1849804516

JOBNAME: Monateri PAGE: 1 SESS: 2 OUTPUT: Tue Mar 21 15:52:53 2017
COMPARATIVE CONTRACT LAW
Pier Giuseppe Monateri - 9781849804516
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RESEARCH HANDBOOKS IN COMPARATIVE LAW

Series Editors: Francesco Parisi, Oppenheimer Wolff and Donnelly Professor of Law,
University of Minnesota, USA and Professor of Economics, University of Bologna, Italy
and Tom Ginsburg, Professor of Law, University of Chicago, USA
The volumes in this series offer high-level discussion and analysis on particular aspects of
legal systems and the law. Well-known scholars edit each handbook and bring together
accessible yet sophisticated contributions from an international cast of top researchers.
The first series of its kind to cover a wide range of comparative issues so comprehensively,
this is an indispensable resource for students and scholars alike.
Titles in this series include:
Comparative Constitutional Law

Edited by Tom Ginsburg and Rosalind Dixon
Methods of Comparative Law

Edited by Pier Giuseppe Monateri
Comparative Law and Society

Edited by David S. Clark
Comparative Labor Law

Edited by Matthew W. Finkin and Guy Mundlak
Comparative Tort Law

Edited by Mauro Bussani and Anthony Sebok
Comparative Competition Law

Edited by John Duns, Arlen Duke and Brendan Sweeney
Comparative Law and Economics

Edited by Giovanni B. Ramello and Theodore Eisenberg
Comparative Criminal Procedure

Edited by Jacqueline E. Ross and Stephen C. Thaman
Comparative Law and Regulation

Understanding the Global Regulatory Process
Edited by Francesca Bignami and David Zaring
Comparative Contract Law

Edited by Pier Giuseppe Monateri
Comparative Contract Law
Edited by
Pier Giuseppe Monateri

Professor of Comparative Law, Department of Law,
University of Turin, Italy
RESEARCH HANDBOOKS IN COMPARATIVE LAW
Cheltenham, UK + Northampton, MA, USA
The editor and contributing authors severally 2017
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01
Contents
List of contributors vii
Introduction 1
PART I CONTRACT LAW: THEORIES AND GENEALOGIES
1 Theories of contract law 7

Brian H. Bix
2 In defense of Roman contract law 19
James Gordley
3 The authoritarian theory of contract 47
4 Contract and the comparatist: should we think about contract
in terms of contracticles? 67
Geoffrey Samuel
5 Critical comparative contract law 95
Giovanni Marini
6 Contract law and regulation 111
Giuseppe Bellantuono
PART II MARKET VALUES AND THEIR CRITIQUES: PRIVATE

GOVERNANCE AND NORMATIVE REGULATIONS
7 Enforcing bilateral promises: a comparative law and economics

perspective 145
Francesco Parisi, Marta Cenini and Barbara Luppi
8 Spontaneous order and freedom of contract 173
Carlo Ludovico Cordasco
9 Party autonomy 193
Horatia Muir Watt
10 Who is the contracting party? A trip around the transformation
of the legal subject 205
Maria Rosaria Marella
vi Comparative contract law
11 Freedom of contract and constitutional values: some exceptional

cases from the Colombian Constitutional Court 216
Pablo Moreno Cruz
PART III REPRESENTATIONS AND NARRATIVES
12 The unburiable contract: Grant Gilmores discontinuous parabola

and the literary construction of American legal style 245
Cristina Costantini
13 Queering the contractual paradigm between law and political
theory 303
Flavia Monceri
14 Contracts in literature: from Doctor Faustus to vampires 322
Daniela Carpi
15 Women and contracts in Angela Carters postmodern revision
of the fairy tale 361
Sidia Fiorato
PART IV GLOBAL CONTEXT AND LOCAL FRAMES
16 The wrecking ball: good faith, preemption and US exceptionalism 385

Peter Goodrich
17 Technological contracts 408
Massimiliano Granieri
18 Contractual interpretation: the South African blend of common,
civil and indigenous law in comparative perspective 451
Andrew Hutchison
19 Promissory estoppel 469
Paolo Pardolesi
20 Party autonomy in global context: an international lawyers
take on the political economy of a self-constituting regime 512
Horatia Muir Watt
Index 537
Contributors
Giuseppe Bellantuono is Associate Professor of Comparative Private

Law at the University of Trento, Faculty of Law. His research interests
include the comparative analysis of regulatory systems, methodologies of
comparative law, interdisciplinary approaches to legal studies, law and
technology, comparative energy law, and comparative communications
law. Among his recent publications are: Contratti e regolazione nei
mercati dellenergia (2009); Law, Development and Innovation (co-
edited with F. Lara, 2015); and Convergences and Divergences Between
the Italian and the Brazilian Legal Systems (co-edited with F. Puppo,
2015).
Brian H. Bix is Frederick W. Thomas Professor of Law and Phil-
osophy, University of Minnesota. He was a Visiting Professor of Law at
Georgetown University Law Center during the Spring semester of 2000
and at George Washington University Law School in the Fall of 1999.
Professor Bix was the Lecturer in Jurisprudence and Legal Reasoning at
Kings College, University of London, from 1991 to 1993. He is a
Member of the Bar of the States of Minnesota, Connecticut and Massa-
chusetts, and a member of the American Law Institute. His publications
are primarily in the areas of contract law, legal philosophy and family
law, and include: Contract Law: Rules, Theory, and Context (2012); A
Dictionary of Legal Theory (2004); and Jurisprudence: Theory and
Context (7th ed., 2015).
Daniela Carpi is Professor of English Literature at the Department of
Foreign Languages and Literature at the University of Verona. She is the
President of AIDEL and a member of Academia Europaea. She is a
member of AIA, Associazione Italiana di Anglistica; of the European
Society for the Study of English, ESSE; and of IASEMS, Italian
Association of Shakespearean and Early Modern Studies. She is on
the editorial board of the journals Symbolism: A Journal of Critical
Aesthetics (New York), Anglistik (University of Heidelberg), Cardozo
Law Bulletin (University of Trento), La Torre di Babele (University of
Parma), Law and Humanities (University of Warwick) and CoSMo
(Comparative Studies in Modernism) (University of Turin). She
co-founded and co-directs the journal Polemos. Her fields of research are
vii
viii Comparative contract law
literature and law, literature and science, literature and visual arts,
Renaissance theatre, postmodernism, critical theory. Her latest mono-
graph is Fairy Tales in the Postmodern World. No Tales for Children
(2016).
Marta Cenini is Researcher of Private Law at the University of Milan.
In 2013 she obtained the National Scientific Qualification (Law no. 240
of 30 December 2010, article 16) to the position of Associate Professor in
Private Law. She holds a Ph.D in Private Law and she has published in
English and Italian in the fields of contractual damages and tort law,
remedies for breach of contracts, legislation concerning circulation of
goods, securities, and, recently, environmental liability, always using as
research tools the comparison with laws of different countries and the
economic analysis of law. Among her publications, Gli acquisti a non
domino (2009); Cases and Materials on Italian Private Law (with
Rossella Esther Cerchia, 2016).
Carlo Ludovico Cordasco is Ph.D Candidate in Political Philosophy at
the Department of Politics at the University of Sheffield and Visiting
Scholar within the Politics, Philosophy and Economics Program at the
University of Pennsylvania.
Cristina Costantini is Associate Professor of Private Comparative Law
at the University of Perugia. She is member of AIDC (Associazione
Italiana di Diritto Comparato), AIDEL (Associazione Italiana di Diritto e
Letteratura), Selden Society (London), ESSE (The European Society for
the Study of English), and AIA (Associazione Italiana di Anglistica). She
is Managing Editor of Cardozo Electronic Law Bulletin; member of the
Scientific Committee of the review CoSMo (Comparative Studies in
Modernism); Assistant Editor of Plemos: A Journal of Law, Literature
and Culture; member of the Editorial Board of Comparative Law Review
and Comparazione e Diritto Civile. Her main fields of research include
the comparative construction of legal traditions, the history of English
common law, the intellectual assessment of the liminal thresholds within
the humanities (law and literature; law and philosophy; law and religion).
Among her numerous publications: La Legge e il Tempio. Storia com-
parata della giustizia inglese (2007); The Keepers of Traditions: The
English Common Lawyers and the Presence of Law (2010); Representing
Law: Narrative Practices, Poetic Devices, Visual Signs and the Aesthetics
of the Common Law Mind (2013).
Sidia Fiorato is Researcher of English Literature at the University of
Verona. Her fields of research include detective fiction and the legal
thriller, law, literature and culture, literature and the performing arts,
Contributors ix
Shakespeare studies, the fairy tale. Among her publications, Il Gioco con
lombra. Ambiguit e metanarrazioni nella narrativa di Peter Ackroyd
(2003); The Relationship Between Literature and Science in John Ban-
villes Scientific Tetralogy (2007); and essays on the contemporary novel,
Shakespearian adaptations, Victorian literature.
Peter Goodrich is Professor of Law and Director of the Program in Law
and Humanities at Cardozo School of Law, New York. He was the
founding dean of the department of law, Birkbeck College, University of
London, where he was also the Corporation of London Professor of Law.
He has written extensively in legal history and theory, law and literature
and semiotics and has authored 12 books. He is managing editor of Law
and Literature, and was the founding editor of Law and Critique. His
most recent book is Legal Emblems and the Art of Law (2013); and to
this coruscating and lucifugous erudition can be added co-writing and
co-producing the award winning documentary Auf Wiedersehen:Til We
Meet Again (Diskin Films, 2012).
James Gordley is W.R. Irby Professor of Law at Tulane Law School and
Shannon Cecil Turner Professor of Jurisprudence Emeritus at the Univer-
sity of California School of Law at Berkeley. He is a member of the
American Academy of Arts and Sciences, a Corresponding Fellow of the
British Academy, and a membre titulaire of the Acadmie international
du droit compar.
Massimiliano Granieri is Associate Professor of Comparative Private
Law, Department of Mechanical and Industrial Engineering of the
University of Brescia Health and Wealth (Italy) and adjunct faculty of
European Private Law at the Widener Law School (United States). He
holds a JD from the LUISS Guido Carli School of Law, a Ph.D from the
University of Florence and an LLM from the University of California at
Berkeley, Boalt Hall. He was the Jemolo Fellow at Nuffield College,
Oxford (United Kingdom).
Andrew Hutchison is an Associate Professor in the Department of
Commercial Law at the University of Cape Town, South Africa.
His affinity for contract law began during his LLM studies at UCT
(20056), and was carried through to his Ph.D thesis on fundamental
change of circumstances in contract law (hardship), completed in 2010.
He has published a body of work in leading South African and inter-
national law journals on contract law. His main research interests are
general principles of contract law, specific and commercial contracts,
insurance law, constitutional development of contract law, decolonization
x Comparative contract law
of law/customary law (with reference to contracting), comparative con-

tract law, and legal interpretation.
Barbara Luppi is Assistant Professor of Economics, University of
Modena. She holds a Ph.D in Political Economy from the University of
Bologna and a Ph.D in Economics from the London School of Eco-
nomics and Political Science. She has held visiting positions at the Eitan
Berglas School of Economics at Tel Aviv University and at the University
of Minnesota. Her recent research has focused on law and economics,
finance and behavioural economics and bounded rationality. Among her
main publications, Deterrence of Wrongdoing in Ancient Law in G.
Dari Mattiacci, Roman Law and Economics (2015); Behavioral
Approach to Tort Law in J. Teitelbaum and K. Zeiler (eds), Handbook of
Behavioral Law and Economics (Edward Elgar Publishing, 2015); Rent-
Seeking in the Law in R. Congleton and A. Hillman (eds), Companion to
the Political Economy of Rent-Seeking (Edward Elgar Publishing, 2015).
Maria Rosaria Marella is Full Professor of Law at the University of
Perugia Faculty of Law, where she teaches Private Law and heads the
Law Clinic on Health, Environment and Territory. She is a member of the
Socit de Lgislation Compare, the International Academy of Com-
parative Law, the Association of Italian Private Law Scholars and the
Italian Society of Feminist Legal Scholars (GIUdIT). She has been
awarded the Canadian Studies Faculty Research Award twice (in 2008
and 2010). Her current fields of study concern comparative family law
and the law of property with a focus on the tension between the
traditional private property paradigm and alternative forms of ownership
and use of resources. She has recently published a book on family law as
a governmental apparatus, Di cosa parliamo quando parliamo di famiglia
(with G. Marini, 2014) and a book on the commons and their legal
regulation, Oltre il pubblico e il privato. Per un diritto dei beni comuni
(M.R. Marella ed., 2012). Other recent publications include: The
Commons as a Legal Concept, Law & Critique (forthcoming); The
Contractualisation of Family Law in Italy in F. Swennen (ed.), Contrac-
tualisation of Family Law Global Perspectives (2015); Famille (with
Giovanni Marini) in M. Troper and D. Chagnollaud (eds), Trait inter-
national de droit constitutionnel (2012); and Critical Family Law,
American University Journal of Gender, Social Policy & the Law (2011).
Giovanni Marini is Full Professor of Law at the University of Perugia
Department of Law, where he teaches Private Comparative Law. He
received his law JD from the Universit degli studi di Roma, La Sapienza
(Rome, Italy) and the MCL from Michigan Law School (Ann Arbor,
Contributors xi
United States) where he was Fulbright fellow. He has been a researcher

at European University Institute (Fiesole) and a visiting professor at Yale
Law School (New Haven, United States), Max Plank Institute (Hamburg,
Germany), Harvard Law School (Cambridge, United States) and Univer-
sit Paris I, Sorbonne (Paris, France). He has published papers and books
in many areas of interest, such as comparative law, comparative jurispru-
dence, tort law, property and contract law and family law.
Pier Giuseppe Monateri is Visiting Professor at Sciences Po, Paris and
Professor of Comparative Law at the University of Turin. He is titular
member of the International Academy of Comparative Law (New York);
member of Accademia delle Scienze (Bologna); Profesor Honorario
Universidad San Marcos (Lima); Vice-President of AIDEL (Associazione
Italiana di Diritto e Letteratura). He is former Vicarious Rector of the
University of Trento and Past-President of the Italian Association of
Comparative Law. He has been the first Director of the Department of
Private Law of the State, Scuola Superiore della Pubblica Amministrazi-
one (Rome) and former member of the Board of the Italian Society for
Law and Economics. He has been honoured as Jean Monnet Professor of
European Law at the University of Trento. His main fields of research
include comparative law, contract law, tort law, and law and humanities.
Among his publications are The Italian Legal System: An Introduction
(with M. Livingston and F. Parisi, 2015); Classics in Comparative Law
(with T. Ginsburg and F. Parisi, 2014); Methods of Comparative Law
(2012); Black Gaius: A Quest for the Multicultural Origins of the
Western Legal Tradition (2000).
Flavia Monceri is Associate Professor of Political Philosophy, Universit
del Molise, Italy, where she teaches Political Philosophy, Gender Studies
and Multiculturalism and Intercultural Communication. Her research
interests include continental philosophy (from Nietzsche on), queer and
transgender theories, disability studies, intercultural communication, film
philosophy, complexity and systems theories, East Asian cultures,
religions, and institutions (especially Japan).
Pablo Moreno Cruz is Professor of Comparative Law at the University
Externado de Colombia. He is currently also teaching Theory of Com-
parative Law in the Masters on Global Rule of Law and Constitutional
Democracy at the University of Genoa, and a module of the course Law
of the Americas at the University of Ferrara. Between 2011 and 2015 he
taught Comparative Law at the University of Genoa, Imperia. He holds a
law degree from the University Externado de Colombia (2000), a
Masters in European Private Law from the University of Roma, La
xii Comparative contract law
Sapienza (2005) and a Ph.D in Comparative Law from the University of

Ferrara (2010). He has been a visiting scholar at the University of
Pennsylvania, Penn Law School (2008). He is a member of the editorial
board of Revista de derecho privado published by the University Exter-
nado de Colombia.
Horatia Muir Watt is Professor at the Law School, Sciences Po Paris,
where she currently co-directs the speciality Global Governance Studies
within the Masters in Economic Law. She teaches and publishes in the
field of private international law and comparative law, where she de-
velops critical and interdisciplinary approaches. She was elected in 2013
to the Institute of International Law. She is Editor in Chief of the Revue
critique de droit international priv and on the editorial board of various
international law reviews or journals (Journal of Private International
Law, European Review of Contract Law, Transnational Legal Theory)
and co-editor of various collections: International Studies in the Theory
of Private Law, Private Law in European Context, and A droit ouvert
chez Dalloz (with Antoine Lyon-Caen). Her books include Aspects
conomiques de droit international priv (2005); Common law et trad-
ition civiliste (with Duncan Fairgrieve, 2006) (a pocket comparative
study); Droit international priv (with Dominique Bureau, 2007, now in
its 3rd edition, 2014), and a Que sais-je on the same subject (also with
Dominique Bureau, 2009). She co-edited The Making of European
Private Law: Regulatory Strategies and Governance (with Fabrizio
Cafaggi, vol. I 2008, vol. II 2009). She is co-editor of Private Inter-
national Law as Global Governance (with D. Fernandez Arroyo, 2014).
Representative publications in article form include, Private International
Law Beyond the Schism in Transnational Legal Theory (2011); Dette
souveraine et main visible du march: de nouveaux enjeux du droit
international priv des contrats in Revue critique de droit international
priv (2015); Conflicts of Laws Unbounded: The Case for a Legal-
Pluralist Revival in Transnational Legal Theory (2016).
Paolo Pardolesi has a Ph.D in Comparative Private Law from the
University of Trento and was Official Visiting Researcher at Yale Law
School. He is currently Associate Professor of Comparative Law at the
University of Bari, Aldo Moro, Italy, and a lawyer enrolled in the Bari
Bar Association.
Francesco Parisi is the Oppenheimer Wolff and Donelly Professor of
Law at the University of Minnesota, Law School and a Professor of
Economics at the University of Bologna, Department of Economics.
From 2002 to 2006 he held a Chair in Private Law at the University of
Contributors xiii
Milan (Statale), where he was appointed Professore Ordinario per Chiara

Fama. From 1993 to 2006 he taught at George Mason University where
he served as Professor of Law and Director of the Law and Economics
programme, and as an Associate Director of the J.M. Buchanan Center
for Political Economy.
Geoffrey Samuel is Professor of Law at the Kent Law School, Univer-
sity of Kent, and a Professor affili at the Sciences Po Law School. He
holds doctorates from the universities of Cambridge and Maastricht and
an honorary doctorate from the University of Nancy 2. His research
interests are in the areas of comparative law theory, legal epistemology
and the law of obligations. His most recent books are An Introduction to
Comparative Law Theory and Method (Hart Publishing, 2014) and A
Short Introduction to Judging and to Legal Reasoning (Edward Elgar
Publishing, 2016).
Introduction
Contract has never been more alive than nowadays and pervasively
dominates world transactions. Notwithstanding its enduring presence and
the complex apparatuses of technicians devoted to managing clauses and
interpretation, the inquiry on the proper nature of contract, on its status
and collocation within private legal taxonomies continues to be a
controversial exercise. This comprehensive book, which collects the
contribution of different scholars from different backgrounds, offers a
thoughtful survey of theories, issues, cases, in order to reassess the
present vision of contract law. The adjective comparative, prominent in
the title, refers both to the specific kind of methodologies implied, and to
the polyphonic perspectives collected on the main topics, with the aim of
superseding the conventional forms of representation. In this perspective,
the work engages a critical search for the fault-lines, which cross
traditions of thought and globalized landscapes.
Moving from a vast array of dissimilar inclinations, which have
historically produced heterogeneous maps of law along with protean
representative aesthetics, the book is built around four main groups of
insights, including: the genealogies of contractual theoretical thinking;
the contentious relationship between private governance and normative
regulations; the competing styles used to stage contract law, and the
concurring opinions expressed within the domain of other disciplines,
such as literature and political theory; the tensions between global
context and local frames and the movable thresholds between canonical
expressions and heterodox constructions.
Part I (Theories and Genealogies) deals with fundamental
epistemological issues and aims to dissect the underlying structure of the
most accredited conceptual frameworks. How can we critically rebuild a
theory of theorizing contract law as a separate field of law? How can we
reassess the genealogy of contract law, managing the darker legacies
embedded in Roman tradition? As it has been noted, despite the long
history and the recent increase in theorizing about contract law, the
nature and purpose of such theorizing remain under-discussed and many
basic questions remain unanswered. Competing visions have framed the
intellectual debate: autonomy theories have confronted property and
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2 Comparative contract law
reliance theories and from their impact, if not from their collision, a new
creature, a hybridized form of scientific construction has taken shape. On
a parallel level, the trans-historical and inter-cultural investigation paves
the way to the possible corruption or contamination of the normative
purity predicated to contract law by legal science. A deeper look reveals
the quest for new taxonomies, for other schemes of intelligibility apt to
valorize the specific role played by contracticles, namely by different
types of transactions to be found at the lowest level of generality. In this
perspective, a supplementary bulk of fragmented knowledge opens mean-
ingful fissures within the body of systematized codes. The reflection on
the actual morphology of contract rules also reveals the growing influ-
ence of social justice in private law and uncovers the failures that can be
ascribed to the liberal conceptions of classical legal thought. In the
present context, an intriguing and illuminating exercise could be to
explore the relationship between what would be called traditional
contract law and regulatory contract law. This is not a well-established
topic in the comparative law literature and rouses broader and more
systematic inquiries.
Part II (Market Values and Their Critiques: Private Governance and
Normative Regulations), developing the arguments introduced at the end
of Part I, reports the most interesting positions on the relation between
private governance and normative regulation. Once again, the issues of
complexity and spontaneous order are under scrutiny, in order to pursue a
strategic response to decisive questions, such as: how is it possible to
maximize the satisfaction of the largest number of compatible goals in
complex systems such as contemporary societies? How is it possible to
secure an acceptable degree of certainty and to have efficient rules in
order to achieve cooperation? On these premises, the contributors re-
discover the various political representations of private autonomy and
detect the key function fulfilled by the principle of party autonomy
within the political economy of private ordering in todays global
scenery. According to a skeptical view, it could be argued that even one
of the most powerful creations of the legal science underlying classical
legal thought, which lasted almost unchanged through the second global-
ization of law, has now come to an end or, in any case, has been
dramatically transformed. A critical perspective aims both to trace and
dissect the epiphanies of this substantial crisis and to propose new
re/de-constructive projects. Another important and closely related topic is
the tense relationship between freedom of contract and judicial interven-
tion on the agreement. In particular, the jurispathic power asserted by
national courts is scrutinized both in its theoretical foundations and in its
operational way of functioning. The judicial creation of exceptions, of
Introduction 3
cases of contractual terms inapplicability, seems to construct a kind of

supra-competence of the judiciary, enhancing a newfangled sovereign
order, based on a hyperbolic claim.
Part III (Representations and Narratives) stages a compelling por-
traiture of the representational models, which have structured the multi-
farious narratives on contract law. Law, literature and politics are here
intersected in a fruitful interplay of mutual illuminations. The literary
emplotment of legal traditions is disclosed with its inner strategic
potentialities. A particular attention is reserved to the wavering shifts
which have animated the American legal debate, from the assertive and
dogmatic rise of a classical theory of contract to its fall and disintegration
under the fierce attacks of legal realism. The unresolved alternation of
order and crisis, stability and change, certainty and instability is captured
and expressed by the means of the texts written by distinguished
intellectuals. The polyphonic voices are juxtaposed and assembled; legal
tradition is de- and re-composed through the accepted discourses and the
prospective imaginations of scholars and judges, here presented as
mindful legal humanists. In a corresponding way, literature comes to
vivify the normative world in which a community lives: novels, poetry,
fairy tales, dramas and other genres express aspirations and perceptions,
evaluations and expectations. Law lives in literature and is questioned by
literature. Prospecting an unavoidable bond, an inseparable relation
between law and literature, the volume offers a bright ensemble of
diachronic examples, which substantiate the literary lecture of contractual
theories and rules from the Renaissance to the Victorian era, and also
reproduce the deep quest engaged by postmodern compositions. The
interdisciplinary approach allows us to disclose the inconsistencies of the
contractual paradigm (the tenet according to which the social institution
we are used to naming the State has been established by means of a
(social) contract), as one of the most appealing ideas in the history of
modern and contemporary Western political thought. In fact, searching
for the identification of who is entitled to sign the original contract, one
could find that this abstract contractor is concretely personified and
identifies as a male, white and Christian human being. The two most
important requirements for a man to become such a full member are
heterosexuality and able-bodiedness or ableness.
Part IV (Global Context and Local Frames) focuses on the process by
which global ideas, principles and institutions could eventually be
reinterpreted through local frames of reference. Dealing with the main
arguments introduced in Part I, in this renovated de-contextualization and
re-contextualization framework, the theorization refers to a dis-

embedding/re-localizing strategy. On this ground, the theoretical para-
digms through which a contract may be read are previously identified in
broader terms, emphasizing their essential characteristics and, subse-
quently, are measured and operationally tested with regard to the specifi-
cities of selected jurisdictions. An analogous exercise is meant to make
clear the proper functioning both of doctrines and of remedies. Therefore,
the doctrine of good faith is scrutinized according to its general scope
and to the exceptional application made in recent decisions of US Courts.
Analogously, Part IV presents a critical genealogy of promissory estop-
pel, dwelling upon the sharp break from the traditional approach and the
paradigm shift from the reasonableness of the conduct during the
negotiations and moves in the direction of the obligation to act in good
faith. A stimulating analysis, conducted through comparative methodol-
ogies, probes the binomial technology/contracts and provides the
observer with a comprehensive view of local responses to common
universal problems and developments posed by use of technology in
contracts.
Comparative Contract Law is intended to be an original contribution to
the ongoing elaboration of contractual theories and a contemplative effort
to explore uncharted paths of inquiry at the intersection of different fields
of research.
PART I
CONTRACT LAW:
THEORIES AND
GENEALOGIES
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1. Theories of contract law

Brian H. Bix
INTRODUCTION
Theorizing about contract law has a long history its origins coincide
with the origins of thinking of about contract law as a separate area of
law.1 However, there has been a particular flourishing of work (at least in
English) on contract theory in recent decades, prompted in large part by
the publication of Charles Frieds influential book, Contract as Promise2
(about which, more below). Despite the long history and recent increase
in theorizing about contract law, the nature and purpose of such theoriz-
ing remains under-discussed and many basic questions remain
unanswered.
In this chapter, section I will discuss general considerations relating to
theorizing about contract law, section II offers an overview of some
major types of theories, and section III raises some of the skeptical
challenges to theorizing in this area.
I. THEORIZING ABOUT CONTRACT LAW

A basic question about theories of contract law is, what is the nature and
purpose of such a theory? Surprisingly, while there is a growing literature
regarding which is the best theory of contract law, there is relatively little
discussion of this foundational inquiry. At a basic level, a theory of a
social practice could be descriptive (describing what is the case),
prescriptive (making claims about how the practice should be organized
or how existing practices should be reformed), or interpretive (sometimes
called rational reconstruction, this is a combination of description and
prescription, where existing practices are reformed or at least
re-characterized to make them better: more coherent, more legitimate,
etc.). It is crucial to understand what sort of claim is being made for or
1
See Simpson (1981).
2
See Fried (2015). The first edition of the book (published by Harvard
University Press) came out in 1981.
by a theory, though this is a matter that theorists (and their critics) too
often leave undiscussed. Sometimes a theory and its critics are talking
past one another: it is not a fair criticism of a purely prescriptive theory
that it does not accurately describe current practices, and so on.
Additionally, we need to know something about a theorys purported
scope. Is the theory meant to be (at one end of the spectrum) about the
contract law of a particular jurisdiction at a particular time, (at the other
end of the spectrum) about all existing, past or possible contract law
systems, or something in-between? For example, when Charles Fried
offers a theory of contract Law,3 is it a theory of American (or, perhaps,
Anglo-American) contract law, a theory about (say) American, English,
and similar common law legal systems, or about all possible legal
systems? Fried never makes that clear.4
In the different area of general theories about the nature of law, it is
often reported that the theories are conceptual meaning that they are
true of any existing or possible legal systems, that they describe simply
and basically what must be true for something to be a legal system.5
Would it make sense to make comparable claims for a theory of contract
law (or tort law or property law), that there are certain characteristics that
must be true for something to be contract law? One could certainly
imagine a functional-style theory of this sort, e.g., that contract law is
whatever set of legal remedies are made available for the enforcement of
promises, exchanges and transactions.
At times the claims made regarding a doctrinal area of law are said to
be explanatory, but in a way that is more abstract or metaphorical.
When contract law is said to be essentially about promise6 (or tort law
to be essentially about corrective justice7), the theorist is usually not
saying that every rule, principle and practice of this doctrinal area
perfectly reflects that value, but more that this value pervades the practice
and is the primary component of the practices justification.
One final line of questioning regards the data that grounds the theory:
is the theory meant to explain or justify the outcome of particular cases
or is the theory meant to operate at a more general level, e.g., explaining
the rules or principles that cover whole categories of cases? To put the
issue another way, when it is said on behalf of a theory on contract law
that it explains or justifies contract law, what precisely within or about
3
Ibid.
4
See Bix (2012a).
5
See, e.g., Raz (2005).
6
See Fried (2015).
7
See, e.g., Coleman (1992).
Theories of contract law 9
contract law is being explained or justified? The alternatives are perhaps

more sharply differentiated in common law legal systems (like those of
the United States and England), where (a) much of the contract law has
developed from judicial decisions rather than being stated in or derived
from a Code or other collection of statutes; and (b) the law continues to
be developed (modified) by contemporary judicial decisions (which also
bind lower courts and, generally, later decisions by the same court). At
least in relation to common law legal systems, one can reasonably ask
whether the data points that the theory purports to explain are the
particular case outcomes, or rather the black-letter rules (and principles)
that one may find in treatises, Restatements, and other summaries of the
field (but which have no authoritative status in (most) legal systems).8
It has already been mentioned that one type of theorizing about
contracts would involve interpretive claims, also known as rational
reconstruction. Interpretation/rational reconstruction has the advantage
of being similar to what lawyers do in many legal systems while arguing
a case: lawyers offer arguments that take into account relevant legal texts
and past judicial decisions, trying to offer a coherent and principled
justification of the whole area. In legal practice, this form of theorizing is
often part of advocating that the law be changed, filled in or clarified in
a way that is advantageous to one side of a legal dispute. There is a
robust argument that this is the best and most natural use for theories of
doctrinal areas: to offer guidance to judges who need to decide novel
questions of law (in a way that may also combine with the judges
improvement of the legal rules).9
There are, of course, other kinds of theories of, or relating to, contract
law, beyond those already mentioned. For example, Dagan and Heller
have offered what could be thought of as a theory of contract law, though
one that would be part of a larger moral or political theory, in that it
focuses on how the state can and should use contract law to promote a
good (and autonomous) life for its citizens.10 There is also, of course
(and as already mentioned), room for purely prescriptive theories, sug-
gesting what the ideal set of contract rules and principles would be (in
general, or for a particular country).
As already noted, it may be instructive to compare theories about
doctrinal areas of law with the perhaps better established and more
widely known and discussed theories about the nature of law the type
8
See Kraus (2007).
9
See Moore (2000).
10
Dagan and Heller (2013).
of theory one finds in general jurisprudential discussions, and the works

of theorists like H.L.A. Hart, Hans Kelsen, Ronald Dworkin and John
Finnis.11 There are parallel questions regarding whether the claims of
these sorts of theories should be understood to be descriptive, interpretive
or conceptual, and whether it makes sense to speak of a general or
universal theory. One difference is that it may be sensible and valuable to
have a parochial theory of contract law (e.g., a theory of German, or
French, or American contract law) in a way that a (general) theory of
German, or French, or American law would likely seem less sensible and
useful.
There are obvious connections between the topic of this volume,
comparative contract law, and the issues surrounding theorizing about
contract law. Comparative contract law starts by assuming something
like the following: that there is a general category, contract law, such
that there are examples of that category in many, and perhaps all, legal
systems. And once one concludes (or assumes) that there are examples of
contract law in most, and perhaps all, legal systems, then it seems
sensible, or at least possible, to have a theory of what all (actual, or
perhaps actual and possible) members of that category (contract law)
have in common.
Additionally, it might be said that one needs to have at least an
intuitive sense of the nature and boundary lines of the category contract
law in order to do comparative contract law. One must know what to
include and to exclude in comparing one legal system with another: for
example, does comparative contract law extend to a countrys legal rules
regarding pension obligations? Landlord-tenant rules? Mandatory terms
for insurance policies? Requirements for separation agreements? Stand-
ards for when charitable pledges are enforceable? And so on.
While having a category of contract law gives one a subject for
theorizing, it still of course leaves open the question of whether anything
interesting can be said about that category, and also what are the nature
of claims being made within the theory. As already noted, a theory of
contract law could be making descriptive claims about what is true about
all the contract law systems one knows, or it could be making a
conceptual claim about what must be true of all contract law systems,
about what makes something a contract law system as opposed to
something else. (There is, inevitably, a certain amount of circularity in
the conceptual inquiry: if one is trying to determine what makes
11
See, e.g., Hart (2012); Kelsen (1997); Dworkin (1986); Finnis (2011); see
also Raz (2005).
something contract law as opposed to something else, one will look at

all examples of what one calls contract law, to see what distinguishes
them from other things, e.g., legal rules of tort or restitution, or moral
rules about keeping promises. There is thus a certain reflective equilib-
rium between conventional or intuitive views about what fits into a
category, and potential theoretical views about what makes up the
boundary lines of the category.)
The next section considers some prominent examples of contract law
theories.
II. CURRENT THEORIES

A. Autonomy Theories
This is a broad category that could include not only the will theories of
contract that were popular in continental Europe in the nineteenth
century,12 but also more recent examples, like Charles Frieds promissory
theory13 and Randy Barnetts consent theory.14 These all qualify as
autonomy theories because they tend to focus on the choice of
(potential) contracting parties, and the importance of respecting and
enforcing such choices. The whole ideal of freedom of contract (and its
cognate, freedom from contract) is that contract law is distinctive
(relative both to public law and many other parts of private law) in giving
individuals significant power to choose which duties will bind them: in
principle, one chooses whether one enters any contracts at all, and the
terms of the contracts one does enter. And there is another tie to
autonomy: contractual partners are able to create legally enforceable
rights and obligations to help them achieve objectives it would be
difficult to achieve without legal enforcement of those commitments.15
The most influential modern autonomy theory is probably the promis-
sory theory. The impetus for a promissory theory of contract law is the
likely connection between the generally accepted moral obligation to
keep promises and the legal enforcement of contracts. However, there are
theorists who have questioned the connection between promises and
contracts;16 and, in any event, in almost all legal systems, a significant
12
Gordley (1991).
13
Fried (2015).
14
See, e.g., Barnett (1986); Barnett (2012).
15
Kraus (2009).
16
See, e.g., Pratt (2008); Shiffrin (2012).
portion of promises are not legally enforceable (in common law systems,
generally only promises that are part of an exchange are enforceable; in
many civil law systems, there is a requirement that promises be suffi-
ciently important before they are enforced). The fact that not all promises
are enforced, and that courts often focus only on whether a party has
sufficiently outwardly/publicly consented to the legal duties in question,
has motivated the competing consent theory of contract law.17
B. Property Theories
Theories like Peter Bensons theory of contract law posit that a contract
involves a transfer of a property right, or something like a property right,
at the time the contract is entered.18 The advantage of this approach is
that it justifies the rule in many jurisdictions that in the case of a breach,
the non-breaching party has the right to full performance, or its economic
equivalent, even if the breach occurred so early that the non-breaching
party has not suffered any harm from the breach and has not relied on the
contract in any significant way.
On one hand, while the assertion that some sort of entitlement passes
between the contracting parties at the time the agreement is entered does
justify certain doctrinal outcomes, it seems to do this by assuming what
is to be proven. Perhaps more problematic: to claim that one party has an
entitlement or property right against the other leaves open many of the
intricate questions a working contract law system must answer regarding
the contours of that right, e.g., when does the party have the right that a
court order the other party to perform, and in the case of money
damages, how are damages to be measured, and what are the limits of
what can be recovered (e.g., in US contract law, there are limitations
based on causation, foreseeability, mitigation and certainty)? The asser-
tion that one has a property-like contractual right would only open the
inquiry on such questions, and would seem to leave a great deal still to
do before the questions are resolved.
C. Reliance Theories
Some theorists have noted that while the doctrinal rules in some legal
systems may allow the recovery of significant damages for breach of
contract at any point after the contract has been entered (as mentioned in
the previous section), in practice parties may not expect to recover
17
See Barnett (1986); Barnett (2012).
18
Benson (2001); Benson (2007).
damages, and courts may be reluctant to award damages, unless the

non-breaching party can prove that the breach caused significant damage
(e.g., because of the non-breaching partys reasonable reliance on the
contract). It is additionally argued that, in any event, the moral claim for
damages is strongest when there has been such reliance, and weak when
no such detrimental reliance has occurred.19 This line of argument has
sometimes been thought to make up a reliance theory of contract law, and
some theorists have strongly urged a focus on (reasonable) reliance,
though it is hard to find fully-worked-out theories of contract law along
these lines.20 In any event, any theory that purports to ground the rights
party do (or should) have on their reliance, will need also to have a
theory regarding when such reliance is reasonable, and that will in turn
require some reference to other values (promise? consent? efficiency?).
D. General Theories, with Application to Contract Law
Along with theories aimed particularly at contract law, there are also
forms of legal theory whose scope is broader, but the scope includes an
application to contract law.
The most influential such general theory (at least in the United States)
is law and economics. Speaking in very rough terms, law and eco-
nomics involves the application of various resources of economic thought
to the understanding of legal rules, practices and institutions, and argues
that legal norms generally do, and generally should, promote economic
efficiency. A large number of theorists have used economic analysis as a
way to explain current contract law doctrine or to prescribe changes in
the current contract law rules (within a particular legal system, though
prescriptions may also range more broadly across legal systems).21
One advantage the economic analysis of law has over other (mostly
deontological) approaches to contract law is that economic analysis has
the resources to make recommendations regarding detailed contract law
rules and principles (e.g., when in a breach of contract case should a
non-breaching party be granted specific performance as opposed to
being confined to money damages? When should damages in a breach of
a construction contract case be measured in terms of cost of completion
as against diminution of value? And when should a seller have a
contract law obligation to disclose information?). A general reference to
19
See, e.g., Fuller and Perdue (19361937).
20
The usual names here are Patrick Atiyah, e.g., Atiyah (1979) and Grant
Gilmore, e.g., Gilmore (1974).
21
See, e.g., Posner (2011); Kronman and Posner (1979); Craswell (1989).
autonomy, fairness, corrective justice or property is unlikely to

offer much guidance, while economically focused theorists at least
purport to have recommendations on most detailed questions, based on
efficiency.22
There are other comparably general theories with potential application
to contract law: e.g., utilitarian moral theories,23 Marxist and other
critical theories,24 feminist theories,25 and so on, with examples of such
applications in the notes.
E. Mixed Theories
As there are arguments in favor of a variety of approaches, it is not

surprising that some theorists have argued for a theory of contract law
that combines different approaches: in particular, combining autonomy
and consequentialism (law and economics).26 The difficulty with such
mixed theories is they require the theorist to offer a meta-theory that can
ground which justifications go to which part of the theory, or regarding
what the priority will be among the theorys justifications if and when
they conflict.
III. DOUBTS ABOUT THEORIES

There are theorists who have expressed skepticism about the possibility
or value of any general theory of contract law. This skepticism has been
grounded on a number of grounds, some of which are detailed below.
A. Basic Task
Contract law is a sub-category of law, and some of the same difficulties

that come with theorizing about law apply to theorizing about contract
law. In general, there are complications inherent in the task of offering a
theory of an ongoing social practice. Social practices change over time,
and vary from place to place. They are human creations, not defined by
chemical composition or species category the way natural kinds are.
There are reasons to doubt that there is a stable category, contract law,
22
See Craswell (1989).
23
See, e.g., Cohen (1933).
24
Unger (1986); Feinman and Gabel (1990).
25
See, e.g., Frug (1985).
26
See, e.g., Kraus (2001); Kraus (2002).
to offer theories about, and also reasons to doubt that there is anything
valuable that could be said at a descriptive, analytical or conceptual level
about contract law (even skeptics would allow for the option of a purely
prescriptive theory of contract law, arguing for what would be the best
contract law system for a particular country).
B. Pluralism
A number of theorists have rejected theories of contract law on the basis

that it is mistaken or misleading to point to a single essence or nature
of contract law, because, the argument goes, contract law serves a variety
of goods. For example, in most legal systems, there are numerous limits
to autonomy (freedom of contract): one can be held to contractual
terms even if one did not know about or fully understand them, and there
are categories of terms that will not be enforced (e.g., on public policy
grounds) even if the parties consented to them with full knowledge.
Contract law systems generally include mandatory rules, default rules
and rules of interpretation which may frequently serve interests other
than respecting party choice (e.g., values of general fairness, protecting
vulnerable parties and expressing different public policies on particular
issues). And similar counter-examples can be raised to other alleged
essential values for contract law. Indeed, one might see the range of
different essentialist or prescriptive theories as themselves giving proof of
the variety of values that contract law can and should promote: e.g.,
while Ian Macneil famously argued that contract law does and should
promote long-term relationships,27 other writers have emphasized the
way that contract law does (and should) facilitate cooperation between
those who have been, and will remain, strangers.28 The obvious response
is that some types of contracts are primarily about supporting long-term
relationships, and some types of contracts are primarily about facilitating
short-term cooperation among strangers; contract law does and should
promote these quite different values, and many other values as well.
C. Variation
The challenge of variety responds to the (express or implicit) scope of

contract law theories that purport to be general, universal or conceptual.
The argument is that the rules, principles and practices of contract law
are sufficiently diverse over time, across jurisdictions, or even across
27
See Macneil and Campbell (2001).
28
See, e.g., Kimel (2003).
transaction types within a single jurisdiction, that no single theory can

capture the whole range of contract law without either being so general,
or so cumbersome and detailed, as to be of little value as a theory.
For example, the analysis goes, across jurisdictions some contract law
systems protect naked promises (promises made without any return
promise, and without any detrimental reliance upon the promise) and
some do not; some jurisdictions prefer the remedy of specific perform-
ance (a court order that a party perform what it promised) for breach of
contract, while others do not; some jurisdictions allow awards of ex-
emplary (punitive) damages or damages for pain and suffering and
emotional distress while others do not, and so on.
Some theorists have argued that we should favor theories of contract
law that are general (at least within a single legal system) because
reinforcing common contract law principles may prevent the rules and
principles covering particular transaction types from being captured by
the interests and values of powerful groups (e.g., lawyers and lobbyists
for insurance companies determining the law of insurance policies, or
large businesses similarly determining the rules for consumer and
employment contracts).29 However, there is also a concern sometimes
expressed in the other direction: that the talk of a single essence to
contract law, especially when this is part of legal education or part of a
public image of contracts that presents them as paradigmatically involv-
ing two parties of equal bargaining power and sophistication negotiating
terms at arms length, may be a way to hide (to legitimate) the real
injustices and inequalities of contracting practices.30
D. Summary
The debate between advocates of contract law theories and skeptics often
seems to be primarily one of emphasis. For example, those favoring
having a general theory of contract law will usually concede that there is
significant variety across transaction types and across jurisdictions and
that there are some rules and practices that do not fit neatly under a
single rubric, but they urge that what is common and constant across
contract law(s) is more important than what varies. From the other
direction, skeptics of contract law theory do not deny that there are
common principles, rules and themes across transaction types and across
jurisdictions, likely based on shared intuitions about keeping promises
29
See Oman (2005).
30
Bix (2012b).
and the regulation of transactions, but argue that what is common is less
important than what differs.31
CONCLUSION
The area of contract law theory remains largely unformed and unsettled.
Those offering such theories often ignore basic methodological questions
regarding what such theories are meant to accomplish and what the
criteria are for success. Two likely models for such contract law theories
are to see them as efforts to explain contract law, or to rationally
reconstruct its rules and principles. There remain issues as to whether
such theories should be seen as covering all existing, past and possible
contract law systems, or only contract law systems of the theorists home
nation and perhaps comparable current systems. Those who challenge the
possibility or value of contract law theories tend to emphasize the wide
variety of rules, remedies and practices across jurisdictions, over time,
and even across transaction types within a particular jurisdiction. Chal-
lenges may also focus on the plurality of goods that contract law rules
and practices promote, arguing that contract law theories that focus on
only one value inevitably distort the underlying contract law system too
much to be useful.
REFERENCES
Atiyah, P. (1979) The Rise and Fall of Freedom of Contract. Oxford: Oxford University
Press
Barnett, R. (1986) A Consent Theory of Contract, 86 Columbia Law Review 269321
Barnett, R. (2012) Contract is Not Promise; Contract is Consent, 45 Suffolk University
Law Review 64765
Benson, P. (2001) The Unity of Contract Law in P. Benson (ed.), The Theory of Contract
Law: New Essays. Cambridge: Cambridge University Press, 118205
Benson, P. (2007) Contract as a Transfer of Ownership, 48 William and Mary Law
Review 1673731
Bix, B.H. (2012a) Theories of Contract Law and Enforcing Promissory Morality:
Comments on Charles Fried, 45 Suffolk Law Review 71924
Bix, B.H. (2012b) Contract Law: Rules, Theory, and Context. Cambridge: Cambridge
University Press
Cohen, M. (1933) The Basis of Contract Law, 46 Harvard Law Review 553
Coleman, J.L. (1992) Risks and Wrongs. Cambridge: Cambridge University Press
31
Cf. ibid. at 12862 (arguing against contract theory) with Oman (2005)
(arguing for a general contract theory).
Craswell, R. (1989) Contract Law, Default Rules, and the Philosophy of Promising 88
Michigan Law Review 489
Dagan, H. and Heller, M.A. (2013) Freedom of Contracts, available at http://papers.
ssrn.com/sol3/papers.cfm?abstract_id=2325254
Dworkin, R. (1986) Laws Empire. Cambridge, MA: Harvard University Press
Feinman, J.M. and Gabel, P. (1990) Contract Law as Ideology in D. Kairys (ed.), The
Politics of Law: A Progressive Critique. New York: Pantheon Books, 37392
Finnis, J. (2011) Natural Law and Natural Rights. Oxford: Oxford University Press, 2nd
edn
Fried, C. (2015) Contract as Promise. Oxford: Oxford University Press, 2nd edn
Frug, M.J. (1985) Re-Reading Contracts: A Feminist Analysis of a Contracts Casebook,
34 American University Law Review 1065
Fuller, L.L. and Perdue, W.R., Jr. (19361937) The Reliance Interest in Contract
Damages: Parts I and II, 46 Yale Law Journal 5296; 373420
Gilmore, G. (1974) The Death of Contract. Columbus, OH: Ohio State University Press
Gordley, J. (1991) The Philosophical Origins of Modern Contract Doctrine. Oxford:
Clarendon Press
Hart, H.L.A. (2012) The Concept of Law. Oxford: Oxford University Press, 3rd edn
Kelsen, H. (1997) Introductions to the Problems of Legal Theory (Bonnie Litschewski
Paulson and Stanley Paulson (trans.)). Oxford: Oxford University Press
Kimel, D. (2003) From Promise to Contract: Towards a Liberal Theory of Contract.
Oxford: Hart Publishing
Kraus, J.S. (2001) Reconciling Autonomy and Efficiency in Contract Law: The Vertical
Integration Strategy in E. Sosa and E. Villanueva (eds), Philosophical Issues: Social,
Political and Legal Philosophy. Oxford: Basil Blackwell, vol. 11, 42041
Kraus, J.S. (2002) Legal Theory and Contract Law: Groundwork for the Reconciliation of
Autonomy and Efficiency in E. Villanueva (ed.), Social, Political and Legal Philosophy,
vol. 1, Legal and Political Philosophy. Amsterdam: Rodopi, 385445
Kraus, J.S. (2007) Transparency and Determinacy in Common Law Adjudication: A
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Kraus, J.S. (2009) Personal Sovereignty and Normative Power Skepticism, 109 Columbia
Law Review Sidebar 12634
Kronman, A.T. and Posner, R.A. (eds) (1979) The Economics of Contract Law. Boston,
MA: Little Brown
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Pollock, F. (1885) Principles of Contract, London: Stevens and Sons
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Companion to Philosophy of Law. London: Routledge, 24157
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University Press
2. In defense of Roman contract law

James Gordley
Even those who understand and admire Roman contract law think that
modern contract law is a great improvement. As has often been said, in
contrast to the Romans, who had a law of particular contracts, we have a
general contract law reflecting general principles. One principle is that
contracts are binding upon consent, although there are exceptions such as
the common law rules on consideration and the civil law requirement that
certain contracts be notarized. Another principle is that the parties are
bound to the terms to which they expressly agreed and, if their agreement
is silent, to the terms on which they would have agreed had they given
the matter thought. A third is that when one party fails to perform, the
aggrieved party should receive a remedy that places him where he would
have been had the performance been forthcoming.
As I have described elsewhere, Roman law was first given a systematic
structure based on general principles by a group of jurists who worked in
the sixteenth and seventeenth centuries and are known to historians as the
Spanish natural law school or the late scholastics. They synthesized
Roman law with the moral philosophy of their intellectual heroes,
Aristotle and Thomas Aquinas. Many of their conclusions were borrowed
by the seventeenth century founders of the northern natural law school,
Hugo Grotius and Samuel Pufendorf, paradoxically, at the very time
when the Aristotelian philosophy on which these conclusions had been
based was falling into disfavor. In the nineteenth century, the doctrinal
structure was reworked by jurists we remember as will theorists. Their
innovation was not to recognize the importance of the concept of will
but, in A.W.B. Simpsons words, to treat the concept as a sort of
Grundnorm from which as many rules of contract law as possible were to
be derived. The three principles just mentioned emerged from the work
of the late scholastics as modified by that of the will theorists.
Elsewhere I have discussed the difference between the work of the late
scholastics and of the will theorists and its implications for modern law.
Here I will discuss some aspects of Roman contract law for which the
systematizers had no use. The late scholastics found no theoretical
justification for them and so dismissed them as matters of Roman
positive law. Many will theorists dismissed them as archaic features
19
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tion: 1 / Date: 12/12
which modern law had outgrown, an opinion widely held today. I believe
that the work of systematizing Roman law was a great achievement.
Nevertheless, I will argue that these features were dismissed too quickly.
I. WHEN CONTRACTS ARE BINDING

As has often been said, the Romans did not have a general contract law
but a law of particular contracts. They began to use the term contract at
a comparatively late date, after most of the rules governing particular
contracts had been settled. Gaius was the first to distinguish the general
classes of obligations contractus and delictus.1 The distinction is similar
to one that Aristotle drew between involuntary and voluntary commuta-
tive justice. Modern scholars believe that Gaius took it directly or
indirectly from Aristotle.2 In any event, Gaius did not discuss its
implications. Having drawn this distinction, he immediately turned to the
rules that governed particular torts and contracts of Roman law. As Alan
Watson observed, for the Roman jurists:
Each individual type of contract, such as stipulation, loan for use, or loan for
consumption, sale, hire, or mandate, remains intact with its own sui generis
body of rules [F]or a Roman jurist it was unthinkable to write a
commentary on the law of contracts or even on the law of a group of
contracts, such as consensual contracts. The same is equally true of other
fields, for instance of delicts.3
Some of these rules concerned when an agreement between the parties

became binding. Although the Roman jurists recognized that the parties
must consent for any contract to be binding, only some contracts, the
consensual contracts or contracts consensu, were binding by consent
alone. Gaius mentioned sale, lease (or hire), partnership and mandate,
which is a kind of gratuitous agency.4 Others, the real contracts
(contracts re) were binding when an object was actually delivered, for
example, loans for use or for consumption, and deposit, all of which were
gratuitous. Other contracts were binding upon the execution of a formal-
ity. The all-purpose formality was stipulatio, which was originally oral
although eventually a writing could be used to prove that a stipulatio had
1
G. 3.88.
2
See Zimmermann (1990) 1011; Kaser (1959) 522; Honor (1962) 100;
Coing (1952) 59.
3
Watson (1995) 170.
4
G. III. 135.
tion: 2 / Date: 8/2
In defense of Roman contract law 21
been made. One party would ask the other, Do you promise such and
such? and the other would answer that he did. For each party to be
bound, each party would make a stipulatio in which his obligation was
conditional on the other partys fulfillment of his own. Eventually, a
special formality, insinuatio, was required for the promises of gifts. The
promise had to be officially registered. Finally, there were innominate
contracts, contracts without names, that were not enforceable before
performance. An example was barter.
A. Rejection of the Roman Distinctions
Although some medieval jurists expressed surprise that barter, unlike

sale, was not binding upon consent,5 the attack on the Roman distinctions
among contracts began with the late scholastics. Luis de Molina thought
that the Roman distinctions were wrong in principle. In a barter,
ownership was transferred when the objects exchanged were actually
delivered. Molina saw no reason why, if the parties so intended, they
could not transfer upon consent the right to demand delivery. A court
should ascertain their intent by examining the circumstances.6 Molina
concluded that everything, indeed, concerning innominate and
innominate contracts that was invented and introduced by the pagans
more subtly than usefully should be abolished.7 His contemporary
Leonard Lessius agreed that the Roman distinction had no principled
justification, but for a different reason. He claimed that Molina had failed
to recognize that promises are binding simply because they are promises
and not because of the precise intention with which they are made. A
promise was a commitment to do something, not a mere statement about
what one would do. Therefore every promise gave rise to an obligation.8
A promise to give one object in exchange for another was therefore
binding without any need to inquire into the circumstances.
In the seventeenth and eighteenth centuries, these arguments were
repeated by the leaders of the northern natural law school, Hugo Grotius,
Samuel Pufendorf and Jean Barbeyrac. Grotius and Barbeyrac made the
argument of Molina. Why, Grotius asked, may there not be transferred
a right in personam either that ownership be transferred or that something
5
See, e.g., Iacobus de Ravanis, Lectura Super Codice to C. 4.64.3 (1519);
repr. Opera iuridica rariora, vol. 1 (1967) (published under the name of Petrus
de Bellipertica: on authoriship, see Meijers (1959) 7277.
6
Molina (1614) disp. 262.
7
Ibid. disp. 258.
8
Lessius (1628).
tion: 3 / Date: 12/12
be done?9 Barbeyrac concluded that if a purely gratuitous promise can

confer a true right, then the one to whom the promise was made has
certainly lost a right that he had acquired.10 Pufendorf conflated the
arguments of Molina and Lessius. Every perfect promise gave rise to an
obligation because it is a perfect promise when a man not only declares
his will for a future time to perform something for another, but also
shows that he gives him a right whereby the other is fully entitled to
demand of him the thing promised.11 The Roman distinctions among
nominate and innominate contracts came to be regarded, at best, as a
peculiarity of Roman positive law, and, at worst, as a mistake. Over the
next century, they disappeared in jurisdictions that had adopted Roman
law.12 They were abolished by statute in parts of Spain.13 German and
Dutch jurists claimed that, unlike most of Roman law, they had never
been received.14 So did the leading French jurists Jean Domat and Robert
Pothier.15
Molina and Lessius launched the attack on the Roman distinctions with
a simple argument: the parties should be able to make their agreement
binding by consent if they so wished. Therefore, any of the contracts
recognized by Roman law should be binding by consent if the parties so
wished. The question that they did not face is whether or not the parties
to every sort of voluntary arrangement did wish to be bound on consent.
Molina said that a court should ascertain their intent by examining the
circumstances.16 But he was so certain that the parties would wish to be
bound upon consent that he said, everything, indeed, concerning
innominate and innominate contracts should be abolished.17 Lessius
thought that one who consented to a contract promised to abide by its
9
Grotius (1646) II.xi.1.3.
10
Barbeyrac (1734) n. 10 to III.v.10.
11
Pufendorf (1688) III.v.7.
12
See Zimmermann (1990) 53840, 54445.
13
Molina (1614) 25758.
14
Vinnius (1703) 3.14.2 11; Voet (1827) 2.14 9; Bhmer (1791) 2.14
25; Stryk (1739) 2.14 13; Brunnemann (1731) 2.14.7 no. 6. An exception
was Lauterbach, who denied that an action could be brought on a mere
agreement, Lauterbach (1707) 2. 4 1920. As Nanz noted, Wesenbeck, in a
commentary first published in 1565, was the first to make the claim that,
according to usage, all agreements are enforceable, for which he miscited
Bartolus and Baldus. Wesenbeck (1665) 2.14 9; Nanz (1985) 85. See Birocchi
(1990) 14655, 197213.
15
Domat (1771) liv. I, tit. i, sec. 1, 8; Pothier (1821) 3, 1.
16
Molina (1614) disp. 262.
17
Ibid. disp. 258.
tion: 4 / Date: 8/2
terms, and therefore bound himself to do so before performance. It is

possible, however, for parties to agree on the terms of a voluntary
arrangement without wishing to be bound in advance of performance.
Lessius would say that they did not consent or promise and that
consequently their arrangement was not a contract. He did not deny that
if the parties did not wish to be bound in advance of performance, they
should not be. The question he did not address was when, typically, or
more often than not, the parties who entered into the Roman real
contracts and innominate contracts would wish to be bound.
The conclusion that in principle, all contracts are binding upon consent
was accepted by the nineteenth century will theorists virtually without
argument. They defined contract in terms of the will or consent or
agreement of the parties.18 They did not explain why the law should
enforce contracts or why the expressed will of the parties should be
respected. As Valrie Ranouil observed in her study of the French will
theories, they took the binding force of contract for granted rather than
demonstrating it.19 She quoted Gounots characterization of their view:
The contract is obligatory simply because it is the contract.20
The question that needs to be addressed is when the parties would wish
to be bound. We will examine that question, first, with regard to
innominate contracts such as barter, and second with regard to real
contracts such as loans for use and consumption and deposit. Then we
will see that the same question should be addressed even in dealing with
consensual contracts such as sale.
B. Innominate Contracts
In innominate contracts, one performance is given for another. There is

no price, and so the contract is neither a sale nor a lease. In a passage
ascribed to Paul but probably interpolated by Justinians compliers,21
there are said to be four such arrangements: either I give to you so that
you give; or I give so that you do; or I do so that you give; or I do so that
you do.22 We will discuss barter (permutatio), in which one thing is given
18
See, e.g., Savigny (1840) 134; Puchta (1884) 49, 54; Windscheid
(1891) 69; Demolombe (1882) 12; Larombire (1857) 1, 41; Laurent
(1875) 15, 42427; Leake (1867) 78; Pollock (1885) 19; Langdell (1880)
121. See generally Gordley (1991) 161213.
19
Ranouil (1980) 7172.
20
Gounot (1912) 129, quoted in Ranouil (1980) 72 n. 31.
21
Zimmermann (1990) 534.
22
Dig. 19.5.5.pr.
tion: 5 / Date: 8/2
for another, although the same analysis would apply to other innominate
contracts.
It is not clear that the reasons why contracts such as sale should be
binding in advance of performance normally apply to a barter. Modern
scholars disagree over what these reasons are. I have discussed their
opinions elsewhere,23 and argued that the best explanation is that of
Melvin Eisenberg: one party may want to lock in a favorable bargain.24 It
might seem as though the parties to a barter would want to lock in a
favorable trade just as the parties to a sale might want to lock in a
favorable price. Nevertheless, although the parties to a sale typically are
seeking the best bargain they can make, it is hard to say what is typical of
the parties to a barter. Moreover, even if the parties to a barter are
seeking the best deal they can, it is not clear that they would want to lock
each other in.
Sometimes, the parties to a barter are not seeking the most favorable
bargain. To intend to bind the other party legally would be repugnant to
the reason they chose to barter instead of choosing to buy and sell. One
party might want to acquire an object owned by the other party but,
because they are friends, relatives, neighbours or colleagues, they might
prefer to barter because a cash transaction seems commercial. Artists
frequently trade their work with each other in part because it would be
embarrassing for them to buy and sell for cash based on the estimated
market value of the work of each artist. One of the parties might be
trying to do the other a favor and wish to barter because the favor is less
obvious than if he had adjusted the price. During the Depression my
wifes grandfather, a physician, used to accept cuts of lamb and beef
from a local meat dealer in return for the medical services he provided. I
suspect that my grandfather-in-law was receiving less meat than he could
have purchased for his normal fee because he wanted to help his patients
in hard times, but it may be that the dealer was giving him more meat
than his normal fee would buy, having noticed that he was no longer
buying choice cuts of meat.
Even if each party to a barter were interested only in getting a good
bargain, they might not want the transaction to be binding in advance as
the parties typically do in a sale. Each party to a sale has the choice of
taking the price that the other party proposes or waiting and looking for
a better one. Because a sale is binding upon consent, each party insures
himself against the loss he would suffer if he had waited and obtained a
23
Gordley (2006) 29396.
24
Eisenberg (2001) 223, 279.
tion: 6 / Date: 12/12
worse price by forfeiting the gain he would make if he had obtained a

better one. If the parties are risk averse, they will both want to insure. In
contrast, the parties to a barter may not be insuring themselves against
such a risk. They may have chosen to barter rather than to buy and sell,
not to avoid the risk of contracting on less favorable terms if they look
further, but to take advantage of the fact that each happens to have the
very thing that the other wants. Each may have something that the other
regards as very special or difficult to obtain elsewhere. Or they may be
bartering in order to avoid such extra costs as brokers fees, taxes
possibly, and, in any case, the time and money spent in looking for a
good price. The reason one party would want the other party to bind
himself in advance of performance is the fear that the other party will
back out, not because he has found better terms, but because he has
reconsidered and decided the exchange would make him worse off rather
than better. But is that a reason both parties are likely to have? And if so,
is it one the law should respect?
It might be that one party is afraid that the other will back out because
the other party has acted foolishly and will back out as soon as he
realizes it. He realizes that the exchange is one to which no sensible
person would agree. It is unlikely that both parties would want the other
to be bound for this reason, each believing that he has gulled the other. If
so, it is hard to see why the law should enforce an arrangement which is,
in effect, a bet they have placed on which of them has been gulled.
A more likely reason is that one party wants the other to be bound for
fear that the other will decide the exchange is not to his advantage
because of a change of circumstances or simply a change of mind. Is it
likely that both parties would have this fear, and to such an extent that
each would be willing to bind himself for fear the other party will not
wish to be bound? If so, each party thinks it more likely the other will
back out than that he will want to do so himself. Sometimes each partys
fear that the other will want to withdraw, and his confidence that he will
not wish to, may be so great that each party will want the arrangement to
be binding on both. But it would be odd if that were normally the case.
Even if it were, it is hard to see why the fear that one party may decide
the bargain is disadvantageous is a reason that the law should respect for
holding them bound. A prime objective of contract law is to allow the
parties to enter into contracts that make each of them better off, at least
in his own estimation. Sometimes there is a good reason why the party
who later finds the contract disadvantageous should not be able to
withdraw: the purpose of the contract is place on one of the parties a risk
that must be borne by someone. The party who bears that risk is
compensated for doing so. He should not be able to withdraw if he loses
tion: 7 / Date: 8/2
when he might have won. Insurance contracts are binding for that reason.
So, as we have seen, are sales which insure each party against the risk of
finding worse terms if he waits and looks further. Suppose, however, that
one party wants to lock the other in for fear the other party will discover
that the deal will make him worse off. It is hard to see what good purpose
is served by holding the parties bound in advance of performance. If each
party is free to withdraw, and one party discovers that the deal on the
original terms will make him worse off, it may still be possible to
renegotiate the deal on terms that make both parties better off. If not, one
party will have been made worse off and the normal purpose of contract
law will have been frustrated.
C. Real Contracts
In Roman law, some contracts, the contracts re, were not formed until an
object was delivered. Translators call them real contracts, using real in
the sense of real estate, not in the sense of the real McCoy. Among
these contracts are loan for consumption (mutuum), loan for use (com-
modatum), and deposit (depositum). All three are gratuitous. No compen-
sation is paid by the person who is allowed to consume or use a thing, or
to a person who agrees to safeguard an object deposited with him.
According to the late scholastics, as we have seen, all contracts should
be binding on consent as long as the parties so intended. They assumed
that when the parties consented, they intended to be bound as of that
moment. Nevertheless, they recognized that the real contracts were
different than others. One of the parties was doing the other a favor, and,
indeed, a favor that he could do without cost to himself. The lender might
have no other use for the object loaned, or the depositee for the storage
space needed to keep the object deposited. That difference seemed to call
for a difference in the treatment of these arrangements. Having assumed
that the parties had promised to be bound before delivery, Lessius and
Molina moderated the rigor of this conclusion by saying that they had
promised subject to a condition: that the party doing the favor could
perform at no cost to himself. If that party discovered that he needed the
object loaned or the storage space, he could withdraw from the arrange-
ment even after delivery.25
They reached this conclusion despite a Roman text:
As lending rests on free will and decency, not on compulsion, so it is the right
of the person who does the kindness to fix the terms and duration of the loan.
25
Lessius (1628) lib. 2, cap. 27, dub. 5; Molina (1614) disp. 294, nos. 810.
tion: 8 / Date: 12/12
However, once he has done it, that is to say, after he has made the loan for
use, then not only decency but also obligation undertaken between lender and
borrower prevent his fixing time limits, claiming the thing back or walking off
with it in disregard of agreed times Thus, if you have lent me writing
tablets for my debtor to enter a cautio, you will do wrong suddenly to demand
them back. For if you had refused, I would have either bought some or made
sure I had witnesses present. The same applies where you have lent timber to
prop up a building and then hauled it away again or even knowingly supplied
defective materials. Favors should help, not lead to trouble.26
Molina agreed, as a general principle, that one party should not be able to
change their mind in a way that injures another. But, he argued, the
borrower should have understood that the loan was made on the tacit
condition that the lender continued to have no need for the object. If the
need arose, it was an accident for which the promisor should not be held
responsible.27
Thus, for the late scholastics, as for the Romans, mutuum, com-
modatum and depositum remained special contracts requiring special
treatment because a favor could be done costlessly. The Roman solution
had the advantage of simplicity: the party doing the favor could call the
arrangement off before delivery or afterwards with no questions asked,
unless he had set a time limit, in which case he must observe that limit.
The late scholastic solution had the advantage that it required the party
withdrawing from the arrangement to prove he had a good reason for
doing so. But it did not protect the party with whom the Romans
sympathized: a party who had changed his position expecting to receive a
favor and now was hurt when the arrangement was cancelled before the
time agreed. The reason, according to Molina, was that the consent of the
party conferring the favor was subject to a condition: that doing would be
costless. That conclusion seemed necessary because Molina and Lessius
had assumed that the parties had consented to be bound in advance of
performance, and they thought it unfair to hold him unconditionally
bound. But if he promised subject to such a condition, then the party to
receive the favor could not complain. Whether or not the late scholastic
solution was fairer than that of Roman law, the late scholastics arrived at
it, not by asking which solution was the fairest, but by assuming that, like
other contracts, mutuum, commodatum and depositum were binding upon
consent.
Modern jurisdictions have adopted either the Roman rule, or the late
scholastic rule, or some cross-variation. I edited a study in 2001 in which
26
Dig. 13.6.17.3.
27
Molina (1614) disp. 279 no. 10.
tion: 9 / Date: 12/12
authorities from 12 Member States of the European Union were asked

how their jurisdiction would resolve a series of problems concerning the
enforcement of promises. One problem concerned the loan of a car which
the owner later discovered that she needed for her own use.28 Here is a
summary of the answer in civil law jurisdictions:
In two civil law countries (Spain and Germany), and possibly in a third
(Greece), a contract of loan for use is formed whether or not the car is
delivered. In the rest, except for Scotland, such a contract is formed only if
the car is delivered; otherwise the arrangement is a promise to enter into a
loan for use (France, Belgium, the Netherlands, Portugal, Italy, Austria and
possibly Greece). In Italy, possibly in the Netherlands, and conceivably in
Spain and Portugal (where the majority opinion is to the contrary), the
distinction matters because such a promise would not be binding. In France
and Belgium, it matters because [the owner] can reclaim her car if circum-
stances have changed only if the contract is a loan for use. In Austria, it
matters because [the owner] can reclaim her car for this reason only if the
contract is not a loan for use In Scotland, the promise is unenforceable
(absent a writing or reliance) whether or not the car is delivered.
The Civil Codes of France, Belgium, the Netherlands, Italy, Austria, Germany
and Greece all provide that, in a loan for use, the lender who has a grave and
unforeseen need for the object loaned can reclaim it before the time agreed.
The Spanish Code has a similar provision that speaks of the gravity of the
need but not of its unforeseeability. The Portugese Code allows the lender to
reclaim it if he has a fair reason. The Austrian Code provides that the lender
cannot reclaim it.29
Another question dealt with a promise to store furniture without charge

when the promisor later learned that he needed the space himself to store
furniture he had just inherited:30
In two civil law systems, a contract of deposit is formed whether or not the
furniture has been delivered (the Netherlands and Germany). In seven civil
law systems a contract of deposit is formed only upon delivery; before then,
the arrangement is a promise to enter into such a contract. In two of these
systems, such a promise is enforceable (Belgium and Austria); in two it is
enforceable according to the leading opinion (Greece) or that of most scholars
(Portugal); in two it is uncertain whether it is enforceable (France and Spain);
and in one it is not enforceable unless made in the economic interest of the
promisee, as, possibly, if he were an antiques dealer or a professional storer
28
Gordley (2001) 17192.
29
Ibid. 19192.
30
Ibid. 11850.
tion: 10 / Date: 12/12
In one system, the promise is not enforceable with or without delivery

absent a writing or reliance (Scotland).
In six systems, even if [the person storing the furniture] is bound con-
tractually, he will likely be excused because of a specific provision in the civil
code that a depositee can return the goods before the time fixed if he has an
important reason (the Netherlands and Germany) or fair motive or fair
reason (Spain and Portugal) for doing so, or if, due to changed and
unforeseen circumstances, he cannot store them without harm to his own
interests (Austria and Greece). In Belgium, [the depositee] may be excused on
account of force majeure, even though performance has become more difficult
rather than impossible. The reporters from France, Italy [and] Scotland
concluded that the reason for the change of mind is irrelevant. (It might be
worth noting that in Italy, the promise is not binding without delivery; in
France, whether it is binding is doubtful; in Scotland, it is not binding with or
without delivery ) In the six systems in which the promise is enforceable
with or without delivery, at least according to the prevalent opinion, [the
depositee] would have an excuse (the Netherlands, Germany, Belgium,
Portugal, Austria and Greece).31
Both of these solutions treat the Roman real contracts as special. They
are subject to a special rule that does not apply to other contracts. The
difference among modern civil law jurisdictions concerns what this rule
should be: that these contracts are not binding before delivery, or that a
party can back out if he finds the contract disadvantageous for a reason
that he did not expect. The one rule is a legacy of Roman law. The other
is a legacy of the late scholastics conclusion that the parties wished to be
bound upon consent but not conditionally. But they did not reach that
conclusion because it seemed to be fairer, but because it seemed to be
necessary given their conclusion as to when all contracts were binding.
Supposedly, common law jurisdictions do not accord any special status
to these arrangements. If a promise was made in connection with them,
the promise is binding if it has consideration. In the United States, it is
binding even without consideration if the promisee changed his position
in reliance that it would be kept. Yet the common law has been unable to
ignore the special features of what the Romans called real contracts.
Before the nineteenth century, the common law was not organized in
categories such as contract and tort. It was organized by writs. In the
Middle Ages, a writ was necessary to bring a lawsuit before the royal
courts. Centuries later, whether the plaintiff could recover still depended
on whether he could bring his case within a certain writ. If the defendant
broke a promise, he could bring a writ of covenant if the promise had
31
Ibid. 14950.
tion: 11 / Date: 8/2
been made under seal, by making an impression on a document contain-

ing that promise. He could recover in assumpsit if the promise had
consideration.
Traditionally, English courts had found consideration in disparate
cases in which it seemed sensible for the plaintiff to recover. Some of
these cases were bargains or exchanges in the normal sense. Some were
not: for example, some were of gratuitous loans and bailments32 includ-
ing the types of voluntary arrangements that the Romans had called
mutuum, commodatum and depositum. The courts held that there was
consideration for the promise of the borrower or bailee to look after the
object and to return it or repay the loan.
In the nineteenth century, treatise writers, followed by courts, tried to
rationalize and systematize the common law. Wanting to attach a definite
meaning to consideration, they equated it with bargain or exchange. Sir
Frederick Pollock explained bargain in an ingenious way that trans-
formed into bargains cases such as those just mentioned which were not
bargains in any ordinary sense. A promise had been bargained for if the
promisor was induced to make it by some change in the legal position of
the promisee.33 The promisee gave up a legal right, or promised to do so,
and the promisor made his promise, in part, in order to induce the
promisee to give up that right. That definition was adopted by his
American friend, Oliver Wendell Holmes,34 and by Holmes admirer
Samuel Williston,35 whence it passed into the first Restatement of
Contracts36 and eventually into the Second Restatement.37
By this definition, once delivery was made, a gratuitous loan could be
considered a bargain. The lender gave up his legal right to the use or
consumption of his property. The borrower promised to give it back or
take care of it, in part, to induce the lender to give up the legal right.38
The result was like that in Roman law. The contract was binding only
after delivery was made. Yet supposedly, the reason was not that such
32
Simpson (1975) 41652.
33
Pollock (1936) 164.
34
Pollock sent him a copy of the manuscript of the first edition; Holmes
wrote back that the account of consideration was the best which I had seen.
Letter from Pollock to Holmes, 16 December 1875, in Holmes et al. (1961) 276.
Holmes then published his own theory of consideration, which was similar.
Holmes (1881) 29394.
35
Williston (1914) 51618.
36
Restatement of Contracts 75 (1932).
37
Restatement (Second) of Contracts 71(1) (1979).
38
See Restatement (Second) of Contracts 71 cmt. c, illus. 8 (1979).
tion: 12 / Date: 12/12
contracts were subject to a special rule. It was that such contracts were
bargains, and subject to the same rules as all other bargains.
Williston accepted that explanation,39 although his friend Arthur Cor-
bin found it artificial.40 A harder question was why there was consider-
ation for the arrangement that the Romans called depositum. In the early
case of Coggs v. Bernard, a carter had agreed to transport a keg of brandy
free of charge, and then damaged the keg. The court said that bare being
trusted with another mans goods, must be taken to be a sufficient
consideration.41 Pollock and Williston themselves admitted that in this
situation the formula did not work.42 The carter was not promising, even
in part, to induce the owner to entrust him with the goods.
These problems were resolved, to the satisfaction of many jurists,
when Williston, with Corbins assistance, wrote the doctrine of promis-
sory estoppel into the first Restatement of Contracts. Under this doctrine,
a promise was enforceable if it was relied upon, even if it lacked
consideration.43 The result, again, and as in Roman law, was that a
gratuitous loan or deposit is binding only upon delivery. But now the
reason was said to be that, in making delivery, the lender or depository
was relying on the other partys promise to repay him, to return the
property, or to safeguard it.44 Thus, the reason given was not that
mutuum, commodatum and depositum are special contracts that require a
special rule. It is that, as in the case of all promises, the promisor is liable
if the promisee relies.
That explanation is no more plausible than the claim that these
gratuitous contracts are really bargains. One hopes a US court would
39
Williston (1920) 1, 138, at 3057.
40
His notes to his 1919 edition of Ansons Principles of the Law of Contract
contain two of his principal ideas about contract formation. First, [n]o single
definition of consideration could explain all the currently approved decisions.
Anson (1919) 118, at 116 n. 3. Consequently, one should not try to fit all the
cases into a single formula. Second, when courts find consideration they are
sometimes holding the promisor liable because of subsequent facts consisting of
acts in reliance on the promise. Ibid. 118, at 116 n. 3. Although Corbin does
not say so expressly, he seems to have been thinking of cases in which the courts
found consideration for gratuitous agencies and bailments. In the text Corbin
was editing, Anson had listed them as an exception to the normal requirements of
consideration. Ibid. 122, at 119; 13335, at 13235.
41
(1703) 92 Eng. Rep. 107, 114.
42
Pollock (1885) 174 n. (n); Williston (1920) para. 1038.
43
Restatement (First) of Contracts 90 (1932).
44
Corbin (1963) para. 207, at 26263; Boyer (1952) 66574; Seavy (1951)
918.
tion: 13 / Date: 12/12
hold the promisor liable whether the promisee relied or not. Suppose that
the owner of the keg of brandy who entrusted it to the carter had no other
choice but to abandon it. The carter happened to be the only person on
the pier when the owner was told he could not take it with him on a
cruise ship he was about to board. In Shakespeares play, The Merchant
of Venice, Antonio loaned money to his friend Bassanio to woo and win
the fair Portia, a loan which could only be repaid if Bassanio succeeded.
Suppose that Antonio were thoroughly convinced that Bassanio would
not succeed, that the money would never be repaid, but loaned it to
Bassanio anyway for fear of losing his friendship. An American lawyer
would find it hard to explain why, if Bassanio did marry Portia, he had to
repay Antonio. Antonio did not loan the money in reliance on Bassianos
promise to do so. Portia, having studied Roman law, would have no
trouble at all. The contract was a mutuum.
D. Consensual Contracts
According to Gaius, sale, lease, partnership and mandate (a kind of

gratuitous agency) were contracts consensu. The reason was not that, in
these instances, Roman law adopted the modern principle that contracts
are binding on consent. Roman law was a law of particular contracts.
Sale, lease, partnership and mandate were binding on consent because
each was a kind of contract to which such a rule was appropriate.
The Roman rules as to what constituted a sale, lease, partnership or
mandate thus set a boundary to the contracts that were enforceable upon
consent. Here, we will discuss one case in which those boundaries were
later crossed: the enforcement of a generic sale, a sale-like contract that
the Romans did not recognize as sale.
In Roman law, the seller was bound to deliver an object whose identity
could be specified at the time of sale. He could not be bound to deliver
any goods that answered to a certain description, such as a certain
amount of a fungible commodity such as wheat, or goods made to certain
specifications. In Roman law, the owner of a barn that contained wheat
could sell so many bushels of it although they had not yet been measured
out.45 The owner of a field could sell wheat that had yet to be grown on
it.46 A goldsmith could sell a ring he was yet to make.47 A fisherman
45
Dig. 18.1.35.5.
46
Dig. 18.1.8. pr.; 18.1.39.1.
47
Dig. 18.1.20.
tion: 14 / Date: 12/12
could sell whatever his net would catch on the next cast.48 But one could
not sell or buy any wheat or any ring that met certain specifications.49
The medieval jurists lost track of this limitation. In the Ordinary Gloss
to the Corpus Iuris of Justinian, Accursius, speaking of a sale of so many
amphorae of wine, simply noted, and so it is the sale of a quantity or of
a genus, which is the same.50 To the late scholastics, the northern natural
lawyers, and the will theorists, the limitation did not matter. If, in
principle, all contracts were binding on consent, then one did not have to
decide whether a contract was a sale to determine when it was binding.
Today, the Roman refusal to recognize a generic sale is considered a
primitive feature of their law which we have wisely done without.
According to Kaser, originally, sale-like transactions were executed on
the spot. Consequently, every sale was of a specific object to be delivered
immediately. The failure of Roman law to recognize generic sale was
supposedly a relic of this earlier way of thinking.51
Nevertheless, the recognition of a generic sale in modern law has
caused difficulties that do not arise with the sale of a specific object. As
mentioned, one reason that it makes sense for the sale of a specific object
to be binding in advance is that it allows the parties to lock in a price.
The specific object, however, is either owned by the seller or will be
owned by him, for example, as soon as the grain on his land ripens and is
harvested. Because he is the owner of the goods he wishes to sell, he runs
the risk that he will obtain a larger or smaller price when he does so. By
selling, he transfers this risk to the buyer. Typically, however, in a generic
sale, the seller does not yet own the goods that he sells. The buyer
anticipates that he will need goods of a certain kind in the future, and
will be hurt if the price of them rises. As Paul Joskow noted, the seller
insures him against that risk.52 The parties enter into a contract of
insurance cast in the form of a contract of sale.
It does not follow, as Joskow believed, that the seller assumes the risk
of a rise in price, however drastic.53 In a conventional insurance policy,
the amount the insurer can lose will be no greater than the loss that the
insured will suffer. An insurance company will not insure a house for
more than its value. The reason is not simply a fear that the insured
48
Dig. 18.1.8.1.
49
Buckland (1950) 484; Zimmermann (1990) 238.
50
Accursius, Glossa ordinaria to C. 4.48.2 to veneant (Venice, 1551). See
generally Ernst (1997) 303.
51
Kaser (1955) 455. Similarly, Zimmermann (1990) 238.
52
Joskow (1977) 162.
53
Ibid.
might burn the house down to collect the insurance. Parties are normally
risk averse. A party who faces a probability p of a loss of L will pay
another party more than pL to assume that risk. The other party will
charge more than pL for assuming it. If a party were to insure for more
than his loss, the parties would, in effect, have made a sidebet on whether
the loss would occur. The insured party would not pay more than p times
that extra amount; the insurer would insist on receiving more. The
contract would not be made because risk-averse parties never gamble.54
In a generic sale, if the market price of the goods contracted for
changes sufficiently, the seller may owe far more than any loss against
which the buyer would have been willing to insure. Yet courts and
commentators tried to resolve the problem as though the contract were a
sale like that of a specific object. Consequently, they have seen only two
possibilities when market prices rise to extraordinary levels between the
time of contracting and that of delivery. One is to apply the Roman rule
that the seller is liable for non-performance unless it is impossible for
anyone to perform, that is, he is excused only for vis maior. The other
expands the rule of vis maior to excuse a party when performance is still
possible but has become extremely expensive.
Until recently, French courts have opted for the first alternative. No
relief could be given unless performance became actually impossible.55
The French Civil Code has now been changed by ordinance.56 It now
provides that a party can demand renegotiation of the contract if an
unforeseeable change of circumstances renders execution excessively
onerous.57
German courts took the restrictive approach in the early twentieth
century and then flip-flopped. In 1916, the German court for civil
matters, then called the Reichsgericht, held the defendant liable on a
contract he had made to deliver brands of English tin even though the
price skyrocketed a couple months later with the outbreak of World War
I.58 In 1921, the Reichsgericht repudiated that position. A party who had
54
Consequently, I do not see how the analysis that Jeffrey Perloff applies to
the case of a farmer selling his crops for future delivery can be carried forward,
as he says it could be, to the case of a dealer who breaches because the price of
his inputs rises. The farmer is trying to adjust the risk on the crop he raises by
selling forward. The dealer is insuring the other party against some loss he may
suffer. Perloff (1981) 233.
55
Gordley (2006) 34849.
56
Ordonnance n 2016-131, 10 February 2016.
57
Code civil art. 1195.
58
Reichsgericht, 21 March 1916, RGZ 88, 172.
sold ten tons of iron wire in October 1918, refused to deliver it when the
price had soared due to the German military defeat. The court applied the
doctrine of changed circumstances (clausula rebus sic stantibus) to
relieve the seller of his obligation.59 The view of the German courts is
still that the doctrine applies to radical and supposedly unforeseen
changes in prices.60
In the United States, it is an open question whether a seller would
receive relief in such a case under the doctrine of changed or unforeseen
circumstances, or, in the language of the Uniform Commercial Code, of
commercial impracticability.61 The question arose in the Westinghouse
litigation.62 Westinghouse had agreed to provide a continuing supply of
uranium at a fixed price to fuel nuclear generators. The price of uranium
then skyrocketed due to the Arab oil crisis. The case was settled before
appeal.
The seller should be given relief in such a case, but the reason is not
because the change in price was unforeseeable. It is because the Roman
law of sales should have been limited to sale as the Romans conceived it.
In the modern world, it is perfectly proper that parties dealing in fungible
commodities would want to purchase price insurance. But that need
should be met, not by ignoring the Roman distinctions among contracts,
but by working out new rules for a new type of contract that would better
meet their need. The proper solution, I have argued elsewhere, is, as in an
insurance contract, to limit the plaintiffs recovery to what one might call
his insurable interest, the amount of the loss he might have suffered had
he been forced to buy the goods for his own use on the open market. If
the price rose to the point that he would make more by reselling the
goods on the open market than by using them himself, he should not
recover the excess.63
II. CONTRACTS BONAE FIDEI AND STRICTI IURIS

In Roman law, sale, lease, partnership, mandate and loan for consump-
tion were contracts bonae fidei, contracts of good faith. The parties were
bound, not only to what they expressly agreed, but to do whatever good
faith required. Others were contracts stricti iuris, contracts of strict law.
59
Reichsgericht, 29 November 1921, RGZ 103, 77, 78.
60
On the development of German doctrine, see Dawson (1983) 1039.
61
UCC 2-615.
62
See generally Joskow (1977).
63
Gordley (2006) 35051.
The parties were bound only to the terms to which they agreed. The
paradigm example was the formal contract of stipulatio. Initially, such a
contract could only be made by the two parties face to face. One party
would ask the other Do you promise such-and-such? The other party
would answer that he did. Tony Weir gave an example taken from the
poem, The Owl and the Pussycat. The pussycat said to the owl, Oh let
us be married, too long have we tarried, but what shall we do for a ring?
The owl overcame this obstacle with the help of a pig whom he asked:
Sir Pig, are you willing to sell for one shilling your ring? Said the
piggy, I will.64 The owl and the pig thus made a contract of stipulatio.
There was no requirement that such a contract be in writing. It became
customary to write down the terms, at first, as evidence of what the terms
were, and later, because a written contract was becoming a substitute for
stipulatio. Supposedly, the parties still needed to be face to face. Yet
Justinian provided that:
the documents which indicate that the parties were present are to be regarded
as conclusive unless the person who makes this suspect defense proves by the
clearest evidence in writing or by respectable witnesses that for the entire day
for which the contract was made he or his adversary was in another place.65
In the Middle Ages, this requirement was swept up in a serious of rules

as to how many witnesses it would take to contradict a private document.
The safe course was to have the document notarized.66
Notaries handbooks contained formulas for all sorts of agreements
that, once notarized, would be binding as contracts by stipulatio. Some of
them disadvantaged one of the parties. Critics charged that such pro-
visions were inserted in contracts, not because of the will of the parties,
but because they were incorporated in the notarys form (ex tabellionum
stylo).67 The protection the party would have received by hearing the
terms of the contracts read aloud to him face to face had been lost. Some
critics argued unsuccessfully that these provisions should only be binding
if they were read aloud to the disadvantaged party or put in his
handwriting.68
64
By the late Roman republic, the promisor did not have to repeat back the
question that was put to him. Zimmermann (1990) 74.
65
I. III.20.12.
66
Accursius, Glossa Ordinaria to III.20 [vulg. 19].12 to omnino.
67
Covarruvias (1568) II, iii, no. 4.
68
Ibid. Covarruvias rejected this view.
tion: 18 / Date: 12/12
In the modern world, as Reinhard Zimmerman has noted, one who

subscribes to a standard form contract lacks the protection once provided
by stipulatio.
As the promisor is made to listen to this question and to give an explicit,

corresponding answer, there is little room for misunderstanding: much less
than where contracts can be concluded inter absentes and/or by signing
lengthy documents that have often not been read (let alone understood), such
as (for example) modern standard form contracts.69
The attempt to protect those who sign standard form contracts is often
criticized as an interference with freedom of the parties to contract on
whatever terms they want. When, as Zimmermann observes, the parties
sign documents which there is no realistic expectation they can read and
understand, then terms contained in these documents are not those that
they want.
The solution has been to move in two directions, both prefigured in
Roman law. One is to bind them by terms to which they should be bound
as a matter of good faith, as Roman parties were in contracts bonae fidei.
The other is to hold them bound to terms of which they were expressly
made aware, as in stipulatio.
Indeed, it is hard to police unfair terms without returning to the idea
that certain terms normally belong, as a matter of good faith, to certain
types of contracts, and that deviations from these terms are forbidden or,
at least, need special justification. For example, according to section 307
of the German Civil Code:
(1) Provisions in standard contract terms are ineffective when they unduly
disadvantage the contract party of the party who supplies them contrary to the
requirements of good faith.
(2) In doubt, an undue disadvantage is established when a provision:
1. is not in agreement with the basic ideas (Grungedanken) of the
statutory regulation from which it departs, or
2. so limits essential rights and duties that result from the nature of the
contract that the achievement of the purpose of the contract is
endangered.
The German Civil Code contains statutory regulation of each of the

principal Roman contracts which sets forth the terms that will govern
these contracts unless the parties agree otherwise. They are modernized
versions of the terms that Roman law would have read into these
69
tion: 19 / Date: 12/12
contracts as a matter of good faith. Section 307(2)(1) sets limits to

deviations from the basic ideas behind these terms. According to section
307(2)(2), contacts have a nature and purpose which make certain
terms appropriate as a matter of good faith and others inappropriate. We
have returned to an approach more like that of Roman law in which the
parties who enter particular types of contracts are bound to whatever
good faith requires of them in those types of contracts, or, at least, they
cannot stray from what it requires.
One can see the same approach implicit in US cases on the uncon-
scionability of contract terms. In Henningsen v. Bloomfield Motors, a
case that played a major role in establishing the unconsionability
doctrine,70 an automobile company had disclaimed liability for conse-
quential damages resulting from defects in the cars it sold. Plaintiff sued
over an injury resulting from an unconnected brake cable. Refusing to
enforce the disclaimer, the court said that the right [relinquished] is the
most important and fundamental one resulting from the relationship.71
The implied warranty was treated as a term which the contract ought to
contain as a matter of fairness, not merely as an interpretation of the
presumed will of the parties. The premise explicit in this cases is implicit
in others. Not all the terms of a written contract come under scrutiny, but
only those that depart from the terms the law would otherwise read in to
such a contract. As in Roman law, those terms are taken to belong to that
kind of contract as a matter of good faith.
The second approach is to require that the parties be expressly made
aware of the terms to which they are bound, as in stipulatio. The German
Civil Code provides that the party asked to assent to standardized terms
be given a reasonable opportunity to become aware of their content. He
must be expressly told about terms with which he might otherwise be
unfamiliar, or, if it is not feasible to do so, his attention must be called to
them by a sign which is clearly visible and posted at the place of
contracting.72 According to the Draft Common Frame of Reference, in a
contract between a business and a consumer, terms that were not
individually negotiated may be considered unfair on the sole ground
that they are not drafted and communicated in plain, intelligible lan-
guage.73 A term may also be considered unfair if it significantly
70
Although the problem it dealt with is now handled by imposing strict
liability in tort for defects in manufacture.
71
161 A.2d 69, 92 (N.J. 1960).
72
BGB 305(2).
73
Principles, Definitions and Model Rules of European Private Law: Draft
Common Frame of Reference (Munich, 2009) II.-9.402.
tion: 20 / Date: 12/12
disadvantages the other party, contrary to good faith and fair dealing,
and one circumstance to be taken into account in determining whether it
does is the extent to which the consumer was given a real opportunity to
become acquainted with the term.74
The same approach is often taken in the United States. An example is
the Uniform Commercial Code. According to the Code: A term or clause
is conspicuous when it is so written that a reasonable person against
whom it is to operate ought to have noticed it.75 In a variety of
situations, terms or clauses that are conspicuous have greater force that
those that are not. For example, to exclude or modify the implied
warranty of merchantability the language must be conspicuous.76
If further progress is made, a modern contracting party may be nearly
as well protected as a party was 2000 years ago.
III. DAMAGES
A leading principle of modern contract law is that when a party fails to
perform, the law should put the aggrieved party where he would have
been if performance had been made. That principle is a generalization of
instances in Roman law in which a party was compensated for what was
later called damnum emergens and lucrum cessans, the loss he suffered
and the profit he failed to make.
Roman law was actually complicated, and, indeed, baffling. There
were instances in which the aggrieved party recovered for damnum
emergens and lucrum cessans, harm suffered and lost profit, but there
was no general rule, at least, so far as one can see. The difficulty in
trying to find a general rule about the recovery of damnum emergens can
be illustrated by a single passage from Ulpian:
If someone unknowingly leases out defective storage jars and wine runs out of
them, he will be liable for the [lessees] interest, nor will his lack of
awareness have been excused, so Cassius wrote as well. It is quite different if
you leased out a pasture in which harmful weeds grew; in this case, if the
cattle either died or lost value, the lessees interest is owing if you knew this,
but if you were unaware of it, you may not sue for payment of rent, a view
which Servius, Labeo and Sabinus also approve.77
74
Ibid. II.-9.403, II-9.407(2).
75
UCC 1-201(10).
76
UCC 2-316(2).
77
Dig. 19.2.19.1.
tion: 21 / Date: 12/12
As Zimmermann notes, [i]t is very difficult if not impossible to

reconstruct the true position in Roman law78 despite centuries of effort.
The difficulty of finding a general rule about the recovery of lucrum
cessans is illustrated by comparing a text ascribed to Neratius with one
ascribed to Paul. According to Neratius, if I did not deliver a slave on
time, I should be held responsible not only for what I acquired through
him but for what the buyer would have acquired had the slave already
been delivered to him.79 According to Paul, When the seller is respons-
ible for nondelivery of an object, every benefit to the buyer is taken into
account provided that it stands in close relation to this matter. If he could
have completed a deal and made a profit from wine, this should not be
reckoned in.80
Whatever distinctions the Roman jurists were attempting to draw were
obscure to Justinian, who, as Zimmermann notes, was not altogether
pleased with the intricacies of the case law.81 He placed a mechanical
limit on the damages that the plaintiff could recover. They could not
exceed twice the contract price in cases which have a certain quantity or
nature.82 The limit was clear, although what cases had a certain quantity
or nature was not.
The late scholastics sought order, once again, by borrowing from
Aristotle and Aquinas. Aristotle had distinguished commutative justice in
voluntary and involuntary transactions, a distinction which, as mentioned,
had probably prompted Gaius to distinguish contract and tort. Commuta-
tive justice preserved each persons share of resources. As we have seen,
the late scholastics thought that by consent, one party to a contract
transferred to the other the right to claim performance. Therefore, if the
promise was broken, the aggrieved party was entitled to the value of the
performance of which he had been deprived.
They discussed whether his damages might extend beyond that
amount. Aquinas had said that if a persons thing was actually taken,
for example, if his house was destroyed, he should be paid an equiva-
lent: the amount the house is worth. If someone is harmed by another
person by preventing him from acquiring what he was on the way to
having he should receive less.83 Lessius and Molina explained that as
long as a person was deprived of a right, he should receive compensation
78
79
Dig. 19.1.31.1.
80
Dig. 19.1.21.3.
81
82
C. 7.47.1.
83
Summa theologiae II-II, Q.62, a.4.
tion: 22 / Date: 12/12
for whatever he might have acquired by the use of that right, taking into
account the labor it would have taken and the probability of acquiring
it,84 an idea that approached the modern economic concept of expected
value.85 Roman limitations on this principle were matters of Roman
positive law, perhaps warranted for pragmatic reasons, but lacking
support in principle
The late scholastics explanation was founded on a clear principle. It
passed into modern law by way of the seventeenth and eighteenth century
natural law school, and then with the support of modern jurists.86 A
disappointed promisee was entitled to be placed where he would have
been if the promise had been kept.
It might seem difficult in this instance to defend the Roman law. The
modern approach is based on a clear principle. That of the Roman jurists
was based on no clear principle at all. The confusion was such that
Justinian stepped in and promulgated a mechanical but unprincipled rule:
that the aggrieved party could recover no more than twice the contract
price.
Nevertheless, the Romans may have done well, and, indeed, better that
we have done since. They recognized that recovery of damages in
contract should be limited although they could not explain where and
how. The limit Justinian imposed was mechanical but may have been
more sensible that the limit imposed by modern law.
Modern law, with some variations, limits the damages recoverable for
breach of contract to those that were foreseen at the time the contract was
made. That limit was recognized by the French jurist Robert Pothier,
whence it passed into the French Civil Code and codes based upon it, and
into English and US law in the famous case of Hadley v. Baxendale. The
German variation, inspired by French law, is that if the damages are not
foreseeable by the party who is to perform, the failure of the other party
to explain the extent of these damages may constitute contributory
negligence and so prevent recovery of unforeseeable damages.
The foreseeability rule was taken by Pothier from the work a sixteenth
century French jurist, Charles Dumoulin.87 He had been attempting to
find a principled explanation for the mechanical rule laid down by
Justinian. He claimed:
84
Lessius (1628) lib. 2, cap. 12, dub. 19, no. 137; Molina (1614) disp. 726,
no. 4.
85
So did Soto and Lessius in discussing wagers and insurance. Franklin
(2001) 28688.
86
87
Ibid. 829.
the particular rationale of the limitation in the cases of what is certain is that
most likely it was not foreseen or thought that greater damage would be
suffered or that there was a risk beyond the principal object than the principal
object itself.88
Although Du Moulin had tried to explain Justinians rule in terms of

foreseeability, Pothier turned the requirement of foreseeability into a rule
in its own right
I have argued elsewhere that Pothiers rule, which is ubiquitous in
modern law, makes less sense than the ancient rule of Justinian which
it replaced precisely because it is a rule about foreseeability unlike
Justinians, which was a rule about the disproportionality of damages.89 If
the parties realize that non-performance by one party may cause dispro-
portionately high damage to the other, they may or may not agree that the
party who fails to perform should be liable. It depends on which party
can best bear the risk. If the party who is to perform can best do so, then
risk-averse parties will place the risk on him, and he will be compensated
by an increase in the price. The fact that a party can foresee the harm
suffered if he fails to perform does not mean that he can best bear this
risk, let alone that he agreed to do so and that the price was adjusted to
compensate him.
It is not surprising, then, that courts that claim to be considering
foreseeability have been unwilling to live with the consequences. They
have denied recovery of damages that were disproportionately high,
given the contract price, by claiming that the damages were unforesee-
able, even when they could have been foreseen. In France, for example,
when a contractors employee negligently set fire to the plaintiffs
chateau with a blow torch, the Cour de cassation said it was unforesee-
able that the owner would have to borrow money at interest to fix the
damage or that he would lose rentals while it was being fixed.90 The
Cour de cassation refused to impose liability on a party responsible for
the death of a race horse91 or the loss of a box with unusually valuable
contents.92 The court said that although the type of harm was foreseeable,
the amount was not. Yet it was surely foreseeable to a party entrusted
with race horses or boxes that sometimes they will be extremely valuable.
88
Molinaeus (1589).
89
Gordley (2011) 699.
90
Cass., 1e ch. civ., 11 May 1982, Gaz. Pal. 1982.2.612.
91
Cass. civ., 3 August 1932, D.H. 1932.572.
92
Cass. civ., 7 July 1924, D.P. 1927.1.119.
Similarly, in one German case,93 the defendant was to translate a

brochure concerning motorcycle parts into Dutch, French, English,
Spanish and Italian. The defendant sought damages on the grounds that
brochures it printed were unusable because the translation was faulty.
The court said that the plaintiff was at fault for not calling the
defendants attention to the fact that it would print the brochures without
having the translation checked. Was that really so unlikely? One suspects
that the courts real concern was that, in its words, the damage that
threatened, and which occurred, was forty times as large as the fee for
translation.
Indeed, the same seems to have been true in Hadley v. Baxendale. A
mill was stopped when the mill shaft broke, and the mill owners
contracted with a transporter to carry the shaft to where it could be
repaired. Due to the transporters delay, the mill remained stopped, and
the mill owner sued the transporter for his lost profits. The court denied
recovery, supposedly because the lost profits were not foreseeable. Yet,
according to the headnote of the case, the plaintiff told the defendant
that the mill was stopped. Is the headnote wrong, or was the court wrong
to say that the loss was unforeseeable? Or did the court use Pothiers rule
to reach a result that did not in fact turn on foreseeability?
The American Restatement (Second) of Contracts accepts the rule of
Hadley v. Baxendale that [d]amages are not recoverable for loss that the
party in breach did not have reason to foresee when the contract was
made.94 Yet in giving an illustration based on Hadley, it explains that the
judge may deny recovery because damages are disproportionate:
A, a private trucker, contracts with B to deliver to Bs factory a machine that

has just been repaired and, without which Bs factory, as A knows, cannot
reopen. Delivery is delayed because As truck breaks down. In an action by B
against A for breach of contract the court may, after taking into consideration
such factors as the absence of an elaborate written contract and the extreme
disproportion between Bs loss of profits during the delay and the price of the
truckers services, exclude recovery for loss of profits.95
93
OLG, Hamm, 28 February 1989, NJW 1989, 2006.
94
Restatement (Second) of Contracts 351(1) (1979).
95
Restatement (Second) of Contracts 351 Illus. 17 (1979).
Indeed, there is a line of cases stretching back almost to Hadley v.

Baxendale that deny recovery when damages were disproportionate but
seem to be foreseeable.96
Roman law recognized that the problem is one of disproportionality
and adopted a rule directed at that problem. Their rule was mechanical,
and they explained the need for it poorly, but it may have been better
than any we have found.
IV. CONCLUSION
The Romans were not systematizers. Their gift was an insight into how
concepts should be applied to reach good results in particular situations.
From the time of the late scholastics to that of the German Pandekten-
schule, the work of systematizers seemed intellectually strong in part
because of its ability to explain the Roman insights. In the process, as we
have seen, some of these insights were neglected. Often they were
neglected, not because they were unsound insights, but because the
systematizers could not think of a principled justification for them. We
should re-examine them, and when they were sound, look for principles
by which they can be explained.
96
Postal Instant Press, Inc. v. Sealy, 51 Cal. Rptr. 2d 365, 373 75 (Ct. App.
1996) (no recovery by franchisor of future royalties from a franchisee); Sundance
Cruises Corp. v. American Bureau of Shipping, 7 F.3d 1077, 1084 (2d Cir. 1993)
(no recovery for loss caused by defects in a ship that the defendant had certified
to have no defects); Armstrong Rubber Co. v. Griffith, 43 F.2d 689, 691 (2d Cir.
1930) (no recovery for injury to plaintiffs business caused by defendants
delivery of defective tires); McEwen v. McKinnon, 11 N.W. 828, 830 (Mich.
1882) (no recovery for profits lost on a steam mill and salt block when the
defendant failed to provide boilers on time); Snell v. Cottingham, 72 Ill. 161, 170
(1874) (no recovery against a defendant who failed to finish building a railroad
for profits lost when the road could not be used); Moulthrop v. Hyett, 17 So. 32,
3334 (Ala. 1895) (no recovery of profits lost when defendant failed to furnish a
machine for drying bricks with as much capacity as promised, although the court
added that damages were remote and speculative); Fleming v. Beck, 48 Pa. 309,
312 (1864) (no recovery of profits lost by a miller when defendant breached a
contract to dress stones for his mill); Armstrong and Latta v. City of Philadel-
phia, 94 A. 455, 458 (Pa. 1915) (no recovery by the owner of machinery of the
profit he would have made had it been returned to him on time). For other cases
see Garvin (1998) 34560.
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3. The authoritarian theory of contract

Pier Giuseppe Monateri*
The encounter of contract (conceived as an autonomous field of law, as a

set of rules, principles, doctrines) with the political strategies of authori-
tarian regimes brought ground-breaking theories and reshaped the inter-
nal articulation of operational taxonomies.
This chapter will discuss three main issues. First of all, moving from a
comparison among different authoritarian projects (namely the Fascist
and National Socialist ones), the analysis will emphasize how private law
was variously reassessed by the means of a proclaimed rejection or
constraint of Liberal individualism. Secondly, it will be demonstrated
how the inaugurated vision led to a new kind of geopolitical distribution
of legal rules and devices, to a divergent dislocation and re-articulation of
competing forces. The morphology of private law was synthetically
moulded in order to produce and, meanwhile, deal with a juridical
exception: it was framed into a liminal threshold between tradition and
innovation. Finally, the critical inquiry will dissect the specific de-
clensions of Italian legal discourse during Fascism, in order to detect the
structural dissonance which countered the rhetorical strategies introduced
by legal scholars to subvert Liberal determinations with the conservative
style preserved by Italian courts in the text of their decisions. Ultimately,
the emerged incongruity seems to be responsible for the conscious
choices of economic policy, discovering an unexpected contiguity
between classic liberal thought and the Fascist appraisal of contract law
as a cornerstone of the economic process.
* The chapter is based on reflections and arguments first discussed, written

and published with Prof. Alessandro Somma, who subsquently modified his
scientific opinion on some relevant issues. On the contrary, I remain persuaded of
the intellectual legitimacy of the research project conducted and devoted to
rediscover the darker legacies of European private law. In this perspective it can
be demonstrated how contract law could be framed and moulded in similar terms
both in totalitarian regimes and in market economies.
47
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I. KEYWORDS AND FORMALISMS OF THE DEBATE

ON JURIDICAL FASCISM
The reflection carried out by German authors on National Socialism and
the law has taken on the dimension of a debate the features of which
have impressed Italian scholars. First of all, it is a debate that involves a
considerable number of jurists, and therefore it is not the marginal
occupation of a limited circle of enthusiasts. In the second place, it is not
a debate conditioned by the intent of preserving the scientific and moral
integrity of the masters whose activity is under discussion or of comply-
ing with the protective instinct of their disciples. Finally, it is a debate
characterized by a prominent interdisciplinary vocation and, therefore, by
methods less susceptible to the charm of the formalistic approach.
In Italian literature the features of the scientific discussion regarding
law in the Fascist time are different. It is carried out against the
background of a dispute about the role of the relationship between
intellectuals and the Fascist regime stimulated by the intent of finding its
most open supporters, thus neglecting the ample circle of those who
simply made the totalitarian perversion possible by attitudes that were in
other respects not so markedly referable to the dominant ideology.1
This approach becomes an expedient by which any continuity of the 20
years of Fascism with the immediately preceding or following periods
can be denied. It combines with the intent of maintaining that intellectu-
als are substantially impervious to the regime, and that such condition
concerns most of all the juridical science.2
In the wake of these specifications it is asserted that a sort of
extrinsic homage has been paid to the politics of the regime: no one
historian who really considers the significant traits of these two decades
can concretely talk about a fascist theory of private law, figuring a
break with dogmatic methodologies and traditional schools of thought.3
A similar opinion is expressed with regard to the so-called Mussolinian
codifications, insofar as the Italian codes promulgated from 1930 to 1942
are largely based on ancient codes and past doctrines, even if they were
originated by a completely different political context: the new ideas and
constructions were grafted on the elder legislation.4
1
See Somma (2001) 617.
2
Such trend is developed in particular by those scholars who adopt the
conception of Crocian origin elaborated by Bobbio (1973) 209.
3
Irti (1990) 138.
4
Biondi (1952).
The authoritarian theory of contract 49
These opinions are founded on an implied premise: that the formulas

used in legal texts and in doctrinary discussion are capable of expressing
univocal constructions, regardless of the cultural context in which they
are used. Such premise leads to a denial that the so-called lip service paid
to the regime contributes to the definition of the rule. With specific
reference to private law, it leads to insisting blindly on a jus-rationalist
assertion, namely, the necessary Anti-Fascist value of a contract dis-
cipline claiming to be constructed around the principles deriving from
Roman law.5
The link between Roman law and the liberal juridical culture is hinted
at on different occasions, starting at least from the well-known dispute
opposing the Bernhard Windscheid Romanists to the Otto Gierke Ger-
manists in the course of drafting the German Civil Code currently in
force. On the other hand, such link is disproved if one examines the life
of the Brgerliches Gesetzbuch (BGB): this text begins in the Germany
of Wilhelm II and survives the Weimar Republic. The same text remained
in force during National Socialism and after World War II, and has
constituted for almost three decades the core of printed text of the
German Democratic Republics private law.
The reference to the National Socialist experience is therefore of
certain interest for studying juridical Fascism: an interest that, in fact, is
justified not only on a scientific level. As the existence and the features
of National Socialist private law are largely agreed upon, identifying
analogies with the Fascist experience actually contributes to temper the
ideological conflict that, especially in the Italian context, still accom-
panies the investigations devoted to the theme which is the object of
these notes.
II. A POSSIBLE WAY OUT: COMPARISON WITH

JURIDICAL NATIONAL SOCIALISM
There are many connections, mostly highlighted by the theories about
Fascism as a European phenomenon, between the Fascist and National
Socialist experiences. In particular, both regimes develop in a common
economic and social background which at first feeds their revolutionary
potential and later on, instead, calls for adaptation to the status quo: for
this purpose, they start building a productive system formally based upon
cooperation among the classes but, in fact, sensitive to the request of
5
Ibid. See Somma (2002) 15382.
major industry. Further, Fascism and National Socialism share the view
of State organization as a power instrument in the hands of the leader
and therefore the construction of a legal system aimed at minimizing and
controlling individual action.6
Such circumstances lead, during the 20 years of Fascism, to a
comparative study of Fascism and National Socialism, centred on themes
of public and political importance in a broad sense: in particular about
the idea of the State developed in both experiences by the scholars who
were close to the political power. The system of private law is also of
interest for the scholars of the time. Besides, both National Socialists and
Fascists tackle problems connected with the codification of civil law and
with overcoming of the values which inspire the texts in force at the time.
And this is one of the aims of the Italian-German juridical committee,
Comitato giuridico italo-germanico, constituted to coordinate the
collaboration between the scholars of the two countries.7
Some passages of the Nationalsozialistische Deutsche Arbeiterpartei
(NSDAP) programme are indeed devoted to the reform of the German
legal system. It states that each German citizen has the duty of acting
both spiritually and materially for the common interest (item 10) and that
it is up to the State, in this perspective, to fight those who act to the
prejudice of the common needs (item 18). It also says that it is necessary
to substitute Roman law which is subservient to the world-wide materi-
alistic order with German common law: Wir fordern ersatz fr das der
materialistischen Weltordnung dienende rmische Recht durch ein
deutsches Gemeinrecht (item 19).8 In private law, such intents lead to
cancelling most laws and institutions based in different ways on the
Kantian philosophy and therefore refusing the jus-rationalist perspective
of the legal system as a complex of duties:
ordnet der Nationalsozialismus den einzelnen der Gemeinschaft unter, so

muss er auch das Rangverhltniszwischen Recht und Einzelwillen umkehren,
den Gemeinwillen zum Herrscher, den Parteiwille zum Diener machen.9
Within the indicated perspective, the underrating of individual interests is

clearly the element characterizing the National Socialist experience,
6
See De Grand (1999) and Tranfaglia (2001).
7
The Committee is mentioned in art. 7 of the Cultural Agreement between
the Italian Reign and the German Reich dated 23 November 1938. In this regard
see Messina (1938).
8
See Simon (1989) 161. In the literature of the time see Jung (1934) 183.
9
Lange (1934).
which identifies in the struggle against the Liberal ideology the only
course to reconstruct a legal system based on the duties of individuals
and on the glorification of the prerogatives pertaining to the group: der
Einzelne is nicht um seiner selbst, sondern um einer Stellung in der
gemeinschaft willen von Bedeutung.10 It is widely known that in the
National Socialist ideology the group on which the destiny of the
individuals depends, has in the first place a racial connotation. However,
references to its economic value often prevail, and together with them,
statements regarding subordination of the individual needs to the require-
ments of production:
Nach der nazionalsozialistischen Rechtsidee ist der Vertragsabschluss schon

rechtspolitisch eine Gemeinschaftsangelegenheit und daher kann die Hin-
wirkung des Staates auf den Abschluss von Vertrgen geboten sein. Alle
dahingehende allgemeinen oder besonderen hoheitlichen Anoprdnungen sind
Lenkungsmassnahmen Diese Massnahmen sind Ausdruck der staatlich
gelenkten Wirtschaft.11
As an implementation of this programme, a number of special laws are

developed with regard to different aspects of the discipline of the
relations among individuals. Most of all, the National Socialist doctrine
intended to replace the Brgerliches Gesetzbuch with a popular code,
the Volksgesetzbuch.12 However, this project did not appear to be a
political priority of the regime, whose interest seemed rather to be
directed to conditioning the application of the law and therefore to
formulating keywords expressing a use of the law in force as an
instrument to impose the Fhrers will.13
III. COMPARISONS BETWEEN FASCIST AND

NATIONAL SOCIALIST PRIVATE LAW, IN
PARTICULAR THE DEBATE ON THE VALUE OF
ROMAN LAW
National Socialists and Fascists are joined together in the fight against
the values believed to be expressed by Liberal juridical thought. Even in
10
Lange (1933). In the same way see, e.g., Bhmer (1932), and Stoll (1943).
11
Stoll (1943). In the same way see among others Larenz (1936).
12
In the literature of the time see, e.g., Hedemann (1941) 1913 and Lehmann
(1942) 1492.
13
See in particular Frank (1936) 137 and ff. and Lange (1934).
Italian literature, the individualist framework of the private system

inherited from the past is criticized14 and especially those civil law
codifications are attacked, which pursued the acknowledgment of
individual interests, putting aside the relevance of social values and
functions.15
As we have already seen, the National Socialist scholars conceive the
struggle against Liberal laws as a glorification of the German juridical
experience and a contextual abandoning of the Roman one. Some authors
close to the Fascist regime expressed themselves in the same way,
demanding the abandonment of the apologetic defence of Roman law,
conceived as the juridical device used to support the fortunes of
liberalism and the Fascist interpretation of the Code Napoleon.16
On the other hand, Italian scholars of the Fascist period did not
approve of such statements and, on the contrary, claimed a solid link with
Roman law.17 Actually, the Fascist authors work in a context which the
traditional structures are still solid, and in this perspective they are
interested in legitimating the regime by excluding a break with the past.
This does not mean, however, promoting values alternative to those
implied by the National Socialist reference to German law: for Fascists
the Roman-Italic law is the living law of the Roman (authoritarian,
hierarchic and expansionist) State.18 Thus, Dino Grandi was able to
address the German jurists by stating that the Nazi-Socialists, inclined to
preserve the purity of the German race and tradition, and the Fascists,
devoted to promote and support Roman law as the better expression of
Italic race, were united in destiny.19
Fascists and National Socialists also share the belief that private law is
to be seen as a complex of duties assigned to the members of society for
the common needs.20 Even among Italian scholars, the underrating of
individuals is further aimed at defending race, conceived as the proper
protection of the Italian family, of the Italian civilization and of the
Italian law:21 such aim leads to establishing the rule according to which
14
As appears, for instance, from Scaduto (1939) 321 and ff. and Domined
(1942). See also Bellomo (1936), and Costamagna (1940) 530.
15
De Semo (1942) 166. Similarly Maroi (1941) 65 and Panunzio (1936).
16
Costamagna (1938).
17
Among many others Maffei (1934).
18
Grandi (1940).
19
Grandi (1941).
20
See for all Asquini (1938).
21
Maroi (1941).
the limitations of the juridical capacity based on race are provided by

statutes (Italian Civil Code, article 1).22
On the other hand, in the Fascist literature the intent of supporting
economic interests, and in particular the necessities of national produc-
tion, prevailed. Italian authors substantially agreed in believing that such
circumstance might be ascribed to the development of the corporative
idea of the State23 and in underlining that it leads to exalting themes such
as enterprise productivity and economic solidarity in the superior interest
of the nation.24 For this purpose, the Labour Chart states that the
production objectives are to be considered unitary, related to the welfare
of the individuals and to the growth of national power, and argued that
the organizer of the enterprise is held responsible before the State for
production.
Even with specific reference to the law of obligations, Fascists and
National Socialists had the opportunity to draw the guidelines of a
common development of the Italian and German legal systems. These
aspects were dealt with in the course of a meeting of the Italian-German
juridical committee, held in Rome in the summer of 1938. On this
occasion, Alberto Asquini noted that the new law of obligations should
be inspired by the political spirit of the reform.
Similarly, Hans Carl Nipperdey observed that the Nazi and Fascist
interpretations have transmuted the proper significance of ancient and
fundamental principles (such as private property, freedom, free com-
petition, private association), giving particular emphasis to the individual
responsibility against community.25
IV. NATIONAL SOCIALISM AND THE LAW OF

CONTRACTS: FROM THE BILATERAL JURIDICAL
TRANSACTION TO THE AGREEMENT FOR
EXCHANGE OF GOODS AND SERVICES
Fascists and National Socialists devoted another meeting of the Italian-
German juridical committee to the issue of contractual matter in Vienna
in the spring of 1939. On that occasion, they discussed the principle of
22
For references to the Italian-German cooperation in building a racist legal
system see Costamagna (1939a).
23
See Aquarone (1995).
24
In the literature of the time see among many others Pugliatti (1942).
25
See Nipperdey (1938).
freedom of contract to affirm its value only within the limits of the new
principles of public order and to specify that the same is abused not only
in case of violation of express statutory prohibitions and morality, but
also in case of violation of political order and fundamental economic
principles.26 Along these guidelines the law of contracts was re-examined
and in particular its traditional aspects referable to the theory of
individual rights were removed.
In Germany, first of all the equation identifying contracts with a
bilateral juridical transaction was abandoned. In fact, the abstraction
principle was criticized, and with it also the identification of contract
aimed at the immediate transfer of real rights as an independent figure of
the law of goods.27 It is also specified that the cases regarding the
individual position in respect of the social formations, in particular in
family law and in labour law, did not constitute contracts.28 In this way,
the contract is confined to cases in which the parties exchange individual
goods and services:
Das Verlbnis, die Eheschliessung, der Eintritt in ein Arbeitsverhltnis sind in

unserem Sinne keine Vertrge, weil sie nicht den Austausch einzelner Leis-
tungen oder Gter zum Gegenstande haben, sondern die Eingliederung der
ganzen Persnlichkeit in einer Gemeinschaft.29
Obviously, the limitation of contracts to the cases of exchange of goods

and services depends on considerations regarding the emphasis on the act
with respect to the contractual bond. Such limitation is also a means to
underline subordination of the parties interests to those promoted by the
legal system. And indeed, on one hand, in the National Socialist literature
the relation between debtor and creditor is qualified as a bond between
cooperating parties. On the other hand, it is said that the external control
on the contract derives from considerations concerning the execution of
its performance according to the bona fide principle: according to a
communitarian view, the obligational relationship has not yet to be
considered as a fight between creditor and debtor.30
It is worth noting that in this way the reference to good faith is not
connected with the jus-rationalist fides: it does not lead, in fact, to
suppress the principle of the freedom of contract to give prominence to
26
Vassalli (1939).
27
See Wieacker (1941).
28
See, e.g., Siebert (1941).
29
Larenz (1939).
30
Vassalli (1939).
the opposite principle of contractual equity. The legal system, in

fact, prevails on the private act for aims placed beyond the parties
horizon and not corresponding to the intent of achieving the balance of
performances.
Such formulation was insisted upon during the drafting of the Volks-
gesetzbuch. On that occasion it was underlined in particular that the law
of contract must be restricted to the exchange of goods and services. It
was also confirmed that this institution must be reconstructed from the
point of view of the bond, ignoring its formation.
This latter suggestion is the maxim founding the theory of de facto
contractual relations, as suggested by legal writers close to National
Socialist political power.31 However, in the intention of its founder it is
not aimed at preventing the application of the Civil Code, but only at
avoiding recourse to legal fictions. In this sense, it would not represent an
element of crisis in the traditional doctrine of contracts, but simply an
integration of the same.32
V. FASCISM AND THE LAW OF CONTRACTS

BETWEEN TRADITION AND INNOVATION
We have said before that Fascists and National Socialists recognized
themselves in the statement according to which free private enterprise is
a value to be re-examined in the light of the maxims formulated by the
regime. In the Italian context, such idea caused a re-examination of the
contractual matter in less strict terms than in the German formulation.
And yet it led to the promotion of solutions characterizing the system of
the sources of law in a public and corporativist perspective:33 unification
of the law of obligations and of contracts is among these solutions.34 The
patterns deriving from it often lay the accent on the productivity of the
enterprise, on the economic solidarity and on the superior interest of
the nation.35
A selection of material regarding the codification of private law allows
some traditional solutions to be found together with interventions in the
opposite sense. To the former kind belong the descriptions of the law of
obligations as a subject matter moulded on the basis of the classic
31
Haupt (1943a).
32
Ibid.
33
Ferrajoli (1998).
34
See mostly Teti (1990).
35
Perlingieri (1978).
paradigm of Roman law, considered as the ratio scripta. To the latter,

instead, the glorifications of the law of contracts as a sector of the legal
system in which obligations are strictly linked to the economic life.36
This second remark does not account for the statements regarding the
patrimonial nature of the performance (Italian Civil Code, article 1174)
and of the legal relation that is the object of the contractual relation
(Italian Civil Code, article 1321). In both cases, such nature is included
in the intent of coordinating the regulations of contracts with the damage
compensation system centred on the principle of the patrimonial liability
of the debtor.37 Nor are there any links with the Fascist doctrine of
contracts, finally, in those comments on the legal definition of the
concept that seem not to exclude its equivalence to the bilateral legal
transaction and which, however, highlight its nature of technical con-
cept of private law.38
Different observations can be made with regard to the rule according to
which debtor and creditor must behave according to the rules of correctness
and to the principles of corporatist solidarity (Italian Civil Code, article
1175). Such provision, in fact, takes up the idea of cooperation of the
parties to the obligation and in this perspective it reveals the influence
exerted by Nazi-Socialist doctrines on our compilators.39
Similar influences seem to inspire the reflections aimed at relinquish-
ing the equivalence of the contract to the bilateral legal transaction:
equivalence that is recurrent in the literature influenced by the German
doctrine of pandectist inspiration. On the basis of such intents, in the
preliminary works it is stated that the contract is the juridical device used
for the exchange of products and services and that it must be governed
by provisions based on the Fascist rule of the prudential coordination of
individual interests and of the pre-eminence of general, collective
interest.40
Some indications about the contents of the mentioned maxim can be
derived in particular from the comments to the regime of atypical
contracts and from the regime of the essential elements of the contract.
36
Relazione della Commissione Reale al progetto del libro Obbligazioni e
contratti, n. 5.
37
See Relazione del Guardasigilli al progetto ministeriale delle obbligazioni,
n. 17.
38
Relazione del Guardasigilli al progetto ministeriale delle obbligazioni,
n. 156. In the same sense, among the authors of the time Messineo (1943).
39
Di Majo (1985), who refers to opinions expressed by Pietro Rescigno.
40
n. 10.
As regards the first aspect, the Civil Code provides that the parties can
conclude even contracts which cannot be subsumed into a specific
normative type, as long as they are intended to realize interests worthy of
protection (Italian Civil Code, article 1322). In this respect it is specified
that this rule intended to codify the maxim according to which the legal
system acknowledges the private agreement only as much as the effects
deriving from it realize at the same time interests outside the sphere of
the parties: the new obligation law was inspired by the concept of
autonomy of will instead of the one of dominion of will41 and saw in the
equivalence of contract to law a formulation by which it can be stated
that the autonomy could not legitimate interference in the rights of third
parties.42 Similar considerations, as is well known, are the grounds of the
rule that identifies causa as one of the essential requisites of contracts
and in particular of the formulation according to which it is the
social-economic scope of the contract or is the scope of the contract
socially appreciable.43 The same conclusions drawn with regard to the
German experience may be inferred from the discipline of cause and of
atypical contracts: in the Fascist idea the supremacy of positive law on
the covenant was mostly characterized as an instrument for the impos-
ition of the will of the political power per se, and not as a means to
affect the situation of the party whose interests the system decides to
interpret. In other words, in the Fascist and National Socialist contract
law the individual was not considered uti singulus, but always and only
uti civis.44
VI. PROTECTION OF THE WEAKER CONTRACTING

PARTY IN JURIDICAL FASCISM AND NATIONAL
SOCIALISM
Both Fascism and National Socialism developed reflections regarding
protection of the weaker contracting party. On the other hand, they did
not deviate from the principle according to which the prevalence of the
legal system on contract was a mere mark of the power of the group on
the individual. The weaker contracting party, in fact, is considered as
such only insofar as he is party to a bond that the outside intervention
41
Relazione al Re, n. 603.
42
43
nn. 193 and 194.
44
Costanza (1981) and Alpa (2001).
intends to examine in the perspective of the common needs and not of the
balance between performances.
Such considerations are consistent in the first place with some of the
proposals worked out during the drawing up of the National Socialist
popular code, and in particular the one concerning the duty of the
drafting party to formulate the general conditions of contract in accord-
ance with the needs of society:
Inbesondere mssen Abreden, die den Vertraginhalt fr eine unbestimmte

Zahl zuknftig abzuschliessender Vertrge (Reihenvertrge) festsetzen (allge-
meine Geschftsbedingungen), den Anforderungen des Gemeinschafts lebens
entsprechen.45
In this sense, the general conditions of contract assumed a largely

different meaning compared to the one attributed to them previously, in
particular by the Liberal scholars. The latter had considered such
conditions as a sort of generalization of the contents of bonds that certain
categories of contracting parties would later conclude. The National
Socialist scholars deemed such approach not to be a sufficient break with
the traditional private system and maintained that it was necessary, on the
contrary, to underline the prescriptive character of the general condition
of contract. Only in this way, in fact, could they be efficiently coordin-
ated with the super-individual interest:
Die Vertragsordnung macht die Geschftsbedingungen sichtbar, erleichtert so

die ffentliche Kontrolle und die Einordnung der Wirtschaft des Einzelnen
Unternehmers in die Volkswirtschaf und die Ordnung unseres Volkes
berhaupt.46
Not all the proposals formulated by the National Socialist authors imply
a discipline of mass contracts having the indicated features.47 On the
other hand, those who justify the lawmakers intervention to subtract the
scope for private autonomy without carrying out considerations regarding
the matter of contractual equity are definitely prevalent.48 Even the
Fascist experience tackles the protection of the weaker contracting party
with different attitudes. In the Civil Code, some rules seem to take up
45
So para. 1 Gesetzentwurf von Heinrich Stoll aus der Denkschrift des
Ausschusses fr Personen- Vereins- und Schuldrecht: Die Lehre von den
Leistungsstrungen. Schubert (1988); Schubert and Regge (1988).
46
Herschel (1942).
47
See, e.g., Haupt (1943b).
48
See for all Larenz (1936).
models aimed at promoting values such as the balance between the

performances provided for in contracts, in particular the provision stating
usurious interests to be void (Italian Civil Code, article 1815) and the one
deciding on the matter of annulment for injury, pointing out the general
character of such remedy and setting aside the referability of the relevant
hypothesis to the vices of agreement (article 1448). Quite different are
some reflections devoted to protection of multi-party contracts. The
authors who are close to the political power invoke in this regard an
imperative intervention that would place the will of the State over the
will of the individual.49 Similar concerns seem to have inspired the
discipline of the general conditions of contracts (article 1341) and of
contracts stipulated through forms (article 1342). This latter is sometimes
indicated as an instrument of protection of the contracting parties who
are at a disadvantage because of the context in which the transaction is
stipulated. However, the mentioned discipline is often based on the
remark that mass negotiation is a factor of acceleration of productivity, to
which the freedom of transaction has to be sacrificed.50
The underlining of such aspects is a feature of the Fascist and National
Socialist contract law, which refers to the economic interests of the group
and in such perspective pursues objectives such as an efficient allocation
of assets: Der Vertrag hat fr die Gemeinschaft die Aufgabe, an einer
sinnvollen Gterverteilung und zur Erreichung immer hherer Leistungen
mitzuwirken.51 Therefore, the invective of certain authors in the Fascist
period claiming the distance of the new ideas from Liberal theories about
the homo oeconomicus assume a merely propagandistic meaning, and in
any case they seem to be inconsistent, as those theories were also
founded on a view of the contract that set aside the parties horizon.52
VII. LAW OF CONTRACT IN THE FASCIST AND

