract Theory, 103 Mich.L.Rev.1481 (2005).
[85] For a libertarian rationale for the morally binding nature of promises, see Cass Sunstein, Preferences, Paternalism, and Liberty, 81Royal Institute of Philosophy Supplement 233 (2006), also available at < & aid=457780> . See too Robert Nozick, Anarchy, State and Utopia 503 (1974). For the argument that a lack of clarity in legal standards may enrich moral deliberations, see Seona Valentine Shiffrin, Inducing Moral Deliberations: On the Occasional Virtue of Fog, 123 Harv. L. Rev.1214 (2010).
[86] On past consideration, see Fried, supra note 77. On these moral dilemma, see generally W. David Slawson, Binding Promises, supra n. 55; Michael Trebilcock, supra n. 1. But cf. David Fellman, The Limits Of Freedom (1973).
[87] On the view that Charles Fried’s theory of ‘contract as promise’ is a wills theory, see Kronman, supra n. 78, at 404.
[88] On the detrimental reliance arising from a promissory estoppel, see supra n. 73. But cf. Robert Hillman, The Richness of Contract Law, supra n. 1, at 52-55.
[89] For Charles Fried’s recognition that courts may construe contracts expansively on grounds of fairness in the absence of contract as promise, see Fried, supra n. 74, at 25. See further Morris, Practical Reasoning and Contract as Promise: Extending Contract-Based Criteria to Decide Excuse Cases, 56 Cambridge L.J. 147 (1997); Langille and Ripstein, Strictly Speaking – It Went Without Saying, 2 J. Legal Stud.63 (1996).
[90] On the so-called ‘priority’ of the right over the good, see Trakman and Gatien, Rights and Responsibilities, supra n. 4, chs.1-2. On the priority of the good over the right, see Michael Sandel, Liberalism and the Limits of Justice (1982). See further J.J. Thomson, The Right and the Good, J.Phil.273 (1997); William David Ross, The Right and the Good (1930).
[91] On moral determinism in relation to law, see e.g. Lon L. Fuller, Positivism and the Separation between Law and Morals, supra n. 76, at 630-38. For a critique of morally open-ended judicial activism by ‘new legal formalists’, see e.g. Lisa Bernstein, Merchant Law in a Merchant Court: Rethinking the Code’s Search for Immanent Business Norms, 144 Pa. L. Rev.1765 (1996). For a critique of moral pluralism in liberal thought, see e.g. David Lewis Schaefer, Illiberal Justice: John Rawls vs. The American Political Tradition (2007); Joseph H. Carens, Culture, Citizenship, And Community: A Contextual Exploration of Justice as Evenhandedness (2000).
[92] For the proposition that, before a contract and promise can correspond, it is necessary first to provide a theory of self-imposed moral responsibility, see Jody S. Kraus, The Correspondence of Promise and Contract, 109 Colum. L. Rev.126 (2009).
[93] See Restatement (Second) Of Contracts § 90(1) (1979).
[94] For criticisms of reliance on open-ended conceptions of fairness in arriving at contract remedies, see Ian R. Macneil, The New Social Contract 62 (1980). But see Robert Hillman, The Richness of Contract Law, supra n. 1 who identifies distinct norms of fairness by which courts decide cases, such as in allocating performance losses. See too Hillman, Court Adjustment of Long-Term Contracts: An Analysis under Modern Contract Law, 36 Duke L. J. 1 (1987).
[95] Cf. Melvin Aron Eisenberg, The Role of Fault in Contract Law[2009] MichLawRw 12; , 107 Mich. L. Rev. 1413.
[96] See e.g. Hugh Collins, Regulating Contracts 5-7 (1999); Jean Braucher, Contract Versus Contractarianism: The Regulatory Role of Contract Law, 47 Wash. & Lee L. Rev. 697, 712, 718 (1990).
[97] See Braucher, id. For a thoughtful analysis on the interaction between self- and public regulation in a democracy, see Christine Parker, The Open Corporation: Effective Self-Regulation and Democracy (2002).
[98] On how contracts can be invoked in governing social interaction, see Hugh Collins, supra n. 96, at 70, citing Nader, Disputes without the Force of Law, 88 Yale L.J. 998 (1979). On free choice, see supra Section II.
[99] The risk in a plural theory of self-regulation is in determining the plural qualifications for such regulation. For example, if knowledge and reputation are preferred values, the insidious inference is that only knowledgeable and people with a public reputation ought to regulate their own affairs.
[100] From a legal perspective, See further infra Section XIV. See too Buckley, Illegality and Public Policy, supra n. 2.
[101] See Jushia A. T. Fairfield, Anti Social Contracts: The Contractual Governance of Virtual Worlds, (2009) 53 McGill L.J.427. For reflections on plural conceptions of contract regulation in a complex socio-legal order, see Grant Gilmore, The Ages of American Law (1977).
[102] On the regulatory framework behind contract law, see e.g. Jean Braucher, Cowboy Contracts: The Arizona Supreme Court's Grand Tradition of Transactional Fairness, 50 Ariz. L. Rev. 191 (2008); Jean Braucher, New Basics: 12 Principles for Fair Commerce in Mass-Market Software and Other Digital Products, in Consumer Protection in the Age of the Information Economy 177, Jane K. Winn ed. (2006).
[103] See e.g. Robert L. Hale, Bargaining, Duress and Economic Liberty, 43 Colum. L. Rev. 603 (1943);; John P. Dawson, Economic Duress – An Essay in Perspective, 45. Mich. L. Rev.253 (1947).
[104] On the rationale for such judicial scrutiny on grounds of procedural unconscionability, see e.g Gatton v. T-Mobile USA Inc., 152 Cal.App.4th 571 (2007), para.5: “Oppression, for purposes of rendering a contract provision procedurally unconscionable, arises from an inequality of bargaining power that results in no real negotiation and an absence of meaningful choice.” But see Robert A. Hillman, Debunking Some Myths about Unconscionability: A New Framework for U.C.C. § 2-302, 67 Corn.L.Rev.1 (1981).
[105] On the contra proferentem rule, see 11 Samuel Williston & Richard Lord, A Treatise on the Law of Contracts, § 32:12, 476–81 (4th ed. 1993 & Supp. 2005); Restatement (Second) of Contracts § 206 (1981); 17A Am.Jur.2d Contracts § 342 (2004).
[106] On such immutable implied-in-law terms, see supra Section III.
[107] It is easier to determine the percentage of consumers who bring suit in response to complex exclusion and limitation of liability clauses than those consumers who understand them. See e.g. Steven P. Croley and Jon D. Hanson, Rescuing the Revolution: The Revived Case for Enterprise Liability, 91 Mich. L. Rev. 683, 687 (1993).
