Aditi Bagchi (Fordham University School of Law) has posted Contract as Exchange (113 California Law Review (forthcoming 2025)) on SSRN. Here is the abstract:
Most people agree that the institution of contract serves autonomy—or it should. But how? Philosophical theories of contract link contract and autonomy by way of an appealing intermediate principle such as the authority of the individual will, promissory morality or conventions of agreement. However, each of these theories is focused on the mental and verbal acts surrounding contract and is thus at odds with both contract as a social practice and contract law. The theories fail to account for basic features of modern contracting such as anonymity, mass scale and market determination of contract terms; facts to which both the common law and statutory regulation have long adjusted. The so-called objective theory recommends an outward turn, but it has been reduced to an epistemic constraint that reflects the limits of communication and evidence; it did not achieve the expansion of perspective that it promised.
In this Article, I propose a different approach. “Contract as exchange” emphasizes what people are trying to do when they contract. Contracting parties do not will, promise or agree for the sake of will, promise or agreement; their objectives in contract are material. Contract as exchange links autonomy to contract by way of the latter’s capacity to get people what they want from complete strangers using the mechanism of exchange. The institution of contract serves the principle of autonomy but, on this view, its contribution is contingent, not inevitable. Contract succeeds as an institution when all members of the political community can access the market to exchange their entitlements for ones that they prefer, thereby securing the cooperation of others for their own projects while contributing to the projects of others. Contract fails to promote autonomy when people face barriers to access or when their encounters with the market go so badly that their life plans are derailed.
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