NATIONAL SOCIALIST COURTS
A common feeling has thus been shown between the Fascist and the
National Socialist literature interested in constructing a contract law
alternative to the one inherited from the Liberal scholars. And we have
seen that the spreading of the new ideas characterizes the German
49
Domined (1942).
50
51
Stoll (1943).
52
See among others Ferri (1931) and Costamagna (1933).
experience more than the Italian one. Similar considerations concern the
application of the law.
Fascists and National Socialists entrusted the judiciary with the task of
implementing the political programme of the regime through
re-examination of pre-existing rules; such task was undertaken by some
scholars during the meeting of the Italian-German juridical committee,
held in Vienna in March 1939.53 In this perspective, the National
Socialists prepared a system of strict political control extended to the
whole public service.54 The Fascists, on the contrary, issued rules aimed
at favouring conditions on the judiciary that would not lead to political
prosecutions55 and yet affecting a system of rules that proclaimed the
autonomy of the judicial body just in principle.56 With specific reference
to the law of contract, the German courts seem at first to resist the
pressures of the National Socialist doctrine, in particular those regarding
the use of general clauses as an instrument to emphasize the general
interest in construing the agreements between individuals.57
A different trend develops through the reference to the provision
according to which is void a contract against morality (BGB, section
138). On one hand, the good morals clause is apt to allow the intro-
duction in contracts of the values promoted by the political power,
particularly as judges apply it referring to a subsequent time with respect
to the conclusion of the agreement.58 On the other hand, such clause is
combined with the sanction of voidness of the private deed, thus not
allowing reform of its contents. Especially, National Socialists deem that
such impediment is not compatible with the intent of subduing individual
ends to the exigence of the legal system.
The Italian Civil Code also contains (obviously) provisions regarding
contracts contrary to good morals. In particular, article 1119 provides that
the obligation without cause or based on a false or illicit cause can have
no effect, and the subsequent article 1122 specifies that the cause is illicit
when it is prohibited by law, contrary to good morals or public order.
53
See the report by Costamagna (1939b).
54
See Gestetz zur Wiederherstellung des Berufsbeamtentums (7 April 1933),
in particular para. 4.
55
According to Aquarone (1995).
56
Neppi Modona (1973) 136.
57
RG, 9 July 1935, (1935) Entscheidungen des Reichsgerichts in Zivil-
sachen, 266.
58
RG, 8 January 1937, (1937) Entscheidungen des Reichsgerichts in Zivil-
sachen, 294.
However, it seems that the Courts did not develop trends inspired by
the intent of accepting the guidelines of the political power. Against the
background of a concept of causa other than the model used in the
preliminary works,59 the Courts continued to interpret such formulation
with reference to the grade of middle morality, thus establishing a
continuity with the previous line of decisions.60 And they also provided
that the unlawfulness of the cause has to be ascertained at the time of
conclusion of contract.61
VIII. REVISION OF CONTRACTS BY JUDGES

We have already remarked that through the good morals clause, the
German Courts came to eliminate agreements that were not compatible
with the maxims propagandized by the regime, without, however, affect-
ing their contents. This latter result was obtained instead by recourse to
certain constructions derived from application of BGB, sections 157 and
242, i.e. the provisions mentioning the good faith principle respectively
in the matter of contract construction and performance fulfilment.
It is well known that the use of good faith for the mentioned aims is
not a remedy conceived by the National Socialist literature. It was
established, in fact, during previous periods and is present, for instance,
in the first doctrinal formulations of the contractual grounds (Geschfts-
grundlage) theory, the whole of the events integrating the implied
foundation of a negotiated agreement, the breaking of which justifies an
intervention aimed at rebalancing the transaction.
The theory in question is established in a period of German juridical
history characterized by the intent of re-examining the cultural premises
on which the civil codification is based, and in particular the intent of
re-evaluating the rebus sic stantibus clause. In the Italian context it is
precisely the recourse to this clause that allowed the courts during the
Fascist period to justify certain interventions affecting the contract
contents. Nothing being contained in the Italian Civil Code on this
59
See Cass. Civ., 1 August 1936, (1936) Repertorio della Giurisprudenza
italiana, Entry obbligazioni e contratti n. 44 and Cass. Civ. 23 April 1937,
(1937) Repertorio della Giurisprudenza italiana, Entry Obbligazioni e contratti
n. 18. Later on see Cass. Civ. 11 December 1940, (1940) Repertorio della
Giurisprudenza italiana, Entry Obbligazioni e contratti, n. 25.
60
See Cass. Civ., 11 May 1936, (1936) Giurisprudenza italiana at I, 1, 626.
61
Trib. Caltanissetta, 22 December 1933, (1934) Repertorio della Giuris-
prudenza italiana, Entry Obbligazioni e contratti, n. 59.
matter, the judges used to this end the provision regarding good faith in
the fulfilment of contracts (article 1124).62 On the other hand, in this way
they did not promote principles formally referable to the Fascist private
law. The provision, in fact, was interpreted in the light of the common
intention of the parties (article 1131)63 on the equivalence of perform-
ances and led to solutions which did not subordinate the individual end to
the general interest, as is shown by those decisions that refused to use the
clause rebus sic stantibus in order to consider ineffective a golden
clause, thus damaging the regimes monetary policy.64
Even the scholars who were closest to the political power, in fact, did
not seem to agree completely with the National Socialist writers trend.
Many Italian authors were not in favour of giving judges discretionary
powers to modify the contract which, according to the general principles
of impossibility, should be declared resolved. It seems, rather, that the
opinion fostering the limitation of political interventions in the monetary
and economic order was prevalent.65
In the German Courts, the theory of the contractual grounds became,
on the contrary, an instrument used to reform contract law in the light of
the principles proposed by the National Socialist literature. This latter
identified in the use of the institution in question one of the main devices
apt to strike at Liberal individualism.66
The German judges did not cease to found such theory on the grounds
of an individual character, as proved in particular by the references to the
presumed intention of the contracting parties and the discipline of error.
However, they emphasized new events capable of justifying external
intervention on the act vitiated by loss of the contractual grounds. In
order to determine the social and economic marginalization of Jews, the
changes in the racial policy of the regime, in particular, were mentioned:
Das verstrkte Hervortreten des Rassengedankens kann ein Grund dafr

sein, auch frhere Ruhegehaltsvereinbarungen mit jdischen Angestellten
dahin zu berprfen, ob und wieweit sie noch mit nationalsozialistischen
Volks- und Rechtsempfinden vereinbar sind.67
62
See Cass. Civ., 13 July 1942, (1942) Giurisprudenza italiana at I, 1, 606.
63
See App. Palermo, 29 April 1938, (1939) Repertorio della Giurisprudenza
italiana, Entry Obbligazioni e contratti, n. 16 and Cass. Civ., 24 June 1940,
(1940) Giurisprudenza italiana at I, 1, 919.
64
See, among many others, App. Bologna, 20 July 1939, (1940) Giuris-
prudenza italiana at I, 2, 37 and ff.
65
Asquini (1938).
66
See for all Lange (1934) and Larenz (1936).
67
RG, 24 April 1940, (1940) Deutsches Recht, 1314.
To increase political control on the productive system, on the other hand,

circumstances such as the destiny of the popular economic system were
referred to:
Denn ein Festhalten am Vertrage wrde nach stndiger Rechtsprechung

insbesondere dann gegen Treu un Glauben verstossen, wenn infolge des
Irrtums beider Parteien ber das Bestehen einer sachlichen Geschftsgrund-
lage ein Missverhltnis zwischen Leistung und Gegenleistung eingetreten ist
Auch die Heranziehung des volkswirtschaftlichen Gesichtspunktes in
diesem Zusammenhang ist zu billigen.68
IX. SOME FINAL CONSIDERATIONS: THE LAW OF

CONTRACTS FASCIST MALGR SOI
In consulting the Italian Fascist magazines cases and on Court decisions,
therefore, one does not receive the impression that in the law of contract
the Italian judges have behaved simply as executors of the regimes
policy, but at least not with as much zest as their German colleagues.
The same does not apply, on the other hand, with regard to scholars.
Certainly, they have not adopted the regimes keywords with the same
intensity as observed in the German authors, a circumstance due in part
to the variety of positions in which the authors who were close to the
political power have reflected themselves.
And yet the comparison with National Socialist law has allowed the
highlighting of certain features characterizing the Fascist doctrine on
contract law. In particular, it has allowed us to remark that such doctrine
is based on the subordination of agreements to the legal system for aims
outside the pursuit of interests ascribable to the parties. The comparison
with the German experience has also made it clear that the prevalence of
the legal system is often functional to promotion of the economic
structure decided upon by the political power. This leads to confining the
matter to cases of exchange of goods and services, through certain
devices that differentiate it from contracts of a jus-rationalist character.
From this point of view, the Fascist and National Socialist experiences
diverge from the preceding theories about functionalization of private
action, even though they seem to imply a reconstruction of the relations
between contracts and the legal system which is not always sensitive to
the question of the balance between performances.
68
RG, 5 April 1939, (1939) Entscheidungen des Reichsgerichts in Zivil-
sachen, 257.
If these are indeed the characteristics of the Fascist law of contracts, it

is necessary to specify, in the first place, that they have been introduced
in the civil law codification in force. And it is further to be underlined
that this implies the presence of a juridical doctrine in some way
participating in the construction of such law, even though only by virtue
of distinguishing contents.69 The statements of those who think that it is
possible to speak of juridical Fascism only if the scholars are united and
conformed to the political power, concluding that this is not the case in a
context where it merely formulates an external homage to the politics of
regime, are therefore worthless. Even such homages, in fact, contribute to
outline a law of contracts Fascist malgr soi.70 However, even without
such express references to the Fascist contract law, for instance in the
language that was substantially taken from the Liberal tradition, some
constructions have emerged, capable of supporting the legal policies
determined by the regime: a circumstance that was justified in the past by
portraying Fascism as the white guard of capitalism.71
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4. Contract and the comparatist: should we

think about contract in terms of
contracticles?
Geoffrey Samuel
When asked to think about contract in a comparative law context, many

academic lawyers and law students might well be tempted into thinking
about the subject at a very general level. This should surprise nobody.
Contract in both the civil law and the common law world is founded on
a general theory which now finds concrete expression in a range of
transnational codes.1 These codes would appear to be the fruits of work
done by comparative lawyers who have toiled to harmonize the some-
times divergent principles that make up the various general theories in the
nationalized systems.2 However, not all comparatists have envisaged
contract in this way. And two in particular have produced work that
might encourage a rather different approach to thinking about contract.
The late Tony Weir expressed concern at the abstract nature of contract,
especially when compared to the Roman law of contracts,3 while the late
Emeritus Professor of Comparative Law at Oxford, Bernard Rudden,
produced a key work in the law of torts which, by way of analogy, ought
to provoke reflection about contract.4
Building on the ideas of these two eminent comparatists, this present
contribution will investigate whether it would be epistemologically
valuable to think about contract, not by way of a general theory, but by
way of the very many and various types of contract. Might classification
of contract by way of index, which has the potential capacity to identify
not just the grand transaction such as sale and hire but equally the little
contracts (contracticles), provide knowledge that le grand plan cannot
reveal? Indeed, such reflection might go further than classification given
this reference to the index. Might not the idea of clusters within the
framework of contractual knowledge act as points of entry into this
1
See, e.g., Rampelberg (2005); Cabrillac (2012).
2
See recently Schulze and Zoll (2013).
3
See Weir (1992); Weir (1998).
4
Rudden (199192).
67
knowledge itself? By cluster is meant a focal point that can consist of

an empirical object (pork or peas), a descriptive concept such as
commercial or public interest, reasonableness, damage or fault, or even a
normative concept such as right or duty. These classification categories
and these clusters cannot be linked or described relationally in terms of a
contents plan or even a complex system;5 they are brought together only
in an index whose linking scheme is of course the alphabet.6
I. INTRODUCTION: THE WEIR AND RUDDEN

DIMENSION
Tony Weir was perhaps better known as a tort rather than a contract
lawyer but as a Roman law specialist and comparatist his tort knowledge
must of course be appreciated within the context of the law of obligations
as a whole. In fact, he published several contributions on contract and if
one were to attempt to extract some memorable points there are two that
are striking. The first was his (statistically correct) insistence that most
claims for breach (or perhaps one should say non-performance) of
contract were actions for debt rather than damages. Specific performance
is, in other words, by far the most important remedy in English contract
law. As Tony Weir put it:
The critical matter is, what did the defendant promise to do and under what
conditions? Here the principal distinction, as it seems to me, is between
promises to pay money and all other promises.
As he goes on to point out, though one would never suppose it from the
books, the money promise is the commonest of all promises, and the one
most commonly unperformed. And so while consumers are always
presented as victims, the truer view is that they are people who dont
pay for what theyve got. Thus whatever academics say or might like to
think, courts are principally collectors of debts, not extractors of dam-
ages.7 The second point is this:
The civilian emphasis on the different kinds of contract rather puzzles the
English lawyer, for he assumes that contract consists only of the general part
and is strongly disinclined to pay much attention to the nature of the
transaction in question. In complete contrast to his attitude to torts, his
5
Cf. Morin (2005).
6
See further Samuel (2011b).
7
Weir (1998) 72.
Contract and the comparatist 69
approach to contract is abstract and unitary. The reason is that whereas the
law of torts developed (as did the Roman law of contracts) under different
forms of action trespass, case, trover and so on the English law of contract
since the early seventeenth century had really only one form of action
assumpsit A student asked to specify what kind of contract he has in mind
will sooner think of replying bilateral than sale or employment or
carriage.8
And he continued:
This abstraction is distractingly unrealistic It is as if medical students had

a first-year course entitled Disease, and consequently came to believe that
diseases were all much of a muchness and that when it was a question of
remedies, it did not really matter whether it was a case of nephritis or
schizophrenia.9
This extract obviously provokes one into thinking about contract in terms
of the various major transactions mentioned by Tony Weir.10 Yet is this
the only classification structure which might act as a useful alternative?
Tony Weir had already alluded to one, namely, the dichotomy at the level
of remedies between debt and damages. This suggests that if one were to
approach contract from the position of remedies, then a grouping under
debt, damages, rescission, rectification, injunction, and so on could
provide valuable insights. However, a closer examination not just of the
cases but also of the legislative texts stimulates a range of other schemes.
The distinction between a supply of goods and a supply of services
contract suggests a dichotomy between an obligation of means and of
result,11 while a sale of land contract has different effects than a sale of
goods one.12 The difference between public and private law contracts is
of course well known and has given rise to some literature,13 but the ever
growing number of regulations coming from Brussels is adding a whole
new meaning to Ulpians observation that there are more transactions
than names that attach to them.14 Could being unaware of the differences
between different kinds of contract have important practical implications?
Are there not important pedagogical reasons for emphasizing different
classes of contract? One is used to approaching contract from the
8
Weir (1992) 1638.
9
Ibid. 1640.
10
See further Samuel (2011a).
11
UNIDROIT Principles of International Commercial Contracts, art. 5.1.4.
12
Lawson and Rudden (2002) 5662.
13
See, e.g. Davies (2008).
14
D.19.5.4.
position of an over-arching general theory; but what if one were to adopt

an index-based approach?
With respect to the law of torts, Weir himself suggested not just that a
general theory is an unintelligent way of thinking about torts in the
common law but that there is no general theory. The only thing holding
a torts book together is the binding.15 Bernard Ruddens article on
torticles approaches the subject in a similar spirit.16 However, the
important contribution that he makes is to suggest that classification
through the alphabet will reveal a much richer undergrowth (so to speak)
than a series of general chapters organized in accordance with some
abstract plan. The idea of thinking about law through the alphabet has
also been explored by Nicholas Kasirer and his original paper has
stimulated a more general reflection as to whether an index can have an
epistemological role.17 The topic of classification of contracts, which
seems to be largely ignored by those writing general introductions to the
subject, ought, then, to be given some more serious attention.
II. WORDS AND THINGS

Following a lead provided by the late Peter Birks, some academic
lawyers have started to interest themselves once again with questions of
taxonomy. One of the tensions that emerges out of this debate is the
dichotomy between words and things: classifying physical objects is
perhaps not the same exercise as classifying things that have no physical
(or immediate physical) existence.18 Indeed, the debate between what
actually exist as physical objects and what are only names (nomina) is
one that goes back at least as far as the Middles Ages, if not to Roman
law. The debate has relevance to any discussion of classification by index
in a subject like law because the index will always be a place where the
empirical world meets the world of ideas. Offal and offer could well
be close neighbours in a contract textbook, as could pants, peas,
personality, pork and product. Now classifying through categories
such as personality, property and obligations would not be the same
as classifying law through bathroom, cat and peas. Yet these latter
categories could actually be used as a means of conveying, ultimately, as
15
Weir (2006).
16
Rudden (199192).
17
Kasirer (2003); and see Samuel (2011b).
18
See further Samuel (2000); Samuel (2004).
much information as the former scheme if one reasons, not through a

structure of genus and species, but through a progression by analogy.
This point perhaps ought to be developed a little further. Hugo Mattei
has written an article in which he suggests that the legal systems of the
world should be classified according to three categories, namely profes-
sional, political and traditional.19 No doubt this taxonomical scheme
is open to criticism, but the point to be made here is that, arguably, one
could arrive at the same information by starting out from the empirical
categories mentioned above. It may seem a little bizarre that a bath-
room could stimulate a jurist into thinking about the relationship
between the professional and the political, but the location of a bathroom
in a local authority council flat came close to provoking a constitutional
crisis in a case that, because of its sensitivity, ended up in the House of
Lords.20 Lord Hoffmann managed to find a professional way of solving
the problem, but not before he had explained the political implications
of the case. One can move from this bathroom to others: the builder who
fails to build one in conformity to the contract with a flat owner or the
bathroom that leaks water into the flat downstairs. Again, the builder who
fails to complete the construction of a bathroom, leaving valuable shower
fittings and basins unfixed to the property. Can the builder reclaim these
objects as his own? Moving, by way of analogy, from bathroom to flat
and from flat to other buildings will allow one to raise all manner of
obligation and property problems. Is not the notion of a home one that
brings in both professional law and tradition?21 Indeed, the question
has even been raised as to whether a building has legal personality.22
With regard to cat, an advertisement in the 1970s once asserted that
Your cat has the right to eat Whiskers (a particular tinned cat food). Do
cats have rights? What are the legal problems here? It is easy to move
from this creature to a much more political sensitive one: the unborn
child in the womb. Does such a person have personality rights? Do
these rights trump those of the mother who might desire an abortion?
One has soon moved into the categories of political and traditional.
One can move in other directions. Your cat eats your neighbours
goldfish: what are the legal implications?23 What if a vet fails to cure
your cats illness or what if your neighbour tries to adopt your cat?
19
Mattei (1997).
20
Birmingham City Council v. Oakley [2001] 1 AC 617.
21
See Attia v. British Gas Plc [1988] QB 304.
22
See Bumper Development Corp. v. Metropolitan Police Commissioner
[1991] 1 WLR 1362.
23
See Animals Act 1971, s. 2(2).
Perhaps these examples are entirely professional ones, but if one moves
by way of analogy to a horse, the legal implications become more
interesting. A horse panics, jumps the fence of a field, and crashes into an
oncoming car seriously injuring the driver. The injured driver it seems
can get damages without having to prove fault.24 Yet, if there is a strict
liability scheme for horses that cause car accidents, why is there not a
liability without fault regime that attaches more generally to motor
vehicles that cause accidents?25 Is this professional law or is one in the
realm of tradition?
As for peas they can lead one into a discussion, first, about defective
products (the caterpillar in the tin of peas)26 and then, thanks to a case
concerning an unfortunate piece of aerial advertising (Eat Batchelors
Peas), about the effects of words on a group of understandably sensitive
people.27 By way of analogy pushing outwards from these facts one
can soon arrive at a whole range of problems about formation of
contracts (does putting a tin of peas into ones supermarket trolley
constitute contractual acceptance?), about the effects of insulting, untrue
or misleading words, about the futures market (buying peas before they
are grown), about agriculture and land use, about government regulations
with respect to food production and safety, and so on and so forth.
Now, of course, it is very easy to raise objections to this empirical
object and reasoning by analogy approach to understanding legal sys-
tems. Peas are not, as such, all embracing categories like those of the
law of property or professional and political and thus such a category
would have provoked ridicule from the late Peter Birks who regarded the
alphabet as a scheme lacking epistemological credibility.28 Yet perhaps
care must be taken. If one starts out from categories such as those
suggested by Mattei there is a real danger that, for the comparative
lawyer at least, one could end up taking a Eurocentric view of law as a
knowledge system. If one adopts physical objects as the starting point
there is the point that such objects are to be found in many very different
kinds of cultures with the result that one is at least starting out with less
culturally infused terms. No doubt bathroom might not be a particularly
suitable object but there are rough equivalents in many cultures and cats
and green vegetables certainly are global things. Interestingly, the Gaian
scheme of persons, things and actions is, by this test, more culturally
24
Mirvahedy v. Henley [2003] 2 AC 491.
25
Mansfield v. Weetabix Ltd [1998] 1 WLR 1263.
26
Smedleys Ltd v. Breed [1974] AC 839.
27
Aerial Advertising Co. v. Batchelors Peas Ltd [1938] 2 All ER 788.
28
See, e.g., Birks (1997) 34. See also Editors Preface at v.
neutral than the Mattei scheme inasmuch as persons and things (if not
actions) are empirical as well as rational categories. Gaius was, it could
be argued, trying to classify objective social realities.
The difficulty with trying to apply scientifically inspired taxonomical
schemes (genus and species) to a discipline that essentially consists, if
the rule theorists are to be believed, of words is that one is not classifying
an independent object. Professor Birks tried to get around this problem
by asserting that legal categories were responses to causative events.29
Actions in tort arose from wrongs while claims in contract were triggered
by agreements. Wrongs and agreements were things rather than words.
Moreover, sub-classifications within tort were a matter of interests (and
thus things) and so distinctions had to be made between, for example,
the bodily health, property, financial and reputation interests. The prob-
lem with this thesis is that the taxonomical scheme itself was as much
implicated in determining the object as the objects themselves. Certainly,
one can objectively distinguish between a bodily, financial and reputation
interest; but many factual situations reveal ambiguity as to which interest
is in play. Did Mr Spring, the victim of an untrue reference letter, suffer
an invasion of his economic or his reputational interest?30 In asserting
that he suffered an invasion only of the latter, Birks was in part asserting
his own reality.31
High level abstract schemes in law cannot, then, rely on correspond-
ence for their epistemological validity. This leaves only coherence and
consensus.32 Tony Weir has suggested, as we have seen, that attempting
to apply some kind of coherent scheme to tort is a fruitless task and,
given his view on contract, even if such a scheme were possible it would
be meaninglessly abstract. Medical reasoning cannot solve problems by
reference to the category of disease. The legal scientist would no doubt
agree but equally would argue that such high level categories are made
relevant through a hierarchy of sub-categories, sub-sub-categories, and so
on, until one arrives at a sufficiently empirical level to solve concrete
cases. One is thus creating not just a set of empirically relevant categories
such as products, goods, services and the like but linking these
categories within a rationalized structure that can be reduced finally to a
single notion which sits atop of the pyramid or hierarchy. Scientific
reductionism is what motivates many legal taxonomists. The index in
contrast has only the alphabet as its organizing scheme, even if it is a site
29
Ibid. 17.
30
Spring v. Guardian Assurance Plc [1995] 2 AC 296.
31
Birks (1996) 46.
32
Soler (2000) 4345.
where, as the law of contract demands, a pork chop can be distinguished

from a lamb one33 and a caf from a restaurant.34
III. LEVELS OF CLASSIFICATION

One taxonomical question that emerges from this discussion is, accord-
ingly, the level at which contracts might be classified. Much will depend
upon the kind of problems to be solved. And so, for example, if the
emphasis is on liability rather than, say, on the particular professional
peculiarities of different classes of contract (architects, solicitors, ship-
ping, and the like) one might look to comparative law and think in terms
of fault (obligation of means) and strict liability (obligation of result).35
Here the distinction that emerges is one between a contract for the supply
of goods, where liability is strict if the goods are defective,36 and a
contract for the supply of services, where the duty is one only of
professional skill and care.37 Nevertheless, as useful as this dichotomy is,
one cannot really abandon the index since certain factual situations can
prove awkward.
A recent case is of interest in this respect. In Platform Funding Ltd v.
Bank of Scotland,38 a bank brought an action for damages against a firm
of surveyors for breach of contract. The bank had contracted with the
surveyors for the latter to value a property to be used by the bank as
security for a loan made to a third party. The surveyors gave a written
valuation on the property after being shown around it by the third party
borrower and the bank made the loan. When the borrower failed to keep
up the loan repayments, the bank repossessed the property but then
discovered that the wrong property had been valued with the result that
the bank incurred a financial loss because the repossessed property was
worth less than the valuation. Now the surveyors argued that it was not
liable for breach of contract because it had not failed to exercise the skill
33
Heil v. Hedges [1951] 1 TLR 512.
34
Lockett v. A & M Charles Ltd [1938] 4 All ER 170; cf. Donoghue v.
Stevenson [1932] AC 562.
35
See UNIDROIT Principles for International Commercial Contracts,
art. 5.4; Avant-projet de rforme du droit des obligations et de la prescription,
art. 1149.
36
See traditionally Sale of Goods Act 1979, s. 14; and now Consumer
Rights Act 2015, s. 9.
37
See traditionally Supply of Goods and Services Act 1982, s. 13; and now
Consumer Rights Act 2015, s. 49.
38
[2009] QB 426.
and care required of the reasonable valuer. In other words, this was a
service contract and, despite valuing the wrong property, it was not, the
valuer argued, actually negligent. The claimant, for his part, asserted that
this argument was irrelevant since the contractual obligation to inspect
the correct property was an absolute one. Fault did not enter into the
equation, so to speak. In holding the valuer liable, Rix LJ, supporting the
judgment of Moore-Bick LJ, observed that if the defendants argument
were to succeed the valuer who valued the wrong house (without any
want of care), like the photographer who photographed the wrong
wedding (equally without any want of care), could demand his fee: there
has been no breach, for each has acted with all reasonable care. This
idea, he concluded, is plainly flawed.39
The judges were keen to stress that as a general rule service contracts
were, as the civilian would put it, obligation of means rather than ends.
However, in service contracts it would appear that whether the claimant
is entitled to damages is answered by posing the question whether the
defendant is entitled to claim his debt. If he was so entitled, then the
issue of liability becomes one focusing on the quality of the performance.
The emphasis is on the act or behaviour of the contractual party and such
an emphasis leads naturally towards fault or its absence. If he was not so
entitled, then the issue is different; it means that there has been no
performance of the basic promissory obligation at all and in this situation
the emphasis shifts to the object of the contract, the property valued (or
not valued). Distinguishing between service and sale contract must, in
consequence, be treated with caution. Is this because certain types of
service have goods-like qualities or is it because the remedy of
debt attracts its own rules which in turn can distort the transactional
distinction?
Certainly, debt has an interesting role. As Tony Weir stressed, the most
common contractual promise is one to pay a sum of money but this
obligation contains within it a question about the circumstances in which
the debtor becomes obliged to pay. As Rix LJ says, payment can be
refused if there is a complete non-performance of the service. The
supplier of goods and the supplier of a service can therefore find
themselves in an identical position if what they proffer as performance
proves to be completely defective. They do not get paid. This point is not
always appreciated in contractual cases. In Photo Production v. Secur-
icor, the House of Lords had to consider whether or not a security
company would be liable for the destruction of a clients factory when
39
Ibid. para. 50.
the companys patrolman sent to guard the factory burned it down

instead.40 Leaving aside the exclusion clause issue, one would have
thought that the way to determine this question might have been to ask
whether or not, after the fire, the security company could claim its fee. If
not, then the company would, if Rix LJ is right, be liable to pay damages
irrespective of the question about whether or not the patrolman was
acting outside the course of his employment. Yet this was not the
approach adopted and one reason is, surely, the very force of the facts
themselves. Valuing the wrong factory is very different than burning
a factory down. An employee who deliberately destroys the object of a
contract is likely to be distinguished from the employee who makes a
drastic misidentification.
The point to be made here is that a classification distinction between
contracts to supply goods and contracts to supply services is epistemo-
logically wanting. Reference equally needs to be made to the distinction
between debt and damages claims and to different types of objects such
as buildings, photographs, paintings, arsonists, and so on. These low level
facts (things) can be just as determinative as categories founded upon
names (words). Other examples can be given. A claimant contracts with
the defendant ship-owners for the latter to hire the former a ship;
however, for some unexplained reason the ship explodes and sinks
leaving the claimant without a vessel to transport their cargo. The
claimant accordingly brings a claim for damages for failure to perform
the charterparty (namely, to provide a ship) but the defendants argue that
they are not liable as the contract is frustrated.41 Was the cause of the
ship exploding due to some act or omission on the part of the owners or
was it due to an event completely outside the control of the defendants?
The civilian rule might prove useful here in that it suggests that where
someone has promised to do something, the burden of proof should be on
the promisor. If the promise is not performed, then the non-performer
should be required, at the very least, to show absence of fault. Thus Scott
LJ, in the Court of Appeal, seemingly adopting this approach, said that it
was a very simple case.42 Yet this was not the approach adopted by the
House of Lords. As soon as fault became a focal point the judges took
the view that he who alleges fault ought to bear the burden of proving it.
This the claimant could evidently not do since the explosion was
unexplained and the result was that the defence of frustration was upheld.
40
Photo Production Ltd v. Securicor [1980] AC 827.
41
Constantine (Joseph) SS Ltd v. Imperial Smelting Corp. [1942] AC 154.
42
[1940] 2 KB 430, at 432.
What provided the opportunity for a difference of opinion between the

Court of Appeal and the House of Lords was the choice between two
factual focal points, both in turn governed by quite separate normative
propositions. The first was the fact of non-performance in turn linked to
the explosion, and the second was fault. The non-performance and
explosion was what made the case a simple one for the Court of Appeal,
while the fault is what made it not a very simple one for the House
of Lords.43 Now a critic might very reasonably argue in respect of this
case that taxonomy is of considerable importance. The rule that he who
alleges fault must prove it is one primarily belonging to the tort of
negligence whereas the frustration rules belong in the law of contract. In
the codes, therefore, non-contractual fault liability is in a quite separate
section than fault liability in contract.44 Moreover, one might provide
some support for criticizing the decision handed down from the House of
Lords by arguing that not only did they indulge in some false dichot-
omies but the Law Lords equally have handed to contracting parties the
possibility of escaping from the consequences of a non-performance by
alleging frustration. A consumer hires a boat for a holiday on the Norfolk
Broads which catches fire and sinks causing damage to the hirers. The
boat owner can, it would logically seem, escape liability by alleging
frustration unless the consumer himself can prove that the boat was
defective (not reasonably fit), which might not be easy. However, when
such a case came before the courts the judge observed that he was
entitled to say that, when a motor launch catches fire, apparently for an
entirely unexplained cause, there is a presumption that the launch was not
reasonably fit for that purpose.45
The false dichotomy employed by the House of Lords was that
between what a French jurist would call an obligation of result and an
obligation of means.46 In the words of Lord Porter there are some
contracts absolute in their nature where the promisor warrants the
possibility of performance and in these he is bound to perform in any
event or to pay damages, but there are other cases where the promisor is
only obliged to perform if he can.47 The Law Lord then went on to make
the point that where a contracting party seeks damages for non-
performance of an if he can contract in order to make him liable his
43
[1942] AC at 160 per Viscount Simon LC.
44
See, e.g., Code civil, arts 1231-1 and 1240.
45
Lewis J in Reed v. Dean [1949] 1 KB 188, at 193.
46
See Avant-projet de rforme du droit des obligations et de la prescription,
art. 1149; Nicholas (1995) 339, 351.
47
[1942] AC at 2034.
fault must be proved by the party which alleges that it destroys his
excuse.48 This is a false dichotomy inasmuch as it seems to suggest that
there are no if he can (obligation of means) contracts where a
non-performer might have to prove absence of fault. This is not true. For
example, if a contract of services is defectively performed (a form of
non-performance) it may be that the provider of the service will be
obliged to prove an absence of fault before he can recover the agreed
price. Thus, in a case about a defectively performed funeral service, the
Court of Appeal refused to allow the funeral parlour to claim its debt.49
Consequently, when something goes wrong which undermines the
performance the burden is not always on the person alleging fault; he can
simply allege non-performance. In the exploding ship case, however,
reasonableness seems to have crept in at the burden of proof level. He
who alleges unreasonableness (fault), so it seems reasonable to say, must
prove it. One can only assume that a contract involving a ship is different
from a contract involving a boat or a funeral service, strongly suggesting
that these terms should appear in the index.
Having said this, the distinction between ships on the one hand, and
boats and funeral service on the other, might be rationalized at a higher
level of abstraction by reference to the consumer (equally to appear in the
index). Consumers are treated differently in the law of contract than
business professionals.50 This is certainly true with respect to exclusion
and other unfair clauses, but formally classifying contracts into these two
categories would beg a question as to whether this is a suitable level to
operate. Might it not be better to operate at an even higher level of
generality? Would it not be better to move to the more general level of
status and to see the consumer as an issue of capacity? Certain types
of contractual parties (consumers, dealers in the course of a business,
distant sellers, professionals, and so on) attract their own particular
rules.51 No doubt being aware that the status of a party is of importance,
but formally classifying contracts in terms of a special status category,
would probably not prove particularly helpful because the rules attaching
to the different status groups vary quite widely. It would, surely, be better
to make these distinctions in the index.
48
Ibid. 204.
49
Vigers v. Cook [1919] 2 KB 475.
50
See now Consumer Rights Act 2015.
51
See, e.g., Consumer Contracts (Information, Cancellation and Additional
Charges) Regulations 2013, SI 2013/3134.
IV. RIGHTS AND REASONABLENESS

Another possible criterion for categorization in respect of contracts is the
dichotomy between rights and reasonableness. Could it be said that there
are some contracts where the performance of the promises is judged in
terms of strict rights and other contracts where the key to performance is
reasonableness? Now in 1963, a Court of Appeal judge asserted that he
would be sorry to find a new concept of law introduced that a man may
unreasonably exercise his right of termination, which was clearly given to
him by the contract.52 In the same year another Court of Appeal judge
had declared that a person who had a right under a contract was entitled
to exercise it for a good reason, a bad reason or no reason at all.53
These assertions seem to reinforce what is surely a common perception,
namely, that the law of contract is about strict promissory obligations
voluntarily assumed (for the most part) between two parties and which
can be vindicated as a matter of right. Contract rights, in other words, are
often not that far removed from property rights.54 These rights may be
expressed orally or in writing or, depending on the transaction, implied
by the law; but the key concept is that a contract is an agreement
between two or more persons which the law recognises as creating,
altering or extinguishing legal rights and duties.55
This common perception of rights capable of vindication is, it must be
said at the outset, not a false one in respect of one of the most common
promissory obligations which, as we have seen, is the promise to pay a
fixed and determined sum of money in return for a service or for goods
or other property supplied.56 Just as the courts do not inquire into the
behaviour of an owner seeking to assert his right of ownership in an item
of property,57 so they do not look beyond the formal question of whether
the creditor has the right to the debt being claimed. If the court finds that
the claimant is a lawful creditor, they condemn the defendant to pay and
the judges do not generally inquire into the behaviour of the parties or
into the substance of the transaction. Yet, are these normative concepts of
rights and duties always capable in themselves of providing an under-
standing of how contractual liability cases are reasoned and decided or
52
Upjohn LJ in Financings Ltd v. Baldock [1963] 2 QB 104, at 115.
53
Pearson LJ in Chapman v. Honig [1963] 2 QB 502, at 520.
54
Atiyah (1979) 102. Note that a debt is a form of property (a chose in
action).
55
McGregor (1993) art. 1.
56
An action for debt or sum due: Zakrzewski (2005) 108.
57
See, e.g., Moorgate Mercantile Ltd v. Twitchings [1977] AC 890.
do other, more moderating, notions or ideas have a role in contract cases?

Are there more latent ideas to be found beyond the formality of a right?
A recently published thesis in France suggests that there is such a
concept or notion at work, often latent, within legal reasoning and that
this concept or notion is that of reasonableness.58 This thesis is of
course devoted to French law (although there are references to the
common law), but it evidently raises important questions for English and
for comparative lawyers. The most obvious question, prompted by
Madame Ramparany-Ravololomiaranas book, is this. Are those French
private lawyers, like the preface writer to Madame Ramparany-
Ravololomiaranas thesis, who assume that the notion of reasonableness
is taken for granted in the common law of contract, correct in their
assumption?59 If the observations of the two Court of Appeal judges cited
above are to be believed, it might well appear that the assumption should
be treated with scepticism. Madame Ramparany-Ravololomiaranas the-
sis, in other words, should be transplanted to England, if at all, only with
great care. Yet perhaps the scepticism and the care should be directed less
at the idea of reasonableness in itself and more at the way the question is
formulated. Instead of asking some general question about reasonable-
ness and contract it might be better to pose a series of bottom-up
questions. In other words, it might be better to take an index approach.
Does reasonableness, for example, have a role to play in contract where
one person is claiming to have been damaged by the other partys failure
to execute (or to execute fully) his promise? Can reasonableness have a
role where one person is attempting to vindicate what appears to be a
clear contractual right? Does reasonableness ever apply to the object of
the contract? And, if reasonableness, does make appearances on occa-
sions, how can it be reconciled with the idea that contract is about strict
rights and duties?
Before these questions concerning reasonableness can be properly
tackled, one is faced both with the question of why this reasonableness
question might be of importance and with some definitional problems.
The question of reasonableness and contract could be an important one if
it were to reveal a dcalage between contract, on the one hand, as an
abstract structure of rules, rights and duties60 and, on the other hand, as a
series of liability cases which are reasoned and decided using methods
58
Ramparany-Ravololomiarana (2009).
59
See Beauchard (2009) v.
60
See, e.g., McGregor (1993); Principles of European Contract Law
(PECL); UNIDROIT Principles of International Commercial Contracts
(UNIDROIT).
and notions that may have little or no place in the textbooks, treatises and
codes on the subject.61 Put another way, the question would be important
if it were to indicate that there is a whole dimension of contract
knowledge that is unrevealed by the traditional doctrinal material on
contract. Do contract and legal reasoning inhabit different
epistemological worlds? And can these different worlds only be revealed
by an index?
With regard to the definition problems there are a number of issues.
What, actually, is meant by a right and what is meant by reasonable-
ness (or unreasonableness)? In addition, if the notion of reasonableness
does have a role in contract, there are questions about the level or levels
at which this role might operate. For example, it is generally stated that
consideration does not have to be reasonable in the sense of fair or
just (there is, in other words no doctrine of the just price). Con-
sequently, it would seem difficult to assert that all contracts must be
reasonable. Or, put another way, there is no doctrine prohibiting a
person generally from making unreasonable contracts (although of course
some will be prohibited by the law).62 Yet once one descends from this
holistic level to the individual parts of contract law to the individual
levels of formation, content, performance and remedies the position
becomes more complex (as indeed Madame Ramparany-Ravololomiarana
indicates in respect of French contract law). Reasonableness cannot be so
easily dismissed, as a glance at the exclusion clause legislation or some
cases on performance indicates.63
As one might expect, Madame Ramparany-Ravololomiarana
approaches reasonableness (le raisonnable) in terms of a notion that is
difficult to grasp. She examines the various definitions and concludes,
importantly, that it is not actually to be confused with other notions such
as rationality, justice or equity.64 Equally, it is not to be confused with
good faith.65 Perhaps, she suggests, it is to be understood in a negative
sense: it is something that is not unreasonable.66 Thus it could be said
61
See, e.g., Samuel (2009).
62
This principle finds expression in (to take a random example) Galbraith v.
Mitchenall Estates Ltd [1965] 2 QB 473, although this is not to suggest that this
case would be decided the same way today (although it might be: see Director
General of Fair Trading v. First National Bank plc [2002] 1 AC 481).
63
See in particular the Unfair Contract Terms Act 1977 and now Consumer
Rights Act 2015.
64
Ramparany-Ravololomiarana (2009) 25.
65
Ibid. 67.
66
Ibid. 78.
that reasonableness is absent in situations of abuse or irrationality; but of

course the danger here, as she recognizes, is that it can become confused
with morality and this is dangerous because one important aspect of the
notion of reasonableness is its pragmatic orientation.67 It is a means of
moving away both from the irrationality of sentiment and passion and
from the rigid rationality of formal deductivism towards a pragmatism in
which an economic and (or) social functionalism can come into play. It is
a means of adapting legal reasoning to the case in issue. And it does this
by permitting the legal reasoner to switch from one scheme of intelligi-
bility to another. One moves from formal structuralism (contract as a set
of axioms) to a form of reasoning that takes its reference from, on the
one hand, an idealized actor (the reasonable person) and from, on the
other hand, the economic supposed ends that the contract rule or
principle is said to be pursuing.
Accordingly, definitions of a right have tended to be based on
structural schemes that are circular in their pattern. For example, one
leading theory is that a right is correlative to a duty and so where a
party is under a duty to pay to the claimant 100 the latter has a right
to such a sum (which, presumably, can then be claimed for a good
reason, a bad reason or no reason at all).68 Another structural approach is
to see a right as being based on a relation between persona and res. Here
the paradigm example is the right of ownership, in turn defined as the
right to enjoy and dispose of in the most absolute manner,69 but the
notion of a res can be extended to embrace all kinds of intangible things,
including claims not just for something under a contract but for more
ephemeral items such as liberty, wealth, privacy, dignity, education, and
so on. A right under this scheme of intelligibility has the flavour of
property talk and from a diachronic viewpoint is rooted in the history of
the two Roman law terms of dominium and ius.70
Another definitional possibility is to add a functional dimension to the
structural approach. Under this scheme a right is, for example, nothing
more than a social interest recognized and protected by a legal action or
claim, that is to say that the function of a right is to give priority to some
empirical interests over others.71 However, lawyers are usually forced to
adopt a dialectical scheme when it comes to deciding actual cases since
many rights come into conflict, for example, the right to privacy often
67
Ibid. 9.
68
Hohfeld (1919).
69
Code civile, art. 544.
70
See, e.g., Tuck (1979); Villey (2006).
71
See generally Ionescu (1978) 14149.
finds itself in conflict with the right to press freedom or the right of
ownership with the protection of third parties.72 The judges talk of
balancing one right against another although not it seems where
ownership is concerned73 and this, in turn, can force the legal reasoner
towards an actor approach whereby, for example, the courts create an
agent such as the reasonable journalist or the reasonable business-
man.74 In short, definitions are in themselves of little help; what matters
are the methodological schemes of intelligibility adopted by judges in
individual cases concerning rights.
V. INVASION AND BEHAVIOUR

Nevertheless one way of approaching rights, and possibly the most useful
way for the purposes of comparing rights with reasonableness, is to
contrast invasions with behaviour. As Lord Hobhouse once explained
with respect to the law of tort:
Typically, a tort involves the invasion by the defendant of some legally

protected right of the plaintiff, for example, trespass to property or trespass to
the person. Conversion is another example. Such conduct on the part of the
defendant is actionable as such and the belief of the defendant as to the
legality of what he did is irrelevant. It is no defence for the defendant to say
that he believed that he had statutory or other legal authority if he did not. The
legal justification must actually exist otherwise he is liable in tort.75
The Law Lord then went on to observe:
On the other hand, where the plaintiff is not entitled to complain of the
invasion of such a right but bases his claim on some loss which he has
suffered consequentially upon some act of the defendant which the defendant
mistakenly believed was authorised by the law, the defendants honest belief
provides him with an answer to the plaintiffs claim notwithstanding any
actual illegality. Thus the holder of a public office who acts honestly will not
be liable to a third party indirectly affected by something which the official
has done even if it turns out to have been unlawful.76
72
See, e.g., Shogun Finance Ltd v. Hudson [2004] 1 AC 919.
73
Ibid.
74
See Lord Hoffmann in Jameel (Mohammed) v. Wall Street Journal [2007]
1 AC 359, para. 55.
75
Lord Hobhouse in Three Rivers District Council v. Bank of England
(No. 3) [2003] 2 AC 1, at 229.
76
Ibid.
This distinction between the starting points of invasion and behaviour

might be a useful analogy for approaching rights and reasonableness in
contract. Is contractual liability about vindication that is to say
claiming something without having to prove anything more than non-
performance by the other contractual party (the invasion of the right)
or is it about suffering loss through some act which itself must be proved,
in substance, as unreasonable, the mere proving of a breach of promise
not being sufficient to result in any substantive remedy? More generally
one might say that the question comes down to one of vindication of
rights contrasted with proof of unreasonableness.77
However this general question is not in itself sufficient as a vehicle for
approaching the issue of reasonableness in contract. As Madame
Ramparany-Ravololomiaranas thesis indicates, where reasonableness
does appear to have a role is at the level of individual aspects of contract
law (problems concerning penal and exclusion clauses, change of circum-
stances (imprvision), performance expectations, and the like) and so
what is needed is a scheme for analysing contract into parts that are
relevant for this purpose. The obvious scheme is the one employed by
contract codes and textbooks. Reasonableness can be assessed, first, at
the various stages of contract and, secondly, at the level of the contractual
obligation itself. Thus one might start at the pre-contractual (negotiation)
stage, progressing to reasonableness in formation, in interpretation of
content, in performance and in the enforcement of remedies.
Yet the problem with this approach is that it fails to comprehend a
further dimension to the problem. It may be that reasonableness is not a
concept that can easily (if at all) be detached from the contractual liability
cases so as to exist as some kind of abstract entity itself amenable to a
consistent definition. Madame Ramparany-Ravololomiarana seemingly
takes a somewhat different view it must be said; for she sees reasonable-
ness as being some kind of general notion that has the function of adapting
the various elements of contract to make it conform to the aim (la finalit)
of the parties.78 Nevertheless, she might agree that reasonableness exists
not only within the facts as an empirical idea and within a range of legal
rules (even statutory ones) as a normative proposition but also as a vehicle
capable of informing and explaining legal reasoning. As she says, the
notion authorizes the judge to fill in gaps or adapt or declare void certain
clauses which do not facilitate the achievement of the objective of the
77
An interesting case displaying such a conflict is Moorgate Mercantile Ltd
v. Twitchings [1977] AC 890.
78
Ramparany-Ravololomiarana (2009) 399.
parties.79 To a common lawyer this may sound as if it is a notion that

explains everything and nothing and were it to be employed only at what
might be called the large scale mapping level the criticism would
probably be valid. This is why one is forced back to an index approach.
Time must be spent looking at the reasoning methods employed by the
judges (no doubt inspired by counsel on occasions) in some contract cases.
In other words the devil is in the detail and these details can only be
accurately referenced through a well-constructed index.
VI. SCHEMES OF INTELLIGIBILITY

These reasoning methods have been described in detail elsewhere.80
Nevertheless, it might be valuable to recall how they interrelate with
contract decisions so as to permit the idea of reasonableness to enter into
the equation. Several such methods, or schemes, have already been
mentioned in passing. An actor approach is one that permits the
reasoner to construct an individual agent endowed with certain qualities
and attitudes; this agent can then be called upon to make a judgement
within particular sets of facts. What would the reasonable man have
done? How would the reasonable bystander have interpreted the negoti-
ations? The validity of this approach will, of course, depend upon the
extent to which such a constructed individual enjoys consensual support
amongst the audience at whom the reasoning is aimed.
A structural scheme emphasizes the relations between elements, for
example between persons, things and actions or between carefully
defined categories and classes or again between abstract concepts such as
rights, duties, liberties and privileges.81 Often such a scheme draws its
validity from its coherence, the model being that of mathematics, and
thus ideas such as symmetry and non-contradiction are fundamental.
Indeed, the reasoning method usually employed by conceptual structur-
alists is logical deduction and the reliability of such reasoning depends
on the perfection of the structure or the system.82 This aspect of legal
79
Ibid. 399401.
80
Samuel (2009).
81
On structuralism as a scheme of intelligibility see Berthelot (1990) 7072.
82
Bouchon-Meunier and Nguyen (1996) 720.
conceptualization has a long history in European legal thought.83

Reasonableness within this scheme would be a matter of axiomatic
principle, but one linked to the circumstances of each case.84
One might add to this structural scheme a causal approach, that is to
say the scheme of reasoning normally used in the natural sciences.85
Certain structural models might be employed to demonstrate how one
object (in law a particular result or solution: S) is dependent upon a
causal relation with another object (a rule or concept or norm: N). If N,
then S. Thus if one is able to establish offer, acceptance and consider-
ation in a set of facts (F) then one can conclude there is a contract (C);
and if one can go on to establish an act that amounts to a breach of this
contract (B) one can causally conclude there will be liability (L). Thus F
causes C which causes B to be treated as L.
In contrast to this structural scheme is a functional approach which
puts the emphasis on the purpose or function of a rule, concept or
category.86 What is the empirical role of the doctrine of consideration in
contract? What economic or social objectives should the law of contract
be attempting to achieve? A functionalist might, then, refuse to interpret
a provision in a written contract in a way that will lead to an unreason-
able economic or social result. One should add here that functionalism
often makes its appearance in English law civil liability cases under the
guise of policy. In asking what the policy is behind a particular rule a
judge is often alluding to its social purpose.
Other approaches that are of importance are hermeneutics and dialec-
tics. A hermeneutical approach is one that sees a rule, word, concept,
category or whatever as a sign whose deeper meaning whose signifi-
cance is in need of discovery.87 For example, in statutory interpretation
one often talks of the will of Parliament as the object to be discovered
behind a word or expression in a legislative text; the role of the
interpreter is thus to discover this will behind the written word. In
contract one can talk of the will of the parties. Does the written text
(contractual document) give a true expression of what the parties
intended? Did the parties, for example, imply into the text a term that the
two parties should perform the contract reasonably? A dialectical
approach is one that emphasizes contradiction out of which will emerge
83
See generally Dubouchet (1990).
84
See, e.g., European Sales Law Regulation (proposal), art. 5.
85
Berthelot (1990) 6265.
86
Ibid. 6570.
87
Ibid. 7275.
some higher truth.88 This, of course, is a scheme that is inherent in the

whole adversarial approach of the common law; out of arguments for and
against (advocatus diaboli) will result the solution to a litigation or
criminal prosecution problem. Judges might adopt this approach in
contrasting two possible outcomes to a contract problem and then, after a
careful comparative analysis, choosing the most appropriate (the most
reasonable?) between them.
One final point needs to be recalled with respect to these different
schemes of intelligibility in reasoning. They are not mutually exclusive
but, as already indicated, often combine to produce a set of reasons or
justifications. Thus a causal approach, or indeed a functional approach,
might be combined with an actor scheme; a hermeneutical scheme might
be mixed with a dialectical one (as in medieval legal reasoning).
Reasonableness, in other words, might be excluded in a scheme of
intelligibility that emphasizes conceptual structure and causal logic; the
solution (S) is caused by the juxtaposition of a given set of facts (F) and
a conceptual scheme of norms or positive rules (N). Thus N juxtaposed
with F causes S. However, reasonableness can be (re)introduced by the
reasoner who adopts a different scheme, say functionalism or dialectics.
As a Law Lord once said, a preoccupation with conceptualistic reason-
ing may lead to [an] absurd conclusion; and thus ideas divorced from
reality have never held much attraction for judges steeped in the tradition
that their task is to deliver principled but practical justice.89
VII. CONTRACT CLUSTERING

How do these different reasoning schemes relate to the classification of
contracts? In one sense they do not; they are forms of reasoning and not
forms of contractual types. However, where they meet different types or
categories of contract is in the index. The index becomes the place where
taxonomical, conceptual (including reasonableness), institutional, factual,
economic, political, social, moral and other notions meet. This place is
the means through which a reader can appreciate the complexity of law
and legal reasoning. This complexity, rather than being rationalized
through classification (at whatever level) of rules and transaction types,
might be better reflected in a form of clustering that takes as its starting
point a factual situation, a descriptive concept or a reasoning method.
Instead, therefore, of understanding contract through a rule (or set of
88
Ibid. 8283.
89
Lord Steyn in Lister v. Hesley Hall Ltd [2002] 1 AC 215, para. 16.
rules) like offer and acceptance it might be better to look at the details
of contractual situations as reflected in differing factual situations such as
supermarkets, transport, builders, ships, boats, motor vehicles, and so on.
This is not to assert that rules such as offer and acceptance or consider-
ation are irrelevant; they are not. However, they should be seen not as
axioms as such but as the means of marking out relatively defined spaces
in which a whole range of differing clusters are to be found. One might
make an analogy with the theatre where the stage acts as a space for an
enormous range of differing productions themselves involving complex
relations between actors, props and scripts. Plays represent a cluster
within the defined space of the stage.
In truth even the idea of contract rules determining a space within
which contract problems are played out is misleading in that once one
starts out from a factual situation such as the supermarket it becomes
clear that certain problems do not fit neatly within a contract framework.
The customer who picks up, and places in his trolley, a can of beans from
a display marked special offers and then, with a change of mind,
replaces the can back in the display certainly raises an issue that is of
interest to the contract lawyer. At what point is there a contract to
purchase the tin? But what if the customer slips up and injures himself on
some spilt yoghurt: is this equally a contract issue? One customer
surreptitiously removes an item from the trolley of another customer
because there are no more of these special offer items on the shelves: is
this a contract issue? Now of course one might argue that this is exactly
the problem with emphasizing the empirical context rather than the
systematized conceptual structures of normative rules; contract norms
become lost in a mass of other norms from other areas of the law.
However, one may respond in saying that one of the advantages in
viewing contract within specific empirical situations is that it actually
emphasizes the artificiality of dividing up the law into tight normative
categories of a type essentially inherited from Roman law. At the level of
particular transactions in particular factual situations contract rules can-
not often be divorced from tort, from property, from public or from
procedural rules. This does not make the contract rules irrelevant as such,
but the idea that there exists a body of pure contract norms is useful only
in certain kinds of problem-solving situations where, for example, it
might be ideologically useful (in a legal argumentation sense) to separate
contract norms from administrative law or from property law norms.
This point can be put another way. The construction of a set of
contractual norms isolated from other areas of law such as status, wills,
family relationships, employment, ownership and legal personality under-
pins much contemporary legal thinking in Europe, at least if the Draft
Common Frame of Reference is to be believed.90 Such normative purity

is usually regarded as a product of legal science. The methodology
associated with this science is one based on the idea that one categorizes
and analyses a factual situation in relation to the existence of this
abstracted taxonomical normative structure. Yet do those working in the
natural sciences problem-solve in this type of way? If one looks at an
area of science that is perhaps the closest (in some ways) to law, namely
medical reasoning, medics themselves do not seem to think that the
methodology is founded upon comparing facts (symptoms) with an
abstract and highly systematic taxonomical structure of diseases.91 The
experienced doctor well knows that illnesses often do not manifest
themselves in the way described in textbooks and that there is not a clear
demarcation between being ill and not being ill. Medical reasoning is
based as much on analogy as upon deduction.92 Much the same is true of
law, although it must be stressed at once that there are different
epistemological underpinnings between the two disciplines.93 As has
been seen with respect to one of the cases already discussed, one arrives
at the conclusion that the valuer who values the wrong building is strictly
liable through the use of an analogy. The valuer is analogous to the
painter who paints the wrong person or to the photographer who
photographs the wrong wedding.
How might contract clustering relate to contract classification? In order
to try to answer this question one needs to return to the role of the index
because classification and categorization can take many forms and
operate at many levels. In addition, as we have seen, one has to factor in
reasoning methods (induction, deduction and analogy) and schemes of
intelligibility. What the index provides is a range of entry points in which
one can understand the workings of contract law. Thus the distinctions
between sale and hire, between contracts of service and contracts for the
supply of goods, between interactions in a supermarket and in building
construction sites, between distance selling contracts and financial ser-
vices transactions, between expectations or interests and rights and
90
See DCFR Book I, art. 1:101.
91
Masquelet (2006) 45. Medical reasoning is of course different in many
ways to legal reasoning but they do share some similarities; for example, both
doctor and legal practitioner have clients who have expectations which mean that
they must reason in a manner that forms part of an ongoing relationship between
reasoner and client: Masquelet (2006) 3. See Samuel (2015) 323.
92
Masquelet (2006) 41, 9193.
93
Samuel (2015).
duties, between rights and reasonableness, and so on and so forth, are all
points of entry. Yet they all operate at different levels and in different
dimensions which cannot be adequately embraced in a two-dimensional
plan; they can only be listed in an index. Contracticles that is to say
the many different types of transaction to be found at the lowest level of
generality are, in other words, just one aspect of a fragmented
knowledge. This does not mean that systematized codes (or textbooks) of
abstract contractual rules are irrelevant. They are not. They are, to use the
mapping metaphor, like large-scale national motorways maps; yet the
existence and undoubted utility of such maps does not render irrelevant
the street plan map which in its own way is of equal utility. The index,
then, is like a contract street map. It provides an entry into contractual
knowledge from the bottom up. There are contract cases about, for
example, offer and acceptance, rules of interpretation and frustration; but
there are also contract cases about bailment, banks, buses, damage, debts,
franchising arrangements, functional reasoning, funerals, heating sys-
tems, insurance, interests (commercial, public, and so on), knives, local
authorities, peas, pork, property, reasonable business person, rectification
in equity, telecommunications agreements, valuers, and so on and so
forth. These clustering points have as much knowledge potential as offer
and acceptance or any other notion to be found in a code or textbook.
They may require, of course, a particular type of reasoning and scheme
of intelligibility to unlock this knowledge potential.
VIII. OBSERVATIONS AND CONCLUSIONS

These points are not particularly startling or original. The good indexer
knows that his or her index should act as a kind of metaphorical X-ray
which reveals the interior in all its detail and complexity of some defined
area of knowledge. Equally, the civil lawyer has long thought in terms of
particular types of contractual transaction and that classification of
contracts is an important part of the introductory section in some codes
and textbooks. Even the common lawyer has books on specific contracts.
What perhaps has not been sufficiently appreciated is how these not
particularly startling or original points have never really formed the basis
of any serious epistemological thinking within legal subject areas. Tony
Weir, it must be said, was contemptuous of epistemology despite his
excellent epistemological point that thinking at the level of a general
theory of contract was analogous to a doctor thinking at the level only of
disease (as opposed to specific illnesses).94 But while jurists have been
prepared to look at, for example, political or gender bias in cases and in
legal reasoning, they (with one or two exceptions) have never really
seemed that interested in thinkers such as Edgar Morin who has
reminded scientists and social scientists of the importance of complexity.
As Morin points out, science is based at one and the same time on
consensus and conflict; there are permanent conflicts between rationalism
and empiricism and between the whole and its parts. Complexity is a
dialogue between order, disorder and organization.95
If one looks hard enough at certain legal rationalizations such as
reasonableness in contract one can see this conflict. Reasonableness is
to be objectively ascertained by having regard to the nature and
purpose of the contract, to the circumstances of the case and to the
usages and practices of the trades or professions involved.96 The
epistemological emptiness of this assertion ought surely to be a warning
sign that law as a rational discipline is in danger of becoming a kind of
intellectual parody in which social reality is envisaged as a flat two-
dimensional framework full of one-dimensional subjects and objects
linked by notions such as reasonableness that cannot ever have any
abstract meaning. The idea that reasonableness can be objectively
ascertained in some sense divorced from the nature and purpose of the
contract and the circumstance of the case is epistemologically absurd and
seemingly works only because of the inductive formal framework (hav-
ing regard to) that gives the assertion the appearance of intellectual
credibility. There is, in other words, a dialogue only between order and
organization. It is not a dialogue that embraces the disorder of social
complexity.
Of course, there is a very strong ideological element to all of this. Law
must be seen to be certain and free of internal contradiction. Equally, say
some, it must be free of social functional reasoning; law is about rights
not social ends.97 These rights theories are perfectly proper, but if they
become dominant in comparative law or indeed in legal education then
comparing laws and learning the law become a matter of ideological
imperialism rather than epistemological investigation. Perhaps ideology
is too strong a notion and so one might replace it with what Morin has
called the paradigm of simplicity. This is a paradigm which puts order in
94
See Weir (1992) 1616.
95
See Morin (2005).
96
Proposal for a Regulation on a common European sales law (2011/0284
(COD)), art. 5(1).
97
See generally, e.g. Robertson and Wu (2009).
the universe and chases disorder out of it.98 It is a matter of continual

reduction, of uncovering the simplicity that lies hidden behind the
apparent complexity and disorder of phenomena. That comparative law is
plagued by this paradigm is evident in these European general theory of
contract codification projects in which highly complex notions such as
reasonableness, or difficult problem areas like mistake, are reduced to
normative assertions that are so general as often to be meaningless when
applied to facts. It is, as Tony Weir obliquely suggested, like trying to
harmonize all the illnesses in Europe by reducing them to the single
notion of disease. No doubt they are all diseases, but this is hardly a
notion that is of any use when it comes to medical problem-solving.
Thinking at much lower levels of categorization at least as low as all
the different contracticles thrown up by European Directives but prob-
ably on occasions one should go to the even lower idea of clusters has
the advantage of being more ideologically neutral and more transparent
with regard to the reasoning methods and schemes of intelligibility in
play. For example, if one really wishes to appreciate the English law
approach to mistake problems where there is no misrepresentation one
can do no better than study Lord Atkins judgment in Bell v. Lever
Brothers.99 No abstract normative proposition could ever capture the
detail of this Law Lords analogies.
Lord Atkin operated at the level of paintings, garages and horses.100
These are cluster point things that cannot be captured in any general
theory plan; their epistemological location is only in an index where they
can co-exist both with other low level categories such as financial
service contracts and dry cleaning transactions and with other cluster
focal points such as interest, debt and functional reasoning. The
good index is where the details of contractual and near to contract
knowledge can be discovered. The comparative lawyer keen on identify-
ing difference (and indeed similarity) should, accordingly, become a
lover of the index. Professor Birks, as has been seen, argued that the
alphabet is not an epistemological scheme of any value, but Tony Weir
has asserted that he could tell a hawk from a handsaw without the need
of any theory of aerial predators.101 Somewhere between the two lies the
good index a scheme that, as this chapter has hopefully demonstrated,
does have an important epistemological dimension and this is the
location where the enquiring comparatist ought to take up her residence.
98
Morin (2005) 79.
99
Bell v. Lever Brothers [1932] AC 161.
100
Ibid. 224.
101
Weir (1992) 1616.
Both Tony Weir and Bernard Rudden helped direct comparatists towards
this location.
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Press
Beauchard, J. (2009) Prface in H. Ramparany-Ravololomiarana, Le raisonnable en droit
des contrats. Paris: LJDG
Berthelot, J.-M. (1990) Lintelligence du social. Paris: Presses Universitaires de France
Birks, P. (1996) Equity in the Modern Law: An Exercise in Taxonomy, 26 University of
Western Australia Law Review 1
Birks, P. (1997) Definition and Division: A Meditation on Institutes 3.13 in P. Birks (ed.),
The Classification of Obligations. Oxford: Oxford University Press, 1
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intelligents. Paris: Presses Universitaires de France
Cabrillac, R. (2012) Droit europen compar des contrats. Paris: LGDJ
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Dubouchet, P. (1990) Smiotique juridique: introduction une science du droit. Paris:
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5. Critical comparative contract law

Giovanni Marini
I. INTRODUCTION: THE AESTHETICS OF THE

SOCIAL
The course of the twentieth century is characterized by the growing
influence of social justice within private law. The liberal conceptions of
the classical legal thought failed to portray the actual transformation from
a set of formal notions regarding private autonomy and freedom of
contract to the idea that, in different contexts, individuals were not so
autonomous and free to contract.1 In particular, this transformation
imposed a limitation to the freedom of contract and its binding force and
introduced a series of duties to protect the weaker party and to avert
unfairness. Similarly, social justice within the law of property meant the
introduction of the social function idea and the consequent elaboration of
a series of limits to the classical concept of liability, based on fault in tort
law.2
This social approach spread in European and North American legal
systems on the one side mainly through legislation (and more rarely the
judge through general clauses), which took a primary role through the
legal protection of specific categories of weaker parties (workers, con-
sumers) and on the other, through courts, which began deploying
doctrines to pursue the socialization of private law.3 After World War II,
in Europe the process continued with the new generation of constitutional
charters. Several constitutions drafted during these years were profoundly
influenced by social justice ideas: the Italian Constitution, for example,
contains the duties of solidarity (article 2), the conception of substantial
equality (article 3) and the idea of the social function of property (article
42). Similar pronunciations may be found in the constitutions of Ger-
many, Spain, Greece and Portugal. The socialization of private law is
1
For a further focus on the globalization of the social, see Kennedy
(2006a) 37 ff. See also, Hesselink (2008) 16 ff.
2
On the social function of property idea, see M.R. Marella, The Core of
Property (unpublished paper available from the author).
3
See Kennedy (2006a) 4446.
95
pursued deploying the constitutional tools: contract, property and tort law
are studied through the social principles stated in the constitutions.
Moreover, this process of socialization of private law has profoundly
affected European legal systems recalibrating the private/public divide
and enhancing a new idea of private law as another tool to redistribute
power among the different categories of individuals.4
The social seems now to be part of that whole of common interests,
beliefs and values which constitute the European legal tradition.
By the appeal to the social European tradition, some scholars working
on issues of European integration seem sometimes to constitute a new
contract law under their influence that can be used against the influence
of US dominated global contemporary legal consciousness. In contracts,
for instance, a conception grounded on altruistic good faith is pitted
against a more individualistic American conception of contract. A similar
position, grounded on social justice, is sometimes taken against EU
private law and its functional approach.5 The European legal tradition is
called on to slow down the harmonization projects.
At the same time, the social has undergone a striking process of
transformation. Legislation and intervention by the judge (through gen-
eral clauses) which were the key tools of the second globalization, for its
capacity to bring back into discussion the boundaries between law and
policy with reference to social realities and to the creativity of the judge,
have been redeployed. Now they are not used to react against an
exceedingly individualistic approach in the name of the public interest.
On the contrary, their goal is to enhance autonomy. Private autonomy as
self-determination becomes a value, which is at the core of consumer
protection a value to be balanced eventually with other competing
values.
II. THE CONSTRUCTION OF LEGAL TRADITION

In this short sketch there are many features, which deserve a closer
analysis from a comparative perspective.
The first is the renewed focus on tradition. Tracing back the roots is a
work of representation and its process of construction and reconstruction
gradually occupies a central place in comparative studies. An investiga-
tion into legal tradition may better be understood as a self-reflection and
4
Kennedy (2006b) 19 ff.; Caruso (1997).
5
On this point, see Hesselink (2001) 3749; Wilhelmsson (2004) 712 ff.;
Lurger (2005); Collins (2006).
Critical comparative contract law 97
critical interrogation of the various and conflicting political projects

underlying comparative law. Together with style, the way law is produced
over and over again by its institutional actors and represented to get its
legitimacy, canons, etc., that is tradition, plays a central role in our
studies. It is a sign of the undeniable aesthetic dimension of law.
The second is the emergence of distributive analysis, the analysis of
the institutional structure that governs the discipline of transactions and
economic relations, on which the power and possibilities of the parties
depend.6 Every change in that institutional structure and its background
rules is able to affect the power of the parties and the power of groups
and categories to which these parties belong. This is a feature particularly
important with reference to the ambiguity of the advocacy of certain
(social) values.
They look at wholly different features: the former at the representative
moments and the latter at the operational rules (background rules). But
both reinstate politics at the center of the stage in private law and in
comparative law and both are necessary for a serious critical analysis.
If it is necessary to move out of the ideological mechanisms and
produce a critique of the process of meaning production, at the same time
it is also necessary to avoid the trap of reducing everything to a discourse
or an epistemic question. If the critique and the dismantling of the
previous order may often reveal the marginalization or suppression of
other discourses inherent to the text itself, what is at stake is not only the
repression of a discourse but also the consequences of this repression.7
Law is simultaneously a body of ideological representations of space
and a collection of material practices, which maintain social order and
govern space. In fact, space is also a bundle of relations and networks
that make social action possible. To reconstruct a national or regional
identity is to redistribute wealth and power. It is therefore important to
ask who wins and who loses. The different opinions may be better
understood in terms of ideological disputes over the acceptable limits of
redistributive projects.
6
The focus of the analysis is not on general notions defining contract or
property but on those specific background rules that assure their operation, those
rules that create limits to the parties of a contract. Within these limits, the parties
can take advantage of their own specific competence, their information and even
other resources, such as a social position or strength.
7
The material consequences they produce are assured by the means of a
complex bulk of devices, such as dispositifs, conceived as an involved network
of relations, which link different strategies and techniques together.
As to the latter, it is also important to remember that advocacy of

social values is not self-explanatory: It is not per se progressive or
egalitarian. Some ambiguities arise when we move from the market to the
family or privacy sphere. In the latter, the social may be identified with
duties of solidarity or relation of authority, and is often connected to a
traditionalist agenda of upholding the dominant morality. In that sphere, a
progressive project seems better deployed by tropes such as self-
determination or autonomy which would be considered conservative in
the law of the market.
Every legal intervention is open to biases and blind spots. Legal
reforms or legal changes require in fact a more complex analysis, with a
frank assessment of distributive effects. It is noteworthy to underline the
cross-subsidy effect in which redistribution occurs within the same
section of society.8 It is very interesting to note how often representa-
tions, theoretical statements and argumentations provided to explain legal
rules may reveal the same legal rules to be redundant and even contra-
dictory. This trend opens the way for a sort of false consciousness very
close to the ideology, just in the same light underlined by Marx a couple
of centuries ago.
As to the former, it is important to remember the increasing import-
ance of legal tradition as a renewed tool for analysis in the field of
comparative law, something totally different from the usual units of
analysis such as functions, operational rules and their justificatory
arguments. Legal traditions are not only a challenge to the old tax-
onomies in the name of a more dynamic and flexible approach. Very
often legal traditions are deployed or used strategically to advance
various projects, such as to resist or slow down integration, to negotiate a
strategy to minimize how much to give up in the encounter with other
legal systems.
In this perspective, legal traditions are not only another exercise in
re-mapping the world but also a tool to challenge the taxonomic exercise
in itself. To map the world you combine and re-combine pre-existing
elements according to a theory of the basic units and structure you think
relevant and the respective weight you assign to the different elements.
As critical legal geographers, comparative lawyers are interested in the
way their discipline draws lines of inclusion and exclusion. In this work
it is important to identify cultural and legal elements which can be
8
These effects require an accurate inquiry in order to clarify their general
impact. In fact, costs may be reallocated, as is the case in all relations between
professionals and consumers. See Kennedy (1982).
included, and are actually included, in a tradition, the way in which

tradition works combining and re-combining their constitutive elements
and foundational myths, the way in which it adapts and maintain its
distinctiveness and makes strategic use of law in relationship with other
cultures.9
In this project it is possible to understand comparative law as the
analysis of plural ways of combining cultural and legal elements with
rhetorical devices ground a memory. The genealogical method can
provide the tools to challenge the coherence of the reconstruction.
Genealogy makes it possible to situate historical events not along a
unique model of development, but alongside different paths of possibil-
ities and shows other roads which, at the moment of the choice, were not
followed. In this sense, the resulting choice is only the result of a series
of contingent events.
Any totalizing or organic understanding of tradition fails to take into
account the role that individual actors can play in generating meaning
and, in particular, it fails to account for conflicting understandings and
views within every tradition. Tradition as context, tradition as culture is
not smooth, but it is the product of conflicts.
The focus of comparative law is on the dissemination of discursive
practices, which shapes the legal consciousness of the authors and marks
the boundaries within which hegemonic and counter-hegemonic projects
can take place. Legal consciousness is the complex system of distinct and
multiple building blocks, such as a common conceptual vocabulary, a set
of potential rule solutions, typical arguments pro and con, organizational
schemes, modes of reasoning, which are actually considered typical in
each given experience. To study legal consciousness means to identify the
elements of the system and the balance between forces (explicit and
implicit) operating in a specific legal field on which depends the way in
which the elements combine in any given period.10
9
Recently, the study of borders and limits. It has been proposed that there
should be a more complex topology and a more critical approach to borders.
Instead of the border in which what is in and what is out is clearly defined, in
which you are included or excluded, we can imagine an in-between, a threshold
of indistinction between inside and outside, inclusion and exclusion, a field
which is characterized not by opposition but by a tension between poles that
requires you think in a different way, a space which is not seized, impossible to
map.
10
The medium is constraining but also plastic, its flexibility depending on
the elements (signatures) which mark it and refer it to a specific interpretation
and context.
The assumption that not only the objects of the analysis but also the
subjects are socially and culturally constituted is crucial. Thus the
subjective side of knowledge moves to center stage in the comparative
analysis and comparative law has to face the constraint of forms of
knowledge production and their engagement with governance. By treat-
ing consciousness as a historical product, the analysis shifts attention to
the constitution of the structure in historically specific situations and the
way it contributes to the asymmetries in the abilities of individuals and
social groups to define and realize their projects.
The reference to historical forms of consciousness or subjectivity
emphasizes that subjects can work only within specific contexts which
provide the language they can speak when they have to face a specific
legal issue. The more relevant questions for comparative law become to
understand the way in which the consciousness is shaped, who shapes it
and what the purpose of the whole enterprise might be.
III. FROM CLASSIC TO CONTEMPORARY

COMPARATIVE LAW
This marks a strong difference between classic and contemporary com-
parative enterprise. Comparative studies turn to the humanities, the
sciences which study the complex relationships between individuals and
knowledge, individuals and culture. The encounter with various strands
of critical theory had a very important impact on comparative law and its
critique of the processes of meaning production.
Combining the structural approach with the identity turn and then with
the post-structuralist and the post-colonial turns, comparative law pro-
vides the basis for a critique of hidden assumptions, normative inconsist-
encies, fallacies and interests associated with particular imaginations and
categories and a critique of the latent that limit, through a variable mix of
consent, coercion and other technologies of domination the capacity to
advance a project of emancipation.
In comparative law, functionalism, due to its anti-formalist approach,
emphasized the connections between law and social context. This per-
spective focused on the function of the legal instruments in order to
address issues and problems in the society. The goal was to measure the
distances between different legal systems, using the function as a tertium
comparationis. Through this functional comparison, societies (or at least
most of them) appeared to be facing the same issues, their solutions
differed only because the tools employed to solve them are affected by
the specific legal culture that influences the lawyers of each legal system.
The variety of the different legal cultures influences the legal tools
employed only and it doesnt spread to the results. Such aspect allows
this type of comparison to develop a critical approach towards those legal
cultures, as for example the Italian, still affected by formalism. Function-
alists rely on historical dimension and variability of legal institutions that
can nevertheless be used to perform the same function in different legal
systems as tools to weaken the reification of legal concepts.11 On the
other hand, this method pushes them to identify which solution addresses
better a specific legal issue. So, they determined (by using the compara-
tive argument as an interpretative tool or as a possible de iure condendo
answer) that some solutions are better than others and can be seen as
models to imitate. Specific differences, related to irrational elements or
historical accidents within a particular legal system, were easily dis-
missed. The faith in the function replaced the faith in the essence.
Functionalism, in its pretension to universal science, faces two mortal
enemies: first, the critique regarding its dismissal of every other (cultural)
element, different from the function and secondly, the critical approach
towards its adoption, through the functional paradigm, of determined
cultural perspectives, deeply connected to specific legal systems and far
from universal applications.
The functionalist approach was, most of all, an attempt to grasp the
interrelations between law and society. Essentially, functionalism was a
response to conceptualism and the split between legal reasoning and
social context. It sought to understand policy-oriented decisions that
stand behind positive legal rules: how legal systems employ different
tools to realize their specific policy. In this vision, law becomes both an
instrument to drive the evolution of society and a key factor of change
within society, reducing in this way the juxtaposition between application
and creation of the law.
Functionalism, as a theory of the relationship between law and society,
had to struggle not just against the so called dark sides of the
regulation, but also with a task growing more and more difficult:
matching the events produced within a particular society (social and
economic phenomena) and a determined legal form. The solution identi-
fied by the functionalist approach, the functional analogue, turned out to
be a double-edged sword.12 In fact, the intellectual efforts needed to
detect these functional analogues and their uncontrolled proliferation
11
An emblematic text is Zweigert and Ktz (1998).
12
In this sense, functionalism can be considered as subversive and so is the
comparative law inspired by this method. Cf. Muir Watt (2000).
weakened the functionalist theory, preventing its generalization. For these

reasons, functionalists decided to focus on restricted and more generic
goals, in which legal rules were employed as means to ensure predict-
ability and stability of legal relations, a set of minimum conditions in
order to preserve economic exchanges. Obviously, these struggles under-
mined further the method.
By the end of the 1970s, an alternative approach gained importance
within comparative legal studies. This method focused on the constitutive
role of law, highlighting its capacity to provide visions of the world that
are used to frame social relations and determine their concrete terms and
on the resulting complexity in keeping law apart from culture and
society. Unfortunately, the study has always remained on a high level of
abstraction.13 Under these circumstances, it has been quite easy for the
structural approach to strike down the functional method and so chop off
the link between law and society.
IV. THE LEGACY OF HETERODOXY

The success of Schlesingers factual approach during the 1960s offered
an alternative way to overcome conceptualizations, beyond the strict
boundaries of functionalism. In the course of the well-known Cornell
seminars, the comparative endeavor focuses on how legal systems usually
solve a particular legal issue: starting from a typical problem originated
from a hypothetical case, focusing on the factual elements that character-
ize each solution, avoiding any type of national conceptual category.
The rehash of the Cornell method by the structural approach allows
significant progress in comparative legal studies, highlighting how, within
every legal system, there is not always just one legal solution, on the
contrary, there are various possibilities, as many as the formulations.
Every single legal system is formed by a multiplicity of legal formu-
lations that develop independently and whose interaction allows us to
confer a meaning to legal rules. Due to several factors, such as the
circulation of models from different legal systems, these formulations
13
The critique of functionalism moves from the critique of the generalization
represented by the adoption of the function, the presumptio similitudinis to the
use of functional analogues, a particular problem or issue within a given society
cannot be the same in another (among the others, Frankenberg (1985); Husa
(2003); Michaels (2007); Graziadei (2003) 100. The critique of functionalism is
connected to the critique of scientism in Somma (2005) 3.
may not only contradict each other (fundamental dissociation), as hap-

pens when the positive legal rule is different from the one established by
the courts or elaborated by legal scholars. The contradiction can also be
found within a single legal formulation (internal dissociation).14 Every
formulation may elaborate both an operative rule (a set of factual
elements that are necessary to provide a certain legal effect) and a
declamatory rule that is meant to describe the rule itself and to affect the
way these rules are perceived and evaluated.
For these reasons, there is a plurality of possible solutions and also a
plurality of possible justifications. So, the justifications, as we will see,
can be related to the solutions in different ways: they can be completely
overlapped, they can be superfluous or even contradictory.
In the structural approach, the context is interpreted as structure and
not as social background. The components of a legal system can be
evaluated only in relation to each other.15 Structuralism allows legal
comparison to become, at the same time, a theory of interpretation aimed
at criticizing the conception of law as a merely linguistic construction,
and a legal process theory aimed at analyzing the (dynamic) relationships
between the different components within a particular legal system that
operate in the production and the enforcement of law.
For these reasons, two major changes were introduced within compara-
tive legal studies. First, legal comparison didnt dismiss but rather
recognized and embraced blanks, ambiguities and conflicts inside the
legal rule. According to the structural linguistics, legal structuralists
emphasize the spread between significance and significant: the interpret-
ation of the legal rule is arbitrary and depends on the complex compos-
ition and re-composition of legal formulations within each legal system.
The structural approach could be considered as an anti-formalistic
method. So, structuralism, as any other anti-formalism, could be
involved in a scientific endeavor (reconstructive) or in a critical analysis
(deconstructive).
Within structuralism, it was possible to find both the tools to unpack
the idea of completeness of the legal dogmatism, highlighting the
multiplicity of different solutions and the conflict among them, and the
instruments to affect this completeness.
14
The reference point is always represented by the coercive institution
through market law and the rules that govern the relations among individuals; cf.
Barcellona (2000); Marini (2008).
15
They both share the need to go beyond the concepts to focus instead on
the substantial problem (cf. Zweigert and Ktz (1998)), or on solutions: a set of
factual elements that determine a single legal effect (cf. Schlesinger (1968)).
On one side, the different solutions provided by the legal formulations

and their contradictions could enhance those alternative reconstructions
that were eclipsed by the dominant ones. The former assumed the role of
dangerous supplement, highlighting an aporia that showed how these
dominant reconstructions were substantially partial and how they
betrayed their coherence conditions. These premises made it possible to
situate historical events not along a unique model of development, but
alongside different paths of possibilities. In this sense, the chosen path
wasnt mandatory, only the result of a series of contingent events. This
theory, applied to national legal systems and besides any deconstructive
implications, is basely a critique of the internal coherence of single legal
models and rules, very similar to the critical positions of American legal
realism.
On the other side, the analysis of the internal dynamics of law could
have allowed us to predict the outcome of a possible conflict among the
formulations. In fact, if it is possible to analyze the institutional con-
ditions that characterize their competition, the factors that influence such
competition, the official (theories) and unofficial (cryptotypes) facts, the
implicit (cryptotypes again) and explicit connections not necessarily
determined by human actors that can affect decisions, then this method
can reduce or even reset the indefiniteness.
At the same time, this approach cut the last ties that connected law to
society. Through the observation of the different legal systems, Sacco
showed how societies characterized by deeply different socio-economical
structures have adopted the same legal rules, while on the contrary,
societies which share the same socio-economic structure have chosen
quite different legal rules.
V. IDEOLOGY AND LEGAL ARGUMENTS

The study of the internal dynamics of law had unveiled another quite
important aspect. We are talking about the need to explore not only the
results provided by the different legal systems, but also the way in which
(within a single framework delimited by the tools and the restrictions
provided by the legal tradition) the outcome is produced, described and
justified.
If it is quite normal for interpreters to give motivations in order to
legitimize their choices, it is very interesting to note how often represen-
tations, theoretical statements and argumentations provided to explain
legal rules may be revealed to be redundant and even contradictory
vis--vis the same legal rules. Interpreters are well aware of these
aspects. These justifications influence the way in which rules are

embraced and evaluated within every legal system. So, they can provide a
false consciousness of what the system actually produces.
At the same time, justifications, as well as the whole system of
representations provided by the interpretative practices, have an
extremely important goal of social communication and social stability.
The ideological aspect that affects these justifications and representations
is now quite clear, understood as a false consciousness of the reality.
This phenomenon can be found typically in openly politicized legal
systems, such as was once the Soviet one, but it is also quite normal in
any other system, starting from those systems which, like the French
legal system, were historically influenced by jus naturalism. It is no
surprise that the Code was the ground where the synecdoche was tested,
this figure of speech, in which a part is used to refer to the whole, allows
and makes easier the separation between operational rule and declama-
tion.
The synecdoche makes room for ideology. This ideological component
works on different levels. First, it operates at a more general level, where
ideology involves interpretation and in which the whole interpretative
process is considered purely technical. This legal reasoning can be
exclusively deductive or policy-oriented, taking into account the social
interests (often conflicting) protected by the legal rules. According to this
representation, the interpreter denies his creativity, legitimizing the
product of his work as neutral.
At the same time, within the comparative legal studies, an apologetic
component appears: representations are useless to the elaboration of a
solution, but they can be very helpful to provide and develop visions of
the world, discourses and narratives that can be imitated and duplicated
over and over again. Different representations are functional to elaborate
projects for intellectual lites. For example, representations, which
depict, through comparison, different legal models as prestigious can help
realize projects in favor or against the particular legal system that
originated the same model, inspiring or activating resistance and oppos-
ition. We are very close to the idea of using cultural products as tools to
eliminate or to substitute a hegemony.
Comparative law meets the disciplines which study the relationship
between individuals and knowledge and individuals and cultures. It is at
this juncture that comparative law goes beyond the identification of legal
formulations and their deconstruction and turns to narratives and dis-
courses. This aspect is strictly connected to the idea of belief systems:
those collectively delimitated structures of thinking which, implicitly or
explicitly, direct the way interpreters think. These intellectual paradigms
of historical and contingent nature restrict the field where interpreters

conditions of possibilities can work and determine the achievable out-
comes.
It is interesting to note that the ideological and apologetic component,
underlined by the separation between the process of rule selection and its
justifications, is quite common. In fact, the study of several specific
discourses, that are used to explain and justify the adoption of particular
legal rules of private law, can highlight the recurring division between
theoretical declamations, rules presented and the outcomes obtained in
different contexts.
VI. CONTRACTUAL JUSTICE AS A LEGAL

DISCOURSE: SOME EXAMPLES AND THEIR
DISTRIBUTIONAL IMPACT
This is the case, for example, of those discourses that are connected to
the application of several rules of contractual justice. This legal field
perhaps represents the example of greater separation between theoretical
justifications historically inspired by deeply committed declamations in
favor of the highest reconstructive principles distinctive of the various
ages in which they established themselves and operational rules that
produced specific distributive outcomes.
Within the contractual justice field, while justifications swung from the
will theory, the social and finally solidarity, operational rules often
produced outcomes particularly difficult to match with these statements
of principles.
We only need mention how the classical legal thought grounded
contractual remedies firmly on the will theory. Within this limited
framework, however, it was possible to pursue projects of different types
not always in line with their purported justifications. Thus by recognizing
the actionability of the remedy only on behalf of the seller of land,
French courts only ended up by protecting the landowner against
speculation by bourgeois merchants.
With respect to the social, the rules enacted by the German Civil
Code in 1900 were seen as a necessary concession to the protection of
the weak parties (2 Brgerliches Gesetzbuch (BGB), section 138). Their
practical operation produced results often at odds with the spirit of
innovation. By a narrow interpretation of the requirements (necessity,
inexperience and carelessness) and preventing the judge from reshaping
the contract, they depleted the remedy of any utility for the weak parties,
who had to bargain again on the market for the performance.
Today, regarding solidarity, which is at the core of many of the
contractual justice discourses, particularly in EU law, it is necessary to
perform the same kind of careful analysis to double check its operation in
different contexts and settings with respect to its distributive impact.
The forward expansion of the unconscionability clause to cover any
kind of excessive and unjustified advantage (UNIDROIT Principles,
article 3.10) and unjust profit or iniquitous advantage (Principles of
European Contract Law (PECL), article 4:109), levelling the way towards
an adaptation of the contract by the judge, goes well beyond any
remedy anticipated by national legislation. Nevertheless it is very pos-
sible that the remedy will work only to restore the functionality of the
market, in particular the conservation of the contract with reference to the
equilibrium that would have been reached in a comparable but perfectly
competitive market.16
This approach opens the way to another quite interesting development
in the study of the effects of legal rules. This field of research is not
entirely new, it is quite familiar to comparative legal studies that are
usually connected to economic analysis in general and law and eco-
nomics in particular.
The idea of operational rules as a set of relevant elements necessary to
produce a result allows not only a better approach for scholars interested
to understand similarities and dissimilarities between the different legal
systems, but also a series of other intriguing results. Beyond declam-
ations and conceptual structures of each legal system, operational rules
enhanced a more accurate analysis of how rules work within different
societies, in particular they could unveil the effect (incentives) of these
rules on the behavior of the components of given society.
This formulation has also been used to test the efficiency of the rules
with respect to allocating resources or reducing costs17 and consequently
to evaluate which rule should be used within a project of harmonization
of the law or which rule was the fittest in order to circulate it among the
legal systems.18
The employment of the consideration and its functional analogues
(causa) to select which promises and contracts should be considered
16
Consumer relationships deserve a close analysis in themselves for their
many different cross-subsidy effects.
17
See Cooter (1991); Mattei (1994).
18
See the application of Calabresis Chart (Calabresi and Melamed (1972))
to the inter-proprietary conflicts in Mattei (1987).
legally binding highlighted how decisions taken by the different legal

systems in those circumstances are policy-oriented. Deciding that only
those promises or bargains supported by a sufficient consideration or
other relevant (in terms of efficiency) elements represents a huge step
forward to prove that these outcomes could be considered really efficient.
The result of the operational rules can also be compared to the
declamations. Here, the patterns of the economic analysis allowed a
critical control of the possible separation between declamations and the
rules made by the courts, exposing the cleavage between the substantial
level of the operational rules (remedies) and the formal level of the
conceptualizations of a particular system.19
VII. FINAL REMARKS: THE FOCUS ON

BACKGROUND RULES
In any case, even with the more critical approaches, law and economics
does not take into account any consequences different from the efficient
allocation of resources. The idea was that the only possible goal shared
also by classical economic analysis should have been to ensure to the
entire society the bigger cake (without any discussion about the way in
which this cake should be divided). This aim was considered the only one
legitimately pursuable using private law rules.
The new stream restates the importance of distributive consequences
that follow the operational rules. This approach does not lead to any
Marxist analysis,20 in the sense that it does not take into consideration the
fate of the capitalist system, but it focuses only on local conflict with
small interests at stake.
So, it is necessary to rethink the role of operational rules: if once they
were used only to evaluate the more efficient allocation, now they have
become a way to understand how resources and power were distributed.
The recent discussion regarding the projects of harmonization of
contract law focused on the fact that an adoption or the modification of a
particular legal rule also through the simple consolidation of a judicial
orientation can change the outcomes of the conflict between the
19
The disagreement persists only regarding the criterion with which this aim
must be pursued; this criterion allows us to state that the method is substantially
neutral, but see Baker (1975) and Kennedy (1981).
20
In this sense, no rule is precise and strong enough to frame an entire
system inside a particular logic.
different parts, but also among the categories and the groups to which the
parts belong (the related distribution of the resources).
The debate does not involve configurations or general notions regard-
ing contract, property or anything else, but it focuses on those back-
ground particular rules that assure their operation, those rules that create
limits for the parties of a contract. Within these limits, the parties can
take advantage of their own specific competence, of the information they
can collect and even of other resources, such as social position or
strength.
Every change (even small) in the institutional structure that governs the
discipline of transactions and economic relations is able to produce
re-distributive effects relevant to the power of the parties and the
distribution of resources.21 There is no field within private law that can
be considered not affected by these effects.
These rules create the substantial framework where the social and
economic relations among the different groups operate. Such rules are
normally considered neutral or at least scarcely relevant, but they decide
the position of strength of each individual and also how much they can
obtain through the relations of cooperation and competition between one
another. This perspective also allows consideration of whether the
presence of the same rule, or its possible modification, may alter the
relationships of strength between groups and how much the individuals
belonging to those groups may obtain when they enter into conflictual or
cooperative rapport with the others.
REFERENCES
Baker, E. (1975) The Ideology of the Economic Analysis of Law, 3 J Phil. and Pub.
Aff. 3
Barcellona M. (2000) La scienza giuridica italiana ed il marxismo, prima e dopo luso
alternativo del diritto, Riv. crit. dir. priv. 715
Calabresi, G. and Melamed, A. (1972) Property Rules, Liability Rules, Inalienability
Rules: One View of the Cathedral, 85 Harvard L Rev. 1089
Caruso, D. (1997) The Missing View of the Cathedral: The Private Law Paradigm of
European Legal Integration 3 ELJ 332
Collins, H. (2006) The Alchemy of Deriving General Principles of Contract Law from
European Legislation: In Search of the Philosophers Stone, 2 ERCL 21326
Cooter, R. (1991) Le migliori regole giuste, Quadr. 526
21
These effects demand an accurate inquiry in order to clarify their general
impact. In fact, as in all the re-distributive phenomena, sometimes costs can be
re-allocated, as happens with the relations between professionals and consumers.
See Kennedy (1982).
Frankenberg, G. (1985) Critical Comparisons, Harvard Intl LJ. 41145

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Press
6. Contract law and regulation

Giuseppe Bellantuono
I. INTRODUCTION: MAPPING THE RELATIONSHIP

BETWEEN CONTRACT LAW AND REGULATION
Suppose you want to know which rules apply to the contractual relation-
ship between the operator of a communications or energy network and
the users of that network. Or suppose you want to know the remedies
available to an investor who has been damaged by an investment service
provider. It is common knowledge that general contract law does not
provide complete answers to such questions. Sector-specific rules must
be consulted. What is less well known is that issues at the interface
between general contract law and sector-specific regulation pop up with
increasing frequency in a disparate set of fields and across developed and
developing countries. This chapter sets out to explore the relationship
between what will be called traditional contract law and regulatory
contract law.
This is not a well-established topic in the comparative law literature.
Therefore, what follows is just a mapping exercise that hopefully will
help broader and more systematic inquiries. Before explaining why this
exercise is needed, it is useful to point out three methodological
challenges that must be faced when dealing with the relationship between
contract law and regulation from a comparative perspective.
First, both notions are highly variable across space, time and dis-
ciplines. This means that the definition of the research agenda risks
starting from arbitrary assumptions about the kind of issues that should
be taken into account by each branch, in a specific period and with
specific analytic tools. Secondly, the relationship evolves along paths that
are largely influenced by broader dynamics (e.g., the regional economic
integration leading to the Single Market in the EU or the building of a
regulatory state with distinctive features in developing countries). There-
fore, it is quite difficult to disentangle the changes brought about by these
dynamics from the influence they exert on contract law and regulation.
Thirdly, the relationship may remain more or less hidden, with each
branch living in its own separate sphere until it collides, overlaps or
interferes with the other one. This means that in some legal systems no
111
systematic assessment of the relationship is provided or discussion only

takes place in some sectors.
Despite these challenges, this chapter argues that more sustained
attention to the relationship between contract law and regulation provides
insights that risk being overlooked by an exclusive focus on one branch.
Today, a not insignificant share of contractual relationships take place in
markets that have been restructured or liberalized. In those same markets
independent authorities were granted the power to produce contract rules
and use a vast array of enforcement mechanisms. Moreover, in global
markets contracts are used for many different purposes, including regu-
lating transnational supply chains, regulating risks or providing the
building blocks for private orderings. What seems increasingly clear is
that the search for new governance tools in global markets and in
multi-level regulatory systems has led to the belief that contracts are
more or less interchangeable with other regulatory tools. More often than
not, each tool competes with, clashes with, supplants or complements the
other ones.
While not pretending to explore all the facets of such an interplay, this
chapter tries to shed light on the parallel dynamics of contract rules
devised for traditional bilateral relationships and contract rules applied in
regulated markets. Section II discusses attempts to classify the relation-
ship between contract law and regulation. It suggests that the core issue
is how to identify a set of rules that can be labelled regulatory contract
law. Section III turns its attention to rule-making processes and tries to
identify the main features of regulatory contract law in the European
Union and the United States. Section IV deals with enforcement mech-
anisms and compares them across the two branches. Section V draws on
examples from Brazil and China to understand what is the role played by
regulatory contract law outside the Western legal tradition. Section VI
identifies the most important policy choices to be made when using
regulatory contract law. Section VII summarizes the analysis.
II. TYPOLOGIES
Because of the multiplicity of meanings that can be attached to the
notions of contract and regulation, it is useful to distinguish the different
streams of the debate. This section tries to identify connections among
related but distinct research areas and to clarify the relationship with
non-legal disciplines.
Contract law and regulation 113
Let us start with a typology proposed by the literature on contract

governance (Mslein and Riesenhuber 2009: 260 ff.; Grundmann et al.
2015: 42). Four different topics are singled out:
(1) the institutional framework of contract rule-making (who produces

contract law and how);
(2) governance of contractual relationships (the facilitative or enabling
function of contract law);
(3) contract law as an instrument for achieving regulatory goals;
(4) collective self-regulation through contract.
The first two topics reflect the usual concerns of contract law literature
about the bilateral relationship. The last two topics are the focus of this
chapter, from the point of view of public and private regulation,
respectively. Some preliminary observations about this functional typ-
ology are in order.
First, it explicitly includes contract law among several other regulatory
instruments. This approach plays both a descriptive and a justificatory
role. But it runs the risk of overlooking the distinctive features of contract
law. The latter include processes of rule-making, availability of enforce-
ment mechanisms and interplay between private and public goals.
Whether contract law can be employed for regulatory purposes is directly
dependent on those features. Most importantly, local, national or regional
institutional contexts shape those features and render them more or less
amenable to adaptation for different purposes. This means that the
assumption of an unbounded malleability of contract law might be wrong
in most settings. Hence, contract law cannot be equated with other
regulatory tools. Of course, none of the above mentioned observations
prevents a comparison between contract law and other regulatory tools.
Secondly, the typology conveys the impression that the first two and
the last two topics listed above can be analysed separately. Indeed, the
most troublesome issue is their interdependence. The contexts in which
contract law and regulation interact show that rule-making can be
directed both at the bilateral relationship and at the wider market
environment, contract rules can be at the same time enabling and
regulative, and private goals are intertwined with public ones. What we
need is a theoretical framework that helps assess the wide implications of
such coexistence.1
1
Micklitz (2015a: 132 ff.) suggests to merge the four categories into two
(the first two concerning the structural level or governance and the second two
Thirdly, the typology suggests an answer to the question whether there

is something really new in the relationship between contract law and
regulation. In a long-term perspective, one might observe that contract
law has been instrumentalized many times to pursue public goals
(Jansen and Michaels 2008). However, signs of a real transformation can
be detected in the multiplicity of the processes that lead to the production
of contract rules besides the traditional legislative and judicial ones, as
well as in the availability of new enforcement mechanisms. Additionally,
the geographical reach of the contractual relationships to be managed
today is much wider than in the past. Contract rules play a regulatory role
both in multi-level regional systems and in global supply chains. What
these developments show is that more general transformations about the
role of the nation-state and the changing nature of global markets lead to
a completely different set of contract rules, or to a parallel branch of
contract law. Therefore, elements of change are both quantitative (the
number of contexts in which contract rules play a regulatory role) and
qualitative (how such a role is played).
Fourthly, different disciplines may conceive of the relationship
between contract law and regulation in different ways. To the extent each
of them talks about different research problems, semantic assonances do
not cause any misunderstandings. For example, the economic literature
which focuses on infrastructure or concession contracts (Guasch et al.
2008; Stern 2012) or on the relationship between the regulators and the
regulatees (Spiller 2013) employs a contractual language, but deals with
issues related to the private-public interaction from a perspective that is
clearly distinct from the one discussed here. Conversely, the need for
interdisciplinary integration arises when there is overlap between the
issues dealt with from different disciplinary perspectives (Repko 2012).
For example, to the extent law and economics suggests a specific view of
the relationship between contract law and regulation, its methodological
premises must be compared with different perspectives and a synthesis
should be sought.
These preliminary observations help articulate a set of questions that
will guide the discussion in the following sections:
(a) Do contract law and regulation live in separate spheres or do they

interact? And what types of interactions can be observed? Which
institutional factors shape the type of interaction? Is there any
the interplay of regulation and autonomy) and to add a procedural level that
connects the structural and content levels.
observable difference between legal traditions or countries in differ-

ent stages of economic development?
(b) How does the interaction work when public (statutory, judicial or
regulatory) or private contract rules are involved?
(c) Can relevant differences be detected between contract law remedies
and regulatory remedies?
Questions (a) and (b) have to do with rule-making processes and will be
discussed in section III. Question (c) has to do with enforcement
mechanisms and will be discussed in section IV.
III. REGULATORY CONTRACT LAW IN THE

MAKING: THE WESTERN LEGAL TRADITION
This section tries to establish to what extent the EU and the US legal
systems accept and use some version of regulatory contract law. Here the
focus is on differences between the processes aimed at producing the
rules that make up traditional contracts and those aimed at producing
regulatory contract law. To some extent, such processes overlap. Legisla-
tors, judges and private regulators are involved in the development of
both types of contract rules. However, public regulators are only involved
in the production of regulatory contract law. Even though the two types
of rules cannot be distinguished from the point of view of the rule-maker,
several distinctive features can be singled out:
(1) Timing: traditional contract law was developed over the centuries
through doctrinal and judicial work; regulatory contract law is
developed in a much shorter time span by private and public
regulators.
(2) Stability: traditional contract law changes slowly; regulatory con-
tract law changes quickly.
(3) Generality: traditional contract law includes rules with a higher
degree of generality than those making up regulatory contract law.
(4) Public-private distinction: in traditional contract law public (legis-
lative and judicial) processes of rule-making are clearly divided
from private processes; in regulatory contract law private and public
processes of rule-making are usually blended together.
(5) Systemic coherence: in traditional contract law coherence (with past
decisions or other parts of the legal system) is a strong constraint;
in regulatory contract law coherence plays a lesser role (although
there are other types of constraints, for example, those imposed by

judicial review).
(6) Democratic legitimacy and justice: in traditional contract law
legitimacy and justice are taken for granted, but at the same time
they are heavily constrained by the focus on the bilateral relation-
ship; in regulatory contract law legitimacy and justice are widely
disputed, but may find more channels to influence the contractual
relationships.
This list proposes stark dichotomies, but they are much less clear-cut in
practice. Moreover, the same contract rule could play a traditional and a
regulatory role. Keeping these caveats in mind, the features described
above highlight the close connection between contract rules and the
rule-making processes available in a specific regulatory state. Moreover,
those features alert to the fact that traditional contract law and regulatory
contract law may well lead to different outcomes.
At first sight, the EU market-building process shows a clearer connec-
tion with the evolution of EU contract rules. But we shall see that the
relationship between the American and European versions of the regula-
tory state, on one hand, and contract law on the other hand does not lend
itself to easy interpretations.
The regulatory role of EU contract law has been the object of a lively
debate. Collins (1999, 2004, 2008) argued, first with reference to English
law and then to the future of EU law, that contract rules could play a
much broader regulatory role in the three areas of rule-making, moni-
toring and enforcement. This position explicitly endorses the view that
contract law and regulation belong to the same conceptual box of
regulatory tools. Moreover, it claims that traditional contract law can
incorporate public interests or values going beyond the private interests
of the parties.
For the purposes of this chapter, Collins most important contribution
is the catalogue of strengths and weaknesses displayed by contract rules
when employed for regulatory purposes. Whereas their reflective charac-
ter allows adaptation to parties needs, overlooking of third parties
externalities, insufficient particularity and lack of expertise by legislators
or adjudicators may reduce their regulatory capacity. However, the bulk
of the discussion is not addressed at the interplay with other bodies of
regulation, but at the internal transformation of contract law. Collins
delineates the contours of a new vision of instrumental contract law, but
does not take a position on its relationship with other bodies of
regulatory law.
The interplay becomes the central issue in the approach to regulatory

private law proposed by Micklitz (2005, 2009) and his co-authors
(Micklitz and Svetiev 2012; Micklitz et al. 2014; also see Cafaggi and
Muir Watt 2010). Regulatory private law is the product of the peculiar
features of the EU rule-making process. The latter manufactures a new
type of contract law that differs under several respects from traditional
(national) contract law. How the pre-contractual stage is defined, the
balance between default and mandatory rules, the type of available
remedies, as well as the notions of private autonomy and justice fed into
the new paradigm bear little resemblance to the branch of private law that
was systematized in the European codifications and in English common
law. Regulatory private law is tightly linked to the Single Market project
and finds itself in an uneasy relationship with national contract laws. This
analysis leaves open the possibility that the European and the national
legal orders clash, converge or merge.
The development of a new regulatory contract law is grounded on the
choices made by the EU in a large number of sectors, ranging from
financial markets to utilities. However, a different debate is also taking
place within the EU, this time with reference to the replacement of
national contract law with a new EU code. The legislative process on the
regulation for a Common European Sales Law (CESL) is the most
advanced project in this field. But its withdrawal in 2015 signals that
Member States are only willing to transfer to the EU level more limited
competences in the field of contract law.
The two projects (regulatory contract law and CESL) are difficult, if
not impossible, to reconcile. Whereas the former addresses real problems
of a multi-level regulatory system in a host of sectors, the latter relies on
arguments about the benefits of harmonization of a dubious quality. This
is not the place to discuss the codification projects in any detail. For
present purposes, the most important aspect is that the EU regulatory
approach to private law has already transformed the European debate.
The excessive instrumentalization of contract law prompted by EU
policies can be criticized (Schmid 2010), but the criticisms are not
addressed to the instrumental approach per se. They suggest that the
goals to be pursued should be different. For example, the Manifesto for
Social Justice in European contract law claims that a balance must be
struck between the Single Market agenda and the demands for distribu-
tive justice in economic relations (Brggemeier et al. 2004). This claim
implicitly accepts that contract law can and should pursue wider goals
than those closely associated with the parties. Much the same point can
be made about the role of fundamental rights in private law (Brggemeier
et al. 2010; Collins 2011) or about the principles to be applied to
contracts playing a crucial role for self-realization and human develop-

ment (Nogler and Reifner 2014).2
Looking at legislative interventions only provides a partial view of the
changes taking place in EU contract law. Much of the transformative
potential of the new paradigm resides in the daily activities of public and
private regulators at European and national level. Although their rule-
making powers vary a lot from one sector to the other, in most cases they
significantly impact on contractual relationships. This new source of
contract law raises several issues. First, are regulators using the same
concepts of traditional contract law? Or are they transforming and
adapting them? Secondly, what is the relationship between contract rules
produced by regulators and traditional contract law? We still lack final
answers to these questions, but we can at least discern some emerging
patterns. One of them has to do with the features displayed by the
contract rules written by regulators. Another one relates to the interaction
with more traditional sources of contract rule-making.
With regard to the features of the rules produced by public and private
regulators, an analogy with the process leading to the adoption of
technical standards has been proposed (Micklitz 2009). The content of
the new contract rules is decided within administrative procedures aiming
at a wide participation from different categories of interest groups. In
several cases, EU processes leave room for self- or co-regulatory
processes (Cafaggi 2011). This means that regulatory contract rules can
be qualified as soft or binding, but the distinction is much less relevant
than the default-mandatory rules dichotomy in traditional contract law.
What matters is the availability of mechanisms that, on one hand, allow
the reaching of acceptable compromises and on the other hand, avoid
abusive or anti-competitive behaviour. Plenty of examples can be found
in the fields of network or market access in the electronic communica-
tions, energy, transport and financial sectors. At the same time, legal
concepts are borrowed from traditional contract law, but they are embed-
ded in a different context that changes their meaning. Hence, pre-
contractual information rights can be used to increase the switching rate
from incumbents to new entrants, contract formation rules can be used to
avoid discriminatory behaviour in network access and rules about the
quality of the performance can be used to increase the reliability of the
infrastructures. Generally speaking, in most cases regulatory contract
2
It is possible to argue that the horizontal direct effect of fundamental rights
only strengthens the interests of the individuals concerned (Colombi Ciacchi
2011), but what is suggested in the text is that the European debate thrives on the
ambivalence between instrumental and non-instrumental arguments.
rules display the features described in the list at the beginning of this
section. Of course, they may be present with varying degrees of intensity.
With regard to the interaction with traditional sources, it is tempting to
conclude that the new regulatory contract law lives in a separate room
(Black 2004). While this could be true in some cases, it seems increas-
ingly less so today because of the pervasive nature of the new regulatory
contract law. The contemporary trend seems to be more in the direction
of hybridity (in the sense proposed by Trubek and Trubek 2006), that is,
a blend of new and old concepts to form a new one with a different
meaning or role. To pick up just one example: in the financial sector the
business conduct rules laid down by the Markets in Financial Instruments
Directive (MiFID) may be interpreted as public standards without any
relevance for contractual relationships, as a reference point for contrac-
tual duties and as a minimum threshold that does not prevent national
courts from imposing broader duties on investment service providers
(Cherednychenko 2014). What can be expected is not that the EU will
come up with a single solution for conflicts between regulatory and
traditional contract law, but that a range of mechanisms will be experi-
mented with and gradually adopted to deal with vertical, horizontal and
diagonal conflicts in the EU multi-level system (Joerges and Schmid
2011).
To what extent does the European debate tally with the contemporary
debate and evolution of US contract law? From a historical point of view,
the starting point seems to be much different. US contract law was
pushed in a direction that today shows few commonalities with the EU
turn to regulatory contract law. But we shall see in a moment that there is
more to this than meets the eye.
The starting point in the evolution of US contract law can be identified
in the loose ties connecting contracts to state sovereignty. Whereas the
legal systems of continental Europe accepted the idea that contractual
relationships can only exist within the boundaries set forth by the state,
US thinking turned such perception upside down and granted priority to
parties power to structure their private orderings (Caruso 2006: 24 ff.;
Michaels and Jansen 2008: 76 ff.). The most important implication is a
much narrower view of the proper scope of contract law. For example,
mandatory rules can be described as something extraneous to the core of
the relationship. The same view explains why remedies and enforcement
are central issues in US contract theory.
The historical processes that drove this perspective may have to do
with the conception of the individual that became dominant in late
nineteenth century American culture. The invention of a general contract
law exclusively based on consent transformed any state intervention in an
interference to be justified (Kreitner 2007). Of course, contract law as

applied by the courts did not reflect this image. Several doctrines allowed
the judges to impose limits on the parties or to fill gaps in the contracts.
Though, still today the idea of a contractual relationship almost com-
pletely detached from public interventions has a looming influence.
Consider the debate between instrumentalist and anti-instrumentalist
approaches to private law and to law more generally (Tamanaha 2006;
Kraus 2007). That such debate has been more heated in the United States
than in other countries signals a strong resistance to the idea of pursuing
external goals through contractual relationships. Moreover, even in the
instrumentalist camp the arguments supporting the pursuit of external
goals are usually confined to those interventions that are closely con-
nected to the parties interests, not to some overarching or systemic
public interest. Perhaps this approach has to do with the need to find a
middle ground that sounds acceptable to both sides of the debate (Dagan
2008; Hedley 2009). Or perhaps it is a consequence of the normative
preferences expressed by lawyer-economists, the group of scholars
usually identified as the staunchest supporters of an instrumentalist view.
More generally, it cannot be excluded that social and institutional factors
make it more difficult for the US legal system to implement public
policies with ex ante mandatory rules and easier to rely on ex post
interpretative default rules (Bagchi 2014b).
It might be surprising to find that instrumental arguments are more
easily accepted in the EU, with its majority of civil law countries, than in
the United States, where policy arguments are usually deployed by
common law courts. However, a distinction must be made between types
of policy arguments. To the extent that they refer to goals such as
efficiency, fairness and deterrence, their close connection to parties
interests allows the judges to embed them in their doctrines. However,
common law judicial developments face several constraints when broader
policy assessments are needed (Robertson 2009; Waddams 2011). There-
fore, the institutional context of the common law does not automatically
open the door to regulatory contract law.3
3
Interestingly, the US debate devotes more attention to the relationship
between regulation and tort law (e.g., Rabin 2012; Geistfeld 2014). While by no
means uncontroversial, the regulatory role of tort law seems to be received more
favourably. Several reasons might explain such difference, including the absence
of interferences between liability and consent, the supplementary role often
played by tort law with respect to regulation, and the distribution of legislative
powers between the federal and the state levels.
Of course, the US contract literature does not speak with a single

voice. It is not difficult to find positions much closer to the European
idea of regulatory contract law. In the first half of the twentieth century
the public dimension of contract law was underlined by American legal
realists. They are still cited today, but they have been unable to displace
the dominant approach (Kreitner 2007: 191). Much the same observation
can be made about relational contract theory, another influential strand in
the US debate. Stewart Macaulays work cuts across the private-public
distinction and proposes a much broader view of contractual relationships
(Gordon 2013). Similarly, Ian MacNeil pointed out that contractual
relationships can be used to achieve special public goals (MacNeil and
Gudel 2001: 554 ff.). Both authors are also associated with a normative
preference for regulated contracts akin to those available in US labour
law (see critically Scott 2013). However, even the relational approaches
are more interested in redefining the content of traditional contract law
than in exploring its relationships with other branches.
Much the same observation can be made about proposals for a pluralist
approach to contract law (e.g. Kreitner 2012; Dagan and Heller 2013;
Gilson et al. 2014).4 They all start from the premise that general contract
law needs a more fine-grained articulation to account for the characteris-
tics of a larger number of relationships. They do differ as to what
characteristics should be considered. But the main thrust of the argument
is the development of interpretative regimes that should guide the judges
in deciding contract cases. Even when an explicit link with public or
private regulation is proposed, it goes in the direction of extending to
those areas the same interpretative regime which is proposed for other
commercial relationships.5 Additionally, the many examples of private
orderings analysed in the US legal system provide further support for the
4
There are also authors that defend a unitary view of contract law (e.g.,
Oman 2009).
5
See Gilson et al. (2014: 68 ff.) with reference to the regulation of
agricultural commodities and self-regulation of food safety. The same authors
praise the EU consumer protection regime because it clearly separates the
mandatory regulation for unsophisticated parties from the common law rules of
interpretation. However, they do not refer to the regulatory role played by EU
consumer law. Also see Zamir (2014) for the observation that contemporary US
books on contract law tend to eschew any reference to statutory contract rules
and to expel consumer issues from general contract law. It seems that this
approach reflects widespread opinions about the proper scope of contract law.
See, e.g., Snyder and Mirabito (2014: 402 ff., 406 ff.) (suggesting that issues
about consent in e-commerce and public policy defences are best left to
regulatory authorities).
argument that general contract law should not play any regulatory role at
all. Hence, the US debate shows another peculiar feature: contractual
concepts and ideas can be and are exported to regulated sectors, but the
opposite track is much rarer.6
Should we conclude from the foregoing review that a deep cleavage is
going to divide US and EU contract law? Perhaps so. But there are other
corners of the US legal system we should look at before jumping to this
conclusion. State-building throughout the nineteenth and the twentieth
centuries has involved incremental changes in the balance of powers
among the federal branches as well as between the federal and the state
levels. Public interventions in the economy were made possible and at
the same time shaped by those developments and by the legal infrastruc-
tures they produced (Carpenter 2001; Mashaw 2012). Strong analogies
with the building of the EU regulatory state in the second half of the
twentieth century can be identified (Egan 2013). However, the EU
experience appears exceptional in the way it relied on private law to craft
a peculiar version of a supranational market state (Micklitz and Patterson
2013). Conversely, in the US state-building took place mainly through
changes in administrative law. This is not to say that the US regulatory
state did not have to deal with the interface between public regulation
and contract law. Judicial review of agencies decisions made it possible
to work out several doctrines whose influence is still felt today. The filed
rate doctrine is perhaps the most famous among them. It was already laid
down in early twentieth century and is still applied across the utilities
sectors (Rossi 2005: 131 ff.). Its meaning has changed somewhat in the
passage from the monopoly to the competition era. Its usefulness has
been contested and its abolition has been suggested (Bush 2006;
Vaheesan 2013; Hovenkamp 2013). But the doctrine helps identify the
borderline between contracts and regulation when it prevents any con-
tractual (or antitrust) actions against a tariff (here intended in the broadest
sense of a collection of contractual terms applied by a utility) which has
been approved by a regulator.
Much the same function is performed by another judicial doctrine
developed in the energy sector. The Mobile-Sierra doctrine, named after
two US Supreme Court cases in the 1950s, prevents the Federal Energy
Regulator (FERC) from modifying a tariff which has been agreed upon in
wholesale energy contracts, unless it adversely affects the public interest.
6
The most prominent examples are disclosure duties and default rules: see,
e.g., Sunstein (2013); Porat and Strahilevitz (2014). For a European discussion of
regulatory default rules see Mslein (2011).
The practical effect of this doctrine is to carve out a space for private
autonomy and avoid, or at least make more difficult, regulatory modifi-
cations of contracts. Developments of US energy markets in the early
twenty-first century have re-opened the debate about the interpretation of
the doctrine both in federal courts and at the FERC (McCaffrey 2009;
Haskell 2010; Tewksbury et al. 2011; Keegan 2012; White 2012).
However, the point to underscore here is that in the US legal system a
body of judicial doctrines and regulatory decisions addresses the inter-
face between contract law and regulation with sector-specific rules that
balance the public and private interests at stake. This is exactly the same
role that EU regulatory contract law tries to play. The important
difference is that in the United States, sector-specific regulation affecting
contracts shows fewer connections with general contract law than is the
case in the EU.
The difference becomes relevant in all the contexts that call for a
diffusion of each model beyond the borders of the two legal systems. To
the extent that the relationship between contract law and regulation
becomes a problem to be addressed in transnational settings, the United
States and the EU may try to export their different models. While the
United States has been generally successful in exporting its contractual
models and its drafting style (Cordero-Moss 2011), the EU has often
been successful in exporting its regulatory choices (Bradford 2012; Roda
2014). What can be expected in the near future is that both of them will
try to replicate the success of their strategies in a larger number of fields.
The multiple forums that today help manage the extraterritorial effects of
regulations in transatlantic relations (Scott 2014; Fahey 2014) may be
employed to decide on the degree of mutual deference that each contract
model is entitled to. A related issue, which will be addressed in section V,
is the influence that Western models might have in non-Western
countries.
In the field of transnational private regulation, the battle between the
two models may be ongoing already. Descriptions of private governance
can emphasize the benefits of an extension of the contractual paradigm to
areas previously monopolized by state interventions (Vandenbergh 2013)
or see it as an extension of public regulation (Cafaggi 2013). Here we
can begin to identify the dividends of a clearer understanding of
regulatory contract law. Differences between the US and EU models
might matter under two respects. First, the type of rules that are endorsed
by each model might include to a larger or lesser extent the features
listed at the beginning of this section. It can be expected that the contract
rules proposed by the US model will resemble the boilerplate provisions
of commercial relationships, while the contract rules proposed by the EU
model will resemble the regulatory provisions adopted in public regula-

tory systems. Secondly, the content of the rules in the two models may
differ from the point of view of the balance between public and private
interests. Whereas in the US model it can be expected that public
interests will be a side concern, the opposite should be true for the EU
model.
IV. CONTRACT REMEDIES VS REGULATORY

REMEDIES
This section turns from rule-making to enforcement mechanisms. The
interplay between contract and regulatory remedies will be analysed from
the point of view of the usual dichotomy between public and private
enforcement. We shall see that several countries are experimenting with
the hybridization of different types of remedies. Also, references will be
made to the interplay between remedies administered by public regula-
tors and remedies administered by private regulators.
From the vantage point of a remedial perspective, enforcement mech-
anisms grounded in regulatory and contract law may overlap in a
significant number of cases. For instance, remedies against the infringe-
ment of regulatory law or competition law can be activated by parties to
a contractual relationship. Furthermore, when the same infringement
amounts to contractual non-performance, contract remedies may serve
both to protect individual interests and to achieve regulatory goals.
Finally, criteria to coordinate public and private enforcement are needed
to avoid conflicting outcomes. But the choice of criteria depends on the
content, effectiveness and costs of each type of enforcement. Hence, the
traditional dichotomy is just the starting point for a more complex
assessment of the range of available options (Cafaggi and Micklitz 2009).
The same complexity must be acknowledged in a diachronic perspective.
Traditionally, the US legal system has been identified with a preference
for private enforcement, the European legal system with a preference for
public enforcement. In light of the developments taking place in the last
few decades, such distinction should be revised.
As far as the US legal tradition is concerned, the priority granted to
private enforcement in regulation and antitrust law can be traced back to
some crucial institutional features (Carrington 2004; Gerber 2008). In the
second half of the twentieth century private enforcement became a
conscious political strategy deployed by the two major parties to over-
come the veto points of the US legislative process and the lack of a
presidential commitment to actively enforce the statutes they passed
(Farhang 2010; Burbank et al. 2013). Since the 1980s, efforts at curbing
private enforcement have largely failed. However, a stream of Supreme
Court decisions has imposed substantive and procedural constraints on
litigation before federal courts (Burbank and Farhang 2014). This means
that private enforcement might become much less relevant in the US
legal tradition. At the same time, the antagonistic stance of the Supreme
Court toward private enforcement might have other repercussions, both
internally, with an increase of litigation rates at state level, and externally,
with a shift of some types of transnational litigation to other countries
(Childress 2014).
No less relevant are the developments that can be observed on the
European side. They point in two opposite directions. On one hand,
several initiatives on alternative dispute resolution (ADR), collective
actions and competition law damages suggest that private enforcement
could be on the rise (Hodges 2014a). These changes seem to support the
hypothesis that the EU is developing its own version of adversarial
legalism, or Eurolegalism (Kelemen 2011). On the other hand, it has been
pointed out that the EU has tried to strengthen the enforcement powers of
regulators, mostly at national level but in some cases at the EU level, too
(Micklitz 2011a, 2015b). The latter development is tightly connected to
the more general dynamics of EU-Member State relationships and to the
new role played by European agencies and networks of national regula-
tors in the rule-making and implementation phases. The stronger their
influence in the EU decision-making process, the higher the probability
that the powers of national regulators will increase (Bach and Ruffing
2013; Maggetti 2014).
For the purposes of this chapter, the developments described above are
rife with implications. To begin with, it is possible to follow the usual
approach in the enforcement literature and assume that the main goal is
to design a complementary relationship between regulatory and contract
remedies. Rightly understood, complementarity should mean that each
type of enforcement has its own sphere of application, there are no
reciprocal interferences and their combined effect is to increase the
probability of accomplishing the chosen goals. However, in both the US
and the European literature there are plenty of analyses lamenting that
such complementarity is difficult to achieve (e.g., Engstrom 2013; Lowe
and Marquis 2014). Moreover, solutions to achieve complementarity may
well differ from one sector to the other (Glover 2012; Burbank et al.
2013). This means that other types of interplay are possible and should
be managed in some way. Two of them are worth discussing here:
displacement of regulatory remedies by contract remedies and displace-
ment of contract remedies by regulatory remedies.
First, it is possible to observe a recourse to contract remedies in cases

where competition law or regulatory law would apply. This choice may
be due to lighter burdens of proof or to the limited availability of actions
for competition law damages (Hviid and Peysner 2014). The main
problem with this type of interplay is that the real impact of several
contract actions decided by different courts may be difficult to gauge.
Moreover, conflicts between judicial decisions and those of regulatory or
competition authorities cannot be avoided. The only solution is to provide
plaintiffs with the appropriate remedies in the field of regulation or
competition law.
The latter observation leads to the second type of displacement. What
can be observed in both the EU and the United States is a tendency to
introduce new regulatory remedies that go a long way toward providing
the kind of redress that could be claimed with contract or tort actions. In
the EU such a tendency is partly due to national developments and partly
to the Europeanization process. For example, the United Kingdom
granted sector regulators the power to award compensation to consumers.
Remedial action includes paying an amount to affected consumers,
preparing and distributing a written statement setting out the contraven-
tion and its consequences, or terminating or varying any contracts. In the
latter case, the consent of the affected consumer is required. Regulatory
orders can be enforced independently by consumers, who can also claim
additional damages in ordinary civil actions (e.g., Ofcom 2012; Financial
Conduct Authority 2014; Ofgem 2014). However, it can be argued that
this type of regulatory remedy greatly reduces the need for private
enforcement (Hodges 2014b).7
EU law, too, prompted national regulators to develop new remedies,
mostly in the field of adjudication of disputes among operators or
between operators and consumers (Bellantuono 2015). Of course, the
shift from contract to regulatory remedies does matter for the final
outcome. Adjudication by regulators or ADR bodies usually expands the
set of available options. Some of them lie beyond the purview of civil
courts (e.g., for the financial sector, Mak 2013). Whether this is an
advantage for all the parties involved in these adjudicatory processes is
7
The UK Consumer Rights Act 2015 consolidates consumer enforcement
measures and extends the redress powers to public enforcers for any breach of
consumer law. Redress obtained from public enforcers will foreclose individual
civil actions by consumers. The Secretary of State will be granted the power to
extend enforcement measures to private enforcers like consumer bodies or other
private organizations. See Twigg-Flesner (2016).
highly debated in the literature on dispute resolution (e.g., Meili 2010

and the contributions collected in Steffek and Unberath 2013).
Another open issue is the distribution of enforcement powers between
the national and the EU level. Today, competences are shared unevenly
and remedies are shaped haphazardly by both levels (Reich 2010;
Johnston 2013). Calls for European harmonization have already been
heard (Ottow and de Weers 2011). Though, the guiding principle in the
area of remedies is still Member States procedural autonomy, to be read
in light of the European Court of Justice case law on the principles of
effectiveness and equivalence (Dougan 2011; Rott 2013). Hence, full
harmonization does not seem practicable and more efforts should be
devoted to the search for conflict management mechanisms.
In the United States, both federal and state regulators have a long-term
acquaintance with different types of regulatory remedies. Explanations
about factors leading to the choice of each policy-making form and their
likely effects have been proposed (Magill 2004; Morriss et al. 2005;
Givati 2014). What is most interesting here is that the wide range of tools
and the substantial flexibility enjoyed in using them may reduce the
recourse to contract remedies. Regulatory settlements are examples of
policy-making forms that may produce just that outcome when they make
room for compensation to be awarded directly to final consumers or more
generally damaged parties (Doucet and Littlechild 2006; Ramus and
Zimmerman 2015). Similarly, the availability of informal and non-
binding policy-making tools increases the opportunities to press regula-
tees to adopt voluntary redress schemes or compliance programmes that
decrease litigation in court. Of course, the impact of these regulatory
measures is difficult to disentangle from other contextual factors, for
example, the pressure exerted by the threat of a class action. Moreover,
none of the policy-making forms aimed at informally pushing the
regulatees toward the desired ends or at settling enforcement actions is
free from doubts about accountability and fair distribution of benefits
(Zimmerman 2011). Still, it is of relevance that in a legal system
generally eager to incentivize private enforcement regulatory remedies
play a central role and may at times displace contract remedies.
A comparison between the United States and the EU can also be made
from the point of view of the multi-level distribution of enforcement
powers. It has been observed that the power to enforce federal law often
granted to states Attorneys General provides a useful alternative to
private enforcement, reduces the risk of under-enforcement by federal
agencies and generates the benefits usually associated with the exercise
of decentralized state authority (Lemos 2011). As we saw above, much
the same arguments are made with reference to the role played by
national regulators in the enforcement of EU law. However, in the United

States, the availability of a federal judiciary and of federal agencies with
full-fledged enforcement powers reduces the risks of conflicting deci-
sions, over-enforcement or under-enforcement. Conversely, in the EU
those risks loom larger and are kept under control with a mix of hard and
soft mechanisms (for competition law see Wils 2013; for electronic
communications see Simpson 2013). Because of these institutional differ-
ences, coordination of enforcement across levels is usually costlier in the
EU and leads to more cases of interplay between regulatory and contract
remedies.
A complex relationship can also be detected in the interplay between
remedies administered by public regulators and those administered by
private regulators. The literature on regulatory governance underlines the
benefits stemming from the enrolment of private regulators in enforce-
ment activities. The limited availability of enforcement mechanisms at
transnational level suggests that in that context private regulators may
even represent the only credible option (see the contributions collected in
Cafaggi 2012). At the same time, empirical evidence shows that private
regulators provide effective enforcement mechanisms only under rather
stringent conditions (e.g., Parker and Nielsen 2011; Black 2012). More-
over, it is usually quite difficult to identify the distinct contribution made
by private enforcement mechanisms because they are intermingled with
public ones (see the exchange between Brzel 2012 and Sabel and Zeitlin
2012). On a more general level, it should be acknowledged that the
objectives of contractual remedies are different from those of regulatory
or certification remedies (Cafaggi 2013: 1613 ff.). This means that the
respective incentives provided by each mechanism may prevail in a
specific context and leave unanswered the demand for other forms of
redress. Moreover, it cannot be excluded that some private regulators
(e.g., chain leaders) exploit the powers they have been conferred for
regulatory purposes to increase their bargaining power (Killingsworth
2014).
What the materials discussed in this section show is that the interplay
between regulatory and contract remedies cannot be left to spontaneous
coordination but must be managed with ad hoc strategies that take into
account the hybrid character of enforcement. Hybridity can be found in
the distribution of powers across different levels, in the variety of
enforcement tools that can be employed for different purposes, as well as
in the interaction between public and private regulators. Each of these
facets should be included in an enforcement strategy suitable for multi-
level and multi-enforcer settings. Arguably, contract remedies can play an
important role in such a strategy, but only if they are fully integrated with
all the other enforcement mechanisms.
V. REGULATORY CONTRACT LAW BEYOND THE