[108] For a legal realist ‘critique’ of fine print clauses in adhesion contracts, see Karl N. Llewellyn, The Common Law Tradition: Deciding Appeals 370 (1960). [“The fine print which has not been read has no business to cut under the reasonable meaning of those dickered terms which constitute the dominant and only real expression of agreement...”]
[109] For a critique of forum selection clauses in e-commerce, see e.g. Brower v. Gateway, 246 A.D.2d 246, 676 N.Y.S.2d 569 (App. Div. 1998). On concerns over choice of arbitration clauses in contracts, see Jonnette Watson Hamilton, Pre-Dispute Consumer Arbitration Clauses: Declying Access to Justice?(2006) 51 McGill L.J.962; Stephen J. Ware, Arbitration Clauses, Jury-Waiver Clauses and Other Contractual Waivers of Constitutional Rights, 67 Law & Contemp.Prob.167 (2004); Sajida A. Mahdi, Gateway to Arbitration: Issues of Contract Formation Under The U.C.C. And the Enforceability of Arbitration Clauses Included in Standard Form Contracts Shipped with Goods, 96 Nw. U. L. Rev. 403, 418 (2001. See too Robert A. Hillman & Jeffrey J. Rachlinski, Standard-Form Contracting in the Electronic Age, 77 N.Y.U. L. Rev. 429, 430 (2002).
[110] A converse indicator is ‘herd behavior’ among consumers. Cf. Marcel Kahan & Michael Klausner, Path Dependence in Corporate Contracting: Increasing Returns, Herd Behavior, and Cognitive Biases, 74 Wash. U. L. Q.347, 353–59 (1996); David Scharfstein & Jeremy Stein, Herd Behavior and Investment, 80 Amer. Econ. Rev. 465, 466 (1990).
[111] On such cultural influences over plural decision-making, see infra Section XIV.
[112] See e.g. Hugh Collins, Regulating Contracts, supra n. 96, ch.2.
[113] The UCITA was initially framed as Draft Article 2B-207 and 208 of the UCC. In 2003, after various efforts to have states adopt it, the National Conference of Commissioners on Uniform State Law suspended efforts to obtain further state adoptions beyond Maryland and Virginia that had already adopted it. On the UCITA, see
[114] Click-wrap contracts include conditions of sale at the end of the agreement where the e-purchaser is asked to tick an ‘I agree’ box consenting to the purchase. Browse-wrap contracts provide e-purchasers with a hyperlink to another screen containing those terms. See further Leon E. Trakman, The Boundaries of Contract Law in Cyberspace, Int’l.Bus.L.J.161 (2009) [hereinafter “Boundaries”].
Dale Clapperton and Stephen Corones, Unfair Terms in “Clickwrap” and other Electronic Contracts, 35 Australian Bus. L. Rev.152 (2007); Kaustuv M. Das, Forum-Selection Clauses in Consumer Click-wrap and Browse-wrap Agreements and the "Reasonably Communicated" Test, 77 Wash. L. Rev. 481, 500 (2002); Robert A. Hillman & Jeffrey J. Rachlinski, Standard-Form Contracting in the Electronic Age, supra n. 109, at 493.
[115] On the UCITA, see supra n. 113. Notwithstanding dissension among regulators, new mandatory rules have evolved that govern the use of new technologies in e-commerce. See e.g. Robert Hillman, On-Line Boilerplate: Would Mandatory Website Disclosure of E-Standard Terms Backfire? [2006] MichLawRw 33; 104 Mich. L. Rev. 837 (2006).
[116] On the interface between plural regulatory policies in contracting and functionalism, see infra Section XI.
[117] A key figure in developing the relational contracts perspective is Ian Macneil, see Ian Macneil, The New Social Contract, supra n. 94. See too James Fox Jr., Relational Contract Theory and Democratic Citizenship, 54 Case Western.L.Rev.1 (2003).
[118] The distinction between discrete transactions and relational contracts is not universally endorsed. See e.g. Melvin Eisenberg, Why There is No Law of Relational Contracts, 84 Nw. U. L.Rev.805 (2000). But see Donald J. Smythe, The Doctrine of impracticability and the Governance of Relational Contracts, 13 S. Cal. Interdisc. L. J. 227, 339-341 (2004); Kevin Cole, The Characteristics and Challenges of Relational Contracts, 72 Nw. U. L. Rev. 823 (2000).
[119] See generally, R. Macneil, Contracting Worlds and Essential Contract Theory, 9 Soc. and Leg. Stud. 431 (2000); Macneil, Relational Contract Theory: Challenges and Queries, 94 Nw. U. L.Rev.877 (2000); Ian R. Macneil, Contracts: Adjustment of Long-Term Economic Relations under Classical, Neo-Classical and Relational Contract Law, 72 Nw. U. L. Rev. 854 (1978).
[120] The continuum arguably treats relational contracts as monist, not pluralist. For example, consent may remain a ‘super’ value. All that changes on entering the relational part of the continuum is that the ‘fairness’ and ‘goodness’ values are acknowledged without displacing the monist super-value of, say, the wills or promises of the parties. In some respects, the law governing ‘adhesion contracts’ is grounded in monism in seeking to remedy the imperfect consent of consumers faced with ‘take it or leave it’ standard form contracts. See id.
[121] On the judicial construction of consent under a continuum or spectrum approach, see supra, Section IV.
[122] On the ‘single moment’ theory of consent, see infra n. 126. See too F.D. Rose, Consensus ad idem: Essays in Honour of Guenter Treitel, supra n. 39; Joshua A.T. Fairfield, The Search Interest in Contract, supra n. 72.
[123] An inference arising from Ian Macneil’s ‘the new social contract’ is that the socialization of relational contracts renders them pluralist in nature. See Macneil, The New Social Contract, supra n. 94.
[124] On the implicit recognition of interacting plural values exemplifying ‘law in action’, see e.g. Stewart Macaulay, The Real and the Paper Deal: Empirical Pictures of Relationships, Complexity and the Urge for Transparent Simple Rules 66 Mod.L.Rev.44 (2003); S. Macaulay, Elegant Models, Empirical Pictures, and the Complexities of Contract, 11 Law & Soc. Rev.507-528 (1977).
[125] Engaging in plural value determinism is implicit in establishing when and how to ‘adjust’ long-term relationships. See e.g. Ian Macneil, Contracts: Adjustment of Long-Term Economic Relations, supra, n. 122.
[126] On a challenge to the ‘single moment’ theory of consent, see E. Allan Farnsworth, Precontractual Liability and Preliminary Agreements: Fair Dealing and Failed Negotiations, 87 Colum. L. Rev. 217, 220 (1987).
[127] Courts may also be ‘activist’ in policing discrete transactions, for example in responding to the perceived abuse of differences in bargaining power between the discrete parties, while still being monist in subscribing to consent or promise as a ‘super’ value. See supra n. 36.
