Bagchi, Dagan, and Hesselink at “Contract Law in a Liberal Society” Summer School in June — John Golden

Post by John Golden

From June 29 to July 1, the University of Amsterdam hosted a “summer school” on “Contract Law in a Liberal Society.”  The gathering featured extended presentations by Aditi Bagchi of the Fordham University School of Law, Hanoch Dagan of Tel Aviv University’s Buchmann Faculty of Law, and Martijn Hesselink of the University of Amsterdam, as well as additional short presentations of completed works or works in progress by more junior scholars.  This post describes aspects of the presentations by Bagchi, Dagan, and Hesselink as I perceived them.

Bagchi led off the conference by leading conversations on three basic topics: (1) a liberal state’s role and responsibility in regulating contract law and its effects; (2) the nature of voluntariness in contracting; and (3) the importance to individual autonomy of allowance for fickleness—roughly speaking, one’s ability to change one’s mind—and the ways in which contract and associated laws do and can take account of this value.  With respect to the liberal state, Bagchi contended that state regulation and application of contract law with an eye to concerns of distributive justice can be justified by (1) the state’s at least partial reliance on justification through its capacity to protect individuals from injury; (2) the increased ability of the modern administrative state to regulate effectively; and (3) the collective responsibility for distributive injustice in which individual members of a society might share.  On voluntariness, Bagchi argued that voluntariness is too often conceived in binary, on-off terms instead of being treated as a matter of degree that reflects different levels of material or moral constraint in making promises or granting permissions.  Finally, Bagchi emphasized the importance to individual autonomy of being able to change one’s mind, a capacity with which supposedly autonomy-enhancing contract law might unduly interfere if it excessively favors the promises or permissions issuing from a former self over the beliefs and inclinations of a present or future self.  She suggested that contract law doctrines and associated law, such as contract law’s doctrine of consideration and bankruptcy law, respectively, already reflect an interest in enabling “fickleness.”

On the second day of the summer school, Dagan presented the “choice theory” of contract on which Michael Heller of Columbia Law School and he elaborate in a forthcoming book.  Dagan and Heller reject what they characterize as an excessive, Willistonian focus on commercial contracting, a focus that they contend that has caused substantial spheres of employment, labor, and family relations to seem largely peripheral to contract law, at least as it is commonly taught and researched.  Dagan and Heller further argue that, consistent with Charles Fried’s path-breaking work Contract as Promise, autonomy should be viewed as contract law’s fundamental informing principle.  But they allege that Fried faltered in pursuing a rights-based approach to contract, and they offer an alternative vision under which a liberal state should make efforts to further contract law’s autonomy principle by permitting and even fostering pluralism in the forms of contract available within the different spheres of human activity with which contract law interacts.  In their view, doctrines designed narrowly to implement commonly touted notions of freedom to bargain and freedom from contract can fail to adequately implement contract law’s autonomy-promoting potential.  Only when an individual can exercise meaningful choice within different relational spheres will that individual have the sort of independence and capacity for self-determination that contract law should foster.  On the other hand, the state’s charge to foster multiple contract forms is not absolute: it can be overcome when, for example, concerns about political economy or individual vulnerability suggest that the availability of multiple contract forms will not properly promote independent and self-determinative choice.

Finally, Martijn Hesselink presented aspects of his work and thought on the summer school’s third day.  Hesselink emphasized the contingent nature of contract law and the suspect nature of universal theories, stressing that, even when optimized, the significance and content of contract law can differ with circumstance.  Hesselink contended that modern constitutional democracies commonly feature a diverse society marked by what John Rawls termed “reasonable pluralism,” the existence of differing worldviews that can conflict and yet be separately reasonable.  In Hesselink’s view, the focus of concern with justifying contract law in such societies is properly on (1) identifying justifications that are compatible with a pluralist society and (2) more generally fostering justificatory discourse through democratic processes in which all affected individuals feel appropriately included.  From this perspective, common law development of contract law can raise concerns because of its isolation from general citizen input.  Moreover, significant aspects of contract law’s content may be up for grabs in democratic processes that might, for example, settle on a contract regime that protects only reliance and restitution interests, rather than expectation interests.  Contract law may declare contracts void on grounds of public policy or morality, but the grounds for such avoidance should be limited: these grounds might include protection of basic human rights but fail to encompass the whole of the larger category of fundamental rights recognized by the EU Charter.  Likewise, contract law may seek to protect weaker parties on the basis of concerns with human rights or distributive justice, although not paternalism per se.

This brief account necessarily falls short in its description of these three scholars’ work and thought, never mind the active interchange that these scholars’ presentations, as well as those of others, inspired at the summer school.  I hope that this post nonetheless suggests a healthy number of issues with respect to “Contract Law in a Liberal Society.”  There was—and there is—much to discuss!

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