WESTERN LEGAL TRADITION
Is regulatory contract law a concept that only makes sense within the
Western legal tradition? This section suggests that the concept cannot
travel easily across different legal traditions because it is tightly con-
nected to the peculiar version of the regulatory state that prevails in the
EU and United States. However, countries developing their own versions
of the regulatory state may benefit from a reflection on the interplay
between regulation and contract law. Even though specific solutions
cannot be transplanted, the governance issues entailed by that interplay
need to be understood and interpreted in every regulatory system.
An assessment of the relevance of regulatory contract law beyond the
borders of the Western legal tradition should start from the observation
that the public-private distinction does not have the same meaning
everywhere. The two spheres are not easily distinguishable in areas of
limited statehood, that is in the states (representing the vast majority
still today) where public institutions lack the resources to implement and
enforce rules. In those areas, governance is in the hands of non-state
actors and non-hierarchical modes of social coordination are prevalent.
While both features can also be found in the EU and United States, they
take on a different meaning where no complementary relationship
between state and non-state actors is possible (Risse 2011).8
The idea of regulatory contract law is heavily dependent on the
assumption that the public and private spheres can be kept distinct. It is
exactly because of this assumption that the interplay should be managed
to avoid conflicts and to maximize the efficiency and effectiveness of
each tool. As soon as the assumption becomes untenable in a different
8
To be sure, areas of limited statehood could be identified in the East
European countries which still face problems in implementing EU standards of
regulatory contract law (e.g., Cafaggi et al. 2013; Svetiev 2013; Caruso 2015;
also see Dietz 2014 on the non-use of EU law in cross-border transactions
between West and East Europe countries). Both within and outside the EU it
seems useful to address the issue raised in this section, namely whether the
strategy of regulatory contract law can be effectively implemented, should be
dismissed or adapted to other contexts.
institutional context, it is not useful to ask whether and how well-

resourced regulators should balance public and private interests in
contractual relationships. Such a strategy requires institutional capabil-
ities that are not available. However, it still makes sense to ask whether a
regulatory strategy relying on contracts can help overcome the dearth of
public institutional resources.
The benefits and costs of regulatory strategies involving contracts will
depend on the main features of the regulatory state which prevail in a
specific country or region. It has been pointed out that tools and
institutions developed in the regulatory state of the global North acquire
a new meaning in the regulatory state of the global South (Dubash and
Morgan 2013). This observation matches with the comparative law
literature that emphasizes the role of local interdependencies and inter-
pretative practices in shaping the acceptance or rejection of foreign
transplants in developing countries (e.g., Milhaupt and Pistor 2008;
Gillespie and Nicholson 2012). If regulatory contract law is simply
another tool of the global North, the main question is what meaning
could it take in other types of regulatory states. Two examples, one from
Brazil and one from China, may provide partial answers. Both suggest
that the interplay between general contract law and regulation can be
organized in ways that differ from the US and EU models.
The 2002 Brazilian Civil Code states that freedom to contract shall be
exercised by virtue, and within the limits, of the social function of
contract (article 421; article 2035 sanctions with voidness agreements not
fulfilling the social function). These rules were directly influenced by the
broad recognition of individual and collective rights in the Brazilian
federal Constitution of 1988. For example, the protection of consumers is
connected to the fundamental principle of equality (article 5 XXXII) and
the economic order should accord with the dictates of social justice,
having due regard to, among other principles, the social function of
property and, again, the protection of consumers (article 170). Explicit
reference to the rights of users can also be found in article 175 on public
utility services. The new constitutional framework was probably one of
the factors driving the experimentation with a new type of relationship
between the state and the economy (Trubek et al. 2013).
The social function clause made it possible to argue that collective or
diffuse interests should be taken into account by the parties to the
contractual relationship. How exactly such a constitutional reading of
contract law can be reconciled with its economic goals is still debated.
The Brazilian case law has acknowledged that the social function can be
invoked to protect the weaker party, but seems more reluctant to accept
its most wide-ranging interpretations (Modenesi 2009; Albuquerque
2012; Nalin and Sirena 2013; Torres and Ribeiro 2014). For our
purposes, the most interesting observation is that in Brazil general
contract law can drive the development of the regulatory approach.
Whereas the Brazilian regulatory regime is often criticized because of its
limited use of innovative policy tools (e.g., Queiroz-Cunha and Rodrigo
2013), interdependencies between the two branches show that an inte-
grated approach is, at least in theory, possible. Conversely, both the US
and the EU had to pursue a separation approach that keeps the two
branches as distinct as possible.
To be sure, the coordination between contract law and regulation is no
less difficult to manage with an integrated than with a separation
approach. Consider, for instance, Brazilian case law in the field of
telecommunications. In a 2008 decision of the Superior Tribunal de
Justia, the legitimacy of the annual charge for the fixed telephone line
was challenged on the ground that it hampered universal access to
communications services and, as such, was against the social function of
contract and more generally the social values listed in the Constitution.
But that expansive reading was rejected by the Tribunal (Modenesi 2009:
201 ff.). Conversely, Brazilian Civil Code, article 421 does not prevent
Anatel, the Brazilian telecom regulator, from forbidding any charges in
case of reconnection of a previously interrupted communication service.9
These two decisions suggest that general contract law sets down the
boundaries of regulatory action. At the same time, they make clear that
general principles on the balance between private and social interests and
on the degree of deference to be accorded to regulators are still missing.
The Chinese example shows that contracts can be deployed in regula-
tory states with a high degree of public control to smooth out the
transition to alternative regulatory regimes. In this case, the main
advantage of contracts over other regulatory tools is to change the
incentives transmitted to the parties while at the same time safeguarding
public control. The 2012 reform of the relationship between coal
suppliers and electricity utilities exemplifies this kind of strategy. China
is the biggest producer and consumer of coal in the world; 80 per cent of
its electricity generation is dependent on coal-fired plants. Because of
this strategic role, the relationship between the coal and the electricity
sector has traditionally been heavily regulated. However, since the 1990s,
the coal market has been largely deregulated. Conversely, electricity
9
Tribunal Regional Federal da Primeira Regio, decision of 8 August 2014,
17 ff., available at www.trfl.jus.br, rejecting the challenge against the General
Regulation on the rights of consumers of telecommunications services, issued by
Anatel with decision no. 632 of 8 March 2014, available at www.anatel.gov.br/.
prices are still regulated. With coal prices becoming higher and more
volatile in the 2000s, the gap between coal prices and electricity prices
has become untenable. For several years, the Chinese government tried to
force coal suppliers to sell at low prices. However, the high rates of
non-compliance suggest that regulated prices could not be enforced
effectively when the price gap widened. In 2011, unavailability of coal
was among the causes of a power shortage (Zhao et al. 2012; Yang et al.
2012; Ming et al. 2013).
The new regulation introduced in 2012 abolished price controls and
left coal suppliers and electricity utilities the task of negotiating new
agreements. Mismatches between coal and electricity prices can be
avoided with different strategies, including vertical integration and
arbitrage with international coal markets. Moreover, the risk of rising
coal prices has been passed on to a large extent (90 per cent of the fuel
cost changes) to grid operators (IEA Coal Industry Advisory Board
2014). It is still unclear whether the new regime is sustainable in the long
run. But the interesting point here is that even regulatory states charac-
terized by a strong component of state intervention in the economy can
find innovative ways to deploy contracts for regulatory purposes. More
specifically, the new regime for the coal-electricity relationship suggests
a model of regulatory contract that helps remedy an enforcement gap.
Taken together, the Brazilian and the Chinese examples confirm that a
Western regulatory tool can take on a different meaning when transferred
to another context. Moreover, for a specific regulatory problem more than
one solution can be devised, each with different economic and distribu-
tive impacts (Kennedy 2013). We can now see more clearly that the
separation approach adopted in the EU and United States is largely due
to the peculiar path they followed in building their regulatory states. But
an integration approach (Brazil) or a partial regulation approach (China)
are equally possible in other institutional contexts. The features of
regulatory contract law listed in section III are still relevant, but they
should not be combined according to Western models. They should be
designed taking into account local factors.
Similar observations can be made about private regulation in non-
Western countries. It has been pointed out that the two main problems are
the imposition of Western private standards and the lack of effective
enforcement mechanisms (e.g., Lin 2009; De Schutter 2014). Both seem
to suggest that regulating through private contracts could be more
difficult in non-Western countries. However, such a conclusion is only
justified with reference to the Western meanings of private standards and
compliance. Different ways to organize a global supply chain, changes in
governance regimes or in enforcement mechanisms may well prompt
beneficial effects in developing countries (Maertens and Swinnen 2012;

Colen et al. 2012; Coslovsky 2013). For public as well as private
regulatory contract law, the key is to identify those contextual conditions
that allow the selection of the most useful model of interplay.
VI. POLICY CHOICES

It is highly probable that anti-instrumentalist scholars will not be
convinced by arguments in favour of regulatory contract law. At the same
time, some instrumentalist scholars might fear that regulatory contract
law goes too far in imposing constraints on private autonomy, while other
instrumentalist scholars might fear it does not go far enough in pursuing
redistributive policies.
What is important to underscore here is that the debate about instru-
mentalization has mainly developed with reference to traditional contract
law. When the interplay with regulation enters the scene, the arguments
discussed in that debate should be revised. Take, for example, the
argument that invokes a minimalist contract law on the ground that
generalist courts do not have the knowledge that would allow them to
write efficient default rules (e.g., Schwartz and Scott 2003; Morgan
2013). Whatever its merits for judicial default rules of traditional contract
law, the argument appears less plausible when interventions on contracts
are made by regulators with a high degree of technical expertise and their
decisions are reviewed by specialized courts. This is not to say that the
regulatory decision-making process is error-free (Tasic 2011; Cooper and
Kovacic 2012). What the developments discussed in this chapter suggest
is that the pros and cons of regulatory contract law need to be assessed
on empirical grounds. It is reasonable to assume that contracts can help
regulators fulfil their tasks in some contexts, not in any context. There-
fore, the institutional factors allowing successful management of contrac-
tual relationships for regulatory purposes should be identified. Moreover,
the economic and distributive impact of regulatory contract law should be
part of the analysis.
This evaluation calls for an institutional diagnostic approach akin to
those proposed by several streams of social sciences literature (McGinnis
and Ostrom 2014; Rodrik 2007; Young 2008). The aim of those
approaches fits well with comparative law inquiries. The core issue is to
unpack the main contextual factors which, across time and legal
systems, could affect the policy issue to be understood. Moreover, the
diagnostics approach explicitly assumes that the interaction among
contextual factors, and not any single factor, is the key determinant of the
final outcome.
Of course, this kind of contextual analysis can also be undertaken with
several other more or less interdisciplinary approaches proposed by the
comparative law literature.10 Assuming the perspective of the diagnostic
approach only helps to bridge them in a more integrated framework.
Nothing prevents a diagnostic approach that blends together contributions
from law, social sciences and the humanities. At the same time, efforts at
integration should bring to light fundamental divergences on ontological
and epistemological assumptions.
It is beyond the goals of this chapter to suggest how such an
integration could be carried out. But it is useful to illustrate its meaning
by listing the contextual factors that every attempt to implement the
strategy of regulatory contract law should take into account, as well as
their possible interactions:
(a) The policy-makers should identify the (local, national, supra-

national or international) level of rule-making for regulatory con-
tract law. This factor is important to understand the desirable or
undesirable features of the rule-making process (section III). Most
of the time, more than one level will be involved. Therefore, the
type of relationship among levels should be identified. In some
cases hierarchical relationships will be possible. But usually, rela-
tionships in multi-level regulatory regimes are more complex and
fragmented. They tend toward polycentricity, that is shared com-
petences along fuzzy boundaries. Virtues and vices of polycentricity
(Aligica and Tarko 2012; McGinnis and Ostrom 2012) should be
taken into account when choosing how to use regulatory contract
law.
(b) Policy-makers should also identify the level and type of enforce-
ment mechanism. This choice is closely related and to a large
extent dependent on the choices made for the rule-making process.
The debate about private and public enforcement in multi-level
systems (section IV) provides useful insights. Hybridization strat-
egies are now visible in several sectors and countries. They help
exploit the advantages usually connected to contract and regulatory
10
See e.g. Grundmann et al. (2015: 4 ff.): the governance perspective
contributes to a genuinely interdisciplinary discussion. As opposed to law and
economics, the range of disciplines that collaborate has greatly increased, and
these various disciplines contribute on an equal footing, gathering together into
one discourse community.
remedies. Also, they may reduce coordination costs more signifi-

cantly than any attempt to design complementary relationships
among different types of enforcers.
(c) Regulatory contract law is not neutral from a distributive point of
view. At the same time, there is no reason to suppose it is inherently
biased toward a specific class of interests. It has been observed that
structural distributional effects of any regulatory system are usually
dependent on the exclusion of specific categories of stakeholders
(Bthe 2013). As the examples from non-Western countries show,
regulatory contract law does not automatically prevent the consider-
ation of any public interest. On the contrary, regulatory concepts
like energy poverty or universal service broaden the range of
distributive policies that can directly affect contractual relation-
ships. Of course, like any other regulatory tool, those policies can
be exploited for rent-seeking purposes (Wiener and Richman 2010).
The crucial issues are: (1) to identify the old or new concepts of
justice that should guide the policy-makers (Micklitz 2011b) and
(2) to measure the impact of each regulatory choice. What is
already clear is that traditional arguments about the arbitrariness of
distributive justice in contract law, or about the risk of unintended
consequences of distributive policies (Bagchi 2014a) lose much of
their force when contracts are embedded in a broader regulatory
system and explicitly contribute to achieve its goals.
VII. CONCLUSIONS
In all the markets heavily dependent on some type of regulation, the
interplay with traditional contract law is inevitable. What this chapter
shows is that such interplay does not lead to a single outcome. Within the
Western legal tradition, it is possible to identify an EU model, that leans
toward the development of a completely new regulatory contract law, and
a US model, that tries to negotiate a boundary-setting strategy with both
common law and administrative law concepts. Outside the Western legal
tradition, further variants of the interplay can be identified: they can be
integrationist strategies (e.g., in Brazil) that deny any distinction between
contract law and regulation, or they can be partial regulation strategies
(e.g., in China), where the policy-makers try to exploit contractual
incentives while at the same time maintaining a tight control on the
economic activities.
The regulation/contract interplay raises many theoretical and empirical
issues that cannot find an answer in this chapter. Those issues are
entangled in some of the most debated concepts in legal and non-legal

comparative analysis, including the role and meaning of transplants, the
North-South relationship and the causal links between each regulatory
tool and a specific outcome. The mapping exercise attempted in this
chapter was meant to alert readers to the relevance of regulatory contract
law for those broader debates. Both the regulation literature and the
contract law literature should pay more attention to what happens at the
interface between the two fields. Talking about transnational or global
contract law as if it is national contract law with a wider geographic
scope risks being a worthless exercise. What is badly needed is an
in-depth exploration of the contextual factors that, in each regulatory
system, affect the interplay between contract law and regulation. Evi-
dence collected through such an exploration should then lead to policy
recommendations that help engineer the interplay. The ultimate goal is a
fruitful exchange of ideas and concepts that changes for the better the
world of traditional contract law and the world of regulation.
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PART II
MARKET VALUES AND

THEIR CRITIQUES:
PRIVATE GOVERNANCE
AND NORMATIVE
REGULATIONS
7. Enforcing bilateral promises: a

comparative law and economics
perspective
Francesco Parisi, Marta Cenini and
Barbara Luppi
I. INTRODUCTION
Legal systems use different and often conflicting terminology to refer to
a situation where the parties to a contract exchange promises, creating
mutual obligations to be fulfilled at a later time. Common law systems
refer to these situations as bilateral contracts.1 The original Restatement
on Contracts, section 12, defined a bilateral contract as one in which
there are mutual promises between two parties to the contract and where
each party is both a promisor and a promisee; in other words, an
agreement where the parties exchange promises of performance (rather
than actual performances) with one another.2 In bilateral contracts, the
offer of one party calls for a promise by the other party. Acceptance
usually takes the form of a communication by the offeree of his
counter-promise; the exchange is said to be executory and not already
executed (executory consideration). Each party is obliged to some act or
forbearance, which, at the time of entering into the contract, will take
place in the future.
On the contrary, unilateral contract means a contract where the offer
calls for an act and not for a counter-promise and the promisee does not
undertake any obligation until that moment. The original Restatement
defined a unilateral contract as one in which a promisor receives an
1
See Corbin (1982) para. 1.23 (distinguishing unilateral contracts from
bilateral contracts); see also Treitel (2003) 37 ff.
2
Restatement (Second) of Contracts, on the contrary, chooses not to carry
forward the definition of unilateral and bilateral contracts because of doubts as to
the utility of the distinction between the two types. See Restatement (Second) of
Contracts 1 cmt. f (1981). We believe that the conceptual category of bilateral
contracts remains relevant, inasmuch as it encompasses contractual situations that
share a common distinctive feature.
145
actual performance, put differently, a promise of future performance is

made in exchange for an actual present performance. The promise of
performance by one party is conditioned upon the performance of the act
by the other party and the acceptance consists in the fulfillment of the
act, which represents the executed consideration. The promise of future
performance remains an (unaccepted) offer until the other party performs
his side of the obligation (theory of unilateral contract).3
Common law lawyers usually see the contract as a promise, or as a
sum of multiple promises, that causes the promisee to rely upon the
promise, leading to a characterization of breach in terms of reliance.4 On
the contrary, civil lawyers traditionally view the contract as an agreement
that requires the meeting of two or more declarations so that the contract
could be viewed as the sum of as many declarations as there are parties.5
The notion of contract thus pivots the rule of the necessary bilaterality of
its formation. Although still present in the conventional understanding of
what constitutes a contract, this doctrine has been criticized by Rodolfo
Sacco,6 who showed that, when a contract creates obligations only upon
one party, it can be validly concluded with only the declaration of the
burdened party, so it is not true that contracts must be bilateral.7
Article 1108 of the Napoleonic Code also states that for the validity of
the contract (convention) it is only necessary for there to be le
consentement de la partie qui soblige (the consent of the party who
assumes the obligation) and at articles 1102 and 1103 it states that:
Le contrat est synallagmatique ou bilatral lorsque les contractants sobligent

rciproquement les uns envers les autres.
Il est unilatral lorsquune ou plusieurs personnes sont obliges envers une ou
plusieurs autres, sans que de la part de ces dernires il y ait dengagement.
3
See Guest (1984); Schlesinger (1968); Gorla (1955) 327 ff.; Gorla (1968)
431 ff.
4
See Klass (2010) 28; see also Carlo Marchetti, UnIntroduzione al
Contract del Draft Common Frame of Reference: la (Necessaria?) Bilateralit
Della Formazione del Vincolo (2012).
5
See Somma (2000).
6
Sacco and De Nova (2004) 243 ff.
7
The Italian Civil Code of 1865 (art. 1099) also used the term bilateral
contracts to refer to situations in which the contract creates mutual obligations of
future performance. The article was not retained in the 1942 Italian Civil Code
and the term bilateral contract has acquired different significance under the
current code. For a historical narrative of the evolved usage of this term, see
Messineo (1961).
Enforcing bilateral promises 147
As Sacco points out, at the time of its enactment, the French Civil Code
thought of contracts as means to constitute future obligations and viewed
the partys promise as a commitment under which the promisor under-
takes the obligation.8 The common law conception of bilateral contracts
more closely matches the civil law notion of synallagma and prestazione
corrispettiva, which suggest the interdependence of the two obligations
so that each promise is the consideration for the other. These notions call
to mind a link with the notion of causa, cause, consideration as the
element that justifies the burden borne by each party.9
It is significant to note, however, that in the civil law tradition, the
notion of contract comprehends both exchanges of future performances
and transfers of property or other rights. Thus, it may be that the
exchange of performances is instantaneous, as in a contract of sale. On
the contrary, as we have already noted, the notion of bilateral contracts in
the common law requires that each party is obliged to some act or
forbearance which, at the time of entering into the contract, will always
take place in the future. As a rule, unless otherwise agreed upon by the
parties, the exchange of performances should be simultaneous (hand in
hand, mano contro mano, Zug um Zug, donnant donnant). This is
because, as we will see later in more detail, both common and civil law
countries provide for rules such as the defense of non-performance: each
party can refuse to perform if the other party does not perform.
More recently, the European Draft Common Frame of Reference, at
article II.-I:101, has provided a definition of contract as an agreement
which is intended to give rise to a binding legal relationship or to some
other legal effect and that is a bilateral or multilateral juridical act. The
Draft thus confirms the traditional civil law notion of contract as an
agreement that needs for its formation two or more declarations. In
articles II-1:101 and 103, the Draft introduces the notion of juridical act
(which comprehends that of contract) as any statement or agreement
which is intended to have legal effect as such; the juridical act may be
unilateral, bilateral or multilateral and in case of a unilateral undertaking
the promise is binding even without the acceptance of the promisee. The
Draft has, therefore, kept a distinction between contracts and unilateral
juridical acts, even though an in-depth analysis has shown that this
8
The French Civil Code, therefore, states that in order to create an
obligation it is sufficient that one party has made a promise, whereas it is not
necessary that the other party has accepted. This idea has been opposed by
scholars who are anchored to the idea that contract formation requires the
meeting of two declarations: offer and acceptance.
9
Sacco and De Nova (2004) 779 ff., 792.
distinction is immaterial for most practical purposes, given the fact that
unilateral undertakings ultimately have the same discipline and the
same effects as contracts.10
Evolving terminology aside, the problem of how best to enforce the
exchange of promises of future performance remains relevant. Breach
remedies applied to these contracts in the event of unilateral and bilateral
breach determine incentives and equilibria.11
In this chapter, we develop a comparative law and economic analysis
of the breach remedies provided for these types of situations, which, for
the lack of a better and broadly accepted term, we shall interchangeably
refer to as bilateral promises or bilateral contracts. We give special
attention to the defense of non-performance and the preclusion rules that
many legal systems apply in situations of unilateral and bilateral breach.
These remedies play an important role in the enforcement of bilateral
promises and have thus far escaped the attention of comparative law and
economics scholars. In this chapter, we wish to fill this gap in the
literature, considering the effect of bilateral legal remedies applied to
situations in which the contract involves reciprocal promises of perform-
ance. The chapter is structured as follows. Section II identifies the
problem and discusses it in a historical and comparative context, paying
special attention to the alternative ways in which legal systems address
the different cases of unilateral and bilateral breach. Section III intro-
duces an analytical set-up in the context of the existing law and
economics literature. We use this framework to study the effects of
existing legal remedies on the parties performance and reliance incen-
tives when contracts involve reciprocal promises that create bilateral
investment problems. In section IV, we illustrate the results with the aid
of a numerical example. Section V concludes by revisiting the question
of optimal remedies for bilateral contracts in a comparative law and
economics perspective.
II. LEGAL REMEDIES FOR BILATERAL PROMISES

Contracts involving bilateral promises are formally governed by the same
legal principles governing contracts involving unilateral promises.12 Gen-
erally speaking, it is considered a breach of a contract when one party
does not fulfill his performance in due course or does not perform at all.
10
See Marchetti (2012); see also Acquis Group (2009) 125 ff.
11
James (1916) para. 1102.
12
Corbin (1982) para. 1.23.
However, several issues may acquire particular significance in con-

tracts that involve an exchange of promises, as these contracts create
future bilateral obligations between parties.13 In most legal systems,
when no time sequence is specified for fulfilling these obligations, the
performance of both obligations must be simultaneous and either party
can usually demand performance from the other by offering his own
performance.14 In the case of bilateral promises, the non-breaching party
may bring action only if the counterparts breach is substantial, to wit it
compromises the contract in its entirety: US courts will require that any
breach be substantial, and not a mere formality.15 Civil law systems
provide for similar rules, requiring the so-called importance of the
breach.16 When the obligations are divisible, a breach of one of them
does not count as a substantial breach of the contract: in the United
States, if the steps can be exchanged in corresponding pairs, then the
whole contract is not necessarily breached by the failure to perform one
step. This can limit the amount of damages recoverable by the non-
breaching party.
So what remedy, if any, should be given to a party who is unable to
perform and yet has undertaken investments in reliance on the other
13
Restatement (Second) of Contracts 231 (1981).
14
In most cases, when the timing of the parties performances is unspecified
or when performances are due simultaneously, either party can demand perform-
ance from the other by offering or tendering his own performance. See, e.g.,
Restatement (Second) of Contracts 238 (1981); see also UCC 2-507 (1977).
It is only when different periods are affixed within which each party is to
perform that the counter-performance is construed as conditional and dependent
on the performance of the other party. In all other situations where the same time
is fixed for performance, or where time is fixed for one party, and no time is
fixed for the other; or where no time is fixed for the performance of either party;
or where the same period is fixed in which parties may perform, performances
are presumed to be due simultaneously. In all such cases, either party can trigger
performance by the other (after the specified period has elapsed, when a time
was specified), by offering his own counter-performance. Restatement (Second)
of Contracts 234 (1981).
15
Farnsworth (1981) 267 (giving examples from English and early US law
of cases in which a non-breaching party attempted to back out of a contract by
pointing to insubstantial breaches by the defendant). Farnsworth states that this
issue arises most often today in building contracts, in which breaches must be
directed at structural features of the building in order to be considered substantial
breaches. Failure to place a correct doorknob, for example, would not be
considered substantial breach and would not relieve the buyer of paying for the
building.
16
See, e.g., Italian Civil Code, art. 1455.
partys counter-performance? Should we allow an action in contract by a

breaching party against his non-breaching counterpart? Should a breach-
ing party be able to collect damages if his counterpart was also in
breach? For bilateral contracts in which both parties promise perform-
ance capable of creating a surplus for the other party, the answer to these
questions has important practical relevance for both private and social
incentives. In the following, we consider the impact of existing legal
remedies when applied to contracts that create mutual performance
obligations.
A. Initial Unilateral Breach and the Defense of Non-Performance
Under most legal systems, in the event of a material breach or lack of

substantial performance, the non-breaching party may suspend his own
obligations under the contract.17 This means that if one party is in breach,
the other party may also breach the contract without being deemed
responsible for it. In this case, the initial non-breaching party may then
sue the breaching party and ask for the termination of the contract and
damages.
This idea has very ancient roots. In the year 294 CE, the Roman
emperors Diocletian and Maximian established that an agreement to
exchange one thing for another was not binding on either party until
there had been performance on one side which was accepted by the
other.18 This principle, also known as the defense of non-performance,
later found broad application in many legal systems and traditions, such
as French, German, Spanish, Swiss and Italian civil law and public
international law.19 The same rule is applied in the countries influenced
17
If breach is non-material (i.e., there has been substantial performance),
then the other party has a claim for damages but is not excused from fulfilling his
contractual obligation.
18
DIG. 19.4.I.2.
19
The French Code Civil adopts the exception of non-performance through
many specific provisions relating to sales (arts 1612 and 1652), barter (art. 1704),
and deposit (art. 1948), but the exception of non-performance is generally
regarded as a principle applicable to all contracts creating bilateral obligations.
Malecki (1999) 3753. Likewise, German law (BGB, s. 320) formulates the
exception as a general principle, under the title of plea of unperformed contract.
A similar approach is followed by Spanish-based legal systems (e.g., Spanish
Cdigo Civil, art. 1426 ) and by the Swiss law of obligations (Swiss Code des
Obligations, art. 82). Italian law adopts the exceptio inadimpleti contractus both
as a general principle (Italian Codice Civile, art. 1460) and as a rule applicable to
specific bilateral contracts (e.g., under arts 1565 and 1901). The defense of
by the German legal tradition, such as Austria (ABGB, sections

918921), Japan (CIV.C. 533) and China (UCL, article 68).
As a general rule, in the case of bilateral breaches the judge must
establish which breach prevails against the other, in order to ascertain
which one justified the other. The trial court must compare the overall
behavior of the parties in order to determine which party is responsible
for the most relevant violations, thereby provoking the behavior of
the counterparty and the consequent alteration of the contractual syn-
allagma.20 Once it is determined which party breached the contract first,
the common rules on damages and restitution will apply.
If it is impossible to determine who was responsible for the most
relevant violations and, therefore, the breaches are equivalent, in coun-
tries like the Philippines (Civil Code of the Philippines, article 1192) the
contract will be extinguished and each party will bear her respective
costs. In Italy,21 the judge cannot declare the termination of the contract
but must declare the rejection of both claims due to the absence of facts
supporting them: in other words, it is impossible to declare the judicial
termination of the contract without placing the responsibility of the
breach on one of the parties.22 This means that civil law systems do not
non-performance has been adopted by the United Nations. United Nations

Convention on Contracts for the International Sale of Goods, Art. 71, 11 April
1980, 1489 UNTS 3. Article 71 of the Convention provides the so-called defense
of non-performance, stating that a party may suspend the performance of his
obligation if, after the conclusion of the contract, it becomes apparent that the
other party will not perform a substantial part of his obligations. Article 72
provides that the right to withhold performance applies also in the case of
anticipatory breach of contract and provides a remedy that is available even
before the obligation becomes due, offering protection against a future breach of
contract. Cenini and Parisi (2009) 15170.
20
See Cass., 24 September 2009, no. 20614, Giust. Civ. Mass. 2009, 9 (In
order to ascertain which breach justified the other, the Court must take into
account the interests of both parties and the objective importance of the breach
and consider not only the chronological element, but also and above all the
contribution in terms of causality, the proportionality between the unfulfilled
performances and the impact of these unfulfilled performances on the overall
economic and social function of the contract. This judgment may lead to
ascertain which of the two parties shall be considered the breaching party while
the default of the other party is justified on the ground of the defense of
non-performance). See generally Sacco and De Nova (2004) 640 ff.
21
See ibid.
22
Cass., 9 June 2010, no. 13840, Giust. Civ. Mass. 2010, 6, 879. Sacco and
De Nova (2004) (arguing that the parties will thus terminate the contract for
mutual agreement).
explicitly consider the case of bilateral breach, but solve it with reference
to the unilateral breach problem. The amount of the damages may be
reduced according to the other partys level of culpability and contribu-
tion to the loss.
There are several important differences between the treatment of the
defense of non-performance, and of bilateral contracts in general,
between the civil and common law systems.23 The defense of non-
performance first arose in English law in the sixteenth century.24 Prior to
this time, a non-breaching party would have to give his own performance
before he was allowed to sue the breaching party.25 The idea that this
should not be required was finalized and set right in the famous English
case, Kingston v. Preston.26 In the United States, whether the defense of
non-performance is applicable depends on which performance is due
first. The Restatement (Second) of Contracts provides further guidance to
resolve any remaining ambiguity on when performance is due. According
to section 234, unless otherwise agreed, when performances are capable
of being simultaneous, each duty of performance is constructively
conditioned on tender of the other.27 This implies that, even if the parties
did not expressly condition their promise on performance by the other,
the law sees each partys duty to perform as conditional on the other
partys offer to perform.28 A party that is unable or unwilling to offer his
performance cannot bring an action against the other. Performance or
tender of performance by one party is a condition precedent for the
liability of the other.29 The Uniform Commercial Code also reflects this
23
See generally Treitel (1988) (discussing the differences in the ways civil
and common law systems approach the defense of non-performance and bilateral
contracts).
24
See Farnsworth (1981) 254.
25
Ibid.
26
2 Doug. 689, 99, Eng. Rep. 437 (K.B. 1773).
27
Restatement (Second) of Contracts 234(1) (1981): Where all or part of
the performances to be exchanged under an exchange of promises can be
rendered simultaneously, they are to that extent due simultaneously, unless the
language or the circumstances indicate the contrary; see also ibid. 238; UCC
2-507 (1977). The second type (conditional and dependent) makes the perform-
ance of one promise a constructive condition of performance of another.
Therefore, no counter-performance is due unless the first obligation is duly
performed. See also Corbin (1982) para. 35.6; Perillo (2003) 42429.
28
In practice, courts often depart from this principle. One partys breach of a
promise may be deemed material and thus give a right to suspend the duty to
perform even if the promise was not technically found to be a condition as well.
29
See, e.g., Kingston v. Preston, Lofft 194, 2 Doug. 684 (K.B. 1773).
preference in its rule that payment and delivery of goods must be

simultaneous.30 The rule for the sale of land is the same.31
The scope of the defense of non-performance under US law is quite
broad. The defense is available in all but a few cases, such as when
different periods are affixed within which each party is to perform.32 At
common law, a defense of non-performance gives the non-breaching
party the option of withholding performance in the event of a substantial
breach.33 A non-breaching party has two options: (1) he can refuse his
performance, invoking the defense of non-performance against the other
partys action; and (2) he may ask for a rescission of the contract.34 One
factor that may induce a non-breaching party to exercise the defense of
non-performance is the fact that collecting damages from the other party
can be a costly and difficult enterprise. A second factor is linked to the
opportunity for the non-breaching party to redeploy the performance
towards alternative uses.
30
UCC 2-507(1) (1977).
31
See, e.g., Rushton v. Campbell, 94 Neb. 141, 145 (1913) (holding that the
payment of price and the delivery of the deed are simultaneous except by prior
agreement).
32
Various contract rules reveal a heavy inclination towards simultaneous
performance of promises. The Uniform Commercial Code reveals a similar
tendency for the case of sales in which the counter-performance amounts to the
payment of a price. See, e.g., UCC 2-507 (1977) (tender of delivery is a
condition to the buyers duty to accept the goods and, unless otherwise agreed, to
his duty to pay for them). Along similar lines, UCC 2-511 states that Unless
otherwise agreed tender of payment is a condition to the sellers duty to tender
and complete any delivery.
33
Legal systems adopt different wording to characterize the seriousness of
the breach necessary before a party can exercise the defense of non-performance.
The wording ranges from material breach (Daugherty v. Bruce Realty & Dev,
Inc., 892 S.W. 2d 332 (Mo. App. 1995)), to fundamental non-performance
(UNIDROIT Principles of International Commercial Contracts), to total breach
34
Treitel (1988) 31011 (Termination [through an action for rescission]
brings to an end each partys duty to perform, though the circumstances making
the remedy available may give the injured party a right to damages; it also gives
the injured party a right to the return of his own performance on restoring what
he has received under the contract. The exception [of non-performance] does not
produce these effects but merely entitles the injured party for the time being
to refuse to perform his part.).
B. Bilateral Breach and Plaintiff in Default Preclusions
Most legal systems provide that in contracts creating bilateral obligations

between parties, when no time sequence is specified for fulfilling these
obligations, the performance of both obligations must be simultaneous
and either party can usually demand performance from the other by
offering his own performance. As a general rule, a party cannot complain
of the other partys breach if he himself is also in breach: in this case the
party cannot bring suit against the other. The system of the so-called
plaintiff in default preclusions applies to cases of bilateral breach.
A party under the US and UK systems typically cannot bring suit
unless he can show he was ready to perform his end of the bargain: this
is the so-called plaintiff in default rule.35 Even if the non-breaching
party is able and willing to offer performance, other issues may prevent
him from bringing suit. If a suit is brought, the allegedly breaching party
cannot argue that he did, in fact, perform unless his performance is
considered substantial.36 Finally, we have already seen that a court can
hold that the performances in the contract are divisible (i.e., one
incremental step toward performance by one party may require another
incremental performance by another party). If the steps can be exchanged
in corresponding pairs, then the whole contract is not necessarily
breached by the failure to perform one step. This can limit the amount of
damages recoverable by the non-breaching party.
Assuming any case can go forward, the amount of payoff may vary
considerably. In the case of bilateral breach, for instance, neither expect-
ation nor restitution damages are due by either party: a party who was
himself in breach might not be able to recover restitution for any steps he
performed.37 Just in case the plaintiff has actually performed part of the
obligation or conferred some benefit on the other party, then he might
35
36
Farnsworth (1981) 270. For example, if the breaching partys performance
could be returned to him, it would not be considered substantial. Farnsworth
again uses building contracts as an example. Piling up some building materials at
the buyers site would not be considered substantial because the builder could
take the materials back and use them elsewhere. Laying a foundation of a
building, on the other hand, would probably be considered a substantial step
toward performance. Varying degrees of performance will lead to varying
degrees of forfeiture by the breaching party. Willful breach would also make
the performance nonsubstantial.
37
See, e.g., Stark v. Parker, 19 Mass. (2 Pick.) 267, 275 (1824); Lawrence v.
Miller, 86 N.Y. 131, 140 (1881); Britton v. Turner, 6 N.H. 481 (1834).
have restitution38 in application of the rules governing the remedies in

quasi-contracts.39
Civil law systems provide for similar preclusion rules, which usually
take the form of procedural preclusion. In particular, the countries
influenced by the Code Napoleon, like France (article 1139), Italy (article
1454), Switzerland (article 82) and Quebec (articles 1591 and 1596),
provide for the so-called putting in default rule, which states that before
bringing the action the non-breaching party must offer the breaching
party an opportunity to perform. This offer may take the form of a
written letter addressed to the breaching party, or a more official form,
which may require the intervention of a public officer. For this act to be
valid, it is necessary that the claimant be ready to perform his obligation
and to offer his counter-performance. The German Civil Code (section
297) states that the obligee is not in default if the obligor at the time of
the offer is not in a position to effect performance. The Austrian ABGB,
on the contrary, provides for a substantive preclusion rule (sections
918921).
In the case of bilateral breaches, in some countries,40 each party cannot
require specific performance or expectation damages but may sue the
other party for restitution in kind. We have already seen that in the
Philippines,41 where the court is not able to determine which party was in
breach first, the contract will be extinguished and each party will bear
its respective costs. To the contrary, the Chinese legal system provides
that in the case of bilateral breach, both parties must pay damages (UCL,
article 120) or each party must demonstrate to the court to what extent
they have suffered, and the court will determine which party is entitled to
any surplus (the so-called off-setting rule).42 We can conclude that, in
actuality, only China considers the case of a bilateral breach, while the
other systems tend to solve it by reference to the unilateral breach
38
See Perillo (2003) 446. In the case of termination of the contract, which
may be a further consequence of the defense of non-performance, the initial non-
breaching party may be allowed to claim damages. Treitel (1988) 31011.
39
When remedies in quasi-contracts are available, the damages payable in
the event of bilateral breach would not be equal to zero. For the purpose of
analyzing the parties incentives, all that matters is the size of the remedy, rather
than its doctrinal label. Although the remedy generally available in restitution
may be less (and in some cases greater) than the remedy available in contracts,
its availability is nevertheless capable of minimizing the distortions otherwise
created by the preclusion rule.
40
Civil Code of Lithuania, art. 6.62.
41
Civil Code of the Philippines, art. 1192.
42
See Hsu (2007) 115; see also Gregory (2000).
problem or applying rules on quasi-contracts. The expected private

payoff of each party is discussed in section III.
III. ENFORCING BILATERAL PROMISES: A

COMPARATIVE LAW AND ECONOMICS
VIEWPOINT
In the following, we develop a comparative law and economic analysis of
the breach remedies discussed in section II, with special attention to the
defense of non-performance and the preclusion rules that many legal
systems apply in situations of unilateral and bilateral breach. As we will
demonstrate, these remedies play an important role in shaping the
incentives of the contracting parties. Here, we will introduce an analytical
set-up, in the context of the existing law and economics literature, to
study the effects of existing legal remedies on the parties performance
and reliance incentives when contracts involve reciprocal promises that
create bilateral investment problems.
A. Conventional Framing of the Contract Problem
The question of which remedy would best incentivize the optimal

performance of contracts has been widely researched by law and eco-
nomics scholars.43 The choice of damage remedies affects the promisors
commitment towards performance and the promisees reliance on the
promised performance.44 Much of the early literature in this field builds
on the contributions of Barton and Shavell.45 Barton asks how a single,
value-maximizing firm would design damage measures in order to induce
two of its divisions to make optimal breach and reliance investments.
Shavell identifies a Pareto efficient complete contingent contract at the
point of contracting in order to derive optimal contract remedies.
According to these authors, the optimal legal remedies should be
designed to mimic the entitlements that would be chosen under each of
these hypothetical frameworks. The issue of optimal remedies for breach
43
This idea is a fundamental part of any law and economics textbook. See,
e.g., Miceli, (2009).
44
In economic terms, reliance is a sunk investment that increases the value
of performance if performance takes place, but also increases the promisees loss
in the event of a breach.
45
Barton (1972); Shavell (1980).
of contract has also been investigated within the framework of incom-

plete contracts.46 These contributions showed that optimal remedies could
mitigate the well-known under-investment phenomenon in relationship-
specific assets.47
There is a general agreement in the law and economics literature that
expectation damages are best suited for promoting optimal performance
and reliance investments by the promisor and promisee to a contract.48
Expectation damages force a breaching promisor to compensate the
promisee for the forgone benefit from the contract, bringing the promisee
to the same level of utility he would have received in the event of
successful performance.49 Expectation damages create incentives for
efficient performance, since awarding expectation damages restores the
promisee to the position that he would have achieved if the promisor had
completed performance.50 Expectation damages also effectively link
liability to the benefit forgone by the promisee, in the absence of other
externalities caused by the breach.51
Under a regime of expectation damages, however, the promisee will
undertake excessive reliance. This is because expectation damages, by
compensating the promisee for the forgone benefit in the event of breach,
operate as a form of implicit insurance, inducing the promisee to invest in
reliance as if performance would likely materialize with certainty.52
The law and economics literature derives the above results using a
model involving two parties: a promisor (debtor of the performance) and
a promisee (creditor of the performance). Each party plays a specific
role: the promisor invests in performance efforts and the promisee invests
in reliance.53 In this model, at least three assumptions are made:54 (1) the
promisee pays a monetary price to the promisor, commonly known as
46
Williamson (1985); see also Hart and Moore (1990).
47
Edlin and Reichelstein (1996).
48
Eisenberg and McDonnell (2003) 1335.
49
Ibid.
50
Ibid. at 1336.
51
See Posner (1972); Shavell (1980). The standard taxonomy of contract
damages is generally based on the distinctions among expectation, reliance and
restitution interests: Fuller and Perdue (1936). Commonly adopted measures of
damages in contract law are linked to one of these three interests of the
promisee. See also Mahoney (2000) 11739.
52
Shavell (1980); Parisi, Luppi and Fon (2011).
53
Parisi, Luppi and Fon (2011).
54
The following assumptions are standard in the law and economics litera-
ture. See, e.g., Cooter and Ulen (2003).
consideration, as payment for the promisors performance; (2) the

promisee invests in reliance on the promised performance; (3) the
promisor does not invest in reliance on the promisees payment. These
assumptions allow scholars to focus their intention on the promisors
performance incentives and the promisees reliance incentives.
Although complex contractual relationships can in theory be disentan-
gled into separate agreements with unilateral performance obligations, in
many real-life situations we observe contracts with mutual obligations:
parties exchange promises rather than actual performances and each party
is at the same time a promisor of his obligation and a promisee of the
other partys obligation. In these situations, both the rights and obliga-
tions of the parties have a bilateral nature.55 As Parisi, Luppi and Fon
observe, parties choose to enter into contracts with mutual performance
obligations for a variety of reasons,56 and contracts involving the
exchange of goods or services between two parties can generate a surplus
to the receiving party when the obligation is fulfilled.57 Each party relies
on the other partys performance. In the following analysis, we consider
the effect of existing legal remedies in inducing parties to perform and
rely optimally when entering into contracts with reciprocal performance
obligations. The analysis develops a numerical illustration, which builds
on the economic model of Parisi, Luppi and Fon. The exercise is
intended to show that a bilateral obligation problem cannot be reduced to
the sum of two independent unilateral problems.
B. Extending the Conventional Approach to Bilateral Promises
Bilateral relationships are more common than unilateral relationships in

everyday contractual practice. Thus, it is important to provide answers to
questions that may arise in cases of breach of bilateral contracts. One
such question might pertain to appropriate remedies when one party is
unable to perform but has undertaken investments in reliance on the other
partys counter-performance. Courts also might ask whether there should
be legal remedies, other than resolution for non-performance, in cases of
55
56
Parisi, Luppi and Fon (2011). For example, parties may find it practical to
enter into a contract involving the exchange of goods or services, to reduce
transaction costs, to avoid outlays of money, or to reduce tax burdens. In other
situations, practical necessities may require the formation of contracts with
mutual performance obligations and it would be difficult and often undesirable to
disentangle the parties obligations, creating separate unilateral obligations.
57
Ibid.
bilateral breach. To answer these questions, we analyze the incentives

created by hypothetical rules that would allow a breaching party to
collect damages when his counterpart was also in breach. Likewise, we
analyze the result if a breaching party is allowed to force the performance
of his non-breaching counterpart.
This theoretical analysis will hopefully serve as a building block for
the understanding of the economic incentives created by the defense of
non-performance and preclusion rules in real-life contractual situations.
We examine bilateral contracts in a simplified framework, according to
the standard law and economics assumptions that parties are risk-neutral
and that they choose the level of effort and reliance that maximizes their
wealth.
In cases of contracts involving bilateral promises, one or both parties
could default on their contract obligations. In the case of a breach, the
payoff or loss for non-performance is set equal to zero; in other words,
the promisee receives no benefit in the event of breach, except for the
possible loss of reliance investment. A bilateral contract situation there-
fore has four possible performance outcomes: both parties fulfill their
contractual obligations, one party performs while the other party
breaches, and both parties breach. We consider all such cases, allowing
for the possibility of different measures of damages in the event of
unilateral or bilateral breach.
Given the set of possible outcomes, the social problem can be
described as the sum of the payoffs of parties in each of all four
possibilities, and the net of the total cost of effort and reliance investment
for both parties. If each party fulfills its contractual obligation, each
receives his sought-after gain. If one party fulfills his contractual
obligation and the other party breaches, only the latter party realizes a
gain. The symmetric analysis of payoff applies in the case of unilateral
breach by the first party. There is no payoff in cases of bilateral breach,
because revenues for non-performance are assumed to be zero.58
58
Note that this analytical set-up is different from the standard contract
scenario often discussed in the literature, according to which the second party is
not required to undertake any performance effort. By omitting the counter-
performance problem, these models implicitly assume that the probability of
success of performance by the second party is certain since he cannot possibly
fail to fulfill the contract. Further, no reliance investment is undertaken by the
first party and no gain can be realized from the nonexistent reliance investment.
This scenario may alternatively be interpreted as the case in which performance
by the second party has already taken place (unilateral contract) or where
In order to achieve a social optimum, each party should choose a level

of performance effort such that the marginal benefit of performance
efforts for the two parties, inspired by the increased probability of
successful performance, equals the marginal cost of performance effort.59
Likewise, the socially optimal reliance investments by each party are
such that the expected marginal gain from each partys reliance invest-
ment equals the marginal cost of reliance investment.
When looking at the optimum from the private parties points of view,
private costs and benefits of effort and reliance are instead taken into
account: each party acts in a way that maximizes his own private welfare
of the contract.60 The recent law and economics literature has shown that,
in order to align private and social incentives and achieve optimal levels
of performance effort, two relationships must hold. The first requirement
is that damages in the unilateral case be the traditional expectations
damages, which give the non-breaching party the benefit of the bar-
gain.61 The second requirement imposes equal differences between
unilateral and bilateral damages across parties.62 This requirement is
necessarily fulfilled when damages for unilateral and bilateral breach for
each party are set equal to each other, suggesting that in order to align
private and social incentives, courts may want to impose expectation
damages, not only in standard unilateral breach cases in which the victim
of the contractual breach was ready to perform, but also in cases of
bilateral breach, granting damages to someone who himself breached the
contract. With respect to private optimal reliance investment, the trad-
itional result63 holds, according to which setting marginal damages to
zero avoids excessive reliance.64
C. Remedies for Bilateral Contracts: A Numerical Example
With a defense of non-performance, the victim of a unilateral breach can

withhold performance and redeploy it elsewhere. In addition to the
performance by the second party can be carried out at will, without effort
investments.
59
For a standard analysis of this optimality condition, see Cooter and Ulen
(2003).
60
Korobkin (2004).
61
Schweizer (2006) 13445.
62
See Parisi, Luppi and Fon (2011) 252 (providing an analytical proof of the
results discussed here).
63
For a discussion of this concept and for an example from a game theory
point of view, see Cooter and Ulen (2003) 193222.
64
See Parisi, Luppi and Fon (2011) 258.
various advantages offered by the defense of non-performance, as dis-

cussed in section II.A, this gives the victim a benefit equal to the
redeployment value minus a damages reduction set by the court,
weighted by the probability of exercising the defense of non-
performance. Likewise, in the event of a partys own breach, he would be
liable to the other party for expectation damages.65 He would obtain the
expected reduction in damages when the non-breaching party exercises
the defense of non-performance or the expected value of counter-
performance if the non-breaching party chooses not to exercise the
defense of non-performance.66
As will be shown in the numerical example, the defense of non-
performance distorts the parties incentives, leading to an increase in
performance efforts but a decrease in reliance investments.67 In the case
of performance effort, the defense of non-performance induces both
parties to exert an excessive level of effort, above the social optimum.
This can be explained by the fact that by performing, the non-breaching
party not only avoids the threat of liability, but also eliminates the other
partys defense of non-performance, increasing the probability of obtain-
ing the sought-after contractual benefit. Performance incentives, there-
fore, are higher than those created when the breaching party only faces
liability in the measure of expectation damages. On the other hand, the
defense of non-performance dilutes the incentives for optimal reliance
since it creates a new opportunity for the dissipation of the parties
reliance investments. With some probability greater than zero, a party
who would otherwise be ready to perform may choose to exercise the
defense of non-performance. Reliance investments can therefore become
sunk not only as a result of the other partys breach, but also as a result
of the partys own breach, when the defense of non-performance is
exercised by the other party. Therefore, even if marginal damages are
zero, reliance investments become suboptimal because the sunk invest-
ment in reliance leads parties to be wary of investing too much in
reliance in the future. This sunk investment occurs whenever one party is
unable to perform and the other exercises the defense of non-
performance. The magnitude of this distortion of performance effort and
reliance investment depends on the parties expectations regarding their
counterparts use of the defense of non-performance. Factors affecting
65
Cooter and Ulen (2003) 207.
66
See Parisi, Luppi and Fon (2011) 258.
67
See ibid. (analyzing how these incentives are distorted).
these expectations might include: the presence of contract-specific

investments; uncertainty in contract litigation; opportunities to redeploy
performances; and damage adjustments that are withheld through the
defense of non-performance.
With the help of a numerical example, we will illustrate the character-
istics of specific remedies for bilateral contracts discussed above. In
order to address these issues more clearly, we consider a bilateral
contract, assuming that the contracts parties are symmetrical. In other
words, we consider the simplest case, in which parties realize the same
sought-after gain from the contract when the other party performs and the
probability that they will perform is the same.68
Each party faces two decisions: (1) how much effort to exert in
delivering their performance to the other party, thereby increasing the
probability of the performance occurring; and (2) how much to invest in
reliance, thereby increasing the value of the contract. The problem arises
when the private optimal levels of effort and reliance, i.e., the levels that
maximize the individual welfare of the parties, differ from the social
optimum, represented by those levels maximizing the joint welfare of the
parties. Legal remedies may or may not reconcile the private and social
optima. It is important to investigate the distortions induced by specific
remedies and whether these distortions can be reduced, in order to arrive
at an accurate overall evaluation of the efficiency of remedies that apply
specifically to bilateral contracts.
According to the numerical simulation presented here, the socially
optimal level of effort for both parties is equal to 4/9 units, with an
associated probability of delivering the performance to the other party
equal to 2/3. The socially optimal level of reliance investment is equal to
1/9. Both parties will experience a gain from the contract equal to 4/3 if
performance occurs, and zero otherwise.
In an ideal world of costless litigation and no administrative costs,
optimal remedies should involve bilateral expectation damages without
any additional remedy specific to bilateral contracts. In contracts involv-
ing bilateral promises, a breaching party should not be barred from
bringing an action against his contracting party demanding performance
and/or expectation damages. In order to reconcile private and social effort
incentives, the courts should grant expectation damages to the non-
breaching party. This would require the faulty party to pay the lost value
68
This numerical simulation is based on the following functions (exhibiting
the properties required in the general theoretical model): the probability of party
1 to perform is equal to e1/(e1+e2) and the value of the performance is equal to
log(r1).
of performance, both in cases of unilateral and in cases of bilateral

breach. In other words, the parties will exert the social optimal effort
level of 4/9 units, if the courts require the breaching party to pay
expectation damages, equal to 4/3 in cases of both unilateral and bilateral
breach. This condition satisfies the additional requirement needed to
align private and social incentives to invest in reliance, which imposes
zero marginal damages to avoid excessive reliance, a standard result in
the literature. In the real world, however, the legal system provides a
number of specific remedies for bilateral contracts, including the defense
of non-performance and the preclusion rule.
First, we analyze the effect of the defense of non-performance. The
defense of non-performance allows the non-breaching party to withhold
his counter-performance in the case of unilateral breach by the other
party. If counter-performance is withheld, the non-breaching party may
redeploy the performance at a redeployment value, of, for instance, 1.
Note that the redeployment value will usually be less than the value of
the contract to the breaching party, since the contract will be efficient if it
is signed between parties on the market who most value that perform-
ance. However, if the defense of non-performance is exercised, the court
will reduce the damages awarded to the non-breaching party, say 1/2.
This scenario occurs with an estimated probability of 1/2. The application
of a defense of non-performance creates a bilateral threat that leads both
parties to undertake an excessive level of effort. In the numerical example
presented here, both parties find it optimal to exert one unit of effort,
above the socially efficient level of 2/3. This is because this rule allows
the non-breaching party to threaten the breaching party with a loss of
contractual surplus. The non-breaching party threatens this because, upon
breach, the non-breaching party has the option of withholding counter-
performance. The possibility that this performance will be withheld
increases the cost of unilateral breach to the breaching party. Reliance
incentives are also distorted by the defense of non-performance, though
the effect is less severe than that on performance incentives. Both parties
invest in reliance 1/4 units, above the social optimum.
As will be discussed later, if the parties have the ability to structure
their contract as a bilateral contract subject to the defense of non-
performance, this can help to mitigate the inefficiencies induced by
insolvency and court errors. In other words, the defense of non-
performance corrects the distortion of effort for the party with limited
liability or the dilution of effort induced by court errors for both parties.
This is because the defense of non-performance creates a higher incentive
to perform, which counterbalances the dilution effect associated with
insolvency or court errors.
The same analysis carried out in the previous section can be used to
show the effects of plaintiff in default preclusion rules. When a
preclusion is applied, payoffs are similar to those described above, with
the additional fact that in the event of bilateral breach neither party may
be entitled to receive damages. The analysis would show that the
adoption of a plaintiff in default preclusion rule creates socially optimal
incentives for both parties only in the special case in which the parties
obtain equal benefit from the contract. Absent such symmetry, both
contracting parties face distorted incentives in the opposite direction: the
preclusion rule leads the party seeking the larger contractual surplus to
exert excessive effort, while the party seeking the lower contractual
surplus will be induced to exert suboptimal effort. This leads to a
paradox, since the party that produces something of lesser value than that
produced by the other party is induced to exert greater effort. This is
because the plaintiff in default rule, by precluding the right to recovery
in the event of bilateral breach, causes the contracting parties to consider
not only the potential liability that they may face in the event of breach,
but also the value of their respective contractual expectations. In other
words, incentives are distorted because the parties pay attention to the
surplus that they might lose due to the preclusion rule, rather than to the
benefit that their performance creates for the other party.
D. Summary of Results: Remedies for Unilateral and Bilateral

Breach
Several legal systems combine remedies for unilateral and bilateral

breach: a defense of non-performance similar to that discussed in section
II.A is used in cases of unilateral breach,69 and, in cases of bilateral
breach, such a defense is used in combination with preclusion rules
similar to those discussed in section II.B. In section III.C above, we
argued that in the case of a bilateral contract, the application of a defense
of non-performance may lead both parties to undertake excessive levels
of effort. This is because the defense of non-performance creates a
double threat: the breaching party faces full liability and risks losing the
benefit of his counter-performance. Reliance incentives are also distorted,
though less severely than performance incentives. A preclusion rule for
bilateral breach leads instead to a different type of distortion of incen-
tives. Unlike the defense of non-performance, the preclusion rule leads
69
See Corbin (1982) para. 1.23.
some parties to undertake excessive performance efforts, while leading

others to undertake suboptimal levels of efforts.
We can now examine the incentive problem facing a party that is
subject to a legal regime in which a defense of non-performance for
unilateral breach and a preclusion rule for bilateral breach are applied
concurrently. As shown above, the defense of non-performance leads
both parties to provide excess effort. Additionally, when parties suffer
asymmetric losses from the mutual breach, a preclusion rule will create
distortions, leading one party to exert excessive performance effort and
leading the other party to invest too little towards performance. There-
fore, in order to paint a complete picture, we need to consider the
opposing effects of the preclusions rule on the parties performance
incentives in conjunction with the effects of the defense of non-
performance. Adopting a preclusion rule mitigates the problem created
by the defense of non-performance for the party with lower surplus from
the contract, but exacerbates the already excessive incentives for the party
with higher surplus. Additionally, introducing a preclusion rule for
bilateral breach in a regime that already adopts a defense of non-
performance has a second-order effect on the parties reliance incentives.
We can summarize the effects of the plaintiff in default preclusion on
incentives, considering the effects when the rule is used alone or in
conjunction with the defense of non-performance. The preclusion rule
induces opposite distortion on effort and reliance incentives of the parties
in cases of asymmetric sought-after gains (i.e., when one party gains
more than the other from performance). In the special case of symmetry,
and only in this case, the preclusion rule induces no distortion in effort
and reliance investment. Hence, both parties will choose a private optimal
level of effort and reliance equal to the social optimum. In the case of
symmetric parties, the combined use of the defense of non-performance
and the preclusion rule induces excessive effort and reliance, since the
inefficiency induced by the defense of non-performance dominates. The
optimal choices of effort and reliance will coincide with the optimal
choices when only the defense of non-performance is available.
Table 7.1 below summarizes the efficiency results on optimal effort
when parties receive full compensation in the event of a breach. We
indicate how the privately optimal level of effort chosen under the given
remedies (indicated in the three columns of Table 7.1) compares with the
socially efficient level of effort.
The analysis conducted here suggests that the solution utilized by
many legal systems, combining defense of non-performance for unilateral
breach with preclusion rules for bilateral breach, has opposite effects on
the two parties performance incentives (mitigating the problem of
Table 7.1 Effect of bilateral remedies on incentives
Defense of non- Preclusion rule Defense of non-performance

performance and preclusion rule
Asymmetric-value contracts
excessive performance suboptimal performance excessive performance effort

effort for both parties effort for party with for party with higher surplus
higher surplus indeterminate effect on
excessive performance performance effort of party
effort for party with with lower surplus
lower surplus
Symmetric-value contracts
excessive performance optimal performance excessive performance effort

effort for both parties effort for both parties for both parties
excessive effort for one party and exacerbating the problem for the other)
and has no effect on the parties reliance incentives. Similar reasoning
applies in the case of partial compensation due to limited wealth or court
errors.
IV. IMPERFECT ENFORCEMENT AND THE ROLE OF

BILATERAL REMEDIES
In the previous sections we discussed the efficiency of incentives
provided by specific remedies applied in the enforcement of bilateral
contracts. With the help of a numerical example, we will illustrate the
characteristics of specific remedies for bilateral contracts in the presence
of contract imperfections. It will be shown that the inefficiencies induced
by insolvency and court errors can be mitigated, under some circum-
stances, by the ability of the parties to structure their contract as a
bilateral contract subject to the preclusion rule.
Many factors may affect the parties probability of receiving full
compensatory damages in the event of breach. Partial compensation
influences the optimal choice of effort and reliance for the contracting
parties, by diluting the parties optimal effort incentive (under the
conditions stated above). One factor than can lead to partial compen-
sation is the limited liability of at least one contracting party. A party is
said to be insolvent if in the case of its own breach, the party cannot fully
compensate the other party and cannot pay the damages set by the court.
In other words, a contracting party is potentially insolvent if his wealth

level cannot cover an award of at least expectation damages set by the
court. The presence of insolvency dilutes the effort incentives of the
insolvent party. In other words, limited liability will induce the insolvent
party to undertake an inefficiently low level of effort.
Court errors represent another factor that may induce partial
compensation. According to the existing literature, courts are prone to
incur systematic errors or biases in the quantification of damages.70
Likewise, courts can choose to liquidate damages according to a
measure that falls short of expectation damages due to difficulties in
proving subjective value. Alternatively, they can impose limitations on
damages based on the foreseeability of harm.71 As with limited liability,
court errors will cause a dilution of the effort incentives in the case of
undercompensation.72
Parisi, Luppi and Fon have suggested that the inefficiencies induced by
insolvency and court errors can be mitigated, under some circumstances,
by the ability of the parties to structure their contract as a bilateral
contract. The choice of bilateral contracts in real-life contractual practice
may therefore be driven by the presence of imperfect compensation.
Imperfect compensation may be present due to a number of different
reasons, including limited liability, legal costs and court errors. In a
bilateral contract, the contracting parties are given an opportunity to tie
two contractual obligations together, with incentives that are superior to
those achievable with two independent unilateral contracts. The superior-
ity of a bilateral contract derives from specific legal remedies that apply
in cases of unilateral and bilateral breach in bilateral contracts, in the
presence of imperfect compensation of the contractual parties.73
In cases of limited liability, the preclusion rule has mixed effects on
the parties incentives depending on the relative wealth of the parties.
More specifically, the preclusion rule corrects the distortion of effort
incentives for the party with higher wealth. The preclusion rule, however,
worsens the distortion of effort incentives for the party with lower
wealth. When the parties are equally limited in their wealth, the pre-
clusion rule does not have any effect on optimal effort. In a similar way,
70
Dore and Veitch (1994); Muris (1983).
71
Ayres and Gertner (1989); Goetz and Scott (1980).
72
On the other hand, overcompensation induces an inefficiently high level of
effort.
73
See Parisi, Luppi and Fon (2011) (suggesting that another example of
superiority of bilateral contract is the presence of interdependent values for the
contract among the parties).
in the case of court errors, application of the preclusion rule alone would
have mixed effects on the parties incentives. The effects depend on the
relative size of distortion of the court assessment of compensation
between the parties.
The following numerical example is designed to illustrate that specific
remedies for bilateral contracts may correct the distortion induced by
imperfect compensation on the private optimal choice of effort and
reliance. Without loss of generality, our example focuses on one specific
reason for imperfect compensation: limited liability. In the event of
limited liability, parties have a wealth level inferior to the damages set by
the court in the event of breach. In this case, parties may not receive full
compensation in case of breach. Imperfect compensation dilutes the
incentives to perform and invest in reliance. Even a small level of
insolvency induces the parties to have a private optimal level of effort
and reliance investment lower than the social optimum. Suppose that the
parties wealth is equal to 1/2. The limited liability arises when the
wealth level of the breaching party is inferior to the expectation damages,
equal to 4/3 in the numerical example (i.e., the value of the contract if the
parties act in a socially efficient way). The presence of even a small level
of insolvency dilutes the incentive to exert effort (effort then falls to 1/16
units), with a consequent reduction of the probability of performance
(probability falls from 2/3 to 1/4). The private optimal level of reliance
investment falls to 1/64, inducing a consistent reduction of the sought-
after gain from the contract (the gain falls from 4/3 to 9/8).
The defense of non-performance distorts incentives in the opposite
direction from the distortion created by limited liability. This defense
induces the parties to exert more effort and reliance than is socially
optimal. In the presence of limited liability, therefore, the defense of
non-performance can be seen as a way to compensate the party in the
presence of the phenomenon of imperfect compensation. Under the same
numerical assumption discussed above, the defense of non-performance
raises private optimal effort, from 1/16 to 1/4 units, even though it still
remains below the socially optimal level (4/9 units). This induces an
increase in the probability of performance, from 1/4 to 1/2, although the
level remains below the socially optimal level of 2/3. The private optimal
level of reliance investment increases from 1/64 to 1/16, inducing an
increase of the sought-after gain from the contract (from 9/8 to 5/4), even
if full efficiency is not regained (4/3 being the socially optimal gain from
the contract). If the preclusion rule is available, in addition to the defense

of non-performance, the equilibrium will not change.74
In Table 7.2, we summarize the efficiency results on optimal effort in
three cases of contract imperfections (limited liability, court errors and
legal costs) and compare the privately optimal level of effort with the
socially efficient one.
Table 7.2 Correcting contract imperfections with bilateral remedies
Defense of non- Preclusion rule Defense of non- performance

performance and preclusion rule
Limited liability
optimal performance effort optimal performance optimal performance efforts

for both parties efforts for wealthier for wealthier party
party suboptimal performance
suboptimal effort for poorer party
performance effort for
poorer party
Court errors
optimal performance effort optimal performance optimal performance effort

for both parties efforts for both parties
Legal costs
optimal performance effort optimal performance optimal performance effort

for both parties effort for both parties for both parties
The results in Table 7.2 may explain the conditions under which parties
may decide to entire a contract with the exchange of promises of future
performance, instead of disentangling the relationship and entering into
two independent unilateral contracts. Our conclusions are consistent with
the fact that, although parties sometimes enter into contracts with mutual
performance obligations as a matter of convenience, most real-life
examples of bilateral contracts involve relationships with imperfect
enforcement.
74
Under the symmetric case, when only the preclusion rule is available, the
equilibrium will coincide with the case when no specific remedy is available.
V. CONCLUSION
In this chapter, we study some problems that parties face when entering
into contracts with bilateral promises of future performance. After
identifying existing legal solutions in contemporary and historical legal
systems, we have observed that two rules often found in legal systems
acquire particular relevance. The first group of rules originates from the
exceptio inadimpleti contractus and is known at common law as the
defense of non-performance. This rule relieves the non-breaching party
from his duty to perform his counter-performance. This rule, by threat-
ening the breaching party with a loss of contractual surplus, increases the
cost of unilateral breach. Our numerical example shows that this may
lead both parties to undertake an excessive level of effort. Our numerical
example shows that reliance incentives are also distorted by the defense
of non-performance, though less severely than performance incentives.
The magnitude of these distortions depends on the parties expectations
regarding their counterparts use of the defense of non-performance.
Factors such as the presence of contract-specific investments, uncertainty
in contract litigation, and opportunities to redeploy withheld perform-
ances, likely affect the magnitude of the distortion created by the defense
of non-performance. The second group of rules creates procedural or
substantive preclusions (in the event of a bilateral breach), for a plaintiff
who is also in default. A plaintiff in default preclusion implies that no
damages are due by either party in the event of a bilateral breach. Our
analysis shows that a preclusion rule for bilateral breach leads to a
different type of distortion of incentives: some parties undertake exces-
sive performance efforts, while others undertake suboptimal levels of
effort.
Taken in isolation, neither remedy seems optimal for the enforcement
of bilateral promises. In an ideal world of costless litigation and no
administrative costs, optimal remedies should not include a defense of
non-performance nor a preclusion rule. Although this may appear
counter-intuitive, recent law and economics literature has shown that
granting breaching parties the right to obtain the counter-performance or
equivalent expectation damages is necessary to maintain optimal incen-
tives in most bilateral contract cases.75 Building on the recent work of
two of the current authors, our analysis suggests that the solution utilized
by many legal systems, combining remedies for unilateral and bilateral
breach, mitigates the problem of excessive effort for one party, although
75
Schweizer (2006) 13445.
possibly exacerbating the problem for the other.76 Before drawing any
firm conclusion, we should note that parties faced with a performance
problem do not generally know ex ante whether the contract will result in
default, or whether the breach will be unilateral or bilateral. The remedies
that we have considered are likely to fail when parties do not face ex
ante uncertainty and strategically rely on the other partys forthcoming
breach, choosing lower performance efforts. This strategic reliance
amplifies the inefficiency of one partys breach, contaminating the other
partys incentives.
The current process of search for transnational principles of contract
law should consider the adequacy, or lack thereof, of these legal
remedies, and maybe encourage a tailored application of bilateral con-
tract remedies in precisely those cases in which the standard remedy of
bilateral expectation damages would be most inadequate.
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8. Spontaneous order and freedom of

contract
Carlo Ludovico Cordasco
I. INTRODUCTION
As Gerald Gaus argues,1 Hayeks theory of spontaneous order has been
attacked on two opposite grounds: on the one hand, some theorists
contend that it leaves no space for reforming or evaluating existing rules
and institutional arrangements;2 on the other hand, other theorists claim
that despite Hayeks insistence on our ignorance in designing institutions,
he still offers prescriptive claims on how we should order our societies.3
Furthermore, some other theorists argue that Hayeks formulation of
spontaneous order consists merely in the protection of freedom of
contract or Lockes triad of rights (life, liberty and property).
In this chapter, I shall analyse three formulations of the theory of the
spontaneous order emerging from Hayeks account and try to show why
the positions mentioned above are ultimately mistaken.
Particularly, I will show that although Hayeks theory provides us with
reasons for limiting our pretence of modifying existing institutions
arising out of negatively free human interactions, his theory of the
spontaneous order does not justify, per se, all institutional arrangements
generated by such interactions. Moreover, I argue that Hayek provides us
with epistemic tools in order to interfere with the overall order of actions
by limiting freedom of contract with the aim of correcting the undesir-
able evolutive patterns that spontaneous orders may face.
It is important to notice that I do not aim to argue that Hayek himself
would allow for such interferences, but that they could be grounded in his
formulation of the spontaneous order.
The chapter is organised as follows: in the first part I shall introduce
what I find to be Hayeks three main requirements for social cooperation
to be possible and will analyse the concept of complexity that is crucial
1
Gaus (2006).
2
See Paul (1988).
3
See Hodgson (1993).
173
in order to comprehend Hayeks account of the spontaneous order; within

the second part I shall develop and analyse three different formulations of
the spontaneous order, emerging from Hayeks work, in order to show
that his theory is (a) not bound to justify any existing institutional
arrangements, (b) not contradictory when it prescribes how institutions
should be arranged, (c) not merely consisting in the protection of Lockes
triad of rights.
II. THREE REQUIREMENTS FOR SOCIAL

COOPERATION
In the popular television programme, The Walking Dead, after a zombie
apocalypse, a group of survivors desperately try to get rid of zombies and
to establish a peaceful social order.
The main obstacles that the group faces are essentially four:
(1) Contamination between zombies and survivors happens quite often

and they need to figure out what causes it in order to avoid it, and
how to kill zombies.
(2) People reacted differently to the zombie apocalypse: many became
thieves and it is hard to know what to expect when groups of
survivors meet.
(3) There are different and often incompatible goals, both intra-group
(among members of a single group) and inter-groups (among
different groups). For instance, in a certain group some members
may prefer to assume relevant risks to rescue their relatives, some
others might prefer to risk their lives in order to find a safer
environment, some others might think there is no such thing as a
safer environment, and that the search is ultimately worthless.
(4) Behaviours are not regulated by stable and efficient social norms.
These four obstacles might be summarised in three main points, which

also constitute what I find to be Hayeks three minimum requirements for
social order to be possible: certainty, compatibility of goals, efficiency.
If I could not attribute any probabilities on your reactions to my
actions, it would be incredibly hard to coordinate and pursue our goals.
To live in an ordered world means, in the first place, to be able to form
expectations that have a good probability to be correct. For instance, in a
post-apocalyptic scenario such as in The Walking Dead it is unclear
what kinds of conduct lead to contagion (whether the physical contact
Spontaneous order and freedom of contract 175
with zombies is enough to be contaminated), what kinds of behaviour

should we expect from other survivors, etc.
This uncertainty can be overcome mainly through the observation of
regularities. For instance, I can form expectations on how contagion
happens if I can observe regularities when analysing it. Clearly, my
expectations can be mistaken but I have, at least, some reasons to
attribute probabilities on future events. Similarly, if group X of survivors
happen to be robbed every time they meet an unknown group, group X
may reasonably come to suspect that theft is quite common among
groups of survivors and, thus, take some precautions.
There is a clear positive correlation between our ability to form
expectations on future events and the possibility of satisfying our goals:
for instance, I need to know what kinds of formal and informal conducts
may help in pursuing an academic career in the United States if I wish to
become a professor; similarly, if I do not have the ability to form
meaningful expectations on shops opening and closing times, it would be
hard to organise my day.
In fact, it is difficult to imagine how we could possibly design either
long or short-term plans aimed at pursuing our own goals without a
certain degree of certainty within our social order. The importance of
certainty in Hayeks definition of order can be easily traced by looking at
one of the most famous passages of Law, Legislation and Liberty:
[Order is a] state of affairs in which a multiplicity of elements of various

kinds are so related to each other that we may learn from our acquaintance
with some spatial or temporal part of the whole to form correct expectations
concerning the rest, or at least expectations which have a good chance of
proving correct.4
The second aspect I wish to consider is compatibility of goals. Goal

compatibility, here, should not be interpreted at a micro-level. There are,
in fact, many intuitive cases in which our goals are non-compatible with
one another in that they cannot be fulfilled together: for instance, we can
compete for a PhD scholarship, to win the Wimbledon Championships, to
become the President of the United States. However, the fact that our
goals are often non-compatible does not make playing the social game
worthless. Here, on the other hand, I refer to goal compatibility as a
general compatibility of individuals ends: for instance, it would be
meaningless to live in a society based upon theft, not just because we
4
Hayek (1982) vol. I, 36.
may consider theft as immoral, but because there is an overall incompat-

ibility of goals both among thieves and between thieves and non-thieves.
In a society based upon theft I can even form correct expectations on
other peoples reactions to my actions, but it would be worthless to play
the social game as it would hardly be a sum-positive game for the parties
involved.
Compatibility of goals clarifies why any meaningful definitions of
order relying merely on certainty are bound to be incomplete: we may
live in a society where individuals can form the correct expectation to be
robbed every time they meet someone they do not know, they can even
know the strategies through which thieves operate, but we would hardly
define such society as ordered. In a society based upon theft we can
experience different degrees of certainty, but there is no room for goal
compatibility.5
The third basic requirement I wish to focus on is efficiency. Suppose
two sisters, Penny and Julia, find a chocolate cake and they need to find
a way to divide it. Unless they spontaneously converge on a solution,
such that Julia only wants a quarter of the cake and Penny is happy with
the remaining 75 per cent, they need a norm to solve the dispute. In the
case in which the spontaneous solution is not at hand, the fact that Penny
and Julia can form correct expectations with regard to the portions of the
cake that each other desires does not necessarily mean they will be able
to reach an agreement. Norms, thus, are needed in order to find a
uniquely salient solution to a coordination problem, reducing the risk of
coordination failure. Without such solutions to coordination problems we
would hardly define our society as ordered as there is no predictable way
to settle disputes and to avoid the risk of systematic coordination failure.
The efficiency requirement, though, does not merely say we need norms
to solve such disputes; it says we need efficient norms. Suppose, again,
Penny and Julia want respectively 80 per cent and 30 per cent of the
cake: although any norm would be better than the impossibility to
peacefully coordinate, a norm dividing the cake into 70 per cent for
Penny and 30 per cent for Julia would intuitively make more sense than
another one assigning 10 per cent to Penny and 90 per cent to Julia. As
we shall see, though, what Hayek is looking for is not a single norm able
to maximise payoffs at any given situation, but rather a set of norms that
5
Although in the quoted passage Hayek seems to define order as a mere
function of certainty, many other passages clarify the importance of compatibility
of goals as a basic requirement for social order under his account. See Hayek
(1982) vol. I, 2024, 207, 211.
is able to create the conditions for cooperation and coordination allowing

for the satisfaction of compatible goals over time.
Although Hayek seems to take compatibility of goals as an exogenous
requirement (in that he takes goals as given), certainty and efficiency are,
in Hayeks mind, the two features on which the spontaneous order acts
with the aim of creating the conditions for social cooperation in order to
maximise the satisfaction of the largest number of compatible goals, as
we shall see in the rest of the chapter.
It is important to notice that each of these basic requirements is
continuous: in fact, we can imagine different degrees of certainty,
compatibility of goals and efficiency. The more is the adherence to those
requirements, the more it would be meaningful to play the social game
since it would result in an overall sum-positive game in which we all
have better chances to pursue our own goals.
III. COMPLEXITY AND THE SPONTANEOUS ORDER

Before I go through the analysis of Hayeks formulations of spontaneous
order I need to say a few words on the concept of complexity that is
crucial to comprehend the nature of the theory of spontaneous order.
Complexity plays an important role in Hayeks system of ideas insofar as
social orders are inherently complex ones. They in fact possess two main
features: non-ergodicity and high number of variables.
Economists such as Douglass North speak of non-ergodicity to define
the continually changing structure of our social orders:
If I say the world is ergodic, I mean that it has a stable underlying structure,
such that we can develop a theory that can be applied time after time,
consistently. It is very important to understand that the world with which we
are concerned is continually changing, is continually novel. That does not
mean that there are not ergodic aspects of the world. But we cannot develop
theory that can be used over and over again and over time. For an enormous
number of issues that are important to us, the world is one of novelty and
change; it does not repeat itself. There may be lessons in history, but we have
to be careful about them.6
Let us think about the invention of the washing machine, to the ways in
which it changed our lives, giving us much more free time compared to
the past, when doing the laundry used to take an entire day of the week.
This spare time could be used to go shopping at the city centre, meet new
6
North (1999) 2.
friends, cultivate new hobbies, be connected with new ideas concerning

lifestyle, politics, fashions, morality, etc. Cultural diversity is an import-
ant source of non-ergodicity, since it determines relevant changes to the
basic structure of our societies. There are even more intuitive examples of
innovations that, by cutting transaction costs, allowed us to be connected
to new people and to be acquainted with new ideas. These sorts of
innovation change, more or less directly, the basic structure of our world
with no possibility of going back to previous equilibria.
Essentially, what distinguishes a non-ergodic from an ergodic system is
the way in which their structures react to the introduction of novelty: an
ergodic system returns back to its initial state, while a non-ergodic one
changes its structure permanently. Non-ergodicity also implies two other
features of complex systems: tight coupling and error sensitivity. Com-
puter scientists refer to tight coupling to describe a system in which
hardware and software are not just linked but inextricably dependent on
one another. A small change in the structure of the former will determine
significant changes within the latter. Similarly, error sensitivity says that
if we try to reproduce a complex system, even a small error in
reproducing a single element, its structure, its positions or interactions,
will determine enormous differences in the evolution of the new system.7
Here, the elements of our complex system are individuals; the objects of
our investigation are the interactions among them, the interactions
between elements and the environment, and the equilibria arising out of
these interactions.
The other important feature concerns the high number of elements.
There is not a precise number of elements needed in order to define a
system as complex, and the individuation of complexity rests on an
intuitive level.8 For the purpose of the present chapter, though, the
individuation of the complexity of our object is intuitively clear: the
world we inhabit is characterised by a large number of elements
7
On this issue I found particularly useful the reading of Alippi, Piuri and
Sami (1994).
8
On this issue I found particularly interesting Cotsaftis (2009). Anyway, the
literature concerning complexity is incredibly vast. For a general introduction to
the concept of complexity see Mitchell (2009). Here is a list of selected works I
found extremely useful: Kauffman (1993); Simon (1962); Gell-Mann (1988);
Gell-Mann (1984); Papentin (1980); Koppl (2006).
(individuals), that are inextricably related to one another, generating

continuous moral and technological innovation.9
IV. UTILITARIANISM AND THE SPONTANEOUS

ORDER
Hayek is often regarded as a critic of the utilitarian tradition but the
theory of spontaneous order seems to belong to the utilitarian frame-
work.10 This appears to be evident from Hayeks account of the general
good in a free society as the facilitation of the pursuit of unknown
individual purposes. Such definition, in fact, opens the second volume of
Law, Legislation and Liberty and starts Hayeks critical discussion of the
utilitarian tradition.
While Hayek seems to regard the satisfaction of the largest number of
compatible goals as the ultimate aim of the theory of spontaneous order,
his attitude toward the utilitarian tradition remains sceptical. The main
reason for such scepticism can be found by looking at Hayeks know-
ledge problem:
The fact, however, is that in a Great Society in which the individuals are to be
free to use their own knowledge for their own purposes, the general welfare at
which a government ought to aim cannot consist of the sum of particular
satisfactions of the several individuals for the simple reason that neither those
nor all the circumstances determining them can be known to government or
anybody else. Even in the modern welfare societies the great majority and the
most important of the daily needs of the great masses are met as a result of
processes whose particulars government does not and cannot know.11
Here, Hayek is clearly rejecting the maximisation of particular satisfac-

tions of several individuals as the ultimate end of the Great Society on
two main grounds: first, in a complex world there is no such thing as a
planner able to know the goals of particular individuals; second, goals are
not given but emerge after a process of discovery that is dynamic and,
thus, subject to change. Such criticisms, though, do not undermine the
utilitarian soul of his moral/political theorising, but merely aim to
criticise utilitarianism on practical grounds, that is to say on how utility is
9
Despite the requirement of the large number of elements, in this chapter
many examples will only involve a few individuals. This oversimplification
should not be an obstacle for my purposes.
10
On Hayek and Utilitarianism see also Gray (1984).
11
Hayek (1982) vol. 2, 2.
to be maximised. Essentially, the utilitarian tradition, in Hayeks mind,

fails to take seriously the ignorance of legislators and planners. The
knowledge problem, indeed, seems to undermine the feasibility of naive
utilitarian approaches by ruling out the possibility of knowing indi-
viduals goals:
[That] the prime public concern must be directed not toward particular known
needs but toward the conditions for the preservation of a spontaneous order
which enables the individuals to provide for their needs in manners not known
to authority was well understood through most of history. For those ancient
authors whose ideas chiefly provide the foundations of the modern ideal of
freedom, the Stoics and Cicero, public utility and justice were the same. And
on the frequent occasions when utilitas publica was invoked during the
Middle Ages, what was generally meant was simply the preservation of peace
and justice.12
If particular goals are either impossible to be gathered to the planner or

dynamic, then, direct maximisation is problematic in two main senses.
Suppose that Alf and Betty have two different sets of goals x and y and
that Bob, the planner, is supposed to choose the set of rules that
maximises the satisfaction of the largest number of Alf and Bettys
compatible goals. If Bob is not able to know Alf and Bettys particular
goals, then, direct maximisation is strictly impossible. On the other hand,
if Bob is aware of Alf and Bettys sets of goals at t1, but the goals are
dynamic, then, the set of rules that allows for the maximisation of goals
at t1 may be different from the set of rules that would be required at t2.
This latter scenario poses four different kinds of knowledge problem:
(a) Bob is aware of x and y at t1 but cannot predict the evolution of x and
y, then, we face a classic knowledge problem starting at t2 instead of at
t1; (b) Bob is aware of x and y both at t1 and t2, but the set of rules
cannot be changed without costs for Alf and Betty; (c) Bob is aware of x
and y both at t1 and t2 but is unable to find the set that contains the
largest number of compatible goals between x and y; (d) Bob is aware of
x and y both at t1 and t2 but is unable to find the set of rules that would
lead to the satisfaction of the largest number of compatible goals over
time.
How are we supposed to maximise the satisfaction of the largest
number of compatible goals if goals are continuously changing and
cannot be known by planners or legislators? Since particular goals cannot
be the direct object of planners maximisation, the choice among sets of
rules is, ultimately, worthless. Such choice, indeed, would need to be
based on a calculation that the planner is unable to perform.
12
Hayek (1982) vol. 2, 2.
Hayeks solution to the knowledge problem seems to consist in a sort

of indirect maximisation. Specifically, rules should aim at maximising
the satisfaction of the largest number of compatible goals by securing the
conditions for cooperation and coordination. Sets of rules able to create a
cooperative environment are tools that might be able to allow individuals
to satisfy the largest amount of compatible goals within a certain social
order. In Hayeks words:
The rules of conduct which prevail in a Great Society are thus not designed to
produce particular foreseen benefits for particular people, but are multi-
purpose instruments developed as adaptations to certain kinds of environment
because they help to deal with certain kinds of situations. And this adaptation
to a kind of environment takes place through a process very different from
that in which we might decide on a procedure designed to achieve particular
foreseen results. It is based not on anticipation of particular needs, but on the
past experience that certain kinds of situations are likely to occur with various
degrees of probability. And the result of such past experience gained through
trial and error is preserved not as a recollection of particular events, or as
explicit knowledge of the kind of situation likely to occur, but as a sense of
the importance of observing certain rules.13
We may summarise Hayeks claims as follows:
(i) The main aim of a Great Society is to maximise the satisfaction of

the largest number of compatible goals.
(ii) Sets of rules should be evaluated according to their ability in
bringing such maximisation.
(iii) Particular goals cannot be known and, even if they were, rules
cannot aim to satisfy such goals as long as we cannot predict the
detailed effects that particular norms will have on the realisation of
particular goals. Hence, sets of rules chosen with the aim of
satisfying particular goals do not really bring the maximisation we
are looking for. Rule-utilitarians who endorse such calculation are
mistaken. They ignore the fact that we need rules insofar as we are
ignorant.
(iv) Sets of rules should merely promote cooperation and coordination
and should be selected according to past experience.
13
Hayek (1982) vol. 2, 4.
V. A FIRST DEFINITION OF SPONTANEOUS ORDER

Why should we rely on past experience in selecting sets of rules that
promote the conditions for cooperation and coordination? The main
reason is that rules, in Hayeks mind, are the result of a complex
selection process that embeds individual expectations and preferences.
If Bob were able to collect Alf and Bettys specific goals and to select
a set of norms that maximises their payoffs, there would no need for the
complex selection process. We may just collect information and deliber-
ate about which set of rules would be best in order to maximise payoffs.
On the contrary, when Bob is ignorant with regard to Alf and Bettys
goals or unable to perform the calculation, Hayeks solution to the
maximisation problem consists in the reliance on past experience in order
to select the best set of rules. The main questions to Hayeks solution are:
what is the relationship between past experience and the satisfaction of
goals? Which mechanism is able to select rules embedding the past
experience that is needed in order to create the conditions for cooperation
and coordination?
When payoffs are not available or it is meaningfully impossible to
choose between different sets of rules, reliance on past experience in
selecting sets of rules is motivated by the idea that the evolution of norms
tend to follow a non-random pattern that would naturally improve rules,
facilitating cooperation and coordination among individuals.
Particularly, according to Gaus, Hayek identifies three main ways in
which norms evolve: group survival, group growth and an endogenous
mechanism.14 The first two mechanisms capture the idea of an inter-
group selection of rules:
Although the existence and preservation of the order of actions of a group can
be accounted for only from the rules of conduct which individuals obey, these
rules of conduct have developed because the individuals have been living in
groups whose structures have gradually changed. In other words, the proper-
ties of the individuals which are significant for the existence and preservation
of the group, and through this also for the existence and preservation of the
individuals themselves, have been shaped by the selection of those individuals
from the individuals living in groups which at each stage of evolution of the
group tended to act according to such rules as made the group more
efficient.15
14
See also Shearmur (1996).
15
Hayek (1982).
According to those two requirements, the evolution of norms regulating

the group of Alf and Betty is shaped by a process of imitation of more
successful groups. If, for instance, Penny and Julia, complying with set
of norms k, were able to achieve better outcomes than Alf and Betty did,
under set z, Alf and Betty would naturally converge toward set k. Such
shift may not be the result of Alf and Bettys rational and intended
deliberation, but rather the unintended result of complex interactions. At
the inter-group level, the process of imitation normally concerns the
whole set of norms instead of particular rules. This is because Alf and
Betty can hardly isolate the effects of particular norms on the general
outcomes. This means that, if a particular rule R, belonging to set k
seems more efficient compared to another norm, belonging to set z, it
may very well be the case that if Alf and Betty decide to incorporate R
within z, the interaction between R and z may even worsen zs ability to
bring the desired outcomes.
The endogenous mechanism, on the other hand, works at the intra-
group level and is shaped by the competition between individuals. As
Gaus says: This stress on individual competition and the evolution of
rules suggests that, instead of a competition between social orders, Hayek
has in mind a competition between individuals within a social order that
leads to the selection and evolution of rules.16
Specifically, intra-group selection is shaped by non-random deviations
from the current set of rules. Particularly, rules that do not satisfy entirely
Alf or Betty are more likely to be violated and, thus, replaced with more
efficient rules. If Betty rightly expects that following norm b would
produce better outcomes than by complying with norm a, and such
deviation also satisfies Alf, then, b will replace a.
If any orders in which inter and intra-group selection processes of
norms take place could be defined as spontaneous, then, almost any order
would be considered as spontaneous. In fact, any institutional arrange-
ments already embed the competition processes that shape the evolution
of norms. This is to say that both the intra and inter-group selection
processes happen almost in any kinds of social order. If we are to define
norms as good or justified merely by virtue of being selected by those
mechanisms, then any norm or institutional arrangements would be either
good or justified and there would be little to say about possible
improvements. However, this is not what Hayek has in mind when he
thinks about the theory of spontaneous order. He seems to think that
improvements can be possible at the general level, or at the basic
16
Gaus (2006).
structure level. In order to show that, I need to introduce a crucial

distinction between fine-grained explanations and explanations of the
principle.
VI. EXPLANATION OF THE PRINCIPLE AND A

SECOND DEFINITION OF SPONTANEOUS ORDER
Although Hayeks account of the evolution of norms provides several and
decisive reasons for relying on existing sets of rules, it does not exclude
the possibility of prescriptive judgements on how to improve the overall
order of actions even in the absence of a detailed knowledge. Such
evaluation is made possible by Hayeks distinction between explanations
of the principle and detailed or fine-grained explanations. Specifically,
fine-grained explanations of complex systems, such as political orders,
require that we have at our disposal distinct elements whose action in
different circumstances is known irrespective of the particular model in
which we use them.17 Hence, all explanations concerning complex
systems must possess some degree of generality since [t]he model might
reproduce only the few common features of a great variety of phenom-
ena, or it may reproduce a much larger number of features common to a
smaller number of instances.18 The degree of generality, though, is not
simply the result of an agents choice but is also dictated by an
epistemological constraint, which impedes us from giving meaningful
detailed explanations of complex systems. Such constraint constitutes one
of Hayeks most relevant contributions to epistemology and consists in
the logical necessity, for any apparatus of classification, to possess a
structure of a higher degree of complexity than is possessed by the
objects which it classifies; and that, therefore, the capacity of any
explaining agent must be limited to objects with a structure possessing a
degree of complexity lower than its own.19 To fully understand the
epistemological constraint Hayek is outlining it is useful to propose one
of his examples:
The usual kind of explanation which we give, e.g., of the functioning of a

clockwork, will in our sense be merely an explanation of the principle. It will
merely show how the kind of phenomena which we call clockworks are
17
Hayek (1952) 182.
18
Ibid. 182.
19
On the relationship between Hayeks epistemological studies and the
theory of spontaneous order, see also Horwitz (2000), and Cubeddu (1993).
produced: the manner in which a pair of hands can be made to revolve at

constant speeds, etc. In the same general way most of us are familiar with
the principles on which a steam engine, an atomic bomb, or certain kind of
simple organisms function, without therefore necessarily being able to give a
sufficiently detailed explanation of any one of these objects so that we should
be able to construct it or precisely to predict its behaviour.20
Explanations of complex events, thus, always require some degree of

generality:
Even where we are able to construct one of these objects, say a clockwork,
the knowledge of the principle involved will not be sufficient to predict more
than certain general aspects of its operation. We should never be able, for
instance, before we have built it, to predict precisely how fast it will move or
precisely where its hands will be at a particular moment of time.21
The impossibility to provide detailed explanations and, thus, fine-grained

predictions of how a complex system works or evolves, that is, in Alf and
Bettys story, the impossibility to foresee the detailed consequences of
replacing one rule with another, does not prevent us from giving
prescriptive judgements on the general structure of the overall order of
actions. The ability to provide general explanations and predictions of
how a complex system works allows us to distinguish between good and
bad evolutive patterns of the overall order of actions. Essentially, it
provides us with the ability to determine which set of general rules or
principles is better in order to create the conditions for cooperation and
coordination.
Although we might not be able to produce general improvements in a
complex system by replacing single elements or changing certain kinds
of interactions among its elements, we can act at its basic structure level
in order to obtain the desired changes. This means that we are not bound
to be stuck with the existing set of rules if we know that there is a better
set of basic rules at our disposal that would produce better patterns. For
instance, going back to Hayeks example of the clockwork, we should
not rely on the time indicated by a clockwork that has not been properly
constructed. We might not possess the detailed and fine-grained know-
ledge that would allow us to correct the functioning of the broken
clockwork by applying small weights on its lancets, but we might be able
to reproduce it with a functioning basic structure.
20
Hayek (1952) 183.
21
Ibid. 183.
Our ability to provide explanations of the principle is, thus, needed in

order to theorise around the general framework of rules that would be
able to secure the conditions for cooperation and coordination even
though we are not able to predict which particular rules will arise out of
those basic and procedural rules and how particular goals are going to be
satisfied. It is, thus, the ability to provide explanations of the principle
that allows Hayek to claim that the protection of Lockes triad is the best
available solution in order to maximise the satisfaction of the largest
number of compatible goals:
Property, in the wide sense in which it is used to include not only material
things, but (as John Locke defined it) the life, liberty and estates of every
individual, is the only solution men have yet discovered to the problem of
reconciling individual freedom with the absence of conflict. Law, liberty, and
property are an inseparable trinity. There can be no law in the sense of
universal rules of conduct which does not determine boundaries of the
domains of freedom by laying down rules that enable each to ascertain where
he is free to act.22
According to such account, an order is spontaneous when it is the result

of free human interactions and not of human design. Specifically, we
have strong reasons to rely on existing rules that arise out of a system
that is based on the protection of freedom of contract.
Such definition of the spontaneous order is, thus, ultimately negative
freedom based. According to it, any institutional arrangements arising out
of a system of rules that protects our freedom of contract should be the
best ones in securing the conditions for cooperation and coordinations
and, thus, in facilitating the satisfaction of the largest number of
compatible goals.
While the first formulation defined as spontaneous any order whose
rules were the result of inter and intra-group selection processes, this
formulation defines as spontaneous any order whose particular or specific
rules arise out of individuals interactions, in a context characterised by
the protection of freedom of contract. I refer to this formulation as
spontaneity in origin.
22
Hayek (1982) vol. 1, 107.
VII. A THIRD DEFINITION OF SPONTANEOUS

ORDER
The controversial aspect of spontaneity in origin concerns Hayeks
reliance on the protection of freedom of contract as a necessary and
sufficient pre-condition in order to satisfy the largest number of compat-
ible goals. But, what motivates it?
Hayek sees rules arising out of free human interactions as prices
emerging in a free market economy:
Fundamentally, in a system where the knowledge of the relevant facts is

dispersed among many people, prices can act to co-ordinate the separate
actions of different people in the same way as subjective values help the
individual to co-ordinate the parts of his plan.23
For Bob to be able to satisfy the needs of Alf and Betty, he needs to
collect all the relevant information concerning their sets of goals and
their evolutions. For instance, Bob needs to be aware of the kinds and
quantities of goods that Alf and Betty would need. Such knowledge is not
at the planners disposal and the problem of coordinating economic
decisions, within free-market systems, is solved through the price system.
Through the price system, decisions concerning what and how to produce
are made at a decentralised level and prices work as signalling devices
that embed the knowledge dispersed among individuals. This may not be
evident in the oversimplified example concerning Alf and Betty, but it is
clear when we deal with complex orders in which many individuals play
the economic game.
Similarly, Hayek thinks of rules arising from free human interactions
as coordination devices that embed relevant knowledge. Those rules, in
fact, are supposed to embed Alf and Bettys sets of goals and should be
able to capture the evolutions of those sets. The dynamic element is
crucial in considering the importance of prices and rules arising out of
free human interactions. We might, in fact, suppose that if Alf and Bettys
sets of goals were static, the relevant information needed in order to
satisfy the set of compatible goals might be somehow available to the
planner. Changes in Alf and Bettys sets are, thus, crucial in order to
argue in favour of the price system and of rules arising from human
interactions, in order to coordinate Alf and Bettys actions:
23
Hayek (1945) 526.
If we can agree that the economic problem of society is mainly one of rapid
adaptation to changes in the particular circumstances of time and place, it
would seem to follow that the ultimate decisions must be left to the people
who are familiar with these circumstances, who know directly of the relevant
changes and of the resource immediately available to them. We cannot expect
that this problem will be solved by first communicating all this knowledge to
a central board which, after integrating all knowledge, issues its order.24
According to such account, the most important task that any order has to
satisfy in order to create the conditions for cooperation and coordination
is to be able to adapt to changing circumstances. If orders fail in adapting
to changing goals and preferences they also fail in creating the conditions
for cooperation and coordination insofar as playing the social game may
not be a sum-positive game for the parties involved when preferences and
goals change.
Hence, in order to create those conditions, we need to take into
account such dynamism. As for the price system with economic decision
making, here, Hayek seems to think about rules as devices that are
ultimately embedding the information needed to create the conditions for
cooperation and coordination. I shall refer to such definition as actual
spontaneity.25
VIII. THREE DEFINITIONS OF SPONTANEOUS

ORDER
To summarise, we have now three different formulations of the spon-
taneous order:
(i) An order is spontaneous when its rules are subject to inter- and
intra-group selection mechanisms.
(ii) An order is spontaneous when its rules are the result of a general
institutional arrangement that protects Lockes triad (spontaneity in
origin).
(iii) An order is spontaneous when it is able to adapt to new circum-
stances (actual spontaneity).
Rather than an account of the spontaneous order, (i) constitutes a

descriptive account of how the evolution of norms is shaped. When
24
Ibid. 524.
25
On the idea of Actual Spontaneity see also Cordasco and Bavetta (2015).
Hayek describes the two selection mechanisms, he does not aim to claim
that any set of rules, by virtue of being the result of those selection
processes, is either good or justified. His intent is merely to show what
drives the evolution of norms at large.
(ii) and (iii), on the other hand, are, in Hayeks opinion, necessarily
linked. Particularly, Hayek seems committed to a view that purports (iii)
as the consequence of (ii). Essentially, by protecting Alf and Bettys
rights to life, liberty and property, we create the conditions for
cooperation and coordination and allow for adaptation to changing
circumstances (such as changes in Alf and Bettys preferences and goals,
or changes in technological constraints, etc.).
However, it is not clear why the protection of those rights would
automatically lead to the ability of an institutional arrangement to adapt
to changing circumstances. It is, in fact, easy to imagine a scenario in
which spontaneity in origin may evolve in an order that does not possess
actual spontaneity; and, similarly, we can imagine orders able to adapt to
changing circumstances that are not the result of institutional arrange-
ments that merely protect rights to life, liberty and property.
We may, indeed, imagine scenarios in which the mere protection of
freedom of contract does not lead to actually spontaneous orders. Take
the case of a group of people, negatively free and unconstrained in the
pursuit of their goals, that in order to enforce non self-enforcing contracts
decide to assign the right to rule to a particular individual or to a group of
individuals, according to certain criteria. The simple fact that such a
decision is the result of people consenting to such an institutional
arrangement does not tell us anything substantive about what kind of
order will be generated. It may very well be the case that rulers will not
be willing or able to adapt the institutional structure to changes in
individuals preferences and goals. If preferences and goals change, the
institutional structure that has been chosen at t1 may not be the best one
in securing the conditions for cooperation and coordination at t2. A
particular order can be stuck with certain institutional arrangements that
satisfy the requirements of spontaneity in origin but do not satisfy those
of actual spontaneity.
Orders that are spontaneous in origin, thus, may easily generate
institutional arrangements that are unable to adapt to new circumstances.
On the other hand, we might imagine the possibility of implementing a
set of general rules that would be able to create the conditions for
cooperation and coordination over time, granting the possibility of
adaptation to changing circumstances, even when the order cannot be
defined as spontaneous in origin insofar as the implementation is not the
result of people consenting to it.
IX. CONCLUSIONS
The main aim of this chapter was to clarify that when we rule out (i)
from the set of the plausible formulations of the spontaneous order, we
are still left with the improbable claim according to which (iii) is implied
by (ii). If we accept that spontaneity in origin can lead to orders that do
not possess actual spontaneity, and that actual spontaneity can be brought
about by orders that do not possess spontaneity in origin, we have to
prioritise one of the two formulations.
If adaptation to changing circumstances seems what most captures
Hayeks idea of the spontaneous order, insofar as, without such feature,
we would hardly maximise the satisfaction of the largest numbers of
compatible goals, then (iii) is the formulation that we should prioritise.
Gaus argues that Hayeks main claims are:
(a) that we cannot devise a reasonable plan to reform our rules in order to
develop a better order of actions and, (b) because we cannot fully understand
our system of rules, we will be largely in the dark about the overall effects
of any change, so we often act in ignorance of the most important
consequences.26
This seems only partially true: we can devise reasonable plans to improve
an order, but such plans cannot be aimed at changing particular rules, but
only basic ones. For instance, we can grasp the superiority of a certain
order in collecting information and adapting to new circumstances, and
we can, thus, prescribe changes to basic institutional aspects in order to
improve the overall order of actions. What we cannot do is to aim to
reform particular rules that arise out of the overall order of actions.
Similarly, we can grasp how a spontaneous order, according to
spontaneity in origin, may evolve in a non-spontaneous one, according to
the concept of actual spontaneity, and we can imagine general rules that
may be able prevent such evolution and, thus, protect the spontaneous
order from non-spontaneous evolutions. Such a claim seems particularly
relevant and has not been ignored by Hayek:
The fact that all law arising out of the endeavour to articulate rules of conduct
will of necessity possess some desirable properties not necessarily possessed
by the commands of a legislator does not mean that in other respects such law
may not develop in very undesirable directions, and that when this happens
correction by deliberate legislation may not be the only practicable way out.
For a variety of reasons the spontaneous process of growth may lead into an
26
Gaus (2006) 253.
impasse from which it cannot extricate itself by its own forces or which it will
at least not correct quickly enough.27
Here, undesirable directions seems to refer to the inability of the system

to adapt to new circumstances and Hayek seems to attribute such bad
patterns to differences in bargaining power:
The necessity of such radical changes of particular rules may be due to

various causes. It may be due simply to the recognition that some past
development was based on error or that it produced consequences later
recognised as unjust. But the most frequent cause is probably that the
development of the law has lain in the hands of members of a particular class
whose traditional views made them regard as just what could not meet the
more general requirements of justice.28
Hence, explanations of the principle provide us with the ability to reform

general or basic rules in order to improve the overall order of actions.
Hayeks theory of spontaneous order, then, cannot merely consist in
the protection of Lockes triad, insofar as it is not clear whether freedom
of contract would always lead us toward orders that possess the ability to
adapt to changing circumstances. We may have to pose limits to our
freedom of contract in order to protect actual spontaneity.
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27
Hayek (1982) vol. I, 88.
28
Ibid. 89.
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American Philosophical Society 46782
9. Party autonomy
Horatia Muir Watt
I. OVERVIEW: THE POLITICAL ECONOMY OF

PRIVATE ORDERING
Now enshrined in Article 3 of the Rome I Regulation (593/2008/EC), the
principle that has come to be known as party autonomy, according to
which parties to an international business contract are free to choose the
governing law, emerged as a key methodological concept in the course of
the twentieth century. It served the progressive liberalization of cross-
border markets, which broke the frameworks of protectionist regulatory
schemes, emancipating international flows of capital, goods and services
from the claims of territoriality. Through a series of technical moves
which will be described below, the law has accredited freedom of choice
as the foundation of a whole parallel world of private transnational
ordering, complete with its own institutions and governing principles.
Indeed, from the resulting representation of the relationship between free
choice of law and sovereign authority stems the fiction of an autonomous
private transnational legal order, widely accepted as the source of
regulation, conceded by the various states, of cross-border relationships
between economic actors. In this perspective, party autonomy is to a
large extent the expression, within the confines of private international
contract law, of a wider political economy which serves the global
expansion of the neo-liberal market. As such, it fulfils a significant
function in creating an enabling environment for private sector activity in
the context of a globally integrated economy.
II. THEORETICAL REPRESENTATIONS OF PARTY

AUTONOMY
Under the classical liberal paradigm, party autonomy was designed to be
exercised within a political framework which ensured the ultimate
primacy of public market regulation. This scheme owes as much to
domestic contract theory as to the Westphalian model of the public
international legal order, composed (exclusively) of equal and sovereign
193
states. Together, state sovereignty and freedom of contract combined to

produce a view of the relationship between law and market in the
transnational economic sphere according to which the empowerment of
private actors was subject to limits imposed in the name of the general
interest. Whether framed in terms of public policy or overriding manda-
tory rules, such restrictions imposed upon the conduct of private trans-
national trade are set by a presumptively like-minded community of
sovereign states similarly desirous of promoting the reciprocal benefits of
international trade.
Within such a scheme, the reasons for which any sovereign state would
allow parties to contract out of its own rules and substitute those of a
neighbouring community, were to be found both in the purported special
needs of cross-border transactions and the dilution of the claim of any
one state to regulate them exclusively. This implied in turn that sovereign
states were deemed to be unconcerned, or their polities less affected, by
transactions which did not directly involve their domestic economy; in a
world where market was coextensive with territory, this idea translated
methodologically into a presumption of territoriality of national regu-
lation. And indeed, this separation of the two worlds of domestic and
international transactions had a functional justification: social and eco-
nomic policies were non-negotiable in homogeneous cases which fell
clearly within their regulatory ambit; on the other hand such policies
were not endangered by contracting-out when the relationship, bearing
foreign elements, was not perceived to belong to the local economy.
However, while contractual choice of law might be encouraged in the
interests of cross-border commerce, its corollary was the assumption that
the community of states specifically, those which were sufficiently
closely connected to the parties to justify the jurisdiction of their courts
would moderate private autonomy to accommodate the requirements of
the common good. No unbridled contrat sans loi, then, but a regulated
freedom to be subject to the sovereign legal order of ones choice. Like
international commercial arbitration, whose growth followed on the
generalization of party autonomy as a foundational principle of choice of
law, the empowerment of private actors is supposed to cater to the special
needs of international economic intercourse.
The notion that party autonomy in the international arena, like freedom
of contract in the domestic context, is a measured concession by the
liberal state to private ordering, rests on theoretical premises which are
also to be found, outside the field of contract, at the heart of multilateral
conflicts methodology. Thus, the very representation of the conflict
between laws within the continental Savignian tradition presupposes a
certain commonality of normative preferences among like-minded (and
Party autonomy 195
pre-regulatory) sovereigns. Indeed, private law, of which the province is

that of horizontal relationships between non-state actors, is perceived to
be largely facilitative of private transactions, so that a conflict of laws
may be seen essentially as the virtual availability of as many interchange-
able sets of rules as there are connections between a given set of facts
and different legal systems. Conversely, any given legal system is
assumed to provide a set of rules of contract law that can suitably (that is,
rationally) be applied in any geographical context.
This double, liberal, representation of the relationship between state
and market, law and territorial polity, had however to adjust to the rapid
growth (in Europe, largely in the second half of the twentieth century) of
public economic regulation affecting the market (such as competition,
securities, consumership) or society (health, environmental, social protec-
tion), as well as the rise of fundamental rights in fields of private law
previously considered to be immune from constitutionalization. Public
policy concerns, social rights, or lois de police (overriding provisions)
in the legislation of closely connected states, frequently endowed with
extraterritorial scope, narrowed the expanse of private empowerment.
Importantly, such concerns were relevant both to judicial proceedings
within the forum state, or in respect of foreign judgments and awards at
the enforcement stage. Thus, in a European setting, first in the Rome
Convention (Article 7) and now in the Rome I Regulation (Article 9),
room was made for provisions the respect for which is regarded as
crucial by a country for safeguarding its public interests, such as its
political, social or economic organisation, to such an extent that they are
applicable to any situation falling within their scope, irrespective of the
law otherwise applicable to the contract. Such rules may override the
otherwise applicable law when a court thinks this makes sense in terms
of the policies they express.
Beyond this adjustment, however, private international law did not
proceed to revisit the conceptualization of party autonomy in the light of
the intensive growth of market and social regulation in the domestic
sphere, with its transformation of the nature and function of private law;
nor did its methods appear to evolve in response to the decline of the
Westphalian model in international relations and the tectonic upheavals
induced by globalization within both the theory of law and sovereignty
and the reality of cross-border trade and investment. Yet within the
changed normative, political and economic environment, party autonomy
can no longer be represented as a carefully monitored concession of the
liberal sovereign state. Philosophically, the shift from obligation to
empowerment can be described in Foucauldian terms as a move to a
neo-liberal model of private governance. Technically, it involves what

might be called methodological slippage.
III. PRIVATE LEGISLATION AND TECHNICAL

DESIGN
Unquestioning acceptance of the principle of party freedom points to its
status as a foundational myth of private international economic law.
Indeed, its success has been unimpeded by the fact that significant issues
as to its real ambit remain unsettled, as will be shown below. Nor does it
seem to matter that despite its Kantian pedigree, its dominant justification
is essentially utilitarian, linked to the needs of international trade.
Although methodological, political and economic objections do appear
from time to time, albeit outside mainstream doctrine, they remain
largely unheeded; thus, neither the functionalist arguments drawn from
governmental interests analysis, nor the potential democratic deficit
resulting from the permission to contract out of local rules, nor indeed
the uncertain economic rationality underlying the apparent indifference
of states to free-riding by foreign parties on proven or novel regulatory
models, detract from its remarkable success. The latter is, most recently,
illustrated by the Draft Hague Principles on the Choice of Law in
International Contracts (2012), which set forth general principles con-
cerning choice of law in international commercial contracts. They affirm
the principle of party autonomy with limited exceptions.
The power thus conceded to private actors to harness available state
legislation to the needs of their cross-border transaction was, and still is,
perceived as doubly conditional to the requirements of the rule of law.
The first perceived expression of the latter is a condition of internation-
ality, which is supposed to prevent domestic contracts from circumvent-
ing local public policy; the second is the requirement of the public
(meaning state) origin of the chosen law, so as to prevent parties from
cherry-picking or resorting to wholly private rules. Neither, in the
contemporary legal context, fulfils the function of safeguarding the public
interest for which it was initially designed. On the contrary, as currently
framed, they create a hiatus between the rules and practice of inter-
national contracting; hence, a sense of methodological misfit. Further-
more, both serve to perpetuate a vision of the world, including the
relationship between regulation and party autonomy, on the foundations
of which the myth of autonomous private ordering was constructed.
The first condition (which, in a European setting, was already
enshrined in the Rome Convention), restricts the exercise of free choice
Party autonomy 197
of law to international contracts or rather, due to the extraordinary

difficulty of defining this cardinal requirement, to contracts of which all
the elements relevant to the situation at the time of the choice were not
located within one state. The Rome I Regulation introduces, in addition,
the idea that, for the purposes of European legislation, a domestic
contract is one which is connected solely to Member States territories as
a whole (Article 3(4)). However, whether the perspective adopted is
national or, now, European, it presupposes a bright line separating the
closely regulated world of the domestic (or intra-European) economy,
from the area of freedom where, beyond national (or European) frontiers,
state policies relax their grip. The rise of the regulatory state, entailing
the multiplication of overriding mandatory rules or lois de police with
extraterritorial thrust (as seen above), has made it difficult to maintain the
bright line between domestic and international spheres in terms of the
respective intensity of state interests. In other words, the idea that
sovereign regulatory concerns stop at national borders could not survive
either the appearance of new forms of market regulation or the growing
interconnectedness of local economies.
Across the Atlantic, attempts were made to adjust methodology to the
increasingly regulatory function of private law. Although these attempts
were not always successful in the long run, the important lesson of the
American realist revolution was that multilateralism was unworkable in a
world where private law is neither purely facilitative nor indeed inter-
changeable. In a functionalist perspective, conflicts of laws arise from the
existence of contradictory regulatory interests, identified by sounding out
the policies of the states involved. However, they are considered as
strictly derogatory, in the sense that they do not represent the normal
way of reasoning in the conflict of laws. Therefore, they do not affect the
initial requirement that the contract be international, or non-domestic, for
the principle of party choice to come into play as a choice of law rule,
accrediting in turn the distinctiveness of the world of international
transactions. Maintaining this multilateralist fiction contributes to per-
petuate the underlying world-view of a community of states conceding an
area of party freedom beyond their frontiers, but over which they retain
the ultimate control.
This representation of an orderly world in which benign liberal states
determine the outer limits of private economic activity is also linked to
the second limitation to free choice. Today, within the Rome I Regu-
lation, like half a century ago in national case law, although parties may
choose any law in the world, with no requirement as to geographical
linkage to the state whose law is thus chosen and no condition as to the
completeness, modernity or democratic legitimacy of its legal system,
their freedom nevertheless stops short of non-state norms such as the lex
mercatoria or the UNIDROIT rules for international contracts. These,
according to recital 13 to the Rome Regulation, may merely be incor-
porated by reference into the contract, where they are necessarily subject
to the contrary provisions of the governing law. Underlying this second
restriction is the idea that the contract law of liberal states is presump-
tively interchangeable, because it is deemed to be based on a shared
conception of societal needs (albeit largely facilitative and exclusive of
specific regulatory interference), whereas norms of purely private origin
cannot be supposed to implement similar conceptions. In other words,
according to this vision, it was important that the parties should not
escape the network of state regulation.
The fear inspired by the concept of private legislation, or, even more
forbidding, le contrat sans loi, may or may not be justified: it could
well be, as frequently argued, that the content of the new law merchant
has now developed sufficiently so as to present a coherent, reasonably
complete and generally acceptable set of operative principles; it is also
arguable that carefully thought out principles of substantive contract law
drafted at an international level may be more valuable and adjusted to the
needs of cross-border trade than many state laws which might be less
progressive, less clear, more parochial, etc. In economic terms, the
burden of over-regulation could be an evil greater than excessive freedom
in the international sphere. But the point here is that if the mandatory
social and economic policies of connected states are implemented
whenever it makes sense to do so in functional terms, then the quality of
whatever non-state contract norms the parties may have chosen (in the
unlikely event they have committed themselves to incomplete, incoherent
or non-progressive principles) hardly matters. In the absence of a specific
regulatory interest, which would trump any other chosen rule anyway, the
choice of non-state law does not endanger the public policies of
potentially concerned states, of which, on the other hand, the protection
is inadequately ensured by the sole requirement that the parties choose a
state law. Excessive focus on the latter has signified, paradoxically, that
party autonomy has ceased to imply subordination of private actors to
state authority.
IV. CHANGES OF STATE: REVERSAL OF THE

RELATIONSHIP BETWEEN LAW AND MARKET
Private actors are empowered to attain regulatory lift-off because the
liberal state has renounced or has been constrained by competitive
Party autonomy 199
economic forces to give up the means to ensure the primacy of its own,
or anothers, public policy regulation over private legislation. Indeed,
the changing global context in which party autonomy is exercised, and to
which it has largely contributed both as a foundational myth and a
methodological tool, has induced two significant functions for which it
was not initially designed. These changes of state are directly linked to
those which affect the relationship between law and market. By allowing
parties to cross jurisdictional barriers unhindered, the principle of free
choice reverses the relationship between public regulation and private
choice and generates a competitive market for legal products and judicial
services.
The first symptom of a reversal of the status of regulation in respect of
party choice law, jurisdictional barrier-crossing, results from the com-
bined effect of choice of forum, choice of law and free movement of
decisions or awards. The general acceptance of free choice of forum in
cross-border litigation, in the name of party autonomy, along with the
spectacular rise of arbitration, is traditionally justified in terms of the
promotion of international commerce through the benefit of predictabil-
ity, procedural economy and litigation risk-management. Such concerns
hold true even when internationally mandatory provisions are at stake:
there is no particular reason why courts should not be trusted mutually to
uphold the interests of the members of a benign community of states and
indeed, the Rome Convention (Article 7(1)) and Regulation (Article 9(3))
have gone a long way down this path. Reputedly more flexible, inter-
national commercial arbitration presents all these advantages, with the
added attraction of confidentiality; furthermore, when political stakes are
high, such as in state investment contracts, it offers an appearance of
neutrality, its legitimacy being enhanced by increasing institutional-
ization. Increasingly commonplace in practice, such agreements have
thrived as initial doubts as to the desirability of allowing private actors to
appropriate access to the courts have dwindled.
Free choice of forum obviously impacts upon the applicability, and
thereby the imperativity, of the mandatory rules of any state other than
the chosen forum (which in the case of arbitration means practically none
at all). This is why the liberal scheme on which party autonomy rests
presupposes that any extension of the scope of party choice of court, or
the enlargement of arbitrability, is compensated by the right to a second
look by the supervising or enforcing state over the judgments or awards
issuing from the chosen forum. This scheme is apparent in the US
Supreme Courts famous dictum in the Mitsubishi case, whereby in the
event that choice-of-law forum and the choice-of-law clauses operated in
tandem to as prospective waiver of a partys right to pursue statutory
remedies for antitrust violations, we would have little hesitation in

condemning the agreement as against public policy. But it rapidly
became apparent that the second look was, in many instances, either
unrealistic (when no enforcement was required, the parties having settled,
for instance), or problematic (when the supervising court is not better
equipped than the arbitrator to make an assessment on the merits in
economic terms), or indeed practically excluded through deference to the
chosen forum (as in cases as notorious as the Lloyds litigation). A
powerful economic incentive for states to renounce their second look
has been to provide a free zone for the arbitration industry.
Indeed, and secondly, the generalization of choice of court agreements,
along with the parallel growth of international arbitration, is now
understood as giving rise to a worldwide market in adjudication or
dispute resolution. Enhancing global jurisdictional competition would
supposedly reap benefits in terms of the improvement of the quality of
courts worldwide. However, the real problem lies in the fact that when
court access is thus privatized, there is a correlative absence of judicial
(or arbitral) regulation of interests beyond those of the parties to the
dispute. In this respect, it is instructive to turn to the conclusion, which
can hardly be suspected of anti-libertarian bias, reached by Landes and
Posner using economic analysis of justice in respect of the domestic
judicial system: privately designated judges lack both the legitimacy
(conferred by public investiture) and the (private financial) incentive to
take account of societal interests in their decision-making process. This
conclusion certainly plays out, for instance, in respect of the impact of
human rights in investment arbitration, where contractual mandate and
choice of law pre-empt any consideration of wider public or third party
interests. Although, of course, the public financing of the court system
establishes both the legitimacy and the incentive which arbitration lacks
in protecting societal interests beyond those of the parties to the
litigation, the tendency of courts designated by choice of forum agree-
ments to act as if they were arbitrators obviously detracts from this
particular regulatory function.
V. DISTRIBUTIONAL EFFECTS OF PARTY

AUTONOMY: HORIZONS
The centrality of private choice of law in the European tradition is so
taken for granted, or at least, appears to be so solidly rooted in the
history of Western private international law, that astonishingly little
attention has been paid to the function it fulfils within the changing
Party autonomy 201
economic and political environment induced by globalization. The cloak

of tradition is reinforced by more recent law and economics doctrines,
which tend to promote party autonomy as efficiency, in the form of
predictability, reduced transaction costs or facilitated risk-management.
No doubt these virtues exist, at least for the party whose skills in contract
negotiation and drafting are strongest. It is highly probable, however, that
the interests purportedly served by unbridled freedom of choice, whether
cast as those of the market or of a purported community of merchants, do
not allow for adequate governance of the cross-border activities of private
actors. In this respect, the (in)famous Lloyds litigation serves as a
cautionary illustration of the cumulative effect of contract doctrine and
private international law theory. Thus, under a wider perspective than that
offered by various dimensions of private law doctrine, it becomes clear
that party autonomy no longer serves to free private enterprise from
entrenched parochial constraints under the benign supervision of a
community of liberal states, but works to transform national public
regulation into a disposable private good in a deregulated economy. This
holds true even after the various recent financial crises and the disastrous
role played by self-regulation in subordinating wider public concerns to
speculative interests.
In this respect, the implications of party autonomy for what has been
aptly described as regulatory liftoff must be seen in the context of the
various legal tools which provide the private legal infrastructure of global
markets and foreign investment. Among these, within the European
context, free movement of goods and services entertains a symbiotic
relationship with party choice, the latter being the metaphorical expres-
sion of cross-border mobility and regulatory arbitrage. While consumer
protection has found its place here, neither social rights nor the produc-
tion chains which supply the European consumer market benefit from
similar solicitude. Indeed, more globally, party autonomy also structures
transnational production and supply chains (generating what has been
described as a plug-in effect in respect of sub-contractors and sup-
pliers), and can moreover be linked in this context to direct investment,
of which it supports the international (contractual) regime. The private
legal regime thus created is reinforced, on the one hand, by private
international law rules in tort, when they work to keep any obligation to
pay attention to third party interests under the sway of local law, itself
often constrained to lower the level of reparation by reason of com-
petition to attract foreign investment. On the other hand and furthermore,
the private international law regime governing the structure of multi-
national enterprise reinforces the autonomy of corporate entities when it
comes to the duty to care or repair in respect of industrial accidents,

environmental damage or human rights abuse.
At the same time, however, various countervailing tendencies have
appeared. Technically, in the current state of the law, the only obvious
way of ensuring that law retains its authority when parties have the
licence to cross barriers is to make the second look effective at the
enforcement stage. This has been made possible within the European
Union, where Member States have the obligation to refuse recognition to
arbitral awards given in violation of European competition and consumer
law, and presumably of those fundamental rights which are part of the
Union legal order. Another notable development in the same context is
the progressive mainstreaming of consumer protection, which, through
the leverage provided by principles imported from outside contract
theory, such as non-discrimination, has been evolving from the status of
exception to the rule in respect of cross-border provision of goods and
services. Party autonomy is therefore severely curtailed in an increasing
number of circumstances, albeit within the safe confines of the European
consumer market. However, it may well be that there is need for a more
radical reformulation of the issues at stake. In the rapidly changing
context of global economy, the real difficulties are not (merely) market
practices shaped by stronger parties through free choice of law and
forum, but the implications of the growth of (hitherto) unaccountable
private authority. The role played by party autonomy in this evolution
needs to be acknowledged before appropriate models of social justice can
be imagined in the uncharted legal environment beyond the state.
BIBLIOGRAPHY
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and the Burdens of Law Reform, 60 MLR 23864
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in Facult de droit et des sciences conomiques de Toulouse (ed.), Mlanges offerts
Jacques Maury. Paris: Dalloz, vol. I, 39
Briggs, A. (2008) Agreements on Jurisdiction and Choice of Law. Oxford: Oxford
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Cafaggi, F. and Muir Watt, H. (eds.) (2009) The Regulatory Function of European Private
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Law 209
10. Who is the contracting party? A trip

around the transformation of the legal
subject
Maria Rosaria Marella
The subject of law is one of the most powerful creations of Classical

Legal Thought (hereinafter CLT), that stage of legal science that devel-
oped in the second part of the nineteenth century.1 In its theoretical
foundation the notion of legal subject has lasted almost unchanged
through the second globalization, which characterizes the first part of the
twentieth century till the early seventies and is marked by the dominance
of social thought. In this chapter I maintain that the idea of the legal
subject has now come to an end or, at least, it is undergoing dramatic
changes that will deeply transform its significance. This chapter is an
attempt to highlight, first, the epiphanies of this crisis in new constitu-
tions, bills of rights or other legal texts, and secondly the different
projects that issue from it and/or represent directions to the way out. My
aspiration is to contribute to the general discussion by investigating the
extent to which these normative projects embody the characteristic traits
of CLT or of the social (or a combination of them) according to the
picture of the third globalization drawn by Duncan Kennedy, or whether,
on the contrary, they depart from them, tracing new patterns.
In CLT the subject of law is a pure legal abstraction. Its dis-
embodiment shapes it as universalistic and transversal to all legal fields
with the exception of family law, where subjects are neither disembodied
nor equal.2 Feminist critique has unveiled the universalistic nature of the
subject of law by disclosing its primal model: the white wealthy married
male owner.3 CLT shapes the subject of law in reference to the market
1
See Kennedy (2006).
2
See Kennedy (2010); Marella (2011).
3
See ex multis Olsen (1991); Frug (1992a); Frug (1992b); Olsen (1983);
Marella (2008a); Marella and Catanossi (2014). On the inescapable link between
gender identity and the legal subject see Thomas (1998) 90.
205
realm. Its constituents are the right of property, on the one hand, and civil
liberties, mainly to be protected against the intrusion of the state, on the
other.4
This construction is still operating in the social. The subject of law is
still a pure legal abstraction5 with the same exception of family law as in
CLT, but its anthropological double has changed: no longer the private
owner as the liberal subject, but the social class, particularly the working
class. This is very clear in the Weimar Constitution (Germany, 1919), in
the Preamble to the French Constitution of 1946 and in the Italian
Constitution of 1948 (the only one still in force) where the subjective
bedrock is undoubtedly the working class.6 The complex set of rights
recognized to the worker are functional not only to his/her personal
fulfillment but specifically to his/her operation in the public sphere. In
the Italian Constitution of 1948 the anthropological change marked by
the sunset of the bourgeois owner figure, which is now replaced by the
wage earner, is emphasized by a set of guarantees that not only enhance
the workers material life conditions (from the right to work Arts. 4
and 35 to the access to property Art. 42, 2 and the guarantee of a
free and dignifying life by means of appropriate wage rates Art. 36) but
also foster and encourage his/her active participation in the political
process, meant as the core of citizens equal social dignity (Art. 3, 1 and
2). In fact the subject of law in the Social has a direct correlation in the
political context, which the Italian Constitution carries out by ensuring
the legal recognition of labor unions (Art. 39), the right to strike (Art.
40), and more generally, by prescribing the removal of any economic and
social hurdle to the fulfillment of substantive equality (Art. 3, 2). This is
no longer the langue of the Grundgesetz, the Basic Law also known as
the Bonn Constitution (1949), which demarcates the transition to the next
stage, as its new watchwords human dignity7 and the protection of the
liberal-democratic order show.
In the third globalization the subject of law is no longer universalistic
and transversal. It is rather fragmented in multiple identities that not only
refer to gender, sexuality, ethnicity, religion, etc. but also to age (minors,
elderly) or contingent situations (consumers, ill persons). The EU Charter
of Fundamental Rights (hereinafter CFR) and the German Civil Code
4
See Mengoni (1985) 12345.
5
Kelsen (1967).
6
See Mengoni (1985) 127; he points out that after the Italian Constitution
of 1947, the producer man, both entrepreneur and worker, assumed a central role
in the Italian system, replacing the bourgeois owner.
7
See below, note 11.
Who is the contracting party? 207
(BGB), as reformed in 2002, are unambiguous examples of this trans-

formation.8 Is there anything left of the former characters of universalism
and transversality? No patrimonial entitlements, no social rights are
constitutive of all legal subjects in this new scenario. Perhaps a minimum
common substratum may be seen in the respect of human dignity.9
Namely, the true objective landmark of this multifaceted legal subject is
human dignity in the very minimalist meaning of the ultimate human
substance that should not be altered (see the prohibition of genetic
manipulation, eugenics, cloning and the like, Art. 3 EU Charter of
Fundamental Rights).10
I. TENSION BETWEEN UNIVERSALISM AND

FRAGMENTATION: EU CHARTER OF
FUNDAMENTAL RIGHTS AND ECHR
Compared to the ECHR (Rome, 1950), which is more or less a classical
bill of rights with a specific emphasis on human rights, perhaps another
example of the transitional stage toward contemporary models of subject-
ivity, the Charter of Fundamental Rights of the European Union shows
important innovations. The CFR, which applies to the acts of EU bodies
and institutions (in particular, legislative work of the European Parlia-
ment, the Council and the Commission) and of Member States bodies
only when they are implementing EU law, puts the values of dignity,
freedom(s), equality and solidarity in the foreground. Now, while the title
on freedoms recalls the classical liberal model, the first title, on dignity,
and the title on equality are of striking novelty. Individual dignity is
placed at the heart of the system and is in fact the true universal core of
the Charter.11 Torture, degrading treatment, slavery and forced labor are
8
See Rodot (2007).
9
Rodot (2010).
10
See Marella (2008b).
11
In the constitutional traditions of EU Member States we find two different
notions of dignity: social dignity and human dignity. The notion of social dignity
refers to the right to a dignified life in terms of material and economic
conditions. It has a positivist essence, implies a commitment to distributive
policies and aims to achieve social justice and equality. The notion of human
dignity is today overwhelming. It has a natural law essence, pre-exists the state
and its law, and has several possible meanings, merging with individual freedom,
autonomy and self-determination on the one hand, with the protection of the
communitys basic values, on the other. In Germany, the human dignity clause is
enclosed in art. 1 of the Basic Law as the utmost fundamental right. As such the
prohibited in the name of human dignity, but it is especially the human

body which epitomizes the value of dignity in the economy of the CFR:
eugenic practices, the commodification of the human body and
reproductive cloning of human beings are banned, as far as they threaten
the common substratum of mankind that the Charter intends to protect. If
this anthropological core represents the recipient (and the minimum
common factor) of the fundamental rights in the CFR, the title on
equality exemplifies its inner fragmentation. Under this title women and
men (Article 23), children (Article 24), the elderly (Article 25) and
persons with disabilities are identified as the individualities in need of
equal treatment. There is no longer a unique social actor as the
anthropological background for the subject of law and the entire political
right to dignity cannot be waived by the person whose dignity is concerned and
cannot be balanced with other fundamental rights. In fact, the human dignity
principle shows a strong communitarian inspiration which justifies the sacrifice
of the individuals wishes. Particularly when its natural law version prevails,
dignity has a very controversial, unclear relation to liberty. For this reason what
characterizes today the enforcement of the dignity clause is mainly its operation
as a (new) limit to private initiatives and to freedom of contract, notwithstanding
the emphasis that several theorists put on a supposed role of dignity as enhancing
individual self-determination. It has been enforced so far in disparate cases,
including abortion, different aspects of free speech and housing. Following the
same multifaceted pattern, French case law has recently (from 1994 on)
implemented the dignity clause as a basic principle implicitly endorsed by the
Constitution. From bioethics issues to housing, free speech and abortion, dignity
is invoked at the same time as the basis and as a limit to individual self-
determination. The CFR includes the dignity clause in the same terms as the
German wording. In the Charter, dignity is a pervasive principle which names an
entire title of the Charter itself. The human body and body parts, human life, etc.
are ruled as issues of human dignity. In accordance with the notion of common
constitutional traditions as the fundamental basis of Court of Justice of the
European Union (ECJ) decisions, it is to be expected that the ECJ will
implement the Charter by making its own case law on dignity conform to
German constitutional case law. This could have significant implications for the
harmonization of contract law in Europe (provided that this project is still in the
EU agenda), specifically on the regulation of contracts illegality/immorality.
Therefore, one can fairly expect that, on the background of the CFR implemen-
tation, a re-assessment of the limits of freedom of contract will take place in
European law and the general clauses of public policy, ordre public, bonus
mores, Sittenwidrigkeit will be reinterpreted in the light of human dignity,
according to the model just described.
For a critique of the abuse of the dignity clause in reference to the human
body and the notion of legal subject in the French legal and philosophical debate
see Thomas (1998).
design underlying the EU Charter remains veiled and unexpressed. The

rights of workers are no longer a question of equality, they are a matter of
solidarity under the EU Charter. On the contrary, life conditions of the
elderly, children and people with disabilities are a matter of (formal?)
equality as long as the EU is not directly committed to enacting social
policies to their advantage, rather it respects their social rights as
established in national laws.
II. TENSION BETWEEN UNIVERSALISM AND