[128] On give-and-take solutions to relational disputes, see Trakman, Winner Take Some, supra n. 38.
[129] See In re Westinghouse Elec. Corp. Uranium Contracts Litig, 517 F. Supp. 440, 454 (E.D.
Va. 1981).
[130] The Westinghouse uranium case, again, illustrates the difficulties in determining the foresight of parties and the foresight that ought ‘reasonably’ to be attributed to them. See e.g. Paul L. Joskow, Commercial Impossibility, the Uranium Market and the Westinghouse Case, 6 J. Legal Stud .119, 157–58 (1977).
[131] The appointment of a special master to resolve complex issues of fact is far more common in tort litigation than in contracts. See generally, Symposium, Judge Jack B. Weinstein, Tort Litigation and the Public Good, 12 J.L. & Pol'y, 149, 169 (2003). The criticism that such an appointment in contracts offends the consensual nature of agreements may be offset in part by the difficulty courts may have in resolving complex relational disputes. See e.g. Trakman, Winner Take Some, supra n. 38. But see Stewart Macaulay, The Real and the Paper Deal, supra n. 124.
[132] UCC, s.2-615 provides for an excuse from performance on grounds of ‘economic impracticability’.
[133] See e.g. Westinghouse supra, n. 130, at 454-6. cf. Eisenberg, Why There is No Law of Relational Contracts, supra n. 118. Eisenberg disputes the existence of a ‘law’ governing relational contracts (at 817).
[134] In issue, for example, is whether the long-term supplier could have averted or mitigated the risk that eventuated, such as through stockpiling supplies, earmarking alternative suppliers, continuing supplies in reduced quantities, etc.
[135] See Richard E. Speidel, Contracts in Crises: Excuse Doctrine and Retrospective Government Acts 3 (2007). See too Mark B. Baker, A Hard Rain’s A-Gonna Fall—Terrorism and Excused Contractual Performance in a Post September 11th World, 17 Transnat’l Law 1, 20–21(2004).
[136] Judges of this genre could be called “trimmers’, in avoiding political conflict over controversial issues. See Cass Sunstein, Trimming, [2009] HarvLawRw 5; 122 Harv. L. Rev. 1049 (2009).
[137] Co-opting party participation in relational decision-making also presupposes that the court will endorse the remedy proposed by the parties. See further supra Section VII.
[138] On ‘Law and Economics’, see e.g Vernon Valentine Palmer and Mauro Bussani, Pure Economic Loss (2009); Richard Posner, Economic Analysis of Law (7th ed., 2007); Richard Posner, Contract Interpretation: The Law and Economics of Contract Interpretation, 83 Tex. L. Rev. 1581 (2005); Posner & Landes, Legal Change, Judicial Behavior, and the Diversity Jurisdiction, 9 J. Legal Stud.367 (1980). But see Mel Eisenberg, The Disgorgement Interest in Contract Law, [2006] MichLawRw 18; 105 Mich. L. Rev. 559 (2006); Adam J. Hirsch, Evolutionary Theories of Common Law Efficiency: Reasons for (Cognitive) Skepticism, 32 Fla. St. U. L. Rev. 425, 429–30 (2005); Todd J. Zywicki, The Rise and Fall of Efficiency in the Common Law: A Supply-Side Analysis, 97 Nw. U. L. Rev. 1551 (2003).
[139] For a classical conception of the social cost of inefficient contracting, see Ronald Coase, The Problem of Social Cost, 31 J.L. & Econ. 1 (1960).
[140] Arguably, there are multiple measures of efficiency. For example, Coleman asserts that ‘Economists as well as proponents of the economic analysis of law employ at least four efficiency-related notions, including: (1) Productive efficiency, (2) Pareto optimality, (3) Pareto superiority, and (4) Kaldor-Hicks efficiency.’ See Coleman, Efficiency, Utility and Wealth Maximization, 8 Hofstra L. Rev. 509, 512 (1980).
[141] On the neo-classical liberal – and libertarian – foundations of ‘Law and Economics’, see Paul G. Mahoney, The Common Law and Economic Growth: Hayek Might Be Right, 30 J. Legal Stud. 503 (2001); F.A. Hayek, The Iron Cage of Liberty (1969). See Further John Gray, Hayek on Liberty 40 (1984).
[142] Efficiency as a measure of ‘preference monism’ is founded on ‘preference utilitarianism’. See e.g. on Stuart Mills’ ‘preference utilitarianism’, J.B. Schneewind & Dale E. Miller, eds., J.S. Mill, Utilitarianism In The Basic Writings of John Stuart Mill, Ill, Utilitarianism in the Basic Writings of John Stuart Mill, 241 (2002); Frederick Rosen, Classical Utilitarianism from Hume to Mill (2003);). But see Ronald J. Scalise Jr., Why No “Efficient Breach” in the Civil Law?: A Comparative Assessment of the Doctrine of Efficient Breach of Contract, 55 Am. J. Comp. L. 721 (2007).
[143] See Epstein, The Social Consequences of Common Law Rules, 95 Harv. L.Rev.1717, 1748 (1982).
[144] See e.g. Michael I. Myerson, Efficient Consumer, The Efficient Consumer Form Contract: Law and Economics Meets the Real World, 24 Ga. L. Rev. 583 (1990). [“A party misled as to the utility to be derived from a proposed transaction cannot properly evaluate the true benefits and costs of the deal.’]
[145] On whether efficiency costs should be measured subjectively or objectively, see J. Buchanan, Cost and Choice 1-26 (1969); Thirlb, The Subjective Theory of Value and Accounting “Costs”, in J. Buchanan and G. Thirlby, eds., L.S.E. Essays On Cost, 137 (1981).
[146] On these justifications for judicial intervention in contracts, see Rea, Nonpecuniary Loss and Breach of Contract, 11 J. Legal Stud. 35, 36 (1982); Posner & Rosenfeld, Impossibility and Related Doctrines in Contract Law: An Economic Analysis, 6 J. Leg. Stud. 83, 88-97 (1977).
[147] On a quasi-efficiency analysis holding the ship owner liable for a performance loss because it was best placed to anticipate the closure of the Suez Canal and to insure against it, see Transatlantic Fin. Corp. v. United States, supra n. 44, at 319.
[148] For argument that one-sided consumer contracts may still be efficient if consumers have market choice, see Bebchuk and Posner, One Sided Contracts in Competitive Consumer Markets, 104 Mich.L.Rev.827 (2006).