FRAGMENTATION: CODE NAPOLEON AND BGB
In this process of atomization, even the sanctuaries of the universal
subject of law, i.e., the Code Napoleon and the BGB, are involved.
Title 1 of BGB Part 1, as reformed in 2002, lists along with natural
persons, consumers and entrepreneurs. Two possible conflicting projects
are behind this inclusion, at least with reference to the consumer. The
first one, dating back to the 1970s, takes the consumer into account as the
epitome of an ideal of social justice that has to be affirmed in the law of
the market;12 it is basically a project that could be ascribed to the Social,
presenting itself as the way to update the notion of social class (namely
the working class) in the consumerism era. The second project represents
a typical neo-liberal move: in terms of policy, it pursues the goal of
replacing citizens (with their socio-political bonds) with the players in
the market arena consumers and entrepreneurs; within the economy of
the BGB it aims at reconstructing a coherent and inclusive legal system
by establishing a link between classic contract law and EU consumer law.
For the purpose of this chapter two opposite aspects are worth
considering. On the one hand, the characteristic I ascribe to the third
globalization, i.e., the fragmentation of the subject of law, emerges here
to the extent that the consumer is presented as a general category, worth
mentioning at the beginning of the Civil Code (in the General Part), but
in fact he/she does not embody the universalistic, general legal subject of
the past eras, being the recipient of a narrow legal regulation (das
Verbraucherrecht, the consumer protection). On the other hand, the BGB
reform of the legal subject might be understood as an attempt to establish
a new general anthropology, which replaces the bourgeois, the private
owner, according to the langue of CLT, and universalizes in the consumer
12
Reich (2006).
the weaker party in market transactions, in the same way that the worker,
as the weaker party in labor relations, was a universal category in the
Social.
Also the French Civil Code has been recently reformed in its first part
concerning natural persons (Statutes of 1994, 2004 and 2008, in the
architecture of the Code: Book I, Of Persons; Title I, Of Civil Rights;
Chapter II, Of the Respect of the Human Body). Apparently the French
approach to the subject of law is opposite to the one undertaken by the
German reformers. The inclusion in the system of the Civil Code of basic
legal principles governing the human body in bioethics seems to be, at
first glance, the symptom of a new universalistic approach: a humanistic
vision of the subject of law, no longer disembodied, rather grasped in its
biopolitical substance, a substance which all individuals share. However,
the biopolitical setting taken into account in the French Code is restricted
to the biomedical scenario. There is no consideration of the biopolitical
dimension in other economic or social relations. So the tendency to
fragmentation and partiality (the individual as patient or as human body
object of medical research) seems to be confirmed in the French legal
context.
To sum up: the atomization of legal subjectivity occurs by fragmenting
individuals in many distinct identities (as in the CFR and in the BGB)
and by scattering the concreteness of human beings in many partial
contexts (as in the French Civil Code).
In my opinion this process is to be understood within a broader
framework in which law stops making sense of individuals as actors/
agents. In this direction move both the new idea of solidarity that can be
found in several recent Constitutions and the new anthropology which it
is possible to draw from legal texts such as the reformed BGB. The
subject is no longer depicted as the promoter of a social design (no
matter if he/she was really the actor or rather a factor within the projects
of CLT or the Social); he/she is rather a walker-on in the picture.
There are two different perspectives:
(1) Lets get rid of the welfare state, individuals need to take care of
themselves: This is, bluntly speaking, the new idea of solidarity, or, as the
Swiss Constitution (1999) and the new Hungarian Constitution (2011)
put it, of individual responsibility toward the national community. In
the wording of these new provisions, individual contributions to state
and society greatly overwhelm what society and state owe to individuals:
All persons are responsible for themselves and shall make use of
their abilities to contribute to achieving the goals of state and society
(Article 6 of the Swiss Constitution, significantly entitled Individual and

Social Responsibility); Every person is responsible for himself or
herself and shall be obliged to contribute to the performance of state
and community tasks to the best of his or her ability and potential
(Hungarian Constitution, Article O) whereas right to work and duty to
work are more or less symmetric in the constitutions of the Social
(Spanish Constitution of 1978, Section 35, Italian Constitution of 1948,
Art. 4).
(2) The individualization of any existential condition such as life, work,
disability or social distress is the code to decrypt the weight and meaning
of social rights in recent constitutional texts such as the CFR and the
Swiss Constitution: in the latter, in particular, tens of provisions concern
social security measures which aim at supporting individuals detached
from any social context or social class identity. The other side of this coin
is the legal centrality recognized to the consumer, as another provision of
the Hungarian Constitution stresses (Art. M: (1) The economy of
Hungary shall be based on work that creates value and on freedom of
enterprise. (2) Hungary shall ensure the conditions of fair economic
competition. Hungary shall act against any abuse of a dominant position,
and protect the rights of consumers) the individual needs to be sustained
and, at the same time, needs to make the machinery function by
consuming and being productive. Last but not least, the creation of new
identities proves to be functional to the expansion of consumption and
the more capillary diffusion of the market. It sounds fastidiously rhetori-
cal but it is exactly what the recent legal texts are telling us.
III. THREE POSSIBLE RE/DE-CONSTRUCTIVE

PROJECTS
To conclude I want to go back to a critical reading of the legal subject,
analyzing three possible re- or de-constructive projects: the basic income
claim (drawing on distributive justice); the commons as a legal notion
which is disruptive of the subject/object dichotomy and the non-subject
as a counter-apparatus.13
13
Agamben (2009).
A. Basic Income Guarantee
The basic income project entails a claim for a new system of social
security, which should not operate on the basis of individuals social
conditions and therefore should not differentiate among social classes
and groups, but recognizes everyone is entitled to a basic income. This
idea has many versions, slightly or relevantly different from one another,
and a complex genealogy (Marx among other advocates14). To my
knowledge the most coherent stand for basic income within the inter-
national debate draws on Toni Negri and Michael Hardts understanding
of social wealth particularly once immaterial labor, and specifically
affective labor, has achieved dominance in the current mode of produc-
tion as the product of social cooperation, that is quintessentially a
collective product, for which everyone should be rewarded. Accordingly
basic income is not understood as a subsidy, but on the contrary as
something owed to everyone.15
The basic income project is nested within the pattern that Duncan
Kennedy describes as constitutive of CLT/Social coexistence in the third
globalization.16 On the one hand, it typically represents a strategy of
distributive justice that recalls the characteristic policies of the Social, but
unlike the Social it has a broad universal vocation and does not draw on
specific social classes and differences in social conditions between them.
It can be defined as a reconstructive project as far as, through the
social transversality of the basic income recipient, it gives new life to the
idea of the universal subject of law.
B. Law of the Commons
As long as it does not simply designate a matter of possession (who

possesses what, whether the private individual or the community) but
rather a way of conceptualizing the relationship between communities
and resources, communities and production/reproduction, the economy
and the law of the commons are likely to subvert the age-old dichotomy
of subject/object, in so doing locating themselves outside liberalism and
outside the capitalist stage of world history, although the challenge would
be to enlarge the realm of the commons right now, in this time, with the
legal tools provided by liberalism.17
14
Marx (1973).
15
Hardt and Negri (2000, 2004, 2009).
16
Kennedy (2006).
17
Marella (2016).
To stand up for collective possessions means to overcome the being/

having and the subject/object dichotomies because the focus in this
framework is rather on the circular relationship between the resource and
the community that owns (or uses) it, within which the two entities are
mutually constitutive of one another. The discourse is more complex if
one thinks of immaterial resources such as knowledge, which are barely
intelligible as community based. Here, Negri and Hardts analysis of
commonwealth within knowledge capitalism is most influential.18
A different version of this discourse is one that pursues a holistic
approach aiming at subverting the current (e.g., capitalist) relationship
between humanity and nature.19
C. Non-Subject Project
The idea of the annihilation of the self is to be understood as a reaction

to (and a deconstruction of) the models of subjectivity I ascribe to the
third globalization and, at the same time, as a possible alternative
(reconstructive?) project. It has developed within the milieu of the
so-called French Theory, namely on the basis of the post-structuralist
philosophy of Foucault, Deleuze20, and more recently Tiqqun (or Tarnac
9 or Comit Invisible)21 but it is also strongly influenced by the work of
the Italian philosopher Giorgio Agamben.22 It draws firstly on the
Foucauldian idea of biopower as productive of subjectivity/identities as
governmental apparatuses.23 The politics of the non-subject is therefore
a politics that aims to counteract the operation of biopower at this stage
of capitalism. The Agambenian notion of whatever singularity is crucial
to the extent that it depicts an entity that is neither identity based nor
universal (the Latin etymology of quodlibet, whatever, is being such that
it always matters), who belongs to an inessential commonality, a
solidarity that in no way concerns an essence.24 An interesting anteced-
ent in this genealogy of subtraction to the constraints of the legal subject
is envisaged by Agamben himself in the theological dispute between
Franciscans and the Pope in the early fourteenth century. Reclaiming the
abdicatio juris, i.e. the subtraction of themselves and their form-of-life to
18
Hardt and Negri (2009).
19
Capra and Mattei (2015).
20
Cooper (2009).
21
Tiqqun (2009); Comit Invisible (2007, 2014).
22
Agamben (1993, 2011).
23
See in particular Foucault (1977, 1982); Genel (2006).
24
Agamben (1993) 1819.
the law, the Friars Minor rejected any legal qualification of their relations
to any asset or good they made use of (usus pauper as usus facti).25 In
the same sense Saint Francis of Assisi in the Admonitiones depicts a form
of life deprived of will, claiming his own legal incapacity, thus rejecting
the very core of what will be later theorized as the legal self.26 A paradox
underlies this idea: the freedom from law is grounded on and located
within the law itself.
In its paradoxical relation to the law, the non-subject locates itself
beyond the legal structures of liberalism in his CLT period, the social
stage and the contemporary time for being neither universal nor identity
based. It can be understood as a reconstructive project beyond and
outside this period of world history. Perhaps the parole of a fourth
globalization.
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11. Freedom of contract and constitutional

values: some exceptional cases from the
Colombian Constitutional Court
Pablo Moreno Cruz*
rase una vez/ un lobito bueno/ al que maltrataban/ todos los corderos.
Y haba tambin/ un prncipe malo/ una bruja hermosa/ y un pirata honrado.
Todas estas cosas/ haba una vez/ cuando yo soaba/ el mundo al revs**
(Jos Agustn Goytosolo rase una vez.)
I. INTRODUCTION: JURISPRUDENCE HEGEMONY

AND THE ACCIN DE TUTELA
In some legal systems and (as far as it may be relevant to this chapter)
particularly in the Colombian legal system, traditionally ascribed to civil
law,1 the continuous (re)configuration of the global panorama of Law is
shown (not solely) in the modification on the degree of relevance of
traditional sources.
Some of them, in specific contexts, from the empirical point of view,
externalize and/or, from the normative point of view, ought to externalize
* I would like to thank Giovanni B. Ratti, Javier Rodrguez Olmos and

Vanessa Villanueva.
** Once upon a time / there was a good wolf / who was bullied / by all the
lambs. And there was also / a bad prince / a pretty witch / and an honest pirate.
All these things / once were found / when I dreamed / a world upside down.
1
Or, at least and extending this assertion in Latin America it is
presented in this way, is built in this way, is (re)invented in this way, is
remembered in this way, and is recalled itself in this way. See, e.g., Esquirol
(1997) 425 et seq.; Lpez Medina (2011) 195 et seq. In any case, if the
adscription is read in genealogic terms, there is an irrefutable fact: the presenta-
tion of the final exteriorization of the law in an exhaustive text characterized
both continental European law (although not so much the case in reality in
Germany) and Latin American post-independent regulations. For the relevance of
the distinction between embodied law and disembodied law in the context of
the distinction between common law and civil law, see Costantini (2007) 2015 et
seq. Also see, and with particular reference to the relevance of memory,
regardless of historiographical truth, Monateri (2013a) 37 et seq.
216
Freedom of contract and constitutional values 217
a progressive liberation from the chains which they pretend, but do not
achieve, to banish (which ends up being) a sort of vocation of producers
of Law (e.g., in jurisprudence2).
Meanwhile others, from the empirical point of view, end up captured
and/or, from the normative point of view, ought to end up captured in the
same prison that at some time made them hegemonic (e.g., in legislation).
The re-configuration of the panorama of Law is also shown in the
identification (and consolidation) of new (and old) legal actors, also
international ones, and therefore, new ways of externalization of Law.3
The externalization of Law, even if tied to the memory of its own past,
tries to re-invent itself to the beat of a rhythm marked by new global
trends, which advocate for a uniform government of normative produc-
tion outside and inside sovereign territories, outside and inside the
parliamentary scenario.
This overview, crowns or, at least, is crowning jurisprudence (local,
foreign, international), in different ways,4 as producer of Law with clear
hegemonic trend, in some cases dethroning the traditional political
scenario, and therefore, the legislator.5
Furthermore, this is a phenomenon that, as previously advised, is not
exclusively a Colombian heritage but rather seems, with wide shades, the
reiteration of a constant6 that governs the current legal reality in several
latitudes;7 this is, if the analysis of the style (of manifestation and produc-
tion) of the jurisprudential norm is omitted (see section VII below).
2
Lpez Medina (2006) 29 et seq.
3
On all levels: contractual (e.g., soft law), in legislative amendments
suggested from the top (e.g., International Monetary Fund and World Bank),
judicial (e.g., international courts), and quasi-judicial (e.g., international arbitra-
tors); in addition to non-institutional actors such as NGOs, mass media and
corporations.
4
In broad terms, about coincidences and differences in the manifestation of
a possible hegemony of the jurisprudence, see, e.g. (also with respect to a
non-Eurocentric nor US-centric perspective), Kapiszewski, Silverstein and Kagan
(2013), especially the conclusions of the editors, Conclusion of Judicial Ships
and Winds of Chance.
5
On this point, see, e.g., regarding Colombia, Landau (2010) 319 et seq.
However, with a Latin-American perspective, see Esquirol (2011) 1031 et seq.
6
We could say that the global world has become a sort of immense
judge-made world of law. Where law consists not so much of statutes and other
forms of written laws, but rather of judicial or quasi-judicial decisions: Ferrarese
(2009) 120. Also see Ferrarese (2010) ch. 5.
7
Of course, not in all scenarios and only where permitted by arbitral
jurisdictions. But above all, as long as permitted by the pure government, a
non-political government, a government that tends to be globally consolidated;
In the specific case of the Colombian Constitutional Court, this

phenomenon can certainly be corroborated. The Colombian Constitu-
tional Court, considered by some as one of the worlds most active
courts, and with a correspondingly broad constitutional review,8 is
configured, under this general framework, as a particularly relevant
subject of study. This is especially true if we take into consideration the
decisions of review of the judgments released by judges in the context of
the accin de tutela or amparo, i.e., a constitutional procedural action
that confers (not less than) a power, functional to the guarantee of
enforcing the correlative duties to fundamental subjective rights, includ-
ing several social rights.9
Decisions in which justification (often with constant reference to
foreign normative instruments, even non-binding ones10) is built, in
certain situations, through the use of normative sentences (jurisprudence,
international treaties, non-binding normative instruments) whose source
is alien to the traditional hierarchic normative structure and, moreover,
outside the local democratic authority.
Decisions which claim to use a foreign legal system (not always
binding)11 precisely, but not solely, based on the necessity to specify the
content of fundamental rights and, at the same time, frequently, on the
necessity to ensure its justiciability, even imposing the enforcement of
correlative duties through the configuration of ad hoc public policies.12
government of the office, of efficiency, in the framework of a trend towards the

privatization of the sources of law. On this point see Monateri (2013a) 100 et
seq.
8
Landau (2010) 321. However, see Wilson (2011).
9
I assume herein that social rights are fundamental rights. Then, in this
chapter, it should be understood that each time I use the terms fundamental
rights I am also referring to social rights. For a conceptual analysis on social
rights as fundamental subjective rights, see Arango (2005).
10
Here the concept of persuasive authority gains in importance within the
context of the (poorly equal) dialogue between the courts globally. See (along
with the literature that triggered the view), Slaughter (2003) 199 et seq. Also see,
for a historical analysis of persuasive authority in the configuration of legal
traditions and their current relevance, Glenn (1987) 26198.
11
On this point, in general terms see Ferrarese (2006) ch. 4.
12
The relation between public policies and the justiciability of fundamental
rights, and even more with regard to social rights, is quite peaceful (Prez Murcia
et al. (2007). In contrast, the direct imposition of norms by the judge is not
peaceful. The debate focuses, for example, on the non-democratic origin of
judges and the impossibility to effectively enforce remedies provided in the
corresponding ruling. On this point see, e.g., Tushnet (2008). Also see Landau
(2012) 202 et seq.
Decisions which, in sum, seem to be the result of the progressive

consolidation of a sort of judges supra-competence in a context charac-
terized (i) by a flexibilization, not always manifested in a sole hierarchy,
of the order of reference by a progressive dissolution of the distinction
between the different acts of authority on the production of law sources;
and (ii) by an extension (not always crystal-clear) of the norms of
competence that result in the exercise of further powers (traditionally
conferred to the legislative and the government13) by the judge.14
II. EXCEPTIONAL DUTY OF TOLERANCE (AT LEAST

TEMPORARILY) OF BREACH OF CONTRACT
Consequences at the local level of this judicial power also radiate effects
in scenarios somehow unpublished, at least in their scope. Specifically,
the normative universe of the agreement (also) faces the burst of
language concerning rights, and consequently, under some circumstances,
procedural mechanisms that allow confronting the agreement outside
traditional jurisdictions (including outside arbitration jurisdictions), and
even against decisions already adopted by ordinary judges.
Thus, we need to focus specifically on the boundaries to freedom of
contract (manifested, in one of its versions, in the variation of the content
of the agreement by the judge) giving rise to a range of new possible
13
For a (prescriptive) reflection on this phenomenon from the point of view
of the crisis of traditional models of the State of Law (Estado de derecho), see
Ferrajoli (2013) 437 et seq.
14
It should be noted that in several systems (think especially in Latin
America), one of the triggers for the loss of centrality of parliaments lies in a
specific interpretative approach of the judge when facing dense constitutions with
strongly indeterminate normative terminology. This linguistic indeterminacy,
rather than being rewritten by the progressive (re)formulation of less undeter-
mined related norms that could lead to a progressive stabilization of fundamental
rights (also by the legislator), led to the consolidation of an (ex post) continuous
and unpredictable balancing exercise of each particular case in the hands of the
Constitutional judge; a judge who acts, then, as the subject who introduces
herself (and is introduced) as the one who each time and directly ought to specify
the constitutional assessment. This phenomenon, critically characterized by the
term neo-constitutionalism (but in fact praised by many), certainly cannot be
underestimated, at least in response to some of the phenomena (not necessarily
the most important ones) that led to the weakening of the legislature and the
strengthening of the judiciary. For the first formulation of the term neo-
constitutionalism through a critical look at the phenomenon, see Pozzolo (2001);
(2012) chs. III. See n. 26 below.
tutela decisions, which show specific trends in the relationship between

the review of the agreement and the (un)justiciability of fundamental
rights.
Some examples may be useful.
Case 1
X breached the obligation to pay included in a mortgage loan agreement

with Y (a bank).15 As a result of the breach, Y filed a foreclosure action
against X, which resulted in the award of the property to Y.
X filed an accin de tutela arguing that Y infringed her fundamental
rights, since Y, although aware of the health situation of X and her
husband namely that they had AIDS continued with the lawsuit.
In review, the Constitutional Court granted protection of Xs funda-
mental rights to equality and human dignity, and consequently, ordered
that, within 60 days, Y refinanced the mortgage credit granted to X,
taking into account the manifest weakness of the latter. In addition, a
duty was imposed to inform the Court about the new agreement to prove
whether Y had taken into account the situation of weakness of X in the
new financial arrangement.
Case 2
In a similar case, X breached the obligation to pay in a mortgage loan

agreement with Y (a bank), who filed a foreclosure action in order to
obtain the payment of the debt.16
X filed an accin de tutela arguing the violation of some fundamental
rights by Y, since Y, knowing that X had been kidnapped during the term
of default of the credit obligations, continued with the lawsuit refusing to
find a way of settlement that would allow X to pay the debt.
In review, the Constitutional Court decided to protect Xs rights to
equality and free development of personality, and consequently ordered
the parties, within the next 30 days, to novate the agreements following
specific rules. Among these rules: (i) the calculation of remunerative
interests, from the time of the kidnapping until one month after the
serving of the lawsuit, should be calculated taking into account the
circumstances of weaknesses of the plaintiff (tutelante); if no agreement
was reached, current bank interest would be charged, according to
15
Colombian Constitutional Court, T-170/05.
16
certificates issued by the Colombian Banking Superintendence Office

(Superintendencia Bancaria); (ii) default interest could not be agreed
with respect to breaches during the kidnapping period and until the
expiry of the 30 day term; (iii) new security interests and guarantees must
be filed; (iv) accelerating clauses agreed would not be applicable.
Case 3
X breached the obligation to pay a loan agreement with Y (a bank), who

filed a foreclosure action that would lead to the sale of the collateral
owned by X for the payment of the debt for Ys benefit.17
X filed an accin de tutela arguing the violation of some fundamental
rights by Y, since Y, being aware that X was an individual displaced by
violence as a result of the internal armed conflict in Colombia, continued
with the lawsuit without applying the judicial precedents of the Consti-
tutional Court, which order a special treatment for the victims of
displacement.
In review, the Constitutional Court decided to protect the fundamental
rights of X, and declared the voidance of the process that ordered the
closing sale of the collateral to pay the debt with Y.
In this case, however, during the interregnum, the collateral had been
excluded from the market by a government agency, subjugating it to the
system for the protection of property and lands of displaced people
(sistema de proteccin de patrimonios y tierras de la poblacin
desplazada). As a consequence, the Court considered that it was not
accurate to impose the novation of the agreement since any (new)
negotiations on the asset were already forbidden.
The Court, to overcome this impasse, obligated the parties, once the
voidance of the process was served, to activate a renegotiation
toward agreement of payment, in order to continue with the contractual
relationship.
The Court ruled that negotiations should take into account the follow-
ing rules, among others (akin to those already indicated in Case 2): (i) Y
should refrain from charging default interest from the date of displace-
ment until the date of serving of the decision; (ii) accelerating clauses
agreed are not applicable; (iii) in the absence of warranties, the obligation
would be guaranteed by the National Fund of Guaranties (Fondo
Nacional de Garantas).
17
In these three cases, in addition to the consequent protection of the

agreement, a justification of the breach of contractual obligations agreed
occurs (see sections IVVI below).
An approach with the same perspective is also presented in the context
of a non-final breach of contract.
Case 4
X, legal user of the utility service of drinking water, breached her

obligation to pay. Y (the private utility company) suspended the service
until X complied with the obligation.18
X filed an accin de tutela against Y for the violation of some
fundamental rights, as a result of the suspension of the utility service of
drinking water at her home where, in fact, six minors and two disabled
people lived.
The Court decided to protect the fundamental right to drinking water
of X and, then, imposed the rendering of the utility service despite the
breach of the bilateral obligation by the plaintiff, since there were minors
and disabled individuals living at the place of suspension of utility
service.
This decision followed the precedent of the Court19 whereby the water
utility service could only be reduced to a minimum of 50 liters of
drinking water per day, upon default by the user, when subjects worthy
of special constitutional protection (see section VI below) live at the
debtors dwelling, and when the arrears of payments occur as a conse-
quence of involuntary, irresistible and insuperable reasons (presuming the
latter requisite in cases of individuals classified as in extreme poverty).
Case 5
X, mother of Z (a minor studying at a private school) did not pay the

monthly school tuition fee. Y (the school) removed her from the school
for the next year, and withheld the certificates (required to access other
schools).20
X filed an accin de tutela on behalf of Z arguing that Y infringed her
fundamental right when the school withheld the certificates.
In review, the Constitutional Court decided to protect the fundamental
right to education of Z and, in spite of the breach of the bilateral
18
19
Colombian Constitutional Court: T-717/10; T-740/11.
20
obligation charged on X, imposed on Y the obligation to release the

school certificates to Z, under previous agreement of payment that Y
should subscribe with X. In the latter decision, the Court considered that:
(i) the right of education of the minor was a priority over (weightier than)
the economic right (claim) in benefit of the school; and (ii) it was proven
that the default was due to supervening impossibility (e.g., unexpected
job loss, serious illness, etc.).
However, the Court, following its own precedents,21 held that in order
to avoid a non-payment culture it was necessary that default debtors
(i) prove the supervening impossibility to perform; and (ii) state conclu-
sive behaviours indicating their willingness to pay.
Once again, in these two last cases, the Court justified the breach of
contractual obligations agreed (see sections IVVI below) limiting, along
the way, the exceptio non adimpleti contractus, even when it would seem
feasible.22
In general, as will be clarified throughout this chapter, the five cases
illustrated so far follow a specific trend: faced with the infringement of
fundamental rights, it is possible for the Constitutional judge to decide:
(i) to intervene in contractual agreements to modify them; and (ii) that
the breach of contract by the debtor does not necessarily justify the duty
to perform her obligation. In other words, a duty of tolerance (at least
temporarily) of the breach of contract operates.23 This is provided that
the debtor is a subject worthy of special constitutional protection
(displaced, kidnapped, minors, disabled, etc.) (see section VI below).
In addition, and above all, from a perspective (without regard to what
judges say they do but) with regard to what judges really do, it is
possible for the Constitutional judge (iii) to intervene in the agreement by
an accin de tutela transforming this procedural action in a mechanism
through which the judge tries to replace the shortage of implementation
of public policies; specifically, by the creditors attribution of additional
correlative duties to certain fundamental rights.
21
Colombian Constitutional Court: S.U. 624/99; T-459/09.
22
For an analysis of this phenomenon, see Moreno Cruz (2014) 215 et seq.
23
For the reasoning by which the judge creates this norm, see section IV
below.
III. BEYOND UNFAIR TERMS, BEYOND THE

AGREEMENT
In these decisions, the Constitutional judge does not seem to unravel the
limits of contractual freedom upon justifications constructed based on,
stricto sensu, the contractual normativity, at least not as ratio decidendi.
The judge builds these limits, justifies them, beyond the agreement,
beyond the specific provisions of the agreement, beyond, then (but not
only) the Civil Code24 whose (old) territorial and sovereign vocation25
almost disappears in the presence of a supra-competence, which final
justification, itself, transcends legislation and territory.
In fact, in rulings of this type of tutelas, a kind of (meta)norm that
obligates to guarantee fundamental rights26 (and which source, ultim-
ately, identifies itself beyond the territorial sovereignty and the local
normative) imposes itself precisely over contractual norms (terms) that
are the result of the election of the parties.
In this way, the performance of the correlative duties to certain
fundamental rights is considered, by the judge, as non-negotiable27 and
its adscription at the expense of one of the parties (i.e., the creditor) is
considered as justified.
24
Grossi (2007) 1539, 85124.
25
Monateri (2013a) 102 et seq., describes the consolidation of this claim as
a hyperbolic act of the sovereign, as an act of exaggeration (in the sense of
enlargement) that pretends to consolidate a kind of political perfection by
capturing (through the writing) the law and its excess (the residue) in one sole
body: the Code.
26
This is a (meta)norm justified by the Court precisely because of the
adoption of a specific ideology of active defense of the Constitutional and
Democratic State of Law (Estado constitucional y democrtico de derecho) or, in
other terms, the adoption of proper premises (as critically described by Coman-
ducci) of ideological neo-constitutionalism: Comanducci (2010) ch. 16. This
type of neo-constitutionalism portrays itself (precisely just as in turn it is
portrayed methodologically by the acceptance of a necessary relationship
between law and morality) by the statement according to which law ought to be
obeyed for moral reasons. Which values?: fundamental rights; under what
concept of law?: any set of norms according to fundamental rights.
27
This is, in this case, a reasoning built based on an axiological hierarchy
between different norms (principles included) that leads to opting for the
applicability of a norm (or set of norms) rather than other(s), without that leading
(at least not necessarily) to the invalidity of the latter, but, more precisely, to its
inapplicability. See on axiological hierarchies and their relationship with in-
applicability, Pino (2008) 288 et seq.
As we will see below, it deals with judicial decisions that, in short,

produce the inapplicability, but not the invalidity,28 of some of the
contractual terms as an effect of a decision that seeks to guarantee the
justiciability of some fundamental rights.29
In fact, the judge, within a context of exceptionality, settles the
relationship between contracting parties, under a perspective that, even if
varying contractual terms, does not criticize the content of the contract in
relation to all circumstances. She rather criticizes the contract based on
specific effects under exceptional circumstances under which, according
to the judges decision, an (unjustified) breach of the correlative duties to
fundamental rights by one of the parties is produced.
In other words, the norms (terms) of the agreement, in relation, for
instance, to the performance in the event of temporary breaches of
contract, or in the event of an already final breach by one of the
contracting parties, cannot be applied, not because they are ex ante and
abstractly void, but because there are (or are identified, or are built ex
post) implicit exceptions to the applicability of the consequences pro-
vided in other(s) superior(s) norms, such as (but not solely) from
legislative derivation.
In this way, by means of an interpretative act (not simple, but)
complex,30 the judge justifies a sort of (re)creation of the agreement in
the light of the circumstances that certainly, in no exceptional conditions,
were not, and could not be, foreseen by the parties (at least at the
moment of entering into the agreement) within the framework of possible
meanings that could be attributed to the respective normative sentences
and, much less, to contractual terms.
28
As will be described (see IV below) the argumentative exercise by the
judge only leads to the inapplicability of contractual terms.
29
For a general vision on the justiciability of social fundamental rights in
Colombia, see Seplveda (2009) 144 et seq.
30
The distinction between interpretation in a strict sense (individualization of
explicit norms: meaning of a text provided in a source) and integration or
creation of law (e.g., individualization, building of unexpressed norms from
explicit norms and/or from other unexpressed norms) may be useful in making
this assertion, provided that it is clear that both activities are interpretative. On
this point, see Guastini (2011) 396, 434.
IV. MOMENT OF EXCEPTIONALITY: FROM THE

JUDGE OF THE AGREEMENT TO THE JUDGES
AGREEMENT
We are surely faced with phenomena that may be read under the general
theoretical perspective of the defeasibility of norms.31 I refer (mainly)
to the ex post identification by the interpreter of exceptions to the
applicability of the consequences provided by the norms.32 This is an
everyday phenomenon in the practice of law: this only excludes those
norms where the identification of any exception by the interpreter is not
possible (indefeasibility.)
Restricting the study to the cases listed herein, a norm is defeasible
when the consequences provided therein are subject (in addition, obvi-
ously, to positive conditions) to negative (defeating) conditions of applic-
ability (implicit conditions not entirely predictable ex ante). This is, in
other words, the formulation of exceptions by the interpreter in the
conditional sentence excluding the imputation of the normative conse-
quences, notwithstanding the positive conditions provided in the con-
ditional sentence are (also) given.
The particularity of this phenomenon in the events herein analyzed
lies, in part, in the judges reasoning; reasoning obviously conditioned in
practice by the interpreters ideology of the sources of law, by her
personal justice conceptions, and so on. Although the particularity lies,
as well, in the consequences of the identification of the exceptions:
(i) inapplicability of contractual terms without mediating (at least in these
cases) a judgment on their validity;33 and (ii) identification (building) of
normative gaps that legitimate the (re)writing of the agreement as
imposition of additional duties to the creditor and concomitant restric-
tions of her subjective rights.
31
Recently, see Ferrer and Ratti (2012).
32
We speak about an applicable norm when the judge (or, in general, the
interpreter) identifies good reasons that justify the use of the norm and, then,
applies it to the case. A norm (at least when faced with another norm considered
applicable) whose use is considered not justified will be regarded as inapplicable,
this is, that there are no good reasons to use it in the specific resolution of a legal
issue, for example, to solve a controversy before the judge. To achieve this goal
the judge uses (in)applicability criteria, that do not (necessarily) lead to the
invalidity of the norm. Pino (2008) 280.
33
On the distinction between validity and inapplicability, and also on the
possibility that inapplicability occurs without resulting in invalidity, see Pino
(2008) 298.
In the cases of interest above, the reasoning seems to operate in four

steps (distinguishable in the analytical perspective, but tending to be
mixed up in the decisions).34
(i) At first, the Constitutional judge, not only through the interpretation
of normative sentences on fundamental rights,35 considers that some
norms governing agreements (mainly from legislative sources)36 pre-
scribe the applicable scope of their consequences to a too ample and
undifferentiated class of cases.37
Specifically, the judge considers that the norm the parties are obliged
to perform bilateral obligations agreed in a valid agreement with this
sentence I pretend to gather together all those norms that in one way or
another impose the performance of obligations in bilateral agreements
should exclude some cases from its scope of applicability.
Furthermore, the judge considers (because she considers it fair), not
only that the norm the parties are obliged to perform bilateral obliga-
tions agreed in a valid agreement will not apply to a specific class of
debtors, but also, and in benefit of the same class of debtors, that there
should be a norm that would prescribe (so to speak) a duty of tolerance
(at least temporarily) of the breach of contract.38
34
I am (partly) using the reasoning mentioned by Chiassoni (2012) 17778,
in its analysis on the distinction, but also on the relation between axiological gap
and defeasibility.
35
Proposing in turn and by an axiological hierarchy a choice when solving
probable conflicts between various fundamental rights. Consider, for example,
the conflict between freedom of contract and the right to health or to drinkable
water. Conflicts are solved by the judge by the balancing technique as under-
stood by some versions of neo-constitutionalism (see nn. 14, 26 above).
36
Obviously, it is also about constitutional principles and rights. Specifically,
those constitutional norms that for the Court prescribe the right to freedom of
contract. However, it being clear that in this reasoning the constitutional right to
freedom of contract is defeated by means of the judges reasoning, who decides
to give more weight to other(s) fundamental right(s), in this chapter, I am
interested in emphasizing the consequences of reasoning at the level of legisla-
tion, in order to highlight, precisely, the limitation (the restriction) of the space
granted, in principle, to contracting parties by means of legislative norms.
37
In brief, identifies (creates) a (so-called) axiological gap. Regarding
axiological gaps see Guastini (2011) 13437; Chiassoni (2007) 20828.
38
I use this term to denote (in my own words) one of the judge-made norms
in the cases shown above. Indeed, in different latitudes, these kind of norms are
not alien to scholars, jurisprudence or even legislation. It is enough to consider,
for instance, the so-called principle of social force majeure regarding remedies
(in the way of mitigation of sanctions) in favour of debtors; remedies that
In order to obtain such unexpressed norm,39 first of all, the judge

assumes the defeasibility of the norm the parties are obliged to perform
bilateral obligations agreed in a valid agreement. In other words, she
restrictively (re)interprets (with an appeal to the language of rights) the
normative sentences so that they express a norm that provides exceptions
to the applicability of the consequences.
In this way, the judge formulates the following norm: the parties are
obligated, but not the debtor if she is a subject worthy of special
constitutional protection [see VI below], to perform bilateral obligations
agreed in a valid agreement. In other words, the consequences of this
norm (perform obligations agreed in a valid agreement) do not apply
when the defaulting debtor has AIDS (Case 1); has been kidnapped (Case
2); is displaced by violence (Case 3); has not been able to perform the
obligations due to involuntary, irresistible and insuperable reasons; a
minor is affected by the decision, and the parents are willing to perform
in the future (Case 4); is an individual classified as in extreme poverty
and/or, minors and disabled people live at that home (Case 5), etc.
(ii) As a consequence of the formulation of this new norm, the
Constitutional judge creates a normative gap since, at that point, it is not
possible (even if at first it was) to identify one (several) norm(s) that
regulate the cases excluded by the new norm, when there is, for example,
a breach of contract.
But above all, the Constitutional judge consequently creates an
avalanche of gaps within the agreement which is the object of contro-
versy. Basically, terms whose applicability (so to say) descends from the
defeated norm can no longer be applicable to the case, as a result of the
inapplicability of the consequences of the norm which is the object of
the implicit exception. This is because the facts of the case are subsumed
in the exceptional conditions that exclude the applicability of the
consequences of the norm.40
(iii) The Constitutional judge, in her efforts to fill normative gaps
created as a result of the (re)interpretation of the norm deemed too ample
regarding its scope of applicability, identifies (or better, builds or creates
would be configured to afford a social obstacle to performance, such as illness,

unemployment, etc. On this principle, see Wilhemsson (1992) 180 et seq.
39
About unexpressed norms see Guastini (2014) 42738.
40
We could talk about external defeasibility of the terms of the agreement
(not only of its consequences) as a consequence of the internal defeasibility of
the consequences of contractual law (e.g., legislative) that provide the application
of the terms. About the concept of external defeasibility, see Ferrer and Ratti
(2012) 3538.
in the cases discussed herein), precisely the unexpressed norm sought by

her: a duty of tolerance (at least temporarily) of the breach of contract
when X (debtor) is a subject worthy of special constitutional protection.
(iv) Finally, regarding the agreement, the judge fills the gaps created
by different interpretative guidelines using (among others and) specific-
ally the unexpressed norm prescribing a duty of tolerance (at least
temporarily) of breach of contract when X (debtor) is a subject worthy of
special constitutional protection.
With this reasoning the judge, as we could see, legitimates a creative
intervention in the agreement without needing to formulate judgments on
the validity of the same: for example, due to the unfair nature of some of
the terms. The judge simply considers (and formulates a justification,
not necessarily good or convincing) that contractual terms are not
applicable because norms (for example, from legislative derivation)
which provided their applicability are, in turn, not applicable to the
specific case; since there is applicable an unexpressed norm: duty of
tolerance (at least temporarily) of the breach of contract.
The consequences of this reasoning are clear: the judge partly vacates
the content of the agreement to partly re-write a new one. And does it by
a progressive search of unexpressed norms that stricto sensu (in the cases
herein analyzed) are a judicial creation.
This is the moment of exceptionality where the judge ceases to be a
surveyor of the agreement (also of its realization) to become a judge
who, to a large extent, appropriates the contract. This is, in short, the
moment of exceptionality that (self-)legitimates the passage from the
judge of the agreement to the judges agreement.
This is an agreement whose normative content is no longer (at least
partly) the result of an agreement between the parties (contractual norm),
becoming the result of a judicial decision (judge-made norm) which in
addition, and inevitably, at several levels or degrees of efficacy, has the
vocation of interfering in the future, conditioning the contractual content
of subsequent agreements. This even more strikingly, if it is taken into
consideration that the Colombian legal system (specifically the jurispru-
dence itself of the Constitutional Court), on the one hand, (i) foresees a
binding effect (at least vertically) of rationes decidendi of decisions
regarding the content of fundamental rights41 and, on the other hand,
(ii) foresees mechanisms (not employed in these cases) that allowed
41
For an illustration of the process of consolidation of the relevance of the
rationes decidendi regarding the accin de tutela in Colombia, see Bernal Pulido
(2007) 389 et seq.
extension of the effects of rulings on acciones de tutela (normally inter

partes) to subjects not involved in the process, e.g., declaration of inter
communis effects; declaration of unconstitutional state of affairs.42
V. INAPPLICABILITY OF DEFAULT NORMS (NORMAS

DISPOSITIVAS): THE PERMISSION THAT NEVER
WAS
In connection to the activities mentioned that the judge carries out in the
building of her decision, some points deserve attention, particularly with
regard to the activity by means of which the Constitutional judge fills the
explosion of gaps created as a result of the inapplicability of the
consequences provided in the norms (for example, but not only, legisla-
tive ones) that in general terms prescribe the freedom of contract and its
realization.
Lets think about, for example, the relation among default norms and
the Constitutional judge-made terms.
A default norm (ought to be; unless the parties agree otherwise, within
some limits) could be understood as a norm compounded, at the same
time, by (at least) two norms.43
Specifically,44 on the one hand, a first norm (that expresses an
obligation, or a prohibition or even a permission) expressly (explicitly)
defeasible, that is to say, a norm subject (at least) to a negative and
express condition of applicability of its consequences ( unless the
parties agree otherwise). On the other hand, a permissive norm45 that,
precisely, when its positive applicability conditions (i.e., the parties
agree otherwise) are verified, generate the inapplicability of the conse-
quences provided on the former norm. A permissive norm from which,
besides, and in turn, descends the applicability of a third norm, i.e., the
42
See section VI below.
43
It even might be possible to refer to a third norm: specifically, a norm that
(in Hohfeldian terms) confers a power on the parties to create a norm (in
particular, a contractual term). However, here I will refer only to (i) the expressly
defeasible norm (which could express an obligation, a prohibition and even a
permission); and (ii) the permissive norm. Regarding the relationship between
power and permission see Poggi (2004) 20924.
44
The scheme adopted herein should not be understood in an ideological
sense. It is, simply, a possible description of the norm structure.
45
About permissive norms, see Poggi (2004).
contractual term regarding the class of cases regulated, until that moment,
and abstractly, for the former norm.
However, within the phenomenon herein analyzed, nothing excludes
the Constitutional judge, when filling some of the gaps identified
(generated) in the agreement, to draft a new term that, precisely, regulates
the class of cases that in non-exceptional circumstances could have been
regulated by the parties by the use of the permission granted by a default
norm, i.e., specifically, by the permissive norm that configures the default
norm along with the expressly defeasible norm.
In fact, for example, the Constitutional judge (Case 2) ordered the
novation of obligations and, in turn, provided that default interest due to
breach of contract could not be accrued during the period of the
kidnapping and until 30 days after the serving of the ruling; while she
stated that remunerative interest should be calculated in response to
the weak position of the ex-kidnapped individual. In this way, surely, the
judge is regulating a subject matter that a default norm allows to be
regulated by the parties. In effect, a norm of the Colombian Civil Code
(article 1699) expressly provides that, as a consequence of novation, first
debt interest is extinguished, unless the parties agree otherwise.
The Constitutional judge withdrew the parties from the use of the
permission granted by the Civil Code, not because the agreement which
is the object of intervention had not ruled on the topic of default and
remuneratory interest (an event in which, then, the first norm should be
applied), and not because such regulation was unfair and so the object of
a judgment of invalidity.46 She limited the permission because at the time
she ordered the novation, she considered that, in this case, the regulation
of interest by the judge should be in line with the unexpressed norm that
prescribes the duty of tolerance (at least temporarily) of the breach of
contract.
The Constitutional judge considered, in other words, that within the
normative framework on novation of obligations, the whole default norm
provided in the Civil Code (and then, both the expressly defeasible norm
and the permissive norm) was implicitly defeasible, namely, was subject
to an implicit exception to the applicability of its consequences. If the
debtor has been kidnapped (and, therefore, if the debtor is a subject
worthy of special constitutional protection) and the judge compels
novation of the obligations (a decision by itself exceptional within the
46
For an analysis on the (in)validity of the terms of the agreement resulting
from the exercise of the permission attached to the default norm, see Grondona
(2011) 326 et seq.
normative framework of freedom of contract), the subject matter of

interest (i.e., default and/or remunerative) may be regulated, not by the
legislator nor in the way provided by the parties, but in the judges
agreement.
Note that, then, the defeasibility of the expressly defeasible norm is not
generated as a result of the verification of the exception expressed by the
legislator (unless the parties agree otherwise), but rather because (in the
same manner that occurred with regard to the permissive norm) the norm
is defeated as a result of the creation, by the judge, of an implicit
exception to the application of the whole default norm.47
Actually, the judge does this (in fact, with the same reasoning already
analyzed above) to generate a new unexpressed norm: ought to be unless
the judge decides otherwise.48
VI. EXCEPTIONS TO THE APPLICABILITY OF

CONTRACTUAL SUBJECTIVE RIGHTS AND THE
DUTY OF SOLIDARITY
The phenomenon analyzed above clearly establishes a limitation to the
exercise of one of the parties subjective right. Thus, precisely, and in
more general terms, the second aspect that deserves attention from the
decisions of the Court, is that concerning the inapplicability of norms
(whether or not they are contractual terms) attributing subjective rights in
favour of each of the contracting parties.
It is evident that since it is an agreement, the inapplicability of
contractual terms (as a result of the inapplicability of the norms that
prescribe in different levels of specification the freedom of contract)
means, necessarily, the inapplicability of contractual terms attributing
subjective rights in their different manifestations (liberty and/or claim
and/or power and/or immunity) to the benefit of the parties or (which is
the same) the inapplicability of norms ascribing duties in their different
47
In effect, nothing excludes that the expressly defeasible norm (i.e., a norm
formulated in a way that includes the express exception and identifiable ex ante)
and, in general, the whole default norm results, in turn (as a consequence of the
interpretative activity) subject to implicit exceptions. On this point see Chiassoni
(2012) 17576.
48
Norm considered by the judge as one more of the concretions of the duty
of tolerance (at least temporarily) of the breach of contract.
manifestations (no right and/or duty and/or liability and/or disability)

charged on the parties.49
In addition, in the act of filling the avalanche of contractual gaps
identified (created) by the Constitutional judge, the latter attributes new
active normative positions (subjective rights) in favour of one of the
parties or (which is the same) duties charged on the other. Effectively,
without a judgment on their validity because, for example, they are
considered unfair some contractual terms are not applied and, as
regards the default debtor features, some new ones are created by the
judge reformulating a balance of rights and duties clearly to the latters
benefit.
Let us consider that the Constitutional judge, using (though not only)
the norm that prescribes the duty of tolerance (at least temporarily) of the
breach of contract, for instance (i) limited the subjective right of action
(in effect, in Cases 1, 2 and 3, the enforcement of judicial foreclosures
was halted or declared void); and (ii) limited the subjective right
(immunity) to the exceptio non adimpleti contractus (in Cases 4 and 5,
the creditor was compelled to continue with the performance of the
contractual obligation by the judge, notwithstanding that the debtor had
not performed her obligation).50
From the point of view of the several duties that the Court ascribes to
the creditor, one particularly deserves attention because through its use
the ascription of other duties was justified, specifically correlative duties
in respect of the debtors fundamental rights (including social rights,
whose core is a claim). I refer to the duty of solidarity that the
Constitutional Court, upon an expansive interpretation,51 ascribes to
everyone (when the infringement of a fundamental right may derive from
the breach of the duty of solidarity).52
Precisely, the norm that prescribes the constitutional duty of solidarity
is used by the Constitutional judge as part of the justification (in the
building) of the unexpressed norm prescribing the duty of tolerance (at
49
Hohfeld (1923). As regards Hohfeld, see, e.g., Kramer (1998) 7111.
50
For the qualification of the exceptio inadimpleti contractus as a subjective
right, see Moreno Cruz (2014) 21517.
51
The judge considers that the target class of the consequences of the norm
which prescribes the duty of solidarity should be broader and, therefore,
(re)interpret the norm to produce a second one that ascribes the duty of solidarity
to everyone, expanding the relevant class in this way in contrast to the class that
would be obtained, for example, by the literal interpretation of the corresponding
normative sentence.
52
See, e.g., C-237/97, T-389/99, C-459/04, T-110/05, T-972/09.
least temporarily) of the breach of contract and, before that, in the

building of the justification of the restrictive (re)interpretation of the
norm the parties are obliged to perform bilateral obligations agreed in a
valid agreement.53
Concerning this restrictive interpretation, it is important to remember
(see section IV above) that the Court excluded one (sub)class as recipient
of the consequences of the norm. In other words (and actually from a
different point of analysis), the Court seeks to produce a diversification,
specification,54 of the person having rights (sujeto nico de derecho)
resulting (at that moment) from the abstractions of the modern process of
codification, prescribed in its most influential version in the Civil Code,
whose impact in the Colombian and, in different degrees, in Latin-
American legal cultures is known to everyone.55
The diversification of the sujeto nico de derecho does not only
operate with respect to the relationship of the subject with the market and
its function in the stabilization of its order, i.e., not only in the
diversification of the sujeto nico de derecho in the subclasses of
consumer and employee.56 It is rather a specification that operates on the
basis of (social and/or natural) features of the subject and its evident
exposure to the infringement of fundamental rights, and so worthy of
exceptional treatment. To this purpose, the Court refers to a subject
worthy of special constitutional protection, e.g., subjects who have been
53
Please note, as discussed below, that the norm that prescribes the duty of
solidarity is the result of an extensive (re)interpretation which, in turn, is used to
justify the restrictive (re)interpretation of the norm the parties are obliged to
perform bilateral obligations agreed in a valid agreement (which leads to a
second norm: the parties are obliged, unless a party is a subject worthy of
special constitutional protection, to perform bilateral obligations agreed in a
valid agreement). But, in addition, it is used (along with other norms) to justify
the formulation of the norm that prescribes the duty of tolerance (at least
temporarily) of breach of contract by means of which the gap is filled (see above
section IV). In this way, several interpretative exercises join together:
(i) extensive interpretation to broaden the scope of application of the conse-
quences of a norm (duty of solidarity); (ii) restrictive interpretation which
evidences the defeasibility of another norm and generates a gap (duty to perform
); (iii) filling the gap by means of the identification (creation) of an
unexpressed norm (duty of tolerance (at least temporarily) of breach of contract).
54
Bobbio (1991) 68 et seq.
55
In general see Brito Guzmn (2000).
56
For a critical view on this restrictive version of diversification see Somma
(2009) 13158.
kidnapped (secuestrado), displaced, affected by AIDS, children, indi-

viduals classified as in extreme poverty (i.e., debtors referred to in the
mentioned cases), homosexuals, women, the elderly, etc.
Using the term subject worthy of special constitutional protection,
the Court justified several decisions in which the judges have expressly
imposed specific duties on the executive branch, and even on the
legislative branch, aimed to guarantee fundamental rights to subjects in
positions of weakness. Perhaps the most emblematic situation is the one
concerning the protection of displaced people, in which the Court,
through several tutelas decisions (in particular Case T-025/04), has issued
highly elaborated judicial remedies that impose on the state the activation
of public policies.57
However, let us note that, on the contrary, with respect to the cases
discussed above on the limitation of freedom of contract, the Court has not
imposed duties charged on governmental institutions for the benefit of
subjects worthy of special constitutional protection, within the framework
of the implementation of public policies, but rather duties charged on
unsatisfied creditors within the framework of a contractual relationship.58
57
On this point, particularly concerning an analysis on the scope of the
effects of the tutela T-025 of 2004 of the Colombian Constitutional Court, which
declared an unconstitutional state of affairs in relation to the infringements of
rights of displaced population, see Rodrguez Garavito (2011) 1669 et seq.; and,
previously, Rodrguez Garavito and Rodrguez Franco (2010).
58
In other terms, the agreement or better the (re)writing of the agreement on
the part of the judge is shown as an instrument considered apt to activate the
justiciability of fundamental rights (also social ones) due to the absence or at
least deficiency in the implementation of public policies. Therefore, the distinc-
tion that Monateri (2003) stated in terms of rugiadoso agreement and rude
agreement, still shows its descriptive vocation. In fact, it is difficult not to note,
in the interpretation of the agreement by the Colombian Constitutional Court, a
(re)presentation of the agreement as a malleable object, made of clay, ductile,
able to regulate individual interests and, at the same time, able to correct, ex post,
the absence or deficiency of public policies (and then, also, the functions of other
public authorities). In short, a vision of a sort of super-agreement opposed to an
idea of agreement understood as the result calculated during a momentary lull in
the framework of an ongoing conflict where the rigor of the choice of word
governs the interpretation. It is a distinction (rugiadoso-rude) which, in fact,
opens the door to an analogical distinction between two visions of fundamental
rights. In effect, the balancing technique as understood by some neo-
constitutionalists, supposes a rugiadosa vision of fundamental rights, rights of
clay, malleable, ductile; a vision that may lead to a precarious (in the sense of not
stable) justiciability of the fundamental rights by the decisions of a judge who
determines on the road the entitlement of correlative duties. This vision faces a
VII. CONCLUSIONS: BEYOND THE SIMILARITIES

The framework analyzed so far is only a manifestation (moreover local
and, without reservations, exceptional) of the tense relationship between
freedom of contract and judicial intervention in the agreement. In fact,
this brief analysis yields a specific result: the intervention of the
Constitutional judge in the agreement through tools of procedure such as
the accin de amparo, is characterized (in part) by acts not aimed at the
necessary identification of unfair terms, which are then subject to a
judgment of invalidity. Rather, through the identification of a norm
(duty of tolerance (at least temporarily) of breach of contract) that is
(also) based on an extensive interpretation of the duty of solidarity, the
judge creates, specifically, the inapplicability of terms and, thus, con-
sequent contractual gaps gaps that the judge fills by (re)writing part of
the contract, conditioned by the content relevant to the specific funda-
mental rights of subjects worthy of special constitutional protection.
This inapplicability of the norms of the agreement (the terms) is the
result, in turn, of a process of identification (creation) by the judge of
exceptions to the applicability of the consequences of norms (also default
norms) arising (though not solely) from the legislative discipline of
private contract law. The judge makes the norms inapplicability effective
by means of an exercise of some kind of supra-competence whose source
(at least from the empirical point of view) does not seem to be found (or
not exclusively) in norms of local law but rather in norms sought beyond
state sovereignty, beyond verbalized law and, evidently, beyond codifica-
tion and its failed attempt to establish a sovereign order characterized (to
put it in Monateris terms) by a hyperbolic claim.59
It is a hard version of intervention in agreements but soft regarding the
hierarchy of the sources: instead of identifying the duty to declare
the invalidity of some norms, the Constitutional judge chooses to blur the
applicability of their consequences, which is conducive, as a result, to the
inapplicability of one or several contractual norms (terms).
rude vision of fundamental rights; a vision that before the certainty of the
existence of a perennial danger of infringement in a perennial conflict scenario
proposes an interpretation of the same that progressively leads to its concretion
(even better if legislative) in the form of norms that suffer less from the linguistic
indeterminacy of constitutional sentences, and that, in this way, allows its
predictable application and then fundamental rights justiciability. For some
reflections on this sense, see Pozzolo (2001).
59
See n. 25 above.
This way the decision of the judge ends up generating, within the legal
system, an unpredictable and intermittent applicability of the norms (for
instance, legislative ones) which govern agreements (e.g., subjective
rights), opening the door to the ex post ascription of additional duties
upon the contracting-creditor.
The particularity of this phenomenon cannot be underestimated, at
least regarding legal scenarios where a specific idea, an ideology, benefits
(or, better, has benefited and there is still a general belief that it benefits)
from some kind of hegemony; I refer to the idea under which norms are
(only or mainly) the result of the direct interpretation of normative
sentences produced by Parliament.
For sure, some may affirm (and from a normative analysis perspective,
it would be true) that the whole act of progressive inapplicability of the
legislative norms, which, in turn, is conducive to their intermittent
applicability, has several similarities with the act of distinguishing in the
way shown in the systems of relevance of judicial precedent found in
common law.
In effect, some authors (rightly) define one of the kinds of manifesta-
tion of the act of distinguishing, within the framework of the systems of
relevance of judicial precedent, as the identification of negative con-
ditions of applicability of the consequences provided in the judge-made
norm (the precedent).60
In fact, as dealt with in this chapter, it may be read as one of the
possible continental versions of the act of distinguishing; but accepting
that, in these cases, instead of determining the non-application of a
judge-made norm, the Constitutional judge is determining the inapplic-
ability of a norm issued by Parliament, and as a result of it the
inapplicability of contractual terms.
However, this simile disregards (among other things) a fundamental
distinction. In relation to the way the Constitutional Court has, through
its case law, created the limits to the freedom of contract:
(i) the phenomenon introduces itself (and, perhaps, could be read) as

an act of suspension of, an exception to the law given and written
by legislative authority;
(ii) many judges, scholars and law-makers still consider the given law
(because, for instance, they remember it so) as complete, as an
exhaustive verbalization;
60
See, e.g., Chiassoni (2012) 231, n. 5.
(iii) this memory leaves a sediment in the legal culture, a kind of

presumption according to which written law is (and ought to be)
undefeatable;61
(iv) therefore, although normative defeasibility is an undeniable phe-
nomenon, overcoming this presumption (which is, without doubt,
and in turn, defeasible) in hard cases (i.e., agreement versus
fundamental rights) imposes on the interpreter, the judge, a more
(un)articulated interpretative exercise with more complex argu-
mentative resources (not necessarily convincing ones); even more
so when it involves a radical destabilization of the agreement by the
use (not only of the extra-sovereign law but also) of unexpressed
norms built through the use of interpretative techniques that could
easily produce unpredictable results.
In other words, the phenomenon discussed above cannot be seen, then, as

an act of distinguishing within a quiet exercise of the jurisdictional
function carried out in legal scenarios where the judicial decision has
been represented ironically,62 i.e., as a decision and, at the same time, as
a perennial, but always failed, attempt to capture non-verbalized law.
Law, specifically the common law (above all the English one), may see
(or would like to see or is used to seeing) the act of distinguishing as a
kind of ongoing process of refining of the identification of unexpressed
law, never totally verbalized.
Rather, the phenomenon discussed above is an act which, when
perceived and presented as a break, transforms the portrait of the clash
between the law given ex ante with exhaustive and abstract vocation in
circumstances of normality, and a law that focuses on the cases in order
to consolidate exceptions to the former by means of the unfolding of
folds of a law still not captured.
Therefore (notwithstanding that it is about the same techniques with
similar results), it does not seem to be adequate to reduce, simplify, all
these acts (justified by judges precisely as exceptional) of building of
normative gaps, of identification (creation) of unexpressed norms and of
61
With regard to this presumption, see Barberis (2005) 130.
62
As opposed to sovereign hyperbole (see n. 25 above) according to
Monateri (2013a) 85 et seq., ironic in the sense of a decision that at the same
time is an imperfect declaration of a pre-existent, non-verbalized law. Ironic,
then, in the sense of a creation, by means of the representation, of two levels
where one thing is the set of two different things and, depending on the
context, it may change from one to the other always saving the situation (89).
(re)writing of the agreement, to a homogenized phenomenon of judicial

activism necessarily fungible in any legal scenario.
In effect, the differences between the patterns of judicial activism, also
in the case of intervention over the agreement, go beyond, without doubt,
the techniques used by legal actors (that probably coincide) and are
located in a broad context a context conditioned by the way the legal
actors remember and represent the own legal system and, in turn, by
means of argumentative resources that the actors effectively use (and/or
ought to use) when they want to escape from or otherwise want to
preserve that memory.63
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In this way, concepts (and distinctions) such as (i) embodied law and
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PART III
REPRESENTATIONS AND
NARRATIVES
12. The unburiable contract: Grant Gilmores

discontinuous parabola and the literary
construction of American legal style
Cristina Costantini
I. UNDEAD GILMORE: INTERTEXTUAL AUTHORSHIP

AND SITUATED READERS
Redeem
the time. Redeem
the unread vision in the higher dream
(T.S. Eliot, Ash-Wednesday, section IV)
A land of old upheaven from the abyss

By fire, to sink the abyss again;
Where fragments of forgotten peoples dwelt
(Tennyson, Idylls of the King, The Passing of Arthur, II. 8284)
More than 40 years have passed since the sardonic Grant Gilmore
oracularly pronounced his vigorous and Nietzschean-sounded epitaph to
honour the decease of Contract.1 Time elapsed, and even the agnostic
1
The Death of Contract, first published in 1974, collects the lectures
delivered by Grant Gilmore at Ohio State University Law School in 1970, with
footnotes added to provide further explanation. The celebrated incipit of the book
recites: We are told that Contract, like God, is dead. And so it is. Apart from its
clearly recognizable intellectual ascendancy, this overstatement, which piqued
the academic community, presents three peculiarities in its proper stylistic form.
First of all, Gilmore is referring to a personified Contract, as is evidenced by the
capitalized initial letter C, preserved and reproduced in the body of the present
text for a sense of fidelity to the original. In this way, Contract is equated with
God even in an ontological perspective (not only because of the common final
destiny), as a definite entity. According to Ronald Collins, the capitalization
makes patent that the focus of Gilmores investigation is not contract as a
practice, but Contract as a grand Concept, and specifically the absolute Concept
of pure and classical Contract. What was thus claimed dead, or dying, was some
Grand Concept. It was a Concept of absolute order, not a practice of unruly
bargained for exchange; it was a Concept of abstract consistency, not a practice
245
prophet of the legal uncertainty died in his sleep in the Eighties of the
last century, but the intellectual debate on the late relics of a well-
structured body of law has never faded. With a wavering intensity,
Gilmores secular talk continues to rule us from its grave,2 summoning
up its religious intimations. It is absorbed in the general flow of thoughts
and doctrines; it is drawn into the endless, alternating rhythm of tidy
order and sprawling agony that marks the common destiny of Human-
ities; it is blended into a creative mixture of old and new, in order to
compose an aesthetic structure out of multiple and changeable styles. The
same poetic form of the elegy, clearly evoked by Gilmores intonation,
comes to suture the unavoidability of death with a resurgent memory:3 it
articulates the metaphysic dance that stages the movements of living and
dying as the intense counterpoints of a simultaneous appearing and
disappearing now of the spiritual, now of the carnal body. The literary
of varying obligation; it was a Concept of objective scientific discovery, not a

practice of subjective good faith dealing; and it was a Concept of general
application, not a practice of particular resolution; Collins (1995) 19. The
second element which attracts our attention is the recourse to the plural personal
pronoun we, intentionally used to certify the real existence of a new, collective
consciousness about the present fate of contract. In the explicative footnote,
Gilmore even speaks about the existence of a Contract is Dead Movement,
whose Lord High Executioner was identified with Stewart Macaulay. This
assertion gave birth to a myth, or, realistically, to a Gilmorean myth, if we
consider the strong reaction of the invoked Macaulay, who promptly declined the
honour of this prestigious nomination, specifying his position: academic con-
tract was dead, while the real institution was alive and well. The reply was
definitive when Macaulay, giving a keynote paper at the Sixth Annual Inter-
national Conference on Contracts held at the Stetson University School, declared
There is no Contract is Dead Movement. The last significant element in
Gilmores expression is the use of the past tense form of the verb tell: we are
told. Gilmore, therefore, requires us to accept this assertion as a matter of belief.
2
This is a clear transposition, echoing William Maitlands renowned
remark on the ghostly fortune of the forms of action: The forms of action we
have buried, but they still rule us from their graves; Maitland (1909[1936]) 1.
3
The intimate characteristics of elegy, as a literary genre, are particularly
fit for representing an age of transition, an unsettled cultural climate, caught
between a vanishing past and an uncertain future, when the tendency towards
novelty does not supersede an embodied nostalgia for the past. In this perspec-
tive, it is possible to adapt to the present circumstances the brilliant expression
originally coined by John Rosenberg to depict the spirit of the Victorian age
Waking daily to newness in all its forms, the Victorians felt, in Matthew
Arnolds phrase, like wanderers Between two worlds, one dead / The other
powerless to be born; Rosenberg (2005) 1.2. (Matthew Arnolds quotation is
from Stanzas from the Grande Chartreuse, II. 8586.)
The unburiable contract 247
celebration of the Dead emplots a process of re-interpretation and

re-signification at the lyrical intersection of mourning and praise: folding
into and out of conventional meanings, it emerges in the midst of an
articulated fragmentation of traditions and visions, accepted discourses
and prospective imaginations.
In this perspective, having disrupted the storied past of American
jurisprudence, Gilmore preached the advent of a new era, where crisis
and doubts dull the assumed purity of the pristine mind. At the same
time, his inquisitorial reflection dialectically opens to a further act of
remembrance,4 figuring the possible transubstantiation of the buried
corpse of classical theory into a reinvigorated body of rules and prin-
ciples. With a contemporary and retrospective glance, it could be said
that, if the fact of the death of contract has been recorded, nevertheless
legal scholars have not completely turned their attention elsewhere.
Conversely, it could be noted that, if law students have not been
integrally or permanently dispensed from the accomplishment of anti-
quarian exercises about the theory of consideration, they are from time to
time stirred up by provocative professors to comb unexplored paths. The
pages of The Death of Contract are nowadays read and commented in
various lecture halls, all over the world, certainly far beyond the proud
claim of belonging to the original jurisdiction. Definitively, all the
mundane deaths (of Contract, of Gilmore, and, possibly, of Gilmores
work) are won and the secluded Self of American legal tradition is
de-territorialized. Gilmores reliance on succeeding esteem and broad
circulation has proved to be not detrimental. And so it is.
4
The word remembrance could be here reinterpreted in the light of its
symbolic potential, kept in Shakespearean poetics. Moving from the etymo-
logical roots of the verb re-member (formed by the union of the iterative particle
re with the noun member), as the act of composing again an entity in its
carnal consistency, we can deeply appreciate the longing and aching admonition
addressed by the fathers ghost to Hamlet Adieu, adieu! Hamlet, Remember me.
Moreover, we can remind and apply to Gilmorean discourse the unique proper-
ties of the revenant, the spectral ghost that which comes back as they have
been brilliantly detected by Jacques Derrida. The first property is a kind of
paradoxical incorporation, insofar as the spectre is positioned between life and
death, between body and no body; it is a certain phenomenal and carnal form of
the spirit. The second property is related to time, as it can be actually disrupted
and disjoined by the spectre, and it is owing to the nothing visible of the
spectre. The spectre, is a Thing that is invisible between its apparitions, when it
reappears. This Thing meanwhile looks at us and sees us not see it even when it
is there; Derrida (1994) 5 ff.
It could be an attractive wager to detect the due consideration tendered

to the past respectively by Grant Gilmore and Thomas Stearns Eliot. The
first perceived the untimeliness of the present, abruptly turned into the
past. The present all too soon becomes the past. What is past is past
the future alone has meaning, Gilmore denounced in his first dis-
sertation.5 The second codified the historical sense not only as the
pastness of the past, but also as its presence. The issues at stake involve
the polemical relationship between the hegemony of the past and the
counter hegemony of the future; the acknowledgment or the denial of the
permanent heritage of the Dead; the artful fractures which are provoked
by cognitive injuries in order to juxtapose orthodox views to heterodox
ideas; ultimately, the essence of memory and the theory of tradition. Is
time past redeemable?6 Or does it assume the appearance of a haunting
ghost, which inexorably torments and afflicts posterity? Halting at the
frontier of metaphysics, the Newcomer has to chose which direction to
take: the route towards the awareness of a growing indebtedness, or the
way of a repetitional (mis)appropriation of sedimented words, images
and symbols.
With these questions in mind, the following pages are concerned with
an original and trans-disciplinary close reading of Gilmores work.
The intellectual device proposed for a new, critical reassessment
consists in a specific conception of legal traditions as a network of
textual relations. Deciphering their inner meanings means, therefore, to
discover the plot of intertextuality and its hidden strategies, to trace
mutable connections, to start a process of moving among texts.7
The research leads to capture the interstitial sense and purpose,
something that exists in the liminal threshold between a text and all the
other texts to which it directly or indirectly refers. Legal texts, which
compound, give expression and stylize different legal traditions, are
5
Gilmore (1936).
6
This question is a kind of resounding echo from T.S. Eliots Burnt Norton
Time present and time past / Are both perhaps present in time future / And time
future contained in time past. / If all time is eternally present / All time is
unredeemable. For an illuminating and philosphical comment, see Moore (1965)
25, where the Author draws two interpretative lines: one, which can be taken as
a treatment of Bergsonian dure, explaining how past gnaws away into present,
devouring time future in advance; another, according to which Eliots absolute
time is the child of Roycean and Bradleyan metaphysical idealism, in which the
divine view point is a timeless moment the moment outside of time and before
and after time.
7
For an exhaustive investigation of the various theories about intertextual-
ity, see Allen (2000).
conceived and analysed as intertexts. The single text doesnt stand alone,
in its absolute independence: it cannot exist as a hermetic or self-
sufficient whole and it cannot function as a closed and impermeable
system. On the contrary, it is a relational event, insofar as it keeps only a
part of a meaning, its a synecdoche for a larger whole.
As has been argued, the concept of intertextuality has even more
radical implications and it directly refers to ontological issues. Recalling
John Frows cunning view, intertextuality has transformed the unity and
self-presence of the text into a structure marked by the otherness and
repetition; it has suggested that the exterior of the text is not a monolithic
real, but a system (or an infinity) of other such textual structures.8
Consequently, the dissection of legal traditions involves both the act of
mapping transtemporal influences, in order to detect the underlying
genealogy, and the troubled quest for the possibility of a monologic
structure of juridical canon.
Having clarified the intellectual framework here embraced, three main
issues will be discussed.
First of all, there will be offered a synthetic sketch on the critical
afterlife of Grant Gilmore. In this perspective, the later legal scholars are
conceived as the interpretative heirs of this fine intellect, who have
moulded the course of American legal thought. It will be discussed on the
basis of which arguments and criteria they have appreciated or censured
Gilmores theoretical positions; how they created circles of agreement or
disagreement; in what measure they transformed Gilmores monograph
from a generational product into a timeless book.
Secondly, it will be scrutinized how Gilmore transposed literary
stylemes, figures of speech, novel schemes of construction and elegant
syntactic patterns into the pages of a legal text, with the aim of narratively
8
Frow (1990) 46. The theses developed by John Frow at the beginning of
the mentioned essay are of particular interest for the present discussion. In
particular, the Author points out that 1. The concept of intertextuality requires
that we understand the concept of text not as a self-contained structure but as
differential and historical. Texts are shaped not by an immanent time but by the
play of divergent temporalities. 2. Texts are therefore not structures of presence
but traces and tracings of otherness. They are shaped by the repetition and the
transformation of other textual structures. 3. These absent textual structures at
once constrain the text and are represented by and within it; they are at once
preconditions and moments of the text 6. The process of intertextual reference
is governed by the rules of the discursive formation within which it occurs. In the
case of literary texts (and of readings of literary texts) the relation to the general
discursive field is mediated by the structure of the literary system and by the
authority of the literary canon.
retelling the story of American common law. In so doing, Gilmore himself

operates in an intertextual scenery, in a multidimensional space in which a
variety of voices and utterances blend and clash.
As a third point of discussion, Gilmores writings will be read
according to Harold Blooms conflictual vision of intertextual process. In
this way, it will be possible not only to justify the substantial turn
impressed by Gilmore to the theory of contract from a strictly legal point
of view, but also to appreciate the profound motivations and reasons that
lay at the basis of his graveyard motifs and mocking accent. All the
previous arguments will concur to explain the Gothic paradigm textu-
ally used by celebrated scholars (such as Maitland, Holmes, Gilmore) to
fashion the identity and the essence of the common law tradition. This
model is construed on the basis of a conscious and ponderate distinction
both between the concept of evolution and elaboration, and between the
idea of a vampiric past that preys on the present and the projection of an
amorphous past altered and directed by a governing present.
II. REVIEWING REVIEWERS: POLYPHONY

EMBODIED
Ashes to Ashes, dust to dust.9
These speculations in life and death

these silent battles for reversionary spoil
make brothers very loving towards each other.
(William Makepeace Thackeray, Vanity Fair, ch. XI)
As is so often the case among the mortals, the announcement of the death
of a living creature evokes competing feelings and reactions: curiosity,
dismay, appalled silence or copious words, sense of hope or uncon-
ditional surrender. Similarly, the notice of the decease of an entire field of
law, formally declared, stimulated numerous and assorted responses from
9
At the end of his homage to Grant Gilmore, Waters has offered a poetic
and intense completion of the well-known verse of the Anglican Book of
Common Prayer :
Ashes to ashes, dust to dust / Restate, codify, freeze them if you must / But
laws divorced from ebb and flow / and then arranged in grand tableaux / Are
apt to foster the illusion / That rules writ right end all confusion / And yet
schemes like these do not last long / For all too soon, life proves them wrong
/ Ashes to ashes, dust to dust / In law the future wins / Indeed, it must
Waters (1983) 874.
the legal community. Comments and reviews abounded. Not only the
content of the statement was stunning and sensational, but also the tone
of the prose, an uncommon mix of grave assertions and satirical
witticism, impressed the readers and caught their imagination. Gilmores
scientific hypothesis was intriguing and transformative, his style of
writing sounded fascinating and hardly imitable: these attributes, so
peculiar and distinctive, were certainly adapted to excite academic envy,
much beyond the courtly declaration of respect and the grateful tribute
for the intellectual benefit received. In fact, many colleagues have tried to
erode or, even worse, to dismantle the Gilmorean universe: some of them
have paraded their serious competence against what has been presented
as a kind of trivial sensationalism; others became the fierce defenders of
the historical reason, outraged by such a condensed account; someone
else hunted to find gaps and discrepancies, distortions and misquotations.
The anxious attempt to disentangle from a possible, but undesirable,
identification with a great master finally acted as a boomerang and the
words used to (dis)comment on the controversial book positively
increased. Therefore, once again in spite of the sense first evoked, The
Death of Contract bred a vigorous aesthetic afterlife. Detractors and
devotees, opponents and followers are still facing the Socratic sting that
comes out of the pages.
The destiny of this book reversed the fate reserved for the major
publications authored by the two sage villains celebrated in Gilmores
story (Oliver Wendell Holmes and Benjamin Nathan Cardozo). As it has
been brilliantly pointed out, The Death of Contract quickly became one
of those books that everybody reads and nobody praises,10 while Oliver
Wendell Holmess The Common Law and Benjamin Nathan Cardozos
The Nature of the Judicial Process had nothing in common beyond the
facts that nobody reads them and everybody praises them.11
Gilmores faint smile is lasting with its superior eloquence.
The corrosive Author was utterly astonished to witness such a mount-
ing interest and, at the same time, to cope with the vehemence of the
critical response;12 correctly it has been noted that he was amused by all
the critics, who take him so seriously.13
If we plunge into the mass of published reviews, we can appreciate a
significant variation of tones and arguments. The attributes used to
qualify the work, both in its parts and wholly considered, could be
10
Waters (1983) 870.
11
Gilmore (2014) 76.
12
See Waters (1983) 869.
13
See Speidel (197475) 1167.
collected in an ever-growing bulk and are nuanced with contradictory

moods, that range from pertinacious hostility to emotional appraisal. The
romance has not yet ended! Some commentators seemed to be proud of
denouncing the flaws of Gilmores writing, and properly its inaccuracy,
unoriginality, exaggeration, incompleteness, oversimplification. In add-
ition, Gilmore was accused of describing his own project when he was
textually referring to other celebrated giants of American law: an
inconsistent perspective, apt to generate confusion and embarrass, sinis-
terly meanders across the lines. With an apparently different spirit, it was
said that Gilmore spun a delightful myth about classical contract law, but
this alluring and reassuring premise lead to an analogous, revengeful
conclusion, insofar as it has been noted that such a style is pernicious for
the careless reader who, rapt with wonder, ignores Gilmores disclaimers
and caveats with the result of misunderstanding and misconstruing the
entire thought. In a more sympathetic way, an attempt was made to
dissociate the bright intellect of a distinguished Professor from the
particular qualities of The Death of Contract, depicted as an unsuccessful
publication, or as a kind of contribution, which frustrated the legitimate
expectations of the legal world.
Reporting only a few of the multiple reviews, that concur to corrobor-
ate the above statements, we begin to meet with the genuine and
outspoken assertion of Robert Braucher, Harvard Law Professor,
Reporter for the Restatement (Second) of Contract and State Court
Justice, according to which The idea that Contract is Dead is a perverse
dictum.14 If not aberrant, Gilmores thesis was considered exorbitant or
extravagant, a fruit of exaggeration,15 in a way that the revolutionary
significance of his legal discovery was patently converted into a merely
amusing view.16
Then we encounter the evocative metaphor invented by Richard
Danzig, who once remarked that at any decently set intellectual table,
this book would be a plum a garnish worthy of delight Too many
scholars have been at too much pain to record in which ways Professor
14
Braucher (1976) 122.
15
Atiyah (1986) 68, n. 8: Since Gilmores thesis was so exaggerated, it was
presumably not intended to be taken too seriously; Dawson (1980) 3: Gilmores
accounts that both bargain consideration and Contract are dead seem exagger-
ated.
16
Murray (1990) 2034, para. 54, according to whom Gilmores suggestion
that the bargain theory of consideration can be traced only as far back as 1881,
i.e., to the alleged creator of this revolutionary concept, O.W. Holmes, is an
amusing view.
Gilmore has been imprecise, injudicious, or just plain mistaken.17

Moving from the data collected (by my last count these 100 pages of
lectures had given rise to reviews occupying 150 pages in our leading law
journals),18 Danzig believes that a deeper and more honest reflection on
the reasons that could justify the incongruous attention reserved to a
small book, the dramatic success paid to lessons translated in an elegant,
even if not, in the end, nourishing prose, says a lot about the present,
intellectual state of legal Academia. The thesis is interesting and stimu-
lating. It is based on subtle considerations regarding both the literary
genres of legal literature and the attitudes and inclinations of the legal
profession. How can we explain the fact that the casebook, written by
Gilmore with Professor Kessler, in large part anticipating the doctrine of
the death of contract, was considered absolutely not worthy of attention,
so much so that no one reviewed it?19 Or how can we interpret the
silence that fell on Professor Ian Macneils sweeping article published in
the Southern California Law Review, widely read, but likewise not
recalled or reviewed? According to Danzig, it is not by accident that
discourse within a profession is shaped by circumstances of form as well
as by qualities of substance. The specific and surprising, if not distress-
ing, datum pertaining to the legal profession is that the advantages of
immediate attention, guaranteed criticism and publicity are bestowed
largely on books and withheld from the vast preponderance of legal
academic work that appears in the form of casebooks, articles and
treatises.20 Therefore, the rarity of the use of the book format is one of
the possible causes, which can explain the hunger for a product like
Gilmores work. These notes lay bare the malaise of legal academia and
bring to the light the intellectual conflict between a writing delivered to
descriptive books and a writing perpetuated by the means of a casebook
tradition. From times ago, the approach to book-writing in the law
greatly favoured casebooks: few law teachers write discursive books;
many do not write at all; those who do write typically content them-
selves with detailed analysis of problems attacked piecemeal (in the form
of articles) or they devote their energy to processing preexisting know-
ledge so as to render it teachable (as in casebooks) or authoritatively
accessible (as in treatises).21 Danzigs words strongly resound with
17
Danzig (197677) 1133, 1134.
18
Ibid. 1125.
19
Kessler and Gilmore (1970).
20
Danzig (197677) 1127.
21
Ibid. 1127.
methodological and epistemological implications: the scarcity of discur-

sive books is a tangible surrogate for an intangible shortfall: the shortage
of intellectually ambitious work in the law; the scarcity of overviews, of
imaginative writing, of speculation and creativity cleanly presented. All
these motives, clearly interconnected, inflate the critical echo stirred up
from Gilmores book, even if he proceeded in a very off-the-cuff way:
notwithstanding its intrinsic and self-evident limits, it offered imagin-
ation, generalization, speculation, and creativity cleanly presented.22
Metaphorically speaking, the table was very bare; therefore, the legal
profession, starved as it was, made a feast of a plum and behaved as
though it was given a main course. In a world without meat, or at an
early age, when one finds meat hard to cut, feeling at ease with soft
foods, the tastes are still immature and certainly not sophisticated. In a
similar scenery, it becomes understandable that a plum was appreciated
and devoured, even if lacking the protein of a substantial study.
The description of Gilmores text as a book does not prevent other
reviewers, and first of all Robert Gordon, from observing that the formal
unity is only a kind of superimposed glue, used to put together the body
of different lessons.23 The noble intent of the enterprise is actually
frustrated: not only the tone of the expression is of urbane chattiness, but
mainly the entire design seems to be loose and the execution is
disqualified by its casualness. The conclusive judgment is severe and
harsh, Gilmores perspective being presented as fundamentally distorted,
not so much erroneous as myopic.
In Gary Milhollins view, even the curious title, The Death of Contract,
would lose its apparent efficacy, in fact the study, because of its brevity,
could not show whether contract is dead, or alive and well, or even
flying headlong into places where nineteenth century scholars never
dreamed it could go.24 It remains an undeveloped, brief survey of
changes in doctrine, based on only a few cases, the most familiar ones in
the law of consideration.
Synthetically, Jay Feinman has remarked that The Death of Contract
is good literature, bad history and questionable theory. As numerous
scholars have pointed out, Gilmores picture of the development and
decline of classical law is in many respects overdrawn or just wrong.25
Brian Simpson has represented Gilmores version of the rise and fall of
the general theory of contract law as a parody, specifying I always
22
Ibid. 1133.
23
Gordon (1974).
24
Milhollin (1974) 30.
25
Feinman (1990) 1291.
suspected that he never meant it to be taken as a serious historical

account.26
He is echoed by Joseph Perillo, who has affirmed that contract
scholars know him [Gilmore] best by his Death of Contract, a book
which apparently was intended to be taken largely tongue-in-cheek, a
spoof, that took its title from the death of God of theologians who were
fashionable at the moment According to its parody of history, the
concept of contract was invented by Christopher Columbus Langdell,
perfected by Oliver Wendell Holmes, and propagated by a scrivener
named Samuel Williston.27 On the basis of these words, it could be
supposed that the spirit of parody is contagious and diffusive! Historians
censured the work as bad history; many colleagues had recourse to
multiple stratagems in order to furnish evidence of poor scholarship.
On more than one occasion, the critical inquiry on Gilmores eclectic
views paved the way for wide-ranging reflections. As we have seen
above, the exorbitant number of reviews dedicated to a short and
apparently inconsistent book stimulated a larger debate on the status of
academic production. With the same purposes, Gilmores way of writing
inflated an inspired polemics on the normative merits of rhetorical power
and especially on the functions and meanings of metaphor. The discus-
sion was, therefore, transposed onto an interdisciplinary level, contribut-
ing to the refinement of the topics examined by the so-called metaphor
scholarship and, more generally, by cognitive sciences.28 The obser-
vations are conclusively of the main interest, insofar as they look closer
to the versatile structure of legal writing, to the changeful ways in which
substance becomes intimately related to style in order to compose a legal
text. Beyond the ontological and epistemological issues, it is well known
that language conditions and moulds the real perception and the proper
understanding of information. On this ground, the lively passages of The
Death of Contract were dissected and scrutinized, condemned or
absolved. The shadow of suspicion was projected principally by objectiv-
ist epistemology. Metaphors would be falsehoods, and would have to be
undone into the facts for which they stand; in any case they distract and
confound, generating a sense of weird alienation and dazzled embarrass-
ment. In particular, legal realists were mistrustful of metaphor, because
26
Simpson (1989).
27
Perillo (1993) 761, n. 22.
28
For the discussion on metaphor theory as applied to law, see Winter
(2001); Gibbs (2008). For a very intriguing and exhaustive contribution about
metaphors in law, and in particular on the metaphors implied in contract law, see
Lipshaw (2012).
they conceived it as one of the pernicious creations of the misleading

conceptualism bred by legal formalism.29 An influential confirmation of
this sceptical stance comes from Justice Cardozos famous maxim
metaphors in law are to be narrowly watched, for though starting as
devices to liberate thought, they end often by enslaving it.30 Grasping
his spirit and irony, and recalling his notes on the mysterious (almost
mystical) figure of Benjamin Nathan Cardozo, we can suppose that
maybe Gilmore would have agreed with Patricia Loughlans caustic
comment, when she points out that precisely the statement, destined to
drop metaphor as verbal construction, uses at least two metaphors, those
of liberation and slavery.31 This objection demonstrates, much beyond
the internal contradiction of the sentence, the unity, the potency, the
embeddedness of metaphor, even in the words of speakers who do not
(at least apparently) wish to speak metaphorically and who do not
perceive themselves to be speaking metaphorically. Following the opin-
ion of those who fight against the use of metaphor in legal discourse,
Gilmores prose would be culpable of distorting and confusing the
readers with the massive recourse to such an insidious figure of speech,
apt to camouflage the need for precision and intellectual lucidity.
In an opposite perspective, it has been affirmed that vivid metaphors
can increase clarity by emphasizing particular models of reality, or, with
a much stronger afflatus, that creative use of language can liberate the
author from overly rigid explication. It has also been argued that
metaphor is both a basic dimension of human reason and an indispens-
able tool of legal thought It is only by metaphor that we are able to
express significant aspects of our social reality aspects that are
29
See Cohen (1935) 812, where the Author comments:
Valuable as is the language of transcendental nonsense for many practical
legal purposes, it is entirely useless when we come to study, describe, predict,
and criticize legal phenomena. And although judges and lawyers need not be
legal scientists, it is of some practical importance that they should recognize
that the traditional language of argument and opinion neither explains nor
justifies court decisions. When the vivid fictions and metaphors of traditional
jurisprudence are thought of as reasons for decisions, rather than poetical or
mnemonic devices for formulating decisions reached on other grounds, then
the author, as well as the reader, of the opinion or argument, is apt to forget
the social forces which mold the law and the social ideals by which the law is
to be judged.
Moreover, in the same direction, Cohen (1935) 71112, n. 4.
30
Berkey v. 3d Avenue Railway Co., 244 NY 84 (1926), at 94.
31
Loughlan (2006) 21516.
otherwise devaluated, distorted, or eliminated by more conventional,

reductive approaches to human reasoning.32 Moreover, it has brought to
the light that metaphor functions as a powerful device of translatio, that
is of connection between abstract ideas and tangible things and, there-
fore, it has been underlined that, in the legal domain, it is essential to
exercise the equitable art of modifying or moderating general rules.33
Metaphor appears not only useful, but even practically necessary, to
describe the relationship between law and justice beyond the law, to
clutch a complex set of interactions among different worlds, which can
only be seen in the imagination.34 Concurring with this constructive
view,35 Gilmores words contain a powerful set of insights and the value
of his ideas enhances the readers appreciation of the rhetoric.36
The specific accent posed on the metaphors and tropes, which em-
broider Gilmores pages, seems to have contaminated or embellished
(according to the discordant positions above synthesized) other reviewing
texts. This is the case of Ralph Mooneys essay.37 Its initial lines are
devoted to introduce the strong image evoked by a zoological simile (as it
was first carved by Lawrence Friedman) with the aim to indict the
tendencies of contemporary legal study, while the last paragraph cheers
dodos and unicorns in the title with the purpose to figuratively explain
the implications of the death of the contract in Gilmores prospect. The
32
Winter (2008) 364.
33
Watt (2009) 148.
34
Ibid. 15253.
35
For a clear understanding of the distinction between constructivist and
non-constructivist approaches to metaphor, see Ortony (1993) 3, where the
Author points out that:
the constructivist approach seems to entail an important role for metaphor in
both language and thought, but it also tends to undermine the distinction
between metaphorical and literal. Because, for the constructivist, meaning has
to be constructed rather than directly perceived, the meaning of non literal
uses of language does not constitute a special problem. The use of language is
an essentially creative activity, as is its comprehension. By contrast, the
nonconstructivist position treats metaphors as rather unimportant, deviant, and
parasitic on normal usage. If metaphors need explaining at all, their
explanation will be in terms of violations of linguistic rules. Metaphors
characterize rhetoric, not scientific discourse. They are vague, inessential
frills, appropriate for the purposes of politicians and poets, but not for those
of scientists because the goal of science is to furnish an accurate, (i.e., literal)
description of physical reality.
36
Hillman (1996) 48.
37
Mooney (1976).
first passage of the essay is populated by images and sounds: exotic the
former, mournful the latter. Mooney begins by reporting Lawrence
Friedmans comparative sketch of legal studies and zoology courses,
which confine their study to dodos and unicorns, to beasts rare or long
dead and beasts that never lived.38 Therefore, he continues by saying
that in The Death of the Contract Grant Gilmore offers added support
for that critique by tolling the bell for one of the most closely studied
legal beasts of all.39 The conclusive comment is (all things considered)
not favourable: the extinction of a dominant legal creature would have
been treated with more accuracy and diffuseness, as well as with a more
peaceful devotion. The critical refrain is modulated on recurrent notes.
On the one side, Grant Gilmore is unquestionably a giant among us. The
quality and the range of his scholarship, the clarity and grace of his
writing are legendary among lawyers.40 On the other side:
The Death of Contract is not quite the first-rate contribution to historical

scholarship the legal world has come to expect from Grant Gilmore
Despite its authors eminence and despite its undeniable merits, the book will
fail to satisfy many readers. Perhaps we simply expect too much from Grant
Gilmore. Or perhaps he intended that The Death of Contract be read like an
historical novel, for its broad themes rather than its specific details
Whatever the reason or the reasons, however, the book is strangely unconvin-
cing or uncommunicative on many important points.41
One has to resist the enchanting power of Gilmores composition: as Robert

Gordon annotates, when the magic of the speakers voice has faded, one
begins to realize that this has been a very curious performance.42
As it has been demonstrated, from time to time we have witnessed the
emergence of censorious voices and even of pesky tones, but Gilmores
pages, superior in strength, remain untouched. They perpetually live and
are not in need of resurrection after death. Law professors, if sensible and
honest, will continue to share Gilmores provocative and catching feel-
ings; legal students, if enthusiastic and open-minded, will let themselves
be persuaded to deepen their reading and will be moved by such an
intellectual gift, to them dedicated.
The book introduces important ideas about the process of legal change
and is an aesthetic delight, as Robert Hillmann patently declares: it
38
Friedman (1965) 25.
39
Mooney (1976) 155.
40
Ibid. 163.
41
Ibid. 156, 163.
42
Gordon (1974) 1218.
includes more significant and accurate insights than its critics were
willing to admit. Perhaps more important, the book is memorable for its
rhetorical power.43 In this positive perspective, the framework of Gil-
mores literary construct is worthy of admiration: a big picture is
surrounded with additional details, all interesting and instructive. The
picture allows us to appreciate the evolution of contract law on the
whole, alternatively moving from a broader to a narrow conception in
response to social, economic, and even legal forces. For these reasons,
the most appropriate form of writing seems to be that chosen by
Gilmores illuminated mind. A brilliant fresco is apt to catch the attention
of the observers in a more cogent and immediate way than an excessively
accurate representation, where the relish for the details risks comprom-
ising an overall view. According to Hillmann, the central message
communicated by this impressive painting is the impossibility to halt
or to restrain and moderate the process of legal change and development;
the motion of dissolution and recombination; the enduring metamorph-
osis of legal paths and materials. Adding my personal and further remark,
Id like to make use, in this regard, of a Shakespearean image, pointing
out that the taming of the Law could be eventually versified, but not
realized. Another merit attributed to Gilmore by Hillmann is the clear
comprehension of the internal rhythm, which governs the transformations
of Law: it does not follow a chaotic sequence, but respects a substantial
logic and proportionally reacts to external solicitations. Moreover, in
Hillmanns account, Gilmore offers a seducing way of understanding the
relationship among different movements of thought; in particular the law
and economic trend could be interpreted as a counterweight to the
experimentation and improvization of legal schools such as Critical Legal
Studies. In fact, the view proposed through the economic lens presented
contract law as largely objective, determinate and divorced from political
concerns. Such a view appealed to a legal community primed to stem the
tide of the romantic revolution.44
Among the positive voices, we can surely place Richard Epstein, who
strongly appreciated the intrinsic merits of Gilmores creation, affirming
that The Death of Contract is sure to become as it deserves to be one
of the staples of the literature of common law It is one of those few
books that deserve our most careful thought and attention.45
43
Hillman (1996) 41.
44
Ibid. 2.
45
Epstein (1976) 72.
In recent literature, according to Akbar Rasulovs shrewd analysis,

Gilmore has brought to the light the basic doctrinal symptomatology of
the demise of objectivism, that is, the end of contractualism as a distinct
mode of legal consciousness.46 In this view, Gilmores merit is to build a
three-ages-of-contractualism narrative, emphasizing the role played by
the mounting epistemic crisis in the production of salient paradigmatic
transitions.
In the forty-odd years that have passed since its first publication, The
Death of Contract has been hailed as a clarion call. Undoubtedly, both
beyond and despite the sensationalistic tones of an eclectic criticism, the
book remains a token of a much broader pattern of intellectual transform-
ation in the American Legal Tradition and the narrative it concurs to
construe forms an essential part of the American legal canon.
III. THE POETICS OF LAW: GILMORE AS LEGAL

HUMANIST
The present is the funeral of the Past
and man the living sepulchre of life.
(John Clare, The Present is the Funeral of the Past, 1845)
No anchorage is.
Sleep is not, death is not;
Who seem to die live.
(Ralph Waldo Emerson, Illusion)
Grant Gilmore is over celebrated and over discussed. Apart from personal
and individual inclinations, it is a matter of fact that his mind was
eclectic, his experience impressive, his style unparalleled.
Gilmore perfectly embodied, in his life and his thought, the productive
and fascinating encounter of different knowledge and methodologies, and
especially he became a historical witness of the synergetic intersection
between law and literature. One must remember, in fact, that, before
devoting himself to legal studies, Gilmore earned a Ph.D in French
Studies in 1936, discussing a thesis on Stphan Mallarm, and afterward
he taught French at Yale University from 1937 to 1941. From the great
symbolist poet, the later law professor borrowed a conscious and
pertinacious sense of unorthodoxy, which pervaded not only the form of
46
Rasulov (2013) 295. In order to construct a genealogy of thought about
contractualism, Gilmores account can be connected with M. Horwitzs and
D. Kennedys views; see Horwitz (1992) 963; Kennedy (2000).
the intellectual discourse, the proper arrangements of the words on the

page, their dislocation and syntactical construction, but also, more
incisively, the perception of Law in its mutable composition, the meta-
morphic displacement of rules and precepts beyond the conventional,
concocted geometries. From the literary verses, the legal prose inherited
and jealously kept the awareness of the short distance between vision and
reality, vacancy and fulfilment.
Synthetically, Gilmore was a legal humanist: he restated not the
possibility, but the substantial unavoidability of the reciprocal belonging
of law and literature in order to grasp human experience. If, according to
Holdsworth, Charles Dickens could be considered a fully fledged legal
historian,47 in a similar way Grant Gilmore could be viewed as an
ingenious literary scholar: in their complexities, one figure mirrors the
other. Both of them composed lively stories, superseding the formal
stereotypification and the unemotional impersonality of Reports and
Books of Authorities. They offered an animated picture of the men who
made and represented the Law; they reconstructed the atmosphere of the
period, which they were dealing with; they recreated the impression of
the contemporary background and the actual scene.
Moreover, Gilmore has been an audacious shaper of historical imagin-
ation. He captured the spirit of the past ages in a lyrical or poetic manner
and, at the same time, he built a bridge towards new epochs and
mentalities with a proactive concreteness. Tracing the internal transform-
ations of the American Legal Tradition, he forged a personal style, which
allowed him to acquire a distinctive position in the universe of legal
discourse. In this regard, style is here defined as a particular combination
of modes of emplotment, modes of argument and ideological impli-
cations; it is a replication of patterning, that results from a series of
choices.48 The reasons that generated a wavering stance of critique, from
entranced fascination to trenchant ostracism, seem to arise from the very
fine art of Gilmorean emplotment. This word, in its derivative meaning,
stands for putting the events of a story in a form of a plot, and,
therefore, comes to denote the literary device which grasps together a
variety of novel objects (events, features, actions, places, times) in order
to design a unitarian vision. It involves a dynamic process of selection
and arrangement, an integrating plan and purpose. Building a plot means
47
Holdsworth (1995).
48
This definition of style derives from the encounter of Hayden Whites and
Langs theories and approaches. In particular see White (1973) 5 and Lang
(1987) 21.
to sculpture the outline or the armature of the story,49 which assures a

secured and individuated form with internal coherence, or, in other
words, to trace the organizing line demarcating and diagramming that
which was previously undifferentiated.50 Emplotment configures a kind
of literary nomos. In this perspective, Grant Gilmore was a master of
literary creativity and originality; he dissected the legal past, mulling over
cases, doctrines, thoughts; he reordered and recomposed, with personal
taste and distaste; he dived into the crowd of American legal celebrities
and then he retreated into the secluded space of his own lay Empyrean.
Gilmores plot enlivened and renewed a tradition of discourse.
If we try to typify and name this regulating framework, invented by
Grant Gilmore, we can speak (as I suggest) of a Gothic Satire.
First of all, the dominant theme is introduced by the sorrowful notes of
the title: the public of readers is conveyed to the funeral of a personified
Contract, on whose gravestone the epitaph Contract, like God is dead is
carved with the indication of the date of birth and death. A negative
aesthetics informs the text from its beginning, announcing a story of
mystery and decadence. The pages are crossed by a glimpse of dark and
shaken by erratic movements across time and space, thrilled by tensions
between perception and misperception, understanding and misreading;
fancy and realism.51 Ambiguity and dislocation, juxtapositions and
unsettlements tactically disrupt narrative conventions, prolonging the
interplay of anticipation and apprehension.
A Gothic nuance affects not only the writing style and the word
choice, but also the very conception of legal change, boundaries and
transformations: Gothicism is spreading from the techniques of emplot-
ment upon the very substance of the discourse. Reasoning about Con-
tracts life and death, Gilmore inaugurates a precise ontology of limit in
legal domain. The dynamic inter-relation and the constant transgression,
that jointly build the structural ambivalence of Gothic texts, inspire the
Gilmorean vision on the reiterated breaking of codes of law. As for
ghosts and vampires, death is not a final line, even for Law, boundaries
are not fixed, or impenetrable: supposedly unchanging norms, conven-
tions and especially modes of thought are opened up and reveal their
being sustained by the connected and opposing forces of limit and
trespass. Law is frankensteinized: life and death become sites of
scientific transformation. This ontological infringement of certainty and
49
Brooks (1984) pos. 299.
50
Ibid. pos. 315.
51
Botting (2014) 5.
stagnant immobility projects a sense of ghostliness, assuring the reap-

pearance of past presences, the resurgence of already heard voices and
already bred ideas. A spectral revenant performs a ritual repetition and
enacts an historical mutilation, desynchronizing the tie which bonds the
past with the present. A form of mnemonic reserve produces the uncanny
feel of melancholy and nostalgia, displacing transmission and adaptation.
Contract, personified as Gilmore wants, irrupts in the midst of this
postmodern time out of joint and becomes the protagonist of an uninter-
rupted process of dismemberment and rememberment.
The other characterization of Gilmorean emplotment brings to light its
satirical nature. It is distinctly perceivable, from the first pages, that
Gilmores construction presupposes the inadequacy of the pristine
visions, disentangles the received tradition of American legal thought and
aims to scrub and exfoliate the dominant modes of legal conceptu-
alization. It prepares a new consciousness, built on the repudiation of the
sophisticated theories nurtured in an Age of Faith. Gilmores prose
contains the two main traits considered by Northrop Frye as the essential
elements of satire: wit, or humour, and attack.52 Mobilizing even a sense
of the grotesque or absurd, the legal poet offers a hermeneutic alternative
to the classical reading of contract law evolution and configuration,
ridiculing the valorization of its supposed originality and historical
ineluctability.
On the basis of the previous remarks, and adapting Hayden Whites
illumining words, it is possible to argue that in the poetic act which
precedes the formal analysis of the field, Gilmore creates his object of
analysis and predetermines the modality of conceptual strategies he will
use to explain it.53 Before being a powerful instrument of theoretical
desecration, Gilmores writing is an act of verbal figuration.
Approaching the theme and style of The Death of Contract, the careful
critic chances upon another curious datum. It is an irony of fate that three
of the most memorable sentences in the Common Law Tradition stage
the Law in terms of life and death. The glorious paternity of these
maxims has to be ascribed respectively to Oliver Wendell Holmes,
Frederic William Maitland and, of course, Grant Gilmore. Even within
this celebrated triad of iconic figures, Gilmores voice naturally assumes
a distinctive intonation and inflection. The enigmatic character of Oliver
Wendell Holmes, magnified into legend, cast serious doubts on the
acclaimed continuity of the Common Law and tried to bring to the
52
Frye (2006).
53
White (1973) 31.
surface the karstic flux of legal change concealed beneath the supposed
solid face of this majestic system of law. One of his most well-known
aphorisms (among the many others he had consigned to history) placed
as the inaugural motif at the beginning of his book The Common Law,
The life of the law has not been logic: it has been experience,54
celebrates the inner vitality of the law. The impetuous battle between
continuity and evolution is settled by Holmes in favour of the second
one, as is patently made clear by the following passages:
The law embodies the story of a nations development through many

centuries, and it cannot be dealt with as if it contained only the axioms and
corollaries of a book of mathematics. In order to know what it is, we must
know what it has been, and what it tends to become Many things which we
take for granted have had to be laboriously fought out or thought out in past
times The Common Law has changed a good deal since the beginning of
our series of reports, and the search after a theory which may now be said to
prevail is very much a study of tendencies.55
The same idea of transformation and development, emphasized by the

means of an evocative and metaphorical title, informs the absorbing essay
The Path of Law, where we can find the equally famous dictum [t]he
object of our study, then, is prediction, the prediction of the incidence of
the public force through the instrumentality of the courts. Therefore,
Holmes sympathy and attention are focused on detecting the progressive
evolutionary trends of rules and doctrines, in order to assure an adequate
certainty of predictable results. These are the better premises for subse-
quent theorizing on the distinction between elaboration and evolution: the
first conceived as the mere adaptation of pre-existing principles to the
specificity of later cases, while their core substance is preserved and
transmitted; the second defined as the abrogation, the substitution or the
essential transformation of norms and precepts under the influence of
new purposes and aims, different from those which inspired their original
content. Even if in different manners, in both codified and case law
systems Law lives and dies: the old norms pass away and new ones are
born.
For its part, Frederic William Maitland historically reported the ir-
resistible fascination of the dead forms: they are able to dictate the
permanent structure of the legal system and permanently occupy legal
54
Holmes (1881) 1.
55
Ibid. 1, 2.
imagination.56 In some respects, Maitland draculized the morphology

of English legal tradition and this aesthetic vision acquires more signifi-
cance, if we remember that Maitland and Bram Stoker were precise
contemporaries.
Gothic tones are associated (as it has been suggested above) with
satiric inclinations. Gilmores style is unquestionably unique and over-
poweringly attractive. Let us plunge into the main features of his prose.
In my personal view, three main traits are compelling and typifying: the
strong characterization of the protagonists of the Gilmorean story; the
literary re-vision of American Legal Tradition, now conceived as a chain
of transmission of languages, continuously re-imported, but always
re-interpreted; the rhetorical extra-valorization of contrapositions and
contradictions, which categorically divide the world of law into anti-
thetical positions and conflicting, or, even worse, schizophrenic views.
A. Living Legal Biographies: From Paper Jurists to Actors on

the Stage
First of all, Gilmore gives us a big picture of different epochs and men,
wittily compounded with colourful expressions and astonishing quips.
His merit consists in metamorphosing a potentially tedious book about
the nature and the development of contract law into a literary story,
animated by devouring passions and false beliefs, tormented by intrigue
and conspiracy, acted by heroes and villains and consigned to an
alternating rhythm of revolution and stasis. A syncretistic model of
genres and motifs is chosen to represent a vivid universe populated by
humans, ideas, hopes, expectations, tactics, faults, disillusions, mysteries
and ambiguities. Within this scenic space, Gilmores characters are
brought to life: Story, Langdell, Holmes, Williston, Corbin, Cardozo,
Llewellyn cease to be intellectual constructions, abstract entities, or
historified fossils and become the real actors who perform their drama
on the stage. Their bodily concreteness and intense physicality are
evoked and reproduced by the means of literary forms and devices, such
as charming metaphors, humorous constructions, provocative statements
and poetic aphorisms, reported confessions and fictitious dialogues,
hyperbolic imagery and suspense narration.
56
Maitland (1909). The great legal historian added that process by which
old principles and old phrases are charged with a new content, is from the
lawyers point of view an evolution of the true intent and meaning of the old law;
from the historians point of view it is almost of necessity a process of perversion
and misunderstanding; Maitland (1911) 491.
The book opens with an ironic and desecrating portrait of Christopher

Columbus Langdell, who inaugurated a new course of American juris-
prudence, finding in the ocean of legal norms and remedies a new,
unconquered land. To introduce his tribute to the discoverer of the
classical theory of contract law, Gilmore makes use of an enjoyable
comparison between Christopher Columbus Langdell and Christopher
Columbus, so to connect two significant figures with a common destiny,
in addition to a common personal name. Therefore, the discovery of
Contract on the American soil comes to mimic and to re-enact the
discovery of America itself. It was just a hundred years ago that
Christopher Columbus Langdell, like his namesake four centuries earlier,
set sail over uncharted seas and inadvertently discovered a New World.57
If we pay attention to the words implied, we are immediately acquainted
with Gilmores joke, with his amused act of picking on the honourable
Langdells name. Langdell did not properly invent or build a theory, but
he merely discovered something already in existence, without a particular
intention or a participative inclination, accidentally; it could be said: he
stumbled across it.58
The rhetorical effect is further emphasized if we link together this
description with the colourful account of The Ages of American Law, as
necessarily coordinated parts of a unitary discourse, or of a higher-level
metatext. In The Ages, in fact, Gilmore insists on the fortuitous nature of
Langdells legal finding, recurring to metaphorical verbs and expressions:
it was substantially a fortuitous recovery to defend from other impudent
robbers. Directly quoting Gilmores line He [Langdell, A/N] seems to
have been an essentially stupid man who, early in his life, hit on one
great idea to which, thereafter, he clung with all the tenacity of genius.59
Sarcasm abundantly drips from these pages. Whilst in other respects
Langdell was a mediocre intellect, he revealed the stuff of a genius when,
stubbornly and stolidly, with an obstinate mind, he seized on what he had
mysteriously found.
Despite his personal inclinations and qualities, Langdell was a
dramatically lucky man. Specifically, he was a great man for the records
of history only because of the considerable length of his life. He nurtured
the odd faith that law was a science, like any other science, and even this
aprioristic confidence finally proved to be a fortunate attitude, insofar as
it commended Langdell to the President of Harvard, Charles William
57
Gilmore (1995) 5.
58
Ibid. 6.
59
Gilmore and Bobbitt (2014) 40, emphasis added.
Eliot, who was a chemist and, therefore, entertained a good relationship

with the hard sciences. A sympathetic vision, which possibly distorted
and perverted the real nature of Law, was transformed into an instrument
of success and led to Langdells appointment as the first Dean of the
Harvard Law School. But what remained beyond a long life and a lucky
fate? Not very much, according to Gilmore. To judge by his main works
(the Casebook on Contracts and the Summary of the Law of Contracts,
the same works recalled to the mind as the pioneering studies, which
restyled the external look of contract), Langdell was an industrious
researcher of no distinction whatever either of mind, or of style,60 or,
rather, apart from these over-mentioned books, he seems to have written
little or nothing. Moreover, if we could apply the present-day criteria for
ranking professors and courses, Langdell surely could not be proclaimed
as the winner of a global academic competition: such students com-
ments as have survived suggest that he was a less than inspiring
teacher,61 nor could it be perceived as a kind of satisfactory excuse the
fact that the student reaction was colored by hostility to his novel
method of teaching from the cases instead of lecturing.62 The reference,
here, is to the so-called case method, abruptly inaugurated by Langdell
and based on his undeserved certitude, sustained by dogmatic rather than
reasoned arguments, articulated through the means of statements declared
for divine revelation, synthetically a new methodology, demagogic by
name, but highly perverse in its effects: it had nothing whatever to do
with getting students to think for themselves; it was on the contrary a
method of indoctrination through brainwashing.63
After all, nowadays could we speculate about a classical theory of
contract, if Langdell had remained alone, deprived of a further intellec-
tual aid from abler scholars? The theory itself was pieced together by his
successors notably Holmes, in broad philosophical outline, and Willis-
ton, in meticulous, although not always accurate, scholarly detail.64
The other main character of the story is the well-known and notable
Justice, Oliver Wendell Holmes. In The Death of Contract, Gilmore
explains and comments on the theories of this famed jurist, but the ironic
60
Gilmore (1995) 14.
61
Ibid. 118, n. 20.
62
Ibid. 11819, n. 20.
63
Ibid. 14, 15. Again, with an increasing emphasis, Gilmore states in the
pages of The Ages of American Law after your three years in Cambridge or
wherever, you would never be the same again; you were stamped, branded,
brainwashed for life; Gilmore and Bobbitt (2014) 55.
64
Gilmore (1995) 15.
mood is not spread across all the lines; it appears to be controlled and
restrained, out of a sense of respect and deference, one could say. The
only amusing motto is postponed to the footnotes, where Gilmore
annotates Mark De Wolfe Howes remark on Holmes production,
according to which one must recognize that he was urging a revolution-
ary change in legal thought. Reporting the opinions of the authorized
biographer of Holmes, Gilmore notes that like any revolutionary,
Holmes merely sought to sugar over his more startling heresies with a
frosting of antique learning.65 At this point the line of distinction
between the two intellects, which took an active part in the birth of the
classical theory of contract, is traced: on the one side, we encounter the
grey and confident mind of Christopher Columbus Langdell, who re-
arranged old materials on the basis of an arbitrary choice; on the other,
our imagination is captured by the revolutionary disposition of Oliver
Wendell Holmes, who tried to make a breach in the wall of American
orthodoxy. We can immediately understand how the pendulum of Gil-
morean preferences is oscillating. However, a deeper glance is required.
In fact, the very portrait of Holmes temper and disposition is drawn in
the other twin book (The Ages of American Law), where we chance
upon different tones and modulations. Here Holmes figure emerges from
the abyss of his unresolved ambiguity as strange and enigmatic, dis-
mantling the myth concocted by partisan historians. If the conventional
account narrates the life of a tolerant aristocrat, a great liberal and
eloquent defender of American liberties, and pompously celebrates this
sort of Yankee descended from Olympus, the crude description outlined
by Gilmores pen tears the veil of fiction and shows the real face of
Justice Holmes: he was savage, harsh, cruel, a bitter and lifelong
pessimist, who saw in the course of human life nothing but a continuing
struggle in which the rich and powerful impose their will on the poor and
weak.66 Actually, regarding certain revolutionary tendencies, Holmes
was even short of that gentle optimism which led Karl Marx to believe
that, after one more revolution, the world would be a better place.67 In his
radical and despairing pessimism, Holmes was coping with a Dickensian
world, a muddy space encrusted with oxidized biases and superstitions, a
foggy atmosphere of denied expectations and imposed abuses. It is not by
the way that Gilmore precisely recurs to an over-quoted adjective, first
introduced by Charles Dickens, in order to render the empty inhospitality
65
Ibid. 123, n. 36.
66
Gilmore and Bobbitt (2014) 46.
67
Ibid.
of Holmes universe: the term used is bleak, and it patently echoes the
material and spiritual desolation of Dickens Bleak House. Within a
similar context, the function reserved to the law was simply to channel
private aggression in an orderly, perhaps in a dignified fashion.68 One of
the historical merits credited to Holmes was his membership in the
so-called Metaphysical Club, a group of intellectuals (mainly Charles
Peirce, John Dewey and William James, in addition to Oliver W.
Holmes), who moved American thought into the modern world. These
thinkers had in common an idea about ideas, that we can imagine
Gilmore would have appreciated: ideas are to be considered as tools,
provisional responses to specific and irreproducible circumstances, des-
tined to survive because of their adaptability.69 The underlined scepticism
and the penchant for the mutable form of the ideas, which should never
become fixed ideologies, blend well with Gilmores faith in the in-
exorable flux of legal change.
There is another interesting datum coming out from Gilmores books,
linked together. It pertains to the comparative appraisal of Langdell and
Holmes, as it is construed and motivated by the means of the comparative
analysis of their principal works. We have previously seen that Langdells
Casebook and Summary could not be recommended for a distinctive style
or for profound thought. Holmes lectures, collected in the volume
entitled The Common Law, are presented as difficult to understand, if not
unreadable. As a matter of fact, this apparently negative quality implies a
subtle strategy planned by the brilliant Author: under the semblance of a
common historical survey, Holmes intended to compose a highly original
and essentially philosophical work about the nature of law:
For reasons which he never explained, he chose to dress his statement in the
misleading disguise of pseudo-history. Perhaps the disguise was a way of
sugarcoating the pill of making the new and unfamiliar appear to be old and
familiar. Perhaps it was an elaborate joke which it amused Holmes, who was
of a sardonic turn of mind, to play on his audience.70
68
Ibid. 44.
69
For an interesting study on the Metaphysical Club, see Menand (2001).
70
Gilmore and Bobbitt (2014) 47. In this regard, Gilmore adds: The
historical underpinning was patently absurd, even when it had not been deliber-
ately distorted. I do not mean to suggest that Holmes was a poor historian or that
he did not know what he was doing. He was an excellent historian and knew
more about what he was doing than most of us. Mark de Wolfe Howe
anticipated Gilmores consciousness on the merits of his predecessors, comment-
ing The Common Law is not primarily a work of legal history. It is an endeavor
in philosophy a speculative undertaking in which the author sought to find in
In the related footnote, Gilmore reports, in anecdotal form, the words

pronounced by Holmes in person, in order to reply to the censure of
obscurity and unintelligibility. The passage is intriguing, insofar as it
amplifies Holmes fame as a learned jurist, who knew sources surely
ignored by most of his colleagues. Holmes direct quotation sounds in
these terms: If, within the bounds which I have set myself, any one
should feel inclined to reproach me for a want of greater detail, I can
only quote the words of Lehurou, Nous faisons une thorie et non un
spicilge.71 Who other, besides Holmes, could know of the Belgian
historian, Lehurou? Certainly even those, familiar with the French
language, might be baffled by such a strange word as spicilge.72 Once
again, Holmes chose an almost incomprehensible and cryptic quotation,
borrowed from a different cultural context, as a way of alerting the astute
reader about his own aims. What a curious kind of oxymoronic form of
communication, which uses an abstruse message to make patent one of
the most important tenets of the Author!
For these represented reasons Holmes saturnine and corrosive smile
comes to overlap with Gilmores sneering expression. It seems to be in
front of a wavering hologram, made of the alternating faces of these two
brave and wise men.
Moreover, all the arguments, discussed before, prove the coherence of
Gilmores synthetic view, which assigns to Holmes cunning mind the
function of dignifying Langdells intellectually poor construction: I have
taken Langdell and Holmes as twin symbols of the new age, which I have
called the Age of Faith. Langdells thought was crude and simplistic.
Holmes thought was subtle, sophisticated, and in the last analysis, highly
ambiguous. Holmes accomplishment was to make Langdellianism intel-
lectually respectable.73
Other characters are acting on the stage of Gilmorean macrocosm. At
the opposite side of the pertinacious triad embodied by Langdell, Holmes
and Williston, we bump into a couple of rioters, Nathan Benjamin
Cardozo and Arthur Corbin, cheered in their historical capacity of
the materials of legal history data which would support a new interpretation of
the legal order. Howe (1963) XX.
71
Holmes (1881) Preface.
72
Julien Marie Lehurou (180743) wrote an important history of the
Merovingian institutions. The word spicilge, from the Latin spicilegium,
originally indicates the remnants that can be gleaned from a field after the
principal harvest has been completed. Holmes quotation is consequently coloured
by a metaphorical dart.
73
engineers of destruction. They, in fact, provoked, first, the erosion, and

subsequently the collapse of the classical theory of contract. Metaphors
abound and Gilmores legal saga becomes more and more attractive and
engaging. In his extraordinary lucidity, Gilmore creates a strong parallel,
apt to bring into a mutual, descriptive relation the contending parties. As
Langdell and Holmes created an abstract Contract, each of them with a
proper and different contribution, Cardozo and Corbin overthrew the
pillars of the past discovery with dissimilar force and intensity. Cardozos
attack was subtle, evasive, hesitant, while Corbins attack was more
forthright. Like Holmes, Cardozo was a strange mix of revolutionary and
nonconformist: he gave cryptic hints for our delectation and bewilder-
ment, but it is certain that the outlines of the law of contract that emerged
from the opinions of the New York Court of Appeals during the period of
Cardozos dominance of that Court had little enough to do with the law
of contract as it was taught at Harvard during the same period.74
Gilmore humanizes his characters: they are men of vices and virtues,
of passions and desires; they cross epochs and time, coupling the
transformation impressed onto American jurisprudence with a personal
and interior evolution. From paper masks, they become persons made
of flesh and blood; under the effect of an unusual, but powerfully
successful prosopopeia, they rise from the page and talk directly with
their new and always different audience.
In the lines of The Ages of American Law, Cardozo lives the difficult
and controversial relationship with his father, a corrupt lower court judge
allied with the Tweed Ring in New York.75 From his youth, he assumes a
personal mission, the redemption of his fathers sins. This mature
consciousness builds the solid, but at the same time enigmatic adult and
motivates his personal resolutions: Ascetic in his personal tastes, he
decided at an early age to renounce the pleasures and temptations of the
world in favor of a life of intellectual meditation. The accounts of all
those who knew him tell us of a man of compelling personal charm as
well as of great sweetness of character. By the unanimous testimony of
his contemporaries Cardozo was a saint.76
74
Ibid. 67.
75
The Tweed Ring referred to the political movement founded by William
M. Tweed in New York in the second half of the nineteenth century with the
purpose to control the finances of the city. The men gathered together and
dispensed jobs and contracts in return for political support and bribes; Callow
(1981); Lynch (1927); Mandelbaum (1965).
76
Here we can find Gilmores magisterial literary style: his creative

genius is at work. A tightly woven web of connections and references
comes into sight and produces an effect of ironic alienation. In fact, the
feeling nourished by Cardozo towards his father mimics that act of filial
piety performed by William Wetmore Story in favour of his father, Justice
Joseph Story. As a concrete response to Story Sr.s pervasive desire of
harmonizing an incoherent bulk of principle and remedies, Story Jr.
composed the first American Treatise on Sales in 1848. It was the most
pleasant gift that the son could have given his father. But, after the young
man had fulfilled what he perceived as a cogent filial duty, his legal vein
and verve seemed to be exhausted: William Wetmore Story abandoned
the law and spent the rest of a long life as a sculptor in Italy.77 With a
smug smile, Gilmore annotates [t]he Treatise on Sales is, by the way,
very fine indeed and so, for all I know, the sculptures are too.78
In a corresponding way even if different for its own specificities
the first destiny of grief and pain which happened to the young Cardozo,
came to mould his temperament and to direct his future life-path. The
original sense of temperance and sobriety, which in the beginning
sounded as an antidote to the excesses of the father, became a permanent
antibody resisting against the assaults of history and it impressively
marked the style of the decisions Cardozo wrote in his quality of Judge
and Honourable Justice. The spur for change was concealed and dis-
guised: it became the influential plot beneath the front pages of opinions
and judgments. Once again, to describe the psychogenesis of Cardozos
style, Gilmore resorts to powerful metaphors, frequently construed as the
merging of two synecdoches. We properly read:
Cardozo was a truly innovative judge of a type which had long since gone out
of fashion. In his opinions, however, he was accustomed to hide his light
under a bushel. The more innovative the decision to which he had persuaded
his brethren on the Court, the more his opinion strained to prove that no
novelty not the slightest departure from prior law was involved. Since
Cardozo was one of the best case lawyers who ever lived, the proof was
invariably marshalled with a masterly elegance. It is not until the reader gets
to the occasional angry dissent that he realizes that Cardozo had been turning
the law of New York upside down.79
The inner struggles, sedimented over time on the deep distress first
perceived, even shaped Cardozos view both on the role of the judges and
77
Gilmore (1995) 12.
78
Ibid.
79
Gilmore and Bobbitt (2014) 67 (emphasis added).
on their way of working. From hence it derives his hesitant confession

that judges were, on rare occasions, more than simple automata, that
they made law instead of merely declaring it.80 Despite Cardozos
attempt to mitigate beliefs and impressions, these words were widely
regarded as a legal version of hardcore pornography.81
Therefore, in conclusion, Cardozo was, we might say, a revolutionary
malgr lui who was affectionately attached to the structure, which,
imperceptibly, almost surreptitiously, he proceeded to subvert and
destroy.82
An opposite consideration is due to Corbins thought. Corbin was
patently a revolutionary and his attack on the prevailing orthodoxy was
crucial. In this regard, Gilmores merit lay in a critical reassessment of
Corbins biography, in a wise act of resituating his work in a correct time.
Gilmore unmasks the prejudicial misjudgment about the function of his
Treatise on Contracts; it is a consequence of the fact that, despite the
publication date (1950), the book was conceived at the beginning of the
nineteenth century, in 1910 or thereabouts. Corbin spent the better part of
50 years writing the treatise for publication and we have forgotten this
important datum. The temporal shift between the two events (the writing
of the work and its final publication) causes a schizophrenic perception
of the ideas developed and discussed. By 1950, the reforms which Corbin
argued for, were no longer particularly novel; the ideas had been the
mothers milk of beginning law students for a generation or more and
most of the reforms had long since been accomplished,83 but coming
back to 1910 one could really appreciate the strong revolutionary
gradient associated with the same conceptions.
B. Visions Re-Vision: For a Gilmorean Genealogy of American

Legal Tradition at the Intersection of Past Influences and
Prospective Imaginations
This final remark leads us to discuss Gilmores opinion on the nature of

legal traditions, and, in particular, on the mutable form of the American
one. Patrick Glenn has opened his masterpiece, Legal Traditions of the
World, with the unavoidable question is a theory of tradition pos-
sible?.84 Trying to articulate a grounded response, Glenn notes that the
80
Ibid. 69.
81
Ibid.
82
Ibid.
83
Gilmore (1995) 64.
84
Glenn (2014) 3.
definition of what is a theory involves two different kinds of relation-

ships, both with time and with information. Gilmore offers his own
answer, assuming a personal and critical position on each of the issues at
stake. Specifically, his greatness (according to my interpretation) lies in
the fact that Gilmore successfully proposed a construction of the ways in
which great American scholars, judges and professionals constructed the
American legal tradition and structured a particular legal mind, apt to
explain how the law finds facts and establishes rules in the face of the
fallibility of memory, the frailty of vision and the ambiguity of lan-
guage.85 Synthetically, Gilmore literarily articulated a theory of meta-
construction. Recalling the insights introduced in the first paragraph of
the present chapter, and also bearing in mind the comments previously
made, I would like to conclude that Gilmore narratized past opinions,
suggestive beliefs and influential assumptions. In so doing, his caustic
discourse seems to be inspired by the critical arguments developed by
Harold Bloom in order to revise Thomas Stearns Eliots thought. The
questions, which these two giants of literature were confronted with,
were precisely related to the concept of tradition and influence, to the
dominance of or over the past, to the irenic or battled confrontation
among sages. If we are going to find a leading motto to characterize
Gilmores view, I think that one of the better choices is the transposition,
within the legal domain, of the clear statement put forward in the first
lines of The Anxiety of Influence:
this short book offers a theory of poetry by way of a description of poetic

influence, or the story of intra-poetic relationships. One aim of this theory is
corrective: to deidealize our accepted accounts of how one poet helps to form
another. Another aim, also corrective, is to try to provide a poetics that will
foster a more adequate practical criticism.
If we operate a terminological substitution, replacing poetry with law

or legal tradition; poetic with legal; poet with jurist, and poetics
with legal theory,86 we can define Gilmores short, even if dense book
(just like Blooms work), as a short book, which offers a theory of legal
tradition by way of legal influence, or the story of intra-legal relationship.
One aim of this theory is corrective: to deidealize our accepted accounts
of how one jurist helps to form another. Another aim, also corrective, is
85
Park (2013).
86
Precisely, if poetics could be defined as the theory of literary forms and
literary discourse, the corresponding expression of legal theory, here used for
replacement, can be really interestingly understood as the theory of legal forms
and legal discourse.
to try to provide a legal theory that will foster a more adequate practical
criticism. In the same way as Harold Bloom, Grant Gilmore announces a
queer and unexpected visions revision, based on the critical genealogy
of American legal thought and on the figurative mapping of legal
arguments. This intellectual plan enacts a complex and labyrinthine
relation between the reading of texts and decisions and the search for the
origins of an imaginative vision. The whole universe of legal theories is
fragmented and dissected; it is partitioned into clubs and circles; it is
disembodied into conflicting visionary companies, each of them grouping
a number of thinkers who gather together and reciprocally ally according
to a common theme of prospective imagination. Langdellians, Holmes-
ians, Willistonians, Cardozians, Corbinians are the contending factions
which purport to express divergent creeds.
Theoretically, Gilmore feeds on the same philosophical arguments that
provided Bloom with a key rationale for his conception of the poetic will.
If Bloom followed the Nietzschean Genealogy of Morals with a compel-
ling Genealogy of Literature, Gilmore came to add a condensed Geneal-
ogy of American Law and Jurisprudence. At the basis of all these
constructions is a shared awareness of the importance assumed by the
confrontation among precursors and descendants, ultimately conceived as
the central constituent of philosophical, poetic and legal meaning.
Nietzsches ruminations on bad conscience (an increasing anxiety now-
adays felt towards an increasingly incumbent past) furnish a suited
framework for a specifically diachronic interpretation of a new history of
poetics and law. The Nietzschean assertive, even if anguished declaration
on the nature of our response to the past is strictly pertinent:
the fear of the ancestor and his power and the consciousness of indebtedness
increase in direct proportion as the power of the tribe itself increases, as it
becomes more successful we arrive at a situation in which the ancestors of
the most powerful tribes have become so fearful to the imagination that they
have receded at last into a numinous shadow: the ancestor becomes a god.87
From hence we can extract two main ideas, which also pervade Blooms
works and, therefore, can help us to re-read Gilmores account in a
Bloomian mood. The first is the reversal of conventional trajectories and
temporal vectors in historical discourse. The movements in time are
consigned to a changed perception: it is not the present to be guided by
the past, but the past to be modified by the present through an
87
The passage is quoted in these terms by Harold Bloom in The Anxiety of
Influence; Bloom (1997) 118.
uninterrupted act of misrepresentation. The second idea is the pervasive

battle, which de-forms the irenic continuity from the titans of the past to
the ephebes of the present, the perpetual Agon, the relentless struggle
fought until the parricide of the awkward progenitors is consumed. Both
of these intellectual claims are vividly exposed, in Blooms language,
through the clever use of a demonic metaphor: the demonization of
chronology advances hand in hand with the demonization of the precur-
sor. Moving from the Greek root of the term demonization (from the
verb , that is, to divide), Bloom uncovered the fractures and
divisions in time and among individualities, the aggressive act of
depreciation perpetuated by the descendants to the detriment of the
predecessors.
The first idea, or the critical reassessment of the temporal relations, is
detectable even in Eliots essay, Tradition and the Individual Talent,
especially in the famous passage:
No poet, no artist of any art, has his complete meaning alone. His signifi-
cance, his appreciation is the appreciation of his relation to the dead poets and
artists. You cannot value him alone; you must set him, for contrast and
comparison, among the dead. I mean this as a principle of sthetic, not
merely historical, criticism. The necessity that he shall conform, that he shall
cohere, is not one-sided; what happens when a new work of art is created is
something that happens simultaneously to all the works of art which preceded
it. The existing monuments form an ideal order among themselves, which is
modified by the introduction of the new (the really new) work of art among
them. The existing order is complete before the new work arrives; for order to
persist after the supervention of novelty, the whole existing order must be, if
ever so slightly, altered; and so the relations, proportions, values of each work
of art toward the whole are readjusted; and this is conformity between the old
and the new. Whoever has approved this idea of order, of the form of
European, of English literature, will not find it preposterous that the past
should be altered by the present as much as the present is directed by the past.
And the poet who is aware of this will be aware of great difficulties and
responsibilities.88
Inspired by a similar intent, Bloom concludes his Map of a Misreading

with these words:
Canon-formation is not an arbitrary process, and is not, for more than a

generation or two, socially or politically determined, even by the most intense
of literary politics. Poets survive because of inherent strength; this strength is
manifested through their influence upon other strong poets, and influence that
88
Eliot (1998) 28.
goes through more than two generations of strong poets tends to become part
of tradition, even to become tradition itself.89
Combining the sources of literary criticism, it is detectable the assonance

we can trace when Gilmore personified the artificers both of legal
constructions and of their breakdown: Every Blackstone must have his
Bentham; every Langdell must have his Llewellyn.90 In this perspective,
and following the exemplification proposed by the acute Gilmore,
Bentham and Llewellyn couldnt have a complete meaning alone, but
they have to be appreciated within a relation of contrastive comparison
with their ancestors: they have to be placed among the Deads. Bentham
is signified through Blackstone (and it is arguable even the reciprocal) as
Llewellyn is signified by Langdell (and, in the same way, it is arguable
even the reciprocal). We can reasonably add that the couple Cardozo-
Corbin, formed by the engineers of the destruction, gave its meaning
from the other and previous couple Holmes-Williston, made up of the
designers and executioners of the Grand Theory of Contract.
Nevertheless, there is an important element of dissent between Bloom
and Eliot about their theories on literary tradition. As has been mentioned
before, Bloom imagines tradition as a site of conflicts, not as a mere
handing-down, or a process of benign transmission: it is a conflict
between past genius and present aspiration, in which the prize is literary
survival or canonical inclusion.91 Bloom introduces a conflictual vision
of the intertextual process, described by the means of a combative
terminology: a poetic text is not a gathering of signs on a page, but is a
psychic battlefield upon which authentic forces struggle for the only
victory worth winning, the divinating triumph over oblivion.92 Within
this intellectual framework, the theory of tradition is inexorably linked to
a theory of influence, modelled on Freudian philosophy, specifically on
the sons conflict with the father in the Oedipus complex, or, at a deepest
analysis, on the Kabbalistic philosophy of belatedness.93 The latecomers,
89
Bloom (2003) 200.
90
Gilmore and Bobbitt (2014) 61 (emphasis added).
91
Bloom (1994) 89.
92
Bloom (1976) 2.
93
Blooms repeats many times that the concept of influence has nothing to
do with the notorious study of sources: one is influence at the level of style or
vocabulary (the material source studies), the other is influence as a rhetorical
spacing, the site of production of poetry. By poetic influence I do not mean
the transmission of ideas and images from earlier to later poets. This is indeed
just something that happens, and whether such transmission causes anxiety in
the later poets is merely a matter of temperament and circumstances. These are
the writers who come time after time, are oppressed by the ominous
presence of the predecessors, talented with a superior creative
strength. To surmount this coercive outrage, successful writers enact a
Kierkegaardian or Nietzschean will to power, employing devices and
defence mechanisms against that which they need to keep repressed in
the unconscious. Hooked on the works of the precursors, the ephebes
must guard themselves against the tormenting knowledge that they are
merely involved in a process of re-writing, or, in Bloomian terms, of
misreading. They really borrow stylistic features and figures from the
previous literature, but at the same time they transmute, recast and
reinterpret those literary constructions in new ways, nourishing the
illusion that their work is not properly and definitely influenced by the
central harbingers of literature. The distortion of the already given
meaning is a necessary act devoted to incorporate the greatness of the
predecessors, still maintaining a sense of autonomy. Thereby, Bloom
identifies the agonistic genealogy of poetic (but it could be said, in
broader terms, literary) creation with the endless map of misreading:
poetic history is indistinguishable from poetic influence. Imagination is
nothing but misinterpretation, which makes all creations antithetical to
their precursors. These arguments, wholly considered, support a new
form of critical inquiry, appropriately named antithetical criticism,
devoted to catch and to comparatively measure the series of swerves (or
of clinamen) after unique acts of creative misunderstanding.94 The nature
fair materials for source-hunters and biographers, and have little to do with my
concern; Bloom (1997) 71. The profundities of poetic influence cannot be
reduced to source-study, to the history of ideas, to the patterning of images.
Poetic influence, or as I shall more frequently term it, poetic misprision, is
necessarily the study of the life-cycle of the poet-as-poet. When such study
considers the context in which that life-cycle is enacted, it will be compelled to
examine simultaneously the relations between poets as cases akin to what Freud
called the family romance, and as chapters in the history of modern revisionism,
modern meaning here post-Enlightment; Bloom (1997) 78. Bloom himself
traces the line of discrepancy with respect to Freudian literary criticism: speaking
about poem as an achieved anxiety, Bloom does not mean that the poem
embodies a sort of sublimation of that anxiety, as the Freudian orthodoxy would
admit. On the contrary, every poem is a process of repression and its inner
strength is an evidence of the internal revisionism and repression, of a growing
melancholy identity.
94
In The Anxiety of Influence Bloom appositely devotes an interchapter to
explain what he intends with the expression anthithetical criticism. The swerves
implied as constituent elements of this form of criticism are: to learn to read a
great precursor poet as his greater descendants compelled themselves to read
of poetry determines the nature of critics: all criticism is prose poetry.