[149] For a traditional ‘law and economic’ argument holding that judicial ‘gap-filling’ may be efficient including in relation to contracts, See Richard A. Posner, Economic Analysis of Law 44 (1973). But see Omri Ben–Shahar, Agreeing to Disagree: Filling Gaps in Deliberately Incomplete Contracts, 2004 Wisc. L. Rev. 389, at 389; Ian Ayres and Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 Yale L.J. 87 (1989).
[150] On whether efficiency in ‘law and economics’ determines consent to contract, see James M. Buchanan, Good Economics-Bad Law, 60 Va. L. Rev. 483, 489–90 (1974). But cf Omri Ben-Shahar & John A.E. Pottow, On The Stickiness of Default Rules, 33 Fla. St. U. L. Rev. 651 (2006).
[151] Law and Economics may well address the ‘inequity’ to the buyer as an unreasonable ‘transaction cost’ that justifies setting the contract aside. But it reduces inequity to an inefficiency cost, such as a transaction cost, rather than as an independent value that may be incommensurable with efficiency. See e.g. Judge Richard Posner’s decision in Carr v. CIGNA Securities, Inc. [1996] USCA7 1035; 95 F.3d 544 (7th Cir.1996) [“[I]t would be unreasonable to expect Carr to pore through 427 pages of legal and accounting mumbo-jumbo looking for nuggets of intelligible warnings.” at 548.] See generally Richard Posner, Contract Interpretation, supra n. 138. But see Alan Schwartz and Robert E. Scott, Market Damages, Efficient Contracting, and the Economic Waste Fallacy, 109 Colum. L. Rev. 1610 (2008).
[152] The argument that efficient choices may also be fair choices may include an ancillary assessment as to whether paternalism is efficient. See e.g. Eyal Zamir, The Efficiency of Paternalism, 84 Va.L.Rev.229, 230 (1998); Anthony T. Kronman, Paternalism and the Law of Contracts, 92 Yale L.J. 763, 778-84 (1983).
[153] For example, a court may invoke plural values to arrive at an efficient or fair outcome at the expense of ex ante certainty in contracting. See e.g. Robert E. Scott, The Case for Formalism in Relational Contract, 94 Nw. U. L. Rev. 847, 858 (2000) [“If there are to be tradeoffs, why not trade off the chimera of ex ante certainty in favor of ex post efficiency (or fairness].’ On the tension between the ‘foresight’ of risks by contracting parties and efficient outcomes, see Robert A. Hillman, An Analysis of the Cessation of Contractual Relations, 68 Cornell L. Rev. 617, 626 (1983).
[154] See Veljanovski, The Economic Approach to Law: A Critical Introduction, 7 Br. J. Law & Soc. 158, 162 (1980).
[155] Assume, too, that the drug is either not covered by public and private health insurance, and/or that a significant proportion of patents are uninsured.
[156] An efficiency analysis would not necessarily produce this result. For example, it may be concluded that the sale of the patent is inefficient because the benefit to the drug purchaser is outweighed by the cost to the patent seller and/or to consumers who can no longer afford to buy the drug.
[157] See Trebilcock, The Limits of Freedom of Contract, supra n. 1, at 18. On the prospect of ‘patterned differences’ in efficient choices including fairness values, see e.g. Nozick, Anarchy, State and Utopia, supra n. 85, at 156-57.
[158] On the attempt to add a moral dimension to efficient choice, see Rickard Posner, The Problematics of Moral and Legal Theory, 111 Harv.L.Rev.1637 (1998). But see Ellis Washington, Reply to Judge Richard Posner on the Inseparability of Law and Morality, Rutgers J. L. & Relig.1 (2001).
[159] But see Richard Posner, Let Us Never Blame a Contract Breaker[2009] MichLawRw 40; , 107 Mich. L. Rev. 1517 (2009). Cf. Omri Ben-Shahar and Ariel Porat, Fault in American Contract Law[2009] MichLawRw 3; , 107 Mich. L. Rev. 1341 (2009).
[160] A utilitarian may nevertheless resist pluralism by insisting that such equity values are encompassed within a monist value of utility. See e.g. Richard Posner, The Problematics of Moral and Legal Theory, supra n.158.
[161] Courts adhering to preference monism may also decline to set the patent aside on public interest grounds because they lack ‘law making’ authority and in the absence of a legislated mandate. On ‘preference monism’ in utilitarian thought, see supra n. 142. Preference monism may also be explicated through rational determinism. See generally Richard Craswell, In That Case, What Is the Question? Economics and the Demands of Contract Theory, 112 Yale L. J .903 (2003).
[162] See Steve Thel and Peter Siegelman, Willfulness vs. Expectation: A Promisor-Based Defense of Willful Breach Doctrine[2009] MichLawRw 40; , 107 Mich. L. Rev. 1517 (2009); Ralf Michaels, The Second Wave of Comparative Law and Economics (2009) Toronto L.J.197. But see Trebilcock, The Limits of Freedom of Contract, supra n. 1, ch.1 who attempts to find answers within Law and Economics to questions such as whether people can be permitted to buy and sell blood, bodily organs, surrogate babies, or sexual favors. See too Todd Rakoff, Too Many Theories, a review of Michael Trebilcock, The Limits of Freedom of Contract (Cambridge, 1993), 94 Mich. L. Rev. 1799 (1996); Trebilcock Symposium Issue, Law, Economics and Public Policy: Essays in Honour of Michael Trebilcock (Spring 2010) Toronto L.J (upcoming).
[163] On ‘preference pluralism’, see supra nn.12 and 17. On the interface between plural values and efficient breach, see Macneil, Efficient Breach of Contract: Circles in the Sky, 68 Va. L. Rev. 947, 968 (1982).
[164] On rationality in utilitarianism including law and economics, see supra Section IX. Rational choice may also marry behavioral efficiency with the ‘biology’ of behavior. On rationality in relation to behavioral economics and behavior biology, see Owen D. Jones, Time-Shifted Rationality and the Law of Law’s Leverage: Behavioral Economics Meets Behavioral Biology, 95 Nw. U. L. Rev. 1141, 1151 (2001).
[165] On ‘preference rationality’, see Stoker, supra n. 9; Williams, supra n. 9.
[166] On the rationality of keeping one’s promises, see Peter Vallentyne, The Rationality of Keeping Agreements, in Peter Vallentyne, ed., Contractarianism and Rational Choice: Essays on David Gauthier’s Morals by Agreement 177 (1991).
[167] On the relationship between ‘rightness’ and ‘goodness’ values, see supra text accompanying nn. 29-30.
[168] An issue in exercising ‘rational’ choices is whether a pluralist is rational in regretting the consequence of a ‘correct’ – or at least, preferred -- moral choice. See Michael Stoker, Plural and Conflict Values, supra n. 9; Bernard Williams, Moral Luck, supra n. 9.