Specifying the famous Nietzschean motto, there are no interpretations but
only misinterpretations.
If this is the approach to be followed, even Blooms production has to
be conceived as a revisionist response to his ancestors. Bloom is an
antithetical critic, who writes against his Masters and even against
himself. As it has been pointed out, his main books are best viewed as an
extended polemic against the tradition immediately preceding him, the
tradition that, through most of the twentieth century, had slighted all the
Romantics but Coleridge. Bloom engages in a fierce battle with the
ghostly presence of Irving Babbitts New Humanism, with the New
Criticism of Tate, Ransom, Brooks, Warren, and again, and most acridly,
with the neo-Christian matrix of modern Anglo-Catholic letters repre-
sented by T.S. Eliot, W.H. Auden and C.S. Lewis.95 For my intellectual
purposes, the polemical clash between Harold Bloom and the New
Critics is revelatory. First of all, Bloom reacts against New Critical
aesthetics, which championed modernism as a corrective to the excesses
of Romanticism, and, on the contrary, magnifies the legacy of romantic
visionary imagination as a dynamic, vital force, as a living tradition.
Secondly, Bloom desecrates Eliots conception of literary tradition as an
ideal order, or a process of benevolent transmission. The malign influence
of T.S. Eliot still lingers on:96 he has idealized the process of literary
transmission, producing an idealized fiction of a simultaneous order, that
releases literary time from the burden of anxiety.97 Eliot anaesthetized the
him; to read the descendants as if we are their disciples, and so compel ourselves
to learn where we must revise them if we are to be found by our own work, and
claimed by the living of our own lives. Bloom also clarifies that neither of these
quests is yet Anthitetical Criticism. That begins when we measure that first
clinamen against the second. Finding just what the accent of deviation is, we
proceed to apply it as corrective to the reading of the first but not the second poet
or group of poets. To practice Antithetical Criticism on the more recent poet or
poets becomes possible only when they have found disciples not ourselves. But
these can be critics, and not poets; Bloom (2013) 93.
95
Bloom (1971) 207.
96
Bloom (1982) 17.
97
Ibid. 1718. It is not worth mentioning that, at a deeper glance, Bloom
discovers a sort of internal dissociation in Eliots construction. Eliot was
deceiving us, grand rhetorician that he was. He could not have been deceiving
himself. Against the Eliot of Tradition and Individual Talent, Bloom unmasks a
secret and unofficial Eliot, whose vision is much more commendable. In
Reflections on Contemporary Poetry, an essay published in the July 1919 issue of
The Egoist, Eliot says that admiration of another writer leads most often to
role of the predecessors, confining them to the same destiny reserved to

Prufrocks dissected soul and etherized passions. Bloom concludes:
there is then something uncanny (unheimlich) about tradition, and
tradition, used by Eliot, say, as a hedge against the daemonic, is itself,
however orthodox or societal, deeply contaminated by the daemonic.98
If we ponder over these statements and positions, we can identify a
critical paradigm apt to represent Gilmores antithetical view against the
logical, tidy and incontrovertible superfetations consumed by Classicism
and his agonizing immersion into the stormy waters of Romantic
consciousness, with all the new energy produced in an ecstasy of
self-expression. Each one of the Ages of American Law (the Age of
Discovery, the Age of Faith and the Age of Anxiety) lives and feeds on
the polemical response fantasized by the Newcomers in search of a
distinctive originality. The revision of past visions, even their misreading
or their misinterpretation, at the same time produces and consumes the
history of Law in a continuous conflict, in a preposterous use of doctrines
and thoughts. As both a writer and a legal critic, Gilmore iterates, in the
field of Law, Bloomian themes and especially the sympathetic partici-
pation in a Romantic agony, which defines his aesthetic choice in conflict
with the formal systems built by classical theorists, echoing Blooms
resistance to New Critics orientations. The final pages of The Death of
Contract, a very unusual masterpiece of legal literature, with a perfect
style and incomparable elegance, gives evidence on the proposed
correspondence:
I have one final thought. We have become used to the idea that, in literature
and the arts, there are alternating rhythms of classicism and romanticism.
During classical periods, which are, typically, of brief duration, everything is
neat, tidy and logical; theorists and critics reign supreme; formal rules of
structure and composition are stated to the general acclaim. During classical
periods, which are, among other things, extremely dull, it seems that nothing
interesting is ever going to happen again. But the classical aesthetic, once it
has been formulated, regularly breaks down in a protracted romantic agony.
The romantics spurn the exquisitely stated rules of the preceding period; they
experiment, they improvise; they deny the existence of any rules; they churn
around in an ecstasy of self-expression. At the height of a romantic period,
everything is confused, sprawling, formless and chaotic as well as,
imitation and the awareness of our debt naturally leads us to hatred of the
object imitated. He contrasts with this a feeling of profound kinship, or rather
of a peculiar personal intimacy, with another, probably dead author; Eliot (1919)
3940.
98
Bloom (1975) 9798.
frequently, extremely interesting. Then, the romantic energy having spent

itself, there is a new classical reformulation and so the rhythms continue.
Perhaps we should admit the possibility of such alternating rhythms in the
process of the law. We have witnessed the dismantling of the formal system of
the classical theorists. We have gone through our romantic agony an
experience peculiarly unsettling to people intellectually trained and condi-
tioned as lawyers are. It may be that, in this centennial year, some new
Langdell is already waiting in the wings to summon us back to the paths of
righteousness, discipline, order, and well-articulated theory. Contract is dead
but who knows what unlikely resurrection the Easter-tide may bring?
Having clarified the intellectual framework best fitted to disclose Gil-

mores subtleties beyond his fresh and compact account, it is of great
interest to find out the rhetorical apparatus (tropes and figures of
speech), the expressive devices (terms, adjectives, word-construction) and
the persuasive means (composition and intonation of the sentences) used
to narratize the rise and fall of the so-called Classical Theory of
Contract. In contrast to the dominant forms of discursive tradition,
Gilmores experimental writing appears to be suggestive, rather than
conclusively demonstrative; narrative, rather than exhaustively method-
ical; subjective, including personal or circumstantial details. The Bloom-
ian, agonistic nature of Grand Theory scrutinized by Gilmore is disclosed
from the beginning. First of all, this curious machine was not a natural
development of American law, but it was a construction, an invention,
destined to produced a sharp break with the past, even with the recent
past.99 The apparent unity of doctrine was achieved through what might
be called an extremely selective handling of the case material.100
Besides, it is very interesting to note that, according to the same
depiction Gilmore intended to give us, the builders of this new form of
legal architecture proceeded to a substantial revisionist lecture of past
cases and opinions. They pretended to dress with new clothes old
materials and the sense of belatedness seemingly won through the means
of a persistent act of selective misreading, which originates a chain of
subsequent swerves:
The inventors of the theory did not make it all up out of their own heads.
Indeed they made industrious use of whatever bits and pieces of case law, old
and new, could be made to fit the theory. Such cases were immediately
promoted to leading cases and made to fit in much the same way that
Procrustes made his guests fit. Cases which could not be made to fit were
99
Gilmore (1995) 19.
100
Ibid. 61.
ignored or dismissed, with Langdellian certitude, as wrong. On the whole,

however, the theory was in its origins, and continued to be during its life an
ivory tower of abstraction.101
Once again, Gilmores exhilarant force is at work. The similitude

introduced to explain the operational way followed by Langdellians is
amazing. The mention of Procrustes myth102 transforms and colours the
inter-textual relations, which connect the present to the past: the mis-
appropriation of declared judgments and precedents sounds as a wilful
attack on the purity of the original statements. It was not by the way that
the pillage of restyled decisions was addressed towards that luxuriant
basin of English case law: however conscious American lawyers may
have been of the need to make a fresh start, a system of law cannot be
improvised overnight. It has to come from somewhere.103 In this regard,
we can merge Gilmores further notations with Harold Blooms stunning
remark. On the one side, we read that English cases were precisely
managed and we need not accuse Langdell and his successors of an
unbecoming Anglophilism; for the structure they wanted to build, the
English cases were the best indeed the only possible building
materials,104 even in comparison with the emerging American case law.
On the other side, we recall to mind Blooms synthetic and exhaustive
assertion according to which literary criticism has known always this
reliance of texts upon texts, and this consciousness was strengthened
after Vico uncovered the genuine scandal of poetic origins in the
complex defensive trope or troping defense he called divination.105
In an effort to emulate and finally surpass anterior texts, doctrines and
jurisprudence, strong legal scholars misread the precursors, in a defensive
gesture that allows the something new of juridical creation to occur.
Langdell, Holmes and Williston, as has been anticipated, intellectually
projected and factually led this fine work of stretching old solutions and
ruminating on past ideas.
101
Ibid. 19.
102
In Greek mythology, Procrustes lived in Attica, on the sacred way
between Athens and Eleusis, where the mystery rites were performed. Here, in
Corydalus, he abducted travellers and passengers, providing them with an
abundant dinner and inviting them to spend the night in a rather strange bed; he
wanted to fit guests bodies to perfection. Therefore, who were too short were
stretched (as the name Procrustes etymologically indicates), while those who
were too tall had their legs chopped off with a sharp hatchet.
103
Gilmore (2014) 17.
104
Gilmore (1995) 62.
105
Bloom (1976) 3.
The new theory of contract was forged from three main principles.
First of all contractual liability should be restricted as narrowly as
possible: the theory seems to have been dedicated to the proposition
that, ideally, no one should be liable to anyone for anything. Since the
ideal was not attainable, the compromise solution was to restrict liability
within the narrowest possible limits.106 The merit of having accom-
plished this goal is credited to Oliver W. Holmes, who introduced the
revolutionary107 and purpose-made doctrine, later familiar under the
definitory label bargain theory of consideration. In so doing, and
proceeding to an analogical application of the paradigms previously
discussed, borrowed from literary studies, it could be argued that Holmes
specifically acted according to one of the six ratios enunciated by Harold
Bloom as the six typological dynamics which govern inter-textual
relations. The possible reference is to the figure named tessera, which
indicates completion and antithesis. As Bloom clarifies, the word is taken
not from mosaic-making, but from the ancient mystery cults, where it
meant a token of recognition, the fragment say of a small pot which with
the other fragments would re-constitute the vessel. Therefore, when this
ratio is evoked, one would emphasize that a creative artist antithetically
completes his precursor, by so reading the parent-text as to retain its
terms, but to mean them in another sense, as though the precursor had
failed to go far enough. In our present context, Holmes put his hand into
the sacred urn of the ancient common law and drew out the puzzling term
of consideration, which he converted to some hitherto unsuspected
uses.108 As Gilmore highlights, Holmes analysis of the true meaning of
consideration comes forth almost naked of citation of authority or
precedent. He starts with an off-hand reference to what is commonly
said and commonly thought. However, what is clear to Holmes has
not always been sufficiently borne in mind by others. Whereupon, we
are off to the races at a dizzying clip.109 The new day dawned with
Holmes. Many swerves took place on the backstage. Lord Mansfields
disgust for this questionable institute (explainable perhaps on the ground
of his Scottish birth110) was rejected and dropped, damned as heresy. The
odd idea that any benefit to the promisor or detriment to the promisee
could support a promise was also abandoned. An undeclared meaning
was extrapolated: It is the essence of a consideration, that, by the terms
106
Gilmore (1995) 15.
107
Ibid. 2.
108
Ibid. 20.
109
Ibid. 2223.
110
Ibid. 20.
of the agreement, it is given and accepted as the motive or inducement

for furnishing the consideration. The root of the whole matter is the
relation of reciprocal conventional inducement, each for the other,
between consideration and promise.111 In the after Holmes era there
were benefits and benefits, detriments and detriments. The theory of
consideration became the balance-wheel of the great machine.112
The second principle of the Grand Theory was the objectification of
contractual liability. According to Holmes, that liability, though narrowly
restricted, was to be virtually absolute. Another clinamen was performed.
Gilmore expressly defines the new trend in terms of a switch from
subjective (the substantiation of the adjective used to qualify the
approach which the courts had almost instinctively and without giving
any thought to the matter been following113) to objective. Each
litigated case must become, from an extended factual inquiry into what
was intended, meant or believed, an investigation about the externals, or
about what the parties said or did. As a consequence, Holmesian theory
carefully narrowed the range within which mistake, fraud, duress, impos-
sibility could be successfully pleaded as a defence. These theoretical
premises produced an important effect at the operational level, mainly the
transformation of questions of fact into questions of law and, therefore, a
considerable reduction of the role of the civil jury in contract litigation.
In Gilmores metaphorical language, if the consideration was the
balance-wheel of the great machine, the objective theory of contract
became the great metaphysical solvent, the critical test for distinguishing
between the false and the true.114 With specific regard to this tenet of
classical theory, Gilmore himself speaks in Bloomian terms, evoking the
anxiety of influence perceived by the descendants, even inside the elitist
club of the Classicians:
the post-Holmesian objectivist, led by Williston, make no attempt to argue

that their principle had any common law past On the contrary, the
emergence and triumph of the objective theory was put forward as one of
the great accomplishments of recent times the apprehension of a funda-
mental truth which had long been hidden in a deep morass of error.115
111
Holmes (1963) 230.
112
Gilmore (1995) 1920.
113
Ibid. 39.
114
Ibid. 47.
115
Ibid. 4748. To support his argument, Gilmore quotes various paragraphs
of Willistons treatise on contract, as legal evidence of his version of objectivism.
The references are scrupulously detailed in n. 97; Gilmore (1995) 137. Moreover,
reading Gilmore, the last straw would be represented by the fact that one of the
The third and last principle of the classical theory was the proclaimed
ineffectiveness of contract remedies. First of all, compensatory damages
were liquidated, punitive damages were rejected; secondly, only certain
kinds of losses were compensated; thirdly, specific performance was to
be granted only rarely.
In order to elucidate how the industrious couple Holmes-Williston,
moving from Langdellian premises, assembled a bulk of abstractions into
a supposed organic system, matter of ritual incantation, Gilmore specu-
lates on the strategic use and abuse of law cases, on their narratological
dis-emplotment and re-emplotment, through an act of therapeutic laun-
dering. This diachronic sketch is of the utmost interest for a comparative
legal scholar, insofar as it brings light on the intertextual construction of
legal traditions and on the powerful use that can be made of the citation,
as a form of second-hand writing, or writing at one remove.116 In this
perspective, precedents are repositories of established filiations, com-
posed under the discursive influence of other opinions and traversed by
other styles and voices. Their conclusive shape a cohesive unity of form
and content comes out as the final result of a bellicose battle fought
against or in favour of already declared decisions; the references quoted
in the text lead to the ultimate destination through a path of erasure and
remembrance. Legal traditions disclose their texture, as entangled pal-
impsests of citations and misreadings.
Retelling the story of consideration, Gilmore illustrates Willistons
misuses of past English cases, such as Stilk v. Myrick,117 Harris v.
Watson,118 Dickinson v. Dodds.119 The first, Stilk v. Myrick, is presented
as the better example of how an orthodox view could be supported by a
mis-lecture, a partisan and selective (mis)appropriation of the old sources
of law. A general rule on consideration and performance of contractual
obligations (a promise to perform a contractual obligation already owed
to the other party will not constitute good consideration) was derived
from a decision pronounced in relation to the rigour of seafaring life
during the Napoleon wars. Figuring the past, Gilmore explores the
best known judicial expressions of the objective theory was by Learned Hand,
who had been a student of Willistons and acknowledged the great influence
which Williston had had on his thinking. The case in question is Hotchkiss v.
National City Bank of New York, 200 Fed. 287, 293 (S.D.N.Y. 1911).
116
For a brilliant theory of citation as a second-hand writing, see Com-
pagnon (1979).
117
Stilk v. Myrick [1809] EWHC KB J58.
118
Harris v. Watson, 1791, Kings Bench; (1791) Peake 102, 170 ER 94.
119
Dickinson v. Dodds (1876) 2 Ch. D 463.
contentious relationships both among law reporters and among legal

scholars, who tried to anchor their own conclusions to one authoritative
vision, selected among the others. This is the stratified narrative of Law.
At the beginning, Lord Ellenboroughs opinion was recorded in two
different tales, written by reporters of different standing, Espinasse, not
benevolently considered,120 and Campbell, highly valued and respected.
The first relates that Lord Ellenborough decided the case according to a
principle of public policy, firstly applied in Harris v. Watson;121 the
second identifies the ratio decidendi in a principle of contract law,
namely, a want of consideration in the case.122 The cases were
120
Even if probably provided with many fine qualities, Espinasses capacity
as an accurate law reporter was diminished by the fact that he was virtually deaf
and, according to the common account, he was not an accurate lip-reader.
Consequently, the exactness of his report with reference to an oral judgment
given immediately after the conclusion of legal argument and without a full
written text is at least doubtful; see Megarry (1973) 118 where Pollock CB is
quoted as having said: Mr Espinasse was deaf. He heard one half of a case and
reported the other.
121
Stilk v. Myrick (1809) 6 Esp. 129, 130, 170 ER 851:
Lord Ellenborough ruled, that the plaintiff could not recover this part of his
demand. His Lordship said, that he recognized the principle of the case of
Harris v. Watson as founded on just and proper policy. When the defendant
entered on board the ship, he stipulated to do all the work his situation called
upon him to do. Here the voyage was to the Baltick and back, not to
Cronstadt only; if the voyage had then terminated, the sailors might have
made what terms they pleased. If any part of the crew had died, would not the
remainder have been forced to work the ship home? If that accident would
have left them liable to do the whole work without any extraordinary
remuneration, why should not desertion or casualty equally demand it.
122
Stilk v. Myrick (1809) 2 Camp. 317, 318, 170 ER 1168, 1169:
I think Harris v. Watson was rightly decided; but I doubt whether the ground
of public policy, upon which Lord Kenyon is stated to have proceeded, be the
true principle on which the decision is to be supported. Here, I say, the
agreement is void for want of consideration. There was no consideration for
the ulterior pay promised to the mariners who remained with the ship. Before
they sailed from London they had undertaken to do all that they could under
all the emergencies of the voyage. They had sold all their services till the
voyage should be completed. If they had been at liberty to quit the vessel at
Cronstadt, the case would have been quite different; or if the captain had
capriciously discharged the two men who were wanting, the others might not
have been compellable to take the whole duty upon themselves, and their
agreeing to do so might have been a sufficient consideration for the promise
of an advance of wages. But the desertion of a part of the crew is to be
considered an emergency of the voyage as much as their death; and those who
transmuted onto the rules of the general theory of contract law, fixed
into the bodies of treatises and Restatements, exploiting the vagaries of
early nineteenth century English case-reporting and lumping unlike cases
together without stating the facts of either case. These arguments allow
Gilmore to put at the centre of the scene the polyphonic structure on
which the monument of common law has been erected and, at the same
time, to express his caustic view on the real consistency and authenticity
of the classical theory of contract. A devious process led to the birth of
this Grand Theory: such is the progress of jurisprudence we need not
concern ourselves with whether the process involved deliberate deception
or merely unconscious distortion on the part of the theory-builder. What
is clear is that some funny things happened on the way from case report
to treatise.123 This comment becomes much more pregnant, if we recall
how Gilmore describes the realists position and especially their attack on
the conceptualism of the past. Gilmore states that, according to legal
realism, the predictive value of past cases for future decisions is slight or
nil: the theory of precedent is simply a gimmick by which clever judges
fool other people and stupid judges occasionally fool themselves. The
study of doctrine of rules of law is sterile and absurd.124
In the same way, the case of Dickinson v. Dodds is dusted off and
brushed up in order to make clear the conceptual sliding imposed by
Williston on Mellish LJs opinion. Where Mellish used the subjective
device of the meeting of the mind to verify the revocability or not of an
offer, Williston, faithful and loyal heir of Holmesian objectivism, once
again availed himself of the prodigious versatility of consideration. The
remain are bound by the terms of their original contract to exert themselves to
the utmost to bring the ship in safety to her destined port. Therefore, without
looking to the policy of this agreement, I think it is void for want of
consideration, and that the plaintiff can only recover at the rate of 5 a month.
123
Gilmore (1995) 30.
124
Gilmore (1961) 1038. In these pages Gilmore, with masterly skill,
describes Realists critical attempt to dismantle the false ideologies built by the
conceptualists of the nineteenth century:
The trouble with the nineteenth century, said the realists, was that lawyers
believed, and law professors taught, that law was a symmetrical structure of
logical propositions, all neatly dovetailed. The truth or error, the rightness or
wrongness, of a judicial decision could be determined by merely checking to
see whether it fitted into the symmetrical structure; if it fitted, it was right; if
it did not fit, it was wrong and could, or at least should, be disregarded.
Moreover, law students could be trained by being made to read carefully
selected collections of correct cases, from whose study, by induction, they
could arrive at the correct general principles.
bargain theory was extended to the entire life of the contract, so to

conclude that offers stated to be irrevocable, even if relied upon, were not
irrevocable unless supported by separate consideration.
An analogous fate was reserved (Gilmore notes) for other cases,
metamorphosed or amputated with the aim of dismantling the subjectivist
approach to the theory of contract. The weird,125 even if celebrated, case
Raffles v. Wichelhaus,126 known as the Peerless case, was misinterpreted
by Holmes, who elaborated an astonishing explanation of the declared
rule in order to legitimate his objectivist theory on the exclusive
relevance of what the parties have properly said, not on what they
properly meant. In Gilmores witty criticism even for Holmes this was
an extraordinary tour de force The magician who could objectify
Raffles v. Wichelhaus could, the need arising, objectify anything.127
Afterwards, moving in a background of bibliographical amusement, and
unveiling the curiosities of legal literature, Gilmore traces the story of
transmission of the language of Paradine v. Jane128 from mid-seventeenth
century England to mid-nineteenth century America. This second-hand
writing, the practice of citation, made it possible to steadfastly attach the
apparent meaning of a not particularly celebrated English case (of at least
200 years before) to a theory of absolute contractual liability. Thus, it
turned out that in his edition of Saunders Reports (a collection of late
seventeenth century cases), Serjeant Williams commented on a case here
mentioned, Walton v. Waterhouse, paraphrasing the language used in the
125
In Gilmores view the case is to the ordinary run of case law as the
recently popular theatre of the absurd is to the ordinary run of theatre; Gilmore
(1995) 39. Gilmore treats the report of the case as literary text, detecting the key
structural components from a narratological point of view (it starts with a fairly
detailed rsum of the pleadings, continues with a colloquy between losing
counsel and the two of the three judges who made up the court, gives the
argument of the winning counsel who, after two sentences was stopped by the
Court which, giving no reasons, abruptly announced: There must be judgment
for the defendants), and delineates the main characters with a vivid description,
from Milward and Mellish (counsels of the parties) to Pollock and Martin
(judges of the court), their trial strategies and diversionary tactics; their wooly-
headed questions and narrow-minded disposition; their extenuating attempts to
convince and persuade and their redemptive distractions; Gilmore (1995) 39 ff.;
with a particular emphasis see 4243, where, like in a novel, we find that
Milward could go on talking until he was blue in the face without shaking them
[the judges of the Court A/N]. There seems to be an air of increasing desperation
in Milwards attempts to deal with the wooly-headed questions from the bench.
126
Raffles v. Wichelhaus [1864] EWHC Exch. J19.
127
Gilmore (1995) 45.
128
Paradine v. Jane [1647] EWHC KB J5.
Aleyn Report of Paradine.129 In a chain of transmission, it was Williams

note, which Judge Morton, sitting in the Supreme Judicial Court of
Massachusetts, cited and copied out, creating the general rule on excuse
by reason of impossibility.130
This grand construction, presented by its artisans as tidy, neat, logical
and carefully crafted through a pervasive handling of case material, was
progressively eroded by the salt of a new sceptical movement in
jurisprudence, which culminated in Legal Realism. The new corrosive
prophets disrupted the certainties of the old faith and introduced an age
of doubtfulness. Against the classical vision of Law, conceived as a static
and monolithic entity, the realists invoked the force of change and
dynamics, the permanence of precariousness and instability. Law changes
as society changes: the symmetrical structure of dovetailed logical rules
has never existed;131 the idea that cases can be arranged to make sense
was purest moonshine and nonsense.132 Corbins heterodoxy lambasted
Langdellian illusion and crumbled the Holmesian universe. Cardozo and
Corbin deliberately enacted a personalized Counter-Sublime in reaction
to the precursors Sublime. The first, serving on the New York Court of
Appeals, pursued a line of his own in contractual matters and distanced
himself from the Holmesian bargain theory of consideration. The
second showed the fallacy of the Holmesian model, as it was based on a
doctrine of contract, wholly formal and external, and on a theory of
consideration, which were wrong both as a matter of historical fact and
as a matter of social policy. The new scenario, depicted with growing
emphasis by Gilmore, was marked by strong contrapositions among
characters and institutes: Cardozo and Corbin coped with Holmes and
Williston; promissory estoppel came to supersede the indomitable
monopoly of consideration.
Gilmore portraits the troubled bafflement of many judges, who, unlike
Holmes, were not prepared to look with indifference on the plight of a
plaintiff, who, in turn, had relied, to his detriment, on a defendants
assurances without the protection of a formal contract.133 In order to
manage this overwhelmingly awkward situation, some sage judges began
to rummage in the drawer of the old remedies and mouldy terminology
and they found the redeeming syntagms of equitable estoppel and
promissory estoppel.
129
2 Wms. Saunders 420, 85 Eng. Rep. 1223 [K.B. 1684].
130
The reference is to Adams v. Nichols, 19 Pick. 275, 276 (Mass. 1837).
131
Gilmore (1961) 1038.
132
Gilmore (1995) 65.
133
Ibid. 70.
The struggle between contending factions and visions tore the body of
the First Restatement on Contract, the new product originally devised by
the orthodox establishment as a means of resistance against the attack of
Legal Realists. In the early 1920s, there was still hope that the unity of
doctrine could be preserved and that the viability of a case-law system,
which had actually outlived its time, could be safeguarded. This extra-
ordinary operation was performed by the American Law Institute, which
was composed of the most distinguished practising lawyers, judges and
law professors in the country. Williston and Corbin were the prominent
members of the new crew, the dominant intellectual influences in the
drafting of the First Restatement of Contracts. Narrating the story of this
impressive treatise, Gilmore humanizes, as only a great writer can do, the
pages of an inanimate object, of a book: paragraphs and restated rules are
not mere linguistic signs posed on a material page, but strong voices of
rival actors disembodied into texts. Williston and Corbin held anti-
thetical points of view on almost every conceivable point of law that
accounts for the schizophrenic quality which makes the Restatement,
viewed historically, the fascinating document which it is.134 So, if the
dress-appearance of the Restatement was tidily coherent, its soul was
fractured and disquieted, a noble compromise between form and sub-
stance. Factions ruled: in the debate on consideration Corbin and the
Cardozeans lost out to Williston and the Holmesians. In Willistons view,
that should have been the end of the matter. Instead, Corbin returned to
the attack.135 The quarrel between Williston and Corbin repeated and
reincarnated the strife of their principals, Holmes and Cardozo. The final
result was not the reopening of the debate, but the formulation of two
distinct sections, one of which undercuts the underlying principle of the
other. On the one hand, we find section 75, which contains a pure
Holmesian definition of consideration. With his witty and uncommon
acuteness, Gilmore glosses: The venerable Justice Holmes took no part
in the Restatement project. It is unlikely that he ever looked at the
Restatement of Contracts. If, however, 75 was ever drawn to his
attention, it is not hard to imagine him chuckling at the thought of how
his revolutionary teaching of the 1880s had become the orthodoxy of a
century later.136 On the other hand, we find the ambiguous and really not
134
Ibid. 66.
135
Ibid. 69. Here Gilmore specifies that Corbin, who had been deeply
influenced by Cardozo, proposed to the Restaters what might be called a
Cardozean definition of consideration broad, vague and, essentially, meaning-
less a common equivalent of causa, or cause.
136
Ibid. 6768.
immediately comprehensible text of section 90, which paved the way for
a resurgent operativeness of the estoppel idea, under the auspices of
Corbin, inspired by Cardozo. The mysterious sentence of section 90 had
no comment at all and was illustrated by only four hypothetical cases
(none of them presumably based on a real case), which led any analyst
to the despairing conclusion that no one had any idea what the damn
thing meant. But it was. The centrality of section 75 was definitely
crumbled and demolished. The Restatement ended up uneasily poised
between past and future, which is no doubt the best thing that could have
been done.
The subsequent history and the advent of the Second Restatement of
Contracts are altogether fascinating. In fact, when even the continuers of
the virtuous old ways couldnt oppose resistance to the infection of the
revolutionary virus, the pristine illusions and assumptions came to an
end. A redraft of rules and sections became inevitable. While the
rewritten text of section 75 had not been changed in substance, the
comment had been Corbinized.137 An internal dissociation appeared to
move the rule away from its operational explanation. The work of
dissection had been over-amplified; the old comment, composed with an
authentically Willistonian flourish, had been forgotten.138 However, Gil-
more states, the Corbinization of section 75 is quite insignificant com-
pared to what has happened to section 90. From the original version of
the section, naked of comment and provided with four mysterious
illustrations, for the total amount of less than a page written, Restaters
went to a revised formulation with comments and illustrations (grown to
17) scrupulously reported over 12 pages.
At this time, the agony was pacified and composed:
The unwanted stepchild of Restatement (First) has become a basic principle

of Restatement (Second) the unresolved ambiguity in the relationship
between 75 and 90 in the Restatement (First) has now been resolved in
favour of the promissory estoppel principle of 90 which has, in effect,
swallowed up the bargain principle of 75.139
This was a process of doctrinal disintegration. A new history was

beginning.
137
Ibid. 77. The Comment states: The word consideration has often been
used with meanings different from that given here. It is often used merely to
express the legal conclusion that a promise is enforceable.
138
The Comment states: No duty is generally imposed on one who makes
an informal promise unless the promise is supported by sufficient consideration.
139
Gilmore (1995) 79.
C. Splitting the World: Gilmores Oppositional Ontology
As has been anticipated above, the third main feature of Gilmorean prose
is the rhetorical extra-valorization of contrapositions and contradictions,
which categorically divide the world in general, and the world of law in
particular, into antithetical positions and conflicting, or, even worse,
schizophrenic views.
The final statement, introduced as a comment on the double souls kept,
in a compromise way, by the First Restatement of Contracts, comes to
seal the earth-shaking controversies, which have animated the narrative
of the previous pages: we have become accustomed to the idea, without
in the least understanding it, that the universe includes both matter and
anti-matter. Perhaps what we have here is Restatement and anti-
Restatement or Contract and anti-Contract.140 The premise justifies the
corollary: the one thing that is clear is that these two contradictory
propositions cannot live comfortably together.141
If we synthetically re-figure the intense depiction of American legal
thought, as brightly condensed in the twin books, The Death of Contract
and The Ages of American Law, we can detect a dichotomic reason,
which divides and counters characters, doctrines, objects, entities, opin-
ions, traditions, schools of thoughts. Therefore, we can easily portray this
sequence of oppositional couples: Cardozo v. Holmes; Corbin v. Willis-
ton; Langdell v. Llewellyn; Blackstone v. Bentham; Contract v. Anti-
Contract; Subjectivism v. Objectivism; Formalism v. Realism; Life v.
Death.
There is another, actually underestimated issue, which seems of the
main significance for legal scholars. The fierce competition among
theories and in the specific case between the classical theory of
contract and its Realist disintegration; between the unitarian Empire of
Contract and the Middle-Earth of Cont-Tort is the intellectual and
phenotypical expression of a much more profound and political struggle
among legal formants and legal schools.
First of all, Gilmore presents the ascendancy of the classical vision as
the principal product of the law schools intellectual activities. As he
expressly reminds:
in the academic world the influence of Langdell and Holmes was direct and
immediate, consciously perceived and universally acknowledged. And the
American law school, in the new format which Langdell had designed,
140
Ibid. 68.
141
Ibid.
became a principal instrument in the process of restructuring our jurispruden-

tial thought and reshaping our legal system it may well be that no
educational institutions in any country at any time have enjoyed the prestige
and achieved the success of the dozen or so national law schools which grew
up in the image of Langdells Harvard.142
The law schools became masters of influence. From hence the germs of
anxiety took to spreading abroad. On the one hand, the law schools acted
on subjects and roles, restructuring the relationship between professors
and students; on the other hand, they acted on the sources of law,
producing a new type of legal literature, of bloodless abstraction and
conceptualization, as a response to the pressures generated by the floods
and torrents of published reports. Moreover, the proactivism of legal
schools froze judicial creativity; the courts became the apostles of
reaction and the guardians of an oversimplified past: the judicial product
of the period can fairly be described as Langdellianism in action.143
This predisposition moulded the style of opinion-writing, dictating a
new fashion. The Age of Faith, of the great systematizations, was
consequently the age of the string citation, as in judicial opinions, as in
the learned treatises. The reassuring idea of a fixed body of law, invested
with an almost supernatural authority, proved to be irresistibly attractive
and Langdell historically repeated Blackstones fortune. The juice of life
had been squeezed out; the case reports became so many dry husks. Stare
decisis reigned supreme.144
Beyond these considerations, it is possible to re-dimension the polem-
ics among theories as an epihenomenic device, which intercepts and
captures the cultural clash between the Harvard and Yale Law Schools.
The sardonic grin, which modulates the voice of Gilmores account, is
the final and corrosive harshness nurtured by a Yale man against his
colleagues belonging to the rival faction of Harvard clubbing. In the
opening pages of The Death of Contract Gilmore doesnt forget to state
that, in its pure form the classical theory of contract, this perfection of
abstraction and wilful amputation of the pristine cases, may never have
existed outside the classrooms of the Harvard Law School. At the end of
the book Gilmore returns to the pivotal role played by law schools:
we should not underestimate the influence on the legal profession throughout

the country of the handful of great law schools which, during this period,
142
Gilmore (2014) 5152.
143
Ibid. 55.
144
Ibid. 57.
trained an inordinate number of the lawyers who became the leaders of bench
and bar in every state.145
These words, pronounced by a strenuous defender of the Yale intellectual

mood, during the course of the 1970s, tell more to the attentive reader. It
is a matter of fact that the special combination of Eliot, Langdell and
Ames produced an educational system unusually well adapted to its time
and secured Harvard Law School a unique place in the modern academic
landscape. We have recalled Langdells gospel and his proclaimed
credo, as they have been filtered through Gilmores eyes. The new faith
is composed of a limited number of incontrovertible assumptions: Law
was considered as a science, consisting of certain principles and doc-
trines; the number of fundamental doctrines is much less than is
commonly supposed; the cases which are useful and necessary for
mastering the doctrines bear an exceedingly small proportion to all that
have been reported (the vast majority being useless and worse than
useless); the doctrines could be usefully classified and arranged; all the
available materials of that science are contained in printed books.
Synthetically, Langdell devised a new theory of American law, a new
method of instruction, and a program of credentialing that made his
school a paradigm for American legal education.146 The President of
Harvard, Charles William Eliot (among other things, cousin of the great
poet T.S. Eliot, recurrently remembered in these pages), and the new
Dean of the Law School, fruitfully appointed, shared a common intellec-
tual commitment to the scientism of the day. Analogizing the law library
to the chemistry lab, Langdell built an everlasting, fiduciary relationship
with Eliot. Positivism captured a large number of noble minds, willing to
assert that knowledge is based exclusively on the methods and discover-
ies of the physical or positivist and natural sciences (such as chemistry,
physics, zoology, botany, and so on). Oliver Wendell Holmes, William
James, Henry Adams, Brooks Adams, John Friske came to history
seeking science.147 Law was divorced from politics and treated as a
technocratic discipline; contracts became the queen science of the new
school, because the law of contracts collided less with political issues
that might blemish the actual interest of the legal scientist. Langdell so
drastically revolutionized the nature and system of legal education, that
its historical course could be split into two ages, after and before the
advent of Christopher Columbus Langdell (aC v. bC). Case method was
145
Gilmore (1995) 106.
146
Carrington (1995) 691.
147
Sutherland (1967) 176.
developed as a technique for law teaching and attracted eager students.

As Sutherland vividly notes, men are remembered by tag descriptions.
Langdells case method is his popular memorial148 and Laura Kalman
ironically adds often, the aspiring academic left Harvard after graduation
to spread the gospel of the case method through colonial service at a
less prestigious school in the hinterland.149 It was a devastating earth-
quake, which upset the American tradition of university law teaching.
From these times onwards, only slight changes were brought to legal
curricula. Legal education remained static and uniform, dressing a
canonized style imposed by Harvard from 1870. This couple of clear
propositions gives a precise idea of the academic immobilism: Transport
a first-year student out of a 1967 Contracts class back into Langdells,
and it would have felt familiar. Transport the student of 1967 into a
Contracts class at another prestigious law school, and he would have felt
the same way.150
Legal Realism came to the rescue. A new mantra was sounded against
Harvards logics of imperialism, as well as against formalism, conceptu-
alism, classical legal thought, classical legal science. Langdellianism
progressively became the orthodoxy to be superseded. The Realist
project, after the initial start at Columbia, took root at Yale University,
which led the charge against Harvard and especially against Langdell,
now re-presented as the brilliant neurotic, who had seduced American
legal education. Even legal methods of education were shifted from the
once acclaimed case method towards clinical legal education, placing
the law office at the centre of the curriculum; both Cambridge and New
Haven appeared to be the headquarters of legal doctrine, but while
Cambridge churned out treatises in order to collect, organize, systematize
and reconcile originally conflicting cases, New Haven produced critical
works, with the specific aim of unveiling the incoherence of doctrines,
the personal idiosyncrasies obscured by formal and aseptic decisions, and
the ideological fallacies of their competitors constructions.
Gilmores polemical antagonism, his elegant satire, the ironic tone of
his novelized account, the artful selection of words and adjectives should
be located in the context of the political and educational competition
between Harvard and Yale during the 1960s and 1970s. Life at Harvard
is precise and formal, in the classical tradition. Life at Yale is untidy,
confused and disorganized, in, shall we say, the romantic at all events not
148
Ibid. 179.
149
Kalman (2005) 18.
150
Ibid. 13.
the classical, tradition, he observed with the aim of unveiling the truth
about Harvard and Yale.151 Maybe, it was really from Yales sense of
insecurity, from its living in Harvards shadow, that Gilmore derived his
own feeling of romantic agony. From hence he developed his Bloomian
anxiety of influence.
IV. INFLUENCE AND TRADITION: THE

RHYTHMICAL FLUCTUATION FROM KENOSIS
TO THE RETURN OF THE DEAD
In the end, what could be found, scrabbling under Gilmores knowing
smile and looking behind his humour and nimble wit? One could
respond: a land of complex relationships and ambivalent feelings. His
poetic polemic questioned the illusions of order and coherence and
supported a view of unstable legal change, romantic improvization and
tentative experimentation.
Gilmore concurred to build a new aesthetics of American legal
tradition. In this noble enterprise, his projections and performative
imagination were the personal reactions to a growing anxiety of influ-
ence. Once again, the fault-lines between past and present, the internal
fissures of legal tradition were at stake. As Guido Calabresi reminds us,
Gilmore, in his mature age, insisted that the Golden Age of the Yale Law
School is never now. It was always in the past and can be again in the
future if only we do a few things right. Always close, always striving,
never quite there yet except in memory and hope.
Maybe, one thing right, which could be done, would be the acknow-
ledgment and the management of awkward presences, of troublesome
predecessors.
Charles Yablon has argued and perfectly discussed how Gilmores
ambidextrous depiction of Oliver Wendell Holmes is not unlike that of
the strong poets whose work is analysed by Harold Bloom. Brilliant, but
at the same time (as has been previously emphasized) savage, harsh and
cruel, Holmes becomes the legal remake of Mary Shelleys Dr Franken-
stein, a morbid and self-centred genius who, seeking to create a viable
theory of contract from bits and pieces of prior case law, creates instead
a monster, a powerful but not truly living formalistic system that wreaks
havoc on a quasi-innocent populace for the following fifty years, until it
151
Gilmore (1963) 9.
is hunted down and destroyed by an intrepid band of Legal Realists.152

In this way Gilmore stages a clear dissociation between the Creator and
his creature: a genius, who breeds a monster; a theoretical brilliance
destined to materialize into a freak accident.
Fate summoned Grant Gilmore to an intense confrontation with Oliver
Wendell Holmes. In fact, from 1967, Gilmore was the custodian of the
so-called Holmes devise, the collection of papers Holmes had
bequeathed to the United States and he was commissioned to complete
the biographic work already begun by Mark De Wolfe Howe. Instead of
concluding Holmes official biography, Gilmore published the twin
books, The Death of Contract and The Ages of American Law. Therefore,
these works entered history on behalf of Holmes biography, which was
never written.
Gilmore absorbed Holmes inclinations and composed his The Death
of Contract around a plot of historical evolution, which could be encoded
as similar to that purported by Holmes monograph The Common Law.
The ancestor (Holmes The Common Law) celebrates the progressive
objectification of legal relationships as society moves from the tribal to
the modern; the ephebe (Gilmores The Death of Contract) tells the story
of a formalistic system of contract law superseded by more flexible
concepts of obligation and reliance, in accordance with the modified
needs of the modern welfare state. The latest is inspired by an adversary
proceeding in respect of the former.
The same characterization of Holmes, as has been evoked in these
pages, is clear evidence of the fact that Gilmores views can really be
understood and reassessed in Bloomian terms. We can detect significant
omissions along with exaggerated attributes and emphasized circum-
stances. All these stylistic contrivances delineate a meaningful context
beyond the letter of the text.
In The Death of Contract Gilmore presents Holmes as the theorizer of
the classical theory, the intellectual mind, which came to dignify
Langdells rough materials and incomplete schemes of thought. Actually,
Holmes comes to rectify the miraculous perfection of abstract formalism
built by Langdell: the cathedral erected by the greatest living legal
theologian broke into fragments under the hammering attack of the motto
the life of law has not been logic, it has been experience. Gilmore is
silent on those aspects that imposed, on Holmes as intellectual, at most
the tag of legal realist, but surely not the label of deductive logician.
152
Yablon (1995) 237.
In this regard, Charles Yablons essays are illuminating. He suggests

that the one-sided picture we get of Holmes in The Death of Contract, a
portrait that emphasizes Holmess formalism to the almost total exclusion
of his realism, is a misreading of Holmes in the sense Bloom uses it
and for much the same reason that Bloom tells us that strong poets
misread their predecessors.153
In particular, Yablon applies to Gilmores writing all the revisionary
ratios introduced by Harold Bloom (clinamen, tessera, kenosis,
apophrades) in order to define the legal misprision or misreading
embedded in the pages of the book. First of all, clinamen functions as a
swerve, as an instance of creative revisionism that produces a final
misinterpretation: the newcomer himself determines the precursors par-
ticular law. Gilmore misinterprets Holmes insofar as he makes the
classical theory of contract a matter of artifice, not a natural restatement
of the existing common law, or a part of natural legal development, but
simply a constructed mistake. In the tessera, according to Bloom, the
later poet provides what his imagination tells him would complete the
otherwise truncated precursor poem and poet, a completion that is as
much a misprision as a revisionary swerve is.154 Gilmore offers a
completing antithesis in respect of Holmes project when he presents,
under a new interpretative light, the same cases from which the basic
tenets of classical contract theory were derived: they are re-told,
re-exposed in their factual consistence, re-analysed in their complexities
and puzzling issues. The new exegesis adds a ground of historicity to an
openly invented tradition, divorcing real facts from imagined super-
fetations, reality from magic.
The subsequent ratio, named as kenosis, recalling the theological
kenosis of God, indicates the revisionary act in which an emptying or
ebbing takes place in relation to the precursor. Gilmore emptifies the
classical theory of contract through a process of abstraction till it comes
to predicate the unattainable nonsense that no one should ever be liable
to anyone, anytime.
Blooms final ratio is apophrades, the last phase of the revisionary
relationship marked by the strong return of the Dead. Gilmore cor-
respondently closes The Death of Contract with a prospective of resur-
rection of what has been apparently buried.
In particular, the last chapter of the book is the proper synopsis of
kenosis and apophrades, and, in the end, it traces a (new) beginning of
153
Ibid. 246.
154
Bloom (1997) 66.
return. The story opens with the description of what was happening after
Langdell, after Holmes, Williston, Cardozo and Corbin: contract was
being reabsorbed into the mainstream of tort; it was re-united with what
classical theory had improperly and arbitrarily divorced, staking out an
enclave within the general domain of tort. Two emerging and twin-ideas
went to attack the stronghold erected by classical thought, that is, the
consideration theory: with the idea of quasi-contract and unjust enrich-
ment the classical theory was breached on the benefit side, while with the
idea of promissory estoppel it was breached on the detriment side. The
two fields (Contract and Tort), which had been artificially set apart, were
gradually merging and becoming one,155 metamorphosing the original
configuration into a new hybridized figure, not improperly called by
Gilmore Contorts. This was a precise example of that phenomenon
which, in the history of comparative religion, is called syncretism, or the
reconciliation or union of conflicting beliefs. Classical theory of contract
was, at that point, emptied out and located in a kenomatic threshold. But,
at the end of the same chapter, Gilmore prophesies an apophrades of
resurrection, a return of the pristine mind, a reappearance of dead
scholars and censored rules. An Easter turn of the tide is almost upon on
us.
Since Gilmore pronounced this prediction, the mapping of contract law
has been a controversial exercise. Contrasting views took turns at the
wheel of the legal development machine and different labels have been
used to distinguish and typify new groups of competing adepts. Corbin-
ized contract scholars have been often characterized as neoclassical,
with their sincere disappointment, in the light of the equivocal meaning
of this denomination; they believed, in fact, that the prefix neo,
positively appreciated, was darkened by the much more unmanageable
legacy brought by the adjective classical. On another front, the
so-called relationists, led by Ian Macneil, proposed a redefinition of the
same nature of the contract, focusing their attention on its relational
character, as the term used to name the new theory clearly emphasizes.
Their intent was to deconstruct monistic theories of contract law, to better
approximate to the true understanding of the parties: contract rights and
duties should be guaranteed and imposed within the overall context of
continuing relationships among the parties, repudiating the old and
classical vision of discrete and static transactions. A wider horizon seems
to be opened by inter- or trans-disciplinary projects and movements, such
as Law and Society and Law and Economics. On the other hand, a new
155
Gilmore (1995) 96.
wave of formalism is stirring contractual scholarship, in order to re-create

a product that can be useful to courts and practitioners, much beyond the
accepted Llewellinesque standards. Even if the neoformalists seek to
distinguish their specific approach from the classical formalism of the
oldest Langdellians, their purpose is to affirm the sovereignty of contrac-
tual text, of the express terms, considered not as mere evidence of the
contract, but as its proper and exclusive constituents.
As Gilmore predicted, this is the story of the unburiable contract.
The moment a journey is finished, another begins.
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13. Queering the contractual paradigm

between law and political theory
Flavia Monceri
I. INTRODUCTION
The idea that the social institution we are used to naming state has been
established by means of a (social) contract is surely one of the most
appealing in the history of modern and contemporary Western political
thought. Of course, the fact that such an idea has been able to become the
dominant, most widely accepted, explanation of the origins of the state
does not mean that it is the only one possibility for thinking about those
origins, for different explanations have been suggested, not least the one
proposed by Carl Menger (and subsequently the so-called Austrian
School), according to whom a great variety of social phenomena,
including the state, have in fact an organic/spontaneous root that needs
no explicit agreement or contract (Menger [1883] 1985).1 So the
question may arise concerning the reason why the contractual paradigm
has been so successful in overwhelming competing accounts about the
origins of the (modern) state to the extent that it still seems that political
theory cannot avoid referring to some kind of original contract,
especially if contemporary democratic regimes are to pursue social
justice as their ultimate goal (see notably Rawls [1971] 1999).
Although it is not my aim here to jump into this question and try to
find an answer, which would be impossible also because of space
constraints, I find that a preliminary, but convincing, explanation might
be the one suggested by Menger in his Investigations, where he writes:
The most obvious idea for arriving at understanding of social institutions, of

their nature, and of their movement was to explain them as the result of
human calculation aimed at their establishment and formation, to attribute
them to agreement between people or to acts of positive legislation. This
1
As is well known, further competing accounts to the contractual one can be
found, e.g., in classical accounts of the genealogy of the polis, such as the
ones suggested by Plato and Aristotle, as well as in non-contractualist thinkers
such as Hegel and Marx, and last but not least in anarchist theorists.
303
(pragmatic) approach was not adequate to real conditions and was thoroughly
unhistorical. It still offered the advantage of interpreting from a common,
easily understood point of view all social institutions, both those which are
presented to us actually as the result of the common will of socially organized
human beings and those in which such origin is not detectable. This is an
advantage which will be underestimated by no one who is familiar with
scientific works and knows the history of their development. (Menger [1883]
1985: 148)
In other terms, referring to a contractual origin of the state is appealing

because it is the most immediate, reductionist, and therefore simple,
explanation of social phenomena in that it understands them as a direct
outcome of the human ability to shape the environment according to
human intentions and will. From this perspective, it could be stated that
social institutions, including the state, are intentionally constructed by
human beings, in accordance with their cognitive structure and in the
service of their goals. This of course implies that human beings are able
to univocally detect such goals as well as the means to reach them, by
applying their specific and shared faculties, the main one of which is
reason. I would add to Mengers aforementioned statements that the
appeal of the contractual paradigm consists in its being the most
anthropocentric explanation of the origin of social phenomena, and that
therefore it leaves open a number of questions from the very beginning. It
is obvious that in order for the contractual paradigm to fully work a
clear-cut model of the human being is needed, capable of securing that
the concrete contract will give birth to the most rational and the best
possible configuration of the social institution whose establishment can
be considered its object in this case the state.
The aim of this chapter is to queer (to make odd, strange, as well as to
give a radical twist to) the contractual paradigm by queering the
underpinning model of the human being that is to say the contractor
it takes for granted, never explicitly discussing it, and rather leaving it go
unmarked, as it were independent of any cultural, historical and epis-
temic biases. It is a kind of queering of the modern individual, as it were,
in order to show that far from being an abstract and universal notion
which could be applied to each and every one of the concrete human
individuals, it is on the contrary a very particular construction elaborated
by selecting a number of features from a given environment as if they
were the only ones to count. Moreover, to anticipate something I will
come back to later, the very fact that the model of the human being able
to contract is only a construction also implies that it cannot help but be
exclusive from the outset.
Queering the contractual paradigm 305
The ultimate goal of my work is to show that, for all of its appeal, the
contractual paradigm is not the most adequate theoretical model if we are
to think about a more and more inclusive society, since the paradigm is
doomed to break down as soon as we try to modify the model of the
human being it presupposes, or even simply to consider different features
originally excluded from that same model. This means that contemporary
political theory, which is performed in a complex and multicultural
global environment, should be ready to give up the contractual paradigm
altogether as a privileged account of the origin of civil societies and to
shift to a different theoretical model. And at the end of the day I would
also like to suggest, as a byproduct of this brief investigation, that the
very notion of contract might be radically rethought (queered?) also in
the more dedicated field of contract law, moving from the acknowledge-
ment that it is never independent of a particular understanding of the
contractor.
II. WHO IS ENTITLED TO SIGN THE (ORIGINAL)

CONTRACT?
To be sure, the contractual paradigm might be, and has been, subjected to
different kinds of objections, criticism and questions (e.g. Riley 1982;
Pateman 1985; Hampton 2002, 2007; Richardson 2009). Since the classic
accounts of the (social) contract (see notably Hobbes [1651] 1998;
Locke [1690] 1980; Rousseau [1755] 2002, [1762] 2002) are at the same
time kind of founding myths of the modern state and theoretical
justifications of a newly occurred change in the way of understanding
politics, it seems not surprising that they contain a number of inconsist-
encies. The most relevant of them, as it is well known, lies in the
opposition between a state of nature and a civil society (state), which
should be considered as rigidly separated if the (social) contract is to play
the role of an epochal event, so to speak, after the occurring of which
things will never be as they were before. However, the fundamental
problem in drawing this clear distinction is that there is no possibility of
having perfect knowledge of the ways things actually were in the state of
nature since the contractualists2 were all already situated within a civil
society and therefore cognitively unable to avoid the reference to that
society when constructing the model of what was there before or
2
Although I know that the terms contractarianism and contractualism
have been considered as meaning different traditions (see, e.g., Mills (2008) 53)
I use only the term contractualism as a general one.
abstracting from the here and now (i.e. the state of nature). This
necessarily leads all of them, including modern contractualist authors
such as Rawls, to contaminate, as it were, the state of nature with
elements coming from the civil society still to be established.
This is the reason why I do not find it very useful to focus here on the
similarities and differences in such models, trying to show which one of
them constitutes the most convincing account of the shift from the state
of nature to a civil society/state. I prefer going directly to the root of the
problem, as far as I can conceive of it, by stating that the most relevant
questions to be posed to any contractual accounts past and present are
those relating to the who and the how. The latter question is
apparently a trivial one, since the how is necessarily constituted by the
contract as a neutral instrument to reach the goal of exiting the state of
nature to enter the realm of civil society as something entirely new.
Anyway, this question becomes much less trivial if we consider that an
instrument becomes such only if there is someone who chooses it as the
most adequate one to reach the envisioned goal, that is to say, if we
consider that ultimately the how depends on the who. Even if we
remain inside the contractual narratives, we can legitimately presume that
the individuals in the state of nature might have chosen different means to
establish the state, being an evidence of that also the existence of
different possible accounts of its origins.
To put it bluntly, I claim that in all of these accounts behind the choice
of the contract as the privileged instrument to establish the political body
there is a particular model of the human being for whom the contract can
and must be the preferred instrument to reach that goal. Just in this sense
it can be stated that the how depends on the who, and that this gives
us also some hints as to the particular configuration of that model. But
this also means that the core problem to be addressed is not the one
concerning the instrument, i.e. that the problem is not primarily the
contract as a particular form of interaction between human beings, but
the one concerning the configuration of the human being who decides to
choose just that instrument and not another one, as if it were a
compulsory choice based on that human beings very nature. Hence, I will
not address here the admittedly thorny questions concerning the reasons
for the (social) contract or the actual object of such contract, although I
readily acknowledge their relevance.3
3
See Mills (2008) 50 ff., who stresses also the complexity of the very term
contract: So the concept has been used in radically different ways the
Rather, I will address the question concerning who is the subject of the
contract, the contractor, especially asking: What model of the human
being does the contractual paradigm presuppose as the most adequate one
to negotiate, elaborate, agree, write and sign it, so that all the parties can
be reasonably sure that the contract will effectively work? In fact, the
social contract is not a private contract but a public one, in the sense that
its particularity lies in the fact that all individuals are theoretically
entitled to sign it, although the object of the contract is not an exchange
among them, but the establishment of something which is put over
them, to which they all decide to be subjugated (at least partially). It is
therefore crucial that all parties can trust each other (as well as that
something they establish as the outcome of their agreement), but since
in the moment of the contract there is no guarantee altogether, the most
reliable idea is that they must be all perfectly equal, that is to say
interchangeable. Therefore the idea of the contract needs a clear model
of the human being with which all the signing parties (the single concrete
human beings) must be consistent: this model becomes the norm to
which each and every individual must conform in order to be entitled to
sign the contract, or to consent to it (as is the case for future generations).
Things being so, it is clear that the model cannot include, from the
very beginning, all the concrete individuals who might be theoretically
entitled to sign, but only those who fit the model, and this also means
that the question concerning the who poses itself before the event of the
contract, because the possibility to bargain for the conditions of the
contract, to elaborate and write it down and to conclude it by signing
depends upon the fulfilment of the conditions to be a contractor. So the
event of the contract cannot by necessity be one in which all free and
equal individuals take part, but only some of them. And this immediately
makes clear that what makes the social contract possible is the prelimin-
ary exercise of power on the part of some individuals over the others,
who are excluded in principle. Freedom and equality have nothing to do
with it, if not in the sense that those human individuals who find
themselves entitled to sign the contract are to be thought of as free and
equal among themselves, but at the expense of all the others.
By now it should at least be clear that the model of the human being is
a construction entailing the exercise of power, and particularly of the
contract as literal, metaphorical, historical, hypothetical, descriptive, prescriptive,

prudential, moral, constitutional, civil, regulative ideal, device of representation
(51).
power to exclude.4 From this operation, which already casts a thick

shadow on the ability of the contractual paradigm to represent the symbol
of freedom, justice and participation for all, as contemporary advocates
try to convince us to believe, the figure of the normal human being
arises, which overlaps with the modern individual. What are the features
of such individual? Well, let us state it bluntly: the human being entitled
to perform the activities leading to a successful social contract is male,
white, Christian, heterosexual and able. In the remaining part of this
section I will concentrate on the first three features (male, white,
Christian) postponing the discussion of the last two features (hetero-
sexual, able) to the next section, which will more directly refer to the
current and future possibilities to queer the contractual paradigm to the
extent that we deconstruct it to the ground in order to go beyond it,
replacing it with a different model of the human being, still to be
elaborated, more adequate to the acknowledgement that diversity mat-
ters for political thinking.
Lets start with the idea that the contractor has to be male, an idea
which is detectable more or less patently in all contract theories,5 and
that constitutes the main reason why feminist thinking has subjected the
whole of the contractual paradigm to a deep and radical criticism in the
last decades. In short, it could be stated that the exclusion of women from
the human beings entitled to contract is due to the taken-for-granted
presupposition that the so-called sexual dimorphism is a rule or a law
of nature. In nature, so the story goes, human bodies come to the world
only in two different shapes from the anatomical point of view: some of
them are equipped with a penis, whereas some others have no penis, but
a vagina (which by the way is a mark of the absence of a penis).6 One
relevant by-product of this opinion is that all differently equipped bodies
are to be considered errors of nature, and therefore they do not matter,
but the remarkable point for our goal here is that this natural difference
can constitute the basis for the distinction among two different groups of
human beings (females and males, women and men) as well as for the
4
I understand here power as a relation, rather than a structure, much in
the sense suggested by Michel Foucault, e.g. ([1976] 1998).
5
With the remarkable exception of Hobbes, for whom in the state of nature
all individuals are free and equal, including women, although this natural
condition does not immediately imply that they are to be considered free and
equal as men are in the moment of the contract or in civil society (see also
Pateman (1988) 4452).
6
For a critical discussion of the erroneous idea of a natural sexual
dimorphism see Fausto-Sterling 2000.
exercise of the power to exclude on the part of one of such groups

(historically males/men), on the basis of the belief that the natural
difference in the shape of the body implies a natural difference in
faculties, abilities, and so on.
As Carol Pateman puts it in her seminal The Sexual Contract, for all
the classic writers (except Hobbes), a difference in rationality follows
from natural sexual difference and this implies that only masculine
beings are endowed with the attributes and capacities necessary to enter
into contracts, the most important of which is ownership in the person;
only men, that is to say, are individuals (Pateman 1988: 56). The
point is that contract is seen as the paradigm of free agreement. But
women are not born free; women have not natural freedom (6), so they
cannot become fully entitled contractors like the male human beings. And
why is it so? Because the original contract is a sexual-social pact, but
the story of the sexual contract has been repressed (1). According to
Patemans very influential position (on which see ONeill, Lyndon
Shanley and Young 2008), coming from the time of second wave
feminism before queer theory entered the stage, the social contract could
not be thinkable without the sexual contract in that the story of the
sexual contract is also about the genesis of political right, and explains
why exercise of the right is legitimate but this story is about political
right as patriarchal right or sex-right, the power that men exercise over
women (1). Such power entails that to exclude female human beings
women from the number of free and equal individuals entitled to sign
the original contract.
As a result, it can be stated that the original pact is a sexual as well as
a social contract: it is sexual in the sense of patriarchal that is, the
contract establishes mens political right over women and also sexual in
the sense of establishing orderly access by men to womens body
(Pateman 1988: 2). In this sense, it can surely be stated that the social
contract is in fact a gendered contract, because only one of the two
genders is entitled to sign it and to benefit from it, whereas the other
gender (women) can benefit from it only to the extent to which men
decide to transfer part of the benefits also to women as their sub-
ordinates, and/or to let women participate directly. Now, although this
criticism on the part of Pateman, as well as on the part of feminist
thinking as a whole, is very useful in unmasking the claims of social
contract theory past and present to universality and inclusion, it is far
from being flawless, for at least two reasons. The first one is that this
kind of criticism implicitly accepts the foundations of the very theory it
wants to denounce, namely the existence of two and only two sexes and
hence of two and only two genders. In such critical accounts there is no
space for the differently sexed and gendered subjects there is no space
for the queer subjects because human beings are thought of as
articulated into only two groups. The second reason is that even in such
critical accounts males and females, men and women, are conceived of as
two homogeneous groups confronting themselves: there is only one kind
of sexual contract (generally to be identified with the marriage contract)
whose parties cannot be other individuals than a female and a male, a
woman and a man.
But in my opinion the strangest thing is that this leads us to overlook
an aspect that could be deployed as a very strong theoretical weapon to
prove the inconsistency of the model of human being proposed by the
social contract theorists. As a matter of fact, the most powerful critical
argument is not that all women are excluded from the contract, but that
not all men are included as fully legitimated contractors. As masculinity
studies are trying to show (e.g. Flood, Kegan Gardiner, Pease and Pringle
2007; Anderson 2009; Aboim 2010; Reeser 2010; Robinson and Hockey
2011), the labels male and man do not include all possible concrete
manifestations of being male/man, but only some of them, reproducing
within the dominant group the very same logic of exclusion (also from
the contract and its benefits) which is applied to the Other (the
female/woman). Therefore, it should not go unnoticed that the original
contract is not signed by all men as free and equal human beings,
because a great number of them do not satisfy the conditions to be
granted the status of a full human being. The roots of this in-group
exclusion can be various, for instance the ones I will address in the next
section (heterosexuality and ableness), but one of the most patent and
influential amongst them was the implicit characterization of the human
being that counts as white a feature that can pertain both to women
and men.
Moving from Patemans book, of course with differences, Charles W.
Mills (1997) added to the idea of a sexual contract that of a racial
contract, assuming that white supremacy is the unnamed political
system that has made the modern world what it is today (1). The racial
contract is a particular kind of contract that though based on the social
contract tradition that has been central to Western political theory, is not
a contract between everybody (we the people) but between just the
people who count, the people who really are people (we the white
people). So it is a Racial Contract (3). The idea of the racial contract
moves from three simple claims: the existential claim white
supremacy, both local and global, exists and has existed for many years;
the conceptual claim white supremacy should be thought of as itself a
political system; the methodological claim as a political system, white
supremacy can illuminatingly be theorized as based on a contract

between whites, a Racial Contract (7). As is obvious, the latter kind of
contract cannot be thought of as being stipulated between two free and
equal parties (whites and nonwhites) but rather, it is a Contract between
those categorized as white over the nonwhites, who are thus the objects
rather than the subjects of the agreement (12).
We could state, then, that the very object of the contract, in this case, is
to establish the exclusion of some human beings from the status of
possible contractors and this means from the status of (full) human
beings. Mills racial contract is a clear instance of the relevance of the
question concerning the identification of the correct parties of the
original contract, who far from being all individuals are clearly individu-
ated as the result of a selection between all human beings according to
some markers, among them sex and race. Now, the idea that the
normal human being must be white allows for the exclusion not only
of all nonwhite women (who are already excluded as women) but also
for that of all nonwhite men. In this sense, a nonwhite male/man finds
himself in the very same position as women that of a not-fully-human
being and therefore not entitled to sign the original contract, which in
its turn is not simply a contract signed by males but a contract that only
white males are fully entitled to sign. In this sense, I would add that
from the viewpoint of the social contract theory the individual labelled as
nonwhite male might be already considered as a queer human being (if
he is considered a human being at all).
Although these first two exclusions (women and nonwhite human
beings) would surely give much opportunity for further discussion, I
must limit myself to the previous very brief remarks and proceed to the
last character I address in this section, namely that of being Christian.
By this I do not mean, of course, that the contractor is or should be a
believer, although this might be the case. I only want to stress the fact
that, like any theoretical construction, the contractual paradigm arises
from, and is inserted in, a cultural context by which it is heavily
influenced. In other terms, by Christian I understand the (mainstream)
cosmology of reference of the contractual paradigm, despite all the
differences occurring in time, also and especially in elaborating the model
of human being who can sign the original contract. There is surely no
need to give evidence of the fact that Christian cosmology has been very
influential in shaping fundamental notions of Western political thinking,
such as that of a substantially free, equal and independent individual.
Beyond that, what I am suggesting here is that both the very distinction
between a state of nature and a civil society, and the construction of the
correct model of the civil man, the modern individual, and the
citizen as opposed to the natural man are deeply indebted to Christian

cosmology, and especially to the Book of Genesis.
All the major classic contract theorists, notably Hobbes (e.g. Thornton
2005), Locke (e.g. Waldron 2002) and Rousseau (e.g. Alberg 2007),
independently of their personal beliefs and their different positions
towards the historical religious institutions of their times and their
theological positions, not only confronted themselves with that cosmol-
ogy, but were really unable to get rid of it on the way towards the
construction of a purely rational account of politics and the political
order, from the exclusive viewpoint of the human being. This inability to
think about politics and political order outside or beyond Christian
cosmology, or at least with reference to different possible cosmologies,
surely defeated but not erased by Christianity in the West, is especially
clear in questions of race and sex, since the modern civil rational
man is directly Adams heir. And for all the distinctions, rhetorical
devices, as well as covert criticism of Christian cosmology, theology and
thinking we can find in those classic texts, the fact remains that their
authors surely accepted the supremacy of a white man that those
religious accounts allowed for, as well as the hierarchical descending line
God-man-woman-nature, which is clearly at work also in the newborn
civil society/state.
Therefore, if we analyse the contractual paradigm by simply
de-contextualizing it, as if the reference to Christian cosmology were
redundant or very limited, we might be not able to reach the core of the
difficulties it poses, consisting mainly in the fact that such paradigm
cannot, has no possibility, to emend the original inequalities it implicitly
accepts if not by overcoming its very foundation and justification in
Christian cosmology. In my opinion, when feminists, like advocates of
various social justice theories, try to rethink the contractual paradigm to
include women, nonwhites, differently sexed and gendered individuals,
disabled7 individuals and so on, they are going wrong, since they seem
to think that the solution to a fundamental problem could consist in a
practical move: inclusion by means of political decisions enforced by
positive rules and laws. But they do not clearly acknowledge that since
the paradigm is constructed in order to exclude, if you want to be
included you have only two possibilities: either accept the order estab-
lished by that paradigm and be content with the fact that they (the
7
In this article the terms disability, disabled and the like are always given
in quotation marks to stress the authors discomfort and disagreement with such
terms.
dominant men) listen to you and give you (at least partially) what you are
asking for; or refuse that same order by refusing its presuppositions, that
is to say by overcoming altogether the social contract paradigm. The
ultimate outcome of queering the model of the contractor by unmasking
its culturally biased character should be just this overcoming the
paradigm to construct something different.
III. THE IMPOSSIBLE CONTRACTOR: QUEERING

COMPULSORY HETEROSEXUALITY AND
ABLENESS
In order to be fully entitled to sign the (original social) contract and to
benefit from it under the established law a human being must be male,
white and Christian, but this is not yet the whole story. It is namely not
enough to fulfil these substantial requirements, so to speak, for he also
needs to be able to guarantee his active participation in the political
institution he is going to establish by means of the contract: in short, he
must fulfil the requirement of securing in advance that he will be
functional to the political community, by performing what is expected of
him as a fully entitled member of the civil society/state. The two most
important requirements in order for a man to become such a full member
are heterosexuality and able-bodiedness or ableness, to name them in
current terms (see Katz 1996; McRuer 2006). Roughly speaking, hetero-
sexuality names the idea that the two permitted sexes are mutually, and
only mutually, sexually attracted, whereas able-bodiedness/ableness
names the one according to which any concrete human body should
conform to the standard physical and psychological configuration consid-
ered as the naturally given, normal and therefore correct and
healthy one for an individual of the human species (for a discussion see
Monceri 2014). Both of them also hint at a particular understanding of
the human being as capable not only of living in a community, but of
making it flourish by adding ones own active contribution in all fields
of everyday community life.
The main function associated with heterosexuality is surely reproduc-
tion. A man must be able to have children, that is to say to give new
members to the community in order for it to survive and stay in time. Of
course, a corollary performance is to convey the value of heterosexuality
to his children, to the extent that the heterosexual principle becomes a
prescriptive norm. Hence, heterosexuality gives birth to a heteronorma-
tive regime for which heterosexuality becomes compulsory if a man
wants to remain within the group of free and equal members (on
heteronormativity see notably Warner 1993). Beyond that, in all con-
tractual accounts, and for all their differences, being a father seems to be
something necessary for a man to have an interest in the maintainance of
the civil society/state, for he has a responsibility as a father for an
enduring well-being of his children within society. So, if we think
together the two features of being a male and being heterosexual, the
resulting picture is properly that of a father, not of a mere man, and this
immediately evokes the usual picture of the (heterosexual nuclear)
family as the natural basis of human societies. Now, what is interest-
ing in this very sketchy account is that I did not refer to women, that is to
say to the heterosexual counterpart of men. As a matter of fact, the
discourse concerning fathers and sons as representative of the family
is usual in contractual narratives, reflecting the patriarchal arrangements
of modern and contemporary societies.
Nonetheless, the second sex cannot be totally erased from such
accounts, remaining there at least implicitly, and this leads to a substan-
tial difficulty. In order to say that a man is heterosexual, you need to
acknowledge that there is another sex, better a differently sexed body,
towards which a man should feel a compulsory sexual attraction. In this
sense, the feature of heterosexuality already allows women to be included
in a picture that otherwise excludes them. On the other hand, the only
possible move in order to exclude women from the aforementioned
picture would be to opt for homosexuality, that is to say for a sexual
attraction between same-sexed bodies. However, this would exclude the
possibility of reproduction aimed at maintaining the state, which is of
course unthinkable. Therefore, in a sense, the need to include hetero-
sexuality among the features of the contractor allows a rift to enter the
model of the (male) human being underpinning the contractual paradigm
that cannot be easily fixed. Of course, this might be, and has been, done
by means of exercising the power to exclude, but the very plain fact that
you need women in order to reproduce human beings, i.e. that you must
be a heterosexual male, has the potential to deconstruct the model from
within, as, for instance, feminist theorists have well understood.
At this point, however, it becomes necessary to stop discussing the
feature of compulsory heterosexuality to briefly address ableness,
because the two features are strictly intertwined. In order for a man (or a
woman, for that matter) to be allowed to reproduce himself, it is namely
necessary that he has been recognized as able to perform such a function,
and this immediately shifts the focus to the question of what does it mean
for a human body to be able, and therefore perfectly or at least
adequately functional. Generally speaking, it can be stated that there are
two fundamental questions generally posed to each and every concrete

human body at birth: Is this body male or female?, and Is this body
able or not-able?, although this second question can be also posed in the
following narrower version: Is this body a healthy or an ill one?
Answering both questions is mandatory on the part of the members of a
group/community in order to grant or refuse full membership to the
newborn human beings, but I would say that the question concerning
ableness is the most relevant one, because it has consequences also for
the one concerning the heterosexual performance, so to speak. As a
matter of fact, to be declared male or female is not enough in order to be
fully entitled to participate in the community as a heterosexual being, that
is to say by reproducing yourself, because if you are declared not-able
you will not even be entitled to exercise your sexuality altogether just
because you are not-able, although you will be inserted within one of the
two permitted sex categories (see also Monceri 2012). This immediately
introduces a difficulty in the contractual paradigm: can a not-able
heterosexual male/man become a full member of the group of free and
equal individuals if he cannot become a father, since he is not allowed to
exercise his sexuality because of his stated dis-ability?
It goes without saying that the answer is no, and this poses, as we
have seen in the case of nonwhite men, the question concerning the
position and collocation of disabled men as queer individuals within a
paradigm that apparently grants exclusive dominance to the group of
males/men. But more than this, it can be stated that ableness is perhaps
the most important feature of all those I have mentioned as necessary to
be a contractor, since being recognized as able by the part of the group is
actually what entitles a (male) human being to be a contractor. In fact,
the entire range of abilities and faculties to actively participate in civil
life depends on the original evaluation judgement about a concrete
human body as able. Indeed, I would say that ableness is a feature that
cannot fail to be there if a human being is to be recognized as a possible
participant in a civil society/state, whereas the not-able or disabled
human being is doomed to remain bound to the pre-political state of nature
or to the so-called private sphere, which is more or less the same.
Ableness becomes the most original compulsory feature in order to
participate in the life of a political community, because each and every
human being inserted within it must assure the performance of activities
that are all directly linked to the underlying definition of the able human
body. And it cannot be denied, although I cannot address the issue more
deeply, that there is more than this, because the disabled body (what-
ever its concrete definition) literally embodies or incorporates the fears of
the community to become impure, to be infected to the extent that the
free and equal members might regress to a less-than-human condition.

Hence, we can detect here a parallel process that mirrors the one leading
from heterosexuality to heteronormativity. Compulsory ableness leads to
ableistnormativity (Campbell 2009: 4) as well as to the establishing of
ableism as a network of beliefs, processes, and practices that produce a
particular kind of self and body (the corporeal standard) that is projected
as the perfect, as the species-typical, and, therefore, as essential and fully
human (Campbell 2005: 127 n. 2).
As a matter of fact, in order to prove that you possess all the faculties
that are considered necessary to a contractor, among them notably
freedom, equality, independence, rationality, property (in the person as
well as of external objects, goods, etc.), you must be recognized as
able-bodied on the part of your fellows. If this is not the case, you cannot
be accepted as a full participating member of the political community,
and will be considerd as kind of a burden and as a second-rank human
being to be put in chancery. Just in this sense ableness becomes
compulsory in order for a male/man to be entitled to partipate on equal
terms. Now, the strange thing is that this still, if implicitly, widespread
idea is rooted in a picture of the human being as something given once
and for all, that is to say as something not subject to change, and this
leads to a number of unsolvable difficulties. The first of them is that
human life is bounded to time, and that all human bodies are to be
considered as simply temporarily able-bodied. The human life-course is
such that the body (which of course includes the mind) is doomed to face
decay, corruption and deep functional modifications with the passage of
time, to the extent that an ageing and old human body cannot be
defined as able as the same body in an earlier phase of its duration time,
so to speak.
This means that in order to fully participate you must be relatively
young, that is to say in the phase of your life in which you should
possess all the necessary attributes to be considered able. This is the
reason why when (not only) classical contractual theorists think about
contractors, citizens, and similar figures, the image they end up by
evoking is that of a young, healthy (male) human being, who by the way
is just in that phase of his life in which he can bear children. But the
opposite side of the coin, so to speak, is that children and old people are
excluded from this picture, even when they are males/men: should we
conclude that (male) children and old people can be considered as queer
human beings excluded from entering the role of the contractor? Person-
ally, I think so. Be that as it may, the difficulty remains to find a way to
include the same people in different phases of their life, in that those
phases imply a different understanding of ableness, and therefore a
different degree of that legitimate participation, which is however guar-

anteed to them in principle because they are considered as fully entitled
to the role of contractors. Anyway, even if a solution might be found for
this first difficulty, there would still be a second one for which a definite
solution seems impossible.
Human beings, both those recognized as able and those labelled as
disabled, live in an uncertain, unforeseeable and dangerous environ-
ment, and this has an influence as to the degree to which ableness can be
maintained not only through life, but even from moment to moment. In
other terms, although you can be born able, you can become not-able
or disabled later, without any possibility to foresee, control and avoid it.
Among the various aspects that could be relevant from this point of view,
the most important one for our present discussion of the contractual
paradigm, the social contract, and the figure of the contractor is that this
circumstance has a heavy impact on the very ability to consent to the
contract. How can you commit yourself to be a full participant in the
envisioned political community, if you cannot be sure and therefore
you cannot secure to anybody that you will be able-bodied through all
of your life? Indeed, you might become a burden or a second-rank
human being at any moment, and this would imply that the rest of the
free and equal members would have to decide what to do with you. But
this is only a particular problem, the more general one being that all the
self-appointed contractors are not in a better position than those they
exclude because of their inability, since no one of them can secure that
they will be able actually to perform what is expected of them as full
members of the civil society/state.
The inconsistencies of the contractual paradigm, and especially the
exclusion of the so-called disabled people, have recently given birth to
attempts to revise the conditions and presuppositions of the original
social contract, coming from within the same paradigm in its contempor-
ary version more concerned with social justice. One of those attempts,
as is well known, is that offered by Martha Nussbaum moving from a
criticism of Rawls version of contractual theory, although in the belief
that we should not reject Rawls theory or any other contractarian theory,
but that we should keep working on alternative theories, which may
possibly enhance our understanding of justice and enable us to extend
those very theories (Nussbaum 2007: 25).8 Anyway, this suggestion
8
In this same work, Nussbaum addresses specifically the difficulties posed to
the contractual paradigm, including Rawls version, by the exclusion of disabled
people, and she tries to find a way to open up the theoretical framework in order
cannot be received if one considers the previous discussion as consistent

and convincing enough to have shown that the difficulties the contractual
paradigm has to face come from its anthropological foundations. Hence,
if we try to rethink the paradigm in the direction to let it include different
features in the model of human being supporting the entire theoretical
construction, this proves to be impossible, and we are left with the only
possibility to overcome it entirely just because of its inability to take into
due account the multiplicity of queer individuals (or subjects if you
prefer) it must exclude for reasons of internal logical consistency.
Indeed, the paradigm is unable even to manage the inclusion of the
queer males/men I have previously mentioned (the nonwhite male/man,
the disabled male/man, male children and old people) and it shows also
clear difficulties in fully including women, all the attempts notwithstand-
ing (not only) on the part of feminist theorists. To be sure, it would not
be very difficult to show that the same goes for people variously labelled
as queer from the viewpoint of their sexual difference, for whom there is
no space in the classical accounts as well as in the contemporary ones, if
not under the label of disadvantaged people, minority groups, iden-
tity groups, and so on. To take just one instance, what role should be
envisioned for intersexual individuals (Kitzinger 1999; Hird 2000;
Kessler 2002; Preves 2005; Chase 2006; Harper 2007; Karkazis 2008;
Holmes 2009), who clearly queer the foundational sex binary male/
female upon which the entire contractual paradigm rests? Just as in
many other cases, also in this one the fundamental difficulty is that there
is no possibility to legitimate the inclusion of a third, fourth, n-th, sex
and gender in the model of human being accepted by the contractual
paradigm, since this would imply rethinking all of its basic assumptions,
first of all those relating to reproduction and family as they are conceived
of in a heteronormative regime. It is namely self-evident that speaking
about the heterosexuality (or homosexuality and even bisexuality) of an
intersexual human body makes no sense.
But something similar can be said with reference to other cases, such
as those of transexual and transgender people (see for an introduction
Stryker and Whittle 2006; on transexuality e.g. Shrage 2009), who not
only queer both the sex and gender categories, but also radically
deconstruct the very idea that a sexual and/or gender identity does exist
in principle and remains the same through life, which is one of the most
to let it include not only disabled people but also nonhuman animals. For a
brief discussion of this work, in relation to the case of disabled individuals see
Monceri (2012).
basic assumptions of queer theory as a whole (e.g. Hall 2003; Sullivan

2003; Wilchins 2004; Giffney and ORourke 2009; on legal theory
Albertson Fineman, Jackson and Romero 2009). The cases could be
multiplied at will, since the real problem is that the contractual paradigm
works if and only if its underpinning model of the human being is agreed
upon and accepted as such. Therefore, at the end of this necessarily brief
and preliminary investigation, my personal conclusion is that the contrac-
tual paradigm cannot be all that useful for contemporary political theory,
if it intends to cope with the idea that individual diversity matters. There
are still underexplored ways to conceive of the political community and
its origins, such as, but not limited to, contemporary anarchist and
post-anarchist thinking (for an introduction Jun and Wahl 2010; Rous-
selle and Evren 2011; Daring, Rogue, Shannon and Volcano 2012; Jun
2012; Kinna and Evren 2013). It may surely be that they can value more
diversified, open, flexible, and bottom-up theoretical models, also by
taking under due consideration the fact that in order to attain a really
inclusive society we have to construct, to the extent to which we need
one, a more adequate model of the human being than that offered by the
contractual paradigm.
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Alyson Books
14. Contracts in literature: from Doctor

Faustus to vampires
Daniela Carpi
According to conventional contract law, the formation of a valid agreement

ordinarily involves an offer, an acceptance, and consideration. The former
two elements typically take place through spoken or written language: an
offeror proposes to do something in exchange for something of value to be
given by an offeree. The latter may then accept the offer, reject it,
or make a counteroffer.1
This definition of contract makes a distinction between a promise and an

offer: a promise encompasses a stronger mode of commitment than an
offer. From a legal perspective we may say that a contract is a juridical
act which has a social-economic function. It implies a subjective will and
is the manifestation of an individuals private autonomy. The contract is
the summa of different subjective wills that are structured according to a
formula defined by the state. The contract marks the relational character
of legal rights and exemplifies social relationships within the modern
world. The form of the contract allows people to overcome any juridical
limitation through the dialectics of single wills. Anything can fall under
the category of contract apart from what would encroach upon ones
reason, freedom and dignity. As the Latin word indicates, contract
derives from contractus, a drawing together of two or more parties.
Contractual obligation starts with the acceptance by word or action of an
offer. Certain requirements must be satisfied for the formation of a
legally binding contract. First, there must be an intention to contract.
Second, the parties must have legal capacity to contract. Third, it is
necessary to comply with certain legal formalities. Fourth, there must
usually be consideration. Fifth, the purpose of the contract must not be
illegal.
Literary works have often dealt with contracts, which have been at the
core of many plots. The type of contracts I will take into consideration as
diachronical examples of this contractual proposition extend from the
Renaissance to the end of the Victorian era: they range from an immoral
1
Schane (2012).
322
Contracts in literature 323
contract, invalid in itself, to the interpretation of the text of a contract, to

a verbal contract between two persons establishing a marriage agreement,
to a contract for the selling of a mansion that will give a person legal
existence. These examples do not intend to exhaust the various facets
offered by literature as far as contracts are concerned; instead they
attempt to demonstrate that contracts are one of the many elements that
form the basis for the law-and-literature comparison.
I. IMMORAL CONTRACT IN MARLOWES DOCTOR

FAUSTUS
Marlowes Doctor Faustus brings together the fields of law and art at the
most crucial point in the main characters human and super-human
dealings: his stipulation of a contract with the devil. The text moves
between two worlds, the legal and the artistic, bringing them to a crisis.
The one should emphasize the other. But in fact stress is placed in both
cases upon careful analysis of language, upon the critical interpretation
of the medieval sciences of Trivium and Quadrivium; thus the legal and
religious authority with which these sciences were regarded during the
Middle Ages is thwarted.2 This is indicative of a move from uncritical
and fideistic acceptance (also under the influence of the general ideas of
the Renaissance which would then lead to the experimentalist philosophy
of Bacon) to an analytical and critical approach that eventually ended
with the vanquishing of certain Truths:
Settle thy studies, Faustus, and begin

To sound the depth of what thou wilt profess.3
The turning point of this discourse consists exactly in the act of signing
the pact, which seals the need for a move from an oral contractual form
to a written form, in order to give greater validity to the negotiations. The
legal and literary discourses both become performative, proclaiming the
impossibility of attaining Truth. Furthermore, they both proclaim their
verbal and rhetorical value, due to the attention paid to the main terms of
the contract.
That the authority of law will be challenged is foretold in the opening
monologue delivered by Faustus. He carries out a point by point
examination of the terms of medieval knowledge, which bring together
2
See Carpi (2009).
3
Marlowe (1969) I, i, 12.
law and literature, medicine and the art of rhetoric, science and the
humanities:
Sweet Analytics, tis thou hast ravished me.

Bene disserere est finis logices
Affords this art no greater miracle?

Where is Justinian?
Si una eademque res legatur duobus,
Alter rem, alter valorem rei, etc.
A petty case of paltry legacies.

This study fits a mercenary drudge,
Who aims at nothing but external trash,
Too servile and illiberal for me. (I, i, 636)
These two quotations emphasize the fundamental connection between the

art of rhetoric and the legal code, which both fall under Faustus
accusation of being trivial and unsatisfactory. From the plays very start
the critical comparison between law and literature is set.
Where medieval man saw moral and juridical stability, Faustus sees
defeat by mortality, mercenariness and self-interest (lawyers as money-
grubbers and merchants), broadening of meaning (through the art of
rhetoric), futility. He brings to light the limited nature of human power,
the limits of mans influence on his own destiny and on his own power.
In short, accepted knowledge is suddenly seen as limited and unsatisfy-
ing, and this crisis is provoked by the art of rhetoric. The same ambiguity
and the same dialectical conflict between certainty and uncertainty, truth
and falsity, reappears as central to drawing up the written contract. In fact
Faustus turns to the devil in his need to resolve me of all ambiguities
(I, i, 79): his search for absolute truth involves the deconstruction of all
accepted knowledge.
Writing becomes the means to solidify and reify that which cannot
have solidity, and therefore becomes itself a symptom of corruption. The
emblematic image of Faustus at the beginning of the play, engrossed in
the books in his library, alone before the written word, already conveys
the idea of damnation and claustrophobia.
The written word is seen as a symptom of departing from the straight
and narrow path, of a splitting, and of a search for certainty that has
vanished into nothing. The written contract emphasizes this hinting to the
demonic value of writing, in an attempt to seal a definitive move away
from God and the Holy Scriptures (the only writings with the right to
exist as such). Within the text, law is immediately associated with its
nullification, with its power to broaden Truth rhetorically.
Let us analyze the terms of the agreement: Mephistopheles asks
Faustus to bequeath his soul and then asks for a deed of gift:
Faustus, stab thy arm courageously

And bind thy soul, that at some certain day
Great Lucifer may claim as his own
thou must write it in manner of a deed of gift. (I, v, 4859)
Consummatum est: this bill is ended
And Faustus has bequeathed his soul to Lucifer. (I, v, 7374)
Though different from the legal point of view (bequeathing entails

inheritance, while deed and gift require a pact between living persons),
they both share free will: this is to say that a deed of gift is valid only if
the individual who is contracting the legal deed is not forced to do so. A
contract under seal is called a deed or a special contract. A document
becomes a deed if it is signed, sealed (Faustus blood) and delivered.
Delivery is largely a matter of intention and a deed may be delivered
even though it remains in the possession of the maker. When a deed is
signed, sealed and delivered it is executed. An escrow is a deed executed
subject to a condition that it is not to become operative until a certain
contingency is satisfied, for example, the occurrence of a certain event or
expiration of a period of time. This last element is patently present in the
play, where Faustus bequeaths his soul to Mephistopheles at the expir-
ation date of 24 years. In the text we notice that the terms bequeath and
deed of gift are used interchangeably: therefore the legal conditions of a
testament and of a deed of gift are often interchangeable. In fact, the
contract with the devil is both a sort of living will and the actual selling
of an object.
What is particular is that Mephistopheles asks for securities: why this
request? We immediately get the impression that Mephistopheles is
trying to fortify a bond which is intrinsically invalid, that what we are
facing is an illegal contract, meaning that Faustus could have broken it at
any time and set himself free. In fact, in English law and even more so in
Roman law, which Renaissance humanists so admired (in the very
opening of the play Faustus mentions the Justinian Code), immoral
contracts are not binding: this is exactly the point where law and
theology converge. Underscored is our conviction that Faustus is not
damned by the devil: instead he is his own tempter. An educated person
such as Faustus could not have been unaware of this legal principle.
Moreover, the security is imposed and therefore is not legally valid.
In a transfer of property one can sell what one owns, but an individual
does not own his soul. This principle holds particularly true in the
Renaissance period, when religious faith still prevailed. That is to say, if
Faustus is foiled in his worldly aspirations because he does not obtain
what he seeks, he is equally foiled by the parody of his legal contract.
Another element which makes the pact invalid is the condition required
by Faustus: he wants to be a spirit in form and substance. This demand
is impossible to obtain. A contract contra bonos mores is unenforceable.
Marlowe compares the meaning of law to the eschatological perspective
of all humanity, but this view does not seem to him to have an acceptable
basis. The notion of the instrumentality of law emerges right from the
opening monologue, as does diffidence towards jurists, seen as servile
and illiberal. Faustus sees the study of law as a mercenary drudgery.
The analysis of civil law is followed by that of divine law, canonical law,
moral law. The two different laws are associated with the common notion
of stipendium: if law is mercenary because lawyers are money-grubbers,
moral law regards stipendium in the same way (stipendium peccati mors
est): in both cases we are basically dealing with a commercial agree-
ment, a contract of sale that, in this instance, involves also moral law.
The two events, legal and religious, have precepts and rules in common,
pacts and payments, and thus moral law takes on the connotations of a
mercantile transaction. Pessimism over the human condition, doomed to
die on one hand, and to sin, or spiritual death, on the other hand, causes
Faustus to see the two branches in a common light, negative and
mercenary, in a denigration of the Christian doctrine of free will.
Faustus analysis starts with a quotation from Justinian law. He puts it
into context (testamentary law, Justinian corpus juris) and interprets it by
creating a critical parallel co-text (a petty case of paltry legacies): all
these elements converge in a cognitive purpose (the search for an
absolute that provides universal justice and truth) that is judged a failure.
Therefore, in this part of the monologue, Faustus acts as the interpreter of
the law, casting doubt upon its validity. What was a written code, passed
down to provide a juridical basis for certainty, is deconstructed, shedding
light on its vacuity. The resulting social foundation is therefore an
essentially financial one, where everything is bought and sold, both death
(as a result of sin) and the action of the jurist.
An aspect worthy of note is the way Faustus examines legal texts: a
passage from Justinian law and a passage from Jeromes Bible, thus
putting legal code alongside religious ethics from the very start:
When all is done Divinity is best.

Jeromes Bible! Faustus, view it well. (I, i, 3637)
The strength of law lies in its coercive value, but that effect can only be
obtained when its own rationality and linearity are put into play. Thus
law is based on a desire for legitimacy, and it is here that the need arises
for a contract to sell Faustus soul: to make the negotiations official,
normative and coercive, in order for their performative nature to be made
certain. Yet the paradox of this contract lies not only in the fact that one
cannot sell what one does not possess, but also in its uncertain,
non-binding effects. Faustus first reaction is to waver, thus demonstrat-
ing that the pact can be violated: the only consequence would be physical
torture by the demons (something deeply feared by Faustus). The pact
could not, however, be spiritually binding in any way. The possibility of
its automatic settlement recurs constantly throughout the text. On one
hand, a contract has been stipulated that should be binding, where its
written form would provide the guarantee, but on the other hand,
paradoxically, that pact contemplates its own violation. The contradiction
is irreducible:
Literatures negative capability permits it to hold paradox in abeyance long

enough for it to intuit the paradoxs irreducibility.4
In the play, Faustus adopts the art of self-persuasion. Through rhetorical

devices and dialectical arguments he convinces himself of the worth of
his ambitions. He therefore acts as his own lawyer, employing legal and
philosophical disquisitions together with elements of passion. Passion
should, however, be kept in check in the attempt to reach mathematical
objectivity when searching for truth.
The art of rhetoric is used to establish legal certainty on grounds that
are not legal. Mephistopheles wants securities, and the hurry with
which he asks Faustus to sign the pact underlines the fine line separating
damnation from salvation. They both seem to harbor the same doubts and
distress; thus we can understand the devils attempt to give legal
certainty, at any rate, to the sale: from the request for securities to that
of the legal form of a deed of gift. Yet, for the duration of the contract,
the knowledge of its worthlessness and of the incessant risk that Faustus
will repent, thus nullifying the validity of the written contract, cause
Mephistopheles to stay constantly on his guard, watching for any
possible signs of collapse on the part of Faustus. Were the pact truly legal
and binding, such precautions would be unnecessary. Faustus instead
seems to assign the written pact all responsibility for his actions to come,
using it as an alibi for the choices he makes. He threatens to annul the
4
Joshino (1998).
contract only if Mephistopheles were not to stick to the contract,

meaning in case he did not obey every whim of Faustus:
Here Mephistopheles, receive this scroll,

A deed of gift, of body and soul;
But yet conditionally, that thou perform
All covenants and articles between us both. (I, v, 8891)
The drafting of the contract is quite peculiar. While the notary public did
not exist as an official and public figure before the nineteenth century, the
office was nonetheless in use and played a central role in jurisdiction
over essential aspects of English law (such as weddings and divorce,
proof and application of last wills and testaments, disputes over ecclesi-
astical duties). Furthermore, the notary figure worked in conjunction with
the Church of England. Generally speaking, there was no way to give a
private instrument the same status as a public document. The common
law approach to documents is a reflection of a general attitude towards
proof. Publicity was preferred to secrecy, as oral proof was preferred to
documentary proof. In fact, common law trials were held before juries of
laymen, and oral testimony was preferred over written documents which
could have proved difficult to read. Transfers of property titles were in
fact carried out through a public ceremony, the so-called livery of
seisin. Acts bearing a seal were an alternative to a livery of seisin.
In Doctor Faustus the so-called transfer of ownership of the soul, or
the testamentary document, is negotiated through a written contract. The
reason for this may have been to emphasize both the learnedness of the
contracting parties as well as the need to give documental soundness to
something that was fundamentally illegitimate. Its illegitimate nature is
also emphasized by the fact that there is no public official present to
certify the validity of the document: the affixed seal is represented by the
blood of Faustus, almost as if better to symbolize that the object in
contention is the vital (spiritual, in this case) lifeblood of the contractor.
In case it were challenged, the document, being of an ethical/religious
nature, would have been referred to an ecclesiastical court. In those days,
the ecclesiastical court would in turn refer it to the notary public (who
was granted the exclusive right to authenticate documents for use in
ecclesiastical courts). Here the figure of the notary public is not present,
thus underscoring another aspect of the dubious authenticity of the
contract. In addition, there are not even any witnesses who can certify to
the legality and security of the document. The publicity considered
necessary in those days, in the absence of an official intermediary to the
contract, is lacking. All of these elements place Faustus contract in a
completely illegal, private, and secret sphere (not even his students are
aware of it). Doubts are thus raised as to whether the event really
happened, suggesting that the negotiation actually occurred within the
soul of Faustus, who attempts to give a legal justification for a very
personal betrayal of God. Let us consider the passage where, immedi-
ately after signing the pact, Faustus sees the inscription Homo fuge
appear and disappear on his arm, shedding a dubious light on the reality
of the written words of the contract itself:
My senses are deceived: heres nothing writ!

Oh, yes, I see it plain. Even here is writ. (I, v, 7879)
In theory, common law dictated that anyone could draw up a legal

document, and that its validity had nothing to do with the condition of
the writer. Validity instead depended upon the presence of the seal, or on
the presence of the contracting parties signatures and on the possibility
of producing on request witnesses capable of testifying that the document
in question had been drawn up as indicated. The notion of a public
document valid in itself as a proof, which is characteristic of continental
notary acts, was essentially limited to legislative statutes and court
statements. All other documents had to be authenticated before a court.
But of whom does the court consist in the case of Faustus? Of the devils,
represented by Mephistopheles who is, among other things, a contracting
party? Mephistopheles is acting on behalf of Beelzebub, but he holds no
official proxy: every single element in the transaction is legally very
imprecise, so why resort to such a contract, making continual reference
to it in order to uphold the details of the negotiation?
Common law recognized several basic methods for securing formal
validity of private negotiations. The most effective method of securing a
contract was to draw it up as an act, a written document that was
authenticated in the presence of witnesses and which included seals and
the signatures of the contracting parties. In the absence of proof of fraud
or falsification, it was difficult for such a document to be judged invalid
by a court. In this case, however, where the sale is of something
impalpable and insubstantial, where there are no witnesses, no notary
public and no publicity, the document is on the brink of questionable
legality from the very start, despite its written form which provides a
seemingly credible aspect. It is neither a public nor a private document. It
has a formal appearance but lacks the official requisites. The document
has in fact arisen from an illicit situation. It sells what cannot be sold,
and furthermore lacks the official requirements to secure its authenticity.
The depravity of the contract is made evident by the falseness of the

images that arise from it: just think of the succubus in the guise of Helen
of Troy, of the trick played on the horse-courser with the false image of
the horse, of the semblance of the Seven Deadly Sins who arrive on
scene to distract Faustus from his attempt to repent. The struggle between
law and images dates back in time:
Controversies about images permeate Western law. Their public and overtly
political expression in the iconoclastic disputes reveals not only a deep-seated
fear but also an ambiguity as to the use of art and of images more generally.5
The famous aphorism from the Renaissance Imago veritas falsa sums up
the dual attitude of law towards the use of images, which paradoxically
combine truth and lie, blindness and vision. A false contract generates
false images, and such images are eidola materialized by the devils to lull
Faustus into a dream of omnipotence. The corruption of the sacred word
(Consummatum est) is linked to the corruption of the images, which are
demonical apparitions. The same word takes on iconic value in the text.
Faustus himself, in the very first scenes of the play, is fascinated by the
figural power of the signs on the page (Lines, circles, scenes, letters and
characters; / Ay, these are those that Faustus most desires), which take
on an idolatrous symbolism. Words and images blend into a sensual
possibility for contingent and transient corruption, uniting imagistic
strength with logic and rhetoric. Moreover, the use of rhetoric, or shall
we say the cynical analysis of text and the skillful linguistic devices
Faustus employs to convince himself of the rightness of his quest for
omnipotence, are signals of an Edenic fall, a separation from the whole:
The law arranges, distributes and polices its own image through icons of
authority and sovereignty, tradition and fidelity law has always had a
visual policy and understood the importance of the governance of images for
the maintenance of the social bond.6
We are dealing with a strange combination of iconoclasm and iconophilia

that has always regulated the relations between law and image: legal
responses have in fact determined the set of icons and images for every
era. In Doctor Faustus, the key points of the damnation are linked to the
verb to see: Oh yes, I see it plain. Even here it is writ Homo Fuge
(I, 1, 79); See, see where Christs blood streams in the firmament (V, 2,
156). Damnation of writing accompanies damnation of the images and of
5
Douzinas and Nead (1999) 7.
6
Ibid. 9.
the simulacra of truth they produce. According to the ethics of that time
this is the result of an immoral contract:
The fear of images, displaced into judicial hermeneutics, becomes the fear of
plural meanings and interpretations.7
In reality, a more in depth analysis of the validity of the contract between

Faustus and Mephistopheles, aside from any assessment of the actual
form of the contract, leads to a series of observations. First, the contract
is to be considered as an inter vivos act, though some of its provisions
will go into effect after the death of one of the contracting parties.
Therefore, it is a post mortem exequendum contract. Yet it is not an act of
bequeathal mortis causa, because it also provides for performance of a
service on the part of the devil; thus, in exchange for a service to be
performed immediately, the property transfer (surrendering of the soul) is
deferred post mortem. The written form was employed ad probationem,
in order to facilitate its proof in a court of law, but it is certainly not ad
validitatem, insofar as it was not imposed by the law. Thus, the freedom
of form principle applies. I repeat, though, that aside from issues of
formality (such as the absence of the notary and witnesses, and the
substitution of a seal with blood, etc.), the real reason why the contract is
not valid lies not in the alterity of the good in question (how can I sell
something that does not belong to me?), but rather in its violation of
morals.
In theory, a sales contract for a good belonging to another is possible
(clearly not with effects involving transfer of the property) provided both
parties are aware of the conditions (otherwise it would qualify as fraud).
All judicial systems, however, forbid any and all acts of sale of ones own
body (would it be legal to sell a kidney or a leg to pay off a debt?). This
restriction, though sometimes sanctioned by positive legal systems (for
example, article 5 of the Italian Civil Code), is actually an immanent
principle in all civilized societies. It is thus contra legem, regardless of
whether the law directly forbids it or not, because it is, in any case,
contra bonos mores. In other words, we are faced with an inherent
principle, a fundamental value that cannot be disregarded by any judicial
system. If it is forbidden to sell your physical body, a fortiori it is
forbidden to sell your soul. Ex turpi causa non oritur actio, therefore the
contract could not be enforced by Mephistopheles. We are within the case
of a void or voidable contract: a voidable contract is one which exists but
can be brought to an end by one party if he so chooses.
7
Ibid. 8.
The highly learned Faustus-Marlowe was well aware of all this, thus
the securities requested by Mephistopheles are just a smokescreen. If the
principal contractual obligation is invalid, then the subordinate security
obligation is invalid as well (Italian Civil Code, article 1939). Thus,
Faustus evil contract will find a place suited to it only in an internal
court, or, rather, at an ethical level within the relationship between
salvation and damnation, above and beyond all legal apparatus.
So what was Marlowe, who probably had extensive knowledge of the
law, trying to tell us? In my opinion, the stipulation of this contract
places emphasis on the self-damnation of the character, who attempts to
project his blame externally on documental devices. This play delves into
a re-reading of the religious myth of the fall from Eden, that is, through
the rejection of God by eating from the tree of knowledge. We are thus
led to reconsider the scene where the contract is stipulated, and see it in
the light of a devilish modern temptation, even more subtle because it is
only paraphrased beneath the shroud of legal certification.
II. PROBLEM OF INTERPRETATION OF THE

CONTRACT IN SHAKESPEARES THE MERCHANT
OF VENICE
Shakespeares The Merchant of Venice rests on a persistent desire for the
accomplishing of an interpretation founded in reality: the suitors have to
face the necessity of correctly interpreting the signifying value of the
caskets in order to conquer their beloved; Portia indulges in a continuous
critical analysis of the personalities of the different suitors; Shylock
appeals to an application (that he believes univocal) of the law and he
clashes with unsuspected interpretative expansions; Bassanio argues
about the duplicity of social life, which requires a constantly alert reading
to perceive the separation between appearance and reality, shadow and
substance.8
Within these different articulations of the theme of interpretation, the
key point here is the interpretive perspective on the legal bond and how
to apply it in the confrontation between Shylock and Portia as the judge
in the court scene. On the one hand, there is trust in the law as the
monolithic point of reference, as monument and written code supporting
the state, exemplified by Shylocks invocations to the application of the
law: Ill have my bond (3, 3, 5); I stand for judgment (4, 1, 103);
8
See Carpi (1994).
I stand here for law (4, 1, 142); I crave the law; / The penalty and
forfeit of my bond (4, 1, 2034); I stand here on my bond (4, 1, 239).9
On the other hand, there are the interpretations of the law itself, its
re-constructions, and the traces that survive individual applications.
The re-enactment of the linguistic differentiation between rcit and
discours, the surfacing of the legal code as narration, as text to be
deconstructed, lies between the law and its re-construction, between an
ontological and universal concept and the concept of traces, of narra-
tive representation. Interpretation is a fundamental element that links
literature to law, as Posner, Boyer, and other critics have maintained:
The interpretation of a contract is the process of determining the thoughts that

the use of the words therein intended to convey to each other.10
Interpretation is always relative and governed by intention. For instance,

whether the purpose of interpreting contracts is to recreate the objectives
of the parties or to encourage contracting parties to embody their
agreement in a clearly written, comprehensive document, governs the
interpretive outcome:11
The interpretive common ground between law and literature is best viewed
when law engages society in a concrete example: the written contract.12
[H]owever much the law wishes to have a formal existence, it cannot succeed
in doing so, because at any level from the most highly abstract to the most
particular and detailed, any specification of what the law is will already be
infected by interpretation and will therefore be challengeable.13
The law appealed to by Shylock exists as a deep structure,14 one which

the entire structure of culture tends towards and the solidity of the state
rests on: If you deny me, fie upon your law! / there is no force in the
decrees of Venice! (4, 1, 1012); Antonio: The Duke cannot deny the
course of law: / For the commodity that strangers have / With us in
Venice, if it be denied, / Will much impeach the justice of the state
(3, 3, 2629). The law constitutes the supporting element for the safety of
the state: to subvert it would mean destabilizing the whole social cosmos.
9
Shakespeare and Wilson (1969).
10
Boyer (2003) 169, n. 31.
11
Posner (1998) 212, quoted in Boyer (2003) 169.
12
Boyer (2003) 171.
13
Fish (1994) 14244.
14
Felperin (1990) 152.
The risks that non-compliance with the law would entail are, in fact,
emphasized.
Greenblatts terms of circulation and negotiation might be applied to
this concept, since the legal code seems to be the result of the
circulation of de-codifying energy, the effect of an endless negotiation
between its deep meaning and its re-readings. Portia initiates a new way
of observation and verification, which is in accordance with the scientific
method established by Bacon. Law is transformed into a rhetorical place,
a script for the law to follow. The new authority of the interpreter is, in
fact, rhetoric: the dilation of the law is made possible by a tropological
reading of the canon, which brings to the surface the secretum of the text;
in this way, the style sets itself against the idea, inscribing the initial
discourse within temporality.
This new hermeneutical experience posits itself also as aesthetics, that
is to say that a new paradigm, based upon a system of metaphors, is
created, just as happens in a literary creation. The reading of/compliance
with the law becomes an aesthetic experience for Portia.
Portia demonstrates a new way of living in the law, which entails an
interpretative belonging and a possibility of critical articulation. I am
applying the term living in the sense meant by Vattimo (who, in turn,
derives it from Heidegger) from whom I borrow the image of living in a
library:
while the knowledge of truth, as real possession of an object through a

suitable representation, is represented with the idea of truth as conformity, the
truth of living is, rather, the competence of the librarian, who does not
completely possess, in a precise act of transparent comprehension, the totality
of the content of the books among which he lives15
but who knows where to look. The image of the library, then, dear to
Borges and to Ortega Y Gasset, recurs again in Vattimo. In Portias case,
the knowledge-possession of the object-law materializes in the idea of the
librarian-interpreter, who makes an analytical use of the book for a
precise act of understanding that is also, in this case, an act of
hermeneutical violence. The struggle between Shylock and Portia is a
struggle for the act of reading and for correct interpretation; the ethics of
the law are indispensable to hermeneutical living and are closely tied to
pragmatism. It is a matter of appropriation of content through a suitable
representation.
15
Vattimo (1989).
Interpretation occurs when it posits itself as breaking up with tradition

(here represented as the written text of the law). It begins as an
anti-foundational act: the truth of the law is presented in terms of project,
conformation; its form and its meaning are not any longer bound to the
immediate perceptive grasp, and instead they receive a new schematiza-
tion through interpretive reasoning. The dynamis is realized between the
new and the old structure/image; the new sense, thus derived, is central to
its intelligibility.
We witness the intrusion of doubt: everything is put into question, even
that which seems incontrovertible (namely, the certainty of law, the
apparently patent meaning of the written contract): the evidence is no
longer about the character of Truth, but it is rather about the necessity of
a sensation of analytical integration. In philosophical terms, it is a matter
of the passage from a principle of non-contradiction to the structure of
Being. The truth of the opening is not an object whose cognitive
possession is attested by the sensation of evidence, accomplishment and
integration,16 but rather Truth is located in continuous conformation and
adjustment.
When Portia appears, disguised as a judge, she holds a book in her
hands: the book of the written law, the text of which apparently
corresponds to the monolithic stability of the law to which Shylock
constantly appeals. The book seems to point out the consistency and
irreducibility of the code, the certainty of the canon, the Manichean
source of any judgment. Portia, in fact, emphasizes its stabilizing power:
It must not be, there is no power in Venice

Can alter a decree established:
Twill be recorded for a precedent
And many an error by the same example
Will rush into the state. It cannot be. (4, 1, 21619)
The impossibility of non-compliance with the law is emphasized by the

two categorical statements placed at the beginning and at the end of
Portias speech. All this seems to support Shylocks request and his just
appeal for the application of the bond. However, even the epistemic and
semantic certainty of the text is, little by little, broken down by Portias
clever use of that same text, undermining the validity of the contract.
Indeed, the subsequent act of re-opening the book appears extremely
threatening with the words: Thyself shalt see the act: / for, as thou urgest
justice, be assured / Thou shalt have justice more than thou desirst (4, 1,
16
Ibid.
31114). The written text turns out to be a sharp weapon that might lead
to completely unexpected consequences, and hence Shylocks exclam-
ation: Is that the law? underscores the amazement of someone who
cannot recognize himself in the new text that interpretation has brought
to light.
Portia appears as the Ideal Reader, who reads the legal code in an
unorthodox way, contemplating the possibility of multiple interpretations,
a reader alert to the linguistic fabric of the text, sensitive to the semantic
voids left by the grammatical construction of the text itself. Reading is,
consequently, the search for a secret code operating from within lan-
guage; the code is posited as constituting an ideal objectivity within a
train of thought that establishes the relativity of the universal message of
the written word as its own characterizing element. The mediation of
interpretation brings about a sense of discomfort, of dissatisfaction
towards the restrictions of the code, which exists as long as it is
de-constructed. In this sense, interpretation appears as the trial of writing:
the code as gramm is bound to a time out of time, out of phase with the
moment of its application; the phon or the creative re-reading practice
employed by Portia emphasizes the distorting materiality of the book.
Thus is derived a juxtaposition between faith and critical spirit: on the
one hand, there is Shylock with his faith in the power of his own
property, in the incontrovertible clarity of the law (hence of the contract),
in the loyalty of his daughter; on the other hand, there is the unorthodox
interpreter, who renders the certainties in the code useless, highlighting
its ambiguities and prompting an analytical and deductive capacity in her
suitors. Portia a direct heir of Bacons new experimentalism observes
humankind around her with a highly disenchanted and attentive spirit.
Shylocks defeat, once he is deprived of his supporting structure, points
to the wavering of a universe suffering the blows of a new dialectical
attitude that is liminally located between writing and its interpretation,
between the code and its reading.
This shift in the text, from an acritical acceptance of the law to a
questioning of law itself, corresponds to a diachronic movement within
the legal system. In the sixteenth century, the English legal system, like
those in continental Europe (then somewhat similar) was based partly
upon the common law, orally transmitted or consolidated in the judges
decisions (stare decisis). In addition, it relied on the authority of Roman
law, drawn from the gloss of medieval commentators, mainly from the
school of Bologna, and finally, on the written laws issued by lords or by
authorities enjoying such a power.
In the light of the evolution of sixteenth/seventeenth-century rational-
ism, chiefly French, the incongruence of such a system became evident:
it was a system which presented wide margins of uncertainty. However, a

strongly hierarchical and basically stable socio-economic society could
endure it. The emerging French bourgeoisie strove to overcome this
system; in revolutionary times, and subsequently under the influence of
the Napoleonic ideology, a movement arose for a massive codification of
current law.
The goal of such monumental work was to attain to the absolute
certainty of the law, and to a number of corollaries derived from it,
such as a judge-interpreter rather than a legislator, as well as to the
completeness of the legal system, which would not have any gaps and
would regulate all cases that might eventually arise. Such myths of
uniformity could only exist in a socially stable society, which believed in
progressive and positivistic principles. The concept itself of certainty of
the law wavers as soon as ideological certainties, especially gnoseo-
logical ones, are fractured because of the prevalence of anti-rationalistic
trends; furthermore, it wavers also due to the intensification of the
politico-ideological conflict deriving from the assertiveness of the sub-
ordinate classes and because of the Marxist faith that considers law not as
a value in itself but rather as an ideological superstructure of production
relations. This is the actual situation as seen in the development of
alternative theories, but it is also the situation presented in The Merchant
of Venice. Here we are confronted with the so-called teleological inter-
pretation of the norms; such an interpretation replaces a purely neutral
and literary interpretive criterion with one which tries to fulfill the aim of
the norm itself, in order to appreciate its possible evolutionary interpret-
ations, on the basis of the developments and changes of the social order.
Finally, we reach the so-called alternative interpretation of the law, that is
the use of law as source or lever to subvert social relations, as theorized,
mainly in the last few years, by the most extremist trends of left-wing
jurisprudence.
Such a phase of interpretative confusion is announced by older texts,
such as The Merchant of Venice, where the concept of codification itself
presents some elements of crisis, given the threat of the impossibility of
a reductio ad unum of jurisprudence. Shylock is defeated as the reader
(of the law) by a stronger reading (that of Portia). The conflict is between
a symbolic model of the world (a classical-medieval-Renaissance herit-
age) and a syntagmatic model of the world, inaugurating the relativism of
the modern age.17 Thus, in The Merchant of Venice, the symbolic social
order, with its reference co-ordinates, sets itself against a new episteme,
17
Serpieri (1985).
conceived as disruption and loss of stable values: both the book and the
contract are no longer sources of certainty, but of interpretative relativ-
ism. Within an apparently linear structure some threatening ideological
contradictions are disclosed: a strong sense of hierarchical order (familial
and political: daughter versus father, the law versus its application,
Christian versus Jew) is perceived as undermined by disruptive and
contrasting forces (the daughter tries to guide the choice of her favorite
suitor; Portia invades the masculine sphere disguising herself and becom-
ing a lewd interpreter (3, 4, 80); the relativity of law). Everything is
pervaded by a strong and foreboding sense of death (in primis, Antonios
threatened death, then the Jews spiritual death).
The universe still seems to be regulated by a code (the voice of the
dead father who speaks through the scrolls contained in the caskets, the
written pact and the articles of jurisprudence), but in reality everything is
made relative by Portias new awareness of her ability to impose her will
upon political, legal, and familial power, thanks particularly to her
interpretive ability. At stake are the analogous orders political and
ontological of the microcosm (family, father) and the macrocosm (state,
sovereign, nature, reason), as Kavanagh states regarding A Midsummer
Nights Dream,18 but the same concept can also be upheld in relation to
The Merchant of Venice.
The written text of the law, invoked by Shylock as a pharmakon,
emerges as the other to the self, that is as poison: Shylock will be
annihilated precisely by the use of the law. Justice becomes an unstable
sign which exists only as mediation, as witness to a non-ephemeral
knowledge which can be falsified precisely because it is written monu-
mentalization. As it transpires in Plato, the writing of law appears as
deadly impulse to duplication:
The pharmakon is that dangerous supplement that breaks into the very thing
that would have liked to do without it yet lets itself at once be breached,
roughed up, fulfilled and replaced.19
Interpretation, then, is the sign of a sign, the supplement of a supplement:

if writing is already a sign (a reflection of an abstract concept of justice,
that is, somehow, directed), interpretation is, even more so, detached
from the initial Idea/Logos, an attempt to complete the trace.
Law posits itself, not in the absolute form of its Being, but as the
determination and effect within a system that is no longer that of
18
Kavanagh (1985).
19
Derrida (1972).
presence but of diffrance.20 Interpretation appears as a differential

structure, as the image of deferment. The written code already exists in
function of its destination, in giving itself up to a hermeneutical
interpretation. It becomes dialectic, the place of the founding opposition
between being and non-being: the written text is not only posed and
considered in its informative elements, but it is also practiced in its
dynamic destination. After all, the code has a testamentary character by
itself precisely by being in-scription and also due to its intrinsic
connection to the absence/disappearance of the author.
Portias reading of the contract marks the gap between the time when it
was drafted and the time when it is re-examined: even the document,
then, is bound to the mortal necessity of deviation. Here we find the
distinction between the objectual and the operative.
Paradoxically, we are in the sphere of a conflict between an onto-
logical hermeneutics of Truth and the incontrovertible givenness of
Truth in the metaphysical tradition.21 In other words, a gap is opened
between the notion of Truth (as used by Heidegger to mean conformity)
and hermeneutics, in its rational criticism of the existent (here used as
idolum fori). Following Heidegger, one could say that in the hermeneu-
tical dilation of the written bond/code, as employed by Portia, an
immediate identification of Being with what is nameable without
performative contradictions is undone. The law is realized in its re-
enactment-distortion-acceptance. While Shylock stands for a concept of
Truth as conformity (in a scientific and positivistic sense), Portia stands
for a concept of Truth as opening (in the sense of a science of the spirit).
Portias interpretation is given as a poetic proposal for new rules, as a
hermeneutical activity that achieves new paradigmatic horizons. The
renewal of the canon is entrusted to a woman, and for this very reason is
doubly disruptive: it is up to her to establish an approach to the real
marked by critical spirit, showing new applicative possibilities of the
code. The deductive and critical emphasis, brought to light by Portia, is
displayed also in her denunciation of the stereotyped linguistic code of
love, thus opening a disenchanted gap between the idea and the language,
even in courtship. The inanity of the vows proceeds at the same rate as
the untrustworthiness of the written law, in a total questioning of any
certainty.
From a strictly legal perspective we may say that in the contract signed
by Antonio and Shylock we find the two important terms that typify a
20
Derrida (1974) 25 (my translation).
21
Vattimo (1989) (my translation).
contract: the conditions (Shylock will give Antonio 3,000 ducats) and the
warranties (Antonio guarantees a pound of his own flesh). However, the
contract has some implied terms that are not immediately apparent: that
is, Antonios death. An unexpressed term can be implied only if the court
finds that the parties must have intended that term to form part of the
contract. It must be a term that goes without saying, a term which,
although tacit, formed part of the contract. This is why the Prince takes it
for granted that Shylock wanted to take Antonios life. Thus, the Prince
orders Shylock to break the contract. The breach of the conditions of the
contract would give the innocent party a choice: Shylock would
repudiate the contract in exchange for a much larger sum of money. This
is called discharge by breach. Shylock could affirm the contract and
recover damages to compensate him for the breach. But Shylock wants to
keep to the terms of the contract also because Antonio signed the bond
with his free will: the consent of the parties is necessary for a contract to
be enforceable. When the parties contract under a fundamental mis-
apprehension as to a state of affairs or facts forming the basis of the
contract, the contract is void. As mentioned earlier, Antonio was well
aware of the risks implied in the text, so much so that Bassanio urged
him not to sign under such severe terms. However, rectification through
equity would have been possible, and this is exactly what Portia and the
Duke sustain.
For an agreement to be enforceable as a binding contract it must have
been the intention of the parties to create a legal relationship. The
consensus ad idem falls within this category. The offer made by the
offeror to the offeree is the statement of a willingness to be bound on
certain specified terms.
Kant distinguishes between the juridical and the ethical ratio: the
former is projected outwards and is a reasonable norm which serves the
function of disciplining human relationships and of establishing a proced-
ure to redress the norm once it has been violated. The latter is
independent of circumstances and is addressed inward, toward the soul of
the subject. While the former is part of a written code, the latter is
abstract and does not refer to a particular situation or a material
circumstance. Shylocks bond would be seen by Kant as tautological: it is
the judges duty to respect the terms of the bond because the non-respect
of this contract would impair the economic-social structure of Venice.
However, in Shylocks case both ratios are called into question: on one
hand, the bond does answer the juridical ratio but on the other hand, an
ethical redress is required, hence Portias demand that Shylock plead for
mercy.
Such discourse on the act of interpretation, which has as its fulcrum

the text of the law, branches out into a series of images that converge
towards a sense of uncertainty and instability: for example, there is much
insistence on the element of disguise, travesty and social roles. In
relation to this, Bassanios monologue in Act III, scene II is crucial, since
it is wholly centered upon the ornament, on the exterior gilding which
veils societys inner reality, almost as if social life itself were a code to
be de-codified in order to make the secretum emerge.
So may the outward shows be least themselves / The world is still
deceived with ornament (3, 2, 7375): Bassanio takes into consideration
all sectors of society in order to unveil their hidden meaning, just as
Portia applies her analysis to the inner core of the text of the law.
Bassanio observes how a pretty exterior aspect would often hide evil, just
as religious piety might conceal damned error, and how the fair
ornament masks grossness and beauty has inside itself the skull:
Thus ornament is but the guiled shore / To a most dangerous sea (3, 2,
98100). Such discourse on ornament proceeds at the same rate as the
tropological analysis carried out by Portia in order to show the un-
expected face of the law, and for this reason it is always connected to an
act of interpretation. Everything is role playing, a juxtaposition between
shadow and substance, truth and counterfeit, and, as it has been
pointed out, even amorous words, which seem nothing but a mere veneer
for amorous pathos. The image of woman thus appears as an ideal
perfection, as a quest through the verbal act: the word pursues such an
idea of perfection, clashing with its appearance: yet look, how far / The
substance of my praise doth wrong this shadow / Doth limp behind the
substance (3, 2, 12830). The image of woman emerges as sum of
the Good, which has to ratify the different semblances as the real As
doubtful whether what I see be true, / Until confirmed, signed, ratified by
you (3, 2, 14849).
We are within a dialectics of signs, whose real significance needs to be
perceived beyond the world as a space of inscription, beyond the horizon
itself, as a signifying game ruled by the differences between signs, and
whose external sign is the trace of an overcoming. The juxtaposition
expressed by Bassanio is between the identification (of the hidden) and
its overcoming (the movement of the social inscription of signs). The
essence-Being of things lies in difference, and upon this difference all
textual fabric is organized. Interpreting such signs would mean perceiv-
ing the principle of diacriticity as a condition of significance.
The presence or the entity eludes form and that overabundance of
ornaments which Plato defines as beyond entity and presence: every-
thing is a supplementary structure of a system of irreducible differences,
that is to say that the individuals are not as the others describe them, and
law is not as it appears linearly in a text. It is a constant movement within
a signifying structure. In this pyrotechnics of semblances, not only does
social behavior turn out to be role playing, but very often the characters
themselves ascribe a role to others, so that in order to penetrate
appearances a strong interpretative capacity is once more needed: if
Antonio appears to most eyes as the incarnation of honesty and probity,
Shylock sees him as having the very same lack of piety that others
attribute to Shylock himself. In turn, Shylock, to whom the appellation of
devil is often attributed, in the end appears as the victim of a situation
of social uncertainty which requires an exemplary punishment in an
attempt to rescue societys hierarchical stability. The excess of the
punishment itself (the forfeiture of all Shylocks properties, the loss of
his daughter, the elimination of his own racial identity, and the obligation
to convert) exposes the kind of danger represented by Shylock: it can be
said that he embodies the deeply conservative element within a develop-
ing society. Note, for example, the way he becomes the spokesman for
traditional values such as stability of the law, hierarchy within family, the
solidity and sobriety of his house (Let not the sound of shallow foppery
enter / My sober house (2, 5, 3536)), all of which are opposed to the
new perceptive and critical capacity that has arisen among individuals.
Once again, Portia is the emblem of this new empiricism, which
branches into a different knowledge of the individual. The I builds up
its own meaning through observation and reasoning: Portias superiority
to all the other characters in the play lies precisely in her more subtle
deductive capacity and in the fact that her function is also that of
stimulating an analogous critical spirit in her suitors. They are given the
task of semiologically de-codifying the symbolic meaning of the different
caskets: the differential dynamics between Reality and its traces can be
located in the re-reading of Platos myth of the cave.
The interpretative process is also realized, as has been stated, as an
aesthetic experience: the reduction in evidence of the objects given-
ness22 becomes a harmonious integration within the social community.
Bassanio, momentarily alienated from the social context because of his
financial problems, is re-integrated into the community through a correct
ethical-aesthetic interpretation, which implies a cognitive-appropriative
experience. This is the acceptance of a possible demystification of what
seems evident, the school of suspicion of which Nietzsche speaks.
22
Ibid.
The emergence of experimentalism brings about the consummation of

a model of Truth based on evidence: the separation between what is
immediately perceivable to the senses and the Truth that can be verified
only by positioning ourselves on another horizon. The idea of Truth
begins to be exalted as a critical function, as a permanent rupture, in a
continuous adjustment between sensorial evidence and its verification.
III. MARRIAGE CONTRACT: SHAKESPEARES