[169] On the history of the ‘just price’, see Leon E. Trakman, The Evolution of the Law Merchant: Our Commercial Heritage, ch.1 (1983) [hereinafter ‘The Law Merchant’]. On functional ways in which to arrive at a ‘just price’, see Dempsey, Just Price in a Functional Economy, 25 Am. Econ. Rev. 471, 471, 474-76, 480-86 (1935); De Roover, The Concept of the Just Price: Theory and Economic Policy, 18 J. Econ. Hist. 418, 420, 421-34 (1958).
[170] See Eric A. Posner, Contract Law in the Welfare State: A Defense of the Unconscionability Doctrine, Usury Laws, and Related Limitations on the Freedom to Contract, 24 J. Leg. Studies 283, 312-14 (1995).
[171] See e.g. Russell Korobkin, Unconscionability: Bounded Rationality, Standard Form Contracts, and Unconscionability, 70 U. Chi.L.Rev.1203 (2003) [arguing that the efficient use of standard form contracts, including greater use of mandatory contract terms and judicial modification of the unconscionability doctrine to better respond to the primary cause of contractual inefficiency.]. See too Ian Macneil, Bureaucracy and Contracts of Adhesion, 22 Osgoode Hall L.J. 5 (1984) [arguing that adhesive conditions are often drafted to discourage consumers from reading them,]
[172] On classical commentary on the use of positive economics to measure behavioural practices, see e.g. Milton Friedman, The Methodology of Positive Economics, in Essays in Positive Economics 3; Priest, Selective Characteristics of Litigation, 9 J. Legal Stud.399 (1980). Cf. O'Driscoll, Justice, Efficiency, and the Economic Analysis of Law: A Comment on Fried, 9 J. Legal Stud. 355 (1980); Rizzo, Can There Be a Principle of Explanation in Common Law Decisions? A Comment on Priest, 9 J. Leg. Stud. 423 (1980). See too Korobkin, supra n.171.
[173] On such regulatory measures, see Section VII. Compliance measures may include explicitly prohibiting customers from altering the terms of a contract. See Richard E. Speidel, Contract Theory and Securities Arbitration: Whither Consent? 62 Brooklyn L. Rev.1335 (1996).
[174] Some commentators on the law of unconscionability find little ‘rational’ place for law and economics is reaching determinations based on ‘conscience.’ See e.g. Arthur Allen Leff, Unconscionability and the Code—The Emperor’s New Clause, 115 U. Pa. L. Rev. 485 (1967). Cf. Epstein, Unconscionability: A Critical Reappraisal, 18 J.L. & Econ.293 (1975).
[175] On such indeterminacy, see Joseph Singer, The Player and the Cards: Nihilism and Legal Theory, 94 Yale L.J. 1, 11 (1984). A further concern is that reversals in policy are often difficult to achieve. See Yair Listokin, Learning through Policy Variation [2008] YaleLawJl 3; 118 Yale L. J. 480 (2008).
[176] The claim is not that ’preference rationality’ is value neutral among the plural alternatives, only that it can facilitate choices among them in a manner that value monism precludes. See Alvin B. Rubin, Doctrine in Decision-Making: Rationale or Rationalization, 1987 Utah L. Rev. 357, 367; John O. Newman, Between Legal Realism and Neutral Principles: The Legitimacy of Institutional Values, 72 Calif. L. Rev. 200, 204 (1984).
[177] On the legal significance of boilerplate contracting, see David Gilo & Ariel Porat, The Hidden Roles of Boilerplate and Standard-Form Contracts: Strategic Imposition of Transaction Costs, Segmentation of Consumers, and Anticompetitive Effects, [2006] MichLawRw 22; 104 Mich. L. Rev. 983 (2006); Robert B. Ahdieh, The Strategy of Boilerplate[2006] MichLawRw 1; , 104 Mich. L. Rev. 1033 (2006); Omri Ben-Shahar & James J. White, Boilerplate and Economic Power in Auto Manufacturing Contracts, 104 Mich. L. Rev. 953 (2006). But see Margaret Jane Radin, Boilerplate Today: The Rise of Modularity and the Waning of Consent, 104 Mich. L.Rev.1223 (2006).
[178] On the reliability of statistical evidence, see Edward K. Cheng, A Practical Solution to the Reference Class Problem 109 Colum. L. Rev. 2081(2009). Cf. Daniel Shaviro, Statistical-Probability Evidence and the Appearance of Justice, 103 Harv. L. Rev.530 (1989).
[179] On the ‘just price’, see supra n. 169.
[180] Functionalism in law is closely identified with Roscoe Pound and the school of ‘sociological jurisprudence’. See Roscoe Pound, Liberty of Contract and Social Legislation, 17 Colum. L. Rev. 538 (1917).
[181] For a classical theory of functionalism applied to contract law, see W. Friedman, Changing Functions of Contract in the Common Law, 9 Toronto L.J.15 (1951). See too Roger Cotterell, The Sociology of Law (1992); Wolgang Gaston Friedmann, Legal Theory (1967). But see Felix S. Cohen, Transcendental Nonsense and the Functional Approach, 35 Colum.L.Rev.809 (1935).
[182] On the history of social science research methodologies in law, see e.g. John Monahan and Laurens Walker, Judicial Use of Social Science Research, 15 Law & Behavioral Science 580 (1991).
[183] See e.g. S. Macaulay, Freedom From Contract: Solutions in Search of a Problem? 2004 Wis.L.Rev.777; Macaulay, Non-Contractual Relations In Business: A Preliminary Study, 28 Am. Socio. Rev. 55 (1963). On ‘trust building’, see F. B. Cross, Law And Trust, Georgia L.J. 93 (2005); Michele J. Gelfand And Jeanne M. Brett, eds, The Handbook Of Negotiation And Culture (2004); Russell Hardin (Ed.), Trust and Trustworthiness (2004); Oliver F. Williamson, Markets and Hierarchies: Analysis and Anti Trust Implications (1975).
[184] On ‘social fact’ evidence, see Laurens Walker & John Monahan, Social Facts: Scientific Methodology as Legal Precedent, 76 Cal. L.Rev.877 (1988); Kenneth Culp Davis, Facts in Lawmaking, 80 Colum.L.Rev.931 (1980). On an implied covenant of good faith in contracting, see H. Dubroff, The Implied Covenant of Good Faith in Contract Interpretation and Gap Filling: Reviving a Revered Relic, 80 St. John’s L. Rev. 559 (2006); Teri J Dobbins, Losing Faith: Extracting the Implied Covenant of Good Faith from (Some) Contracts, 84 Oregon L. Rev. 227 (2005); E. Houh, Critical Interventions: Towards an Expansive Equality Approach to the Doctrine of Good Faith in Contract Law, 88 Cornell L. Rev. 1025 (2003).
[185] On depending the use of functional verification to legitimate ‘Law and Economics’ from its critics, see Calabresi, About Law and Economics: A Letter to Ronald Dworkin, 8 Hofstra L. Rev. 553 (1980); Calabresi & Melamed, Property Rules, Liability Rules, and Inalienability: One View from the Cathedral, 85 Harv. L. Rev.1089 (1972).
[186] On socio-legal theory as the coalescence between social theory and pragmatism, see Brian Z. Tamanaha, Realistic Socio-Legal Theory: Pragmatism and a Social Theory of Law (2005). On the capacity of pragmatism to edify pluralism, see James Bohman, Theories, Practices, and Pluralism: A Pragmatic Interpretation of Critical Social Science 29(4) Phil. Soc. Sc. (1999). On the public regulation of contractual behavior, see supra text accompanying nn. 107-110.
[187] See Michael Trebilcock, supra n. 1, at 817. For a critique of the use, inter alia, of functional study to support ‘Law and Economics’, see Duncan Kennedy, Distributive and Paternalist Motives in Contract and Tort Law, with Special Reference to Compulsory Terms and Unequal Bargaining Power, 41 Md.L.Rev.563, 621 (1982). But see Thomas Brennan, Lee Epstein and Nancy Staudt, Economic Trends and Judicial Outcomes: A Macrotheory of the Court, Duke L. J. 1191 (2009).
[188] See e.g. Jack Knight, Are Empiricists Asking the Right Questions about Judicial Decisionmaking? 58 Duke L. J. 1531 (2009). Of further concern is whether the results of field investigation are worth the costs, see e.g. Monahan and Walker, supra n. 182.
[189] On functional study in predicting judicial behavior, see Hans W. Baade, Ed., Jurimetrics (2000); Lee Loevinger, Jurimetrics: The Next Step Forward 33 Minn.L.Rev.455 (1949). On limitations in the use of functional study to regulate contracts under the UCITA, see supra text accompanying n. 113.
[190] A leading theorist on contract interpretation is Stephen A. Smith, Contract Theory (2004). For a critique of this book, see Nathan B. Oman, Unity and Pluralism in Contract Law, 103 Mich. L. Rev. 1483 (2005). But see Robert Hillman, The Richness of Contract Law, supra n. 1, at 125 et seq.
[191] On monist methods of interpretation, see supra Section 1. See too Leon E. Trakman, Interpreting Contracts: A Common Law Dilemma, 59 Can.Bar.Rev.241 (1981). [hereinafter‘Interpreting Contracts’]. But see Colin Farrelly, The Institutional Theory of Legal Interpretation (2008) 58 Toronto L.J.217.
[192] See Steven Shavell, On the Writing and the Interpretation of Contracts, 22 J. Law Econ. & Org., 289 (2006); Eric A. Posner, and Richard Zeckhauser, The Design and Interpretation of Contracts: Why Complexity Matters, 95 Nw. U. L. Rev. 91 (2000).
[193] On the ‘plain meaning’ of a contract, see Eric A. Posner, The Parol Evidence Rule, Plain Meaning, and the Principles of Contractual Interpretation, 146 U. Pa. L. Rev. 533 (1998).
[194] On the influence of plural values upon the ‘substantive’ interpretation of contracts, see e.g. Avery Wiener Katz, The Economics of Form and Substance in Contract Interpretation, 104 Colum. L. Rev. 496 (2004); David Charny, Hypothetical Bargains: The Normative Structure of Contract Interpretation, 89 Mich. L.Rev.1915 (1991); Leon E. Trakman, Interpreting Contracts, supra n. 191.
[195] On ‘good faith’ in contracting, see supra n. 65 and infra n. 203. On the influence of culture on plural methods of interpretation, see infra Section XIV. See too P. Baumann and M. Betzler, Practical Conflict (2004).
[196] The ‘true meaning’ may be monist or pluralist, depending on whether ‘truth’ in interpretation is identified with a ‘super’ value that transcends all other values. On the ‘true meaning’ of the contract, as distinct from its ‘plain’ or ‘ordinary word meaning’, see Avery Wiener Katz, Contractual Incompleteness: A Transactional Perspective, 56 Case W. Res. L. Rev. 169 (2005); Eric A. Posner, The Parol Evidence Rule supra n. 193, at 533.
[197] On more structured steps in interpretation, see e.g. Ronald Dworkin, Law as Interpretation, Tex.L.Rev.299 (1981); Andrei Marmor, Interpretation and Legal Theory (2005). But see Stanley Fish, Working on the Chain Gang: Interpretation in law and literature, 60 Tex. L. Rev. 551 (1986).
[198] On establishing the ‘true meaning’ of the contract, see supra n. 196. Courts can also use canons of interpretation, like the contra proferentem rule to support both unitary and pluralist theories of construction. See e.g. Michelle Boardman, Contra Proferentem: The Allure of Ambiguous Biolerplate, 104 Mich. L. Rev.1105 (2006).
[199] See e.g. U.C.C. § 1-303(b) (2001) [course of dealings].
[200] Id. 1-303(a) [course of performance]. For an argument that the parties should devise their own rules of contract interpretation, see Avery Weiner Katz, supra n. 196, at 496.
[201] On this ‘network effect’, see Larry E. Ribstein and Bruce H. Kobayashi, Choice of Form and Network Externalities, 43 Wm. & Mary L.Rev.79, 110 (2001); Mark A. Lemley and David McGowan, Legal Implications of Network Economic Effects, 86 Cal. L .Rev.479, 587 (1998).
[202] Id. § 1-303(c) [usage of trade]. See too David V. Snyder, Language and Formalities in Commercial Contracts: A Defense of Custom and Conduct, 54 SMU L. Rev.617 (2001).
[203] On the requirement of ‘good faith’ primarily in relation to performance, as distinct from ‘good faith’ in contracting, see Tymshare v. Covell, 727 F.2d 1145 (D.C. Cir. 1984) [per Scalia]; E. Allan Farnsworth, On Trying to Keep One’s Promises: The Duty of Best Efforts in Contract Law, 46 U. Pitt. L. Rev.1,44 (1984); Summers, The General Duty of Good Faith - Its Recognition and Conceptualization, 67 Cornell L. Rev. 810 (1982); Steven Burton, Breach of Contract and the Common Law Duty to Perform in Good Faith, 94 Harv. L. Rev. 369, 372-73 (1980).
[204] Such ‘gap filling’ is monist in subscribing to a monist wills or consent theory of contracting. See supra Sections II and III.
[205] On normative influences including ‘gap filling’ on contract interpretation, see Avery Wiener Katz, supra n. 196; David Charny, supra n. 196. But see George M. Cohen, Implied Terms And Interpretation In Contract Law (2007) at 1,available at <> [206] The underlying assumption is that the wills, consent, or promise exhaust their intentions, leaving no scope for ‘gap filling’. See supra Section II, III and VI.