ROMEO AND JULIET AND JOHN CONGREVES
THE WAY OF THE WORLD
In the course of the seventeenth century the political debates in England
encroached also on the notion of the marriage contract, which rapidly
became the basis for liberal arguments about female equality and
marriage. The marriage contract had established a relationship of irrevoc-
able hierarchical authority between the parties:
The marriage contract involved something more than the consent to marry and
might contain stipulations about the terms of the relationship.23
Romeo and Juliet presents a good example of a marriage contract. The

theme of the marriage pact can be seen from a legal point of view, that is,
we can consider the contractual nature of the promise of marriage,
according to which the contract had force of law. Classical Roman law
attributed an almost exclusively social relevance to betrothals, following
the principle of the freedom to marry. In fact, still today, the free consent
to a marriage is an essential requirement for its validity.24
In the first century AD, to declare that one no longer wished to marry
was sufficient to break the marriage pact. It was only from the fourth
century AD onwards that the sponsales began to acquire the contractual
status that will characterize them for the following centuries, right up
until the time of modern codifications. In fact, in order to confer a
stronger value to Christian engagement, the Imperial constitutions began
to grant several rights to the betrothed, as far as their reciprocal rights
were concerned. The unilateral dissolution of the promise of marriage
was punished with monetary sanctions, unless dissolution was for reasons
defined as acceptable by the authorities. In that case, restitution of gifts
assumed a special value.
23
Shanley (1979) 86.
24
Carpi (2008).
In the later legislation of the Empire, the Christian engagement came

to be identified more and more with the arrale one (from arra, the Greek
word for deposit), an Eastern tradition according to which the promise
of marriage should go along with the giving of gifts on the part of the
future husband (the gift was a kind of warranty for the maintenance of
the pact). The tendency to equate sponsalia to marriage, both in terms of
consensus and of the subsequent status, increased. Even the love pact
between Romeo and Juliet is defined as a contract: Although I joy in
thee, / I have no joy of this contract tonight.25 The party at the Capulets
house certainly assumes the status of a marriage negotiation, tantamount
to a promise from Capulet that he will grant his daughters hand under an
exchange based on dowry and gifts. Thus Juliets refusal to marry Paris
risks her exclusion from the right to succession and to hereditary goods.
Sponsalia were included in the dispute about the relation between
consummation of the marriage and consent to it. In fact, canonists were
debating whether the marriage as a contract could be concluded solo
consensu or required the concrete element of the sexual union. This is the
distinction between sponsalia de praesenti and sponsalia de futuro. The
main characteristic which distinguished the two kinds of sponsalia was
the unitas carnis. If, on the one hand, it was argued that consensus facit
nuptias, on the other hand, there was also a will to distinguish the cases
in which the marriage was real from those in which it had only been
planned for the future, that is, a will to distinguish between actual
marriage and promise of marriage.26
For centuries the tradition of canonical right, and particularly the
influence of Protestantism, have considered engagement as the most
important aspect of marriage, reducing the latter to a mere completion of
the former. Hence, the fianc is for Shakespeare a husband on pre-
contract (Measure for Measure 4, 2, 75),27 to the extent that the
sponsalia could be delegated to a third party by power of attorney, as
with any other contract.28
Romeo and Juliet highlights the ambiguity of these two kinds of
legality within the marriage contract, since Juliet has already been
promised to Paris by her father, who organizes the engagement party. In
25
Shakespeare (1971) 2.1.116. All subsequent references will be to this text,
edited by J. Dover Wilson.
26
In the twelfth century, Pope Alexander acknowledged the distinction
between verba de praesenti and verba de futuro, recognizing that the latter could
be transformed into a real marriage if they were followed by a sexual union.
27
This reference is to the new RSC edition. Bate and Rasmussen (2007).
28
Oberto (1996) 77. See also De Giorgio and Klapisch-Zuber (1996).
fact, what initially appears as a carnivalistic feast later becomes a

solemnity, a formal marriage proposal. Juliets promise to Romeo and
its subsequent consummation raise the problem of which of the two is the
real marriage. From a Christian perspective, the secret marriage is indeed
privileged in the text. In fact, the marriage with Paris would occasion the
risk of bigamy. The dispute concerns the pre-eminence of the secular
marriage over the religious one, or vice versa.
Thus, on the one hand, there is the Church, willing to guarantee free
choice to the individual. On the other hand, there is the ambition of
families, who consider the arranged marriage to be an important element
of political and financial alliance. Once again we are facing a clash
between the private and the public spheres, between a private form of
order and a social or public one. In the text, the marriage theme
underlines precisely this conflict between the two forms of order. The
contrast is further emphasized by the fact that, although in that era
women actually had the right of veto, it is not respected in this case,
given the numerous pressures and threats applied to Juliet.29 In fact, the
social relevance and the complexity of marriage derive from its belonging
to the institutional sphere as well as to that of customs or social usage.
Later, there is yet another shift from the marriage based on the canons of
seriousness required by Protestantism30 to the economic/secular marriage.
The great pomp of the wedding exalted the symbolic role of the
woman: it was her temporary apotheosis and her public triumph, which
was then counteracted by future years of obedience and seclusion.31
29
See Horkheimer (1959) 360: the birth of modern civilization emancipated
the bourgeois family rather than the individual per se and thus carried within
itself a profound antagonism from the very beginning. The family remained
essentially a feudal institution based on the principle of blood Man,
liberated from serfdom in alien households, became the master in his own.
Children, however, for whom the world had been a penitentiary throughout the
Middle Ages, continued to be slaves well into the nineteenth century. When the
separation of state and society, of political and private life, was completed, direct
personal dependence survived in the home.
30
This shift of emphasis towards the nuclear family was given powerful
support by Reformation theology and practice. The medieval Catholic ideal of
chastity was replaced by the ideal of the conjugal affection. The married state
now became the ethical norm for the virtuous Christian. Stone (1978) 135.
31
Let us consider The Taming of the Shrew, where one of the strategies for
breaking Katharinas resistance is precisely that of denying her the pomp of the
ceremony. In Act 3, scene 2, Petruchio arrives at church without the appropriate
clothing and proceeds to deny his wife the wedding breakfast, the first wedding
night, and all the rest of the traditional paraphernalia.
In Romeo and Juliet, there is also another contraposition: that between

a private pact (based on civil law of a Roman model, which recognizes
full juridical status to the agreements made in order to fulfill an
obligation, and which will later become the Anglo-Saxon common law)
and the pact endorsed by the religious authority (sacramentum). It is a
contraposition between juridical norms and canonical code. Hence, Juliet
is bound by both pacts to different contracts, each of which are legally
valid.
The crucial passage in the text, evidenced by the forms of justice
administration, is also revealed by the coexistence between a promise by
parole (entirely dependent on the will of the contractor, since the law
had erased the private exercise of ones rights) and a promise by deed
(based on a contract and on a religious ceremony). Juliet is caught in the
vice of fidelity to two forms of contract, torn between an agreement
stricto iure and one based on bona fide (which is the one forced on her
by her father):
Because canon law declared marriage a sacrament dependent only upon the
consent of the man and woman to be wed, secret marriages marriages
without the presence of parents or other witnesses and even without priests
were legal.32
However, it must be acknowledged that English courts of law, while

recognizing the validity of clandestine marriages, also punished such
unions.
In seventeenth-century Anglo-American contract law, among the prom-
ises that were considered binding according to the common law, we
should mention a formal acknowledgement by bond under seal, often
conditioned upon performance of a promise for which it was a security,
and a simple promise upon consideration, that is, in exchange for an act
or for another promise.33 In the first case, we immediately recall
Shylocks contract in The Merchant of Venice, while the second case can
be applied to the twofold promise of marriage in Romeo and Juliet.
These theories based on a contract were followed by the seventeenth-
century lawyer Hugo Grotius principle of moral force, based on the
ethical meaning of the promise. Hence, the validity of marriage came to
be based on the free will of the contractors, an element which was
definitely not present in the pact between Juliet and Paris. Once again,
the text incorporates two completely different approaches: the fathers
32
Diefendorf (1987) 669.
33
Pound (1954) 145.
absolute authority, and the daughters free will. According to the medi-
eval canons, the latter was an element of subversion, but in the modern
authorities it is an inalienable right.34
Law, however, consists in a constant dialectic between contrasting
situations, which mirror the relation between spirit and nature. According
to Roscoe Pound, law must be stable but cannot remain static. As far as
the legal reality is concerned, there is a need to piece together and to
overcome the antinomy between the stability of law, seen as societys
rational, firm and fixed order and its dynamism, mirroring the incessant
transformations of needs, such as collective and individual interests,
moral requirements and political problems.35 Law, while fulfilling the
social need for stability, must also come to terms with the constantly
changing requirements of society.
Such elements are quite evident in Romeo and Juliet: on the one hand,
the medieval concept of private revenge is still present, but on the other
hand, its results and historical transformations are questioned. This
questioning reveals a concept of law as opus operans rather than opus
operatum. The criteria of marriage pacts are placed in the context of a
continuing historical development. They are presented as a process in
fieri, as a transformation which is still taking place and which reflects an
unceasing evolution.
Congreves The Way of the World (1710) presents an evolution of the
concept of the marital contract stemming from the seventeenth-century
debates described above. The entire play is centered on problems
concerning marriages, valid or invalid, on contracts that may annul
existing marriages, impostures and tricks that may favor or work against
would-be marriages. Everything is done for the sake of Reputation,
which must in no case be blemished. The whole society is rooted in
make-believe, in pretensions and false appearances. Contracts are at its
core:
34
[S]erious challenges were already developing to the traditional authority
of husbands in the patriarchal family. Moreover, the demand for the
separation of religion from state control accelerated the process by which the
divine sanctions for the social hierarchy were undermined. Once they were gone,
the way was open, first for a contract theory of the state, and then, by logical
analogy, for a contract theory of the family. Stone (1978) 340. According to
Stone, the most important transformation of the family structure was the gradual
freedom from paternal authority, which was made possible by the growing power
of the central government. As the state and tribunals granted ever increasing
protection to wives and children, a relationship of subordination towards the
husband and the father became increasingly weakened.
35
Cesarini Sforza (1963).
Mrs Fainall: So, if my poor mother is caught in a Contract, you will discover
the Imposture betimes; and release her by producing a Certificate of her
Gallants former Marriage.
Mirabell: Yes upon Condition that she consent to my Marriage with her Niece,
and surrender the Moiety of her Fortune in her possession.36
Here Mrs Fainall is finding a way out of the possible consequences of a

trick through which Mrs Fainalls mother has been married to Mirabells
servant disguised as a gentleman. Obviously, such a marriage is invalid in
itself, because of the imposture: the woman is marrying somebody who is
not what he pretends to be. If fraud can be demonstrated the contract is
void. Moreover, one cannot enter a contract sub condicione: one draws
up a contract creating a condition of invalidity for oneself so that one
may be set free if necessary. This is legally invalid and annuls the
contract from the start. The marriage contract becomes the solution to
situations of embarrassment, for instance, a woman being impregnated by
her lover, and hence her reputation being ruined. A husband answers the
necessity for an excuse: he would be sacrificed to the Occasion and
would provide a good remedy. What emerges is the mercenary side of
marriage that can be entered and annulled according to necessity. The
fact that the characters themselves speak of Contract stresses the
business perspective on marriage.
The elements of a commercial transaction are evident here: marriage
only entails an exchange of favors, a do ut des. The strong sexual
undertone of the play is in line with the general atmosphere of Restor-
ation theatre.37
Marriage should not be the end of contrivance and pursuit, but a
constant and endless courtship and solicitation on the mans part, a
deferral of favors, a steady play of pursuit and rejection. The enjoyment
should be maintained through a pleasurable fatigue and never fall into an
assured and codified situation. This credo typical of the comedy of wit or
comedy of sex (it depends on the classification) reaches its climax in The
Way of the World in the particularly ironic oral contract (or promise),
which is at the center of Act IV, scene v. Ill never marry unless I am
first made sure of my Will and Pleasure asserts Millamant. The woman
lists all the pleasures that marriage would put an end to: faithful solitude,
darling contemplation, morning thoughts, indolent slumbers. Definitely,
if she agrees to marry Mirabell she wants to keep many privileges: lying
in bed in the morning as long as she pleases, the rejection of nauseous
36
Congreve (1969) Act II, scene iii, 369.
37
See Carpi (2005).
terms of endearment (sweetheart, jewel, joy, love), of familiarity and

kisses. She refuses to be seen with him in society, at the theatre. Let us
be as strange as if we had been marryd a great while; and as well bred as
if we were not marryd at all (The Way of the World, Act V, scene v). But
the conditions are not exhausted:
Millamant: liberty to pay and receive Visits to and from whom I please; to
write and receive Letters, without Interrogatories or wry Faces on your part;
to wear what I please; and chuse Conversation with regard only to my own
Taste; to have no Obligation to converse with Wits that I dont like, because
they are your Acquaintance; or to be intimate with Fools, because they may
be your Relations. Come to dinner when I please, dine in my Dressing-Room
when Im out of Humour, without giving a reason. To have my Closet
inviolate; to be the sole Empress of my Tea-Table, which you must never
presume to approach without first asking leave. And lastly wherever I am you
shall always knock at the Door before you come in. These articles subscribd,
if I continue to endure you a little longer, I may by degrees dwindle into a
Wife.
This Bill of Fare represents the female terms of the Account. But
Mirabell also has his own terms to list:
Mirabell: In primis, then I covenant that your Acquaintance be general; that

you admit no sworn Confident or Intimate of your own Sex; no she Friend to
skreen her Affairs under your Countenance and tempt you to make Trial of a
mutual Secresie. No Decoy-Duck to wheedle you a fop scrambling to the
play in a Mask Item, I Article, that you continue to like your own Face as
long as I shall I prohibit all Masks for the Night made of Oild-skins.
We may discern a difference in Millamants and Mirabells provisos:

the former stresses her will for independence and for keeping her identity
as a woman; the latter indicates his attempt at still considering his wife as
a property to be kept and defended. The request that she should not force
herself into squeezed laces if pregnant is a way to secure the safety and
health of his progeny, in a concept of marriage as procreation. Moreover,
the elements contained in the first part of Mirabells conditions aim at a
moralization of marriage: marriage must be rooted in fidelity and
seriousness. In fact, emplotted in the text of this contract are the
Protestant views on marriage that it must start out on the solid grounds of
solemnity and mutual acceptance. The message of these curious and even
absurd items of the contract reveals an awareness of the serious require-
ments of a religious marriage, where the man must be tractable and
compliant, and the wife must be faithful and attend to the raising of the
ensuing children. If the conditions of the agreement are accepted, then

the two lovers will proceed to the signing of the deed:
Mirabell: Then were agreed. Shall I kiss your Hand upon the Contract? And
here comes one to be a Witness to the Sealing of the Deed. (The Way of the
World, Act V, scene v)
What emerges in this play and in its Bill of Fare is the contractual idea:
the only legitimate basis for relationships of super- and sub-ordination is
the free consent of the individual.
What Millamant requires of Mirabell is a promise which entails a
commitment and future obligation, a sort of conditional promise. What
Mirabell answers could correspond to an offer: he is still committed to
Millamants proposal but he becomes obligated to the future performance
only upon her acceptance:38
But now precisely because the promisors obligation is contingent on the

promisees willingness to undertake his or her part of the bargain, the promise
needs to communicate that desire to the promisor either by performing the
requested act or by promising to do so.39
The fact that Mirabell sets up his own conditions for the agreement
marks his acceptance, so that the contract can take place through an
exchange of promises. The offeree agrees to undertake the requested
performance.
The conceptual revolution that started in the seventeenth century is
best exemplified in the treatment of marriage in literature:
In 1640 virtually all writers still spoke of the contractual element in

marriage as being simply the consent of each party to marry the other. Both
man and woman consented to take on the rights and obligations of their
respective stations To contract a marriage was to consent to a status which
in its essence was hierarchical and unalterable. By 1690, however, John Locke
suggested that if marriage were a contractual relationship, the terms of the
contract as well as whether or not to enter into the relationship were
negotiable. Nothing inherent in the contracting of marriage dictated womans
subordination to man.40
Notwithstanding Mirabells items, that in some way redirect the contract

within male domination (his requests tend to show a will to protect his
38
See Schane (2012).
39
Ibid. 107.
40
Shanley (1979) 79.
property, that is the woman and the progeny as his private property),
the deed marks the signing of the contract as an act of free will and
equality on the womans part. The contract has become mutual, and not
one-directional: also the woman can specify her requests and wants to
have them respected.
Shortly before the publication of The Way of the World, Pufendorf had
asserted that:
We presuppose at the outset that by nature all individuals have equal rights,
and no one enjoys authority over another, unless it has been secured by an act
of himself or the other. For although, as a general thing, the male surpasses
the female in strength of body and mind, yet that superiority is of itself far
from being capable of giving the former authority over the latter. Therefore,
whatever right a man has over a woman, inasmuch as she is his equal, will
have to be secured by her consent, or by a just war.41
The contract between Mirabell and Millamant marks exactly this epochal
change: the woman can dictate her own terms, even if the man retains the
final hierarchical decision. This implies that the marriage contract
involves something more than the consent to marry and might contain
stipulations about the terms of the relationship. This contractual nature of
marriage is very close to Lockes conclusions: if all beings are free and
equal in the state of nature, then when they agree to marry they are free
to set whatever terms to their relationship they wish, as long as these are
consonant with the procreation and care of children:42
Only by adopting a masculine language of contract (i.e., the staging of marital

negotiations in the plays proviso scene) is Mirabell able to reconcile the
seeming conflict between his own desire for authenticity and his partners
penchant for pretense. By recoding his marriage through the terms of legal
contract, Mirabell substitutes the trappings of law for the conventions of
theatricality, thereby subordinating the coquettish Millamant and establishing
himself as the plays moral and emotional center.43
The moralization of marriage throughout the Reformation finds in this

play a middle ground between the comic aspect of the comedy of wit and
the ethical principles bringing a new, more serious attitude: the contract
demonstrates a will to ground marriage on solid moral principles of
respect and fidelity.
41
Pufendorf et al. (1934) Book VI, ch. 1, s. 9, 853.
42
See Locke (1884) vol. II, 83, 365.
43
Davis (2011) 520.
IV. CONTRACT FOR THE ACQUISITION OF A

PROPERTY IN DRACULA: HOW TO ACQUIRE
LEGAL PERSONHOOD
A large part of Bram Stokers novel Dracula focuses on the intricacies of
property relations,44 that is on the social, legal and personal stakes of
ownership. Property rights are thematized vis--vis human rights: the
relationship between property and personhood has commonly been both
ignored and taken for granted in legal thought, asserts Jane Radin.45
Together with Kant, Radin affirms that property is necessary to give full
scope to the free will of individuals, who must have control over objects
in order to fully constitute themselves as persons.
The novel, as a genre, is closely connected to the rise of modern
capitalism. In his Second Treatise of Government John Locke asserts that
the individual first of all owns himself, that man has a property in his
own person (what is defined as possessive individualism). The first sort
of property therefore consists in ones own body. In Draculas case the
owning of property is his way of attempting to exist as a human being
within English culture. In the novel the notion of personal property and
the idea of subjectivity are intertwined.
But does Dracula possess his body? While trying to exist as a legal
persona by becoming the owner of a mansion, Dracula actually does not
possess the fundamental element that would give him the status of a
Western legal persona, that is, his own body. In fact, for half of the day
(the daytime) his body is not under his control; instead he lies inside a
coffin at anybodys mercy. He must defend his undefended body by
hiding the coffin and paying people to transport him while he is
unconscious. This total weakness is paralleled by superhuman capacities
at night-time, thus making his persona inconsequential, while at the same
time he shows a longing for an inner coherence and impregnability. The
issues of subjectivity and economics come to be intertwined. On the one
hand, Dracula owns property and exists because of it, on the other hand,
for part of the day, he does not own his own body, which is supposed to
represent the basic form of property:
Both Hegel and Kant maintained that property is necessary to give individuals
fulfillment: man must have control over some number of objects in order to
44
See Carpi (2012).
45
Radin (1993) 2.
feel at home in the world Liberal property theory indeed states that
property is strictly linked to individuality and freedom.46
In order to constitute himself as a person Dracula needs a connection

with objects, in this case ships and houses. At the very beginning of the
novel Jonathan Harker, a solicitor in a London law firm, goes to
Transylvania to discuss with Count Dracula the selling of a property in
London. Together Harker and Dracula peruse the papers concerning the
deed of acquisition: with him I went into plans and deeds and figures of
all sorts We went thoroughly into the business of the purchase of the
estate at Purfleet I told him the facts and got his signature to the
necessary papers.47 Here we are witnessing a commercial transaction, a
contract for the sale or other disposition of a material property, an act
normally supported by a written memorandum (Law of Property Act
1925, section 40 will provide that contracts which are not so executed
may not be enforced by court action).
The economic transaction that triggers the plot marks an epochal
change in the economy of the state. The Napoleonic Code breaks with
feudal limitations, with the division into classes, with the concept of
patrimony. Being the monument of the age of codification, the Napo-
leonic Code sets the contract at the center of economic relationships.
Civic bourgeois society takes form through the growing contractual
autonomy of each single individual: the old order, which was rooted in
rigid status codes, and on the fixed roles of the patriarchal family, is
superseded. Thus society becomes dynamic, and contractual obligations
are at the center of that process. The access to financial resources is no
longer mediated through the older rigid economic-social means; the
contract becomes the instrument through which the free consensus of the
parties can regulate the actual aspects of a modern economy. That is to
say that Dracula can aspire to be integrated into the social fabric by
buying a mansion and by having recourse to a law firm for the signature
on the contract. The contract marks a trust relationship, a willing
transaction between subjects based on two elements: an expectation of
reciprocity and juridical rightfulness. Dracula pays for the mansion and
the law firm reciprocates in the transaction with a pledge of secrecy. Kant
in fact portrays modern society as an interchange of willed actions
between different subjects endowed with a legal capacity for action. The
contract can be enforced by judicial authority, but society cannot have
46
Carpi (2005) 132.
47
Stoker (1965) 3132.
recourse only to coercion in order to enforce contracts, otherwise the

economic system would be constantly obstructed.
The mythology of property expresses rootedness and the mythology
of contract expresses mutability:48 Dracula indeed strives to be rooted
within Western civilization; in order to attain this goal he has recourse to
a contract that transforms his previous situation of outsider into one of
insider. Thus there is stability and movement at the same time. This view
stems from a traditional ideology of property, the conceptual status quo
with its individualist bias. Property is at the intersection between law and
economy and appears to be a borderline between social institution and
ideological investment. Property suggests a wish for security: it evokes a
status and it implies a request for visibility; it entails a psychological
perspective which permits each individual to feel secure within society.
But what is property? In his Second Treatise of Government (1690)
John Locke wrote every Man has a Property in his own Person: thus no
Body has any Right to but himself,49 and C.B. Macpherson, commenting
on Lockes philosophy, states:
Its possessive quality is found in its conception of the individual as essentially

the proprietor of his own person or capacities The individual was seen
neither as a moral whole, nor as part of a larger social whole, but as an owner
of himself.50
If so, Dracula cannot be considered a proprietor, yet he buys and owns

and therefore he exists as a legal persona.
In the course of the novel the evolution of Draculas identity moves
from that of the wanderer, given his condition of un-dead, rooted in a
place outside history and time (the castle, the snowy wilderness), to that
of the new capitalistic man, established in civilized society thanks to his
acquisition of a mansion. Dracula tries to become part of Western
civilization by his possessions and by acquiring a settled position. It is
this symbolic sense of geography and ownership that epitomizes Drac-
ulas attempt at existing as a legal persona. You are insofar as you
possess.
This entails also the inclusion of a new type of legal identity for him
within the English social system. Dracula is aware of himself as a
nobleman, a master and a boyar: he insists on his class position and his
place in the social hierarchy. However, in a different country he would be
48
Radin (1993) 24.
49
Locke (1988).
50
Macpherson (1962) 3.
a stranger, a no body. The estate he is buying will allow him to keep his
privileges. Moreover, he needs to know the English way of life and the
English language so as to merge culturally.
Dracula poses a threat within Western society in that he tries to
become an intrinsic part of London life by means of his acquisition. The
mansion and his personal manipulation of the law (he guides Jonathan
Harkers legal requests, he strives to absorb the subtle details of the legal
system) demonstrate that he intends to be a legal persona, in the totality
of that meaning, by forcing his way into English civilization. Draculas
ownership of his Transylvanian castle dates far back in time, it is part of
the natural landscape, in the same way as class relationships seem to be:
he wants to reproduce his same position as a master within English
society as well. Property serves exactly this function.
In the novel Draculas sense of belonging takes on two different
aspects: the jus sanguinis (his mentioning that he has always been a
master and a boyar in Transylvania, so he comes from a long established
family), and the jus soli (membership according to land ownership, which
he wants to obtain by acquiring a mansion in London). His jus sanguinis
and jus soli were connected when living in Transylvania, whereas they
must be reaffirmed in London as jus soli if he wants to acquire a new
legal status:
Securing membership status in a given state or region with its specific level
of wealth, degree of stability, and human rights record is a crucial factor in
the determination of life chances.51
Dracula tries to secure membership status by wealth and by a certain

stability represented by his mansion. While in Transylvania his territorial
membership is secured by the entitlements of his birth rights, in London
possession is his only resource. He moves from a situation of inherited
property and acknowledged birth rights to the construction of a new legal
persona, which is necessary to become part of a different culture.
Property is seen as state-enforced relations of entitlement and duties:
Dracula is in fact deeply interested in how the legal system works,
whether, for example, he can employ just one lawyer or more than one.
He realizes that he can exploit the advantages of belonging to his new
civilization through the acquisition of legal knowledge. The role of the
legal profession in maintaining the authority of law is evident in the text.
Dracula thoroughly investigates the workings of the legal profession:
51
Shachar Hirschl (2007) 253.
There was a certain method in the Counts inquiries First he asked me if a

man in England might have two solicitors or more. I told him he might have
a dozen if he wished, but that it would not be wise to have more than one
solicitor engaged in one transaction, as only one could act at a time and that
to change would be certain to militate against his interest. He seemed
thoroughly to understand, and went on to ask if there would be any practical
difficulty in having one man to attend, say, to banking, and another to look
after shipping, in case local help were needed in a place far from the home of
the banking solicitor.52
Dracula goes on to stress the necessity for a lawyer to serve the interests
of his client with undivided attention: this is why for the acquisition of
his London house he has chosen a lawyer who does not reside in London,
so that no local interest might be served save my own wish only: as
one of London residence might, perhaps, have some purpose of himself,
or friend to serve.53 Dracula insists on his request for secrecy, and
therefore on his need to divide the control of his property among
different lawyers. At this point Jonathan Harker admits that such is often
done by men of business who do not like the whole of their affairs to be
known by any one person.54 Harker is so impressed by Draculas
questions that he exclaims he would have made a wonderful solicitor.
Dracula is aware that his understanding of the legal system will give him
the power to impose himself as a legal person in society.
His main purpose is that of protecting his privacy, of not giving any
lawyer exclusive power over himself and complete knowledge of his
affairs. Property gives him legal rights, but also legal duties. Property
creates special relationships among people that can be in rem (rights that
are valid against the world) or in personam (valid against a specific set of
individuals, the ones with whom one has contracted). The in rem quality
provides protection in a collective dimension because it is connected to a
system of laws. Therefore, in buying a house Dracula tries to find some
protection for himself as an individual facing a collectivity: he wishes to
rely upon the recognition of that collectivity. This new identity he is
trying to create is validated by property. Property relations create a web
of entitlements, one of which is the right to privacy; we are reminded of
Jonathan Harkers description of the characteristics of the newly acquired
mansion: seclusion, isolation and protection from trespassers. The
ownership of the house therefore grants Dracula some rights and
entitlements.
52
Stoker (1965) 39.
53
Ibid. 39.
54
Ibid. 40.
Draculas interest in the English legal system and its way of function-
ing is a means of coming to terms with a new reality; it is his way of
trying to understand how the specific English social system is constructed
and organized. By inquiring into the genesis and practice of the law he
wants to learn English social behavior and structure. Since law is one of
the cultural elements that are part of historical reality, law contributes to
the creation and diffusion of meaning, symbols and language: law is part
of the construction, interpretation and negotiation of systems of mean-
ing.55 If Dracula wants to become part of English society he must come
to terms with its legal system, he must know about the production,
transmission and reception of the ideas and practices of lawyers in
society.56
However, the novel is rooted in a legal paradox: on one hand, Dracula
wants to understand the law in order to better exist as a legal persona; on
the other hand, once he exists he uses the law to hide his real essence. It
is Harker himself who tells Dracula that gentlemen usually do not like
the whole of their affairs to be known by any one person.57 In order to
maintain the secrecy of his affairs, Dracula has chosen a solicitor who
does not reside in London. He appreciates the secluded location of his
new house: privacy is essential to him. Therefore, property serves the
function of transforming Dracula into a legal persona, but it is the law
itself that guarantees secrecy and makes his duplicity possible. The law is
source both of legal existence and of legal privacy. Dracula exploits the
law: the law, if well and aptly used, is a means of protection, secrecy and
power. One function of the work of lawyers is to enhance property
values. As Dracula makes use of the law to exist as a person and to
maintain his privacy, law appears to be enmeshed in secrecy and obscure
rituals. Draculas recourse to the law is a means of doing away with his
monstrosity, because the law cannot permit the exceptional body.58
To return to the theme of the contract, if the civil code stands for the
maintenance of a static piece of property, the commercial code stands for
innovation and circulation of property, for commercial mediation, specu-
lation. In the case of Draculas deed of acquisition we realize how
property was circulated in the London of the time:
55
Pue and Sugarman (2003) 1213.
56
Ibid. 13.
57
Stoker (1965) 40.
58
Punter (1998) 40.
Traditional liberal theory placed in property ideology (ownership) the aspect

of connectedness, and in contract ideology (exchange) the aspect of separ-
ability. But because traditional property ideology makes freedom of alienation
through contract an essential characteristic of property, the whole ideological
system tends towards commodification.59
In the text the particularly symbolic function of the contract of acqui-

sition is marked also by the fact that there is no selling party mentioned:
the law firm only acts as go-between but the real owner of the mansion
being sold is not mentioned. The function of Jonathan Harker is that of
facilitating the efficiency of transaction and investment required by
Dracula, to respect his expectations of the function of the law firm
(efficiency and secrecy). Both Dracula and the law firm pursue contrac-
tual fairness through a large measure of contractual freedom.
In the contemporary world, contract law has not yet reached a
complete descriptive theory, explaining what the law is, nor a complete
normative theory, explaining what the law should be, even if contract
theory has become one of the most significant fields in modern micro-
and macro-organization economics. Draculas contract in its specified
details anticipates the awareness of the need for a precise contract law.
However, in the text the contract has the function of marking Draculas
attack against Western civilization, hence his fundamental requirement
for secrecy. The law firm can freely choose the contracting strategies to
maximize the efficiency of the terms Dracula requires, that is his
existence as a legal persona inside Western civilization. However, the
mandatory rules of the contract rest on a misplaced view of the interests
of one of the parties: it is not in the interest of the law firm to have such
a character as Dracula accepted as an equal in society, for he represents a
terrible threat to its survival.
V. CONCLUSIONS
The types of contracts analysed in this chapter do not attempt to give a
strictly juridical overview of the problem, but rather to show how
literature revisits the topic of the contract by considering its moral
aspects. In fact, all the above examples have focused on how contracts
are a means of attaining social identity, or of demonstrating the moral
damnation of the characters, or even of showing the social development
in the so-called war of the sexes. The contracts in the literary texts I have
59
Radin (1993) 31.
mentioned suggest a pervasive ethical perspective that can actually take

legal terms as their starting point, but that in the end move towards a
moral or social judgement of the characters involved. What interests
literature is what law can illuminate and how law can be made to act
within society at large.
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15. Women and contracts in Angela Carters

postmodern revision of the fairy tale
Sidia Fiorato
I. FAIRY TALES AND THE LAW

[L]aw and narrative are inseparably related:1 stories define a societys
commitment to the law, they describe, and at the same time ground, the
normative world in which a community lives. This reciprocal relationship
is clearly exemplified by folk and fairy tales, a genre which has
successfully morphed itself to illuminate contingent historical moments
by attesting to the cultural mentalities dominant in different periods and
by contributing to the codification of social norms. Man, the story telling
animal2 engages in the attempt to understand and portray the world
through his stories, a common hermeneutic aim shared by both law and
literature.3
As Costantini asserts, the law needs the medium of a corpus for its
actualization, which is both a physical corpus of a person who embod-
ies the law and a material corpus represented by the book of law;4
however, the law also needs a corpus over which it can exert its authority
and control and through which it can perpetuate itself. The people of a
community embody such corpus in their behavior toward each other
and their relationships (personal and/or professional) in everyday life;
moreover, the stories of their tradition stage the cultural imagination as a
juridical space of action for the law. A legal tradition includes not
only a corpus iuris, but also a language and a mythos narratives in
which the corpus iuris is located by those whose wills act upon it,5 and
also narratives by the addressee of the action of the law. The narratives
stage a passage and an interpenetration between Ortung, the constitution
of a specific juridical order and its spatial location, Ordnung the
1
Cover (1983) 4.
2
Swift (1983) 62.
3
See Antor (2007).
4
Costantini (2007) 215.
5
Cover (1983) 9.
361
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juridical order trespasses the boundaries of its original locus in order to

become the law of the Kingdom,6 and Kulturordnung,7 the space of
culture and cultural imagination.
Folk and fairy tales do not openly use legal terms, but many and
different legal issues constitute the background of the narratives in a
co-presence of a cultural and legal imagination. The legal issues the
protagonists have to face in their everyday life engage peoples under-
standing and sharing of the legitimacy of the law, the extent to which
[they] accept it as valid, whether it is rational, providential or simply
effective.8 Folk and fairy tales can therefore be considered among the
secondary sources of the law,9 as they stage a narrative understanding of
peoples political selves, narratives by which they represent their con-
dition and interpret the common life they share10 within the community.
In particular, the tales provide and, at the same time, reflect upon the
cultural boundaries within which the reader measures and validates his or
her own identity11 as well as his/her own self-understanding. The tales
imaginative grasp involves the subjective perception of the law within the
depicted social order, yet they also open to the expression of peoples
aspirations, needs, dreams and wishes. As reflectors of actual and
possible normative behavior, the tales can be considered as socially
symbolic acts which can strengthen social bonds or create more viable
ones: their aura illuminate[s] the possible fulfillment of utopian longings
and wishes12 mirroring the desire to overcome oppression and change
society. For this reason, as Zipes asserts, they have provided the critical
measure of how far we are from taking history into our own hands and
creating more just societies.13
II. ANGELA CARTERS FAIRY TALES

The postmodern period has submitted the fairy-tale genre to a deep
scrutiny, in order to expose the tales strong hold on our imaginative
minds and reveal them as enculturing tools for a socialized conduct. In
6
Costantini (2007) 220 and 180.
7
Mhlenkampf (2007) 236.
8
Ward (1999) 1.
9
Laeverenz (2007) 254.
10
Ward (1999) 5.
11
Zipes (1983) 55.
12
Zipes (1979) 6; Zitzlsperger (2007) 157 and Bacchilega (1997) 7.
13
Zipes (1979) 3.
Women and contracts 363
particular, Angela Carter considers fairy tales as repositories of common

cultural scripts a collective mythology which naturalizes certain types
of behavior14 through culturally constructed archetypes, by means of
constant repetition and embodiment. From this perspective, womens
social and physical displacement from action in the world is not an
unavoidable position but a potent myth.15
She therefore rewrites the apparently immutable and timeless scripts
for archetypal female figures through an active feminist subjectivity; her
fairy-tale protagonists are initially presented as socially constrained and
enclosed into ancestral settings, but they eventually refuse to subject
themselves to social stereotypes and sexist ideologies and finally prevail
over them. In this way, she transforms cultural history with acts of
fairy-tale archeology that release th[e] stor[ies] many other voices.16
Her work differentiates itself from feminist versions of fairy tales
which merely operate a reversal of roles and hierarchies but do not
question their existence nor the symbolic order they represent and, at the
same time, create. In her process of role-breaking and role-making,17
Carter does not simply point out the shortcomings of the conventional
representations of gender, but she also offers different representations and
different models which defamiliarize traditional (and unquestioned)
frames of reference.
Carter sees in fairy tales a means of knowledge and self-knowledge.
She inverts the stories traditional pattern from instability to a stable
identity with a movement that attacks the dominant stability with a
situation of apparent instability, which will be finally acknowledged as a
new individual condition; in this way, the passive acceptance and
embodiment of culturally determined roles is called into question.18
14
Rubinson (2005) 151.
15
Brooke (2004) 68.
16
Bacchilega (1997) 59. Carters critical stance can be seen as aligned with
the tradition of the French women writers of contes de fes of the end of the
seventeenth century, who used the tales for social critique, with particular
reference to the institution of forced marriage and the destiny of women in a
predominantly male-controlled world. The fairy tales constituted their only
means of expression, although masked as fantasy, in a patriarchal context.
Moreover, they often included commentaries upon the genre itself.
17
Atwood (2007) 133.
18
See Crunelle-Vanrigh (1998) 11617: Fairy tales are informed by closure,
a movement from change to permanence. Their plots move from an initial,
pernicious metamorphosis to a stable identity. That must and will be reached or
recaptured. Carter, however, stubbornly moves the other way round, from
stability to instability, undermining the closed binary logic of fairy tale and
Carter operates a subversion of the genre from within the genre itself,
and investigates its tenets for a deep analysis of the gendered structure of
society. Such investigation eventually extends to include the legal sphere
and the legal persona of her female protagonists, as well as of her male
characters, who in some of her tales are innovatively portrayed as active
parts in the refusal of sanctioned social roles.
III. CONTRACTS AND THEIR TRANSFORMATION IN

THE BLOODY CHAMBER
Among the many legal issues that can be identified in fairy tales,
contracts are very recurrent; we more often find oral exchanges of
promises,19 that is, the posing and acceptance of conditions to gain
something between two characters, rather than written documents, but
they are nonetheless legally binding and often influence the course of the
story and the life of the main protagonist. Angela Carters revision of
fairy-tale tenets in The Bloody Chamber, The Courtship of Mr Lyon
and The Tigers Bride20 is parallel to a revision of the tenets of the
different kinds of contract present in the stories, in particular their
various aspects and implications, their connection with the definition of
the legal status of the parties, and the womans position within them in
the different phases of the narration.
Under English law there is no univocal definition of contract. As
scholars argue:
Certain definitions stress the need for the existence of a bargain, that is to
say, an exchange of promised benefits. In other definitions the emphasis is
placed on the existence of a promise. According to those definitions, a
contract appears to involve the superimposition of two promises, rather than
any single, all-embracing transaction.21
eventually substituting diffrance for diffrence or difference. She takes her

reader along the paths of indeterminacy, revelling in a state of never-ending
metamorphosis.
19
See Blum (2007) 3: contract describes a relationship that may not be
recorded in a document. As a general rule, a contract does not have to be in
writing to be a binding and enforceable legal obligation.
20
All the references to these stories will be taken from Carter (2006 [1979])
and indicated by the abbreviations of the titles (respectively BC, CML, TB),
followed by the page number.
21
Beale et al. (2002) 3.
However, the various definitions show varying degrees of two com-

ponents: the subjective element of intention and the objective element of
the role of the law. In general terms, a contract is an exchange of
promises or agreement between parties that creates and defines legal
obligations between them. The main elements of a contract are a meeting
of the minds, i.e., mutual consent, in that the parties to the contract must
have a mutual understanding of what the contract covers; offer and
acceptance; mutual consideration,22 i.e., the mutual exchange of some-
thing of value; the performance or delivery of the action contemplated by
the contract; good faith. Contract law is based on the Latin phrase pacta
sunt servanda (pacts must be kept);
Contracts [are] sources of obligations. The basic principle which the law of
contract seeks to enforce is that a person who makes a promise to another
ought to keep this promise. Each promise that a promisor makes to a promisee
by entering into a contract with him creates an obligation to perform it owed
by the promisor as obligor to the promisee as obligee.23
In the case of one party failing to perform its duties of obligations, a

breach of contract takes place.
The most important feature of a contract is that one party makes an
offer for a bargain that another accepts; the meeting of the offer and the
acceptance (concurrence of wills or meeting of the minds) constitutes
the consensus ad idem required to form a contract. There must be
evidence that the parties had each from an objective perspective engaged
in conduct manifesting their assent; by objective perspective is meant
that somebody must give the impression of offering or accepting contrac-
tual terms in the eyes of a reasonable person. This reasonable person in
the case of postmodern fairy tales is the reader himself, called to witness
the exchange of promises between the characters.
In The Bloody Chamber (BC) the young protagonist speaks in the
first person and recalls the past events of her life which led her to marry
the Marquis.24 The marriage contract is a patriarchal construct: [t]he
22
With regard to this, see Beale et al. (2002) 16: the doctrine of consider-
ation requires that, for a promise to be binding in English law, the promise must
form part of a bargain that is to say, the promise must have been given in
exchange for something else, either an act or forbearance or a return promise.
23
Beale et al. (2002) 11.
24
Also the style in which the tales are written signals a subversion of the
narrative conventions of the genre, which shape, or rather constrain expression,
in accordance with their disciplinary function (see Roberts (2002) 498). In
Carters stories, the female narrator manages and controls the narrative; her voice
relationship of exchange which constitutes marriage is not established

between a man and a woman but by two groups of men and the woman
figures as one of the objects in the exchange, not as one of the [male]
partners.25 The referent for the acceptance of the marriage proposal is
here the protagonists widowed mother, who, however, in her first
described action in the narrative, which also represents the first recording
of her voice, refuses the contracts tenets and allows her to decide. She
does not want to sell her daughter as a way out of poverty, so she asks
her a direct question: Are you sure you love him?, pointing to a
requisite for the marriage commonly ignored by the prevalent economic
structure of the contract. The protagonists words Im sure I want to
marry him (BC, 2) only express her will to enter the binding condition of
matrimony, failing to grasp the proffered freedom to actively decide her
destiny and follow a different logic from the economic one.
Actually, her mother embodies such freedom with all its social
consequences, which are likewise underlined, but which have allowed her
a position of autonomy and independence in society.26 Her legacy is,
however, lost on her daughter who, in a passage of status as well as of
jurisdiction, literally cease[s] to be her child in becoming his [the
Marquis] wife (BC, 1).
The daughter seems convinced of her actions; she describes her voyage
towards her husbands house with an ecstasy of excitement: she speaks
of her bridal triumph, her marital coup (BC, 1, 4). She is aware of the
terms of the contract, of what her marriage with the Marquis entails:
when she talks of his castle she calls it that legendary habitation in
which he had been born. To which, one day, I might bear an heir. Our
destination, my destiny (BC, 2). As soon as she arrives there she holds
her first interview with the housekeeper as mistress of the house and
when she is given the bunch of keys, she reflects upon the fact that they
symbolize the practical aspects of marriage with a great house, great
actually alternates with a third-person external perspective only to prevail in what

Cavallaro has defined as a consciousness of stream (see Cavallaro (2011)
12930).
25
Levi-Strauss (1969) 48081.
26
The mother is described as indomitable (BC, 1), a woman who had
gladly, scandalously, defiantly beggared herself for love (BC, 2) willingly
ignoring social conventions and economic interest. When her husband died, she
assumed his role in the family and social context by appropriating herself of his
revolver (symbol of his social role as a warrior). She is presented as a male hero
as she had outfaced a junkful of Chinese pirates, nursed a village through a
visitation of the plague, shot a man-eating tiger with her own hand (BC, 2).
wealth, great man (BC, 16). She appears conscious of her new status:
My new rank forbade overtures of friendship to the staff (BC, 21) and
encourages herself in facing her new life by saying to herself: I shall act
the fine lady to the manner born one day, if only by virtue of default
(BC, 16).
From all these elements we derive the impression of a clear-minded
girl, who consciously and ambitiously entered a marriage contract with a
rich man. We actually recognize the value of the offer accompanied by a
fixed period for acceptance by means of the various and precious gifts
during the period of the Marquis courtship: the engagement ring, which
had belonged to his family for generations; the stylish dress he buys her
to go to the opera; her trousseau (what would I have gone to him in,
otherwise?, BC, 6); her wedding dress and a dress for her mother, too; a
choker of rubies, a family jewel that symbolically signals her inclusion
into the family; the gold opal wedding ring; and, in his own castle, a
turret suite completely furnished and decorated in accordance with her
musical talent. By reflecting upon the solitude and the separation from
her mother the marriage implies, she admits that This ring, the bloody
bandage of rubies, the wardrobe of clothes, all had conspired to
seduce me so utterly that I could not say I felt one single twinge of
regret (BC, 7).
During the journey, she lucidly associates the comfort and warmth
which should characterize family life with something she is excluded
from; from her train window she intrusively imagines the station masters
family life and all the paraphernalia of the everyday world from which I,
with my stunning marriage, had exiled myself (BC, 7), as a consequence
of her acceptance of the opal ring and the weight of all it signifies and
implies. Her words I will always be lonely (BC, 7) act as a recognition
that she has actually not married for companionship but for economic
advantage. As a matter of fact, she underlines the impeccable linen of
the pillow on the train leading her to the country of marriage compared
to her former narrow bedroom with her tumbled garments I would not
need any more (BC, 1) as she now wears a satin nightdress (BC, 2).
There is clearly no case of misrepresentation, i.e., false statements or
promises to induce one party into the contract, nor mistake, i.e., an
incorrect understanding by one or more parties to a contract; no case of
duress, i.e., a threat of harm made to compel a person to do something
against his or her will or judgement, nor undue influence, i.e., taking
advantage of a position of power over another person to induce him/her
to do something. As is explicitly stated at the end of the narrative by the
Marquis to the piano tuner does even a youth so besotted as you are
think she was truly blind to her own desires when she took my ring?
(BC, 39).
The protagonist consciously enters this contract under patriarchal
ideology (paradoxically from within the feminist context embodied by
her mother) according to which individual success and happiness identi-
fied with marriage, and the woman was expected willingly to give up her
independence to a man. In exchange, she acquires social standing and
wealth. She is actually bedazzled by the monetary value of the gifts she
has received.
During the night at the opera, the day before her wedding, the girl
openly states her acceptance of the contract in terms which underline her
side of the bargain:
He was as rich as Croesus

I thought I must truly love him. Yes. I did. On his arm, all eyes were upon me.
The whispering crowd in the foyer parted like the Red Sea to let us through
How my circumstances had changed. (BC, 5)
As the narrative progresses, we notice how the protagonist is slowly

reduced to the Marquis gifts, she is commodified, as she becomes part of
his patrimony. Everything is filtered by her own point of view; at this
stage, she underlines the advantages of the contract and willingly ignores
possible and unexpected negative implications, which she however,
perceives in her ominous comparison of her wedding presents to crystal-
lized fruit (see BC, 1). By accepting the contract, she herself will become
crystallized into a dependent and subordinate position, prevented from
the possibility to develop an autonomous personality.
An important requisite for a contract under English law is consider-
ation, that is, the idea that both parties to a contract must bring something
to the bargain. The young protagonist is always aware of her side of the
contract, in particular that she represents its object. On the evening before
the wedding, the Marquis watches her in the mirrors of the opera house
and she feels his assessing eye of the connoisseur inspecting horseflesh,
or even of a housewife in the market inspecting cuts on the slab, until
she sees herself as he sees her: And I saw myself, suddenly as he saw
me, that is, she becomes aware of her commodified status, significantly
through a mirror, symbol of the patriarchal gaze in fairy tales, as well as
of the definition of female identity through that gaze. She actually says I
saw how much that cruel necklace became me (BC, 6): the verb
became exploits the ambiguity of the meaning indicating also that she is
reduced to her necklace.
This scene is repeated in his bedchamber, when she sees herself

multiplied in the mirrors surrounding the bed as he says: I have acquired
a whole harem for myself!, and during the consummation of the
marriage, when she feels examined limb by limb bare as a lamb chop
And so my purchaser unwrapped his bargain (BC, 11). She is
depicted as always aware of her position and accordingly performing her
side of the contract. She is a sexualized commodity he has purchased; as
she cynically observes, Did all the castle hold enough riches to
recompense me for the company of the libertine with whom I must share
it? (BC, 19). Moreover, when he is suddenly called away on business she
feels that he abandons her on her wedding night to show his mastery over
her marketed self: a child Ive bought with a handful of coloured stones
and the pelts of dead beasts, [she] wont run away (BC, 15).
Before leaving, the Marquis calls his young bride and entrusts her with
a bunch of keys. This act should sanction her status as the mistress of the
castle, but this is at the same time performed and negated through the
positing of a condition which actually invalidates it. The Marquis
explains what each key opens and grants his bride permission to go
everywhere, but for one specific place: All is yours, everywhere is open
to you except the lock that this single key fits you must promise me
to leave it well alone (BC, 18). In this case, however, only the request
of the Marquis is openly stated in the text; we have no binding promise
on the womans part. And in fact she transgresses the prohibition. This is
a traditional pattern of fairy tales in which an injunction is followed by
its transgression in order to stage the educating punishment.27 In Carters
version, however, the latter part of the scheme is revised.
When the protagonist realizes the danger of her new situation, her
thoughts focus on the ring, the symbol of her marriage/selling contract
and on how to escape from the patriarchal power and absolute authority it
represents: My first thought, when I saw the ring for which I had sold
myself to this fate, was how to escape it (BC, 28). She does not passively
accept punishment for her transgressive behavior, a male-determined and
male-judged transgression, as she lucidly and acutely observes; she does
not show any sign of repentance for her actions, but rather denounces her
husbands scheme.
I had behaved exactly according to his desires; had he not bought me so that
I should do so? I had played a game in which every move was governed by
27
See Propp (1968).
a destiny as oppressive and omnipotent as himself, since that destiny was

himself; and I had lost Lost, as the victim loses to the executioner.
(BC, 34)28
The transgression and the entrance into the forbidden room recall a
similar situation in Kafkas parable Before the Law. In this parable, the
man from the country obeys the prohibition to enter the room of the law,
ignoring his own desire to know it; by doing so, he recognizes the power
of the law over himself. Before the Law narrates the foundation of the
subject in the recognition of the law, in the mans self-prohibition and
censorship, in his self-denial and abnegation.29 In Carters story, the
protagonist enters the room and gains a knowledge of patriarchal law and
of its effects on herself. She realizes that the Marquis controls the law, in
that he causes the crimes to happen in order to deliver the punishment as
a law-giver puppet master. As she says, The evidence of that bloody
chamber had showed me I could expect no mercy (BC, 35). She rebels to
her passive position, to her husbands assumed entitlement to legislate
and control her, to reduce her to her mere fleshly dimension (a corpus
iuris) in order to inscribe upon her his continuing [patriarchal] tale of
punishment for wives disobedience.30 She discovers and at the same
time denounces the locus of patriarchal law and its rituals, based on a
system of memories and traditions grounded on communis opinio and the
authority of the ancestral times of its origin, on images and symbols
embodied by the Marquis and his castle, which escape the dimensions of
time and space and reconnect with the dimension of myth.31
The protagonist retains the necessary presence of mind and resolutely
and actively fights not to succumb by exploiting the status granted her by
the contract in order to escape the contract itself and reverse it through
the assertion of her own individuality. In particular, she makes recourse
to all the things/qualities she brought into the bargain and which the
Marquis had appreciated, for example her talent in music: If my music
had first ensnared him, then might it not also give me the power to free
myself from him? (BC, 30); and, even more, her sexuality: Mimicking
the new bride newly awakened I flung my arms around him, for on my
seeming acquiescence depended my salvation (BC, 33). She demon-
strates a resourcefulness and readiness to use her sexuality as an
28
Actually, he has given her all the instructions to guide her to his secret
room in his absence.
29
Douzinas (2003) 43.
30
Manley (2001) 85.
31
See Costantini (2007) 229, and Goodrich (1990) 117.
instrument to save her life and even kill her husband: I forced myself to
be seductive. I saw myself, pale, pliant as a plant that begs to be trampled
underfoot, a dozen vulnerable, appealing girls reflected in as many
mirrors, and I saw how he almost failed to resist me, if he had come to
me in bed, I would have strangled him, then (BC, 3435). If soon after
her discovery she refuses to take refuge in her bedroom as the mirrors
retained the memory of his presence (BC, 28) and his inquisitorial gaze,
now she purposely wishes to exploit the effect of the mirrors on herself,
trying to deceive him through her own reflected commodification in
order to strangle him. She reverses the image of the bargain in order to
ensnare him into her trap, a new bargain from which she will be the only
one to profit, passing from feigned object to deceitful and winning party.
Curiously, the killing method recalls the choker, the symbol of all the
women of his family, and further underlines her intention to reverse the
Marquis methods against himself. Although her stratagems fail, she
demonstrates that she possesses the force to try and determine her own
fate, to conquer independence and power. She engages in a fight with her
husband on equal terms, in order to gain control and therefore power over
him. She feigns playing the (male-made) role of the victim in order to
reverse it, and she will finally manage to do it with the help of her
mother, who will come to her rescue as an image of a furious justice
(BC, 40).
It is the gaze of the mother which disempowers the man, revealing his
role of puppet master: [t]he puppet master, open-mouthed, impotent at
last, saw his dolls break free of their strings, abandon the rituals he had
ordained for them since time began and start to live for themselves (BC,
39). She represents a new conception of the law, as the guarantee of a
different symbolic order to which her daughter now returns and which
she had embodied in her unconventional life. The lack of conformity to
the status quo of community expectations instead of being punished is
revealed as an alternative world order, which the daughter will take
further; as her mother refused to marry for money, that is, she refused
the economic foundation of the marriage contract, she seems to refuse
the contract in toto, as at the end of the story she voluntarily remains
ambiguous on her possible marriage with the piano tuner and seems
rather to suggest a socially uncodified (and therefore unsanctioned)
companionship.
However, she is left with a red mark on her brow, as a memento that
she has let herself be fascinated by the Marquis power and wealth, and
has consciously subjected herself to enter the materiality of a transaction
through which, having marketed herself, she has accepted that her worth
resided only in her purchaser. As Sage asserts, the protagonist becomes a
sort of ancient mariner, who expiates her guilt, that is, the past
acceptance of her cultural identity, the power of the mind-forged
manacles32 by narrating her story.
The two subsequent stories, The Courtship of Mr Lyon and The
Tigers Bride, are inspired by the tale of Beauty and the Beast. At their
opening, the women protagonists are denied any choice; they merely find
themselves as objects in trading contracts (actually mock-marriage con-
tracts), which see on the one hand the father figure, and on the other a
party who escapes a precise social codification, a no-better-specified
beast, who is however allowed to enter the contract in virtue of his
possession of social and economic accomplishments. The female pro-
tagonists both undergo a process of development of self-awareness which
leads them to exit the contract and re-enter it under different terms which
subvert sanctioned social roles (both male and female ones).
In The Courtship of Mr Lyon (CML), the female protagonist,
nameless and therefore deprived of an autonomous identity, is referred to
as her fathers beauty, his girl-child, his pet (CML, 43), as the external
narrative voice points out. We first see her when she is at home waiting
for him, and then we subsequently meet her as she is already in the
palace of the Beast. She appears to be completely powerless, deprived of
any chance for self-determination, as well as of the status of a subject;
she is a mere object of exchange caught in an impersonal patriarchal law
of contract between her father and the Beast, the object sold and bought
by a rose. Once in the palace she is directly addressed by the Beast who
proposes to her a further contractual relationship: he would aid her
fathers appeal against the judgment which had declared his economic
ruin, if she should stay here, with him, in comfort (CML, 48).
According to the bargain theory, contracts are voluntary exchange
relationships involving reciprocal promises or performances; it means
nothing if a party suffers legal detriment, unless the parties agree that it is
the price for the promise.33 This is the case of Beauty, whose essence is
based on her spirit of sacrifice and self-effacement; she complies with her
subordinate status and accepts to remain with the Beast out of filial
devotion and economic dependence:
she stayed, and smiled, because her father wanted her to do so her visit to
the Beast must be, on some magically reciprocal scale, the price of her
fathers good fortune. Do not think she had no will of her own; only she was
possessed by a sense of obligation to an unusual degree. (CML, 48)
32
Sage (2007) 30.
33
Blum (2007) 7.
Beautys reflections show, on the one hand, that she is conscious of her
status as a commodity (actually at the opening of the tale she is described
as a young girl who looked as if she had been carved out of a single
pearl (CML, 49)), as a good to be exchanged in order to grant her father
wealth, and she accepts such patriarchally imposed role and the legal
detriment it implies. However, on the other hand, she feels a sense of
obligation in that, she actively enters the contract as one of the parties, no
longer merely as its object: as long as she accepts to remain in the
Beasts palace, her father will be wealthy.
The tale first portrays the Beast in absentia, that is through his estate
and properties which he puts at Beautys fathers disposal following the
social rules of hospitality and reciprocal help. As the father transgresses
such rules and steals from the Beasts property, the latter abandons his
social role and regresses to his feral nature: Call me Beast (CML, 47).
He seems to partake of two natures as he reared on his hind legs like an
angry lion, yet wore a smoking jacket and was the owner of that
lovely house and the low hills that cupped it (CML, 47), but lets the
more savage one prevail, thus asserting his alterity. On the contrary, in his
attitude towards Beauty he proves willing to abide by social conventions
and deny his real nature in order to perform the socially recognized role
of the gentleman. Beauty, in her accepted gendered role, narcissistically
inhabits the Beasts palace34 as if she were already in the position of the
mistress of the house; she spends her time in reading, embroidering and
conversing with the Beast, while performing female domestic duties such
as pouring tea (see CML, 49). She acknowledges that she feels happy in
this condition, although she is not able to reconcile her feelings to a sense
of strangeness and otherness which prevents her from attaining closeness
with the Beast. When he tries to kiss her hands and fails as his nature
prevents the reproduction of this codified act, while making her experi-
ence the stiff bristles of his muzzle grazing her skin [and] the rough
lapping of his tongue (CML, 50), first she feels compassion, but then
retreat[s] nervously into her skin, flinching at his touch (CML, 51). She
interprets through her point of view the Beasts expression of sadness and
ascribes it to his self-imposed solitude: a constant human presence
would remind him too bitterly of his otherness (CML, 48). Beauty is
described as possessing the quality of piercing appearances and seeing a
persons soul with her gaze, but here the process is reversed as she is
offered a vision of herself reflected in the Beasts green, inscrutable
eyes (CML, 50); such image is not socially sanctioned like the previous
34
See Brooke (2004) 74.
one in the picture or the following ones in the mirror. She has to interpret
and understand her own reflection from a new perspective which will
lead her to acknowledge her own self. The story only seemingly stages a
subversion of roles, through Beautys apparent transforming of the Beast
into the socially accepted Mr Lyon (in line with De Beaumonts
traditional tale); actually, Carters Beauty undergoes a transformation as
well, as an effect of their shared closeness.
When her father, who recovered from bankruptcy and now enjoys a
wealthy condition thanks to her exchange, asks her to go back to him,
she accepts and enters into another contract with the Beast, this time in
the role of obligor: she promises to go back to the palace before the end
of winter. However, while staying with her father, she recedes into a
position of dependence on a male figure, she is commodified and put at
the same level as the objects and treats he buys for her, an ornament on
his arm: a whole new wardrobe for his darling, so she could step out on
his arm to parties (CML, 51). He introduces her into society, maybe to
profit once again from her and conclude another marriage/economic
contract. In this new environment, the image of the Beast and of her time
at his palace slowly fades, leaving only the feeling of a lost possibility of
change and an ensuing desolating emptiness filled (and stifled) by more
and more commodities.
She finds confirmation of her role in mirrors, but little by little she
does not recognize herself any longer in her self-imposed role compliant
with patriarchal tenets, and notices the difference of her reflection on the
glass surface from the one she has seen in the Beasts agate eyes. The
narrative voice underlines how she is losing her beauty, a natural quality,
for prettiness, an artificial ornamented condition. The arrival of the
Beasts spaniel makes her realize the breach of contract on her part, and,
at the same time, wakes her from her hypnotic trance-like embodiment of
her social subordinate role as daughter. She no longer recognizes herself
as a sacrificial victim, the role she covered in the first contract, and goes
back to the Beast in order to cover the role entailed in the second one. In
a subversion of social tenets she proposes an unconditioned relationship
of companionship to the Beast: If youll have me, Ill never leave you
(CML, 54). In this new contract, based on her active and autonomous
choice of remaining with him, she becomes at the same time the
proffering party, and the object at its centre. Through her contractual
promise, Beauty saves the Beast from death and transforms him into
Mr Lyon; as a matter of fact, it is only at this point that the Beast
acquires a name through the external narrative voice, which seems to
impose a social role on him and definitely solve the initial struggle
between his two natures. In the same scene, the Beast calls Beauty for
the first time by name, thus signaling his acknowledgment of her identity
after she has acknowledged it herself, and setting a contrast with the
narrative voice of the closing sentence which refers to her as Mrs Lyon.
There seems to be a contrast here between the Beasts (now turned man)
acceptance of Beautys proffered companionship (in an implicit denial
and refusal of the marriage contract) and the narrative voice which seems
willing to perpetuate the status quo by imposing social conventions and
forcibly enclosing both characters within them.
Actually, the narrative can be seen as ending on ambiguous tones and
fluid identities. The name itself of the couple as Mr and Mrs Lyon seems
to point to an ambiguous nature, half animal and half human. As
Crunelle-Vanrigh points out, after his final transformation, the beast
maintains a resemblance to a lion, the handsomest of all the beasts
(CML, 55) which disrupts Beautys former assertion that a lion is a lion
and a man is a man and, though lions are more beautiful by far than we
are, yet they belong to a different order of beauty (CML, 47). Beauty, on
her part, is referred to in animal imagery in her transformation, as she is
called Miss Lamb, a pampered cat, and finally Mrs Lyon, in an
unfixing and mingling of identities.35 If during the narrative Beauty had
been fascinated by the Beasts beauty (Fascinated, almost awed, she
watched the firelight play on the gold fringes of his mane (CML, 49))
but could not prevail upon herself to establish a physical contact with
him of her own free will (still his strangeness made her shiver he was
so different from herself (CML, 51)), in the final scene the deferred
contact (she flung herself upon him her tears fell on his face like
snow (CML, 54)) determines a mutual contamination of their natures.
She therefore manages to reach and accept a relationship of strange
companionship with the Beast (see CML, 50) whom she tells I have
come home (CML, 54). She does not respond to his pleadings against his
nature (I could not go hunting (CML, 54)), nor does she judge him, but
asks for his acceptance of herself, realizing that She had only looked at
her own face reflected in his eyes36 and failed to perceive his own
essence and suffering in his feigned identity. The scene ends with
Mr Lyon inviting Beauty to eat and they are finally portrayed as
walking in the garden, a possible prelude to hunting.37 Therefore, the
35
See Crunelle-Vanrigh (1998) 121.
36
His attempts at abiding by social laws have only brought him to disillu-
sion, exhaustion and despair.
37
This perspective is echoed in Emma Donoghues version of the story
which ends in the following way And as the years flowed by, some villagers told
travelers of a beast and a beauty who lived in the castle and could be seen
traditional interpretation of the tale which sees the final marriage as a

reward for Beautys sacrifice actually possesses a melancholic tone, due
to the opacity of the restored socially accepted dimension. In re-entering
society and complying with its rules the Beast would renounce a fuller
and purer dimension, the one he possessed at the beginning of the story
and which is explored in The Tigers Bride.
The Tigers Bride (TB) posits the woman protagonist as the object of
an unspecified contract between card players. The one-line opening of
the tale My father lost me to the beast at cards (TB, 56) stages her
powerful feminine narrative voice and point of view, which exposes the
monetary value assigned by the father to his daughter, and foregrounds
her critical attitude. As the protagonist later underlines: You must not
think my father valued me less than a kings ransom; but, at no more than
a kings ransom (TB, 59, emphasis in the original). She silently watches
as he rids himself of the last scraps of my inheritance (TB, 56). Her
words reveal her economic awareness, that she feels entitled to her
inheritance, to a patrimony, aware of its necessity in a patriarchal society
in order to gain a social position. However, her subordinate status as
woman and daughter prevents her from intervening, even when he
staked his daughter on a hand of cards and lost her: I have lost my
pearl, my pearl beyond price (TB, 59 and 60) he laments, at the same
time actualizing her commodification.
The girl becomes quickly aware of her new condition as an object of
exchange, once again in a mock-marriage contract: I had been bought
and sold, passed from hand to hand (TB, 70), but actively reacts,
confronting and renegotiating the terms of the contract. She appears
conscious of the role she must subject herself to play (a flesh-object in a
commodity system), but she is determined not to remain a victim and
tries to exploit her situation to her own advantage: For now my skin was
my only capital in the world and today Id make my first investment (TB,
62). She goes to the palace of the Beast wrapped in her imposed role in
an official and public ceremony of passage of property.
The protagonist is influenced by the patriarchal objectification of
women and, even if she does not appear to have interiorized them at the
point of assuming the role of sacrificial victim like her predecessor in the
previous tale, she continues to see herself in the terms of an object of
trade and believes the Beast sees her in the same way. When she is asked
to show herself naked, something for which the Beast had clearly paid
walking on the battlements, and others told of two beauties, and others of two
beasts (Donoghue (1997) 37). With regard to this, see also Cutolo (2014) 39.
cash on the nail and paid up promptly (TB, 73), she reacts by
transforming the terms of the contract in a grotesque way in order to
disrupt his profit. She declares she will impersonate the role of a
prostitute (she would wait for the Beast with her skirt upon her head and
then expect to be paid for it) or of a ballet girl (that is, a woman who did
not enjoy a respectable social status). The Beasts request of The sight of
a young ladys skin that no man has ever seen before (TB, 68), refers to
the persona not yet conditioned by social tenets, as will become apparent
at the end of the narration. However, entangled in patriarchal frames, the
protagonist understands the Beasts request as a degradation, a bargain
which entails the loss of her traded virginity, and which will leave her
bereft of her only remaining patrimony, although she is repeatedly
defined by the valet as a woman of honour (TB, 66 and 68). In front of
her persistent denial to perform the contractual terms, the Beast un-
expectedly reverses them, and exchanges their positions: as the valet tells
her, If you will not let him see you without your clothes you must
then prepare yourself for the sight of my master naked. I nodded (TB,
71). Her nodding represents her willing entrance into the new contract.
By setting Beauty in the place of the obligor of the contract, as a woman
of honour, the Beast subverts gender relationship, thus showing he is
also positioned outside the patriarchal order (and this will lead to a
reciprocal rather than exploitative relationship). The Beast entitles Beauty
to dispose a contract, enabling her at the same time to assert her own
identity autonomously. He finally fulfills the contractual obligation he
himself had arranged with her father and which involved her as part of
his profit therein; in taking her place, however, he reveals the true nature
of his proposed contract. Actually, by subjecting himself to its conditions,
he does not reify himself, but rather, in showing himself naked, i.e., in his
true animal nature, he reveals that his essence rests outside any culturally
imposed social role, symbolized by the human mask he constantly wears.
Under the annihilating vehemence of his eyes (TB, 71) Beauty starts to
overcome patriarchal ideology by realizing that The Tiger will never lie
down with the Lamb; he acknowledges no pact that is not reciprocal. The
lamb must learn to run with the tigers (TB, 71). There is no space here
for Miss Lamb, the self-imposed role of sacrificial victim; she feels
called to action and reciprocates the stripping. After having acknow-
ledged the beast and discovered the exact nature of his beastliness (TB,
61), she asks to be acknowledged by him on the same terms. Therefore,
the female protagonist actively looks at the male instead of being
passively looked at, she reciprocates his gaze, thus altering her significa-
tion and determining her own meaning and subjectivity. By showing
herself naked she feels at liberty for the first time in her life, because she
has managed to free herself from her culturally imposed role and to open
herself to a new and autonomous one.
When she returns to her room, she looks in the mirror held by her
mechanical maid and sees her father enjoying the newly found wealth
due to his daughters trading value. The protagonists compliance with
the terms of the contract has restored her fathers lost fortune and will
restore herself to him as well, undamaged, together with expensive gifts.
The image in the mirror shows that the Tiger has respected his side of the
bargain and is preparing everything for her departure. Beauty realizes that
the mechanical doll she had been given to attend upon her symbolizes her
culturally defined self, and the mirror she holds reflects a simulacrum of
a woman: all I saw was a pale, hollow-eyed girl whom I scarcely
recognized (TB, 73). She finds the strength to refuse the role of victim,
deprived of rationality (I was a young girl, a virgin, and therefore men
denied me rationality just as they denied it to all those who were not
exactly like themselves, in all their unreason (TB, 70)), and sends back
to her father the mechanical maid dressed with her own clothes to
perform the part of her fathers daughter (TB, 73).
She then annuls the first contract by enforcing the second one she has
actively entered. She strips herself of all clothing, she peel[s] down to
the cold, white meat of contract (BC, 73) in order to belie it; she will not
sell but give herself; not the cold, white meat of the body of the
contract, detached from the self, but her existence as an autonomous
subject. She is finally in control of the terms of her transformation from
object of exchange into a subject making her own contracts and laying
down her own laws,38 as well as constructing her own identity. She thus
acquires the quality of individual autonomy, which is an integral part of
personal liberty and which grounds the power to enter contracts and to
formulate the terms of contractual relationships.39
While in The Courtship of Mr Lyon, the protagonists contact with
the beasts nature, when the latter licks her hands, makes her retreat into
her skin, which symbolizes the safety of her codified identity, in this
second tale, a reverse process takes place and the protagonist allows her
skin to be removed from her real self, through the licking action of the
Beast: I felt the harsh velvet of his head against my hand, then a tongue,
abrasive as sandpaper And each stroke of his tongue ripped off skin
after successive skin, all the skins of a life in the world and left behind a
nascent patina of shining hairs (TB, 75).
38
Aristodemou (1999) 206.
39
See Blum (2007) 8.
The protagonists development parallels the one of the Beast, previ-

ously described as pacing in his room, apparently waiting for her,
divested of all the paraphernalia of his self-imposed social role: The
purple dressing gown, the mask, the wig, were laid out on his chair but
he has abandoned the empty house of his appearance (TB, 74). Actually,
in order to act in society, the beast had to perform the sanctioned human
role of a wealthy man, and deny his feline characteristics by wearing
clothes, a wig and hiding his paws; moreover, he wore a human mask,
uncanny in its perfection, almost self-denouncing the artificiality of his
pose. He does not manage to speak, but emits a growl and a roar which
his valet interprets for him. The mask is therefore not sufficient to render
him a persona (in the etymological sense of the word) as, although he
subjects himself to social conditions, it does not allow his voice to
resonate and communicate in social life. Actually, the narrative often
conveys his strain to abide by a codified social role; he is described as
possessing a crude clumsiness about his outlines and an odd air of
self-imposed restraint, as if fighting a battle with himself to remain
upright when he would rather drop on all fours (TB, 58). As the
protagonist observes, The beast bought solitude, not luxury with his
money (TB, 63) and the failure of his social contract is symbolized by
his dismantled palace, which differently from the Beasts one in The
Courtship of Mr Lyon, appears as uninhabited, a refuge from the strain
of society rather than an assertion of his social self.
The protagonist achieves a form of equality with the beast once their
shared alienation in the human world has been acknowledged and
overcome.40 Her relationship with the Beast is based on equal terms; the
Tiger requires her engagement as a subject in a conception of the law that
builds relationships between people as socii in a society, and grants their
action.41 In this ethics of alterity, the other must be respected in his
difference and the encounter does not lead to the loss of identity on one
side but to creativity and mutual recognition for an equal relationship.
They thus reach a just attitude towards the other, acknowledging their
reciprocal dimension: Alterity should be intended in the most universal
sense of the term (i.e. the other as indeed other), empowered by all its
ontological implications.42 Rules exist not to satisfy the normative will
of the giver (or his personal interests) but to guarantee that the relation-
ship between subjects is really relational, associative, that is, juridical;
40
Dutheil de la Rochre (2013) 261.
41
DAgostino (2000) 13.
42
Ibid. 20 (my translation).
acting juridically implies the reciprocal recognition of interests between

subjects.43
The walls of the Beasts ancestral house, symbol of patriarchal law
(like Mr Lyons and the Marquis mansion), are shaken by his purring,
the expression of his real voice, and will all fall, everything will
disintegrate (TB, 75) opening the way for a newfound dimension in
difference and through difference. In her portrayal of a gendered being
willing to embrace difference,44 Carter transcends the patriarchal myth of
the passive and willingly submitted woman through her imaginative
counterdiscursive position, which eventually includes male characters as
well; actually, by avoiding idealistic representations of either femininity
or masculinity, she transcends both patriarchal and feminist grand
narratives alike. Her stories celebrate identity as a fluid and shifting
endowment45 which is not posited as a requirement for entering a
contract, but is achieved through the contract itself, which allows the
creation of a new corpus iuris.
REFERENCES
Antor, H. (2007) The Ethics of Story-Telling and of Reading: Literature, the Law and the
Principle of Equity in D. Carpi (ed.), The Concept of Equity: An Interdisciplinary
Assessment. Heidelberg: Winter, 15168
Aristodemou, M. (1999) Fantasies of Women as Lawmakers: Empowerment or Entrap-
ment in Angela Carters Bloody Chamber in M. Freeman (ed.), Law and Literature.
Oxford: Oxford University Press, 191218
Atwood, M. (2007) Running with the Tigers in L. Sage (ed.), Essays on the Art of Angela
Carter: Flesh and the Mirror. London: Virago, 13350
Bacchilega, C. (1997) Postmodern Fairy Tales: Gender and Narrative Strategies. Philadel-
phia, PN: University of Pennsylvania Press
Beale, H., Hartkamp, A., Ktz, H. and Tallon, D. (2002) Cases, Materials and Text on
Contract Law. Oxford and Portland, OR: Hart Publishing
Blum, B.A. (2007) Contracts: Examples and Explanations. New York: Kluwer
Brooke, P. (2004) Lyons and Tigers and Wolves Oh My! Revisionary Fairy Tales in the
Work of Angela Carter, 16(1) Critical Survey 6788
Carter, A. (2006 [1979]) The Bloody Chamber. London: Vintage
Cavallaro, D. (2011) The World of Angela Carter: A Critical Investigation. Jefferson, NC:
McFarland & Co., Inc., 12930
Costantini, C. (2007) La Legge e il Tempio. Rome: Carocci
Cover, R. (1983) Nomos and Narrative, 97 Harvard Law Review 144
Crunelle-Vanrigh, A. (1998) The Logic of the Same and Diffrance: The Courtship of Mr
Lyon, 12(1) Marvels and Tales 11632
43
See ibid. 14.
44
See Cavallaro (2011) 130.
45
Dutheil de la Rochre (2013) 262.
Cutolo, R. (2014) Into the Woods of Wicked Wonderland. Heidelberg: Winter

DAgostino, F. (2000) Filosofia del Diritto. Turin: Giappichelli
Donoghue, E. (1997) Kissing the Witch. New York: Harper Collins
Douzinas, C. (2003) The Literature of Law in D. Carpi (ed.), Shakespeare and the Law.
Ravenna: Longo, 1746
Dutheil de la Rochre, M.H. (2013) Reading, Translating, Rewriting: Angela Carters
Translational Poetics. Detroit, MI: Wayne State University Press, 261
Goodrich, P. (1990) Languages of Law: From Logics of Memory to Nomadic Masks.
London: Weidenfeld & Nicholson
Laeverenz, J. (2007) Mrchen als rechtsgeschichtliche Quellen? in H. Lox, S. Lutkat and
D. Kluge (eds), Recht und Gerechtigkeit in Mrchen. Knigs Furt: Krummwisch,
25495
Levi-Strauss, C. (1969) The Elementary Structures of Kinship. Boston, NJ: Beacon Press
Manley, K. (2001) The Woman in Process in Angela Carters The Bloody Chamber in
D.M. Roemer and C. Bacchilega (eds), Angela Carter and the Fairy Tale. Detroit, MI:
Wayne State University Press, 8393
Mhlenkampf, A. (2007) Rechtsinstitute und Vertragstypen in Grimms Mrchen in H.
Lox, S. Lutkat and D. Kluge (eds), Recht und Gerechtigkeit in Mrchen. Knigs Furt:
Krummwisch, 23453
Propp, P. (1968) Morphology of the Folk Tale. Austin, TX: University of Texas Press
Roberts, K.J. (2002) Once upon the Bench. Rule Under the Fairy Tale, 13(2) Yale
Journal of Law and the Humanities 497529
Rubinson, G.J. (2005) The Fiction of Rushdie, Barnes, Winterson and Carter: Breaking
Cultural and Literary Boundaries in the Work of Four Postmodernists. Jefferson, NC
and London: McFarland & Co., Inc. Publishers
Sage, L. (2007) Angela Carter. Northcote: Horndon
Swift, G. (1983) Waterland. New York: Vintage
Ward, I. (1999) Shakespeare and the Legal Imagination. London: Butterworths
Zipes, J. (1979) Breaking the Magic Spell: Radical Theories of Folk and Fairy Tales.
London: Heinemann
Zipes, J. (1983) Fairy Tale and the Art of Subversion. London: Heinemann
Zitzlsperger, H. (2007) ber das Gerechtigkeitsempfinden von Kindern und Jugendlichen
beim Hren vom Mrchen in H. Lox, S. Lutkat and D. Kluge (eds), Recht und
Gerechtigkeit in Mrchen. Knigs Furt: Krummwisch, 14167
PART IV
GLOBAL CONTEXT AND

LOCAL FRAMES
16. The wrecking ball: good faith, preemption

and US exceptionalism
Peter Goodrich
If two of us make a Bargain, why should either of us stand by it? What

need you care what you say, or what need I care what I say? Certainly
because there is something about me that tells me Fides est servanda.1
In the recent US Supreme Court decision Northwest Inc. v. Rabbi Binyomin

Ginsberg, Justice Alito, writing for the majority, determined that the
contractual duty of good faith is not an element of volitional contracting but
a State legislated imposition.2 Just as the rest of the common law world,
including even England, which has had a traditional hostility3 to the
doctrine, moves towards the recovery and harmonization of contracting as
necessarily subject to implicit and interpretative criteria of good faith, the
US common law exposes not only a disturbing degree of exceptionalism but
also a logic that is ever increasingly adrift from the history of doctrine and
the reason of precedent. At the very moment that good faith, the conscience
and equity implied in all promising, and fundamental to the interpretation
of all contractual language, is revitalized in other common law juris-
dictions, and becomes settled and harmonized in European private law,
Brexit notwithstanding, the US Supreme Court strikes out alone.4 It does
so, I will argue, with very limited justifications based primarily in policy
and not in any reasoned, let alone scholarly or consistent apprehension of
the history and development of the law of contracting.
To the extent that it is possible to say that there are emergent topics in
contracts, the doctrine of good faith or more properly the preclusion of
1
Selden (1868) 66.
2
Northwest, Inc. v. Rabbi S. Binyom Ginsberg, 134 S.Ct. 1422 (2014).
3
McKendrick (2014) 219, noting that there are signs that the traditional
English hostility towards a requirement of good faith might be abating. Discussed
in Yam Seng Pte Ltd v. International Trade Corp. [2013] EWHC 111 (QB).
4
The prime example, of course, to which the United States is a signatory, is
the UN Convention on Contracts for the International Sale of Goods, Art. 7(1)
which stipulates that in interpretation of this Convention, regard is to be had to
the observance of good faith in international trade.
385
bad faith performance is enjoying some degree of limelight. The reason,

of course, is as much the growing threat of corporate imposition of
gargantuan standard form contracts, and the corresponding demise of any
sense of volition or of real freedom of bargain in the face of online
consent icons linked to ever increasingly complex and prolix online terms
and conditions of exchange. The imposition of mandatory arbitration in
standard form agreements and the enforcement of class action waivers as
conscionable, despite being presented on a take it or leave it, non-negotiable
basis, increasingly signal the displacement of contract as bargained for
exchange with the leviathan of imposed arbitration by virtue of its unilateral
inscription by the drafting party.5 The motives for such doctrinal elabora-
tions and transformations will here be deemed a secondary concern, as
compared with the primary doctrinal import of such developments, which
impinge first and most directly upon the intellectual history of common law
and, secondly and consequentially, reflect the triumph of corporate interest,
of adhesion over volition in the realm of agreements. It is first a matter of
scholarship, of the failing role of the academy and the declining signifi-
cance of legal education in the United States, a sorry intellectual trajectory,
and latterly the enigma of dissimulation, the inability to accurately present
the reason for decision, the motive that renders judgment, in the ratio
decidendi or deliberation reported.
I. PREEMPTION AND GOOD FAITH

The context of Rabbi Ginsbergs complaint is specific to US law in that it
involves the relation between Federal and State law and the doctrine of
preemption. The Airline Deregulation Act (ADA) of 1978 was passed by
Congress to encourage, develop, and attain an air transportation system
which relies on competitive market forces.6 In order to prevent States
from undoing federal deregulation with regulation of their own, a
5
For the recognition that virtually all consumer contracts are adhesion
contracts see AT & T v. Concepcion, 131 S. Ct. 1740 (2011). For the most recent
Supreme Court decision on class action waivers, see DirectTV v. Imburgia, 136
S. Ct 463 (2015). For general discussion, see Resnik (2015). For an example of
the classic view of equality, see the argument in Laidlaw v. Organ, 15 U.S. 178
(1817), relying principally on Cicero and Pothier, and referencing contracts of
sale of goods: the reason is that equity and justice, in these contracts, consists of
equality.
6
49 USC s. 41713(b)(1). The ADA was amended and incorporated into the
Federal Aviation Administration Authorization Act 1994 where s. 41713(b)(1)
was codified at 49 USC. app. s. 1305(a)(1).
The wrecking ball 387
preemption clause was included in the ADA which stipulated that States
could not impose any law, regulation, or other provision having the force
and effect of law related to a price, route, or service of an air carrier.7 As
formulated by the various courts, the viability of the plaintiffs claim
came down to whether breach of the duty of good faith in the perform-
ance of a contract was preempted under the statute because it was a State
regulation relating to airline prices and services.
Rabbi Ginsberg, a resident of Minnesota, was a Platinum Elite member
of Northwests frequent flier WorldPerks Program between 1999 and
2008. In June 2008 he was told that his membership of the program was
being revoked and in July he received a letter from Northwest stating that
his termination was due to his frequent complaints about the service.
Specifically, the letter stated that in the past six months the Rabbi had
contacted the WorldPerks office 24 times in relation to travel problems,
including nine incidents of late arrival of his bag at the luggage carousel.
The letter continued to state that the Rabbi had continually asked for
compensation over and above our guidelines. We have awarded you
$1,925.00 in travel credit vouchers, 78,500 WorldPerks bonus miles, a
voucher extension to your son, and $491.00 in cash reimbursements.8
Such generosity apparently justified revocation of the Rabbis member-
ship and later attempts to obtain a clearer explanation of the grounds of
termination resulted in an email referring him to Rule 7 of the terms and
conditions of WorldPerks, stating in relevant part that:
[a]buse of the WorldPerks program (including failure to follow program

policies and procedures any misrepresentation of fact or other improper
conduct as determined by Northwest in its sole judgment ) may result in
cancellation of the members account and future disqualification from pro-
gram participation.
In response, Rabbi Ginsberg filed a class action lawsuit, one aspect of

which was a contract claim for breach of the duty of good faith and fair
dealing. The cancellation of his membership of the program was, he
claimed, in bad faith. The real reason for termination, it was argued, was
cost-cutting occasioned by Northwests merger with Delta. Such an
ulterior motive, while not necessarily retaliatory or malicious, is poten-
tially in infraction of the implied covenant of good faith and fair dealing
7
Ibid. The legislative history is discussed in Ginsberg v. Northwest, Inc.
2009 U.S. Dist. LEXIS 133138, at first instance before Janis L. Sammartino J,
and on appeal in Ginsberg v. Northwest, Inc., 653 F.3d 1033 (2011), before
Robert R. Beezer J.
8
Ginsberg (2009), n. 7 above, at 2.
to be found in all contracts according to both Restatement (Second) of

Contracts, section 205, and Uniform Commercial Code, section 1:304,
though the latter was not applicable in the present instance as it was
services and not goods that formed the subject of exchange.9 Case law,
with the partial exception of the at will employment doctrine, which in
a limited number of jurisdictions prevents the formation of a contract and
so also precludes any implied terms, has increasingly followed the
Restatement synopsis of the extant and historic law on good faith. In
Fortune v. National Cash Register Company, for instance, termination of
employment by the defendant company so as to avoid paying a bonus
slightly in excess of US$92,000, due shortly after the date of firing, for
work done, was within the ambit of bad faith breach of contract.10 The
classic statement of the modern US doctrine comes in a case involving
termination of a female employee because she had refused to date her
foreman:
in every contract there is an implied covenant that neither party shall do

anything which will have the effect of destroying or injuring the right of the
other party to receive the fruits of the contract, which means that in every
contract there exists an implied covenant of good faith and fair dealing.11
Ginbergs suit was dismissed, inter alia, on the ground that the implied
covenant was a duty that does not appear ex nihilo, and is not imposed
by the contract itself (unless it so stipulates). Rather, it is implied by state
law That parties must act in good faith and deal fairly with one
another is a requirement of state policy, external to the contract itself, and
that is given the force and effect of law.12 The implied covenant was thus
to be interpreted as State law that imposed regulation relating to the
price, route or service provided by the airline. The good faith provision,
in sum, was not a part of the voluntary undertaking of the agreement
between the parties but was rather predicated upon a State law external to
the volitional bargain. It was this logic that Justice Alito reiterates and
9
For classic discussions of the modern US doctrine of good faith, see
Summers (1968); Burton (1980).
10
Fortune v. National Cash Register Co., 364 N.E.2d 1251 (1977); and
similarly see Nolan v. Control Data Corp., 579 A.2d 1252 (1990) where an
employers right to alter the quotas that formed the basis of a bonus scheme was
held to be subject to the requirement of good faith.
11
Monge v. Beebe Rubber Co., 114 N.H. 130, 133 (1974) (emphasis added),
itself citing Kirke La Shelle Co. v. Armstrong Co., 263 N.Y. 79, 87 (1933).
12
marginally expands upon in the final dismissal of the action and to which
attention will now be turned.
Justice Alito shares the English common laws traditional hostility to
the doctrine of good faith and begins his analysis with a citation to an
apparently dismissive statement of the doctrine: The concept of good
faith in the performance of contracts is a phrase without general meaning
(or meanings) of its own.13 It bears note that Alito J does not bother to
include the end of the sentence quoted, which continues, without pause
or punctuation, and serves to exclude a wide range of heterogeneous
forms of bad faith.14 Nor does Alito J bother with the determination in
Tymshare, which stated that what the intention of the parties was in
making the contract must control the exercise of the power to alter the
quotas upon which bonuses were based. The question to be determined
upon remand was precisely whether or not Tymshare was acting for any
of the purposes implicitly envisioned by the contract.15 It is a point that
is intriguingly and perhaps counter-intuitively affirmed by Judge Posner
in Market Street v. Frey where he opines at length upon the vagueness
and vagaries of the doctrine and, in full conformity with Justice Alitos
hostility to contractual bona fides, cites Learned Hands warning to the
effect that such words as fraud, good faith, whim, caprice,
arbitrary action and legal fraud obscure the issue. Posner
expatiates the doctrinal, which is to say ideological point, by stating that
the particular confusion to which the vaguely moralistic overtones of
good faith give rise is the belief that every contract establishes a
fiduciary relationship.16 That said, the reductio ad absurdum aired, the
normative desideratum nailed to the masthead, Posner then seeks to limit
the doctrine to the most narrow of complexions, but does so while
nonetheless stating a method that conforms to traditional doctrinal
analysis: The concept of good faith is a stab at approximating the
terms that the parties would have negotiated had they foreseen the
circumstances that have given rise to their dispute.17 Thus, again, and
13
Tymshare, Inc. v. Covell, 727 F.2d 1145, 1152 (1984).
14
Ibid. 1152, citing Summers (1968) 201.
15
Tymshare, n. 13 above, at 1154.
16
Market Street Associates Ltd v. Frey, 941 F.2d 588, 593 (1991).
17
Ibid. 595. The notion of taking a stab at what the contract means is one
that is dear to Posner who elsewhere elaborates a theory, if such is not too strong
a term, of contract interpretation as according with the judges best guess as to
what the parties intended, predicated upon the judicially available extrinsic
non-evidence of their meaning, by which latter expression his Honor intends to
refer to judicial acumen and worldly wisdom. See Posner (2005).
even in its most limited form, it is expressly the good faith intention of
the parties, the proper construction of the meaning of the agreement, the
morally apposite interpretation of the words, and thus the immanent and
volitional predicates to the contract that good faith recuperates and
expresses.
Despite a brief acknowledgement of the method of implication and
reference to the actual though imputed intentions of the contracting
parties, Alito moves to stage an alternative position in which the doctrine
is deemed to be imposed externally by law and specifically by the State
so as to legislate that a party does not violate community standards of
decency, fairness, or reasonableness.18 This, he claims, is necessarily a
state-imposed obligation and this even though the exact formulation that
he has used refers to community standards of decency, fairness, or
reasonableness, to what other judges term reasonable expectations,
which is to say custom and common law, the tradition of precedent as the
priority of the anterior, and as such, a law of the land, a body of
immanent norms, patterns of practice that traditionally have precedence
over statute or State regulation according to the sages of the common
law, however much their teachings are now disregarded.19 Granted that
custom, practice and use are hardly consonant with State regulation, let
alone imposition, Alitos logic wavers tenuously between different mean-
ings of law and State. His citation of authority for the necessity of
viewing good faith as a State-imposed obligation, references a Missouri
case which upholds the implied covenant of good faith in all contracts
and so precluded a party from escaping all liability by declaring a lease
to mine a quarry illusory where no express promise had been made to
actually mine and sell limestone from the quarry.20 Alito ignores the
general thread of the argument in Magruder and simply extracts, out of
context, the rather non-probative proposition that [w]hen terms are
present that directly nullify the implied covenants of good faith and
18
19
The various formulations of the leges terrae as the precedence of the prior,
as the pattern of practice and so the expression of what parties actually do, goes
back at least to Fortescues, De Laudibus legum Angliae, circa 146870, and
nowhere better expounded than in Waterhouse (1663).
20
Magruder Quarry & Co. v. Briscoe, 83 S.W.3d 647 (2002); and for the
classic source of such an implication, see Wood v. Lucy Lady Duff Gordon, 222
N.Y. 88 (1917), where Cardozo stated that: A promise may be lacking, and yet
the whole writing may be an instinct with an obligation, imperfectly expressed. If
that is so, there is a contract. Such a contract expressly gives effect to the good
faith meaning of the agreement, the words used.
reasonable efforts the contract is void for lack of mutuality. This, of

course, simply means that the parties never reached an agreement, their
minds did not meet, because at least on one side no commitment was
actually undertaken and so no promise was made. The point is reiterated
powerfully in Harris v. Blockbuster, where the defendants reservation of
a unilateral power to change terms in the contract without notice and with
potentially retroactive effects upon disputes already in process was
deemed no promise at all.21 Again, however, it should be reiterated that
this is because of what the parties have done, said or written, and so is
necessarily here a matter of interpretation of the express intentions of the
parties to the putative agreement and is not by virtue of any imposition
by State or legislation.
Alito extracts a different moral. Turning, somewhat disingenuously, to
the authority of Corbin, he cites a truncated quotation to the apparent
effect that unwillingness to allow people to disclaim the obligation of
good faith shows that the obligation cannot be implied, but is law
imposed.22 This transpires not to be a quotation from Corbin at all, but
rather the invention of his subsequent Editors and an extract from their
Supplement. The reference of the quoted passage is to the imposition of
an obligation of good faith in sale of goods contracts as regulated by the
Uniform Commercial Code (UCC). UCC, section 1:304, imposes an
obligation of good faith and being statutory is an imposition that the
parties cannot disclaim. The Editors legitimate though limited point is
that private agreement should not wholly oust the will of Congress in
relation to sale of goods. Ginsberg, of course, does not involve sale of
goods and is not subject to the statute. Even if it were, the point that
Alito J seeks to extract from the Editors of the Supplement is neither
supported by the subsequent discussion nor is it in consonance with
Corbins text. The Code says nothing of the common law of implied
covenants of good faith though the inclusion of such a covenant does
suggest that the legislature supported the common law doctrine and
insofar as the Code is arguably a synthesis of extant common law with
respect to the sale of goods, it suggests an affirmation of the classical
doctrine and precedents.
More specifically, the Supplement is an updating of the case law that
Corbin had used in his discussion of the difference between constructive
and implied conditions. Here Corbin states clearly that the implication of
21
Elaine Harris v. Blockbuster Inc., 622 F.Supp. 2d 396 (2009), holding that
the contract was unenforceable principally for two reasons: (1) it is illusory; and
(2) it is unconscionable.
22
Corbin (1960) 100.
a condition is for the reason that the parties have so agreed, but the
intention to make it so has not been expressed in sufficiently definite
language.23 Far from viewing good faith as law imposed by the State,
Corbin regards the term either as implied from the intention of the
parties, and so a subjective part of the contract, or as implicit in the
founding juridical virtues of justice and equality, and so objectively a part
of the agreement and implicit in the volitional commitment the parties
have undertaken. To cite Corbin again, a constructive condition is an
event that is operative as such on grounds of fairness and justice. As
later commentators have expressed it, the constructive condition is based
upon the intrinsic morality of the objective conception of intention and
is just as much a part of the presumed intention of the parties as what
was actually expressed.24 It is in the old language bonae fidei iudicia, as
will be elaborated upon in due course. For the present the relevant point
is that if the decision hinges on this interpolation, or at best this out of
context recitation of part of an argument made by the later Editors of
Corbin with respect to an unrelated point of statutory interpretation, then
the motive for the judgment is probably rather far removed from the
ostensive ground of dismissal. In sum, when Alito J goes on to conclude
that the implied covenant of good faith and fair dealing enlarges the
contract and entails application of State imposed regulations relating to
airline services and so is preempted under the ADA preemption provi-
sion, his reasoning is unimpeded by any sound understanding of the
private law doctrine that generates the concept of good faith.
II. BONA FIDE PROMISING

The purpose of preemption doctrine is to give effect to legislative intent
and so with respect to the ADA the spirit of the Act, the intent of
Congress, fictive though that necessarily must be, is that the market
rather than the State regulates airline commerce. This of course means
23
Ibid. 132.
24
Campbell (2014) 484. In the words of Legatt J, in Yam Seng: A paradigm
example of a general norm which underlies almost all contractual relationships is
an expectation of honesty. If it is not expressly included in the contract it is
nonetheless objectively a part of the intentional agreement because the parties
cannot provide for every event that may happen and so the language of the
contract must be given a reasonable construction which promotes the values and
purposes expressed or implicit in the contract. (n. 3 above, at 139).
that contract should determine rights and duties, that private ordering
effectuates the most efficient regime, and that State imposed interferences
in the equilibrium achieved by the invisible hand of social interaction and
agreement be kept to a minimum. The early form of the ADA, the 1958
Federal Aviation Act, which the 1978 ADA statute amends and renum-
bers, and which Alito symptomatically fails to mention, indeed contained
a savings clause which expressly stipulates, by way of clarification, that
nothing in this chapter shall in any way abridge or alter the remedies
now existing at common law.25
The private ordering of an airlines obligations means precisely that the
terms and conditions offered are contractual and volitional, that they are
the result of bargained for exchange as interpreted, implemented and
where appropriate remedied by the courts. If the interpretations of the
courts are deemed preempted because courts as institutions, and judges
as State employees, are in some sense external to the parties volitional
concord, then a plaintiff could have no recourse to the State courts
because they would have no jurisdiction to adjudicate the claim.26 It
seems at least unlikely and at most absurd that the legislature intended
such ouster of the jurisdiction of the courts. If it follows, even presum-
ably for Alito, that some enforcement of contractual rights is permitted
under the statute then the question of the distinctiveness of the doctrine
of good faith comes clearly to the fore.
Common law favors particulars rather than principles, the concrete
case, and by extension custom and use, over code and unitary norm. The
early modern common lawyers even favored at times the maxim com-
munis error facit ius, meaning in the main that examples, particular
instances, practice rather than theory or principle should govern judg-
ment.27 Part of the hostility to the doctrine of good faith, seen as
amorphous and moralizing by Judge Posner, and as an imposition
derogating from volitional market forces by Alito, is thus certainly its
seemingly abstract character and its generality of application. In Market
25
49 USC s. 1506 (1964), amended and renumbered as 49 USC s. 40120(c)
(1994).
26
Ginsberg (2011), n. 7 above, at 1039 (Court of Appeals).
27
St German (1975 [1528]) 162: quod communis error facit ius. That is to
say a comen errour makyth a ryght / of whiche wordis as it semyth some trust
may be had / that though it were fully admyttyd that the sayde recoueryes were
fyst had vpon an vnlawful grounde and agaynste the good ordre of consyence
that yet nevertheless for as moche as they have ben vsed of longe tyme / so that
they haue ben taken as for lawe. On the broad theme of exemplars and
judgment, see Baker (2001).
Street, for example, Posner concludes, in a somewhat divagatory manner,

that if we cannot define good faith as altruism, then we are forced to
limit the doctrine to preclusion of fraud, either express or constructive.
Thus if the plaintiff had not actively concealed a material fact from the
other party, if there was no trick or suppression of pertinent information,
then there was no bad faith. The reason for this, in Posners account, is
that the parties, at the time of contracting, cannot have intended such
opportunism in the face of unforeseen circumstances. Good faith, in
Posners account, and as a mode of limiting the ambit and influence of
the doctrine, gives effect then to the presumed intentions of consenting
parties and these, as defined, are slim to nil, save that they likely preclude
fraud in the event of circumstances unforeseen. Alito is similarly con-
cerned to limit and constrain the scope of this equalizing doctrine and is
equally likely to be motivated by the desire to limit class actions of this
sort, already reproved in AT & T v. Concepcion, and again most recently
in Direct TV v. Imburgia, but it is doubtful that such constitutes an
adequate reason for the historical and conceptual errors in the circum-
scription of good faith.28
First and most obviously, the limitation of good faith to fraud, actual or
constructive, signals that far from being a unitary concept or extension of
common law remedies, the doctrine is plural, transaction based and
pragmatic. Good faith and fair dealing do not constitute a general duty
but rather, as the example of fraud suggests, comprise a series of
situationally specific remedies predicated upon the equitable effort to
give effect to the parties bona fide intentions as expressed and memor-
ialized in the contract. Good faith mitigates against fraud, it also
precludes malice and retaliation in employment terminations, it implies
best efforts into output and requirements contracts, it prevents or more
technically estops a party who has promised one thing from changing
their position and going back on their promise to the detriment of
another. Similarly, the case law indicates that a commercial percentage
lease cannot be undermined by the lessee evading the common interest in
maximizing output or income, as the case may be, and more broadly the
principle of implying a promise not to impede or prevent the other party
from performing their part of the contract is well recognized. The
doctrine of unconscionability implements good faith at the time of
bargain, as also do the defenses of mistake and misrepresentation. It takes
little further analysis to recognize that moral obligation and material
28
AT & T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011); DirectTV v.
Imburgia, 136 St. Ct 436 (2015).
benefit are also attempts in diverse contexts to bring an element or iota

of equity and good faith into situations where the promise is for other
reasons unenforceable. It may be that on occasion the justificatory
rhetoric of judgment expands or rechristens the doctrine into a unity, as
for example, in the judicial statement that I believe that in all relation-
ships between civilized persons, there is an obligation not to act in bad
faith, but the appearance of universality is belied by the recourse to the
negative and a statement which in effect reiterates the pragmatic ground
of equity usually expressed in the maxim ubi ius ibi remedium.29
The second and related point to make is that, in the words of one early
twentieth century judge, following in a lengthy tradition:
[f]raud is kaleidoscopic, infinite. Fraud being infinite and taking protean form
at will, were courts to cramp themselves by defining it with a hard and fast
definition, their jurisdiction would be cunningly circumvented at once by new
schemes beyond definition. Messieurs, the fraud-feasors, would like nothing
half so well.30
This expansiveness of bad faith practice founds Professor Summers

excluder thesis and allows at most for a listing of verified types of
misbehavior in contracting.31 Older English case law makes the same
point. In Allcard v. Skinner, an implausibly named Reverend D. Nihill
was spiritual adviser to a plaintiff who transferred all of her wealth to the
perhaps more aptly named Skinner who was Mother Superior of a
religious order in the circumstances inaptly called The Sisters of the
Poor. Lindley LJ famously observed in the course of deciding that the
plaintiff had exercised free will and that in any event laches, meaning
passage of time, that:
Courts of Equity have always protected people from being forced, tricked, or
misled, in any way, by others into parting with their property [such] is one
of the most legitimate objects of all laws; and the equitable doctrine of undue
influence has grown out of and been developed by the necessity of grappling
with insidious forms of spiritual tyranny and with the infinite varieties of
fraud.32
29
Pederson J, dissenting, in Hillesland v. Federal Land Bank Assn, 407
N.W.2d 206, 216 (1987).
30
Lamm J in Stonemets v. Head, 248 Mo. 243, 263 (1913), citing Lord
Chancellor Hardwicke, in Lawley v. Hooper 3 Atk. 278.
31
Summers (2000).
32
Allcard v. Skinner (1897) 36 Ch. D 145, Cotton LJ dissenting.
Equity is equality and here, by dint of lapse of time, there was no

inequality according to the majority opinion. Be that as it may, and
distant though the norm may seem from the practice, the general
equitable power to intervene is highly specific and attaches to the
wrongdoing and not so directly to the positive principle or moral agenda
that the US exceptionalist tendencies so fear.
If fraud and its companion bad faith cannot be defined, corralled or
delimited in advance, it is necessary to look further for the juristic root of
a doctrine of good faith, and indeed of contracts that in civil law were
enforced for good faith, termed bonae fidei iudicia, actions on and in
assertion of good faith that long pre-date any supposed State imposition
in either common law or continental codes. The legal principle at issue is
properly depicted as that of keeping ones word, abiding by ones
promises and so doing what one has committed to doing in joint venture
with the other. It is a simple, inaugural and profound principle that
returns ultimately to the Twelve Tables and the dictate, dear to Cicero and
to Vico, that stipulates simply and succinctly that as it has been said, so
shall it be done, and specifically, si quis nexum faciet mancipiumque, uti
lingua nuncupassit ita ius esto.33 The root of this general principle is
fides, faith in the word as deed, and in Gaius Institutes, it takes the form
of the sacramentum, the basis of all leges actiones or acts in law. What is
important, for an understanding of the much later elaborations of a legal
concept of good faith, however, is the simple point that fides, being
faithful to ones word, lies at the ethical root of the juridical system, or as
Cicero puts it, fundamentum iustitiae.34 Such fidelity to ones word
precedes and founds the very concept of justice from which law springs,
and again resorting to Cicero, has its roots initially in natural law, the ius
gentium shared by all, and thus is expressly and most interestingly
defined as iudicia sine lege, meaning that it is an action outside law,
because prior to law, as part of divine decree, nature and use, and so
needing no statement in the lesser form of temporal rules. Good faith is
predicated upon equity and nature, justice as such or, in the language of
common lawyers, ius quaesitum alteri, the other face of law.
Contractual good faith is a species of the genus fides and returns, as
the more scholarly jurisprudence is fond of remarking, to the scholastic
33
Twelve Tables (Lex duodecim tabularum) 6.1; Cicero, De officiis 3, 65.
34
Cicero, De officiis 1.23: fundamentum autem est iustitiae fides, id est
dictorum conventorumque constantia et veritas. Elsewhere Cicero elaborates not
only on constancy and veracity as the root of justice, but also on faith as the
doing of what is said. For a general overview, see the excellent Schermaier
(2000).
tradition of philosophical thought that founds the reason of law. Whatever

the precise genealogy of the civilian assertion of good faith as truth
telling, and the sources are diverse and confused, the grounding norm is
one of fidelity to ones word and to promises, even where nothing is to be
gained by such keeping of faith. Aquinas follows Aristotles Ethics and
adds that someone who does not do what he promises, acts unfaithfully,
even if they do not lie.35 For the civil law tradition, the various earlier
sources gain fragmentary but permanent expression in the Corpus Iuris
Civilis and the various statements of fidelity to the word and by extension
faith in instruments are well known. It is sufficient to cite Ulpian who
begins his discussion de pactis by observing that it is natural equity that
founds the principle of human faith fidei humanae and dictates that
what we agree to do must be done.36 Agreements are to be kept, or as
Ulpian depicts slightly later, covenants will be enforced pacta conventa
servabo because such is the requirement of good faith. The later
discussion then moves to bad faith (iniquum) and the preclusion of
malice and deceit, as well as the enforcement of veracity and so of
keeping ones promise where change of circumstances has led the
promisor to want to change their mind.37
Moving to the English reception of Roman law, the mos britannicus and
its indigenous translations, the didactic principle of an inherited law both
divine and human, natural and positive, equitable and secular gains
prominent expression in the pedagogic literature of preparatives. Thus, for
Fulbeck, religion, justice and law do stand together And justice must
be regarded of the law as the load-star is minded of the seaman, for without
it can be no government.38 The learned Judge Sir John Doderidge is more
succinct and cites Justinians Institutes, the exemplar of didactic juristic
texts, to the effect that law is truly stiled, Rerum divinarum human-
arumque Scientia, immediately after praising Chancellor Fortescue
for being excellently learned in Divinity, Philosophy, Law both Ecclesias-
ticall, and the Lawes of this Realme.39 Granted the mixed nature of the
tradition, theological and philosophical, canon and common law mixed
with Latin, law French, civilian maxims and rules, the plural roots of good
faith, of keeping ones word, of being constant and true to promises, at
common law should evidently be plural and transdisciplinary.
35
For discussion and citation, see Gordley (1991) ch. 2; and reprised in
Gordley (2000).
36
D. 2.14.1 (Ulpian).
37
D. 2.14.7 and D. 2.14.10.
38
Fulbeck (1829 [1599]) 24.
39
Doderidge (1631) 34.
Fulbeck can act as our initial guide in that he provides a suitably

pedagogic and splendidly short definition of bona fides, namely sincere
conscience.40 And conscience he defines as cordis scientia, knowledge
of the heart, faith in the truth, to which he adds: Surely the light of the
truth in an honest mind dimmeth and obscureth all cavils and quillets.41
Clearly for Fulbeck, the concept of good faith, like justice, is a faculty, an
interior sensibility and inner apprehension that is most directly correlated
to the conscience and an etymology that can also be given as cum
scientia, knowing with (the divinity). The common law root of this
derivation is St German who begins his discussion of the law of reason
and nature by defining the two as synonyms and then proceeds to
stipulate that the true law of nature (lex vero nature) is that of reason:
And this is the law which among the learned in English law (inter peritos
legis Angliae) is called the law of reason, which natural reason has established
among all men so that there is a natural instinct present in all men to observe
it.42
It is written in the hearts of men, their conscience bearing witness, and

thus against this lawe prescripcyon statute nor custome may not
prevayle.43 St German references Aristotles Ethics and elaborates con-
science as equity, and equity as equality. In the subsequent elaboration,
conscience mitigates the rigor of law, it resolves ambiguities, fills gaps,
supports estopellys, ordains restitution, and generally:
it is understand that the lawe is to be lefte for conscience / where the law
judges according to allegations and proofs, that is to say, where a thynge is
tried and founde by verdyt against the trouth where the cause of the lawe
dothe cease / the lawe also doth cease in conscience.44
The early jurisprudence was more than sufficient to dictate that in equity
conscience required that promises be kept because he that promises is
bounden in conscience to performe.45 To borrow from a slightly later
treatise on conscience, where there is any doubt as to the scope, meaning
or duty occasioned by a contract, veniunt in bonae fidei judiciis, namely
40
Fulbeck (1829 [1599]) 198.
41
Ibid. 8687.
42
St German (1975 [1528]) 1415.
43
Ibid. 15.
44
Ibid. 119.
45
Ibid. 229.
good faith will be the ground of interpretation and judgment as estab-

lished by prescription and common use.46 The bonae fidei contracts,
distinguished in classical law from contracts stricti iuris, were a compact
construed according to the intentions of the parties, with ambiguities,
gaps and scope of terms being determined by reference to the context of
agreement, usage and norms of interpretation that presumed good faith
on the part of the promisor.47 The interpretation of the contract ex bona
fide determined that equality was considered in addressing the promise
and its performance and that the spirit as well as the letter was taken into
account. It is this sense of good faith promising that later law incorpor-
ates into the concept of conscience and the enforcement of contracts as
gude faith and conscens requyer.48 Even a positivist such as Hobbes has
no difficulty in expounding the concept as unproblematic, Chapter 14 of
Leviathan roundly stating the principle of executory contract as being
where both parts may contract now, to performe hereafter: in which
cases, he that is to performe in time to come, being trusted, his
performance is called Keeping of Promise, or Faith; and the fayling of
performance (if it be voluntary) Violation of Faith.49
In sum, when later law variously picks up the doctrine of good faith as
the ground of construction, interpretation and enforcement of agreements
it is the equity of keeping ones promise, the conscience that dictates
fidelity to the word and to the instrument in its expanded and contextual
sense that appertains. Lord Mansfield, who famously abrogated the
concept of consideration, did so not on whim or invention but through
acknowledging that the principle that underlaid the requirement of
consideration was that of good faith and the need to show an intention to
promise, causa or conscientious commitment.50 For Mansfield, consider-
ation was simply evidence of good faith commitment, of an obligation ex
bona fide, and provided that there was an equity underlying the promise,
even an iota, then it has long been established that where a person is
bound morally and conscientiously to pay a debt, though not legally
bound, a subsequent promise will give a right of action.51 In other areas
46
Taylor (1660) Bk 3 ch. 6 rule 12.2 (404).
47
See Buckland (1975) 67882.
48
For the early common law history and distinctions, the principal text is
still Simpson (1987) 396400.
49
Hobbes (1950 [1652]) Part 1 cap. xiv (110).
50
Pillans and Rose v. Van Mierop and Hopkins (1765) 3 Burr. 1663. The
view returns in the common law tradition to Thomas Hobbes. See Atiyah (1979)
16769; Ibbetson (1999) 21517; and more recently Hogg (2011) 14247.
51
Lee v. Muggeridge (1813) 5 Taunt. 36.
of contracting, the same principle of equitable commitment, of doing

what one promises, directly supports enforcement, for example, of
promises to hold auctions without reserve, material benefits, waivers,
notice requirements, interpretation contra proferentem, estoppels in their
diverse manifestations, and the equity of quasi-contractual restitution
more generally.52 The strongest example is perhaps the one that Mans-
field elaborates in Bexwell, namely that of bona fide bidding. In that the
bidder is simply offering and has no contractual relationship with the
auctioneer who solicits their offer, the bidder is bound in good faith,
collaterally, ex contractu, which is here to say in an enforceable manner,
to the truth of their promise.53
In historical terms, from classical Roman to contemporary common
law, good faith promising is the unspoken assumption behind the other
doctrines which, stricti iuris, police the parameters and enforceability of
the agreement. The point is that it is not necessary to adopt a theory of
contract as promise to recognize that underpinning and supporting the
boundaries of contracting and the ethic of promise and performance lies
the tacit substrate of all volitional obligation which dictates that faith be
kept in words, that pacta sunt servanda, and that, to paraphrase St Paul,
the fulfillment of the law is equity. Not only does the volitional
obligation arise ex bona fide, whether or not this is in any specific
application of the doctrine recognized, but so too where strict law runs
out, where interpretation, emendation or application in unforeseen cir-
cumstances has to be determined, good faith again will come to the fore
and play the part of the basic and unwritten law.
In the mos americanus, US common law, the same sources and the
same principles are applicable, and a brief example can make the point
much better than any theory. In Laidlaw v. Organ, the question was
whether there was any duty on the part of the buyer of tobacco to inform
the seller that a recent change of circumstances, the signing of a peace
treaty, was about to radically change the price of the good.54 Tobacco
prices had been depressed for some time due to a blockade of American
ports by the British. The buyer had knowledge of the signing of the Peace
Treaty of Ghent, prior to its public announcement the next day, but when
asked by the seller if there was any news which was calculated to
enhance the price or value of the article, the buyer did not respond.
What is important about the case is not the decision on the facts, which is
52
Bexwell v. Christie (1776) 1 Cowp. 395; and for contemporary law,
Restatement (Second) of Contract, s. 28; Uniform Commercial Code, s. 2:328.
53
See, e.g., Barry v. Heathcote Ball & Co. [2001] 1 All ER 944.
54
Laidlaw v. Organ (1817) 2 Wheat. 178.
relatively uncontroversial, stating that if there had been concealment,

then there had been an exercise of bad faith misrepresentation, but rather
the logic of the decision and the sources that are cited in argument.
Ingersoll, counsel for the plaintiffs, in error, starts from the French
treatise of Pothier and the principle, dear to Selden amongst others, that
the concept of keeping to ones bargain, pacta sunt servanda, is based
upon the principle fides est servanda. The parties treated on an unequal
footing.55 There follows a lengthy attempt to reconstruct the history of
the doctrine of good faith, and its centrality, indeed its place as the
synonym of contract (bona fide) itself. This leads to citation of a
fragment from Florentinus in the Digest of Justinian, where the juris-
consult states that good faith requires that a vendor must not use obscure
speech, and also must avoid insidious concealment.56 Then follows a
lengthy rehearsal of Ciceros arguments in De Officiis, in which he starts
out from the law of the Twelve Tables and the maxim that what is said
must be done, and then poses several hypothetical cases, including that of
a corn merchant who arrives in Rhodes during a time of great scarcity,
knowing that there are several other fully loaded ships arriving soon. Can
he sell his corn at the higher price occasioned by the corn famine?
Rehearsing the views of the stoic philosopher Diogenes and his pupil
Antipater, Cicero concludes that good faith requires that the fact of other
ships arriving soon at Rhodes cannot be concealed from the buyers,
stating that concealment consists in trying for your own profit to keep
others from finding out something that you know, when it is in their
interest to know it.57 It is this Ciceronian logic that Chief Justice
Marshall adopts in his per curiam decision. The range of sources and
the depth of analysis of moral and legal principle in the case is one thing,
the simple rule that one is entitled at law to rely upon the good faith of
the interlocutors words and behavior is another. The maxim fides est
servanda is so primary and basic to contract that it scarcely merits
reiteration, in the same sense that one does not need to expound the rules
of grammar when proffering discursive deliberations. What was true,
however, of the US Supreme Court at the turn of the nineteenth century
transpires to be less evident today. Surprising though it is for Justices to
forget both principle and the law, this is what appears to have happened.
55
Ibid. 182. The reference to Pothier is to the French text of De vente.
56
Digest 18.1.43.
57
Cicero, De Officiis, Book III ch. iii (id est celare ).
III. CONCLUSION: THE IMPLICATION OF GOOD

FAITH
The significance of the promise, and of the judgment, ex bona fide, for
the purposes of analyzing the decision in Binyomin Ginsberg lies in a
doctrinal history which for centuries of the private law of obligations,
both civilian and common, has founded enforcement, implicitly and often
explicitly, upon the good faith intentions of the parties. It is not State
regulation, administrative imposition, or any other apparently insidious
and improper form of political will that dictates that bad faith be
excluded from the formation and performance of the contract. It is rather
and in fact much more simply the legal meaning of the words used by
way of promise and agreement. The judgment of good faith, going back
ultimately to the action bonae fidei iudicia, recognizes that for all the
importance of formalities, and whatever the virtues of the restraining
doctrines of literalism and its attendant restriction of obligation to the
four corners of the instrument, it is still necessary to have faith in such
instruments (de fide instrumentorum in the old language of the Digest)
and so to attend to the implicit dimensions of the agreement, both to what
is written and what is meant.58 It is in the latter dimension that the
question of intent, the scope of volition, and the application of agreement
to future and unforeseen circumstances becomes central to the project of
contract doctrine.
European common law has increasingly returned to the concept of
good faith as the mechanism of interpretation of the contract as the
vehicle of express and implied meanings. This is hardly new law in that
the implication of what is necessary to making the contract effective has
always been an intrinsic aspect of construction ut res magis valeat, as
the older courts were wont to say. Sometimes, such construction has
expressly taken the form of giving effect to a promise by circumscribing
and defining it by reference to good faith, but it has equally been
essential that the logical presuppositions of exchange are on occasion
excavated and enforced. Thus in Shadwell v. Shadwell, an apparently
social arrangement between an uncle and his nephew, in which the
former promised the latter an annuity upon marriage to his fiance, was
made actus legitimi, a legally enforceable promise by implying that the
nephew promised in his turn to bring forward the date of marriage and so
58
Digest 22:4 (de fide instrumentorum), a rubric lengthily annotated in Pierre
Legendres work. For discussion see Goodrich (1997).
changed his economic position in faith that the promise be kept.59 In

Attilio de Cicco v. Joseph Schweizer, Cardozo J went even further and in
a comparable case where the date of the wedding had already been set
implied a promise that the affianced not cancel the nuptials.60 In myriad
other instances where good faith is nowhere expressly present, the
implied sense of the bargain gives legal meaning or business efficacy to
the promises. This is done on the basis of what the promise implies and
if we borrow from the modern law of contract, the test for such
implication is the presumed intentions of the parties, rather than the letter
of the agreement:
The law has outgrown its primitive stage of formalism when the precise word
was the sovereign talisman, and every slip was fatal. It takes a broader view
to-day. A promise may be lacking, and yet the whole writing may be instinct
with an obligation, imperfectly expressed. If that is so, there is a contract.61
To the same effect, in the English decision relied upon by Cardozo, The
Moorcock, the court finds a promise between the lines:
An implied warranty, or, as it is called, covenant in law, as distinguished from

an express contract or express warranty, really is in all cases founded upon the
presumed intention of the parties, and upon reason.62
The implied term is thus internal to the promise and intrinsic to the
volitional agreement, the voluntary undertaking of the promisor. More
recent case law makes the point even more forcefully in elaborating the
meaning of the agreement by way of reference to the reasonable
expectations of the parties, with Lord Hoffman famously pronouncing
that in ascertaining the meaning that the memorandum would have for a
reasonable person in the position of the contracting parties, account be
taken of: absolutely anything which would have affected the way in
which the language of the document would have been understood by a
59
Shadwell v. Shadwell (1860) 9 CBNS 159. I am here borrowing the
example, though it is a very familiar one and cited constitutively in Hamer v.
Sidway, 124 N.Y. 538 (1891), from Collins (2003) 31: At an implicit level,
however, we can discern the operation of a convention that wealthy relatives
might seek to encourage young men to marry and settle down by making it
financially possible or even advantageous for them to do so.
60
Attilio De Cicco v. Joseph Schweizer, 221 N.Y. 431 (1917).
61
Wood v. Lady Duff Gordon, n. 20 above, at 91.
62
The Moorcock (1889) 14 PD 64.
reasonable man.63 Lexicon and syntax provide no more than a start to

the process of construction of the contract as a whole in its proper factual
matrix and commercial context. These provide the basis for construing
the agreement as including what reasonable people would incorporate
into the writing by way of giving it sense and application. Here, in the
words of Justice Legatt, [i]mportantly, for the present purposes, the
relevant background against which contracts are made includes not only
matters of fact known to the parties but also shared values and norms of
behavior. Such assumed general norms will include an expectation of
honesty and equally critically, trust, [y]et it is seldom, if ever, made the
subject of an express contractual obligation.64
In elaborating the meaning of agreement and the content of promises
as dependent upon and expressive of the reasonable expectations of the
parties, the doctrine of good faith effectively disinters the legal sense of
agreement, of the meeting minds, the congregatio mentem, that law
seeks to effectuate. This is an objective rather subjective construal of
intent and, to return to Justice Legatt:
This follows from the fact that the content of the duty of good faith is
established by a process of construction which in English law is based on an
objective principle. The court is concerned not with the subjective intentions
of the parties but with their presumed intention, which is ascertained by
attributing to them the purposes and values which reasonable people in their
situation would have had.65
The statement may be that of an English court but the same doctrinal
principle is evident in US contracts and gets reiterated as a matter of
course in the quotidian interpretation of agreements.66 In White City, to
take a reasonably current example, the question was whether a commer-
cial lease which precluded the landlord from entering any new leases
with businesses that primarily sold sandwiches, should be interpreted as
disallowing a new lease to a Mexican-style restaurant chain selling
63
Investors Compensation Scheme v. West Bromwich Building Society [1998]
1 WLR 896, 912; and reprised in Attorney General for Belize v. Belize Telecom
Ltd [2009] 1 WLR 1988.
64
Yam Seng, n. 3 above, paras 13334.
65
Ibid. para. 145.
66
The textbook cases are Lucy v. Zehmer, 84 S.E.2d 516 (1954); and Embry
v. McKittrick, 105 S.W. 777 (1907). For a more recent example with a strong
element of good faith implied into the finding that a contract existed, see Wrench
v. Taco Bell, 256 F.3d 446 (2001).
burritos, quesadillas and tacos.67 In determining that tacos were not

sandwiches, because they are made from a single tortilla rather than two
slices of bread, it was the express purpose of the court to construe the
contract as a whole in a reasonable and practical way, consistent with its
language, background and purpose.68
It is evident, in conclusion, that if the implication of terms, and the
implied covenant of good faith in particular, is understood as objectively
constituting part of the agreement because it is intrinsic to the proper
construction of the contract, then the notion in Ginsberg that preemption
precludes good faith as State imposed law takes on a different and less
justifiable hue. Corbin in the extract cited did not mean that the State
imposed the good faith requirement but rather that the law implies a duty
internal to the promise that the party made. It is imposed only because
the party in question has gone back on what they promised or has failed
to keep faith with their words. The objective construction of the meaning
of the agreement constitutes a subjective imposition in that it constrains
the breaching party from changing their mind or going against the
promise that was made. At a doctrinal level, the decision in Ginsberg is
expressive of a growing tendency towards US exceptionalism in which
policy overturns principle and the immediacy of pragmatics dispenses
with doctrine. In conclusion, I will argue that there are two principal
objections to such a usurpation of jurisdiction.
The first is perhaps somewhat arcane and is certainly formal. The
exceptionalist disavowal of doctrine undermines what remnants of
legitimacy contemporary law still harbors. It does so by removing itself
from the scholarly discourse, the intellective and intellectual institutions
that to a limited degree anchor law in a deliberative forensic process that
is at least rhetorically distinct from the other liberal sciences and to some
extent socially isolated from the journalism of policy and the reactive
unreason, the attention grabbing low impact catharsis of intrinsically
evanescent new media. The theatre of law loses its impact and effect, it
separates from justice as equality, if the three unities of legal drama,
time, place and ceremony, are eviscerated by the demands of policy. In
Ginsberg the policy claim, insofar as it can be divined, is that of acceding
to the Congressional will to promote a free market in airline services. To
effectuate this policy the Court interprets the ADA preemption clause in
such a way as to effectively eliminate the freedom of the market in favor
67
White City Shopping Center v. PR Restaurants, LLC, 21 Mass. L Rep. 565
(2006).
68
Ibid. 572.
of adhesion, the corporate imposition of unilaterally drafted and imple-

mented boilerplate contracts that have never been read let alone volition-
ally agreed to by any sentient contracting subject.69 The invocation of the
freedom of the market in fact masks an Orwellian unilateralization of
practice, and a pattern of constraint and potential overreaching.
The second objection is more substantive. The decision is wrong. US
exceptionalism here means doctrinal imprecision or imperite judgment.
As I have endeavored to show at some length, the implied covenant of
good faith is a term that is doctrinally at the heart of all agreements and
for significant periods of time, for principal figures in the development of
the common law tradition, it was a synonym for contract as such. Good
faith was what the courts enforced and bona fides were the cause of
action in law. An implied term is one which gives effect to the moral
sense of the vir bonus that the legal subject is in law taken to be. Such a
subject embraces their promises and sticks to the ethical meaning of their
words as stated. They act ex bona fide, out of good faith, and are judged
bonae fidei, because the rendering of justice must give effect to the virtue
and ethic of the good judge, which is to say the moral arbiter of a law
that even in jurisdictions defined by case law, ius non scriptum, is
contained in the books or is not law at all. To imply is to extricate,
construe and elicit the best meaning available, and in Ginsberg the Court
failed to do this. It failed to recollect not only the proper meaning of the
implied covenant of good faith, but also in the process failed to apply the
proper sense of implication which, in its etymological and so strict
meaning, itself has a primary connotation of to infold, entangle, entwine,
envelop, enwrap, embrace and clasp. To imply is by extension to hold in
ones arms, to engage and not to distance and yet the Court sought here
only to create distance and to disengage from the reasons and routines of
established doctrine, proven methods and settled law. In misunderstand-
ing the history and the doctrine, the court itself slipped dangerously close
to a species of decisional bad faith all of its own.
REFERENCES
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University Press
Baker, J.H. (2001) The Laws Two Bodies. Oxford: Oxford University Press
Buckland, W.W. (1975) A Text-Book of Roman Law. Cambridge: Cambridge University
Press
69
On class actions, see Gilles and Friedman (2012); on adhesion, Radin
(2012); Kim (2013).
Burton, S. (1980) Breach of Contract and the Common Law Duty to Perform in Good
Faith, 94 Harv. LR 369
Campbell, D. (2014) Good Faith and the Ubiquity of the Relational Contract, 77 MLR
460
Collins, H. (2003) Discovering the Implicit Dimensions of Contract in D. Campbell, H.
Collins and J. Wightman (eds), Implicit Dimensions of Contract. Oxford: Hart Publish-
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Corbin, A. (1960) Contracts, 1999 Supplement vol. 3A ss. 622771. Lawrence Cunning-
ham and Arthur Jacobson (eds), St Paul: West Publishing
Doderidge, Sir J. (1631) The English Lawyer. London: More
Fulbeck, W. (1829 [1599]) Direction or Preparative to the Study of Law. London: Clarke
Gilles, M. and Friedman, G. (2012) After Class: Aggregate Litigation in the Wake of AT
& T Mobility v Concepcion, 79 Chicago L Rev. 623
Goodrich, P (1997) Introduction: Psychoanalysis and Law, in Law and the Unconscious:
A Legendre Reader. London: Macmillan
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Whitaker and R. Zimmermann (eds), Good Faith in European Contract Law. Cam-
bridge: Cambridge University Press, 93
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Kim, N. (2013) Wrap Contracts. Oxford: Oxford University Press
McKendrick, E. (2014) Contract Law. London: Macmillan
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Princeton, NJ: Princeton University Press
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in Courts, and the Erasure of Rights, 124 Yale LJ 2804
Schermaier, M.J. (2000) Bona Fides in Roman Contract Law in S. Whitaker and R.
Zimmermann (eds), Good Faith in European Contract Law. Cambridge: Cambridge
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Selden, J. (1868 [1689]) Table Talk. London: Murray
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Summers, R. (1968) Good Faith in General Contract Law and the Sales Provisions of the
Uniform Commercial Code, 54 Va. L Rev. 1145
Summers, R. (2000) The Conceptualisation of Good Faith in American Contract Law: A
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Contract Law. Cambridge: Cambridge University Press, 118
Taylor, Dr J. (1660) Ductor Dubitantium or The Rule of Conscience. London: Roiston
Waterhouse, E. (1663) Fortescutus illustratus, or, A commentary on that nervous treatise
De laudibus legum Angliae, written by Sir John Fortescue Knight. London: Roycroft
17. Technological contracts

Massimiliano Granieri
I. INTRODUCTION
Virtually any aspect of law is influenced by technological progress. This
has been true over time; after all, the very history of mankind witnesses
the interaction between technology and legal institutions. But it holds
true as well in space, because the transnational vocation of technology
sooner or later turns into a challenge for all legal systems and their
ability to govern social relationships that happen within areas subject to
state sovereignty. Contract law is no exception to such impact.1
The massive emergence of technology in the realm of contracts and
contract law has been interpreted mainly in terms of transaction costs
reduction, since technology is instrumental to form agreements in a more
expeditious way, regardless of the distance between contractors.2 In this
respect, the advent of technology in contract law has too often and too
simplistically been considered the same as e-commerce.3
1
The impact that technology has on some forms of property (rather than on
contracts) is probably more straightforward, such as intellectual property, which
is truly the creation of technology and would not exist in nature. The inner link
between contracts and property should immediately prompt the suggestion that
the two aspects are inevitably related, as will become clear in discussing UCITA
(see below).
2
Addressing all aspects of contract law that might be impacted by
technology is beyond the reach of this chapter. For more general contributions
see, inter alia, Kalemi and Ndreka (2012); Wang (2010).
3
An area profoundly affected by technology and related to contract
performance of monetary obligations is that of payments. Many legal systems
have started dealing with the ensuing problems, eventually with the aim of easing
the resort to alternative forms of payment, while granting an adequate level of
reliability for payments made by electronic means. The European Union adopted
Directive 2007/64/EC of the European Parliament and of the Council of 13
November 2007 on payment services in the internal market amending Directives
97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive
97/5/EC [2007] OJ L319/1. The last frontier at the intersection of technology and
the law of payments is the challenge posed to governments by bitcoins.
408
Technological contracts 409
All those may prove very partial views of the phenomenon, but they
have been the major driving forces within legal systems to adjust
traditional contract law in order to support the use of technology in
connection with perfecting and executing transactions. Nevertheless, the
implications of technologys pervasiveness are as profound on contract
law as they are on contracts as social institutions and go well beyond
modifying the way offer and acceptance meet to form an agreement.
If it is true that over time new advancements in technology have
represented a source of betterment for people, it is no less true that the
relationship between technology and contract and its implications for
contract law are not a recent acquisition. Contracting has always been
impacted at several levels by the use of novel techniques and contracts
evolved with the development of modern forms of communication.4 An
immediate consequence of such observation is that the interaction
between technology and contract cannot be described in absolute terms;
it is rather historically contingent. In every age of human development
available technologies have been instrumental to some aspects of
transacting.
We face now an era of extraordinarily rapid technological change and
the emergence of pervasive digital technologies is influencing the mean-
ing of contract more than in the past. It remains to be seen whether the
interaction between technology and contract today is different in nature
from what happened in the past or whether it is just a matter of
magnitude.5 Needless to say, one view or the other has consequences in
terms of regulatory approaches.
4
Looking back to ancient law, technology was trivial but still instrumental
to contracting, as is shown in Monateri (2000) 530, when the author recalls that
under Roman law the stipulatio required formalities to take effect and those
formalities where carried out by technologies: a pair of scales and a piece of
copper, a formula had to be pronounced and certain gestures executed. Symbols,
procedures and technical objects mimic or replace consent; so it was, so it is
now.
5
At a more general level, the issue has been whether new technologies and
the Internet require a radically new regulatory approach that begins to remove
old rules or if existing rules can be conveniently adjusted, since technological
advancements did not introduce anything radical or meaningfully different (a
position that has been referred to as cyberfallacy). See Reed (2000) 2 (The
Cyberspace fallacy states that Internet is a new jurisdiction, in which none of the
existing rules and regulations apply). Famously, Easterbrook (1996) asserted
that passing special legislation for electronic contracting would have been
tantamount to suggesting an unlikely law of the horse. Lessig (1999b) argued
that such law could possibly be justified. Concord, Matwyshyn (2013) (pointing
The most advanced legal systems showed some activism in regulating

electronic contracts, as a synonym of a new model of commerce, when
digital technologies brought about further challenges to traditional con-
tract law. Regulation was pursued with different intensity and for
different reasons, from the attempt to support national industries, to the
need to adapt to international standards, to the demand for consumers
protection. In all instances, regulatory responses have been to some
extent not completely aware of the real impact modern technologies have
on consent as the core component of contracts and on contracts as the
pillar of individual autonomy.6 A further, sometimes neglected, conse-
quence of this proposition is also that the interaction between technology
and contract and its implications for contract law must be seen neces-
sarily as influenced by approaches that are taken by judges, legislators
and governments of different legal systems. Technology and contracts is
a binomial that calls for a compelling comparative analysis, that provides
the observer with a comprehensive view of local responses to common
universal problems and developments posed by the use of technology in
contracts. In contract law, common law and civil law legal families are
probably still the most active contributors in terms of doctrines, prin-
ciples and cases;7 comparative law studies have to move along the lines
drawn by those systems also as far as technological contracts are
concerned.
The rest of this chapter is organized as follows. Primarily, the
interactions among technology, contracts and contract law are briefly
clarified; they will remain problematic nonetheless, but it is necessary to
agree on some basic assumptions before moving to the legal discourse.
out that an inconsistent approach by courts to electronic contracting caused an

undesirable law of the zebra). The analysis of Moringiello and Reynolds (2013)
455, confirms their conclusions that courts recognized that the legal problems
posed by new technology were no different than those that had been presented in
the preceding century and, therefore, judges rejected efforts to change the basic
law of contracts (footnote omitted). On the resiliency of contract law see also,
Kidd and Daugthrey (2000); Sommer (2000), and, for Europe, Kryczka (2005)
155. A partially different view, following an economic perspective, has been
taken by Katz (2004) (arguing that changes at the level of application of law
would be justified by the different way in which transaction costs come out in
electronic settings as opposed to the brick-and-mortar world).
6
As Prof. Farnsworth pointed out, the eminent position of contracts is also
due to their central role for the ordering of market relations, especially in the
heyday of liberalism, and to the symbolic importance of private agreements for
the ideology of individual autonomy; Farnsworth (2006) 901.
7
Ibid. 900.
Secondarily, a comparative overview of sources of law will be provided,

discussing the different approaches that states and international insti-
tutions have followed in regulating electronic contracting with a view to
promoting cross-border transactions. Needless to say, electronic contract-
ing and commerce are primarily subject to the laws created by the same
players of the market; state regulations follow. A specific paragraph will
deal with the impact that technology has had on formation of contracts
and on the mechanism of offer and acceptance in the main legal systems,
from traditional approaches of contract law about exchange of consent to
modern techniques where a contract is formed even though the element
of consent has lost its centrality and is replaced by formalities or simply
presumed. A further paragraph will address what is probably the most
innovative aspect of modern digital economies, where technology is no
longer a mere tool to perfect transactions, but it becomes the subject
matter of the agreement. Such evolution in the landscape of contract law
proves problematic, since technology as property can avoid state regu-
lation and can impose one partys will over the other. This is probably
one aspect that makes scholars doubt the ability of traditional contract
law to adapt to the changing technological scenario and justifies the call
for specific regulations. The last paragraph concludes by envisioning a
possible evolution in the relationship between technology and contract
law and provides some critical remarks regarding overly invasive regula-
tory approaches which some legal systems seem eager to take with
respect to electronic contracting.
II. FRAMING THE ISSUE OF RELATIONSHIPS

AMONG TECHNOLOGY, LAW AND CONTRACT
LAW
Dealing with technology and contract law is by no means an easy task.
Any discourse is premised on the logical interaction between three
different entities of the real world, such as technology, contracts and
contract law. Before moving forward, in a truly comparative perspective,
in the observation of what legal systems have done in regulating
contracts, it would not hurt to improve our understanding of the interplay
of technology, contracts and contract law.
Contracts are primarily social institutions. As such, with obvious
exceptions, they are not a product of authority at central level, but the
result of the free exercise of individual autonomy at the most decentral-
ized level. Individual consent is typically the mechanism that justifies the
binding commitment of the parties and contract law has developed

mostly by hinging on this very element of consent, whether as promise
for consideration or as minds that meet at some point in time and space,
depending on the preferred narrative of contract theory. Contracts as facts
of the real world do have their own spatial and temporal existence and
the exercise of individual autonomy in principle can go a long way
towards abstracting the agreement from any specific legal system and
making it self-enforcing.8
At the broadest level, technology is any means that allows mankind to
reach a given goal.9 In this respect, technology is in principle the
outcome of decentralized individual choices to solve problems, a feature
that makes technology very close to contracts. To the extent that
technology remains available to individuals, and not exposed to some sort
of centralization or unilateral or oligopolistic control, it can be seen as a
form of free expression.10 Also, technology as a fact does not have
intrinsic limitations in terms of space and time, even though states
sometimes aim at controlling the use of technology by trying to
reinstate space limitations (a point that will be discussed further in
paragraph 5). As an expression of human knowledge, technology can be
as boundless as the public domain typically is.
Essentially, contracts can be considered a social technology whose aim
is to solve the problem of allocation of resources among humans. Both
contracts and technology are exposed to a risk, which will be dealt with
in more detail later in this chapter; from the expression of a decentralized
private ordering, they can either end up serving the ends of a narrower set
of individuals and institutions (thus subject to more intense centralized
control) or become unilateral (that is, more concentrated in the hands of
one party over the other11). Both contracts and technology can be subject
8
This is particularly true for business-to-business transactions in trans-
national context, when the aim of the parties is, above all, to neutralize the risks
associated with national regulation and judicial power over their relationship.
9
This is one of the broadest definitions proposed by Arthur (2009) 27.
10
It is not a coincidence that open source software communities tend to see
source code as freedom and oppose any sort of control or centralization of the
technology that, according to their views, can be achieved through traditional
property rights. For an understanding of what property means in open source
see Raymond (2001) 65. The most authoritative view has been expressed by
Lessig (1999a) passim.
11
Examples would be unilateral predisposition of terms and conditions in
standardized form contracts and systems for the management of digital rights.
This topic will be dealt with later in more detail; here are instances in which
to regulation by states, with the purpose of limiting power or, on the

other side, encouraging or supporting decentralized individual choices.
If we intend contract law as part of state law, then the differences with
contract and technology as facts are straightforward. Law (both as
statutes or as the product of courts) is a centralized and authoritative
manifestation of public power, subject to the same limits of state
sovereignty. There might be other important differences, but this is
sufficient to highlight the sheer contrast between contract law, on the one
side, and contracts and technology, on the other. The ambition of states to
regulate contracts has always clashed with the extra-territorial vocation of
commerce. Technology has been instrumental to facilitate communication
and now electronic contracting is one of the most serious challenges to
the authority of nation-states, because Internet technologies make the
exchange ubiquitous and can be used to delocalize contracting activities
with respect to applicable law and jurisdiction.12 Quite paradoxically,
national legislations can be detrimental to electronic contracting, since
fragmentation can increase transaction costs and offset the advantages
technology offers to commerce.
Exploring those interactions is a premise to understanding the regula-
tory efforts of states and, first and foremost, the initiatives of model laws
that the United Nations Commission on International Trade Law has
undertaken in the last 20 years, when digital technologies became the
technology and contracts, in principle available to both parties, are in fact used
by one of them to limit the freedom of the other.
12
In Europe, Regulation (EC) 593/2008 of the European Parliament and of
the Council of 17 June 2008 on the law applicable to contractual obligations
(Rome I) [2008] OJ L177/1 provides default rules on applicable law to
consumer contracts and in this respect art. 6.1 specifies that it applies to contracts
used by a professional that by any means (thus, including electronic means)
directs her commercial or professional activities to several countries. Jurisdic-
tional matters are dealt with under Council Regulation (EC) 44/2001 of
22 December 2000 on jurisdiction and the recognition and enforcement of
judgments in civil and commercial matters [2001] OJ L12/1, which is being
replaced by Regulation (EU) 1215/2012 of the European Parliament and of the
Council of 12 December 2012 on jurisdiction and the recognition and enforce-
ment of judgments in civil and commercial matters [2012] OJ L351/1; Regu-
lation 1215/2012, art. 17(1)(a) (corresponding to Regulation 44/2001, art.
15(1)(c)) also refers to any means. Of course, delocalizing contracts through
Internet technologies is also a way to escape prohibitions and trade in unlawful
objects; it is the case of counterfeited goods, as well as the case of the black
market that uses the backbone of the Web (actually the so-called deep Web) to
enable trafficking. One example of such unlawful online marketplace is Silk
Road, also known as the Amazon.com of illegal drugs).
dominant technological paradigm and unfolded a number of problems

and opportunities. Furthermore, the differences in nature between tech-
nology and contract law will help us understand the challenges that
technology is bringing to the world of contract.
III. NATIONAL SOURCES AND GLOBAL

CHALLENGES: A NEW LEX MERCATORIA FOR
ELECTRONIC CONTRACTING?
Regulation of electronic contracting has followed a parallel pattern at
international as well as at domestic level. The common trait to all forms
of legislative intervention has been the idea that there were legal
obstacles at national law level that would prevent the full exploitation of
the opportunities offered by electronic contracting, particularly in trans-
actions involving foreign parties. Laws and model laws have been
adopted to facilitate electronic contracting. The need to occasionally fix
some aspects and to ease the resort to technology for contracting explains
why in most cases legal systems have followed piecemeal solutions,
rather than holistic approaches; old rules have been amended or new
rules introduced (particularly in the field of offer and acceptance) only
to the extent it was necessary to facilitate electronically mediated
exchange.13
At the same time, the realm of electronics and the Internet has been
regarded initially by market players as an area suitable for strong
self-regulation and freedom from state intervention, one remarkable
example being that of standard setting for electronic communications and
for the creation of the information infrastructure that makes the Internet
possible.14 The efforts of firms, developers and technology gurus in
building a stateless domain subject to self-regulation have been a
common trait of the market in the last decades and has followed an even
earlier pattern aimed at the spontaneous creation of what is now called
the new lex mercatoria.15
13
Referring to Canadian legislation, Savirimuthu (2005) 116, notes the
enactment of such regulations reflects the growing domestic and international
consensus among policymakers and industry that traditional ideas like agree-
ment, autonomy and consent cannot remain unaffected by the increasing inter-
action between technology, law and society (footnote omitted).
14
Among others see Reidenberg (1998) 553; Uy (2003).
15
There can be different views about the intensity of deregulation in
cyberspace and one of those could be anarchy, as advocated by one of the radical
Although there has been a growing interest and excitement by national

legal systems worldwide to regulate and facilitate electronic contracts,
the main actors remain common law and civil law countries, epitomized
(with a great deal of approximation) by the United States and Europe,
that have followed an intuitively different approach in the regulation of
contracts, although solutions to specific problems (e.g., formation of
contracts or validity of digital signatures) may occasionally converge. All
systems have been influenced to a certain extent by the actions of
international agencies.
One of the first signs of regulatory activism came from the United
Nation Commission on International Trade Law (UNCITRAL), adopting
in 1996 the Model Law on Electronic Commerce as soft law.16 The 1996
Model Law (and its amendment in 1998) is the first instance in which a
legislative text adopts the principles of non-discrimination, technological
neutrality and functional equivalence, that later became the source of
inspiration for a number of countries.17
A further Model Law followed in 2001, on electronic signatures, to
enable and facilitate the use of electronic signatures by introducing the
principles of technical equivalence between electronic and handwritten
signatures.18
Importantly, through the impulsion of the United States given to
UNCITRAL, the 1996 Model Law and its principles came to be the basis
of the Convention on the Use of Electronic Communications in Inter-
national Contracts, adopted by the General Assembly of the United
gurus of the Internet; see Barlow (1996). As far as open source communities are
concerned, see Marrella and Yoo (2007) 813 (discussing this new form of private
ordering and its interdependencies with state laws). Quite interestingly, an area
that is left apparently uncovered by state legislation is that of consumer-to-
consumer contracts, arranged by online platforms. A first contribution to the
understanding of problems and solutions arising in that context can be found in
Guadamuz Gonzlez (2003).
16
For an account of international sources of electronic contracting
see Frignani and Torsello (2010) 247 ff. More specifically, on the work of
UNCITRAL, Herrmann (1999) 45.
17
For a complete list of countries that implemented the Model Law and the
subsequent UNCITRAL Convention see UNCITRAL (2009) 38, n. 88; for the
Philippines, see Uy (2003) 224. Most remarkably, the work of UNCITRAL
formed the basis for US legislation; see Poggi (2000) 238; Winn and Haubold
(2002) 578 and below.
18
The UNCITRAL Model Law on Electronic Signatures was adopted on
5 July 2001.
Nations on 23 November 2005.19 The purpose of the Convention is clear

in the Preamble: uniform rules would remove obstacles to the use of
electronic communications in international contracts and would enhance
legal certainty and commercial predictability. The Convention was
deemed necessary to overcome a gap in the Convention on the Inter-
national Sale of Goods, that would otherwise be applicable also to
electronic transactions; its article 13 referred to writing as including
telegram and telex, but not other, more sophisticated and technological
means.20
Importantly, those first legal sources remain at international level and
represent a guidance for states to adjust their legislation and achieve
some level of uniformity as far as cross-border transactions are con-
cerned. The fortunate strategy of the drafters of the UNCITRAL legisla-
tion was to follow a policy of technological neutrality, just providing
legislative criteria to establish a generic functional equivalence between
traditional handwritten signatures and the new electronic ones.21 In this
way, a change in technological paradigm does not make the legislation
obsolete.
A. European Normative Framework
The European Union and the United States each followed original, and
only partly converging, approaches, which have also been influenced by
the institutional peculiarities of each legal system.22 A final equilibrium
19
See Boss and Kilian (2008); Martin (2008) 471; Fiorelli (2006). The
Convention was opened for signatures by all states from 16 January 2006 to 16
January 2008. Formally it has been signed and accessed by 20 states (not the
United States nor current European Member States), among which are China, the
Republic of Korea, the Russian Federation and Singapore. It was supposed to
enter into force six months after the date of deposit of the third instrument of
ratification, which happened on 1 March 2013 (art. 23(1)). For an illustration of
the situation in the Far East, see Seng (2008). For a recent overview of the
situation in South Africa, see Srivastava and Koekemoer (2013).
20
For a detailed explanation of the reasons that led to the 2005 Convention
in light of the Convention on International Sale of Goods, see Hill (2003); Smith
(2007).
21
For a comprehensive comment on the UNCITRAL legislation on elec-
tronic signatures, see UNCITRAL (2009) 44.
22
For the purposes of this chapter, the European Union will be dealt with as
a legal system per se, even though national legal systems of Member States
retain a good deal of importance in contract law and in electronic contracting. So
far, indeed, harmonization efforts have not produced bodies of law that replace
has not been reached yet; in particular, Europe is still experimenting with
different sources.23
The most remarkable difference in the regulatory approaches of Europe
and the United States is in the purposes of legislation. European efforts to
provide electronic contracting with new rules are led by a heterodox goal,
one that has been a leitmotiv of much of the European policies, that is to
say, the creation of an internal market.24 Because spontaneous forces of
demand and supply per se have not been able to cause market integration
on the European territories, institutions believed that transactional oppor-
tunities offered by the use of technology in cross-border exchanges
would be instrumental to that goal but that, at the same time, private
autonomy itself needed support.25 As has been pointed out, [p]opular
sentiment in the US by contrast, appears more skeptical both about the
frequency of market failures and whether the likely benefits outweigh the
costs when the costs of unintended negative consequences of regulatory
intervention are taken into account.26
However, harmonization to promote market integration was not the
exclusive policy of European legislation, since the internal market is a
space where consumers must receive a high level of protection in
commercial transactions.27 Thus, legislation on electronic contracting is
partly soaked with, although not exhausted by, mandatory consumer
protection rules. As a consequence, European contract law is now biased
national contract laws. The process of European integration requires keeping an

eye on the national dimension, but it is clear that significant changes happen
because of the input of European institutions.
23
In general, it seems that European institutions are relentless in trying to
correct market failures, sometimes exaggerating this dimension of European
integration and indulging too much in overregulation.
24
Poggi (2000) 248.
25
As Winn and Haubold (2002) 567, have noted, electronic commerce
traverses national boundaries even more easily than traditional forms of cross-
border trade.
26
Winn and Bix (2006) 184; Kierkegaard (2007) 2. Winn and Haubold
(2002) 56869, have suggested that the laissez fair or self-regulatory approach
favored in the US and the more conventionally regulatory approach taken in the
European Union may also reflect in some measure US enthusiasm for new
technology and the much more ambivalent popular attitude toward innovation in
the European Union (footnote omitted).
27
See Treaty on the Functioning of the European Union, Art. 114(3). This
provision was considered also the legal basis for the adoption of the Common
European Sales Law (see n. 52 below and accompanying text), although a
number of Member States raised concerns as to its appropriateness.
in many respects and has caused national laws to lose their comprehen-
sive dimension (and clarity) centered around a monolithic figure of
contract. Consumer transactions are separated from those between busi-
nesses, while in both instances there must be consistency with the goal of
market integration, and with other values, such as privacy and funda-
mental rights. Under such an institutional setting, drafting comprehensive
and consistent legislation would be an extremely complex task in
Europe.28 The regulatory approach remains fragmented and the many
rationales for statutory intervention do not facilitate the goal of creating a
general framework.29
Undeniably, to the extent that the use of technology by one party alters
the normal dynamics of negotiation to the detriment of the other (in
hypothesis, the consumer), technology becomes less decentralized and
more unilateral, thus contradicting its alleged neutrality. Departure from
this basic dimension can justify legislative or judicial intervention. Again,
in this respect European institutions found a reason in the digital
environment to enhance the regulatory framework and protect consumers,
where US courts mostly rely on traditional doctrines of common law,
such as unconscionability.30 In other words, it appears that European
institutions have been skeptical about the ability of traditional contract
law doctrines alone to accommodate the needs of consumer protection in
the digital world. To the contrary, in the United States it has been
assumed that, with few exceptions, common law has the required
flexibility to deal with problems arising out of modern technologies,
including those caused by consumers inexperience and vulnerability.31
Actually, as will become clear in addressing the issue of contract
formation (see below), whenever the US institutions sought a massive
reform of contract law to adjust it to the digital world, the results were
poor.
European legislation concerning electronic contracting is made up of
two specific Directives and a body of originally diverse rules contained in
other Directives.32 The first is the so-called Directive on electronic
28
Winn and Bix (2006) 181. See also Martin (2008) 500.
29
A critical discussion of the rationale inspiring much of the European
contract law regulation can be found in Pardolesi (2014).
30
For the discussion about use of (procedural) unconscionability doctrine to
electronic contracting in the United States see below.
31
See Moringiello and Reynolds (2013) 456 (We believe that, from a legal
standpoint, electronic contracting is no different from face-to-face contracting).
32
Winn and Bix (2006) 181.
commerce.33 The second one is the Directive on electronic signature.34

The remainder of the framework included pieces of legislation that
pre-existed and that apply equally to electronic contracting;35 they
include at least the Directive on contracts negotiated away from business
premises,36 the unfair contract terms Directive37 and the distance selling
Directive.38 In an effort to improve the regulatory framework to unleash
33
Directive 2001/31/EC of the European Parliament and of the Council of
8 June 2000 on certain legal aspects of information society services, in particular
electronic commerce, in the Internal Market [2000] OJ L178/1. The Directive has
been implemented in all Member States, including the United Kingdom with the
Electronic Commerce (EC Directive) Regulations 2002, SI 2002/2013.
34
Directive 1999/93/EC of the European Parliament and of the Council of
13 December 1999 on a Community framework for electronic signatures [2000]
OJ L13/12. The main purpose of the Directive is to allow parties to use electronic
signatures when forming contracts. It introduces a distinction (unknown to US
legislation) between electronic signature and advanced electronic signature
(Kierkegaard (2007) 4546). See Winn and Haubold (2002) 587. For a compara-
tive reading of the Directive and a focus on EU, German and Italian law, see
Troiano (2005). Apart from that, the Directive does not cover aspects related to
the conclusion and validity of contracts or other legal obligations where there are
requirements, as regards form, prescribed by national or European Union law,
nor does it affect rules and limits, contained in national or European Union law,
governing the use of documents (art. 1(2)). In this respect, its impact on
electronic contracting is limited.
35
Electronic commerce in Europe is not taking place in a lawless space or
legal vacuum that would have to be filled by broad legislation, as made clear
by Winn and Haubold (2002) 573.
36
Directive 85/577/EEC of 20 December 1985 to protect consumers in
respect of contracts negotiated away from business premises [1985] OJ L372/31.
37
Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer
contracts [1993] OJ, L95/29. The Directive has been a cornerstone in the
harmonization of consumer contract law in European countries against unfair
terms and it has been applied nationally to online contracts. See, e.g., UFC-Que
Choisir v. AOL France, Tribunal de Grande Instance de Nanterre, judgment of
6 February 2004, affirmed by the Cour dappeal Versailles, 15 September 2005,
in JCP IV, 150905 (AOL online standard terms violated French law implement-
ing the Directive). Several legal systems have statutes concerning consumer
contracts that would apply to online contracting; for an account see Winn and
Bix (2006) 184. A detailed reconstruction of the legal background and of the
historical passages that led to the adoption of Directive 93/13/EEC is offered by
Maxeiner (2003) 131.
38
Directive 97/7/EC of the European Parliament and of the Council of 20
May 2007 on the protection of consumers in respect of distance contracts [1999]
OJ L144/19. This Directive was originally introduced to favor electronic com-
merce, which takes place when consumers enter a distance selling contract by
the potential of electronic contracting, the EU institutions have passed the

so-called consumer rights Directive.39 This new body of law in fact is just
a consolidation of the acquis mentioned above, inspired by the purpose
of achieving a high level of consumer protection and the full functioning
of the internal market.
The electronic commerce Directive has a scope broader than merely
regulating contracts in the digital market. It is aimed at removing
obstacles and creating the internal market for information society ser-
vices, a formula that includes, but does not exhaust, electronic contract-
ing.40 The Directive reaffirms its facilitative nature and the role of
technology when it states that the development of information society
services within the area without internal frontiers is vital to eliminating
the barriers which divide the European peoples.41 In this respect, the
Directive denotes a positive bias for technology, since facilitative contract
law rules imply leaning in favor of electronic contracting.
The definition of information society services includes a number of
economic activities that take place online, in particular selling goods.42
Such a broad definition, provided by the same Directive, has significant
implications for general contract law. Sale of goods online becomes a
service by the very words of the legislator. Contractual types in the
digital economy lose their identities with unpredictable consequences,
means of technology for communication at a distance (technology here has a

broad meaning, including phone calls or email).
39
Directive 2011/83/EU of the European Parliament and of the Council of
25 October 2011 on consumer rights [2011] OJ L304/64.
40
See, specifically, art. 1 of the Directive, that approximates national
provisions on information society services, establishment of service providers,
commercial communications, electronic contracts, liability of intermediaries,
codes of conduct, out-of-court dispute settlements, court actions and cooperation
between Member States.
41
Recital (1).
42
In Google France SARL, Google Inc. v. Louis Vuitton Malletier SA and
others (2010), the Court of Cassation, judgment of 20 May 2008, asked the Court
of Justice of the European Union (CJEU) whether Google Search fell within the
definition of an information society service. In Recital 17, the Directive makes
clear that the definition of information society services is one already existing in
the European Union acquis and covers any service normally provided for
remuneration, at a distance, by means of electronic equipment for the processing
(including digital compression) and storage of data, and at the individual request
of a recipient of a service. Joined Cases C-236/08 to C-238/08 Google v. Louis
Vuitton, CJEU, judgment of 23 March 2010, held that the rules of Directive
2001/31/EC (see n. 33 above) also apply to an Internet referencing service
provider.
since national contract law and contract doctrines at least in civil law
countries are still based on types as selectors of substantive disciplines.43
Regulation has its unintended consequences and this may well be one of
those cases in which the piecemeal approach followed at European level
flies in the face of national legislation.44
Importantly, the limited goal of the Directive does not justify full
harmonization of contract law in Europe.45 It remains a sectorial dis-
cipline that relies, implicitly or expressly, on national legislations for all
aspects of contracts and, in this respect, as will become clear later in this
paragraph, there is a resemblance to the US approach of UETA and
E-Sign.
The core provisions of the Directive lie in three articles (911) grouped
under section 2 (Contracts concluded by electronic means) of Chapter
II. As the title of the section makes clear, these provisions relate to the
conclusion of the contract, which seems to be the moment most affected
by the advent of technology. The general requirement is that Member
States have to ensure that their legal systems allow contracts to be
concluded by electronic means.46
It appears that the main technique to protect consumers (article 10(1)
provides that when parties are not consumers such provisions can be
omitted by contract) is to require the service provider to give a minimum
set of information,47 in a way that is clear, comprehensive and
43
As to unpredictable consequences due to blurring boundaries between
contractual types see C-128/11 UsedSoft v. Oracle International, CJEU, Grand
Chambre, judgment of 3 July 2012 (also published in Foro italiano, 2012, IV,
377), where the Court held that the exhaustion effect is also produced when the
user has paid to download a copy of a software product and her rights have
unlimited duration. The same problem has been raised by some courts in the
United States, whether a contract that a vendor calls a license should rather be
a sale, which would clearly demand the application of art. 2 of the Uniform
Commercial Code; see Softman Products Co. v. Adobe Sys., Inc., 171 F. Supp.
2d 1075 (C.D. Cal 2001). See also Winn and Bix (2006) 180 (n. 25 and
accompanying text).
44
Criticism of the piecemeal approach followed by the Directive has been
expressed by Riefa (2009) 6.
45
As Winn and Haubold (2002) 7 have pointed out, this directive is not
aimed to be the comprehensive and final regulatory framework for electronic
contracts in Europe.
46
Some scholars have referred to such provisions as contract law neutral,
meaning that they do not interfere directly with existing national systems of
general contract law (Winn and Haubold (2002) 574).
47
C-298/07 Bundesverband der Verbraucherzentralen und Verbraucherver-
bnde Verbraucherzentrale Bundesverband eV v. deutsche internet versicherung
unambiguous.48 Importantly, the information must be provided prior to the

order being placed by the recipient,49 a requirement that affects particular
kinds of electronic contracts (see below).50 The duty to provide information
does not apply when contracts are concluded exclusively by exchange of
electronic emails or by equivalent individual communications.51
The last frontier of European regulation efforts was represented by a
highly controversial regulation that went under the name of the Common
AG, CJEU, judgment of 16 October 2008, confirmed that in order to be able to

respond to consumers promptly, a company may need to provide other methods
of communication beyond its postal and email address. A contact us form
without also providing an email address is not sufficient. For a comment on the
decisions, see Lorenz (2009); Melison (2009). For discussion and criticism
regarding the interpretation given by the CJEU to the information requirement
set forth by the Directive see Riefa (2009) 35.
48
See art. 10(1). The service provider must inform the consumers also of
the existence of codes of conduct (art. 10(2)), a tool that has been given
centrality in the Directive as an expression of partial self-regulation in the
industry. As Kierkegaard (2007) 18, points out, these are prior information
requirements.
49
One important thing to note is that the European legislator resorts to the
term order, which is not technical contract law terminology. Its possible
meaning is both offer or invitation to treat and the final choice has been left to
national legislations. On the possible confusion caused by the use of terminology
(justified by the need to reconcile civil law and common law traditions, absent a
sort of common vocabulary) see Riefa (2009) 30.
50
Since the Directive does not stipulate a specific sanction for violation of
informational duties under art. 10, Ramberg (2001) 439, suggests that it is left to
the contract law of the Member States to decide whether an agreement has been
formed on the basis of the information actually made available by the service
provider. The kind of disclosure requirements of the Directive are more specific
than simple mandatory website disclosures (duty to keep the contractual text
accessible at all times on a website, reachable through a hyperlink). Hillman
(2006) 854, has argued that one possible side effect of mandatory disclosure is
not the increased cost for vendors (that is marginal and would be eventually
passed on to consumers), but the enforcement of terms that would have been
otherwise held unconscionable under the doctrine of procedural unconscionabil-
ity, merely because they are made accessible to consumers ex ante and cannot be
held to be surprising. For the opposite view (supported by empirical observation),
that retailers design Web sites balancing between the benefits of extracting
purposeful assent and the burdens of complicating the purchase process, see
Mann and Siebeneicher (2007).
51
This exemption is made explicit in art. 10(4) and it is repeated in art.
11(3) about the placement of the order. In case of email, [t]he rationale is that
necessary information can be asked easily in case of an individual consumer
(Kierkegaard (2007) 20).
European Sales Law (CESL).52 To some extent, the pattern of adoption

that the CESL used to follow resembles very much that of the Uniform
Computer Information Transaction Act (UCITA) in the United States; at
least, it moved from seemingly similar policy premises.53 The CESL was
not directly aimed at electronic contracting; it was rather an ambitious
attempt to introduce a truly European contract law for sales.54 The
Commission took the opportunity of the proposed regulation to harmon-
ize sales law for Europe, including contracts concluded online or for the
purchase of digital content.
After a very intense debate and widespread criticism and political
opposition, the proposal for a CESL was dropped.55 Certainly, the choice
of the Commission to make the CESL an optional instrument, that would
have not replaced national legislations but would add to the existing
options that contracting parties have to regulate their contracts, was one
of the reasons for criticism.56 The back-up plan of the European after the
52
Pongelli (2013); Aubert de Vincelles (2011); Lando (2011).
53
In the flagship initiative document Europe 2020: A Strategy for Smart,
Sustainable and Inclusive Growth, COM(2010)2020 final, at 21, the European
Commission manifested the need to adapt EU and national legislation to the
digital era so as to promote the circulation of content with high level of trust for
consumers and companies. The Commission seized the opportunity of the CESL
to force the introduction of a discipline of certain contracts relating to digital
content in a body of rules aimed at governing sales of goods.
54
For a review of the initiatives of the European Union in the field of
contract law, see Kryczka (2005) 157; Hondius (2011).
55
The European Parliament has approved the draft on 26 February 2014,
with changes to the original proposal of the Commission, that had been
introduced for the first time in 2011. The proposal has to be approved by the
European Council to be passed into a Regulation, but there has been resistance
by a number of national Parliaments, including the Belgian, the German, the
Austrian and the British, on the ground that the initiative is not consistent with
the principle of subsidiarity or lacks legal basis. Also, associations of consumers
and industries have expressed strong criticism of the proposed Regulation, at
least in its proposed form. Scholars have also voiced their dissent, on both sides
of the Atlantic. US contributions have emphasized the over-regulatory attitude of
the European institutions. Much criticism has been expressed in this respect; see
Ancel et al. (2011). For a review of the neo-classical critique of the CESL
proposal coming from US scholars see Caruso (2013) 486.
56
This legal solution was proposed by the Commission to reach the highest
level of harmonization without relying on the implementation by Member States,
on the one side, and without replacing authoritatively national legislations on
contracts, on the other. Member States would have been allowed to make the
future regulation applicable also to entirely domestic transactions. The legal
position of European regulations as sources of law also solves the typical
proposed regulation was withdrawn consisted of two draft directives that

were adopted in December 2015.57 One addresses certain aspects con-
cerning contracts for the supply of digital content and the other is aimed
at certain aspects concerning contracts for the online and other distance
sales of goods. Both drafts borrow heavily from the text of the CESL, but
the European Commission has given up the general approach and the
optional mechanism.
B. United States: Federal Regulation and Model Laws
The minimalist approach of the United States in regulating electronic

contracts produced one model of uniform law and one federal statute.
When a more structured and comprehensive approach was proposed, a
new model law (the Uniform Computer Information Transaction Act,
UCITA) came out, but its history (one that is too famous and notorious to
be recalled here in detail58) informs us that the advent of digital
technology was disruptive indeed, but not as much as to justify the
adoption of a radically new regulatory framework. Looking at that piece
of legislation in hindsight can reveal a lot more about how the common
law (particularly in the United States) is showing resilience to tech-
nological change.
The Uniform Electronic Transaction Act (UETA) was adopted in 1999
as a Model Law for the States of the Union, to remove any doubt that
contracts concluded by electronic means could satisfy the Statute of
Frauds.59 It was shortly followed by the Electronic Signatures in Global
problem of international private law; for a thorough discussion on all these

issues, see Rhl (2012). On the opt-in mechanism, see also Hesselink (2012).
57
See Proposal for a Directive of the European Parliament and of the
Council on certain aspects concerning contracts for the online and other distance
sales of goods, COM/2015/0635 final, and Proposal for a Directive of the
European Parliament and of the Council on certain aspects concerning contracts
for the supply of digital content, COM/2015/0634 final, both introduced on
December 9, 2015, by the European Commission.
58
On UCITA in general and on its tortuous adoption (starting from revised
UCC, art. 2B): Maxeiner (2003) 123. More specific works include Chow and
Kinstlick (2001); Nimmer (2000). UCITA has received much attention also from
comparative law scholars for its innovative content in terms of creation of access
contracts as a possible new type of agreement for digital environments; see,
among others, Pardolesi and Palmieri (2002).
59
Uniform Electronic Transactions Act, ss. 121, 7A ULA 211 (1999).
Nimmer (1996) 227, reports that the uncertainty came from the fact that the
UCC, s. 1-201(46) includes, in the definition of writing, printing, typewriting
and National Commerce Act (E-Sign),60 a federal statute that adopted the
most significant provisions of UETA.61 None of them has general
contract law ambitions; they remain sectorial and leave questions of
formation to the common law of contracts.62
Under UETA (but the same principles apply to E-Sign), a record or
signature may not be denied legal effect or enforceability solely because
it is in electronic form. Furthermore, a contract may not be denied legal
effect or enforceability solely because an electronic record was used in its
formation. If a law requires a record to be in writing, an electronic record
satisfies the law. Also, if a law requires a signature, an electronic
signature satisfies that law.
Those basic provisions found favor with many states, as they were
modestly aimed at facilitating the use of technology in transactions,
without altering the fundamental structure of contract law at national
level.63 As has been vividly pointed out, [a]lthough courts would have
or any other intentional reduction to tangible form. According to Winn and

Haubold (2002) 581, states tried to repeal the Statute of Frauds by enacting
UETA with uneven success, which explains the formation of the occasional
majority which led to the approval of E-Sign (see n. 63 below). A vigorous
opposition to the abolition of the Statute of Frauds came from the software and
information industry, allegedly for the difficulties that they would have encoun-
tered in enforcing verbal contracts, such as software licenses for multiple copies
(Nimmer (1996) 229).
60
Electronic Signatures in Global and National Commerce Act , 15 USC
ss. 70017031 (2006). In signing the law, US President Bill Clinton was the first
to use the electronic signature to pass a Bill into law. General comments on the
two statutes can be found in Wittie and Winn (2000); a detailed description of
E-Signs context is provided by Hays (2001). See also Balloon (2001) (suggest-
ing that regulation of electronic contracting should be at federal level rather than
at state level). Both laws are based on the 1996 Model Law of UNCITRAL:
Martin (2008) 472.
61
E-Sign is more protective towards consumers, as pointed out by Kierke-
gaard (2007) 15. Scholars agree that E-Sign is a bad copy of UETA; it was
enacted by an occasionally formed coalition of political forces that wanted to
exploit the momentum at all costs and rushed to pass the law. The purpose was to
address the issues posed at federal level by the UNCITRAL Model Law on
Electronic Commerce. See Winn and Haubold (2002) 578.
62
Moringiello and Reynolds (2013) 460. Kierkegaard (2007) 13.
63
This also explains why, unlike the e-commerce Directive, the UETA does
not contemplate a checklist of information that must be provided ex ante to the
consumer (Kierkegaard (2007) 21). The institutional constraint to respect con-
tract law at state level explains the peculiar (and troubling) mechanism of
preemption that regulates the relationship between E-Sign and inconsistent
UETA provisions: if states had laws that were inconsistent with E-SIGN,
probably gotten there on their own, the statutes were helpful in moving
the process along. The important point is that the two laws [i.e. UETA
and E-Sign] were quick fixes to a readily understood problem.64
UCITA was an attempt to provide a comprehensive discipline to
contracts of the information age and to validate certain standard terms in
computer information licenses (such as click-wrap contracts, which will
be discussed below).65 The basic assumption was that some features of
the digital economy are so radical as to require a substantial rewriting of
contract law in the United States, starting from article 2 of the Uniform
Commercial Code, which deals with sales of goods in a changed world
where the market is more inclined towards providing services and
access.66
The project of UCITA (that started as an expansion of the Uniform
Commercial Code with the addition of article 2B67) was carried forward
by NCCUSL and finalized in 1999, but the American Law Institute left
the project before its approval and later proposed the Principles of the
Law of Software Contracts.68 Not surprisingly, only two states adopted
it.69 Quite surprisingly, at least four states adopted anti-UCITA bomb
shelter laws to prevent vendors transacting business in those states from
opting into UCITA based on the states where it is in force.70 Criticism
E-SIGN would preempt those laws, establishing national uniformity on the basis
of federal law, but if states instead passed the original uniform version of UETA,
then E-SIGN would not preempt state law, but instead be superseded by the
states enactment of UETA; Winn and Haubold (2002) 579 (footnote omitted);
see also 1 Willinston on Contracts s. 4:5 (4th edn, 2014), and Buckley et al.
(2013) 8:2.
64
Moringiello and Reynolds (2013) 490 (footnotes omitted). This also
explains the good success of UETA, which was adopted by 48 states. See also
Winn and Haubold (2002) 569.
65
Maxeiner (2003) 111.
66
See Nimmer (1996) 23233.
67
For a description of the process of revision of art. 2 see Speidel (2001).
68
Software Contracts: as Adopted and Promulgated by the American Law
Institute at Washington, DC, 19 May 2009, St Paul, MN, 2010. For a comment
on an otherwise little considered project see Hillman and ORourke (2010).
69
Maryland and Virginia. In 2003 NCCUSL suspended its efforts to obtain
adoption of UCITA by the states.
70
Winn and Bix (2006) 180, n. 28. The four states are Iowa, North Carolina,
West Virginia, Vermont; see 1 Williston on Contracts s. 6:41 (4th edn, 2014).
has been widespread and there were also questions whether the final text
reflected established industry practices.71
As scholars pointed out, when a change of the common law touched
upon formalities, statutes passed swiftly and their adoption was success-
ful; they were actually solving the problem created by state enactment of
numerous signature statutes based on a variety of encryption standards
and specific technologies that would fall short of facilitating interstate
transactions. Common law resisted when changes concerned formation.72
IV. TECHNOLOGY AS A TOOL AND AS CONTENT

One of the areas of contract law in which technology has always had an
impact is that of contract formation, where technology is a tool to transport
parties intent along distances when contracting does not take place in a
usual face-to-face situation.73 And since distance creates temporal lags,
contract law defines, among other things, not only how, but also when and
where an agreement is reached for a number of consequences, such as
contractual liability, applicable law and jurisdiction.
The law of contract formation has two souls. One is technical and is
more apparent. As mentioned, it provides answers (and in this respect,
answers can differ among legal systems) to a problem of the real world,
where distance and time matter. The other soul is ideological and more
intimate. In principle, contracts are forms of exercise of individual choice
in democratic, decentralized societies. When parties wills meet, indi-
viduals have committed their freedom to the transactional goal, thus
voluntarily limiting their courses of action in exchange for something.
Contract law is premised on such normative values that now define the
legitimacy of the private ordering regime.74
71
An account of the several critiques is provided by Moringiello and
Reynolds (2013) 464. One of the most authoritative voices against UCITA and its
attempt to redefine contract law was Lemley (1999) (discussing the enforcement
of click-wrap agreement as substantial departure from the common law of offer
and acceptance).
72
Moringiello and Reynolds (2013) 457. According to Winn and Haubold
(2002) 570, absence of broad consensus on how US contract law should be
modified and adapted to electronic contracting also explains the lack of consist-
ency in case law.
73
See Moringiello and Reynolds (2013) 461 (Contract law developed in a
world of face-to-face exchanges among persons who knew one another, at least
by reputation; footnote omitted).
74
Savirimuthu (2005) 110.
Technology has been universally considered a solution to the problem

of forming contracts and to facilitating the exchange of promises,
shortening the temporal lag, limiting risks of communication, automating
responses and reducing transaction costs. In its turn, contract law has
provided incremental answers to problems posed by new technologies.75
What is less straightforward is that the more technology has made the
formation of a contract easier and quicker, the more consent, as the
building block of private ordering, has lost its original meaning and has
been replaced by formalities; there can be a trade-off between use of
technology and consent, but the bottom line is that their very presence is
inversely correlated, as is shown historically by the fact that consensual
contracts supplanted over time agreements with formalities.76
It has been said (although in a different context) that formalities in
contracts have two basic functions. They mark the end of negotiations,
and they provide evidence for the contract and its terms.77 The import-
ance of formalities can be exaggerated but it cannot be seriously affirmed
conceptually that within formalities there is consent and will. They only
convey a meaning of offer or acceptance that is conventionally defined
and accepted. Some gestures, and the language itself, are meant to
represent will. They symbolize it. But they are not will themselves.
The challenge to all legal systems, then, is to understand to what extent
the enforcement of mechanisms of contract formation and formalities that
forgo (even only presumed) parties will is consistent with the basic
principles of contract law about individual freedom and choice, a chal-
lenge that became more difficult with the advent of digital technologies.78
75
Reed (2000) 175. At a more general level, Winn and Bix (2006) 176
(The regulation of electronic contracting is primarily a matter of using existing
Contract Law ruledirectly, or with some extension; footnote omitted). Accord-
ing to Moringiello and Reynolds (2013) 453, so far US contract law has handled
the changes imposed by technology very well.
76
As Nimmer (1996) 214, points out, as human involvement increases, the
time, cost and speed advantages of the electronic system are lost and the system
can become merely an advanced technology variation of a telephone call.
77
Monateri (2000) 525 (discussing the role of formalities in the Roman
stipulatio).
78
Savirimuthu (2005) 125, is clear in this respect: the phrase meeting of
the minds is a distraction. The real question that the use of the online
communications systems pose[s] is this: what constitutes assent in the cultural
and economic environment of software? (the argument is used by the author to
support his view that code is a replacement for consent and it embeds values).
A. From Post to Instant Messaging
Legal systems have responded to the problem of contract formation

between distant parties in different ways, and the two main solutions
the mail box (or dispatch, or postal acceptance) rule and the receipt rule
have been a bonanza for generations of comparative law scholars,
entailing a never exhausted debate.79 Legal systems have been affected
by home bias and have characterized their own choice as the rule and
that of others as the exception.
A number of technical solutions has appeared in the history of
contracts for the formation of agreements when parties are not in the
same place at the same time. Some of those solutions have been
completely replaced over time, some others just added to the previously
existing toolbox. Mailing was followed by the telegraph and then by
telephone;80 subsequently telex and telefax appeared.81 Eventually, email,
Web interactions and instant messaging came on the scene with the
advent of the digital infrastructure represented by the Internet. Each time
a new technology appeared, the issue was to decide whether pre-existing
contract law rules could accommodate the needs of commerce and ensure
an acceptable level of certainty in commercial practice.82
79
All comparative law scholars know that the experiment of studying
comparatively legal institutions and rules using a factual approach to unveil the
common core of legal systems was started by Rudolf Schlesinger at Cornell Law
School investigating (not by chance) the area of contract formation. The fruits of
that seminal intellectual effort are now in Schlesinger and Bonassies (1968).
After all, the first volume of Gorla (1955) also was mostly concerned with
formation of contracts. From one of the authors that were involved in the Cornell
seminars, see Macneil (1964).
80
The mail box rule was extended consistently to contracts made by
telegraph, including those situations in which the offerors burden under the rule
is at its zenith that is, including situations in which the acceptance message is
ultimately lost in transit and the offeror, unaware that a contract exists, is
nevertheless legally bound to perform; Rawls (2009) 205 (footnote omitted).
81
Most English courts applied the receipt rule to transactions carried out by
telephone/telex: Entores Ltd v. Miles Far E. Corp. [1955] 2 Q.B. 327 (AC)
(stating that in such cases parties are at all intents and purposes in each others
presence).
82
An example of shortcomings of rapid technological change is that of
non-oral modification clauses (NOM) which in contracts typically require that
any change of a written agreement must be in writing to be valid. Scholars agree
that statutes and case law in the United States support modification of agree-
ments via email: Holmes (2010). In Shattuck v. Klotzbach, 2001 WL 1839720
(Sup. Ct Mass. 2001), a US court held that exchange of email was sufficient to
The mail box rule was the original solution for common law systems.83
Civil law countries favored the rule of receipt,84 which assumes a
contract is formed when the offeror receives the acceptance of the
offeree, following a rationale close to that of contextual, face-to-face
contracting. International trade law showed a preference for the receipt
rule.85 Over time, the mail box rule lost its appeal, with digital tech-
nologies significantly contributing to its final demise.86
Comparative studies have long dealt with gauging the suitability of one
solution over another and the ability of each solution to accommodate the
modified context of electronic contracting. The use of technology has
transformed negotiations and formation of contracts, basically nullifying
distance and, as a consequence, time lags; exchange of promises,
although not contextual, has become instantaneous.87 In some cases (like
satisfy the writing requirement of the Statute of Frauds, relying on prior case law
that considered a telegram as writing.
83
The rule was established in Adams v. Lindsell (1818) 106 ER 250, and
then was accepted in the United States: Mactiers Admrs v. Frith, 6 Wend. 103
(N.Y. 1830). It is still controlling in most states in the United States; see Nimmer
(1996) 222. The rule is also discussed by Rawls (2009) 205. For a comparative
analysis, see Farnsworth (2006) 916; Maniruzzaman (2001) 487. The diffusion of
the rule in the world is described by Carlini (2005) 524.
84
Italian law, see Civil Code, art. 1326. The situation in France has been
problematic since the Code Napolon, as the code does not propose a solution;
see Carlini (2005) 527.
85
On the complex interaction between the solutions accepted by the
Convention on Contracts for the International Sale of Goods and the Convention
on the Use of Electronic Communications in International Contracts see Martin
(2008) 484, 48788.
86
As reported by Rawls (2009) 207, a number of US courts had discontin-
ued the application of the mail box rule even before the Internet era: Slobojan v.
United States, 136 Ct. Cl. 620 (1956); Rhode Island Tool Co. v. United States,
128 F. Supp. 417 (Ct. Cl. 1955). Also telephone dealings were treated as
face-to-face interaction and the mail box rule was not applied: Exter Mfg. Co. v.
Glass-Craft Boats, Inc., 173 A.2d 791 (N.H. 1961); United States v. Bushwick
Mills, Inc., 165 F.2d 198 (2d Cir. 1947). Morrison v. Thoelke, 155 So.2d 889
(Fla. Dist. Ct. App. 1963) went on excluding the application of the mail box rule
to modern methods of communication. UCITA denies application of the mail box
rule for electronic messages: Kierkegaard (2007) 37. Watnick (2004) 197,
expresses the view that, since a clear default rule for the timing of acceptance
sent electronically does not exist, the mail box rule should be retained for
electronic acceptances of contracts not covered by UCITA. The application of the
mail box rule declined also in Australia: Mik (2009) 8.
87
Moringiello (2005) has been accurate in showing how consumers perceive
paper-based transactions as different from electronic transactions.
emails or instant messaging), between dispatch and delivery there is such

a small space that offer and acceptance are separate for a negligible
fraction of time and revocation is almost impossible.88 Even the US
Restatement of Contracts subjects substantially instantaneous two-way
communications to the same principle applicable to acceptances where
the parties are in the presence of each other.89
The mail box and receipt rule are just different solutions to allocate the
risk of communication between the parties. In common law, it has been
pointed out that a rule based on actual receipt of acceptance by the
offeror would have put her at risk that a revocation of the acceptance
could arrive before the acceptance was received;90 comparing risks, the
offeror91 is already exposed to the chance that her offer is never received
by the counterpart.92 To adjust this situation, the common law of
contracts has evolved in a way that makes all contract communications
88
This explains the rationale of the European Union law that makes
applicable to electronic contracting the jus poenitendi of the distance selling
Directive. If there is no time to weigh a deal, there is some time to change ones
mind and dissolve the agreement.
89
Restatement (Second) of Contracts s. 64 (1981). On the virtues of the
formula used by the Restatement (substantially instantaneous) as able to
capture all future technological developments, see Rawls (2009) 210. Substan-
tially instantaneous communication means include phone, telex, facsimile, EDI,
email and instant messaging; not post and telegraph. But Fasciano (1997) argues
that the mail box rule is still suited for usage of email in contract formation. For
a technical discussion on email as a way to exchange consensus, see Mik (2009)
16, 20 (suggesting that the mail box rule should apply to email).
90
As pointed out by Macneil (1964) 953, with regard to the time between
offer and acceptance, it is not surprising that the Anglo-American courts have
kept that period of nakedness as short as possible by adoption of a dispatch rule.
Indeed, it may be said that one of the prime functions of the dispatch rule is to
shorten the duration of the offerors right to revoke. Moreover, not only does the
dispatch rule shorten the period of revocability, it removes an element of
uncertainty from the contract relationship (footnote omitted).
91
Rawls (2009) 216 (the likelihood that sending an offer will eventually
result in an enforceable contract is, ceteris paribus, inherently less than the
likelihood that sending an acceptance will result in an enforceable contract;
footnote omitted).
92
According to Rawls, ibid. 212, it makes sense for the recipient to bear
the risk of failure, for she is incentivized to choose a reliable operator ex ante
and may furthermore have a legal remedy sounding in contract law against the
operator of the faulty service (footnote omitted).
(offers, revocations, rejections) effective not upon receipt, but accept-

ance.93 Incidentally, a mail box rule is also instrumental in favoring a
quicker conclusion of the contract, raising the paradox that a contract is
nevertheless concluded if the offeror has not yet received the acceptance
and even if, for some reason, she will never receive it.94
The implications of technology use on contract formation impact on
time, of course, although there is also some impact on distance. Parties
can be far away from each other, no matter how far; technology makes
exchange of contractual promises instantaneous as if they were context-
ual and as if parties were in the presence of each other.95 This change
requires an update (not necessarily a revolution) of contract law norms,
since now revocation of the acceptance is virtually impossible and there
is no point in keeping a difference in treatment among different ways of
contract formation.96
Such functional reasons (and not an otherwise conceptually untenable
theoretical superiority) have made the receipt rule prevalent in many legal
systems, particularly as technological change became pervasive.97
Article 11 of the e-commerce Directive requires that the service
provider acknowledges receipt of the recipients order without undue
delay and by electronic means.98 Moreover, the order and the
93
Fasciano (1997) 975; Nimmer (1996) 222.
94
In the landmark case Adams v. Lindsell, n. 83 above, the Kings Bench
reasoned that the dispatch rule was imposed by necessity, since the receipt rule
would have required notification that the acceptance had arrived and the receipt
of such notification would have required a further notification, and so on to the
infinite. See Mik (2009) 9. Macneil (1964) 954, points out that case law has
upheld the mail box rule even in cases where there was no reliance by the
offeree.
95
Receipt of an acceptance does not necessarily correspond to actual
knowledge of the recipient. In electronic contracting it has been argued that
receipt of an acceptance occurs when an acceptance has entered the information
processing system designated for such messages by the offeror (Rawls (2009)
211).
96
Rawls (2009) 214.
97
Ibid. 204 (arguing that the mail box rule discourages the use of the most
efficient means of communication). Cases where courts have suggested the
receipt rule as the best default rule for contract formation include Romala Corp.
v. United States, 20 Ct. Cl. 435 (1990), affd, 927 F.2d 1219 (Fed. Cir. 1991);
Trinity Homes, L.L.C. v. Fang, 63 Va. Cir. 409 (Va. Cir. Ct. 2003).
98
Service provider, within the text of the Directive, has the meaning as
clarified above. The rationale for requiring confirmation is to give consumers
protection against accidental contracts that could be easily entered into without
an intermediate step; for a comment see Kierkegaard (2007) 28. Ramberg (2001)
acknowledgement of receipt are deemed to be received when the parties,

to whom they are addressed, are able to access them, a rule that (like the
rest of article 11) applies also to exchange of electronic mail or
equivalent individual communications. Essentially, the Directive relies on
some sort of reinforced receipt rule for a harmonized solution in
Europe.99
As a further protection for consumers, the same Directive introduces
an element of differentiation with US solutions, requiring the service
provider to make available to the recipient appropriate, effective and
accessible means (e.g., a splash screen or a pop-up window or an
intermediate-review screenshot) allowing her to identify and correct input
errors, prior to the placing of the order. This step is only procedural and
does not change the fundamental contract law solutions adopted by
national systems for contract formation.
Besides formal solutions adopted individually by legal systems, and
once the prevalent model has been identified, a comparative view reveals
that the question over one rule or the other to ease electronic contracting
is ill-conceived and, after all, unimportant. The most challenging issue
becomes understanding to what extent, facing an upsurge of tech-
nological advancements, the law of contracts in legal systems is trading
off consent in the original meaning for mechanisms of contract formation
where the relevance of the human factor shrinks to the point that the
simplest formality replaces the complexity of will altogether and the
humanistic model of contractual behavior fades away.100 The inner soul
440, points out that the rationale is unclear; if it were to avoid uncertainty, that
would be true also for all kind of contracts, not only electronic.
99
The default rule adopted by the Directive is the same that, in common
law, the offeror could have written by altering the mail box rule and explicitly
making receipt of the acceptance necessary for the formation of the contract, as
rightly suggested by Watnick (2004) 179. Winn & Haubold (2002) 575, see a
possible interference with national provisions; they specifically mention s. 130.1
of the German BGB on the moment a contractual declaration is deemed to be
received. Neither UETA, nor E-Sign, takes a stand on the applicability of
dispatch or receipt rules to contract formation; see Rawls (2009) 209. The same
author advocates the adoption of the receipt rule for all contracts in the United
States, however formed, to ensure consistency both with domestic cases in which
the mail box rule is not operative, and with foreign countries (ibid. at 224).
100
The expression is borrowed by Nimmer (1996) 212: The most basic
principle of contract common law entails the assumption that a contract is
undertaken (or not) based on the decisions or actions of an individual, either on
his own behalf or as representative for another. From this humanistic model
stems a wide range of assumptions, restrictions and approaches to the idea of
of the law of contract formation reemerges here and casts ideological

views in the debate. The question revolves not just around procedures but
on the very nature of contracts in society when technology redefines the
contours of human interactions.
Before moving ahead, a warning is in order. The role and the presence
of consent in contract formation should not be overemphasized, at least
in its subjective meaning.101 In its pure, conscious and unconstrained
form consent does not exist any longer, if ever, and it lost centrality even
before the radical technological transformation caused by the digital
revolution took place.102 This is not to say that consent is a myth of a
classical era nor is it a provocative assertion that the meeting of minds
belongs to a lost paradise of contracts. It is rather a disenchanted view of
what contracts came to be in the real world of mass-market transactions
and complex business-to-business dealings (assuming, for a moment, that
all contracts between professionals are still subject uniformly to the same
rationale).
The final question is whether the change brought about by digital
technologies in contract law is different in magnitude or in nature with
respect to the evolution of the past, and to what extent a claim of
exceptionalism is justified.103
B. Impact of Digital Technology on the Meeting of Minds
There are two fields where the issue can be tested. The first is that of
contracting by using electronic agents, epitomized by electronic data
contracting. Radin (2000) referred to the Contract as Consent as opposed to

the Contract-as-Product model.
101
For a discussion of the nineteenth century reconstruction of individual
will in contract theory and the adoption of a subjective theory of consent as
linked to liberalism, see Weitzenboek (2001) 218.
102
In the seed industry, it is common to see terms and conditions printed on
sealed seed bags; unwrapping the packaging (on which are written the terms)
implies acceptance of the conditions defined by the breeder. The seed-wrap
licensing practice has been approved by a number of lower courts and then
affirmed by the US Supreme Court in J.E.M. v. Pioneer, 534 U.S. 124, 145
(2001). In mass-market transactions, the practice of standard terms has provoked
discussions about consent which are now also being raised by the so-called
rolling contracts (usually found in the practice of insurance contracts). See
Gillette (2004) (suggesting that rolling contracts should be studied under the
paradigm of principal/agent problems).
103
Keeping in mind that enough of a quantitative difference is a qualitative
difference (Radin (2000) 1127).
interchange (EDI), an area where contracting is completely automated.

The other is the field of click-wrap/browse-wrap contracts.
From a comparative perspective, it has to be noted that European
Directives, mostly concerned with consumers transactions, do not deal
directly with EDI,104 whereas UETA and E-Sign also provide for
formation of contracts through the interaction of a computer program or
other automated means.105 International sources, such as the UNCITRAL
Convention on the Use of Electronic Communications in International
Contracts, appear to represent a belated acceptance by non-U.S. legal
systems of the legitimacy and utility of such methods.106
EDI takes place almost exclusively in a business-to-business con-
text.107 Its contemporary version corresponds to the machine-to-machine
interactions in the Internet of things.108 Transactions are carried out by
and within the information systems of two or more firms. Exchanges are
instantaneous and internal to the interconnected systems. Tracing parties
consent in the transaction is virtually impossible, both because the
transaction is automated and because formally there are no human
parties.109 They only had a role in defining a priori the general contrac-
tual framework (so-called trading partner agreements) under which EDI
transactions are carried out.110
104
Poggi (2000) 265, interprets the European Directive as possibly leaving
Member States the opportunity and the duty to regulate EDI contracting. See also
Weitzenboek (2001) 228, and Riefa (2009) 12. Kryczka (2005) 167, points out
that the use of automated systems for concluding contracts could be governed in
Europe by other sources, such as the Principles of European Contract Law (see
above).
105
Martin (2008) 49192; Kierkegaard (2007) 41. According to Sommer
(2000) 1177, regulation of EDI is the only actual new issue of UETA.
106
Martin (2008) 492 (footnote omitted).
107
Nimmer (1996) 213. See also Lerouge (1999).
108
See Sundmaeker et al. (2010).
109
However, there can be problems typical of traditional contracting, such as
the battle of the forms when the two systems are programmed to issue and accept
orders according to their own standard terms; see Nimmer (1996) 232 (discuss-
ing the applicability of U.C.C. s. 2-207 to EDI) and Mootz (2008) (arguing that
the battle of the forms is becoming obsolete in the world of electronic
contracting). As pointed out by at Weitzenboek (2001) 209, computers are not
merely a means of communication that enable and facilitate electronic com-
merce, but are capable of initiating the communication.
110
At least one author has argued that business model design by the parties
is also instrumental in shaping the new scenario of electronic contracting while
providing incentives to prevent opportunism; Kobayashi (2005).
Consent is only an antecedent of the exchange in EDI,111 although the

agreement that enables electronic contracting by electronic agents is
fundamental to solving legal issues such as liabilities for malfunctioning
and problems caused by a defect in transmission. This is an area of
technical regulation that is still basically untouched by legislators and
presumably it will be left entirely to private autonomy and to the new lex
mercatoria, unless legislators dare to embark on writing technical rules
that can grow old quickly.112
Eventually, technology in the field of EDI has not completely removed
the role of consent and the human factor associated with structuring the
contractual framework and programming the machines to carry out
instructions. The transaction itself might not be consensual, but its origins
certainly are. The main implication is that traditional contract law rules
are still working as default rules, to the extent a problem appears and its
causes can be traced back to the upstream consensual mechanisms that
created the EDI system.113
In analogy to shrink-wrap licensing,114 click-wrap and browse-wrap
identify kinds of agreements whose conclusion is reached by clicking on
111
Savirimuthu (2005) 131, refers to this model of contracting as mediated
consent. See Weitzenboek (2001) 215, for a discussion of electronic agents
under the law of agency and a possible application of an objective theory of
consent to EDI. Radin (2000) 1130, opposes the view of importing agency into
EDI to justify this kind of transaction (The term agent means something else
when we are considering human agency. Human agency refers to the
freedom of autonomous beings).
112
On the role of technical rules in EDI see also Winn and Haubold (2002)
582. It is worth recalling that UNCITRAL proposed a Draft Model Law on Legal
Aspects of Electronic Data Interchange and Related Means of Communication in
1995. In the United States, the American Bar Association worked on a model
agreement many years ago: Electronic Messaging Task Force (1990). This area is
close to that of electronic clearing of credits and debits. For a commentary and a
further examination of other private initiatives in the field of EDI, see Sabett
(1996) 53031.
113
Moringiello and Reynolds (2013) 485.
114
The majority of courts in the United States were inclined to enforce
shrink-wrap licenses: ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996)
(Easterbrook, J); for a comment, see Winn and Haubold (2002) 6 (manuscript).
The decision was followed in Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir.
1997) (Easterbrook, J), but the court in Klocek v. Gateway, Inc., 104 F. Supp. 2d
1332 (D. Kan. 2000), refused to follow those precedents and stated that there was
not a sufficient showing of consent for an arbitration clause that was part of the
agreement. Kim (2007) 837, recalls that the first cases in the United States were
negative in terms of the validity of shrink-wrap agreements under the U.C.C.:
a screen box with lengthy contractual terms or by simply continuing

navigation on a website that disclaims a formula of implied accept-
ance.115 Sometimes, contracts are enforced even if the user has not had
the chance to access the terms of use prior to purchase, as long as she is
given the contractual opportunity to return the good (a CD in shrink-wrap
agreements) after reviewing the terms of the license.116
Click-wrap contracts have been considered to be like the online
version of standard-form contracts.117 Sometimes they are referred to as
pay now, terms later,118 since one party has to express her consent to
the agreement by clicking on a button before knowing, or without
reading, which terms will govern the relationship and possibly how
much she will have to pay under the contract.119 Browse-wrap
agreements are formed simply because the user of a website continues
navigation usually after being warned that usage of the website or
simply navigation is in itself acceptance of the terms (either the original
see, e.g., Step-Saver Data Sys., Inc. v. Wyse Tech., 939 F.2d 91 (3rd Cir. 1991);
Vault Corp. v. Quaid Software, Ltd., 847 F.2d. 255 (5th Cir. 1988). For a
scholarly discussion, see Lemley (1995).
115
Winn and Bix (2006) 178 (further action, such as continuing use of a site
or downloading software, is construed as acceptance). This Web-based communi-
cation, due to the inherent immediacy of response, raise[s] few problems with
regards to effectiveness (Mik (2009) 27).
116
Kim (2007) 823.
117
Lemley (2006); Winn and Bix (2006) 177. Kierkegaard (2007) 22, has
expressed doubts about the compatibility of click-wrap agreements with the
European rules of the e-commerce Directive which require that the consumer can
also store and retain the contract terms.
118
Moringiello and Reynolds (2013) 463.
119
I. LAN Sys., Inc. v. Netscout Serv. Level Corp., 183 F. Supp. 2d 328 (D.
Mass. 2002), has considered one such agreement valid. See also Feldman v.
Google, Inc., 513 F. Supp. 2d 229 (E.D. Pa. 2007) (confirming the validity of a
term on jurisdiction in a click-wrap agreement). In Canada, Rudder v. Microsoft
Corp., 47 C.C.L.T. (2) 168 (Ont. Sup. Ct. 1999), has held the forum-selection
clause in a click-wrap agreement enforceable. Moringiello and Reynolds (2013)
465, draw a distinction between click-wrap and shrink-wrap: [a] transaction in
which an offeree is asked to click her agreement either at the end of the terms or
next to a hyperlink leading to the terms is not a pay first, terms later
transaction because the buyer has the opportunity to review the terms before
payment.
or a modified version);120 in such a case there is no request to expressly

manifest assent to use.121
Article 11 of the European Directive on electronic commerce would
basically outlaw any kind of agreement if the consumer is not given
information ex ante and if she does not receive a confirmation by the
service provider that the order was received.122 Any other indication
about validity of click-wrap/browse-wrap agreements must be found in
national legislations. In the United States, UCITA contains a very broad
statement about contract formation: a contract may be formed in any
manner sufficient to show an agreement, including offer and acceptance
or conduct of both parties or operations of electronic agents which
recognize the existence of a contract. It is exactly this formula that may
be way too indulgent to a theory of consent-replacing formalities in
electronic contracting and that caused the low level of acceptance of
UCITA by states.
From a comparative perspective, what is important to note is that, once
again, common law judges (not legislators) made important contributions
to click-wrap and browse-wrap agreements; the general trend is to
120
Moringiello and Reynolds (2013) 466. Pollstar v. Gigmania, Ltd., 170 F.
Supp. 2d 974 (E.D. Cal. 2000) (browse-wrap agreement valid and enforceable).
See also Register.com, Inc., v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004). Contra,
Specht v. Netscape Communications Corp., 150 F. Supp. 2d 585 (S.D.N.Y. 2011)
(agreement not valid for lack of consent between the parties). Since navigation is
a continued activity to access a service and can be done on the same website on
different occasions, browse-wrap agreements can also be rolling contracts (see
n. 102 above) and in Swift v. Zinga Game Network, Inc., 805 F. Supp. 2d 904
(N.D. Cal. 2011), the court held that the modified version of the agreement was
applicable to the user. The case has been criticized by Moringiello and Reynolds
(2013) 473, since the modification issue was not dealt with by the court and this
modified click-wrap was simply enforced. The same holding that a rolling
contract is enforceable can be found in the Canadian case of Kanitz v. Rogers
Cable Inc., 58 O.R. (3d) 299 (Ont. Sup. Ct. 2002). The case of contracts
modified unilaterally and accepted by browsing is recurrent in social networks;
for an analysis of the main clauses used by networks in light of European
regulations see Granieri (2011).
121
In this case assent has been characterized by Kim (2007) 817, as
acquiescence rather than agreement (emphasis in the original). See also Kunz
(2003).
122
The Directive clearly refers to a situation in which the user is supposed to
pay for something. In fact, many situations occur in which the service is free and
the user only accepts the terms according to a click-wrap scheme.
enforce them on the ground of contract formation123 and, when neces-

sary, to use traditional doctrines such as unconscionability to prevent
unjust results.124 Scholars seem to confirm this orientation and apparently
do not indulge in exceptionalism,125 even though there is also a strong
dissent on the specific issue of enforcing agreements when consent is
actually missing.126 Some authors underscore how courts decisions can
be aimed at facilitating transactions while lacking a sound rationale in
contract law and contort existing contract doctrine to enforce agreements
that in other contexts would be unenforceable for lack of assent.127
On a more general ground, there is one issue that should not be
underestimated. New forms of technology-enabled contracting are being
held enforceable by the majority of courts, which deny any discontinuity
123
See Hines v. Overstock.com, Inc., 668 F. Supp. 2d 362, 366 (E.D.N.Y.
2009) (The making of contracts over the internet has not fundamentally changed
the principles of contracts (citations omitted)). A full and up-to-date overview of
cases is offered by Moringiello and Reynolds (2010).
124
UCITA also applies the doctrine of unconscionability to transactions in
computer information; see Kierkegaard (2007) 26. See Bragg v. Linden
Research, Inc., 487 F. Supp. 2d 593 (E.D. Pa. 2007) (some terms of a click-wrap
agreement held unconscionable); In re RealNetworks, Inc., Privacy Litigation,
2000 WL 631341 (E.D. Tex. 2000); and Brower v. Gateway 2000, Inc., 676
N.Y.S. 2d 569 (N.Y. App. Div. 1998) (unconscionability of arbitration clause in a
click-wrap agreement); Groff v. America Online, Inc., 1998 WL 307001 (R.I.
Super. Ct. 1998) (online forum selection clause enforceable); contra, America
Online, Inc. v. Superior Court, 108 Cal. Rptr. 2d 699 (Cal. Ct. App. 2001).
125
Moringiello and Reynolds (2013) 46869. For the position that standard-
form online contracting does not require a different treatment in the electronic
age and unconscionability and related consent doctrines are still a valid frame-
work to analyze electronic contracting, see Hillman and Rachlinski (2002).
According to Gillette (2005) 983, the real issue is that judges will not be able to
distinguish a term that is exploitative from a term that is inspired by efficient risk
allocation; since standard-form practices require some legal redress in electronic
contracting and such remedies cannot come from case law, the suggestion is that
the appropriate forum for intervention is administrative, not judicial.
126
See, among others, Macaulay (2004); Braucher (2000); Bern (2004).
Against those critiques (centered mostly on the destruction of consent-based
contract law and on potential damage for consumers), Marotta-Wurgler (2009)
has provided empirical evidence that in the field of software, at least on the US
market, the terms of end-user license agreements (EULAs) as rolling contracts
are not systematically more pro-seller than terms included in contracts available
to users before purchase. Regardless of the absolute quality of those terms,
evidence supports the view that pay now, terms later agreements are not
necessarily bad for users (whether professionals or consumers).
127
Kim (2007) 816 (footnote omitted).
in technical evolution and confirm the resilience of contract law to deal

with new problems caused by technology, even when such problems
relate to contract formation and to the very role of consent.128 To recall
the trade-off mentioned above, the courts attitude trades off actual
consent against speed in commercial electronic environments and is
oriented towards facilitating online transactions.129
However, particularly the experience of click-wrap and browse-wrap
contracts shows that there are instances where a contract is formed by
altering the normal sequence of negotiating steps, when both parties form
their consent based on previous actual knowledge of the good and
services they are dealing with and of the contract terms.130 The process
of contract formation is typically not completely detached by the content
of the agreement, since when parties accept a voluntary limitation to their
freedom or a decrease in their estates they do not do it in the abstract, but
with respect to an actual arrangement of reciprocal interests.
The implication is that when technology affects the process of form-
ation, there are hardly any consequences for the kind of private order the
parties are trying to establish for themselves.131 If the usual sequence is
altered and knowledge follows consent, is there still ground to support
the view that modern technologies do not alter the substance and nature
of contracting?
C. Technology as Content
The most peculiar contribution to the realm of contract (and to contract

law) given by technological progress comes from digital technologies.
They have brought about the case where not only conclusion, but also
execution of the agreement can be carried out entirely in the online
world.132 This is particularly true when the agreement allows the user
to access online resources (storage capacity, software, databases) or to
download digital content. Legal systems have responded by trying to
128
As pointed out by Radin (2004) 3, these wrap procedures are not
agreements in accord with the traditional rhetoric of consent and meeting of
the minds, but neither are most contracts in the contemporary offline world.
See also Radin (2000) 1133.
129
Kim (2007) 800.
130
There is an implicit reference here to the contract-as-thing metaphor that
was originally suggested by Leff (1970) 138, even though the same image goes
back to an intuition of Llewellyn.
131
This point is particularly clear and well taken in Savirimuthu (2005) 121.
132
The online conclusion/online execution binomial is not completely brand
new; payments fall into the execution of the agreement and electronic payments
adjust the traditional contract law to the new digital environment and are
still in the process of framing new rules, sometimes in the same context
in which they try to solve old problems.133
The advent of cloud computing has been a further novelty, as it
basically changed the offered model of digital content (and software,
above all), making the provision of goods shaped after service supply and
license agreements rather than based on sale contracts.134 Whether just
space for storage, or application software, or content, or platforms or
infrastructure, everything now is service,135 and the value chain, up to the
end user, is based on back-to-back agreements that regulate the level of
the service and the regime of liabilities.
When the subject matter of a contract the quid pro quo a price is paid
becomes digital or digitalized, technology is no longer a means to reach
an agreement.136 It is, in a sense, its content, a construct that immediately
calls into question the intellectual property protection of the service/
content provider (typically copyright). The unfortunate consequence is
that now technology can be used to enforce the proprietary regime on the
resources shared by the owner and the combination contract plus
technology proves stronger than property rights alone; it is even apt to
reshape owners rights and prerogatives according to a scheme that is no
longer defined statutorily by legislators, but technologically by private
actors of the market. The advent of digital rights management (DRM)
systems has caused technology to have a new, additional, more dangerous
role. The role of technology is upgraded by DRM: not just facilitative,
but regulatory.137
have been around since long before digital technologies appeared and trans-
formed contract law and were available also for off-line transactions; see n. 3
above.
133
After all, when the European Union believes that fragmentation in
contract law is an obstacle to diffusion of cloud computing, it is blaming a
well-known pre-existing situation that is not influenced by new technologies (for
more specific arguments on cloud computing see n. 146 below). For the statutory
initiative of UCITA, see also Radin (2000) 1140.
134
On the dissolution of the distinction between license and sale see n. 43
above and the UsedSoft decision of the CJEU.
135
Hence the acronyms based on the -as-a-Service suffix (Software-,
Content-, Platform-, Infrastructure-as-a-Service).
136
The fact that everything can be digital or digitalized was a reason for
concern about the potential reach of UCITA (Radin (2000) 1141) and a further
element that explains the failure of this statutory initiative.
137
From this unexpected role comes a challenge for spaces of freedom for
users that legislations usually provide, such as the fair use doctrine in the United
Keeping in mind the original interaction between technology, contracts

and contract law, the final outcome is that technology is redesigning the
original equilibrium, reducing the role of consent in contract formation
and eroding, if not eliminating, the regulatory role of contract law.138
There are strong legal implications arising out of this process.
First of all, individual consent results in a completely different and
weakened form.139 In spite of the liberal tradition, consent is no longer
the basis of voluntary exchanges and circulation of resources.140
Technology-driven formalities might replace it altogether.
Secondly, although even technology requires state rules to reinforce the
regime of fruition for digital goods imposed by digital rights manage-
ment systems,141 state law can lose significant ground and have increas-
ing difficulties in regulating aspects of electronic commerce. Importantly,
technology can contend with national and supranational law in the role of
creating an environment conducive to electronic commerce, since
States and the permitted uses in Europe. For early discussion of this topic see
Burk and Cohen (2001).
138
For consideration on the relationship between technology, contract and
property see also Radin (2004) 10 (The advent of Digital Rights Management
Systems (DRMSs) has the potential to read out the regulatory contouring of
contract just as the advent of ubiquitous superseding entitlement regimes has the
potential to read out the regulatory contouring of property). For a critical
reconstruction of DRM systems in comparative perspective, see Caso (2014).
139
Radin (2000) 1135, reminds us that the real world is populated by
contract-as-products, more than contracts-as-consent, and this argument should
make us more prepared to consider not completely unusual situations where
consent is only presumed.
140
Savirimuthu (2005) 115 (Contract rules and norms are viewed as
mirroring the liberal ideals of a democratic society and the discipline imposed by
the market).
141
As Sommer (2000) 1221, points out: [a] technological fix is not enough
to give copyright industries complete control of their information. Therefore,
they seek to buttress the technological fix by legal means. License restrictions
may control some users. Criminal or tort law may control mass-market abusers,
completely unauthorized users, or those who abet these criminals or tort-feasors
by providing them with technological aids (footnote omitted). From a compara-
tive perspective, it has to be recalled that violation of DRM is unlawful also in
Europe, pursuant to a Directive that was purposefully introduced to harmonize
aspects of copyright in Europe in the digital era. See Directive 2001/29/EC of the
European Parliament and of the Council of 22 May 2001 on the harmonization of
certain aspects of copyright and related rights in the information society [2001]
OJ L167/10, arts 6 and 7.
standardization processes can be quicker and more effective than har-

monization achieved through statutory intervention.142
Thirdly, while consent is individual by definition, technology is not
necessarily available to everyone, which means that technology ordering,
as opposed to private, consent-based ordering, is much less decentralized
and less democratic.143 And it has the diabolic virtue of being pervasive
(having widespread application) but elusive at the same time (able to
escape state regulation).
Advocates of cyber-anarchy should be aware that technology may
eventually turn out to be less democratic, less controllable and less
decentralized than it appears in principle.
V. CONCLUSION: WHAT COMPARATIVE LAW

STUDIES CAN SAY ABOUT CONTRACT LAW
BEFORE TECHNOLOGICAL DEVELOPMENTS
The implications of technological development for contract law are far
more intense than this chapter can possibly say. The comparative survey
of regulatory approaches in the main legal systems should help to draw
some inevitably partial considerations about the relationship between
technology, contracts and contract law.
One first lesson comes from the experience of UCITA. It has been
constantly repeated that Europe, vis--vis the United States, has followed
142
See Radin (2000) 1152.
143
According to Radin (2004) 12, digital rights management systems bypass
contract; [t]hey bypass the states structuring of the legal infrastructure of
exchange. The DRMS is like an infallible injunction controlled completely by
one party. Sommer (2000) 1222, underscores a further aspect of technology:
digital rights management is far more precise than traditional intellectual
property and it facilitates price discrimination in commercial transactions
(something that is harder with physical resources). Recent case law in Europe
witnesses how digital management systems can be used unilaterally to remove
freedom from users well beyond the proprietary and statutory regime. See
C-355/12 Nintendo v. PC Box, CJEU, judgment of 13 January 2014, Foro
italiano, 2014, IV, 207, stating that where technological measures prevent or
restrict not only acts which require the rightholders authorization pursuant to
that Directive, but also acts which do not require such authorization, a national
court must verify whether the application of the measures complies with the
principle of proportionality and, in particular, must consider whether, in the
current state of technology, the former effect could be achieved without
producing the latter effect or while producing it to a lesser extent.
a route of more proactive regulation, showing a skepticism towards the

virtues of market forces to create the internal market and to adequately
amend contracts of unfair terms. Consistently with this view, legislation
has been less intense with respect to business-to-business transactions
where parties tend to be sophisticated. The quality of the ensuing rules
and the real need for regulation are still open to discussion.144
In the United States, the regulatory approach has been lighter (although
not insignificant), both because the nature of digital technologies is not
perceived as extraordinary, and through a more adherent faith in the
laissez-faire credo. As a result, the most significant contributions came
from courts and from adaptation of traditional contract law doctrines.
Legislators only appeared where necessary, for quick fixes. Where
the regulatory anxiety dared the most, such as in the case of UCITA, the
reaction was negative.145
As the European Union is now investing significant resources in the
creation of a uniform body of rules also on electronic contracts (and,
significantly, aimed also at small and medium enterprises) and the
regulatory anxiety never comes to an end,146 the US lesson, if not
144
Stark criticism has been expressed by Ramberg (2001) 450 (From the
perspective of contract law, the E-Commerce Directive is of no value and may
even have contra-productive effects).
145
Not only has contract law rejected hard-and-fast rules, but when legisla-
tors have attempted to codify some of those rules, the courts have softened them.
Contract law has survived because it is firm enough to give guidance to those
who use it to order their daily lives, and flexible enough to permit change when
needed (Moringiello and Reynolds (2013) 49950). A note of concern comes
from Radin (2000) 1147, who rightly observes that if UCITA becomes generally
accepted and implemented in the United States it could be seen as a circulating
model for the rest of the world.
146
With the same purpose of incentivizing the use of cloud computing in
Europe, the Commission is now suggesting initiatives also in this field, although
the Common European Sales Law would have been applicable also to cloud
computing contracts and was expected to solve the problem of fragmentation of
rules within the European Union. See European Commission, Unleashing the
Potential of Cloud Computing in Europe, Communication from the Commission
to the European Parliament, the Council, the European Economic and Social
Committee and the Committee of the Regions, COM (2012)529 final. The
underlying rationale for adjusting aspects of the legal framework is not wrong.
After all, there is little discussion about the relationship between legal norms and
competitiveness of legal systems. The real question is about the source of legal
norms and the ability of legislation alone to be effectively conducive to a reliable
business environment. In the case of cloud computing contracts, it seems that the
followed, should at least be kept in mind at all material times.147

Top-down initiatives in very market-driven environments can be an
expensive failure. If there is no need to legislate, then the do-nothing
option would be advisable, even if bureaucratic forces are left temporar-
ily unemployed.
The US courts certainly played a timely role in creating a favorable
environment for electronic contracting and, in doing so, they sometimes
tipped in favor of technology even when the use of technology would
bring a significant wound to consent-based theories of contract law.148 In
the classical regulatory competition paradigm, the role of the US courts
can be seen as an element of competitive advantage.149 In this respect, if
Europe follows the traditional pattern of forced harmonization it will
mark an even stronger distance with respect to the United States.150
Once again, comparative legal studies are critically important even in
the perspective of legal reform, simply because they are able to bring
empirical evidence of homogeneous experiences, not otherwise avail-
able.151 One might say that the US and the European situations are not
comparable, as the European Union is not yet a wide-open market and
Commission will leverage on model contracts, with standard terms and commis-
sions, that will have the new generation of directives as applicable law (see n. 57
above).
147
As Moringiello and Reynolds (2013) 491, sharply conclude: [i]n short,
UCITA was a solution in search of a problem (footnote omitted).
148
Kim (2007) 801 (The judicial transmutation of constructive assent into
actual assent undermines one of the fundamental principles underlying contract
law that of individual autonomy (footnote omitted)).
149
See Winn and Bix (2006) 179; Winn and Haubold (2002) 568 (stating that
the European Union approach seems more likely to produce a sound outcome in
some areas, such as consumers transactions and the oversight of technical
standards).
150
Some authors have suggested the European Union should increase the
level of regulation. Riefa (2009) 42, concludes that the minimal harmonization
approach followed by the e-commerce Directive (described above) was not
positive for the internal market because it led to diverse national implementation;
for this reason, a change in strategy towards maximum harmonization would
improve the regulatory framework in a more business-friendly way, but would
not systematically increase consumer protection. Discontent about the level of
harmonization achieved by the Directive has been expressed also by Ramberg
(2001) 449.
151
This view has been proposed by Pardolesi and Granieri (2013) 23. Quite
paradoxically, with respect to the UCITA saga, Maxeiner (2003) 129, has
observed that [c]omparative law inquiries could have helped overcome our
limited abilities either to conceive of or to experiment with alternatives.
legislation is indeed instrumental in removing barriers. The point is

whether too many rules may not be barriers themselves. There is no ex
ante answer to this question. Only actual comparative enquiry and
experimentation can have the final word.
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18. Contractual interpretation: the South

African blend of common, civil and
indigenous law in comparative perspective
Andrew Hutchison
I. INTRODUCTION
Interpretation of legal documents remains as relevant today as it was in
Roman times. While theories of interpretation vary between the major
legal families of European law, the essential characteristics of a particular
approach to interpretation tend (invariably) to simply be nuanced aspects
of subjective or objective methods.1 To use the language of the historic
sources, there is a reconciliation that needs to take place between the
verba (or objective language) used by the drafter(s) of a legal instrument
and the voluntas (or subjective intention) which it was intended to
convey.2 In the case of a contract, if the objective meaning of the
language used and the subjective intentions of the parties to that contract
coincide, then the task of an interpreter is easy. If, however, the evidence
suggests that there has been an error in the drafting of the contract; or
that it does not make commercial sense as written; or that there is an
ambiguity in the language used; then the task of the interpreter is more
difficult. This chapter will consider the potential theoretical paradigms
through which a contract may be read, so as to resolve the difficulties of
interpretation. The primary focus will be on the law of contractual
interpretation in South Africa, although there will also be an historical
and comparative look at the other major European schools of legal
thought, particularly the English common law approach, as well as
certain supra-national model laws. The aim of this contribution is to track
the development which the South African law of contractual interpret-
ation is undergoing at present, with reference to leading comparative
regimes.
1
Compare the comparative survey in Von Bar and Clive (eds) (2009) vol. 1,
5569.
2
Zimmermann (1990) 62050. See also Lewis (1996) 195.
451
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II. WHY SOUTH AFRICA?

The geographical region of present day South Africa was a Dutch colony
from 1652 until 1795, and thereafter fell under the administration of the
British government (except for another brief period of Dutch rule
between 1803 and 1806) until the unification of its four composite
territories into what was from then known as South Africa in 1910.3 The
British colonizers chose to preserve the existing system of Roman Dutch
law which they found in place in South Africas colonies, with the result
that uncodified Roman Dutch law remains a binding source of South
African law today.4 In the process of modernization and commercial
development which took place during the British administration, large
tracts of English law and legal procedure were grafted onto this structure,
however, so that today South Africa is one of a handful of mixed legal
systems, displaying the characteristics of both the Romanistic civil law,
as well as the English common law.5 Since the advent of democracy in
South Africa in 1994, there has also been a supreme Constitution
encompassing a vertically and (under many circumstances) horizontally
enforceable Bill of Rights.6 This Constitution recognizes, in addition to
the existing sources of law, the special role of African customary law,
still widely practised by the indigenous peoples of the country.7 This
customary law has been invoked by the South African Constitutional
Court in a number of contexts, including (as we shall see) contract law.8
Thus South African law can be seen as a compromise between vastly
divergent sources, all co-existing in one legal regime and, of necessity,
blended together by our courts on a daily basis. From this blend of
cultures and approaches comes a compromise position, which is unique
to South Africa and yet still in many ways bears the hallmarks of its
3
For a general history see Fagan (1996). South Africa only became a fully
fledged sovereign country following the (British) Statute of Westminster in 1931.
4
Ibid. at 51.
5
Ibid. See further Zimmermann (2004) 48.
6
Constitution of the Republic of South Africa, 1996. Originally enacted as
Act 108 of 1996 and preceded by an interim Constitution, Act 200 of 1993. The
1996 Constitution came into force in February 1997.
7
Constitution of the Republic of South Africa, s. 211.
8
See generally on customary law: Bennett (2004); Himonga and Nhlapo
(2014).

Contractual interpretation 453
European (in the broad sense) heritage. The resultant synthesis is a study
in how divergent legal philosophies can be unified, in much the same
way that model laws such as the UNIDROIT Principles of International
Commercial Contracts (PICC), or the Draft Common Frame of Reference
(DCFR) present an attempt at compromise. The argument of this chapter
is that the South African law of contractual interpretation is moving away
from its Roman Dutch roots to something more like the current state of
the English law of interpretation. It will further be argued, however, that
the new English approach is not too far removed from the German
approach. In sum, there is a shift in South Africa away from a search for
the subjective intention of the contracts drafters, towards a more
objective and reliance based approach.
This chapter will look first at the traditional view which South African
courts take of contractual interpretation, including the civil and common
law sources for this. It will then also consider the latest case law and the
shift in emphasis evident therein. From there, the recent developments of
English law will be examined, with brief reference also to German and
French law, as well as the UNIDROIT PICC and the DCFR. Finally, the
potential future impact of the Constitution and African customary law on
the South African law of contractual interpretation will be considered.
III. DEVELOPING SOUTH AFRICAN APPROACH

Writers in the later European ius commune attempted to distil certain
maxims of contractual interpretation from Justinians Digest. Thus
Pothier listed 12 rules in his Treatise on the Law of Obligations,9 which
were further cut down to nine by Van der Linden.10 The writing of both
these influential authors is considered authoritative by South African
courts, particularly that of Van der Linden, who wrote on Roman Dutch
law. Thus the primary (or golden) rule of interpretation, listed first by
both authors, is that: In agreements we should consider what was the
general intention of the contracting parties rather than follow the literal
9
Pothier (1853), trs David Evans, Part 1, ch. 1, art. 7, 14857, paras
91102.
10
Linden (1806) 1, 14, 4, translated in Juta (1906) 1056.

meaning of words.11 This golden rule was accepted by the South African
Appellate Division12 in one of its first cases, Joubert v. Enslin.13
Thus the inquiry in contractual interpretation was into the subjective
intentions of the parties to a contract, with these taking precedence over
the objective wording of that contract. This should not be understood as
an entirely subjective approach, however, since the Appellate Division
soon after adopted the parol evidence rule from English law.14 This rule,
taken from the English law of evidence,15 was described in the leading
South African case as follows:
Now this Court has accepted the rule that when a contract has been reduced to
writing, the writing is, in general, regarded as the exclusive memorial of the
transaction and in a suit between the parties no evidence to prove its terms
may be given save the document or secondary evidence of its contents, nor
may the contents of such document be contradicted, altered, added to or
varied by parol evidence.16
The search was therefore intended to be for the common intention of the
contracting parties, but the law of evidence prevented a court from
examining what could potentially be a highly relevant source of evidence
of common intention, namely the negotiations between the parties
preceding the adoption of the contract in its final form.17 This does not
11
Linden (1806) 1, 14, 4. Compare Pothier Obligations 1, 1, 7, 91. This
passage has its origins in the Digest 50, 16, 219: In conventionibus contrahen-
tium voluntatem potius quam verba spectari placuit.
12
The Appellate Division, set up in 1910 upon the unification of South
Africa, was the highest South African court in all matters. Appeal was available
to the Privy Council in Britain until the South African declaration of independ-
ence in 1961. Thereafter, the Appellate Division was the court of final appeal in
South Africa until the Constitutional Court was established in 1995, following
the advent of democratic governance. The Constitutional Court then became the
final court in constitutional cases only. Since August 2013 the Constitutional
Court has been the apex court of South Africa in all matters, following an
amendment to the Constitution. See generally Corder (2010).
13
1910 AD 6, 378, per Innes, JA.
14
Lowrey v. Steedman 1914 AD 532, 543.
15
The South African law of evidence is a transplant of the English law of
evidence, subject to certain minor statutory modifications in its new home. See
Schwikkard and van der Merwe (2010) 2431; Christie and Bradfield (2011)
200.
16
Union Government v. Vianini Ferro-Concrete Pipes (Pty) Ltd 1941 AD 43,
47.
17
Debates continue today, both in English and South African law, about the
continuing validity of the parol evidence rule, but it seems to enjoy the

mean that evidence of the context surrounding the conclusion of contract

could not be led, where relevant. In what was for a long time the locus
classicus on the role of context in the South African law of contractual
interpretation, Delmas Milling Co. Ltd v. Du Plessis,18 Schreiner, JA
distinguished three different situations: first where linguistic treatment of
the words of the contract could resolve a difficulty in interpretation;19
second, where a latent ambiguity could not be cured by linguistic
treatment, recourse could be had to matters present to the minds of the
parties when they contracted (but not actual negotiations and similar
statements)20 (cases in this second category could be conveniently
referred to as cases of uncertainty);21 only in the case of a patent
ambiguity, not merely one of uncertainty, but an ambiguity truly
unresolvable on the existing evidence, recourse could be had to what
passed between the parties on the subject of the contract.22
These distinctions were explained in a later case as being between:
(1) the context of the contract as a whole;

(2) background circumstances, which explained the genesis and
purpose of the contract, evidence of which is admissable; and
(3) surrounding circumstances of previous negotiations and corres-
pondence between the parties, evidence of which is admissible
only in an instance of ambiguity.23
What is immediately apparent is that this is a difficult process to explain

and defend, and secondly that it resulted in a qualified contextual
approach, allowing only limited recourse to the context of the contract.
This distinction was dropped by the Supreme Court of Appeal, the
post-constitutional successor to the Appellate Division, in the recent case
of KPMG Chartered Accountants (SA) v. Securefin Ltd.24 The terms
continuing support of the judiciary in both countries. For English law, see
Chartbrook Ltd v. Persimmon Homes Ltd [2009] UKHL 38, paras 2847. For
South African law, see KPMG Chartered Accountants (SA) v. Securefin Ltd 2009
(4) SA 399 (SCA), para. 39. For debate about the continuing validity of the rule,
see, e.g., Nicholls (2005).
18
1955 (3) SA 447 (A).
19
Ibid. at 454FG.
20
Ibid. at 454G455A.
21
Ibid.
22
Ibid. at 455AB.
23
Coopers & Lybrand and others v. Bryant 1995 (3) SA 761 (A), 768AE.
Compare Maxwell (2012) 260.
24
2009 (4) SA 399 (SCA).

context or factual matrix were there thought more appropriate.25 In a

string of decisions following KPMG Chartered Accountants, the Supreme
Court of Appeal has affirmed this decision:
Interpretation is the process of attributing meaning to the words used in a

document, be it legislation, some other statutory instrument, or contract,
having regard to the context provided by reading the particular provision or
provisions in the light of the document as a whole and the circumstances
attendant upon its coming into existence. Whatever the nature of the docu-
ment, consideration must be given to the language used in the light of the
ordinary rules of grammar and syntax; the context in which the provision
appears; the apparent purpose to which it is directed and the material known
to those responsible for its production. Where more than one meaning is
possible each possibility must be weighed in the light of all these factors. The
process is objective, not subjective. A sensible meaning is to be preferred to
one that leads to insensible or unbusinesslike results or undermines the
apparent purpose of the document.26
The Supreme Court of Appeal has also drawn attention to the fictional
nature of the search for the common intention of the parties to a contract,
given the typical contexts of modern contracting, whether through the
medium of legal advisors or the take it or leave it standard form
contract.27 Indeed, one of the Justices of the Supreme Court of Appeal,
Wallis, JA, has argued in his personal capacity for an approach to
contractual interpretation which prefers the objective meaning which an
ordinary, reasonable reader would impose on a contract if he read it, to a
search for the subjective intention of the parties.28 This argument was
with reference to the latest developments in the English law of contrac-
tual interpretation, under the guidance of Lord Hoffmann in particular.
This shift in emphasis by the House of Lords will be discussed separately
below.
The recent dicta from the Supreme Court of Appeal reflect that the
South African law of contractual interpretation is in a state of flux. The
25
Ibid. at para. 39.
26
Natal Joint Municipal Pension Fund v. Endumeni Municipality 2012 (4)
SA 593 (SCA), para. 18. See also Bothma-Batho Transport (Edms) Bpk v. S
Bothma & Seun Transport (Edms) Bpk 2014 (2) SA 494 (SCA), paras 1012;
Ekurhuleni Metropolitan Muncipality v. Germiston Municipal Retirement Fund
2010 (2) SA 498 (SCA), para. 13; North East Finance (Pty) Ltd v. Standard Bank
of SA Ltd 2013 (5) SA 1 (SCA), paras 245.
27
Natal Joint Municipal Pension Fund, n. 26 above, para. 20.
28
Wallis (2010). Wallis, JA penned the unanimous judgment in Natal Joint
Municipal Pension Fund, n. 26 above.

change has come largely in the stage at which the context of a contract
may be considered. Whereas in the past, the context could only be looked
at in cases of ambiguity, or lack of certainty, now the context may be
considered from the outset. At the same time, however, the search is no
longer for the common intention of the parties the former golden rule
of interpretation. Now the process is objective, the ascription of meaning
by a court to the contract as written, in the light of its context (although
still preserving the parol evidence rule). A similar process has taken place
in the South African law of interpretation of statutes, although driven this
time by the Constitutional Court, carrying out the mandate of the
Constitution to interpret legislation purposively to give effect to the
values in the Bill of Rights.29 This movement away from subjective
intention (whether of the contracting parties or the Legislature) to written
words and the reliance thereon by the opposing party (or the populace) is
in line with the evolution of English law, which will be examined next.
IV. PARALLEL RE-EMPHASIS IN ENGLISH LAW

The move from literalism to contextualism in the interpretation of
contracts can be seen in English law. The similarity between the drafting
of legal texts in England and South Africa was remarked upon by
Zimmermann in his magnum opus The Law of Obligations.30 The source
of this influence of English law on South African is not hard to find, and
is partly explained by the colonial administration of South Africa as set
out above. Zimmermann described this similarity as being due to the
existence of strict and relatively formal canons of construction.31 This
strong adherence to the objective wording of the contract, reinforced by
the parol evidence rule, can be seen in the dicta of the court in Lovell and
Christmas Ltd v. Wall:
If there is one principle more clearly established than another in English law
it is surely this: It is for the court to construe a written document. It is
29
Constitution of the Republic of South Africa, s. 39(2). The leading
Constitutional Court decision on the proper approach to the interpretation of
statutes is Investigating Directorate: Serious Economic Offences v. Hyundai
Motor Distributors (Pty) Ltd, In re: Hyundai Motor Distributors (Pty) Ltd v. Smit
NO 2001 (1) SA 545 (CC), paras 216. Whether the Constitution has any role to
play in the interpretation of contracts in South Africa will be considered at the
end of this chapter.
30
31
Ibid.

irrelevant and improper to ask what the parties, prior to the execution of the
instrument, intended or understood. What is the meaning of the language that
they have used therein? That is the problem, and the only problem.32
This blinkered examination of the text was developed in later decisions of

the House of Lords:
In order for the agreement to be understood, it must be placed in its

context. The time has long passed when agreements, even those under seal,
were isolated from the matrix of facts in which they were set and interpreted
purely on internal linguistic considerations.33
The current position of English law was authoritatively stated by Lord

Hoffmann in five propositions in Investors Compensation Scheme Ltd v.
West Bromwich Building Society.34 Only the first and most important of
these will be reproduced here:
Interpretation is the ascertainment of the meaning which the document would

convey to a reasonable person having all the background knowledge which
would reasonably have been available to the parties in the situation in which
they were at the time of the contract.35
Proposition three preserves the exclusion from the context of a contract

the previous negotiations of the parties and their declarations of subject-
ive intent would not constitute admissible evidence when construing a
contract.36 The only exception to this principle would be when a claim
was made for rectification of a contract.37
Lewison explains that Lord Hoffmanns account of the English
approach to contractual interpretation is not a departure from precedent,
32
(1911) 104 LT 85 (CA), 88.
33
Prenn v. Simmonds [1971] 1 WLR 1381 (HL), 13834, per Wilberforce,
LJ. See also Reardon Smith Line Ltd v. Yngvar Hansen-Tangen [1976] 1 WLR
989 (HL), 9957.
34
[1998] 1 WLR 896 (HL).
35
Ibid. at 912H. This rule of contextual interpretation is retained in Arnold v
Britton [2015] UKSC 36 at para 15, although scope for purposive construction
according to commercial common sense (see Rainy Sky SA v Kookmin Bank
Ltd [2011] UKSC 50 in particular) was cut back in paras 1723 of Arnold, with
emphasis being placed on objective interpretation of the actual language used by
the parties.
36
Ibid. at 913AB. For a lengthy defence of the parol evidence rule see
Chartbrook Ltd v. Persimmon Homes Ltd [2009] UKHL 38, paras 2847, per
Hoffmann, LJ.
37
Ibid.

but rather a restatement with a different emphasis.38 Lord Hoffmann

himself pronounced in a later case that he had not thereby greatly
increased the amount of background material which could be considered
in construing a contract his five points could all be backed up with
earlier case authority.39 This argument is borne out by an analysis of
decisions such as those of Lord Wilberforce in Prenn v. Simmonds40
(quoted above) and Reardon Smith Line Ltd v. Yngvar Hansen-Tangen.41
Thus while it might not be true to state that English law is in a stage of
development in this area, there is definitely a progressive shift from
literalism to contextualism at play. Similarly, the process of construction
could not be described as anything other than objective, since the search
is not for the intention of the parties, but for the meaning of the words
they had used. The change in emphasis is in the approach to the
hypothetical exercise which a court has to go through in examining the
evidence before it in order to give meaning to a contract. The parol
evidence rule and the rule excluding evidence of prior negotiations
remain a firm fixture in English law and represent defining characteristics
of its law of contractual interpretation, distinguishing this in particular
from French law and legal regimes based thereon. German law, however,
remains remarkably similar to English law in its operation, particularly
following the re-emphasis of the sources by Lord Hoffmann. The
following section will cast the examination of comparative sources a bit
wider, drawing in other leading European jurisdictions and supra-national
regimes.
V. CONTINENTAL EUROPEAN AND

SUPRA-NATIONAL COMPARISONS
The German Civil Code (BGB) lays down two rules for the interpretation
of contracts:
(1) section 133: When a declaration of intent is interpreted, it is

necessary to ascertain the true intention rather than adhering to the
literal meaning of the declaration;42
38
Lewison (2011) 3.
39
Chartbrook, n. 36 above, para. 37. See also Bingham (2008).
40
See n. 33 above.
41
See n. 33 above.
42
Official translation provided by the Federal Ministry of Justice,
www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html.

(2) section 157: Contracts are to be interpreted as required by good

faith, taking customary practice into consideration.43
These two provisions seem to conflict on their face, the one calling for a
search for subjective intention, the other for a normative search for a
reasonable interpretation.44 Vogenauer explains that due to the manner in
which German courts analyse transactions to determine whether a
contract has been formed, the interpreter has to adopt the objective
perspective of the recipient of the declaration.45 Thus the search is for
the understanding of a reasonable person in the position of the parties.46
Viewed in this light, the German perspective is not far removed from that
of Lord Hoffmann in Investors Compensation Scheme,47 or of the South
African Supreme Court of Appeal in its latest line of cases starting with
KPMG Chartered Accountants.48
The law of contractual interpretation in France is governed by a
sub-chapter in their Civil Code. The first of the articles calls for
subjective interpretation:
article 1156: One must in agreements seek what the common intention of the
contracting parties was, rather than pay attention to the literal meaning of the
terms.49
This is the first rule of contractual interpretation mentioned by Pothier.

The following articles 1157 to 1164 refer to certain objective factors
which may also be used in interpretation; these are all also taken from
Pothiers account of the law of interpretation. Thus, the official starting
point of interpretation in France is with the golden rule, as was
historically the position in South Africa, with subsidiary rules allowing
for a mix of subjective and objective factors.50 Of course, the French
43
Ibid.
44
Compare the analysis of Muthorst (2011) 49.
45
Vogenauer (2007) 1278. In this type of analysis, the equivalent of the
English offer and acceptance, the declaration of intention forming the offer has to
be understood as the recipient would understand it in accordance with good
faith, having regard to commercial practice (ibid.).
46
Ibid. at 128.
47
[1998] 1 WLR 896 (HL).
48
2009 (4) SA 399 (SCA). Compare the arguments of Vogenauer (2007)
1289 and of Ktz and Flessner (1997) 10913.
49
Translation by Georges Rouhette, available at www.legifrance.gouv.fr/
Traductions/en-English/Legifrance-translations.
50
Compare Vogenauer (2007) 1267; Ktz and Flessner (1997) 11012.

Code Civil is a document of considerable antiquity and it is understand-

able that their approach to interpretation will have been developed since
then.51 In this regard, the Cour de Cassation had already intimated in the
nineteenth century that the articles of the French Code Civil on contrac-
tual interpretation were guidance, rather than mandatory rules.52 It should
be noted, however, that in French law, the correct interpretation of a
contract is a question of fact, not law, and therefore lies to the lower
courts judging the merits of the case to determine and is outside the
control of the Cour de Cassation.53 Hence, it is hard to determine a
unified approach of the French courts to the issue.54
On the question of admissibility of extrinsic evidence, there is no
general equivalent of the parol evidence rule in French or German law,
although exceptions exist.55 Vogenauer argues that, to the civil law
observer, such a rule presents a quaint confusion of the law of evidence
and the substantive law on contractual interpretation.56 Rather he posits
that there should be a presumption against admitting extrinsic evidence,
unless the circumstances of the case require it to resolve a difficulty in
interpretation.57 This he argues is the German position.58
This chapter has so far concluded that the South African and English
approaches to interpretation are objective, and require a contextual
reading of the contract itself. German law is also objective in effect, but
the BGB combines subjective and objective approaches and extrinsic
evidence of the parties prior negotiations is permissible as a source of
context to explain the background to their transaction. French law
likewise presents a mix of subjective and objective factors, but the
51
Nicholas (1992) 47, states that this rule of interpretation is of little
assistance, since the difficulties arise where the intention of the parties is not
clear, or a particular situation has not been dealt with by them.
52
Cass req. 24 February 1868, DP 1868.1.308.
53
Nicholas (1992) 47; Vogenauer (2007) 12930. See also Von Bar and
Clive (2009) vol. 1, 557.
54
Nicholas (1992) 47.
55
See, e.g., French Civil Code, art. 1341(1): An instrument before notaires
or under private signature must be executed in all matters exceeding a sum or
value fixed by decree [1500], even for voluntary deposits, and no proof by
witness is allowed against or beyond the contents of instruments, or as to what is
alleged to have been said before, at the time of, or after the instruments, although
it is a question of a lesser sum or value. Translation taken from Legifrance
website, n. 49 above.
56
Vogenauer (2007) 135.
57
Ibid. at 1379.
58
Ibid., citing BGH 5 July 2002, NJW 2002, 3164.

starting point (at least in terms of the Code Civil) is subjective, in line
with the writings of Pothier and drawing on an approach taken from the
Digest. Due to space constraints, this limited survey will omit any further
national jurisdictions and turn now to certain of the supra-national model
rules. These systems of rules are by nature a form of compromise and an
attempt to capture best practice. Again the inquiry will be limited to the
subjective/objective interpretation question.
The UNIDROIT Principles of International Commercial Contracts
(PICC), like the German BGB, contain both an objective and a subjective
directive for interpretation. The 2010 version provides as follows:
article 4.1: (1) A contract shall be interpreted according to the common

intention of the parties. (2) If such an intention cannot be established, the
contract shall be interpreted according to the meaning that reasonable persons
of the same kind as the parties would give to it in the same circumstances.
The comments to this article make it clear that preference is to be given

to the common subjective intention if this can be established. As only a
secondary consideration, recourse may be had to what reasonable parties
with the same knowledge and in the same circumstances would construe
the contract to mean. This, as comment two makes clear, is not a general
requirement of reasonableness, but one which places the interpreter in the
shoes of those particular parties.
A similar rule is captured in the Draft Common Frame of Reference
(DCFR):
Article II 8:101: (1) A contract is to be interpreted according to the common

intention of the parties even if this differs from the literal meaning of the
words. (2) If one party intended the contract, or a term or expression used in
it, to have a particular meaning, and at the time of the conclusion of the
contract the other party was aware, or could reasonably be expected to have
been aware, of the first partys intention, the contract is to be interpreted in
the way intended by the first party. (3) The contract is, however, to be
interpreted according to the meaning which a reasonable person would give to
it: (a) if an intention cannot be established under the preceding paragraphs; or
(b) if the question arises with a person, not being a party to the contract or a
person who by law has no better rights than such a party, who has reasonably
and in good faith relied on the contracts apparent meaning.59
The comments to this section note that it combines elements of the

subjective and objective approaches, as do most Member States of
the European Union. The primary inquiry is again stated to be into the
59
Von Bar and Clive (2009) 553.

common intention of the parties in the light of the context of the

transaction.60 Objective questions of what it would be reasonable to
expect the contracting party to whom an offer was made to understand by
such offer are the next point of call. Finally, as a last resort, the
interpreter may consider what would be a completely objective interpret-
ation of the contract (subject to the requirement that such an interpret-
ation must be reasonable).
This brief excursus of two models of supra-national law thus confirms
that Pothiers golden rule of interpretation is still alive and well. Indeed,
Lord Hoffmann noted not long ago that the UNIDROIT PICC were based
on French legal philosophy and as such the perspective which this model
provides, generally, and on admitting extrinsic evidence in particular, was
at variance with the English common law.61 The two approaches set out
above do try to reconcile with objective interpretation, however, by
providing this as a deadlock-breaker for resolving hard cases of interpret-
ation, not resolvable from examining the parties common intention.
What is noticeable about the continental, particularly German, law as
well as the model laws, is the high premium placed upon good faith.
Since this chapter set out to compare South African law with the major
European legal systems in particular, the role of good faith in South
African contract law will be considered next.
VI. GOOD FAITH, THE CONSTITUTION AND

AFRICAN CUSTOMARY LAW IN SOUTH
AFRICAN CONTRACTUAL INTERPRETATION
As we have seen, in the early days of the law of a unified South Africa,
the search was for the common intention of the parties as expressed in
the wording of their contract. The possibility of allowing good faith to
guide the interpretation of the contract was only acknowledged in the
instance of an ambiguity: in the event of two competing constructions,
the Appellate Division was prepared to favour a construction of the
contract which avoided a manifestly inequitable result.62 Good faith
60
Article II-8:102 encourages the interpreter to have regard to the context in
which the contract was concluded and gives various examples of what constitutes
such context. One of these, it should, be noted, is the catch all provision of good
faith and fair dealing.
61
Chartbrook Ltd v. Persimmon Homes Ltd [2009] UKHL 38, para. 39.
62
Trustee, Estate Cresswell and Durbach v. Coetzee 1916 AD 14, 19.

was hence treated as a deadlock-breaking consideration, in much the

same way as the other secondary rules of construction drawn from
historic sources such as Pothier and Van der Linden. South African
contract law does not recognize an independently enforceable duty of
good faith, the view of the Supreme Court of Appeal is that it is rather a
foundational principle, which underlies contract law in general, and
which finds its expression in the particular rules and doctrines thereof.63
This conservative view was undermined by the Constitutional Court,
however, when it infused the common law test for legality of a contract
with values such as fairness, justice and reasonableness.64 Thus when
invited to consider whether a time bar clause in a short-term insurance
contract was an infringement of the constitutionally protected right of
access to a court,65 the Constitutional Court held that the proper test was
to weigh this clause against public policy.66 The precise formula for the
public policy test used by the Court is worth repeating:
Notions of fairness, justice and equity, and reasonableness cannot be separ-

ated from public policy. Public policy takes into account the necessity to do
simple justice between individuals. Public policy is informed by the concept
of ubuntu. It would be contrary to public policy to enforce a time-limitation
clause that does not afford the person bound by it an adequate and fair
opportunity to seek judicial redress.67
Although this case dealt with the enforcement of contractual terms, this
approach could well be extended to the interpretation phase of a contract
as well, so that competing constructions could be weighed against public
policy in choosing an outcome. Indeed, the Supreme Court of Appeal
stated in South African Forestry Co. Ltd v. York Timbers Ltd that notions
of fairness and good faith that underlie the law of contract have a role to
play in contractual interpretation.68 The concept of ubuntu, referred to
63
Brisley v. Drotsky 2002 (4) SA 1 (SCA), para. 22 (authors translation).
64
Barkhuizen v. Napier 2007 (5) SA 323 (CC), para. 51. This was done via
the public policy rule, which is explained below. See para. 82 of this case,
however, for a reaffirmation of the Brisley v. Drotsky approach to the question of
good faith as a doctrine independent of public policy or the Constitution.
65
Constitution of the Republic of South Africa, s. 34.
66
Barkhuizen, n. 57 above, paras 2830.
67
Ibid. para. 51. Compare Everfresh Market Virginia (Pty) Ltd v. Shoprite
Checkers (Pty) Ltd 2012 (1) SA 256 (CC), para. 72, per Moseneke, J (the context
here was good faith in the negotiation of contracts); Botha v. Rich NO 2014 (4)
SA 124 (CC), paras 456 (a unanimous court limited a sellers power to cancel a
sale of immovable property for breach by the purchaser).
68
2005 (3) SA 323 (SCA), para. 32.

in the extract above, is taken from African customary law and has been
defined as follows by the Constitutional Court:
Metaphorically, [ubuntu] expresses itself in umuntu ngumuntu ngabantu,

describing the significance of group solidarity on survival issues so central to
the survival of communities. While it envelops the key values of group
solidarity, compassion, respect, human dignity, conformity to basic norms and
collective unity, in its fundamental sense it denotes humanity and morality.69
It does not seem to be a stretch to say that notions of fairness and

objective reasonableness, reinforced by notions of African philosophy
and the values of equity and dignity underlying the South African Bill of
Rights, may soon be required of all contracts under South African law,
whether through the public policy rule or a duty of good faith implied by
law.70 This could usefully be coupled with the more objective approach
to interpretation which the Supreme Court of Appeal has adopted in cases
such as Natal Joint Municipal Pension Fund recently.71 This would also
be in line with the prevailing approach to the interpretation of statutes in
this country,72 and has long been advocated by proponents of good
faith.73 Such a move would ensure that an interpretation of a contract
would not only have to be that which a reasonable reader in the position
of the parties would give to it, but also objectively reasonable and not in
conflict with constitutional values. In many ways, this echoes the
approach of continental European jurisdictions listed above, such as
Germany, as well as the supra-national model rules, such as the
UNIDROIT PICC or the DCFR, which require a duty of good faith in
contracting.74
69
S v. Makwanyane 1995 (3) SA 391 (CC), para. 308, per Mokgoro, J. See
further Bennett (2011) 3; Cornell and Muvangua (2012).
70
See the strong statements in this regard in Everfresh Market Virginia, n. 67
above, para. 72. In the consumer context, Consumer Protection Act 68 of 2008
requires (s. 48) that consumer contracts may not contain unfair, unreasonable or
unjust terms. Under s. 52 of that Act, a court is given extensive powers to undo
a contract interpreted to contain such terms.
71
2012 (4) SA 593 (SCA), para. 18.
72
See above and the statement in Natal Joint Municipal Pension Fund, n. 26
above, para. 19, that the new objective, contextual approach to interpretation is in
line with the South African approach to the interpretation of statutes, which
operates particularly within the context of the Constitution.
73
Compare, e.g. Lubbe and Murray (1988) 469.
74
The duty of good faith is captured in UNIDROIT PICC, art. 1.7 and
DCFR, art. III-1:103.

VII. CONCLUSION
We have seen that the South African approach to contractual interpret-
ation used to be a synthesis of civil and common law, with the golden
rule of interpretation, taken from the later ius commune writers and still
to be found in the French Civil Code, being applied against a backdrop of
the English law preventing extrinsic evidence of contractual negotiations.
This parol evidence rule still forms part of South African law, as well as
English law, and the courts of both jurisdictions have defended and
reinforced it recently. This rule is at variance with German and French
law. The South African movement toward preferring an interpretation
based on a reasonable reading by a person in the shoes of the recipient of
an offer, is essentially a reflection of the shift in English law which has
been happening since the 1970s. This technique of reading is very close
to that practised by German courts for many years, demonstrating the
widespread acceptance of this approach. Indeed, it could be said that
South Africa in particular, with its own movement towards an enforceable
duty of good faith in contract law, is moving as much in the German
direction as in the English. This also shows that the South African
synthesis of the law of interpretation positions it closer perhaps to
English and German law than to French law.
Perhaps this is to draw a false dichotomy, however, since elements of
the same trends in interpretation can be found in most of the legal
systems surveyed in this chapter. The major stumbling blocks are the
rules against certain forms of extrinsic evidence, although we have seen
that even some in the English jurisdiction are calling for the abolition of
this. The main argument against abolition of these rules seems to be
prevention of the leading of unnecessary and voluminous evidence of
contractual negotiations by the parties to a dispute,75 but the French and
German experience has proved that this floodgates type of argument is
perhaps overly stressed.76
Questions of drastic reform aside, the shift in emphasis toward the
construction of the reasonable recipient in South African and English law
is a positive one. The inference of the understanding of a contract of an
ordinary contracting party in the shoes of the recipient, rather than that of
legally trained judges, is a step in the direction of making law more
intelligible and open to those who are governed by it, and protects the
reliance of the party who accepted the offer.
75
See, e.g., Lubbe and Murray (1988) 463.
76
Compare the argument of Vogenauer (2007) 1379 (discussed above).

REFERENCES
Bennett, T.W. (2004) Customary Law in South Africa. Lansdowne: Juta
Bennett, T.W. (2011) Ubuntu: An African Equity in F. Diedrich (ed.), Ubuntu, Good
Faith and Equity: Flexible Legal Principles in Developing a Contemporary Jurispru-
dence. Claremont, South Africa: Juta, 3
Bingham, T. (2008) A New Thing Under the Sun: The Interpretation of Contract and the
ICS Decision, 12 Edinburgh L R 374
Christie, R.H. and Bradfield, G.B. (2011) The Law of Contract in South Africa. Durban:
Butterworths, 6th edn
Corder, H. (2010) A Century Worth Celebrating, 127 South African L J 571
Cornell, D. and Muvangua, N. (2012) Ubuntu and the Law: African Ideals and Post-
Apartheid Jurisprudence. New York: Fordham University Press
Fagan, E. (1996) Roman-Dutch Law in its South African Historical Context in R.
Zimmermann and D. Visser (eds), Southern Cross: Civil Law and Common Law in
South Africa. Oxford: Clarendon Press, 33
Himonga, C. and Nhlapo, T. (eds) (2014) African Customary Law in South Africa:
Post-Apartheid and Living Law Perspectives. Cape Town: Oxford University Press
Southern Africa
Juta, H. (1906) Institutes of Holland. Cape Town: J.C. Juta
Ktz, H. and Flessner, A. (1997) European Contract Law. Oxford: Clarendon Press, Tony
Weir (trans.)
Lewis, C. (1996) Interpretation of Contracts in R. Zimmermann and D. Visser (eds),
Southern Cross: Civil Law and Common Law in South Africa. Oxford: Clarendon Press,
195
Lewison, K. (2011) The Interpretation of Contracts. London: Sweet & Maxwell, 5th edn
Linden, J. (1806) Rechtsgeleerd, Practicaal, en Koopmans Handboek. Amsterdam: Allart
Lubbe, G. and Murray, C. (1988) Farlam and Hathaway on Contract: Cases, Materials,
Commentary. Claremont, South Africa: Juta, 3rd edn
Maxwell, C. (2012) Interpretation of Contracts in D. Hutchison and C.J. Pretorius (eds),
The Law of Contract in South Africa. Cape Town: Oxford University Press Southern
Africa, 2nd edn, 255
Muthorst, O. (2011) Contract Interpretation Under the German BGB and Under the
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European Private Law. Munich: Sellier European Law Publishers, 47
Nicholas, B. (1992) The French Law of Contract. Oxford: Clarendon Press, 2nd edn
Nicholls, D. (2005) My Kingdom for a Horse: The Meaning of Words, 121 LQR 577
Pothier, R. (1853) A Treatise on the Law of Obligations or Contracts (Trait des
Obligations). Philadelphia, PN: R.H. Small, David Evans, W. (trans.)
Schwikkard, P.J. and Van der Merwe, S.E. (2010) Principles of Evidence. Kenwyn, South
Africa: Juta & Co., 3rd edn
Vogenauer, S. (2007) Interpretation of Contracts: Concluding Comparative Observations
in A. Burrows and E. Peel (eds), Contract Terms. Oxford: Oxford University Press
Von Bar, C. and Clive, E. (eds) (2009) Principles, Definitions and Model Rules of
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European Law Publishers
Wallis, M. (2010) Whats in a Word? Interpretation Through the Eyes of Ordinary
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Zimmermann, R. (1990) The Law of Obligations: Roman Foundations of the Civilian
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Zimmermann, D. Visser and K. Reid (eds), Mixed Legal Systems in Comparative
Perspective: Property and Obligations in Scotland and South Africa. New York: Oxford
University Press, 1

19. Promissory estoppel

Paolo Pardolesi
I. WHAT IS PROMISSORY ESTOPPEL?