[207] Jurists have long recognized a difference between ‘interpreting’ a contract and ‘constructing’ its terms. See e.g. 3 Arthur Linton Corbin, Corbin on Contracts § 534 (1960); Arthur L. Corbin, Conditions in the Law of Contract, 28 Yale L.J.739, 740–41 (1919).
[208] On the merits of a new criterion for default rules in incomplete contracts, namely, filling gaps in contracts with terms that are favorable to the party with the greater bargaining power, see Omri Ben-Shahar, Bargaining Power Theory of Default Rules, 109 Colum. L. Rev. 396 (2009).
[209] See Leon E. Trakman, Legal Fictions and Frustrated Contracts, 46 Mod. L. Rev.39 (1983). [hereinafter ‘Legal Fictions’]. But cf. George M. Cohen, Implied Terms and Interpretation in Contract Law, in 3 Encyclopedia Law & Econ.78 (2000). For challenges directed by ‘new formalists’ against judicial gap-filling by realist courts, see Symposium: Formalism Revisited, 66 Chi. L. Rev. 527 (1999); Lisa Bernstein, Merchant Law in a Merchant Court: Rethinking the Code’s Search for Immanent Business Norms, 144 Pa.L.Rev.1765 (1996).
[210] For evidence that sophisticated parties often may prefer a default rule that strictly enforces their contract rather than ‘delegate’ authority to courts to fill gaps on equitable or other grounds, see Jody S. Kraus and Robert E. Scott, Contract Design and the Structure of Contractual Intention, 84 N.Y.U. L. Rev. 1023 (2009).
[211] See e.g. Kennedy, Distributive and Paternalist Motives in Contract and Tort Law, supra n.187, at 621.
[212] For a strident critique of liberal rights, see Peter Gabel, A Critique of Rights: The Phenomenology of Rights-Consciousness and the Pact of the Withdrawn Selves, 62 Tex. L. Rev.1563 (1984).
[213] See e.g, Duncan Kennedy, The Stages of the Decline of the Private Public Distinction, 130 U. Pa. L. Rev. 1349 (1982).
[214] On the institutional disempowerment of minorities ‘without consent’ tracing back to slavery, see Robert William Fogel, Without Consent to Contract: The Rise and Fall of American Slavery (1989). On the Disempowerment of Women, See e.g. Linda Mulcahy & Sally Wheeler, eds., Feminist Perspectives on Contract Law (2005). On the use of ‘adhesion contracts’ to disempower consumers, see supra nn.28 and 108.
[215] See .e.g. Duncan Kennedy, Form and Substance in Private Law Adjudication, 89 Harv. L. Rev. 685 (1976).
[216] Critical legal theorists like Duncan Kennedy reflect on the somewhat paternalistic need for “the decision take the beneficiary under his wing and tell him what he can and cannot do.” See Duncan Kennedy, Distributive and Paternalist Motives in Contract and Tort Law, supra n. 187, at 621, 634.
[217] On the critical deconstruction of liberal theory on grounds, inter alia¸ of disempowerment, see Jon Bruschke, Deconstructive Arguments in the Legal Sphere: An Analysis of the Fischl/Massey Debate about Critical Legal Studies, 32 Argumentation and Advocacy (1995).
[218] Feminist critiques are among the most compelling challenges to consent based models of contracting, including the judicial application of a reasonable ‘man’ standard. See Linda Mulcahy and Sally Wheeler, eds, supra n. 214; Dalton, An Essay in the Deconstruction of Contract Doctrine, 94 Yale L.J. 997, 1063-1065 (1985). See too Cynthia G. Bowman, Dorothy Roberts and Leonard S. Rubinowitz, Race and Gender in the Law Review 100 Nw. U. L.Rev.27 (2006); Ellen C. DuBois, Mary C. Dunlap, Carol J. Gilligan, Kimberlé Crenshaw, Mapping the Margins: Intersectionality, Identity Politics, and Violence Against Woman of Color, 43 Stan.L.Rev.6 (1991). On Critical Race Theory, see Richard Delgado and Jean Stefancic, Critical Race Theory (2001).
[219] Some of this criticism revolves around the ‘language’ and ‘culture’ that is ascribed to legal liberalism including to the ‘reasonable person’ standard. See generally Duncan Kennedy, A Semiotics of Critique, 22 Cardozo L. Rev. 1147 (2001); Christine Desan, Expanding Legal Vocabulary: The Deconstruction and Defense of Law, 95 Yale L. J. 969 (1986). See too Robert Cover, Violence and the Word, 95 Yale L.J.1601 (1985).
[220] The attack on pluralism is presented, in part, through liberalism’s allegedly dubious reliance on the divide between public and private values. See e.g. Duncan Kennedy, The Stages of the Decline of the Private Public Distinction, 130 U. Pa. L. Rev. 1349 (1982).
[221] See e.g. Kennedy, A Semiotics of Critique, supra n. 219.
[222] On the importance of utopian community values in the development of Critical Legal Studies, see Roberto Unger, The Critical Legal Studies Movement, 96 Harv. L. Rev.561 (1983).
[223] See e.g. Chris Williams, The Search for Bases of Decisions in Commercial Law: Llewellyn Redux, 97 Harv.L.Rev.1495 (1984).
[224] On such indeterminacy, see Joseph Singer, The Player and the Cards, supra n. 175, at 11. But see Kenneth Kress, Legal Indeterminacy, 77 Calif. L. Rev. 283, 286 (1989); Robert Benson, How Judges Fool Themselves: The Semiotics of the Easy Case, in 2 Law and Semiotics 31 (R. Kevelson ed. 1988).
[225] See further supra Sections II, III & IV.
[226] On this criticism, see e.g. Singer, supra n. 175. On the relationship between the ‘self’ and ‘community’ in post-modernity, see e.g. Charles Taylor, Sources of The Self: The Making of the Modern Identity (1989); Will Kymlicka, Liberalism, Community and Culture (1989); Aladsair C. Macintyre, After Virtue: A Study in Moral Theory (1984); Walter W. Powell And Elizabeth S. Clemens, Private Action and the Public Good (1998); Michael Walzer, Spheres Of Justice (1983).
[227] Critical Scholarship, arguably, has also failed to acknowledge the contributions made by Legal Realism to equality rights including through contracts. On the legal realist movement, see e.g. Llewellyn, The Common Law Tradition, supra n. 108.
[228] On such utopian idealism, see Roberto Unger, The Critical Studies Movement, supra n. 222. But See Martti Koskenniemi, From Apology to Utopia: The Structure of Legal Argument (2006). For an existential exposition of utopia, see Martin Buber, Paths in Utopia (1996).
[229] See Unger, supra n. 222. For a conservative attack on the radical agenda of Critical Theory, including for undermining its multi-cultural aspirations, see Daniel A. Farber & Suzanna Sherry, Beyond All Reason: The Radical Assault on Truth in American Law, (1997). But cf. Robert Hillman, The Richness of Contract Law, supra n. 1, at 190 et seq.
[230] Will Kymlicka defines a ‘societal culture’ as ‘a culture which provides its members with meaningful ways of life across the full range of human activities including social, educational, religious, recreational, and economic life, encompassing both public and private spheres..’ He adds that cultures may be territorially concentrated and based on a shared language. See Will Kymlicka, Multicultural Citizenship 170 (1995). See too Steven Brooks, The Challenge of Cultural Pluralism (2002); Monique Deveaux, Cultural Pluralism from Liberal Perfectionist Premises, 32 Polity (2000); Amy Gutmann, Liberty and Pluralism in Pursuit of the Non-Ideal, 66 Social Research 1039 (1999); George Kateb, Can Cultures Be Judged? Two Defenses of Cultural Pluralism in Isaiah Berlin's Work, 66 J. Social Research 1009 (1999); Amitai Etzioni, The New Golden Rule: Community and Morality in a Democratic Society (1996).
[231] A significant attribute of culture pluralism is the culture of tolerance, including tolerance of difference. See e.g. Catriona Mckinnon, Dario Castiglione, The Culture of Toleration in Diverse Societies: Reasonable Tolerance (2003).
[232] On such cultural values, see e.g. Kenneth Baynes, The Liberal/Communitarian Controversy and Communicative Ethics in Universalism vs. Communitarianism: Contemporary Debate In Ethics, ed. Douglas B. Rasumssen (1990); Douglas A. Buchanan, Assessing Communitarian Critique of Liberalism, 99 Ethics 852-82 (1989).
[233] On the Westinghouse case, see supra text accompanying nn.129-135. But cf. Daniel Markovits, Contract and Collaboration, 113 Yale L.J.1417 (2004).
[234] On restorative justice, see e.g. James Dignan, Understanding Victims And Restorative Justice (2005); Paul Takagi and Gregory Shank, Critique of Restorative Justice, 31 Social Justice (2004); Albert W. Dzur, Restorative Justice and Civic Accountability for Punishment 36 Polity (2003); John Braithwaite, Restorative Justice and Responsive Regulation (2002).
[235] For a libertarian rationale in support of both autonomy and welfare values, see Cass Sunstein, Preferences, Paternalism, and Liberty, supra n. 85. Cf. Russell Korobkin, Libertarian Welfarism, 97 Cal. L. Rev. (2009). On recognition of the adhesion contract in the early and mid Twentieth Century, see supra note 28.
[236] On ‘trust building’ see supra n. 183. See generally Victor P. Goldberg, Framing Contract Law: An Economic Perspective (2006); Lucian A. Babchuk and Omri Ben Shahar, Pre-Contractual Reliance, Chi. J. Leg. Stud. 423 (2001); Eric A. Posner, Law and Social Norms (2000).
[237] On the allegedly artificial distinction between merchant and consumer cultures in contracting, see Larry T. Garvin, Small Business and the False Dichotomies of Contract Law, 40 Wake Forest L. Rev.295 (2005); Alan Schwartz and Robert E. Scott, Contract Enforcement and Interpretation: Contract Theory and the Limits of Contract Law[2003] YaleLawJl 2; , 113 Yale L.J. 541 (2003).
[238] On whether an e-consumer who buys to resell ought to be treated as an end user ‘consumer’ or a repeat order ‘merchant’, see ProCD, Inc. v. Zeidenberg, U.S. Court of Appeals, Seventh Circuit, June 20[1996] USCA7 654; , 1996, 86 F. 3d 1447. But see contra William C Whitford, ProCD v. Zeidenberg in Context, 2004 Wisc. L. Rev. 82. On whether suppliers can detect and cater to aggressive consumers while taking advantage of other consumers, see Clayton Gillette, Rolling Contracts as an Agency Problem 2004. Wisc.L.Rev.679.
[239] On emerging e-commercial and consumer cultures including click-wrap and browse-wrap agreements, see Trakman, Boundaries, supra n. 114.
[240] See e.g. David Nelken, ‘Culture, Legal’ in David S. Clark, ed., Encyclopedia of Law and Society: American and Global Perspectives 369–374 (2007); Werner Menski, Comparative Law in a Global Context (2006); David Nelken, Using the Concept of Legal Culture, 29 Australian J. Leg.Phil.1–28 ((2004); Csaba Vargo, ed., Comparative Legal Culture (1992).
[241] On the propensity to believe that one’s views are predominant, giving rise to ‘false consensus bias’ in the interpretation of contracts, see Larry Solan, Terri Rosenblatt and Dan Osheron, False Consensus Bias in Contract Interpretation, 108 Colum. L. Rev. 1268 (2008).
[242] Cultural discourse may also accentuate extreme positions. See Cass Sunstein, Going to Extremes: How Like Minds Unite and Divide (2009). On challenges to cultural pluralism within communitarian thought, see Amitai Etzioni, The Attack on Community: The Grooved Debate, 32 Society 12-17 (1995); Daniel A. Bell, Communitarianism and its Critics (1993); Derek Phillips, Looking Backward: A Critical Appraisal of Communitarian Thought (1993).
[243] A particular challenge is to measure emerging and receding cultural trends that evolve gradually and unevenly. For example, it remains unclear to what extent emerging consumer e-cultures are distinct from other consumer cultures. See further Trakman, Boundaries, supra n. 114. See too James Q. Whitman, Consumerism Versus Producerism: A Study in Comparative Law 117 Yale L. J. 340 (2007).
[244] See Leon E. Trakman, From the Medieval Law Merchant to E-Merchant Law, 53 Toronto L. J.265 (2003); James R. Maxeiner, Standard-Terms Contracting in the Global Electronic Age: European Alternatives, supra n. 116. For an early commentary on the cultural-legal development of cyber- commerce, see David R. Johnson and David Post, Law and Borders: The Rise of Law in Cyberspace, 48 Stan. L. Rev.1367 (1996). On the ‘just price’ see supra n. 169.
[245] On judges choosing methods of interpretation that are more likely to generate preferred outcomes, see Alexander Volokh, Choosing Interpretive Methods: A Positive Theory of Judges and Everyone Else, 83 N.Y.U. L.Rev.769 (2008). On attempts through jurimetrics to predict judicial behavior based on the socio-cultural and political background of judges, see supra n. 189.
[246] On plural conceptions of legal rights, see Trakman and Gatien, Rights and Responsibilities, supra n. 4.

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