Promissory estoppel took shape in the nineteenth century to smooth out
the rigidity of the doctrine of consideration:1 it is possible to suggest that
promissory estoppel provides a valuable investment protection mech-
anism in so far as it bars the promisor from opportunistic withdrawal of
his undertaking when it can be expected that the promisors behaviour
has induced the justified reliance of the promisee (so that ignoring such
reliance would be contrary to justice). Nevertheless, it simultaneously
poses the problem of the adequacy of such a protection, especially where
there is a margin for trading ex post which would render the imposition
of liability unnecessary. Therefore, we will see that the focus shifts from
the reasonableness of the conduct during the negotiations and moves in
the direction of the obligation to act in good faith.
This being the original inspiration, the theory has seen further devel-
opments in North America, which created an exception and became, to a
greater extent, an alternative principle to the traditional theory of
consideration based on the bargaining principle (which requires that there
be some type of exchange bringing value, monetary or otherwise, to both
parties).
1
The roots of the institution of promissory estoppel go back to the
procedural remedy of estoppel which was an equitable defence exception to
prevent the enforcement of the customary rules in cases where their application
would have produced unjust results. In more detail, there are three figures which
have become progressively more and more important: (1) the estoppel by record
or rem judicatam (which is equivalent to the prohibition of double jeopardy); (2)
the estoppel by deed (which applies in proceedings of a formal nature: in short,
it prevents the other party of the same agreement from denying as stated therein);
and (3) the estoppel in pais (which is based on the idea that he or she who has
stated something then should not have the right to contest it). However, there are
many attempts to reconstruct the estoppel as a unitarian body: the latest one is
the fascinating work of Cooke (2001) 1 ff. For a recent historic reconstruction of
the origins of promissory estoppel see Amato (2012) 49 ff.
469
Therefore, although the traditional version of promissory estoppel

relaxes the rigor of this approach emphasizing the element of induced
reliance (therefore, reinterpreting the lack of commitment of the counter-
party, the commonly received version creates a systematic exception that
is able to co-exist with the principle: the promise of non-reciprocity
would fall on deaf ears if the pressing need to avoid injustice, triggered
by the change of the legal-patrimonial position to which the promisee
was innocently led, did not bar the promisors option to withdraw) the
new course, as we shall see, marks a sharp break from the traditional
approach. In a broader view, the idea is that the unilateral promise is
intended precisely to reassure the beneficiary about the seriousness of the
undertaking and, consequently, to induce him to act on anothers com-
mitment. Thus, the focus shifts from the reliance of the recipient to the
willingness of the promisor to assume the commitment. As a result,
promissory estoppel ceases to appear as an exception and becomes, to a
greater extent, an alternative principle to the traditional theory.2
From the comparative scholars perspective this picture is particularly
intriguing and filled with fascinating suggestions. The counter-intuitive
possibility of identifying the unilateral promise as a bargaining configur-
ation (which revolves around the idea that the promisor wants to stress
the seriousness of the commitment) or as an essential requirement of
pre-contractual obligation (where it is closely linked to the desire to
protect the expectation created in the promisee) requires some crucial
theoretical articulations to be reconsidered. The following notes are the
first steps on the path towards uncovering and examining this complex
conceptual chain.
II. ENGLISH DISCIPLINE OF PROMISSORY

ESTOPPEL: AN INTRIGUING JOURNEY AS A
LEGAL TRANSPLANT
Even though the development of the English discipline of promissory
estoppel mirrors the different matrices of common law and equity (which
have produced, in addition to an intrinsic inconsistency, a terminological
vagueness),3 it is necessary to emphasize that the impulse toward
unification took place not only through the direct influence of American
2
On these profiles see Posner (1977).
3
Spencer Bower (1966) 332. In this perspective it will be important to start
from the impact of the Judicature Acts (187375). Prior to these, the English
system followed a dualistic approach, whereby rights and remedies could only be
Promissory estoppel 471
jurisprudence (where this result had already been largely achieved), but
in a mediated manner, through the stimulus coming from the decisions
made by some Commonwealth courts (mainly Australian), which, in turn,
had adopted the North American legal solutions.4 In this perspective, the
most important case is Waltons Stores (Interstate) Ltd v. Maher, which
not only established the transplantation of the US model of promissory
estoppel into the Australian legal tradition, but also captured the attention
of the English courts, becoming the main way of unifying estoppel in a
single discipline with offensive capabilities.5
Before turning to the analysis of this important legal solution, it seems
appropriate to briefly survey some crucial evolutionary features concern-
ing the enforcement of promissory estoppel in England by means of the
scrutiny of two leading cases: (1) Jorden v. Money6 and (2) Central
London Property Trust Ltd v. High Trees House Ltd.7
applied either by common law courts or by the Chancery court. This approach
was overwhelmed by a procedural fusion; the Acts affirmed the irrelevance of
jurisdiction and the abandonment of the terms legal or equitable, which carry
a complex array of implications. However, this procedural simplification marked
the start of a web of conflicting results, due to the fact that, in many cases,
common law and equity dealt with the same elements, each adopting different
terminology and practical solutions. One example for all: although the term
contract (rooted in common law) was used in equity cases where specific
performance was sought for an agreement binding at common law, the opposite
route did not work. An agreement relevant in equity, but not recognized at
common law, could never have been classified as contract; rather, in the face of
a hypothesis of this kind, it was alleged that the defendant, retracing his steps
(that is, when he had resolved to break the agreement), had committed an
equitable fraud, with the consequence of being subject to an estoppel for
violation of a fiduciary duty (see Jaffey (2000) 4212).
4
Waltons Stores (Interstate) Ltd v. Maher (1988) 164 CLR 387; Foran v.
Wright (1989) 168 CLR 385; Commonwealth of Australia v. Verwayen (1990)
170 CLR 394.
5
This case has been recalled by many decisions: see, for example,
Petromec Inc. v. Petroleo Brasileiro S.A. Petrobras [2004] EWHC (Comm) 127;
Brennan v. Bolt Burdon [2003] EWHC (QB) 2493; Actionstrength Ltd v. Intl
Glass Engineering [2003] UKHL 17, [2003] 2 WLR 1060; In re Goldcorp Exch.
Ltd [1994] 3 WLR 199.
6
Jorden v. Money (1854) 5 HL Cas. 185. For a reconnaissance of the
events in this case see Ngugi (2007).
7
Central London Property Trust Ltd v. High Trees House Ltd [1956] All
ER 256.
A. Difficulty in Recognizing the Requirement of Intention to Create

Legal Relations
In 1854, the House of Lords, ruling on the case of Jorden v. Money, held
that the doctrine of estoppel does not apply to a case where the
representation is not a representation of a fact, but a statement of
something which the party intends or does not intend to do.8 More
specifically, the court recognized estoppel based on simple reliance
(namely, in the presence of a simple declaration of intent aimed to
influence the conduct of a recipient who has acted in reliance): a move to
which the same court had given its plain denial just nine years before in
the decision in Hammersley v. De Biel.9
Only 100 years later, the will of the courts to reduce estoppel to a mere
rule of evidence10 underwent an important transformation by virtue of
the statement of Lord Denning in Central London Property Trust Ltd v.
High Trees House Ltd, which involved a dispute regarding the request of
the plaintiff/landlord to recover arrears of a lease (with a rental agree-
ment lacking consideration) after having shown the defendant/tenant his
willingness to accept a partial payment in view of the special conditions
existing in London as a result of the Second World War.11 In particular, in
spite of the will of the plaintiff/landlord to obtain not only the return of
the full price (i.e. that established originally in the lease), but, given the
lack of consideration, the recovery of the money saved by the defendant
because of his promise, Lord Denning adopted a solution which in some
ways was surprising. He held that, even though the promise was rooted in
an assurance as to the future, estoppel should be granted since the
promisor/lessor intended to bind himself, inducing the lessee to rely on
the willingness of the landlord to accept a reduced amount compared to
that provided by the contract. Consequently, although the landlord could
ask to return to the initial contract terms, he was precluded from claiming
the repayment of the sum which he had promised to relinquish.
8
Jorden v. Money, n. 6 above, at 185.
9
Hammersley v. De Biel (1845) 8 ER 1312 (HL).
10
During that century this practice was mitigated only by the rise of
proprietary estoppel, which allowed the plaintiff to establish a cause of action
based on the expectation created by a declaration of future intent by the
defendant where the underlying subject-matter respecting the representations
was land (Ngugi (2007) 475).
11
Central London Property Trust Ltd v. High Trees House Ltd, n. 7 above,
at 256.
The court patently exceeded the limits laid down in Jorden v. Money;12
but it took advantage of important changes set forth in Hughes v.
Metropolitan Rail Co.13 and Birminghan & District Land Co. v. London
and North-Western Rail Co.14 (which enshrine the principle under which
reliance can only be implemented between actors bound together by a
pre-existing contractual relationship or at least defined and distinct legal
relations).15 The latter two cases lay sufficient foundation and legal basis
on which one can assert the principle that a promisor is not permitted to
drop the promise when certain conditions are met. More specifically, in
cases where the intention to create legal relations is demonstrated (that
is, promises were intended to be binding, intended to be acted on and in
fact acted on), courts must consider the party bound despite the fact that
under the old common law it might be difficult to find any consideration
for it.16 The rationale for the shift was based on the idea that one should
not be permitted to act inconsistently since, if the holder of a contractual
right, by his conduct, induces the counter-party to believe that this right
will not be implemented or will be temporarily held in abeyance, then he
should not be given the opportunity to withdraw and take advantage of
the same right after the passage of the period of insured quarantine.
Only in the presence of these distinct features may the promises give rise
to the instrument of quasi-estoppel, which is more commonly known as
promissory estoppel.17
B. Uncertain Interpretation of the High Trees Decision
Although the High Trees decision has played a vital role in the evolution
of this legal instrument in England, its interpretation was doubtful
regarding whether its application was limited solely to those subjects
already bound by pre-existing contractual relations.
Notwithstanding that the jurisprudence was largely in favour of the
need for the existence of a contractual relationship between the parties,
12
See Jorden v. Money, n. 6 above, at 9. See also, Koffman and Macdonald
(2007) 84: the law had moved on since Jorden v. Money to cover a broader
principle than that traditionally represented by the doctrine of estoppel by
representation.
13
Hughes v. Metropolitan Railway Co. [1877] 2 App. Cas. 439.
14
Birmingham and District Land Co. v. London & North-Western Rail Co.
(1888) 40 Ch. D 286.
15
Ngugi (2007) 4756.
16
Spencer Bower (1966) 3334.
17
The other one is the election. On this kind of instrument see ibid. at 285.
the position of Lord Denning (in determining that the promise, intended
to be binding, intended to be acted on, and in fact acted on, is binding so
far as its terms properly apply) would seem to open the gates to the
possibility that estoppel be imbued with an offensive soul, which, as
will be seen, can be traced to US jurisprudence.18 Furthermore, in a case
of divorce marked by the promise and later refusal by a husband to
provide an annual maintenance allowance for his wife,19 Judge Byrne
embraced the womans arguments and held that the promise of the
spouse, though not based on any previous contractual relationship and
lacking consideration, had to be implemented on the basis of the
principle enshrined in the High Trees case.20
Nonetheless, the appeal gave the author of the decision the opportunity
to clarify the point and vigorously underline that the principle set forth in
the High Trees case was not aimed at following in the footsteps of section
90 of the Restatement (First) of Contracts (which states: [t]hat principle
does not create new causes of action where none existed before[; i]t only
prevents a party from insisting upon his strict legal rights, when it would
be unjust to allow him to enforce them, having regard to the dealings
which have taken place between the parties).21 In addition, this position
was further reiterated by the same judge in an essay where he expressed
his belief that there was no need for equity to alter the English discipline of
consideration since it ensured a much wider scope than that envisaged in
the United States. This, according to Lord Denning, could be explained as
follows: the saliency of this more flexible approach lies in the fact that,
despite lacking an explicit request, an equivalent could be traced in the will
to induce the counter-party to perform a positive act, or abstain from acting
by virtue of reliance created by promises.22 After all, some years before, in
18
See Thompson (1983) 266.
19
What is important to emphasize is that the spouse, relying on the binding
nature of the promise, had failed to undertake the legal proceedings necessary to
obtain the required court order.
20
Combe v. Combe [1951] 2 KB 215 (CA).
21
For a thorough analysis of the reasoning of Lord Denning in Combe v.
Combe see Ngugi (2007) 47782.
22
Denning (1952) 1:
[T]he law for centuries has been that an act done at the request of another,
express or implied, is sufficient consideration to support a promise The
only essentials are the promise by the one and the forbearance by the other on
the faith of it. Even though there was no request in fact for the forbearance,
nevertheless if the promise was given with the intention of inducing the
creditor to forbear on the faith of it, the law will imply a request In these
circumstances it may be well that, instead of using the old language of
Bob Guinness Ltd v. Salomonsen, Denning himself had stressed that

consideration is sometimes the actual purchase price of a promise, and
sometimes a mere fiction recognized to ensure that the promise is enforce-
able.23 The result of Dennings dicta is the implication that [i]f the law is
willing to imply a request, it follows that, under this definition, a
majority of the cases covered by the American doctrine of promissory
estoppel would immediately be transformed into consideration.24
However, the debate about the limit laid down in the cases of Hughes
and Birmingham25 that estoppel may only be applicable between
parties bound by a pre-existent contractual relationship has not lost its
vigour. After all, some courts (often referring to Combe for support) have
request and consideration we can express the self-same principle by saying

that a promise is binding in law if it was intended to create legal relations,
intended to be acted upon and was in fact acted upon by the person to whom
it was given.
23
Bob Guiness Ltd v. Salomonsen [1948] 2 KB 42.
24
Ngugi (2007) 4812 (this would, in turn, make the doctrine of promis-
sory estoppel superfluous if offered to enforce relied-on promises, simply
because the law would imply a request by the promisor to the promisee to do the
actions or forbearance which would be the basis of the estoppel action hence
transforming such actions or forbearance into consideration). This solution has
found confirmation in a variety of subsequent judicial decisions, which has led to
the identification of five essential elements that characterize the rule of English
promissory estoppel: (1) the presence of a promise or a statement put forth in a
clear and unambiguous manner, by the party against which the estoppel is sought
(Motor Oil Hellas (Corinth) Refineries S.A. v. Shipping Corp. of India [1990] 1
Lloyds Rep. 391, 399 (HL 1989); Allied Marine Transp. Ltd v. Vale Do Rio
Doce Navegaao S.A. [1985] 2 Lloyds Rep. 18, 25, 28 (CA)); (2) the promisee
must act to his detriment on the basis of the promise (Goldsworthy v. Brickell
[1987] Ch. 378, 411 (CA)); (3) in a manner inconsistent with the promise/
declaration made to the promise such that it would be unconscionable not to give
legal recognition to the promise (Jennings v. Rice [2002] EWCA (Civ) 159; D &
C Builders v. Rees [1966] 2 QB 617, 625 (CA)); (4) the effect of estoppel must
be to suspend (rather than terminate) the right challenged so that the person who
has formulated the declaration/promise will not be locked forever, but will
regain the faculties paralyzed by providing reasonable notice where appropriate
(National Westminster Bank Plc v. Somer, Intl (UK) Ltd [2001] EWCA (Civ)
970); (5) finally, such a legal instrument has to prevent the execution of the rights
covered by the promise/grant by the promisor, but may not allow for the creation
of new rights (Combe v. Combe, n. 20 above at 220).
25
See Hughes v. Metropolitan Railway Co., n. 13 above, at 439; Birming-
ham and District Land Co. v. London & North-Western Rail Co., n. 14 above, at
286.
held that the pre-existence of legal relations is a necessary element for

the expansion of its scope. Nevertheless, this result was achieved not by
overruling the decision, but by arguing for recognition of a unified
estoppel which does not distinguish between proprietary or promissory
estoppel. The result of such unification would be to make all justifiably
relied on representations enforceable.26
C. Mediated Manner of Transplantation of the US Model of

Promissory Estoppel into the English Legal Tradition
As we stressed beforehand, the impulse toward unification of the English

discipline of promissory estoppel took place not only through the direct
influence of American jurisprudence but through the incentive coming
from the decisions made by some Australian courts that captured the
attention of the English courts.
In particular, the most significant case, Waltons Stores (Interstate) Ltd
v. Maher, gave Chief Justice Mason (and Wilson) the occasion to assert
that statements not supported by consideration might find a cause of
action in estoppel with the equitable goal of preventing unconscionable
conduct.27 This analysis, which stays true to the traditional roots, reveals
an obvious link with the US doctrine: after all, as evidenced by both
judges, in section 90, paragraph 1, of the Restatement (Second) of
Contracts, the connection between estoppel and the contract discipline
appears to be close to the Australian version with its origins in the
equitable concept of unconscionable conduct. This is because the US
version has progressively acquired the role of equivalent or substitute to
consideration in the formation of the contract. Therefore, the proposition
in section 90, which, on the one hand, ensures the implementation of a
promise conditioned on a reasonable expectation on the part of the
promisor that his promise will induce action or forbearance by the
promisee and, on the other, the impossibility of allowing injustice to
occur, makes clear that the promise is enforced in circumstances other
than simply where it is unconscionable28
In light of these considerations, it is reasonable to conclude that the
English discipline of promissory estoppel will complete an intriguing
26
Ngugi (2007) 484.
27
See ibid. at 490.
28
Waltons Stores (Interstate) Ltd. v. Maher, n. 4 above, at 387: the
emphasis is on the promisors reasonable expectation that his promise will induce
action or forbearance, not on the fact that he created or encouraged an
expectation in the promisee of performance of the promise.
journey as a legal transplant: from England to the United States; to

England and back through the Commonwealth. In any event, that would
be a remarkable success rate for a legal transplant.29
III. EVOLUTION OF THE NORTH AMERICAN

DISCIPLINE OF PROMISSORY ESTOPPEL
BETWEEN THE FIRST AND SECOND
RESTATEMENT OF CONTRACTS
Contrary to what some commentators would induce us to believe, the
development of promissory estoppel in North America was not in
response to a draft of the enlightened Restaters, rather it was rooted in a
feeling, inspired by the more elastic US system, which is inescapably
different from the English approach.30
This openness to novelty created a situation of substantial uncertainty
within the framework of contract law:31 following the establishment of
29
See Ngugi (2007) 484.
30
Many decades before the advent of the First Restatement of Contracts
(1932), the US courts, responding to the need to amend the proliferation of cases
stained by the harm caused by reliance (triggered by the rigidity of traditional
rules for the establishment, modification and termination of a contract), sought
alternative routes, referencing possible solutions used in common law juris-
dictions and in courts of equity (on this see Posner (2003) 851), who highlights
the ways in which the promissory estoppel evolved through the common law
process as a device that helped avoid results that were perceived to be unjust in
particular kinds of cases. See also, Prentice (2007) 81, who points out how the
values advanced by the equitable doctrine of promissory estoppel are certainly
consonant with principles well recognized by behavioural decision theory. More
specifically, the institution of assumpsit, which remedies the harm suffered from
reliance on a promise, and the invocation of equitable fraud, for cases in which
the promisor claimed the strict application of the contract doctrine after having
induced promisees justifiable reliance had assumed great importance (Teeven
(2004) 502). Indeed, these legal instruments were capable of ensuring both a
greater flexibility in contractual arrangements and the implementation of crafted
novel promises to deal with uncertain economic conditions: ibid. at 500
(contrary to that accepted account, the following legal history of the justifiable
reliance doctrine documents that courts regularly granted commercial promisees
relief from reliance hardship for many decades prior to the first Restatement).
31
For a recent overview of the origins of the North American discipline of
promissory estoppel see Jimenez (2010). More specifically: the author examines
the significance of the promissory estoppel cause of action, the normative basis
upon which promissory estoppel rests, the traditional remedies that have been
the American Law Institute (ALI), whose primary purpose was to provide
clarification and simplification of the law and its better adaptation to the
needs of everyday life, Samuel Williston emphasized the difficulties of
achieving a uniform definition of consideration. Moreover, Williston
stressed that, in principle, the same could have been detected in the three
distinct and conflicting ideas of justifiable reliance, bargain, and a
slender reed of moral obligation.32 Nonetheless, the perception that the
courts considered justified reliance a valid basis (no less than a bargain)
for establishing a binding contract did not stop Williston from isolating
the exchange as the unitary paradigm of the Restatement to find
sufficient consideration.33 Comment (c) of section 75 of the First
Restatement of Contracts, extrapolating the views of Langdell and
Holmes (the expression, as assessed by a careful observer, of a formalist
reaction against the natural law flexibility that had crept into the sphere
of promissory liability during the preceding decades,34 excluded that
reliance on a promise could constitute consideration.35
awarded to successful promissory estoppel litigants, and the manner in which

promissory estoppel remedies have been traditionally classified according to the
conceptual expectation and reliance interests.
32
See Williston (1921).
33
Teeven (2004) 51112.
34
Ibid. at 514. On this profile see Langdell (1880) s. 79; Holmes (1881).
See comment (c) to s. 75 of the Restatement (Second) of Contracts:
furthermore, although a price has been agreed upon and paid for a promise,
the promise is not binding unless the law deems the price sufficient. The
following Sections state when an agreed price or consideration for a promise
is sufficient to make the promise binding and when such a price or
consideration is insufficient. The fact that the promisee relies on the promise
to his injury, or the promisor gains some advantage therefrom, does not
establish consideration without the element of bargain or agreed exchange;
but some informal promises are enforceable without the element of bargain.
These fall and are placed in the category of contracts which are binding
without assent or consideration (see 8594).
Section 75 establishes that: (1) consideration for a promise is: (a) an act other
than a promise, or (b) a forbearance, or (c) the creation, modification or
destruction of a legal relation, or (d) a return promise, bargained for and given in
exchange for the promise. (2) Consideration may be given to the promisor or to
some other person. It may be given by the promisee or by some other person.
35
Although, from this perspective, it would seem to be heresy to state that
Holmes takes a formalist approach, it is necessary to remark on the complexity of
his role. Holmes undertook a crusade against the possibility of justifiable reliance
being understood as a basis for consideration (Gilmore (1974) 75). In this vein, a
reference can be drawn to the English case of Coggs v. Bernard (case of damage
Nevertheless, such radical conclusions struggled with the prevailing

theoretical view which (conforming to the developments of nineteenth
century jurisprudence)36 looked favourably upon the need for justifiable
reliance to be a worthy exception to consideration.37
In spite of such marked fluctuations,38 the first version of what would
become the First Restatement of Contracts adopted a highly restrictive
caused by the violation of the depositors reliance on the free promise of providing
for the transport of his goods by the depositary), in which the court had deduced
the existence of a consideration that could bind the negligent depositary (Coggs v.
Bernard (1703) 72 Eng. Rep. 107 (KB). The anomaly consisted in the fact that this
decision converted what normally fell within the scope of a tort action for
negligent bailment into a contract action because the court applied the concept of
consideration. Specifically referring to this holding, Holmes described Coggs as
the paradigmatic example of the inadequacy that follows when the general rule of
contracts allows justifiable reliance to become a basis for consideration (Holmes
(1881) 196). On this, see Teeven (2004) 516 (Holmes presented Coggs as a case
representative of contracts generally and then readily pointed out that it was
doctrinally flawed since Coggs was an easy target to undercut. Holmes used Coggs
to side-step, while still trying to compromise, the raft of nineteenth century
American reliance hardship decisions that involved transactions traditionally
governed by the doctrine of consideration).
36
In this perspective the leading case is Rice v. Almy, 32 Conn. 297 (1864).
On this point, see Teeven (2004) 522, who remarks how this case:
provided perhaps an extreme example of how far some nineteenth century
courts at law went to rationalize hardship relief for justifiable reliance. The
Connecticut court traced consideration back to its foundations as a tres-
passory deceit action. That much was correct, but the courts claim that
reliance relief for deceit remained available in contract law was a departure
from judicial treatment because by the sixteenth century, the deceit element
had been subsumed within a modern doctrine of consideration grounded upon
reciprocal agreement. The opinion in Rice stated that consideration contained
substantial elements of an estoppel in that a promise induces another to
change his situation; if he is allowed to deny the validity of the promise he is
enabled to perpetrate a fraud by his false promise.
37
For the doctrine favourable to the protection of reasonable reliance see
Pollock (1950); Pound (1919) 452; Parsons (1886) 359; Bigelow (1876) 441.
38
More specifically, we saw how Williston had identified consideration as
something different from the bargain (corresponding to cases where the prom-
isor, by virtue of his promise, is able to create in the promisee expectations that
lead him to adopt a particular conduct) and had emphasized the impatience of
US courts in relation to the restrictive bargaining theory in reliance hardship
cases (see Wilson v. Spry, 223 S.W. 564, 568 (Ark. 1920); Spitzle v. Guth, 183
N. Y. S. 734, 747 (N.Y. Special Term, 1920)), urging him to adopt the label of
promissory estoppel for this field (Williston (1921) 139). Instead, Corbin
concept of consideration, which effectively excluded from its sphere

justifiable reliance;39 section 75 portrayed a setting strikingly close to
Holmes.40 However, this exclusion did not gather the necessary consen-
sus to ensure consolidation. In fact, the drafters themselves knew that
they had left a vacuum in relation to cases where harm is caused to the
promisee due to his justifiable reliance. In the subsequent draft of 1925
the drafters tried to increase the value of judicial rulings in favour of
promisees on the grounds of justifiable reliance in Restatement sections
85 through 94. A year later, the drafters of the Restatement elaborated in
section 88 (which would later become section 90 in its 1932 publication)
on a specific promissory relief for harm resulting from justifiable reliance
(which soon became an object of heated debate within the legal
community).41
One of the areas of contrast concerned the realization that, while
section 90 adopted an open language approach that foresaw the
applicability of promissory estoppel in relation to promises made in a
commercial setting, the doctrinal view took an approach which was
diametrically opposed as it excluded the possibility of relief based on
justifiable reliance in a commercial setting.42 Such authoritative indica-
tions seemed to prelude the general endorsement of the restrictive
approach under which the remedy relating to justifiable reliance could
reflected on the case law characterized by the sacrifice of reliance, highlighting

how consideration may consist of acts of reliance upon a promise even though
they were not specified as the agreed equivalent and inducement (Anson
(1880)).
39
Although Corbin, and in part Williston, treated justifiable reliance as a
basis for finding consideration in their writings prior to 1926, Willistons
conservative inclinations won out in section 90 placing promissory estoppel
outside the exclusive bargain test for consideration enunciated in section 75:
Teeven (2004) 527.
40
See Gilmore (1974) 56.
41
On the events connected to the drafting of the First Restatement of
Contracts see Gilmore (1974) 56.
42
The point is that, as discussed above, Williston and Corbin, while aware
of practices adopted by the courts to grant relief reliance in relation to violations
of business promises, opted for a substantially different position. Even though
the closing position taken by Corbin might seem counter-intuitive (especially if
we consider its relationship with the doctrine of the realists), it is necessary to
stay away from superficial conclusions about his scientific (in)coherence. To this
end, returning to the insightful comments made by Gilmore, it is useful to recall
that the First Restatement of Contracts was the result of the compromise that
Williston and Corbin were able to achieve notwithstanding the fact that they
started from opposite points of view on almost all issues of law. In this
have been applied only in relation to cases involving free promises and
traditional relationships not covered by consideration.43
Nevertheless, the solution proposed did not ensure satisfactory results.
On the contrary, the muddled effects that it produced convinced the
authors of the Restatement to backtrack in order to review its excessive
timidity (which created many unacceptable restrictions regarding the
objectives and the scope of the applicability of promissory estoppel).44
The results of a change of this kind were not long in coming. In Robert
Gordon, Inc. v. Ingersoll-Rand Co., although the final outcome denied
the application of promissory estoppel because the plaintiff had not been
able to prove an irreparable detriment, the court emphasized that the
mere fact that the transaction is commercial in nature should not preclude
the use of promissory estoppel.45 Three years later, in the Engineering
perspective, however, Corbins position was far from simple: he was a revolu-
tionary who, belonging to an intermediate generation (or those between Willis-
ton and Llewellyn), had felt able to do more working within the establishment
than staying outside with those to whom he was most certainly linked in
ideological choices (realists). This pushed him to support hard solutions (in this
way it is possible to collocate the vicissitudes that accompanied the development
of the concept of consideration under s. 75) which explain this uncertain trend of
the positions of Corbin and clarify the schizophrenic nature which makes the
Restatement, noted from a historical point of view, the fascinating document that
it actually is. More specifically, Williston pointed out how s. 90 constitutes a
formalist retreat from the previous expansion of promissory liability, affirmed
under the principles of natural law, and states a general rule broader than has
often been laid down (ALI Draft and Comments 1928, 245). On his account,
Corbin, although prone in the years preceding the drafting of the Restatement to
show persuasively that justifiable reliance could be understood in commercial
promises, in doing so referred to the case of gratuitous promise of land (for a
more in-depth discussion of this, see Teeven (2004) 5334).
43
For the doctrine see Billig (1927); Shattuck (1937) 913 ff.; Page (1947);
Boyer (1950), as well as Boyer (1952). For the jurisprudence see Bard v. Kent,
122 P.2d 8 (Cal. 1942); E.I. Dupont de Nemorous & Co. v. Claiborne-Reno Co.,
64 F. 2d 224 (8th Cir. 1933); James Baird Co. v. Gimbel Bros., 64 F. 2d 344 (2d
Cir. 1933); Heggen v. Clover Leaf Coal & Mining Co., 253 N.W. 140 (Iowa
1934); James Barclay & Co. v. Bailey, 34 F. Supp. 665 (E.D. Tenn. 1940).
44
After all, both Williston (criticizing the reasoning of certain judicial
decisions) and Corbin (noting that the definition of consideration was so
reductive that the Institute was immediately compelled to construct a number of
additional rules in sections 85 through 94, to deal with justifiable reliance and
moral obligation) led to more opening, thus encouraging an application free
from counter-intuitive limitations (Teeven (2004) 54041).
45
Robert Gordon Inc. v. Ingersoll-Rand Co., 117 F. 2d 654 (7th Cir. 1941).
Co. v. Ellerman decision, there was a decisive step towards the recog-
nition of the full efficiency of promissory estoppel in trade. In fact, the
Supreme Court of South Dakota, moving away from the nearly dominant
case law, held that justifiable reliance would not suffer an impediment in
establishing a contractual relationship due to the inescapable prerequisite
of consideration, affirming that ordinary estoppel abolishes some legal
requirement in its application.46
This approach was readily confirmed in subsequent case law. One case
which had a large impact (and demands attention as a milestone case in
marking such a change) is the decision in Drennan v. Star Paving Co.47
In particular, Judge Traynor, overlooking the approach that had brought
him some years before to decide the opposite way in Bard v. Kent (on the
basis that the subcontractor has the ability to predict the reliance that its
proposal could generate in the contractor), held that a clear and definite
offer cannot be revoked when there is reasonable expectation that the
offer will induce detrimental reliance of the counter-party and when the
offer does, in fact, induce detrimental reliance. In other words, promis-
sory estoppel forcefully asserted its essential role in relation to commer-
cial promises. From this perspective, we can appreciate the purpose
behind the reference (by the same judge) to the historical case of Fontane
v. Baxley, where the court ruled in favour of the promisee allowing the
promise to be protected from harm caused by justifiable reliance. Such a
finding embodied the tendency towards sensitivity, typical of the nine-
teenth century, to natural law (a tendency that Holmes had contrasted
vigorously through the theory of consideration), encouraging North
American courts to apply promissory estoppel in cases involving com-
mercial promises.48
46
Engineering Co. v. Ellerman, 10 N.W. 2d 879 (S.D. 1943).
47
Drennan v. Star Paving Co., 333 P. 2d 757 (Cal. 1958).
48
Fontane v. Baxley, 17 S.E. 1015 (Ga. 1892). On this case see Teeven
(2004) 5678 (in that case, a railroad tie manufacturer in Georgia offered to
supply ties at a set price for one year if the buyers bids to sell ties were accepted
by New York railway companies. Georgias Chief Justice Bleckley said the tie
manufacturer could have repudiated for lack of mutuality before [the buyer]
had incurred trouble and expense in complying with it on his part. The buyer had
relied on the manufacturers offer to sell railway ties by travelling from Georgia
to New York, setting up office in New York, submitting bids to New York railway
companies based on the manufacturers price, landing contracts with two
railways and securing assurances that he had submitted the low bids on three
upcoming contracts. The court concluded that it would be a fraud to permit
revocation after substantial reliance. The court held that the manufacturers
promise to supply the ties needed to fulfil contracts at a stated price was
Thus, the middle of the century marked the return to the state of the
law before the publication of the Restatement of the Law of Contracts,
where the commercial promises were deemed (with a remarkable degree
of frequency) binding on the grounds of justifiable reliance. To be more
concise, this indication would find convincing confirmation in the
Restatement (Second) of Contracts. The proof is the fact that, amidst
the many adjustments made to section 90,49 the main changes concerned
the principle of reliance. To cite Gilmore, section 90 went from featuring
the unwanted stepchild of the Restatement (First) to being the mothers
first son or the basic principle of Restatement (Second) which, as
suggested by the comment, prevails, in case of necessity, over the theory
of exchange referred to in section.50
The affirmation of the principle of the reliance in section 90 of the
Restatement (Second) of Contracts is immediately confirmed in the
holding of the famous case of Hoffman v. Red Owl Store (an action for
damages due to the interruption of negotiations for the granting of a
grocery store franchise).51 In a few words, during the negotiations the
executives of the defendant company (Red Owl Store) had assured the
irrevocable once the buyer had reasonably relied on the suppliers promises of
quantity and price in making his bids to railway companies, at least as to the two
contracts actually formed with the railway companies).
49
See Gilmore (1974) 645; Knapp (1981) 55 ff.; Eisenberg (1982) 657;
Farnsworth (1987a) 1454; Murray (1990) 278 ff.; Yorio and Thel (1991) 123 ff.
Section 90 of the Restatement (Second) of Contracts states that: A promise
which the promisor should reasonably expect to induce action or forbearance [of
a definite and substantial character] on the part of the promisee or a third person
and which does induce such action or forbearance is binding if injustice can be
avoided only by enforcement of the promise. The remedy granted for breach may
be limited as justice requires.
50
Gilmore (1974) 64. From this point of view, the switch is patent: the
structure of the new s. 90 clearly affirmed how the reliance principle, freeing
itself from one of the major limitations provided in its original form, was
applicable in both contexts (commercial or otherwise). In other words, the
irreconcilable ambiguity between ss. 75 and 90 of the First Restatement was
resolved quite clearly in favour of the principle of promissory estoppel in s. 90,
which has absorbed the principle of exchange referred to in s. 75. The only
situation that seems to implicate the use of s. 75 would be a case in which an
exchange has not been fully performed by either party when both of them have
no intention to carry out the action. Even there, as the cryptic comment suggests,
the eventual reliance may be reason enough to provide a legal sanction without a
preliminary investigation into whether or not there was consideration (see
Gilmore (1974) 65).
51
Hoffman v. Red Owl Stores, 133 N.W. 2d 267 (Wis. 1965).
claimant (Hoffman) that he would obtain the franchise if he made a

financial contribution equal to the sum of US$18,000. To this end, the
plaintiff had been encouraged by the same managers to perform a series
of actions in order to obtain the money to secure the franchise. In short,
(1) the claimant sold his bakery; (2) he bought a small grocery store to
establish the experience necessary; (3) subsequently he was urged to sell
it, with the assurance that he would find a larger store in another town;
and finally, (4) he rented a house in the city where he was supposed to
open the franchise. Notwithstanding all these efforts, Red Owl unexpect-
edly increased the amount of capital required to obtain the franchise by
almost double (about US$34,000). Consequently, the exasperated claim-
ant decided to stop the negotiations and sued the defendant company to
obtain the rest of the losses sustained due to the reliance placed on the
declarations and on the promises made by them. The Wisconsin Supreme
Court awarded the compensation to the claimant, stating, inter alia, that
the promise necessary to support a cause of action for promissory
estoppel should not embrace all the essential details of an outlined
transaction between promisor and promisee so as to be equivalent to
the enforcement of a binding contract in the case of an acceptance of the
promise.52 Rather, the existence of justifiable reliance was enough: the
court opted for the enforcement of the promises made during negotiations
to protect the expectation that they have created in the promisee, whether
or not the promisor has acted in good faith or with intent to manipulate
the behaviour of the other.53
A. Alternative Reading of Promissory Estoppel
However, as evidenced by a perceptive scholar, this is not the only key

reading of promissory estoppel:54 moving from the idea that the reliance
of the promisee would seem to be aimed at influencing the decision of
the promisor to sell the franchise on favourable terms, this new approach
looks at both the strength of the promise and the power relationship thus
52
Ibid. at 2978.
53
On this case see Di Matteo et al. (2007) 14258; Khne (1990) 290 (the
court viewed promissory estoppel as being extra-contractual in nature). Never-
theless, this decision by the Wisconsin Supreme Court has been heavily
criticized: see Schwartz and Scott (2007); Scott (2007; Johnston (1999), who
stresses that: while efficiency of the classic Hoffman v. Red Owl is much more
debatable than previously assumed, as actually applied by courts today, promis-
sory estoppel in this context may be surprisingly efficient.
54
Di Matteo et al. (2007) 8.
created (instead of justifiable reliance).55 In other words: Hoffman

exercised his bargaining power to attempt to control the outcome of the
parties interaction.56
To better understand the implications linked to the reconstruction
indicated above, we turn our attention to the helpful suggestions worked
out by Farber and Matheson in a famous essay containing a tremendous
amount of critical substance. The authors, through a careful survey
(covering the period between 1980 and 1985) of the case law concerning
the application of promissory estoppel, not only excluded that reliance
constitutes the only key interpretation, but came to envisage a new rule:
any promise made in furtherance of an economic activity is enforce-
able.57 In a few words, they noted, on the one hand, that the traditional
doctrine of consideration tends to protect the trust generated by promises
that involve social benefits (e.g., sales, rents, insurances and loans), and,
on the other, that irrevocable offers,58 guarantees59 and options60 are
no-consideration promises, yet are enforced for the pragmatic reason that,
otherwise, several important business transactions would not be feasible.
This approach puts emphasis on the fact that promissory estoppel fills a
similar function by enforcing promises in other settings not amenable to
traditional bargaining transactions, in which reliance is beneficial both to
the promisor and to society as a whole.61
55
See Yorio and Thel (1991) 1623 (the critical and difficult question about
Section 90 in the courts is not whether to protect reliance, but whether to enforce
the promise at issue. It is neither sufficient nor necessary that the promise induce
the promisee to rely to her detriment. Every promise may influence the
promisees behavior, and yet not every relied-upon promise is enforceable. What
distinguishes enforceable from unenforceable promises is the quality of the
commitment made by the promisor).
56
Di Matteo et al. (2007) 144 (Hoffman exercised his bargaining power to
attempt to control the outcome of the parties interaction).
57
[A] new rule of promissory liability is emerging from the courts
encounters with an economy in which Okuns invisible handshake is increas-
ingly important: Farber and Matheson (1985) 905.
58
See UCC s. 2-205 (1978) (firm offer rule).
59
See Restatement (Second) of Contracts s. 88 (guaranty).
60
See ibid. s. 87 (option contract).
61
On this profile see Farber and Matheson (1985) 905. According to these
authors, this new rule will make it possible to unify the promissory estoppel and
other exceptions to the consideration requirement with consideration doctrine
itself.
In this perspective, it is no surprise that the need to protect the

certainty and stability of economic exchanges (together with the oppor-
tunity to motivate people to have trust in promises where that trust is
socially beneficial) has pushed the courts in the direction of an expan-
sive application of promissory estoppel, able to ensure, through a new
rule of promissory obligation, a strengthening of trust (understood in its
double meaning of good moral and economic value) between traders,
essential for the formation of valuable economic institutions.62 From
this point of view, the expectation referred to in section 90 of the
Restatement (Second) of Contracts would be only the highest point of a
trend supported by a set of exceptions (to the necessary existence of
consideration) designed to encourage useful commercial agreements.63
The alternative reading of promissory estoppel opens a scenario much
different from that proposed by Gilmore.64 The expansive application,
rather than constituting evidence of the absorption process of the contract
in tort, would witness the institution of a new theory characterized by a
distinctly contractual obligation.65 Finally, one element is unquestion-
able: without the ambition to assert itself as an absolute truth,66 the new
62
Farber and Matheson (1985) 9456 (a rule that gives force to this
expectation simply reinforces the traditional free will basis of promissory
liability, albeit in an expanded context of relational and institutional inter-
dependence).
63
This new approach, while placing itself outside the traditional doctrine of
contract law, at least as it concerns the lack of proof of both consideration and
detriment associated with promissory estoppel, ends up sharing its main object-
ives. Therefore, as pointed out by the best literature, it is possible to say that the
rule sounds within contract law, and operates within its traditional area of
concern: economic exchange promissory (see Farber and Matheson (1985) 929).
64
See Gilmore (1974) 79.
65
Farber and Matheson (1985) 906. On this profile see Yorio and Thel
(1991) 166 (far from evidencing the death of contract, the application of Section
90 by the courts demonstrates that promise is more vital than ever). For a
different reading key see Powers (2007) 842, which points out how the issue is
not whether promissory estoppel is a contract or a tort theory, but whether cases
decided under the doctrine are contract or tort cases, or whether they are
something else.
66
Farber and Matheson (1985) 9467. More specifically, the authors
remarked how this new rule does not account for every case, but it does provide
much surer guidance in understanding the case law. As a normative statement,
the promissory estoppel doctrine expressed in section 90 has raised more
questions than it has answered. In every case, it has required that courts return to
first principles to ask whether injustice can be avoided only by enforcement of
the promise. Busy judges, we think, deserve better guidance.
theory risks facing the problems linked to the implementation of prom-

ises executed in types of relationships which are acquiring increasing
relevance in the modern economic reality.67
IV. SCOTS LAW OF PROMISE: FROM STAIR TO THE

REQUIREMENT OF WRITING (SCOTLAND) ACT
1995
After considering the evolution of the promissory estoppel discipline in
England and in North America, and as a sort of natural connection with
the Italian legal system, it may be useful to consider the mixed
jurisdictions of Scotland and Louisiana, which give a remarkable synthe-
sis between the legal traditions of common law and civil law.68
Let us start with the examination of the discipline of the promise in
Scotland. For this purpose, special attention should be devoted to the
impact of institutional writing69 (concerning private and criminal law)
and, more precisely, of Stairs Institutions of the Law of Scotland, which is
the most important contribution on the subject of the contract and prom-
ise.70 In particular, abiding by the belief that canon law had removed the
67
On this point see Yorio and Thel (1991) 166 (the importance to courts of
promise explains why the remedy for breach of a Section 90 promise is
invariably expectancy relief (if measurable); why the absence of inducement and
detriment is irrelevant; why some promises are not enforced despite detrimental
reliance; and why the outcome (in terms of both liability and remedy) generally
turns on some aspect of promise). For an opposite point of view see Feinman
(1992) 316: the prescription, it seems to me, is to stop addressing old questions
by debating whether the core of Section 90 is promise or reliance, for example,
and address the more fundamental issue of what kind of framework we should
have, for that will determine the questions we should ask.
68
For an in-depth examination of the binding power of the promise in
Scotland and in Louisiana see Snyder (2008). On the concept of mixed
jurisdictions see Smith (1962) 46; rc et al. (1996); Zimmerman and Reid
(2000); Tetley (2000); Palmer (2001); Smits (2001); Smits (2002); Zimmerman
and Reid (2006).
69
On the sources of Scots law see, indicatively, Walker (1983); Rodger
(1996); Black (1936) 59.
70
The Institutions of the Law of Scotland deduced from its Originals, and
collated with the Civil, Canon and Feudal Laws and with the Customs of
Neighbouring Nations was published in 1681 and represent the most important
work of James Dalrymple, 1st Viscount Stair.
exception de nudo pacto non oritur actio,71 Stair rejected Grotius require-
ment of acceptance, emphasizing the binding power of the promise simple
and pure.72 However, this rule suffered a considerable reshaping because
of the evidence system used in Scotland: promises cannot be proved by
witnesses, even for small amounts, unlike contracts.73
Therefore, until the publication of the Requirement of Writing (Scot-
land) Act 1995, in the Scottish legal system the use of writing as a
vestimentum of the agreement represented a fundamental requisite.74 In
more detail: the Acts of Union (passed by the English and Scottish
Parliaments in 1707), apart from leading to the creation of the United
Kingdom of Great Britain on 1 May of that year, caused a progressive
colonization by the principles of English common law, with the result of
separating the Scottish rules from their Roman law origin.75
Significant opposition to the English influence took place after the
Second World War, with the contribution of Thomas Broun Smith, who
brought the Scots law of unilateral promise, if not into the forefront, at
least out of obscurity:76 Im convinced that the civilian tradition in
Scots that element which is the most rational, equitable, universal and
potentially creative is in jeopardy There are pressures from outside
our system and weaknesses within.77 In other words:
what Smith did was to illustrate the elegance of the Scottish solution and
place it into a comparative context that gave it both pedigree and gravitas. His
work takes into account the great civil law families of French and German
law and particularly addresses Roman-Dutch law and South African law. He
explains where Stairs and Scotlands solution fits among those respect-
able traditions, and he demonstrates the superior doctrinal simplicity of a
Scottish analysis of the problems posed by the cases.78
71
[E]cclesiastical courts maintained an important role in Scotland even
after the Reformation, and the Court of Session was itself largely ecclesiastical in
its conception, character, and outlook: Snyder (2008) 28.
72
On this point see ibid. at 289: Stair states that a promise is that which is
simple and pure, and hath not implied as a condition, the acceptance of another,
and he thus distinguishes an obligation based on promise from an obligation
based on a contract, which is the deed of two, the offerer and the accepter.
73
Snyder (2008) 29.
74
For an in-depth examination of these aspects see, once again, Vagni
(2008) 169.
75
On these profiles see McDiarmid (1999).
76
Snyder (2008) 30. On the works of T.B. Smith, see Reid and Carey Miller
(2005).
77
Smith (1962) 73.
78
Snyder (2008) 312.
These orientations were confirmed with the work on the law of contracts
which the Scottish Law Commission undertook in 1973 (under the
leadership of Smith).79 The final goal was to purify the discipline of the
obligations from all theories which brought it far from Stairs contribu-
tion: [t]he obligation to which such a promise gives rise is unilateral,
in that it is the creation of the will of the promisor alone; this is so even
though the promised performance is stipulated to be conditional upon
some act or abstention by the promisee.80 Nevertheless, the Scottish Law
Commission did not realize the goal to clarify the chaotic relationship
between promise and contract in Scots law:81 [i]t is less clear whether
the offeror is similarly entitled to deny the existence of a contract when
the offeree claims that he relied upon the term in the offer to the effect
that his silence would be construed as an acceptance, and that he
intended his silence to be so regarded.82
Actually, turning to the doctrinal debate, there is still great uncertainty,
increased by the inactivity of the Scottish Parliament (which missed the
opportunity to conclude the path to recovery of Stairs contribution
initiated by the Law Commission).83 Instead, with the Requirement of
Writing (Scotland) Act 1995, the Scottish Parliament merely introduced a
few exceptions to the rule according to which the binding power of the
simple promise could be admitted only with the requisite of the vestimen-
tum. In other words, where one party has materially relied, the other
party may not withdraw if doing so would result in material harm. The
lack of formality is forgiven. Nevertheless, the die is cast: [a]lthough the
statutory language is lengthy and convoluted, this Scottish statute essen-
tially states the principle of promissory estoppel as applied to the
problems posed by the statute of frauds.84
In this perspective, it is important to observe that the Requirement of
Writing (Scotland) Act exhibits some different shades when compared to
the discipline of the promissory estoppel in England and in North
79
On the contribution of T.B. Smith see MacQueen (2005) 138.
80
See Scottish Law Commission (1977) 4: [a]t least since the time of Stair
the law of Scotland, diverging in this respect from the laws of most other civil
law systems of Western Europe, has not required, before an obligation is
recognized as coming into being, that the promisee accepts the benefit of the
promise made in his favour; it has consequently seen no need, as other systems
have, to resort to the device of a presumed acceptance by the beneficiary in order
to hold the promisor to his undertaking.
81
Vagni (2008) 216.
82
Scottish Law Commission (1977) 47.
83
On this point see Vagni (2008) 267.
84
Snyder (2008) 23.
America: the most significant one is the explicit request that the reliance
of the promisee be supported by the knowledge and acquiescience of
the promisor.85 What, then, is the real meaning of the requirement
introduced by the Scottish Parliament? In particular, would it be satisfied
when the reliance is foreseeable (as we can see in section 90 of the
Restatement (Second) of Contracts) or in the hypothesis in which it is
expected and desired, but the promisor has not been informed that it has
actually taken place?86
However, instead of tracing a hasty evaluation, it is important to
remark that the inauspicious drafting of the rule,87 on one hand, and the
rarity of Scottish jurisprudence on this point,88 on the other, have reduced
considerably its range of incidence. As a consequence, it is reasonable to
conclude that the Scottish Parliament, endorsing the promise devoid of
the requisite of the vestimentum in the presence of the surrogate of the
reliance of the promisee, sides with the North American concept of
promissory estoppel, but remains far from the implementation of Stairs
principle of the binding power of the promise simple and pure.89
85
See Requirement of Writing (Scotland) Act 1995, s. 1(3):
Where a contract, obligation or trust mentioned in subsection (2)(a) above is
not constituted in a written document complying with section 2 of this Act,
but one of the parties to the contract, a creditor in the obligation or a
beneficiary under the trust (the first person) has acted or refrained from
acting in reliance on the contract, obligation or trust with the knowledge and
acquiescence of the other party to the contract, the debtor in the obligation or
the truster (the second person) (a) the second person shall not be entitled
to withdraw from the contract, obligation or trust; and (b) the contract,
obligation or trust shall not be regarded as invalid, on the ground that it is not
so constituted, if the condition set out in subsection (4) is satisfied.
86
Snyder (2008) 234: there may be some work for the courts here, and it
will be informative to observe the judicial reactions and whether the old stance
on knowledge under rei interventus doctrine is continued. Certainly the prom-
isors knowledge and acquiescence would always be relevant to promissory
estoppel, if for no other reason than the relevance of injustice.
87
The clarity that might be expected of a modern statutory codification of
bar with respect to formalities, however, is arguably illusory in the case of the
1995 Act. Certainly the drafting is infelicitous and its circumlocution raises a
number of technical questions of statutory interpretation that could make a real
difference in the results of cases: Snyder (2008) 24.
88
On this profile see Vagni (2008) 229.
89
For an in-depth examination of these aspects see, once again, Vagni
(2008) 230.
A. Louisiana Law of Promise: The Codification of Promissory

Estoppel
It is a long way from Scotland to Louisiana; yet, the suggestions of a

mixed jurisdiction marked by the tangible and singular codification of
promissory estoppel, do persist.90
One of the most relevant problems which has characterized the origin
of the Civil Code of Louisiana is that it contained the problematic word
consideration, both in the central definition of cause (Civil Code of
1870, article 1896 provides that by cause of contract is meant the
consideration or motive for making it) and in other troublesome places
(for example, the options discipline).91 Although this approach fomented
a fair amount of civilian angst in Louisiana, efforts were made to
reconcile these mentions of consideration with the indisputably civilian
notion of cause, assuming that the word consideration (as used in the
Civil Code) could be read to be at times synonymous with cause, and
other times with onerous cause and arguing that the requirement that
there be any consideration for an option would be satisfied in virtually
every option, given that the parties are interested in buying or selling,
particularly since the flexible any consideration formulation (therein
stipulated) replaced the earlier, stricter requirement that the option be
purchased for value.92 However, these efforts did not achieve resounding
success. In fact, Louisiana courts adopted a more severe approach
requiring that an option be supported by consideration, much as at
common law.93
This scenario became more complicated when Louisiana did recog-
nize certain kinds of conventional obligations without any consideration
at all, as long as formal requirements were met. In other words,
Louisiana preserved the possibility of a valid gratuitous contract, that is,
90
For art. 1967 of the Louisiana Civil Code see n. 97 below.
91
Snyder (2008) 1011, observes that the source of art. 1896 of the Civil
Code of 1970 has to be found in art. 1887 of the French version of 1825: On
entend par la cause du contract la consideration ou le motif qui a engag
contracter. Moreover, the French version is considered more authoritative than
the English versions of either 1825 or 1870.
92
Snyder (2008) 12. For an in-depth examination of these aspects see
Litvinoff (1975) 107.
93
In this sense see Goodyear Tire & Rubber Co. v. Ruiz, 367 S.O. 2d 79
(La. Ct App. 4th Cir. 1979); McCarthy v. Magliola, 331 S.O. 2d 89 (La. Ct App.
1st Cir. 1976); Davis v. Bray, 191 S.O. 2d 774 (La. Ct App. 2d Cir. 1966);
Moresi v. Burleigh, 127 S.O. 624 (La. 1930); Gloven v. Abney, 106 S.O. 735
(La. 1925).
promise of donation, as long as there was the presence of two funda-

mental requisites: [f]irst, the intent had to be expressed in a so-called
authentic public act, that is, a writing passed before a notary public and
two witnesses. Second, the promise had to be accepted.94
A relevant step forward in the direction of assuring greater systematic
cohesion was registered in 1985 with the revision of the Civil Code.
References to consideration were removed. Instead, the revision re-
activated the requisite of cause, with an important clarification: Under
this Article, the cause is not consideration.95 Coherently, with respect to
options, the revision requires no consideration and the revision commen-
tary states, with a certain amount of gumption, that the revision does not
change the law. Finally, the reference to consideration in the article on
gratuitous contracts was also removed, without mention, with the usual
comment that the revised article does not change the law.96
In light of these premises, it comes as no surprise that in article 1967
of the Civil Code97 the Louisiana State Law Institute showed its will to
remove consideration from Louisiana obligations law. More surprising
was its willingness to add promissory estoppel (with a meaning evidently
inspired by the model expected in section 90 of the Restatement (Second)
of Contracts): this desire was made explicit when the Institute instructed
the reporter to draft an article that would make it quite clear that cause
is not consideration in the common law sense and, further, to introduce
a concept analogous to detrimental reliance or promissory estoppel.98
94
This situation obtained at the same time as various mentions of consider-
ation in other contexts muddied the Louisiana waters on whether the courts
would follow the doctrine of cause exclusively or would revert to ideas of
consideration. The legal situation in Louisiana was decidedly mixed: Snyder
(2008) 12.
95
See La. Civ. Code, art. 1966 (requiring cause), art. 1967 (defining cause)
and comment (c).
96
Snyder (2008) 13.
97
See art. 1967:
Cause is the reason why a party obligates himself. A party may be obliged by
a promise when he knew or should have known that promise would induce
the other party to rely on it to his detriment and the other party was
reasonable in so relying. Recovery may be limited to the expenses incurred or
the damages suffered as a result of the promisees reliance on the promise.
Reliance on a gratuitous promise made without required formalities is not
reasonable.
98
See Snyder (2008) 33. For an in-depth examination of these profiles see
Louisiana State Law Institute, Revision of the Louisiana Civil Code of 1870,
Book III, Obligations Revision Cause, 3 (20 April 1979).
In this perspective, it is worth observing that, in the Common Law

states, promissory estoppel got its start in late XIX nineteenth-century
case law in which the equities of the case seemed to require enforcement
of a promise that did not amount to the usual kind of contract: often
courts, because of a lack of ad hoc solutions, enforced promises on
grounds that could be rationalized under the terms of promissory
estoppel.99 In particular, one of the most important cases was Ducote v.
Oden, decided by the Louisiana Supreme Court.100 The importance of
this decision is connected to the observation that, although representing
the emblem of the rejection of common law doctrine,101 it was
subjected to the change of orientation sponsored by the Louisiana State
Law Institute. Beyond the in-depth analysis of the main profiles concern-
ing this litigation,102 the Louisiana Supreme Court remarked that [s]uch
a theory is unknown to our law and could not be found in the
all-important provisions of the Civil Code.103
The Louisiana State Law Institute decided, on one hand, to remove
consideration from Louisiana obligations law and, on the other hand, to
transplant the model of North American promissory estoppel into the
Civil Code. Therefore, the irony is double-faced: not only are common
law notions defining cause, positively and negatively, but promissory
estoppel is being imported at the same time that the chief doctrine that
made it necessary is being deported. All that implied a wide effort of
interpretation: the cause, rather than revealing the motive for making a
promise, should represent the essential reason or, even better, the
reason that makes an obligation enforceable.104
Despite this change of horizon, the 1985 revision did not obtain the
hoped for results:
[i]n the proposed formulation, if the promise is supported by cause, it is for

that very reason enforceable, by definition. Cause has been not only turned
around, then, but made to serve the same function as consideration. To be
clear, it did not employ the same test as consideration no bargain was to be
99
So in the early Louisiana law, promissory estoppel percolated quietly
through the cases, as elsewhere in the country: Snyder (2008) 13.
100
Ducote v. Oden, 59 S.O. 2d 130 (La. 1952).
101
Snyder (2008) 14.
102
See ibid. at 13 ff., who observes how [t]he court emphasized the
weakness of the plaintiffs allegation that the promise took place in a casual
conversation in the stages of discussion, and even courts which accept the
doctrine would likely find that the elemental promise had not been shown.
103
Ducote v. Oden, n. 100 above, at 132.
104
Snyder (2008) 34.
required but the function of the doctrine was to be the same. At Common
Law, if there is consideration the promise is enforceable, and otherwise not.
Under the proposed formulation, if there is cause, the promise is enforceable,
and otherwise not. This proposition is a far cry from the original scheme, and
while Civilian in its adherence to a cause not identical to bargain, it is being
driven by concerns emanating from the Common Law.105
This solution was confirmed by the arguments through which the

Louisiana State Law Institute justified the introduction of the discipline
of promissory estoppel in the Civil Code: (1) first of all, this discipline
is consonant with the principles in the existing Code, including its
Napoleonic general article on delictual obligation; (2) moreover, the
implementation of promissory estoppel has been recognized and sup-
ported in the case law ([t]his proposition was a bit difficult in light of
the Supreme Court of Louisiana decision in Ducote v. Oden, as men-
tioned above, but the reporter identified the stream of cases that applied
the principle sub rosa both before and after Ducote); and finally (3), the
most remarkable argument is that promissory estoppel, by virtue of its
strong connection with both delictual and quasi-delictual obligations
and culpa in contrahendo, is in essence a civil law doctrine anyway.106
The transplant of promissory estoppel into the Louisiana Civil Code
(recognizing an ancient heritage of civil law)107 may appear an artifice,
yet the Institute worked in many of the same sorts of jobs associated
105
See ibid. at 345.
106
On this point see, in more detail, ibid. at 356, who observes how
promissory estoppel is linked
to the binding force of a unilateral declaration of will, the very same idea
observed in Scotland, and most clearly in Stair. The crowning glory, though,
goes to the assertion that estoppel is descendent from the Roman law doctrine
of venire contra factum proprium. The assertion that promissory estoppel is
not a common law invention after all, and is instead Roman and thus
quintessentially of the civil law, is no less remarkable for its dubiety. Venire
contra factum proprium is more generally viewed as being based on facts
rather than executory promises, and is therefore closer to equitable estoppel
rather than promissory estoppel. Moreover, venire contra factum proprium
is probably better attributed to the ius commune, and perhaps Bartolus
originally, rather than Rome, as earlier research has shown. But these are
scholastic points. The impetus came from the American Common Law and
Restatement. The revision draft reproduces section 90, not a text from the
Digest or from Bartolus, neither of which is very clearly about promissory
estoppel anyway.
107
This view was certainly not shared by all participants in the legislative
process. The extent to which promissory estoppel, with its delictual flavour,
with promissory estoppel in the rest of the United States. Therefore,

differently from the Scottish law (in which the discipline of promissory
estoppel has not obtained a wide success), promissory estoppel in
Louisiana, conquering a role of fundamental importance in the law of
promise, has been applied in many cases concerning different problems
such as option contracts, irrevocable offers and, more generally,
pre-contractual liability.108
V. ITALIAN LAW OF PROMISE: UNILATERAL

PROMISE AND CULPA IN CONTRAHENDO
In the light of the survey conducted regarding the discipline of promis-
sory estoppel in English and North American law, on one hand, and the
mixed jurisdictions of Scots and Louisiana law, on the other hand, let us
now approach the analysis of the Italian experience (about the binding
nature of promises) utilizing two different points of view: pre-contractual
and contractual.109 More specifically, the ability to identify, in the
voluntary assumption of a commitment, both a contractual configuration
(which revolves around the idea that the declaration of intention is to
confirm the seriousness of the promise by the promisor) and a pre-
contractual obligation (which, by contrast, is closely linked to the desire
to protect the reliance created in the promisee) comports with the
could be compatible with any civilian conception of cause seems to have been
especially troublesome: Du Plessis (2003) 228.
108
See Lafayette City-Parish Consol Govt, 907 S.O. 2d 37 (La. 2005); Baker
v. LSU Health Scis Ctr, Inst of Professional Education, 889 SO 2d 1178 (La. Ct.
App. 2004); Hibernia Natl Bank v. Antonini, 862 S.O. 2d 331 (La. Ct. App.
2003); Holt v. Bethany Land Co., 843 S.O. 2d 606 (La. Ct. App. 2003); Dan
Rhodes Enters v. City of Lake Charles, 857 S.O. 2d 1256 (La. Ct. App. 2003);
Jesco Constr Corp. v. Nationsbank Corp., 830 S.O. 2d 989 (La. Ct. App. 2002);
Magic Moments Pizza, Inc. v. Louisiana Restaurant Assn, 819 S.O. 2d 1146 (La.
Ct. App. 2002); Haring v. Stinson, 756 S.O. 2d 1201 (La. 2000). On this, see De
Long (1997); Hillman (1998); Barnett (1996); Farber and Matheson (1985) 903;
Yorio and Thel (1991) 111.
109
On this, see the recent work of Amato (2012) 87218, who, examining
the preferential relationships (in which arise the duty to protect the reliance),
identifies and analyses three hypotheses: (1) culpa in contrahendo; (2) mis-
information (which runs across contracts and torts); and, finally, (3) the damages
as reflex caused to third party through the implementation of contractual
obligation.
discipline of unilateral promises and culpa in contrahendo (with particu-

lar reference to the issues underlying the unjustified withdrawal from
negotiation).
Let us to start with the scrutiny of the former. In the Italian legal
system, the problem with the binding nature of a unilateral promise is
traditionally linked to the controversial co-existence of Civil Code,
articles 1987 and 1333.110 In more detail: while in article 1333 the
unilateral declaration to bind oneself would seem to be ascribed to the
contractual sphere (making it part of the prerogatives of the private
autonomy reserved by the art. 1322 to the contract),111 article 1987
precludes any binding effect beyond the cases expressly allowed by
law.112 In a few words, the same formula for the creation of a promise
(characterized by the declaration of assumption of commitment and of its
object) could be classified either as a proposal (per article 1333) or as a
promise (per article 1987). Nonetheless, the consciousness of the
impossible co-existence of different disciplines for the same phenomenon
has prompted both literature and jurisprudence to handle the issue of the
compulsory nature of a unilateral promise by moving in two opposite
directions:113 on one hand, the more orthodox trajectory under which the
foundation of the binding nature of all unilateral promises should be
identified in the general discipline of contracts and, in particular, in the
dual requirement of causal justification and of the nuances provided by
the legislature; on the other, a more recent strand has focused on the
reliance of the promisee as an independent criterion for recognition of
obligations and responsibility of the promisor.114
However, given the limits of this chapter and the obvious impossibility
of scrutinizing both alternative routes here,115 our attention will be
centred upon the more recent one. Accordingly, we will focus on the
approach that presents more affinity with the North American tradition
110
Since the entry into force of the Italian Civil Code in 1942, the
assumption of the unilateral formation of a bond (per Civil Code, art. 1333) has
raised many compatibility problems with the precept of art. 1987. On this, see:
Tamburrino (1954) 2930; Segni (1972) 347; Ravazzoni (1973); Sacco (1975)
37; Castiglia (1983). For a thorough historical reconstruction of the evolution of
the issue of the binding nature of the promise in the Italian legal system see
DAngelo (1996).
111
DAngelo (1996) 612.
112
See Barassi (1946) 299, according to whom art. 1333 constitutes a
perferct antithesis of art. 1987.
113
DAngelo (1996) 64.
114
In this sense see Marini (1995) 245.
115
For a detailed survey see Pardolesi (2009) 14459.
and identifies justifiable reliance of the promisee as the premise for the
binding nature of the promise.116
Moving away from damages awarded to those who have carried out
activities, incurred costs or assumed risks based on reliance triggered by
the statements of a promisor about the implementation of a future
behaviour (not due to relationships of exchange), this solution shapes a
clarification after the wider review of criteria for recognizing a promises
binding nature, as well as after the reconstruction of a basis of liability
other than the binding force of promise as a contract or legal transaction.
Consequently, giving great importance to the reasons for the bond rather
than the obligatory nature of the promise, the reliance of the promisee
becomes not only a specific criterion for the recognition of obligations
and responsibility of the promisor but the focus of a comprehensive
interpretation of rules and principles heterogeneous and distinctly related
to the procedure for the formation of the bond and to the foundation of
the latter.117
Considerable headway in the debate around the recognition of the
binding nature of unilateral promises can be detected in an Italian
Supreme Court decision relating to letters of patronage, in which the
scheme proposal/failure to refuse pursuant to Civil Code, article 1333 is
looked on as a viaticum to escape from the necessary verification of a
bilateral declaration and to trigger the recognition of the binding charac-
ter linked to unilateral statements which come through the bottleneck of
article 1987.118
The split takes place close to the heated debate concerning the
identification of the legal nature of the letters of patronage and the
responsibility to reconnect to them.119 Starting from the observation that
the specific function linked to such unilateral declarations is meant to
strengthen the future creditor, to whom the declaration is addressed, and
corroborates the belief that the sponsor will meet its commitments, there
is no doubt that the legal implications coming from the letters of
116
On this, see Di Majo (1989) 48 ff.; Alpa (1991) 311 ff.
117
DAngelo (1996) 152.
118
Cass. 27 September 1995 no. 10235, in Banca, borsa ecc., 1994, II, at 40.
This decision has been commented on by: Chin (1996b); Stignone (1996);
Caliceti (1996); Figone (1996); Cavanna (1996).
119
On the theme of letters of patronage see, briefly, Chiomenti (1974); De
Sanctis Ricciardone (1983); Di Giovanni (1984); Ruffolo (1984); Atti (1985)
878; Mazzoni (1986); Segni (1990); Severini (1991); Barbuto (1994); Stignone
(1996) 301; Chin (1996a); Caliceti (1996) 3007; Galgano (1996); Papale
(2000); Musy (2001); Gallo (2001); Caleo (2002); Turco (2004); Corea (2007).
patronage are a testing ground that is of absolute importance to any

development on this issue.120 For that reason, the Supreme Court went
over the black letter text of article 1987, looking at the scheme
contemplated by the provision, well within the contractual discipline,
relating to the proposal which would imply obligations only for its author
(i.e., article 1333). With that said, the procedure envisaged in article 1333
responds to the sequence of a proposal without a refusal (from which can
120
See Cass. 10235/1995, n. 118 above, at 4041. In particular, this decision,
following a linear trajectory, states that generalizations, particularly in the field
of letters of patronage, should be avoided, and it has identified a concept of
extra-contractual liability in unilateral statements for the injury caused by
reliance that is a consequence of the release of false or inaccurate statements, or
to the sequence of behaviors in conflict with their content (Marini (1995) 505).
For the doctrine favourable to the extra-contractual thesis see Chiomenti (1974)
348; Checchini (1977) 178 ff.; Galgano (1988) 214. Nevertheless, the statement
of facts in the different legal disputes involving such unilateral declarations has
pushed the interpreters to go towards the tort profile. It is indisputable that such
declarations have the common element of reliance created by the person who
makes the declaration with respect to the behaviours and to the initiatives relating
to the subsidiary. However, in order to identify the actual legal range of the
individual letters of patronage it is necessary to distinguish between weak and
strong statements. The former deals with declarations solely concerning infor-
mation about the economic and financial situation of the company that is seeking
financial support. The composition of the shareholders and, sometimes, of the
modus operandi of administrative bodies seems to possibly identify a respons-
ibility charged on the supporting person on the basis of the precepts formulated
in Civil Code, arts 1337 and 1338 (Cass. 10235/1995, n. 118 above, at 40). In the
second instance (i.e., in the case of strong statements), since the holding
company assumes some specific commitments (such as safeguarding the sol-
vency of the subsidiary, to give prior notice of its intention to divest its holding
or of future maintenance of the same), it is necessary to check whether its
liability can be established based on the negotiation plan (in this sense see Marini
(1995) 507). This last question (despite the presence of a significant doctrinal
orientation aimed at recognizing the contractual nature of a breach of such
unilateral declarations) persuaded the Italian Supreme Court to balance, on one
hand, the principle of typicality (in art. 1987) and, on the other, the complexity
of the relationship between the latter and art. 1333, to reach the surprising
conclusion by which the nature of the declaration of strong patronage must find
its foundation in the scheme outlined in art. 1333 (on this point see Mazzoni
(1986) 99100). After all, this solution [is] perfectly suited to the letters of
patronage, which have binding character, and consequently there is no reason to
doubt their binding force, since those statements, albeit with different tools than
those proper to typical guarantees, are still aimed to reinforce the protection of
the rights of creditors and, therefore, to achieve interests certainly deserving of
protection under the law (Cass. 10235/1995, n. 118 above, at 43).
be inferred the sole will of the proposer with absolute exclusion of the
recipient), and omits any declaration with bilateral character. Therefore,
the conclusions that can be drawn from it are that for every free promise
(i.e., a promise in which the obligation lies only on the promisor) the
relationship can be constituted without acceptance but rather by the effect
of a unilateral act. Through the scheme of article 1333, the letter of
patronage is imputed to the area of contracts. Yet, the decision was a
huge leap as it recognized the binding nature of such unilateral declar-
ations.121 Consequently, in spite of the radical rejection of the equiva-
lence between acceptance and a recipients failure to refuse an offer, and
the requisite of will by the obliged party, the Italian Civil Codes
conception of contractual consensus is extended, by virtue of an un-
prejudiced reading of article 1333, to embrace the non-legal process,
consisting of the mere proposal of the person who is obliged (with the
corollary fiction of the laypersons failure to refuse).
In the light of these premises, it is now necessary to take into account
cases in which the binding effect is based on the justifiable reliance
created in the counter-party. In this perspective we need to move our
attention onto the discipline of culpa in contrahendo with particular
interest in the issues connected with unjustified withdrawal from
negotiations.
Although the Italian debate on the issue of culpa in contrahendo has
ancient roots,122 it acquired consistency at the beginning of the twentieth
century, both through the implementation of judgments penalizing unjus-
tified withdrawals in negotiations,123 and the achievement of an orien-
tation that had completely metabolized the German reflection of good
faith in contrahendo.124 A natural consequence of this assimilation
121
Chin, G. (1996b) 741.
122
Caruso (1993) 157, who observes that before Jherings teachings were
adopted by the Italian legal system (the origin of this concept is conventionally
connected with the publication of the article of Von Jhering (1861)) both Italian
doctrine and jurisprudence showed their indifference toward pre-contractual
liability.
123
See App. Napoli 27 March 1911, in Foro It., Rep. 1911, voce Contratto,
no. 19; Cass. 6 February 1925, in Riv. Dir. Comm., 1925, II, 248.
124
After all, before the Civil Code of 1942 introduced an ad hoc rule, some
parts of the literature (see Faggella (1918) 269) had just provided for the
introduction of the concept of unjustified withdrawal from the negotiations in
pre-contractual liability. This theme has been (and is still today) the object of
strong doctrinal debate: on this debate see, e.g., Verga (1941); Mengoni (1956);
Benatti (1963); Visintini (1972); Bessone (1972); Ravazzoni (1974); Morello
(1974); Speciale (1990); Turco (1990); Patti and Patti (1993); Mantovani (1995);
resulted in the elaboration of Civil Code, article 1337, and the debate has
gradually developed into the systematic classification and the nature of
the pre-contractual liability.125 In a few words: together with the three
traditional interpretive approaches that have marked the doctrinal and
jurisprudential confrontation,126 the general framework has been enriched
by a new contribution characterized by the division between liability for
failure of negotiations based on the evidence of malice or guilt and a
more objective withdrawal liability (i.e., independent of fault).127
Bastianon (1996); DAmico (1996); Monateri (1998); Musy (1998); De Lorenzi

(1999); Palmieri (1999); Rovelli (2000) 199; Matera (2000); Maninetti (2000);
Meruzzi (2002); Gallo (2004); Pardolesi (2005); DAmico (2006) 977; Afferni
(2008).
125
Caruso (1993) 161. In this respect it is necessary to remark how this
discipline follows different rules in other legal systems: see Cartwright and
Hesselink (2008) 461.
126
In essence these are: (1) that liability for withdrawing from a negotiation
would fall within the area of torts (about the theory of Aquilian nature see Greco
(1952); Sacco (1975) 676; Carresi (1987); Bianca (2000); Roppo (2001) 184;
Gallo (2004) 299; Patti and Patti (1993) 45. For the jurispudence see, e.g., Cass.
19 April 1983 no. 2705, in Foro It., Rep. 1983, voce Contratto in genere, no.
143; 18 June 1987 no. 5371, ibid., 1988, I, 181; 6 February 1992 no. 2704, in
Giur. It., 1993, I, 1, 1560; 13 December 1994 no. 10649, in Foro It., Rep. 1994,
voce Contratto in genere, no. 284; 1 February 1995 no. 1163, ibid., Rep. 1995,
voce Contratto in genere, no. 284; 30 August 1995 no. 9157, ibid., Rep. 1996,
voce Contratto in genere, no. 259; 29 April 1999 no. 4299, ibid., Rep. 1999,
voce Contratto in genere, no. 356; 16 July 2001 no. 9645, ibid., 2002, I, 806; 10
October 2003 no. 15172, ibid., voce Contratto in genere, no. 317; 7 May 2004
no. 8723, ibid., Rep. 2004, voce Contratto in genere, no. 359; 5 August 2004 no.
15040, ibid., Rep. 2005, voce Contratto in genere, no. 426.); (2) that (remaining
faithful to the German matrix) culpa in contrahendo should be specifically
confined to non-fulfilment liability (on this see Mengoni (1956) 362; Giorgianni
(1965); Tucci (1970) 134; Portale (1982); Benatti (1987); Turco (1990) 755 ff.;
Rovelli (2000) 126 ff.; Meruzzi (2002) 53 ff.; Di Majo (2004) 537; Galgano
(2004) 635; DAmico (2006) 1107 ff.; Castronovo (2006) 502; Afferni (2008)
1011); and finally, (3) that this type of responsibility should be linked to a
tertium genus, working halfway between contractual and extra-contractual (the
origin of this thesis belongs to Sacco (1961); on this, see Rescigno (1979) 142;
Cuffaro (1988)).
127
Afferni (2008) 1518. The thesis according to which two pre-contractual
liabilities would exist is strongly expressed in the German doctrine: see, e.g.,
Larenz (1987) 107; Canaris (2000); Grunewald (1984) 71011.
Beyond the scrutiny of the intricate positions articulated in the

debate,128 great importance should be given to the determination of the
temporal element which can be considered as reasonable reliance on
the future conclusion of the contract. The case law (almost) dominantly
connects this moment to the attainment of an advanced state of negoti-
ation.129 More specifically, it is necessary for parties to have reached an
agreement on all essential elements of the contract (the only element
lacking is the signing of the deal) for reliance worthy of protection to be
found. However, the same jurisprudence seems to request some direction
sufficient to justify the partys belief about the future conclusion of the
contract.130
As a result, it is not surprising that, in a climate of uncertainty, a
substantial part of the literature (looking at possible solutions envisaged
from German legal experience) has suggested the opportunity of match-
ing the very advanced stage of negotiation with the achievement of
practical certainty of the future conclusion of contract.131
128
Traditionally the prevalent orientation of jurisprudence recognizes the
duty to indemnify (to the extent of the negative interest) damage resulting from
the injury to the legitimate reliance of the counter-party on the conclusion of the
contract: see Cass. 10 October 2003 no. 15172, in Foro It., Rep. 2003, voce
Contratto in genere, no. 317; 14 February 2000 no. 1632, ibid., Rep. 2000, voce
Contratto in genere, no. 347; 14 June 1999 no. 5830, in Foro It., Rep. 1999, voce
Contratto in genere, no. 355; 25 November 1997 no. 11811, ibid., Rep. 1998,
voce Contratto in genere, no. 322; 9157/2005, n. 126 above; 26 October 1994
no. 8778, in Foro It., Rep. 1994, voce Contratto in genere, no. 286; 12 March
1993 no. 2973, ibid., 1994, I, 956; 30 March 1990 no. 2623, ibid., Rep. 1990,
voce Contratto in genere, no. 233; 11 September 1989 no. 3922, ibid., Rep.
1989, voce Contratto in genere, no. 255; 25 January 1988 no. 582, ibid., Rep.
1988, voce Contratto in genere, 266. However, the doctrine, while considering it
essential that this responsibility has its basis in the culpability of the party which
withdraws, outlines more diverse approaches: see Bianca (2000) 168; Patti and
Patti (1993) 73.
129
See Cass. 13 March 1996 no. 2057, in Foro It., 1996, I, 2065; 25
February 1992 no. 2335, ibid., 1992, I, 1766; 22 October 1982 no. 5492, in Giur.
It., 1984, I, 1, 1199; 13 July 1968 no. 2521, in Foro It., 1968, I, 2454.
130
Afferni (2009) 46970 (in effect the reliance may subsist even when
all the essential elements of the coming contract have not been yet determined
and, vice versa, the reliance may be lacking when these elements have already
been determined).
131
See Afferni (2008) 18. The idea come from the German jurisprudence
(see BGH 29 March 1996, NJW, 1996, 1884; BGH, 22 February 1989, NJW-RR
1989, 627; BGH, 7 February 1980, BHGZ 76, 343; BGH, 12 June 1975, NJW
1975, 1774; BGH, 11 February 1969, WM 1969, 595, 597), which adopts a
From this perspective, the futuristic solution proposed in the Dutch

legal system deserves substantial attention. The Dutch legal system has
created a general duty to negotiate in good faith, but it takes the view
that the very nature of negotiations creates a relationship which the law
should protect; and sees that relationship as one which develops during
the course of the negotiations and its final stages almost merge into the
same contract.132 In other words, since the decision of the Hoge Raad in
Plas v. Walburg (in which three distinct levels characterizing the process
of negotiation were set forth),133 the Dutch courts ruled that at the third
stage (the beginning of which coincides with the moment when the
claimant could reasonably expect that the contract would be concluded)
the parties can exercise their right to withdraw from the negotiations: in
the sense that if one party does break off he may be required not only to
compensate the claimants out-of-pocket losses but even to compensate
the expectation which he had from the contract; or even that the court
will require the defendant not to break off at all, but to conclude the
contract specific enforcement.134 Consequently, standing out from the
grain of other civil law systems, Dutch law has taken steps to clarify
the uneasy distinction between contract and negotiations through a
gradual process whereby, after a certain threshold, the party that suffers
the withdrawal can claim compensation which would place him in the
same position that they would have been in if the contract had been
correctly concluded:
[i]t is not impossible that negotiations concerning a contract may reach such
an advanced stage that the act of breaking them off must in itself be regarded,
resolute position in considering that the workability of culpa in contrahendo does

not depend exclusively on the fact that the counter-party has made investments
relying on the future conclusion of the contract; it is necessary, instead, that the
refusal of coming to agreement does not have an acceptable reason, where the
business would result in a clear benefit and the other party has taken on burdens
which are necessary to the conclusion of the contract (Lorenz and Vogelsang
(2008) 356). For an overview of the German doctrine see Larenz and Wolf
(2004) 601; Medicus (2005) 49.
132
Cartwright and Hesselink (2008) 4689.
133
HR 18/6/ 1982 (Plas/Valburg), NJ 1983, 723. More specifically, the Hoge
Raad established the following subdivision: (1) in the first stage of the negoti-
ations, the parties of the negotiations are free to withdraw without any liability;
(2) in the second stage, the parties, although they may withdraw without
coercion, have to compensate the counter-party for the expenses supported; (3) in
the third stage, the party is no longer free to break off negotiation (Hesselink
(2008) 456).
134
in the prevailing circumstances, as a breach of good faith, on the basis that the
parties may be assumed mutually to have relied on the expectation that some
sort of contract would in any event result from the negotiations. In such a
situation, it may also be legitimate to find that an obligation exists to pay
compensation for lost profits.135
These remarkable solutions in pre-contractual liability, introduced by the

practice of Dutch law, offer the opportunity to consider, on a more
informed basis, the apparent polarity of the civil law and common law
systems (namely, the English and the North American system). Moreover,
though the English system is traditionally regarded as the most restrict-
ive in terms of pre-contractual liability, it seems appropriate to consider
the possibility of detecting several points of contact, in their ways of
framing the responsibilities that flow from the interruption of negoti-
ations:
[i]f English law were to take the step of accepting a development of the
doctrine of promissory estoppel to cover contractual negotiations generally,
rather than being limited (within the doctrine of proprietary estoppel) to
promises relating to interests in land, both the rationale and the result of the
liabilities might resemble the Dutch position.136
135
HR 18/6/ 1982 (Plas/Valburg), n. 133 above, at 723. Therefore, looking at
how withdrawal from the negotiation is precluded if it causes a real expectation
of the future conclusion of the contract, Dutch jurisprudence not only eludes the
problems related to the relationship between negotiation and contract, but
emphasizes that [t]he wrong is therefore the breaking-off of the negotiations,
and so the loss caused is the loss of contract, because if the defendant had not
committed the wrong, he would have concluded the contract and thereby
fulfilled, rather than disappointed, the claimants expectations. On this point see
Cartwright and Hesselink (2008) 469: [i]n this, Dutch law goes even further
than most of the other civil law systems in our study, which will impose liability
for breaking off negotiations but will normally limit the damages to wasted
expenditure: the reliance interest.
136
A party who has created in the other the expectation that he would
receive the benefits of a contract, where the latter has acted in reliance on the
belief that the contract would be concluded, might be estopped from denying that
he is bound to complete the contract. That is, it would be open to the courts, in
developing the doctrine of promissory estoppel, to allow the remedy to be based
not simply on the value of the claimants reliance on his belief that the contract
would be formed, but on his expectation from the contract. The claimants
reliance is the trigger for the estoppel, but need not to be measure of his remedy
under it: Cartwright and Hesselink (2008) 470.
Therefore, following this approach, it is not surprising that certain parts

of the doctrine have gone so far as to identify promissory estoppel as the
appropriate tool to overcome the problems related to European pre-
contractual liability:
[t]he aim of a new EC reliance doctrine should be merely to validate limited

incursion into private bargaining, principally in order to restore reliance
expenditure to A in situations where A has acted to his detriment on a
reasonably held belief or view, inspired by or attributable to B, that a contract
would materialize.137
By common recognition, the English legal system appears to exhibit the

strongest reluctance to impose pre-contractual liability. Even though,
following in the footsteps of the US legal system (i.e., through the
impulse of the decisions of Australian courts), the nearest that English
law has come to recognizing the development of a new source of
obligation within the pre-contractual phase is through the doctrine of
estoppel.138 However, the North American system, which can be charac-
terized as favouring a dynamic and flexible approach, would appear to
have gradually adopted a softer attitude, capable of opening a bridge to
the discipline of culpa in contrahendo.
In addition, notwithstanding the reasons traditionally given for denying
entry to pre-contractual duties of good faith,139 in recent decades the
137
See Doris (2007) 16.
138
139
In a work that meticulously collects the plethora of previous case law
relevant to the area of withdrawal from negotiations, the most reliable doctrinal
voice in the United States identifies five essential reasons of inescapable
relevance (Farnsworth (1987b) 2423): (1) the so-called aleatory theory of
negotiations (deeply rooted in US doctrinal and jurisprudential views, in the sign
of the belief that negotiation is a pitiless arena, where everyone works at his own
risk, knowing that error will not be forgiven), under which, until the final
conclusion of the contract, the outcome of negotiations remains unclear, leaving
the parties free from any contractual relationship; (2) the general indifference of
the system with respect to the outcome of negotiation (except the cases where the
conclusion of a contract responds to interests deemed worthy of protection from
the order); (3) the reduction in costs of administration of justice (through clear
rules and simple application); (4) the uncertainty stemming from the difficulty of
identifying with absolute precision at which point in time should the parties of a
negotiation be constrained by the duty of good faith; and, finally, (5) the
widespread concern that such an obligation is a relevant obstacle to the normal
course of the negotiations (both discouraging parties at all times where the
probability of a deal appears remote, while greatly accelerating the negotiations
legal community has witnessed a remarkable opening on the part of the

US legal system to the imposition of an obligation of good faith and fair
dealing in the execution of the contract.140 As such, it is possible to track
the advent of section 1-201(19) of the Uniform Commercial Code (which
includes a definition of subjective good faith)141 and of section 205 of the
Restatement (Second) of Contracts (which verbalizes a general duty of
fairness).142 Nevertheless, American law was not and arguably is not
yet ready to adopt a similar approach for bad faith in bargaining.143
After all, although the decision of the (often cited) case of Hoffman v.
Red Owl Store144 is an application of section 90 to the pre-contractual
stage able to open a direct connection with culpa in contrahendo (with
regard to the implementation of the duty of good faith, we can safely say
that the principles of culpa in contrahendo, with the exception of a
generalized duty of good faith arising out of the negotiations themselves,
are by now implicit in the American case law after a period of much
in order to reach a final conclusion, even if hasty). These, in brief, are the
reasons that, at least initially, led US doctrine and jurisprudence to adopt an
attitude of substantial reluctance towards a generalized pre-contractual obligation
of good faith.
140
Colombo (1993) 343.
141
UCC s. 1-201(19) (in the official draft of 1952) establishes: Good faith
means honesty in fact in the conduct or transaction concerned.
142
Restatement (Second) of Contracts, s. 205 provides that: Every contract
imposes upon each party a duty of good faith and fair dealing in its performance
and its enforcement. On this point see Summers (1982), who remarks how this
section is one of the truly major advances in American contract law during the
past fifty years. However, Colombo (1993) 344, stresses how such advance was
produced amidst doubts and fears of judicial activism that, at least from a
European perspective, are bewildering given the nature of the common law
system. In this perspective great importance is ascribed to the transcription of
the 1970 Proceeding of the American Law Institute (at 814): Professor Braucher
[the Reporter]: I have been asked Is this really a restatement of the law? Is
this not an attempt to write the Sermon on the Mount into Restatement of
Contracts? I do not want to try to disguise what is being said here. This
proposition is thoroughly acceptable if you define good faith very narrowly; but
as you define good faith more broadly, the doubts begin to arise reference to
what happened to the law of Germany under the heading of good faith. It
became, in the days of the great inflation following World War One, a license for
judicial remaking of contract way beyond anything that ever happened in the
United States. Now, I suppose if we got to a place where you had 25 per cent
inflation every month that you might find some judicial activism here too.
143
Colombo (1993) 3445.
144
Hoffman v. Red Owl Stores, n. 51 above, at 267.
experimentation with good faith notions by trial and error),145 the

absence of a theoretical elaboration of a general obligation of good faith
would seem to testify against the definitive overcoming of the ancestral
reluctance to impose pre-contractual liability.146 More specifically: even
though a significant step forward has been made by the legal community
recognizing the concept of good faith ratified in section 1-201(19) of the
Uniform Commercial Code and section 205 of the Restatement (Second)
of Contracts, and by virtue of the expansive implementation of section 90
of the Restatement (Second) of Contracts, the real problem lies in the
back-door technique of their use. The issue of good faith is not tackled
head on and the problems, resolved in a roundabout and ad hoc manner,
refuse to go away.147
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Portale, G.B. (1982) Informazione societaria e responsabilit degli intermediari, I Banca,
Borsa e Titoli di Credito 2
Posner, E.A. (2003) Economic Analysis of Contract Law After Three Decades: Success or
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Posner, R.A. (1977) Gratuitous Promises in Economics and Law, 6 J Legal Stud. 411
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Ravazzoni, A. (1974) La formazione del contratto. Milan: Giuffr
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20. Party autonomy in global context: an

international lawyers take on the political
economy of a self-constituting regime
Horatia Muir Watt
Arguably the most significant principle of contemporary private inter-

national law,1 party autonomy, or contractual freedom of choice of the
governing law, also fulfils a key function within the political economy of
private ordering in todays global context. In this respect, while the
principle emerged as part and parcel of the mythology of modern law,2
it has also worked, less visibly, to destabilize modernitys assumptions
about the relationship between law and sovereignty, which are now at the
heart of the theoretical turmoil within the traditional legal paradigm. The
role played by party autonomy in this evolution needs to be acknow-
ledged before new models of social justice can be imagined within the
uncharted legal environment beyond the state. With such an aim in mind,
this chapter is an attempt both to analyse the way in which the principle
of party autonomy provides crucial support for the powerful fiction of an
autonomous private transnational legal order and, by the same token, to
connect the current tribulations of private international law to the wider
debate on the future of law beyond the state.
To this end, first, a brief overview is called for in order to set the scene
for this analysis (I). The various political representations of private
autonomy then need to be revisited (II) before exploring the relationship
between the idea of private legislation and issues of merely technical
design (III). The latter are at the root of the fundamental reversal of the
relationship between law and market which accompanies the move from
liberalism to neo-liberalism (IV). Significant distributional effects
thereby attach to this specifically global function of party autonomy (V).
1
The literature on this principle, its origns, evolution, current status and
limits, is too abundant to be cited exhaustively. See among many others: Batiffol
(1960) vol. I, 39; Briggs (2008); Cuniberti (2009); Damman and Hansmann
(2008); Lehmann (2008); Yetano (2010); Muir Watt (2005); Niboyet (1927);
Nygh (1999); von Overbeck (1993) 619.
2
For the authentic version, Fitzpatrick (1992).
512
Party autonomy in global context 513
The stakes are therefore sufficiently significant to warrant a detour by the

stimulating insights of societal constitutionalism, in the search for ways
to understand the expansionist tendencies of party autonomy conceptual-
ized as an autonomous social sphere (VI). It may then be wondered, in
conclusion, whether the wheel has turned full circle with a twist.
I. OVERVIEW: THE POLITICAL ECONOMY OF

PRIVATE ORDERING
Now enshrined in an astonishing number of national codes worldwide,3
and indeed still expanding as a central element of transnational soft law,4
the principle that has come to be known as party autonomy, according
to which parties to an international business contract are free to choose
the governing law, emerged as a key methodological concept in the
course of the twentieth century. It served the progressive liberalization of
cross-border markets, which broke the frames of protectionist regulatory
schemes, emancipating international flows of capital, goods and services
from the claims of territoriality. Through a series of technical moves
which will be described below, the law has accredited freedom of choice
as the foundation of a whole parallel world of private transnational
ordering, complete with its own institutions and governing principles.
Indeed, from the resulting representation of the relationship between free
choice of law and sovereign authority stems the fiction of an autonomous
private transnational legal order, widely accepted as the source of
regulation, conceded by the various states, of cross-border relationships
between economic actors. In this perspective, party autonomy is to a
large extent the expression, within the confines of private international
contract law, of a wider political economy which serves the global
expansion of the neo-liberal market. As such, it fulfils a significant
function in creating an enabling environment for private sector activity in
the context of a globally integrated economy. This role is rarely ques-
tioned, any more than the various supporting fictions which have worked
to ensure the expansion of the principle within the liberal legal paradigm.
3
See for an impressive panorama, Symeonides (2014); and, for example,
emblematically, Rome I Regulation on the law applicable to contractual obliga-
tions (EC) 593/2008, Art. 3.
4
Compare the Hague Principles on the Choice of Law in International
Contracts (adopted on 19 March 2015).
II. THEORETICAL REPRESENTATIONS OF PARTY

AUTONOMY
Indeed, under the classical liberal paradigm, party autonomy was
designed to be exercised within a political framework which ensured the
ultimate primacy of public market regulation. This scheme owes as much
to domestic contract theory as to the Westphalian model of the public
international legal order, composed (exclusively) of equal and sovereign
states. Together, state sovereignty and freedom of contract combined to
produce a view of the relationship between law and market in the
transnational economic sphere according to which the empowerment of
private actors was subject to limits imposed in the name of the general
interest.5 Whether framed in terms of public policy or overriding manda-
tory rules, such restrictions imposed upon the conduct of private trans-
national trade are set by a presumptively like-minded community of
sovereign states similarly desirous of promoting the reciprocal benefits of
international trade.
Within such a scheme, the reasons for which any sovereign state would
allow parties to contract out of its own rules and substitute those of a
neighbouring community, were to be found both in the purported special
needs of cross-border transactions and the dilution of the claim of any
one state to regulate them exclusively.6 This implied in turn that
sovereign states were deemed to be unconcerned, or their polities less
affected, by transactions which did not directly involve their domestic
economy; in a world where market was coextensive with territory, this
idea translated methodologically into a presumption of territoriality of
national regulation.7 And indeed, this separation of the two worlds of
domestic and international transactions had a functional justification:
social and economic policies were non-negotiable in homogeneous cases
which fell clearly within their regulatory ambit; on the other hand, such
policies were not endangered by contracting-out when the relationship,
bearing foreign elements, was not perceived to belong to the local
economy.
However, while contractual choice of law might be encouraged in the
interests of cross-border commerce, its corollary was the assumption that
5
Francescakis (1966); Romano (2009).
6
See Ribstein (2003).
7
This notion is far from irrelevant today. See the US Supreme Courts
influential ruling on this point in the 2010 Morrison case (Morrison v. National
Australia Bank, 561 U.S. 247 (2010)).
the community of states specifically, those which were sufficiently

closely connected to the parties to justify the jurisdiction of their courts
would moderate private autonomy to accommodate the requirements of
the common good. No unbridled contrat sans loi, then, but a regulated
freedom to be subject to the sovereign legal order of ones choice. Like
international commercial arbitration, whose growth followed on the
generalization of party autonomy as a foundational principle of choice of
law, the empowerment of private actors is supposed to cater to the special
needs of international economic intercourse.
The notion that party autonomy in the international arena, like freedom
of contract in the domestic context, is a measured concession by the
liberal state to private ordering,8 rests on theoretical premises which are
also to be found, outside the field of contract, at the heart of multilateral
conflicts methodology.9 Thus, the very representation of the conflict
between laws within the continental Savignian tradition presupposes a
certain commonality of normative preferences among like-minded (and
pre-regulatory) sovereigns. Indeed, private law, of which the province is
that of horizontal relationships between non-state actors, is perceived to
be largely facilitative of private transactions,10 so that a conflict of laws
may be seen essentially as the virtual availability of as many interchange-
able sets of rules as there are connections between a given set of facts
and different legal systems. Conversely, any given legal system is
assumed to provide a set of rules of contract law that can suitably (that is,
rationally) be applied in any geographical context.
This double, liberal, representation of the relationship between state
and market, law and territorial polity, had, however, to adjust to the rapid
growth (in Europe, largely in the second half of the twentieth century) of
public economic regulation affecting the market (such as competition,
securities, consumership) or society (health, environmental, social protec-
tion), as well as the rise of fundamental rights in fields of private law
previously considered to be immune from constitutionalization. Public
policy concerns, social rights, or lois de police (overriding mandatory
provisions) in the legislation of closely connected states, frequently
endowed with extraterritorial scope, narrowed the expanse of private
empowerment. Importantly, such concerns were relevant both to judicial
proceedings within the forum state, or in respect of foreign judgments
and awards at the enforcement stage. Thus, in a European setting, first in
8
Jansen and Michaels (2006).
9
See Mills (2006).
10
Ogus (1999).
the Rome Convention (Article 7) and now in the Rome I Regulation

(593/2008) (Article 9), room was made for:
provisions the respect for which is regarded as crucial by a country for

safeguarding its public interests, such as its political, social or economic
organisation, to such an extent that they are applicable to any situation falling
within their scope, irrespective of the law otherwise applicable to the contract.
Such rules may override the otherwise applicable law when a court thinks
this makes sense in terms of the policies they express.
Beyond this adjustment, however, private international law did not
proceed to revisit the conceptualization of party autonomy in the light of
the intensive growth of market and social regulation in the domestic
sphere, with its transformation of the nature and function of private
law;11 nor did its methods appear to evolve in response to the decline of
the Westphalian model in international relations and the tectonic up-
heavals induced by globalization within both the theory of law and
sovereignty and the reality of cross-border trade and investment. Yet
within the changed normative, political and economic environment, party
autonomy can no longer be represented as a carefully monitored con-
cession of the liberal sovereign state. Philosophically, the shift from
obligation to empowerment can be described in Foucauldian terms as a
move to a neo-liberal model of private governance.12 Technically, it
involves what might be called methodological slippage.
III. PRIVATE LEGISLATION AND MERELY

TECHNICAL13 DESIGN
Unquestioning acceptance of the principle of party freedom points to its
status as a foundational myth of private international economic law.
Indeed, its success has been unimpeded by the fact that significant issues
as to its real ambit remain unsettled, as will be shown below. Nor does it
seem to matter that despite its Kantian pedigree, its dominant justification
is essentially utilitarian, linked to the needs of international trade.
Although methodological, political and economic objections do appear
from time to time, albeit outside mainstream doctrine, they remain
largely unheeded; thus, neither the functionalist arguments drawn from
11
Cafaggi and Muir Watt (2009); Micklitz (2009).
12
Foucault (2004).
13
Kennedy (2002).
governmental interests analysis, nor the potential democratic deficit

resulting from the permission to contract out of local rules, nor indeed
the uncertain economic rationality underlying the apparent indifference
of states to free-riding by foreign parties on proven or novel regulatory
models, detract from its remarkable success. The latter is, most recently,
illustrated by the Hague Principles on the Choice of Law in International
Contracts (2015), which affirms the general principle of party autonomy,
with limited exceptions.
The power thus conceded to private actors to harness available state
legislation to the needs of their cross-border transaction was, and still is,
perceived as doubly conditional to the requirements of the rule of law.
The first perceived expression of the latter is a condition of internation-
ality, which is supposed to prevent domestic contracts from circumvent-
ing local public policy; the second is the requirement of the public
(meaning state) origin of the chosen law, so as to prevent parties from
cherry-picking or resorting to wholly private rules. Neither, in the
contemporary legal context, fulfils the function of safeguarding the public
interest for which it was initially designed. On the contrary, as currently
framed, they create a hiatus between the rules and practice of inter-
national contracting; hence, a sense of methodological misfit. Further-
more, both serve to perpetuate a vision of the world, including the
relationship between regulation and party autonomy, on the foundations
of which the myth of autonomous private ordering was constructed.
The first condition (which, in a European setting, was already
enshrined in the Rome Convention), restricts the exercise of free choice
of law to international contracts or rather, due to the extraordinary
difficulty of defining this cardinal requirement, to contracts of which all
the elements relevant to the situation at the time of the choice were not
located within one state. The Rome I Regulation introduces, in addition,
the idea that, for the purposes of European legislation, a domestic
contract is one which is connected solely to Member States territories as
a whole (Article 3(4)). However, whether the perspective adopted is
national or, now, European, it presupposes a bright line separating the
closely regulated world of the domestic (or intra-European) economy,
from the area of freedom where, beyond national (or European) frontiers,
state policies relax their grip. The rise of the regulatory state, entailing
the multiplication of overriding mandatory rules or lois de police with
extraterritorial thrust (as seen above), has made it difficult to maintain the
bright line between domestic and international spheres in terms of the
respective intensity of state interests. In other words, the idea that
sovereign regulatory concerns stops at national borders could not survive
either the appearance of new forms of market regulation or the growing

interconnectedness of local economies.
Across the Atlantic, attempts were made to adjust methodology to the
increasingly regulatory function of private law.14 Although these attempts
were not always successful in the long run, the important lesson of the
American realist revolution was that multilateralism was unworkable in a
world where private law is neither purely facilitative nor indeed inter-
changeable. In a functionalist perspective, conflicts of laws arise from the
existence of contradictory regulatory interests, identified by sounding out
the policies of the states involved. However, they are considered as
strictly derogatory, in the sense that they do not represent the normal
way of reasoning in the conflict of laws. Therefore, they do not affect the
initial requirement that the contract be international, or non-domestic, for
the principle of party choice to come into play as a choice of law rule,
accrediting in turn the distinctiveness of the world of international
transactions. Maintaining this multilateralist fiction contributes to per-
petuate the underlying world-view of a community of states conceding an
area of party freedom beyond their frontiers, but over which they retain
the ultimate control.
This representation of an orderly world in which benign liberal states
determine the outer limits of private economic activity is also linked to
the second limitation to free choice. Today, within the Rome I Regu-
lation, like half a century ago in national case law, although parties may
choose any law in the world, with no requirement as to geographical
linkage to the state whose law is thus chosen and no condition as to the
completeness, modernity or democratic legitimacy of its legal system,
their freedom nevertheless stops short of non-state norms such as the lex
mercatoria or the UNIDROIT rules for international contracts. These,
according to recital 13 of the Rome I Regulation, may merely be
incorporated by reference into the contract, where they are necessarily
subject to the contrary provisions of the governing law. Underlying this
second restriction is the idea that the contract law of liberal states is
presumptively interchangeable, because it is deemed to be based on a
shared conception of societal needs (albeit largely facilitative and exclu-
sive of specific regulatory interference), whereas norms of purely private
origin cannot be supposed to implement similar conceptions. In other
14
Such attempts met with considerable resistance in Europe, often on
(legal-theoretical) grounds similar to those which have been opposed more
recently to the invasion of law and economics doctrines. See, e.g., Kegel (1964)
112.
words, according to this vision, it was important that the parties should
not escape the network of state regulation.
The fear inspired by the concept of private legislation or, even more
forbidding, le contrat sans loi may or not be justified: it could well
be, as frequently argued, that the content of the new law merchant has
now developed sufficiently so as to present a coherent, reasonably
complete and generally acceptable set of operative principles; it is also
arguable that carefully thought out principles of substantive contract law
drafted at an international level may be more valuable and adjusted to the
needs of cross-border trade than many state laws which might be less
progressive, less clear, more parochial, etc. In economic terms, the
burden of over-regulation could be an evil greater than excessive freedom
in the international sphere. But the point here is that if the mandatory
social and economic policies of connected states are implemented
whenever it makes sense to do so in functional terms, then the quality of
whatever non-state contract norms the parties may have chosen (in the
unlikely event they have committed themselves to incomplete, incoherent
or non-progressive principles) hardly matters. In the absence of a specific
regulatory interest, which would trump any other chosen rule anyway, the
choice of non-state law does not endanger the public policies of
potentially concerned states, of which, on the other hand, the protection
is inadequately ensured by the sole requirement that the parties choose a
state law. Excessive focus on the latter has signified, paradoxically, that
party autonomy has ceased to imply subordination of private actors to
state authority.
IV. CHANGES OF STATE:15 REVERSAL OF THE

RELATIONSHIP BETWEEN LAW AND MARKET
Private actors are empowered to attain regulatory lift-off16 because the
liberal state has renounced or has been constrained by competitive
economic forces to give up the means to ensure the primacy of its own
(or anothers) public policy regulation over private legislation.17 Indeed,
the changing global context in which party autonomy is exercised, and to
which it has largely contributed both as a foundational myth and a
methodological tool, has induced two significant functions for which it
was not initially designed. These changes of state are directly linked to
15
For this expression, see Brett (2011).
16
Wai (2002).
17
Rodi (2008).
those which affect the relationship between law and market.18 By

allowing parties to cross jurisdictional barriers unhindered, the principle
of free choice reverses the relationship between public regulation and
private choice and generates a competitive market for legal products and
judicial services.19
The first symptom of a reversal of the status of regulation in respect of
party choice law, jurisdictional barrier-crossing, results from the com-
bined effect of choice of forum, choice of law and free movement of
decisions or awards. The general acceptance of free choice of forum in
cross-border litigation, in the name of party autonomy, along with the
spectacular rise of arbitration, is traditionally justified in terms of the
promotion of international commerce through the benefit of predictabil-
ity, procedural economy and litigation risk-management. Such concerns
hold true even when internationally mandatory provisions are at stake:
there is no particular reason why courts should not be trusted mutually to
uphold the interests of the members of a benign community of states and
indeed, the Rome Convention (Article 7(1)) and Rome I Regulation
(Article 9(3)) have gone a long way down this path. Reputedly more
flexible, international commercial arbitration presents all these advan-
tages, with the added attraction of confidentiality; furthermore, when
political stakes are high, such as in state investment contracts, it offers an
appearance of neutrality, its legitimacy being enhanced by increasing
institutionalization. Increasingly commonplace in practice, such agree-
ments have thrived as initial doubts as to the desirability of allowing
private actors to appropriate access to the courts have dwindled.
Free choice of forum obviously impacts upon the applicability, and
thereby the imperativity, of the mandatory rules of any state other than
the chosen forum (which in the case of arbitration means practically none
at all). This is why the liberal scheme on which party autonomy rests
presupposes that any extension of the scope of party choice of court, or
the enlargement of arbitrability, is compensated by the right to a second
look by the supervising or enforcing state over the judgments or awards
issuing from the chosen forum. This scheme is apparent in the United
States Supreme Courts famous dictum in the Mitsubishi case, whereby:
in the event that choice-of-law forum and the choice-of-law clauses operated
in tandem as prospective waiver of a partys right to pursue statutory remedies
18
On such changes induced by a competitve market for legal products, see
Kerber (2000).
19
Muir Watt and Radicati di Brozolo (2004).
for antitrust violations, we would have little hesitation in condemning the

agreement as against public policy.20
But it rapidly became apparent that the second look was, in many
instances, either unrealistic (when no enforcement was required, the
parties having settled, for instance), or problematic (when the supervising
court is not better equipped than the arbitrator to make an assessment on
the merits in economic terms), or indeed practically excluded through
deference to the chosen forum (as in cases as notorious as the Lloyds
litigation). A powerful economic incentive for states to renounce their
second look has been to provide a free zone for the arbitration
industry.21 It is useful to note here, in view of the characterization
(proposed below, under VI) of the lex mercatoria as a self-constituting
constitutional regime, that the extreme liberalization of arbitration law
has come complete with a philosophical doctrine designed to legitimate
the regulatory lift-off thus achieved.22
Indeed, and secondly, the generalization of choice-of-court agreements,
along with the parallel growth of international arbitration, is now
understood as giving rise to a worldwide market in adjudication or
dispute resolution. Enhancing global jurisdictional competition would
supposedly reap benefits in terms of the improvement of the quality of
courts worldwide. However, the real problem lies in the fact that when
court access is thus privatized, there is a correlative absence of judicial
(or arbitral) regulation of interests beyond those of the parties to the
dispute. In this respect, it is instructive to turn to the conclusion, which
can hardly be suspected of anti-libertarian bias, reached by Landes and
Posner using economic analysis of justice in respect of the domestic
judicial system: privately designated judges lack both the legitimacy
(conferred by public investiture) and the (private financial) incentive to
take account of societal interests in their decision-making process. This
conclusion certainly plays out, for instance, in respect of the impact of
human rights in investment arbitration, where contractual mandate and
choice of law pre-empt any consideration of wider public or third-party
interests.23 Although, of course, the public financing of the court system
establishes both the legitimacy and the incentive which arbitration lacks
in protecting societal interests beyond those of the parties to the
20
Mitsubishi v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985).
21
Radicati di Brozolo (2003) and Radicati di Brozolo (2004).
22
Gaillard (2007).
23
Landes and Posner (1979).
litigation, the tendency of courts designated by choice of forum agree-

ments to act as if they were arbitrators obviously detracts from this
particular regulatory function.
V. DISTRIBUTIONAL EFFECTS24 OF PARTY

AUTONOMY
The centrality of private choice of law in the European tradition is so
taken for granted, or at least, appears to be so solidly rooted in the
history of Western private international law, that astonishingly little
attention has been paid to the function it fulfils within the changing
economic and political environment induced by globalization. The cloak
of tradition is reinforced by more recent law and economics doctrines,
which tend to promote party autonomy as efficiency, in the form of
predictability, reduced transaction costs, or facilitated risk-management.
No doubt these virtues exist, at least for the party whose skills in contract
negotiation and drafting are strongest. It is highly probable, however, that
the interests purportedly served by unbridled freedom of choice, whether
cast as those of the market or of a purported community of merchants, do
not allow for adequate governance of the cross-border activities of private
actors. In this respect, the (in)famous Lloyds litigation serves as a
cautionary illustration of the cumulative effect of contract doctrine and
private international law theory.25 Thus, under a wider perspective than
that offered by various dimensions of private law doctrine, it becomes
clear that party autonomy no longer serves to free private enterprise from
entrenched parochial constraints under the benign supervision of a
community of liberal states, but works to transform national public
regulation into a disposable private good in a deregulated economy. This
holds true even after the various recent financial crises and the disastrous
24
On the use of the notion of distributional effects of legal institions as a
critical tool to understand their often hidden effects in neighbouring spheres, see
Rittich (2002).
25
Roby v. Corporation of Lloyds, 996 F. 2d 1353 (2d Cir. 1993); Bonny v.
Society of Lloyds, 3 F. 3d 156 (7th Cir. 1993); compare in France, the Monster
Cable case: Cass civ 1re, 22 October 2008, JCP (G) 2008, II, 10187, note L.
dAvout; JCP (E) 2008, 2535, note N. Mathey; Contrats, conc consom 2008,
comm 270, note M. Malurie-Vignal; D 2009, 200, note F. Jault-Seseke, D.
Bureau and H. Muir Watt, Limprativit dsactive? ( propos de Cass civ 1re,
22 octobre 2008), Rev. Crit. DIP 2009, 1.
role played by self-regulation in subordinating wider public concerns to

speculative interests.
In this respect, the implications of party autonomy for what has been
aptly described as regulatory lift-off26 must be seen in the context of
the various legal tools which provide the private legal infrastructure of
global markets and foreign investment. Among these, within the Euro-
pean context, free movement of goods and services entertains a symbiotic
relationship with party choice, the latter being the metaphorical expres-
sion of cross-border mobility and regulatory arbitrage. While consumer
protection has found its place here, neither social rights nor the produc-
tion chains which supply the European consumer market benefit from
similar solicitude. Indeed, more globally, party autonomy also structures
transnational production and supply chains (generating what has been
described as a plug-in effect in respect of sub-contractors and sup-
pliers27), and can moreover be linked in this context to direct investment,
of which it supports the international (contractual) regime. The private
legal regime thus created is reinforced, on the one hand, by private
international law rules in tort, when they work to keep any obligation to
pay attention to third-party interests under the sway of local law, itself
often constrained to lower the level of reparation by reason of com-
petition to attract foreign investment. On the other hand, and furthermore,
the private international law regime governing the structure of multi-
national enterprise reinforces the autonomy of corporate entities when it
comes to the duty to care or repair in respect of industrial accidents,
environmental damage, or human rights abuse.
At the same time, however, various countervailing tendencies have
appeared. Technically, in the current state of the law, the only obvious
way of ensuring that law retains its authority when parties have the
licence to cross barriers is to make the second look effective at the
enforcement stage. This has been made possible within the European
Union, where Member States have the obligation to refuse recognition to
arbitral awards given in violation of European competition and consumer
law,28 and presumably of those fundamental rights which are part of the
Union legal order. Another notable development in the same context is
the progressive mainstreaming of consumer protection, which, through
the leverage provided by principles imported from outside contract
26
Wai (2002).
27
See Muir Watt (2010), citing Roger Brownsword, to whom the expression
is attributed.
28
See emblematically (in a competition law case), C126-97 CJCE Eco Swiss
China Time Ltd v. Benetton International.
theory, such as non-discrimination, has been evolving from the status of

exception to the rule in respect of cross-border provision of goods and
services.29 Party autonomy is therefore severely curtailed in an increasing
number of circumstances, albeit within the safe confines of the European
consumer market.
However, it may well be that there is need for a more radical
reformulation of the issues at stake. In the rapidly changing context of
global economy, the real difficulties are not (merely) market practices
shaped by stronger parties through free choice of law and forum, but the
implications of the expansion of unaccountable private authority in the
context of what social theory aptly describes as the increasing functional
differentiation of autonomous regimes.30 The stakes are sufficently high,
therefore to warrant a detour by the intimations of global legal theory,31
with a view to fitting the career of private autonomy into the bigger
picture of the normative landscape beyond the confines of state sover-
eignty.32 The next section will present the insights of societal constitu-
tionalism, a brand of legal pluralism, which may offer a way of
re-reading conflicts theory in global context, with particularly interesting
implications in respect of the transnational market regime based on party
autonomy.
VI. RE-READING CONFLICTS INVOLVING PRIVATE

TRANSNATIONAL REGIMES: FUNCTIONAL
DIFFERENTIATION OF PLURAL AUTONOMOUS
ORDERS
Societal constitutionalism, the specific brand of pluralism advocated by
Gunter Teubner,33 makes a direct connection between its own vision of
29
Ziegler (2007).
30
Teubner (2011).
31
Walker (2015).
32
For a critique in turn of Walkers own conceptions as being tainted by a
state-focussed paradigm, see Buchanan (2009).
33
This theory is developed by Teubner (2011) on the basis of insights in
Niklas Luhmans theory of functional differentiation of social spheres. It is
emphatically not a theory of global constitutionalism involving the search for an
all-encompassing set of shared principles of world governance, but a pluralist
perspective. As will be seen, it advocated only one possible common constitu-
tional approach, that of collision law, which each node (or forum, in more
traditional vocabulary) would define for itself.
colliding function-systems and the conflict of laws.34 It is also deliber-

ately attuned to the features of the global, and is not therefore merely an
extension of infra-state pluralism to the transnational sphere. As such, it
is certainly one of the most original and productive strands of contempor-
ary global legal thought. What follows is a (very) abbreviated presenta-
tion of some of its key insights, which may be necessary for the
information of readers who are not familiar with the vocabulary of the
social sciences. However, it is suggested that this section should be read
with conflicts of laws in mind, particularly those involving the lex
mercatoria.
In short, this sociological perspective sees as the central evolution of
late modernity (that is, emerging within the modern state and accentuated
by globalization), the multiplication of areas of autonomous action in
society, each developing its own formal rationality, in mutual indifference
to each other. It claims a post-structuralist pedigree35 to the extent that it
was Foucault who first identified radically de-personalizing power
phenomena and identifying todays micro-power relations in societys
capillaries in the discourses/practices of disciplines. This results in
escalated differentiation, pluralization and reciprocal compartmentaliz-
ation of separate spheres.36 Such spheres concern culture, science, the
economy, or law, but also more specialized sub-spheres such as finance,
ecology, or human rights (or indeed the lex mercatoria). These processes
describe and explain the crisis of politics in the modern state. It is no
longer possible for any authority to represent the whole of society. The
political constitution of the state can no longer channel the collective
energies of the whole society, founding the nations unity. In modernity,
the collective potential is no longer available as a whole, but has been
dispersed into numerous social potentials, energies, powers. This is due
to the narrow specialization of the communicative media of each social
sphere: power, money, knowledge, law.37
34
Christian Joerges and others have also mooted a version of (three-
dimensional) Conflicts Law as Constitutional Form (Kjaer et al. 2011).
According to this project, meta-conflict rules would allocate competence as
between the different multi-levels of governance (national, supra-national/
regional). In this respect, it seems to assume an overriding conflicts law rather
than the reflexive, decentred approach advocated below.
35
See Teubner (2011) 74, observing however that an inflated perspective of
power does not discern the more subtle effects of other communication media.
36
Ibid. at 39.
37
Ibid. at 63. This process is not necessarily negative. It has made possible
great achievements of civilization in the arts, science, medicine, economics,
Like the nation-state emerging in early modernity, these social sub-

systems are self-referential, establishing themselves through processes by
which, ex nihilo, they constitute their own autonomy. The specific
contribution of societal constitutionalism is to analyse this move towards
autonomy as the development by each sphere of its own constitution.38
Obviously, the concept of constitution advocated here must be dis-
sociated from the nation-state:39
Firstly, the constitution should be disconnected from statehood, so that

transnational issue-specific regulatory regimes may be considered candidates
for constitutionalization. Secondly, the constitution should be decoupled from
institutionalized politics, thus allowing other areas of global civil society to be
identified as possible constitutional subjects. Thirdly, the constitution should
be decoupled from the medium of power, thus making other media of
communication possible constitutional targets.40
The idea advocated by Teubner is then to borrow insights from the

discipline of constitutional sociology, relating both to the conditions
politics, and the law even if it has dark sides. More specialization is to come:
research, education, healthcare, the media, the arts globalization offers the
opportunity to strengthen their autonomy (82).
38
In terms of systems theory, the political constitutions of nation states have
the constitutive function of securing the autonomy of politics which has been
acquired in the modern era in relation to other religious, familial, economic,
and military sources of power (ibid. at 75). In contrast to the former, however,
their self-foundation does not take place through a formally organized collect-
ive, but rather as a communicative self-foundation with no formal organization of
the whole system.
39
This is a move constitutional scholars often have trouble making. It is
preferred, however, to alternative terms, such as meta-regulation, indispensable
norms or higher legal principles which are inadequate to comprehend the
complexity of issues that the concept constitution covers.
40
Ibid. at 60. There is serious disagreement here under the wide umbrella of
pluralism. Noting that we should abandon, then, the false premise that constitu-
tionalization inevitably means the transformation of a group of individuals into a
collective actor, Teubner warns that concepts which some find helpful, such as
epistemic community, eco-nomic community, or nomic community should
be used with extreme caution, since, once again, none of the sociological
characteristics of a community are present. In this respect, he argues, Bermans
ideas are therefore problematic, since his anthropological approach always
assumes the presence of culturally defined communities that function as consti-
tutional subjects. In reality, however, the communities referred to in social
constitutions are just imagined identities, just self-descriptions of their oper-
ational unity (ibid. at 68).
surrounding the constitution of social systems, and the contributions

made by legal norms to this process, and then to generalize these insights
to non-state systems. Thus, a constitution dissociated from state requires
a legal imagination which can call upon the founding myth of a
collective a constitution does not necessarily require a demos, a
primordial ethnic group or intermediary structures, but it does need
a legal imagination of revolution and memory.41
The requirement of a foundational myth is linked in Teubners account
to the constitutions first essential function, which is to supply a way of
dealing with the paradox of self-reference42 or how a political system
emerges out of nothing. Self-foundation or mystical self-recursivity43 is
described as a feature of the political constitutions of nation-states. The
self-constituting social system refers to the law which in turn supports
self-foundation. This means that the problem of self-reference is dealt
with as it were by externalizing the paradox to the law. The same
phenomenon can be observed in other social systems: their respective
paradoxes of self-foundation are externalized to the law. When a social
system gives itself a legal constitution, it finds an escape from the
deficiencies of self-foundation and its paradoxes.44 A second function of
constitutions at least, of successful constitutions is to induce limits
within each social system through self-steering mechanisms. On the
41
In support of this point, it can indeed be observed that even private
regimes have their founding myths, which are at the heart of their constitutions
and legitimize their jurisgenerative power. Global law itself, in Neil Walkers
account (cited above), has to confront self-referentiality and, to do so, creates its
own pedigree by appealing to the past in its own ongoing process of self-
constitution. In respect of the lex mercatoria, Teubner shows how its constitu-
tional self-validation also appeals to the history of ancient trade customs. The
culture of the past of the common law or the natural rights pedigree of the civil
law tradition are other examples in more traditional spheres.
42
Teubner (2011) 82. And ibid. at 63: Systems theory understands the
pouvoir constituant as a communicative potential, a type of social energy,
literally as a power which, via constitutional norms, is transformed into a
pouvoir constitu, but which remains as a permanent irritant to the constituted
power. The constitutional subject is then not simply a semantic artefact of
communication, but rather a pulsating process at the interface of consciousness
and communication, resulting in the emergence of the pouvoir constituant.
43
Ibid. at 104 : We should only speak of constitutions in the strict sense
when the medial reflexivity of a social system be it politics, the economy, or
some other sector is supported by the law or, to be more precise, by the
reflexivity of the law.
44
Ibid. at 107.
one hand, sub-systemic rationality can develop pathological, self-

destructive tendencies (turbo-autopoiesis). This compulsive growth
dynamic can be seen in the politicization, economization, juridification,
medialization and medicalization of the world.45
Although societal constitutionalism developed in order to understand
changes which take place within the late-modern state, these ideas apply
equally well to global regimes which cross the boundaries of nation-
states. In transnational contexts, it is the issue-specific regimes that form
new kernels around which collective identities crystallize. However,
these regimes are distinctive because their:
primary constitutional aim is to dismantle nation-state barriers: to break down

the close structural couplings between the function systems and nation-state
politics and law, and to enable function-specific communications to become
globally interconnected Constitutive rules thus serve to unleash the
intrinsic dynamics of the function systems at the global level. Unburdened by
nation-state restrictions, the systems are now placed to follow, globally, a
programme of maximizing their partial rationality.
This is quite clear in the context of the global economy, where the
dismantling of national production regimes releases destructive dynamics
in the global systems; destructive dynamics in which the one-sided
rationality-maximization of one social sector collides with other social
dynamics.46
45
The analysis is applicable to law itself (ibid.): In the case of law, we can
clearly see that law not only resolves conflicts and returns to a position of rest.
Rather, its own regulations actually generate conflicts, which then call for further
regulation. Through its regulatory intervention in daily life, law itself produces
the situations which then give rise to conflicts. And, at the same time, each norm
generates problems of interpretation, which themselves generate further conflicts.
Finally, the sheer mass of legal rules produces rule-conflicts which call for the
production of yet more rules. It appears that the high autonomy of law enhances
the number of conflicts.
46
Ibid. at 79. In respect of these constitutionalized regimes, arises the
disturbing question: does functional differentiation secretly imply a peculiar
growth compulsion? In other words, do these autonomous regimes have an
inherent tendency to expand into the other spheres, with potentially harmful
effects or negative externalities? The equally disquieting answer is that the
self-reproduction of function systems and formal organizations follow an inexor-
able growth imperative. The explanation is to be found in the specific structure
of these specialized systems, which are oriented towards one and only one
binary code. As such they destroy the inherent self-limitations which worked
effectively in the multifunctional institutions in traditional societies. This, then, is
In the absence of any higher central authority or perspective from

which to order these regimes in any reassuring semblance of hierarchy,
how then might the expansion of autonomous regimes be contained? This
is the point at which theories of legal pluralism usually fall short of
providing an answer. However descriptively adequate, they are of little
use once the autonomy of normative regimes and the ensuing competition
for supremacy are identified. But at this point, societal constitutionalism
suggests that the most appropriate analysis is in terms of networks. This
means that the network nodes each internally develop their own conflict
of laws from which perspective they can decide conflicts of norms.47
There is no network centre to decide norm conflicts between nodes, but
rather, the nodes decide the issues for themselves in a decentralized
manner. Each node then has the responsibility to incorporate into its
internal perspective the norms of the other nodes as well as those of the
overall order.48 But identifying the (de-centralized) standpoint does not
in itself provide the methodology with which such conflicts may be
solved. The idea here is that different methods are available to deal with
issues of conflict according to the type of social couplings involved for
different types of societal spheres.49
Thus, in societal constitutionalism, different regimes (or nodes) each
entertain particular relationships with the social. The parameter is the
constitution of the nation-state, which is embedded within an encompass-
ing legal order. In this respect, it disposes of an internal balance
constituted by mechanisms of self-limitation, notably a set of funda-
mental rights. By contrast, specialized transnational regimes may present
a far lesser degree of social embeddedness, lacking similar internal
resources. These are tailored to one functionally differentiated sector of
world society and as a consequence reflect the independent rationality of
the societal sector to which they are coupled. Regime constitutions are
partial constitutions that are not based on overall social processes, i.e.
the particular problem of globalization: when the function systems become

global, thus freeing themselves from the dominance of nation-state politics, there
is no longer an agency to set them limits, stem their centrifugal tendencies, or
regulate their conflicts. The example of the private market regime supported by
commercial arbitration which is progressively expanding into the realm of public
regulatory interest through investment arbitration provides an excellent illustra-
tion of this centrifrugal growth.
47
Teubner (2011) 159.
48
Ibid. at 160.
49
A similar classification and analysis can be found in Fisher (2011),
discussed in more detail in Muir Watt (2011) 418.
those directed at the broader public interest.50 At the other extreme,

indigenous normative orders are more strongly embedded at the overall
social level than nation-state law. The reason is that they appear in social
areas in which no functionally differentiated legal system has been
formed: their norms are inseparably interwoven with religious, political,
and economic aspects.51
These differing degrees of social embeddedness, it is suggested, impact
directly upon the appropriate mode of conflict resolution. In instances
involving only transnational specialized regimes (such as a conflict
between party autonomy and the requirements of health, culture, finance
or the environment), the appropriate methodology would be the substan-
tive law approach, which:
takes up elements from the conflicting constitutional norms in each case and
reflects these in the shape of a new substantive norm oriented at the same
time towards the ordre public transnational. This leads to a form of hybrid
law as, from the viewpoint of the deciding authority, the substantive norm
internalizes alien constitutional norms into its own law, but at the same time
leaves their autonomy undisturbed.52
VII. CONCLUSION: A FULL CIRCLE WITH A BIG

TWIST?
While much of the previous section makes for difficult reading, notably
because it uses the vocabulary of a non-legal discipline, it may also have
a highly familiar ring for private international lawyers, at least in some
respects:
+ The most familiar illustration, for private international lawyers, of

an autonomous self-constitutionalizing system with destructive
growth tendencies can of course be found, precisely, in the
transnational market regime (the global version of the lex
mercatoria53). As we have seen, such a regime of unaccountable
private authority, complete with its own inner logic, structuring
50
Teubner (2011) 160.
51
Ibid. at 184. These socially embedded regimes appear as generating
intercultural conflicts. An example might be claims grounded on indigenous
property rights against the land-grab by private investors in the context of
investment arbitration.
52
Ibid. at 156.
53
Fischer-Lescano and Teubner (2004).
principles and private jurisdictions, prospers notably through

extreme liberalization of arbitration; it shows furthermore a marked
propensity to expand into neighbouring areas such as investment
law, where it clashes with other regimes;54 it has come complete
with a philosophical doctrine designed to legitimate the regulatory
lift-off it has achieved, in respect of limits contained either in the
laws of nation-states or indeed, as the context of investment
arbitration shows, fundamental rights.55 This is largely how private
corporate actors govern.56 In Teubners words, corporate constitu-
tional politics have successfully dismantled nation-state production
regimes whenever they impede the global expansion of corporate
activities.57
+ Furthermore, insofar as it advocates network analysis, the insights
of societal constitutionalism are perfectly comprehensible from the
perspective of private international law. It has long been accepted in
this context that (unless there is an international treaty) each legal
system can only decide conflicts for itself. This is the case even
when it develops elaborate devices (such as renvoi) that purport to
coordinate various legal systems outside itself: it still operates as a
closed system. After all, this is why, in a conflict of laws perspec-
tive, there is no such thing as a subjective right out there (as
opposed, perhaps to a fundamental right): a right can only exist
from the extremely relative perspective of a particular forum.
Nevertheless, the various nodes composing a network have to
cooperate in order to survive. Similarly (even in the age of cynical
particularism), the conflict of laws has remained attached to a
vision of the relationship between legal systems in which various
ideas of coordination, comity, deference, and more recently, peer
review have pride of place.58 Moreover, the conflict of laws has
long developed such ideas as tolerance (in the case of public policy)
and mutual recognition (in the case of judgments or rights), which
are clearly essential to the functioning of a reflexive network
paradigm.
+ The third set of developments on which conflicts lawyers will have
a certain impression of dj vu concerns the differentiation within
the proposed methodology according to diverse degrees of social
54
See Muir Watt (2014).
55
Gaillard (2007).
56
Danielson (2005).
57
Teubner (2011) 77.
58
Mills (2014) 245.
embeddedness of the systems involved. Although the question is

framed very differently, the latter concept might be said to echo the
idea of proximity, which has long dominated horizontal conflicts of
state law, and led to differentiated approaches according to the
nature of the legal relationship. More specifically still, as far as
conflicts involving transnational functional regimes are concerned,
Von Mehren and Trautman suggested a specific substantive method-
ology many years ago, for the needs of interstate conflicts of laws,
which involved re-interpreting the policies of each interested state
in the light of the others aims and interests.59 More recently,
Hannah Buxbaum proposed a similarly substantive-cosmopolitan
approach in respect of public regulatory conflicts.60 As Teubner
himself points out, this may be similar to the idea of transnational
public policy that has emerged in arbitration. Above all, it recalls a
conception of ordre public conceived as a positive measure of
tolerance towards alterity.61
So does all this mean that the wheel comes back full circle? To answer
this question in a conclusion which aspires only to open future debate, let
us go back to another striking statement by Gunter Teubner:
In a world society with neither apex nor centre, there is just one way
remaining to handle inter-constitutional conflicts a strictly heterarchical
conflict resolution. This is not just because of the absence of centralized
power, which could be countered by intensified political efforts, but is rather
connected with deep structures in society which Max Weber called the
polytheism of modernity. Even committed proponents of the unity of the
constitution are forced to agree that the unity of the nation-state constitution
is now moving toward a clash of civil constitutions, toward mutually
conflicting rationalities to be defused by a new conflict of laws.
Teubners statement elevates the conflict of laws to a meta-constitutional

level. Yet, to a certain extent, this is unsurprising. After all, the conflict of
laws line of business has long been making sense of interactions that
cross state boundaries and fall between the gaps between domestic
sovereignty and public international law. At the same time, however,
complacency would be largely misplaced. The disciplines contemporary
intellectual abeyance certainly warrants a humble detour by the various
59
See von Mehren and Trautman (1965).
60
Buxbaum (2002).
61
Boden (2002).
thriving strands of global legal theory.62 Indeed, it may have much to

learn from other disciplinary vocabularies, either about the definition of
conflicts or their modes of resolution, and this could lead in turn to a
radical reformulation of its own core issues. Indeed, if encounters
between heterogeneous norms or expressions of diverse types of informal
authority are central to the understanding of the normative landscape
beyond the confines of state sovereignty,63 the traditional schemes of
intelligibility which underlie the conflicts of laws need to take on board
various additional dimensions of global complexity. If it does so and
succeeds in living up to this challenge, it may emerge considerably
enlightened by global legal theory. Conflicts involving the lex
mercatoria, as a functionally specialized cross-border regime, seem to be
a good place to start!
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disponibles in J. Mestre, A. Bonomi, A. Albarian, Centre de droit conomique
(Aix-en-Provence, Bouches-du-Rhne), Centre de droit compar, de droit europen et
de lgislations trangres (Lausanne) and Institut suisse de droit compar (Lausanne),
Regards comparatistes sur le phnomne contractuel. Aix-en Provence: Presses Univer-
sitaires dAix-Marseille PUAM
Symeonides, S. (2014) Codifying Choice of Law Around the World: An International
Comparative Analysis. Oxford: Oxford University Press
Teubner, G. (2011) Constitutional Fragments: Societal Constitutionalism in Globalization.
Von Mehren, A. and Trautman, D. (1965) The Law of Multistate Problems. Boston, NJ:
Little, Brown
Von Overbeck, A. (1993) Lirrsistible extension de lautonomie de la volont en droit
international priv in Nouveaux itinraires en droit: hommage Franois Rigaux.
Brussels: Bruylant
Wai, R. (2002) Transnational Liftoff and Juridical Touchdown: The Regulatory Function
of Private International Law in a Global Age, 40 Columbia Journal of Transnational
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Walker, N. (2015) Intimations of Global Law. Oxford: Oxford University Press
Yetano, M.T. (2010) The Constitutionalisation of Party Autonomy in European Family
Law, Journal PIL 155
Ziegler, K. (2007) Private Law and Human Rights. Oxford: Hart
Index
ableism 316 atypical contracts 5657

ableness 3, 310, 31317 Australia, courts 476, 504
accelerating clauses 221 Austria 2829, 151
acceptance, offer and 88, 90, 365, 409, authenticity 287, 32829, 351
411, 414, 431, 438 authoritarian theory of contract 4764
accin de tutela 21623 authoritarian theory of contract law
Accursius 33 juridical Fascism and juridical
acquisition 35258 National Socialism compared
activism, judicial 239 4953
actors, non-state 129, 195, 515 keywords and formalisms of debate
actual performance 14546, 158 on juridical Fascism 4849
ADA (Airline Deregulation Act) authority 336, 351, 39091, 411, 413,
38687, 39293 523, 525, 530
ADR (alternative dispute resolution) autonomy
125 individual 378, 41012
African customary law 45253, 46365 party, see party autonomy
Agamben, G. 213 private 2, 58, 96, 117, 123, 133, 322,
Age of Faith 263, 270, 280, 293 417
agents, electronic 434, 436, 438 theories 1, 1112
agony, romantic 28081, 296
Airline Deregulation Act, see ADA background rules 97, 108
alphabet 68, 70, 7273, 92 bad faith 38789, 39497, 402, 406,
alterity 331, 373, 379, 532 505
ambiguities 9798, 103, 262, 265, balance 55, 5859, 63, 99, 117, 12224,
39899, 451, 455, 457 13031, 233
ancestors 275, 277, 279, 297 banks 74, 90, 22021
Antonio 32, 333, 33840, 342 Barbeyrac, J. 2122
anxiety 274, 27880, 284, 293 bargain theory of consideration 283,
apophrades 29899 289
applicability 199, 22526, 22831, bargaining power 128, 191, 485
23637, 520 bargains 3031, 1078, 36465,
applicable law 195, 413, 427, 445, 516 36871, 37778, 38586, 478,
Aquinas, Thomas 19, 40, 397 49394
arbitrage 132 barter 21, 2325
arbitration 199200, 386, 52021, Barton, J.H. 156
53132 basic income project 212
international 200, 521 Bassanio 32, 332, 34042
Aristotle 1920, 40 Beauty and the Beast 372
art of rhetoric, see rhetoric behaviour 107, 151, 361, 363, 401, 404,
asymmetric-value contracts 166 498
537
Columns Design XML Ltd / Job: Monateri-Comparative_contract_law / Division: Index /Pg. Position: 1 / Date: 16/3
and invasion 8385 China 112, 13032, 135, 151, 155

Belgium 2829 choice 24, 99, 12627, 134, 194,
Bentham, J. 277, 292 199200, 42829, 515
bilateral breach 148, 152, 15456, 159, accredited freedom of 193, 513
16365, 167, 170 free 19697, 345, 51718
event of 164 party 15, 197, 199, 201, 518, 520, 523
preclusion rule for 16465, 170 unbridled freedom of 201, 522
bilateral contracts 145, 14748, 150, choice of forum, agreements 200, 522
152, 15859, 162, 164, 16667 choice of law 196, 199, 520; see also
remedies for 16064, 166, 168 forum
bilateral juridical transactions 5354 free 193, 202, 513, 524
bilateral obligations 149, 154, 222, Christian cosmology 31112
22728, 234 Cicero 180, 396, 401
bilateral promises 14849, 163, 165, circumstances, new 18891
16970 civil law 50, 67, 216, 326, 346, 487,
comparative law and economics 494, 503
viewpoint 15666 countries 28, 120, 147, 415, 421, 430
enforcement 14571 systems 12, 28, 149, 151, 155, 502
extension of conventional approach civil society/state 3056, 31115, 317
to 15860 class actions 127
legal remedies for 14856 classic to contemporary comparative
bilateral remedies 16669 law 100102
binding force 23, 95, 49798 classical theory 247, 266, 28485, 297,
Bloody Chamber 36465, 370, 427 299
Bloom, H. 250, 27480, 28284, classical theory of contract 3, 26768,
29698 271, 287, 29293, 29899
bona fide promising 392401 classification 67, 70, 87, 8990, 184,
bonds 5455, 5758, 325, 33233, 335, 348
340, 346, 497 levels of 7478
borrowers 27, 30, 74 click-wrap contracts 437
Brazil 112, 13032, 135
clockworks 18485
Civil Code 13031
clustering 6768, 8790, 92
breaching parties 150, 152, 15455,
159, 16163, 168, 170, 405 Code Napoleon 52, 155, 20911
burden of proof 76, 78 codification 50, 55, 234, 236, 337, 353,
buyers 3334, 40, 400401, 483 361
Coggs v. Bernard 31, 479
Cardozo, B.N. 251, 256, 265, 27173, coherence 73, 85, 99, 270, 296
28992, 299, 403 Collins, H. 11617, 246
Carter, A. 36180 Colombia 21639
case method 29495 Constitutional Court 216, 218
castle 354, 36667, 36970 commercial promises 48183
causa 57, 61, 107, 147, 399 commercial transactions 348, 353, 417
Charter of Fundamental Rights of the commodatum 2627, 3031
European Union 2067 commodities 333, 37374
children 2089, 235, 31314, 316, common intention 62, 454, 45657,
35051 460, 46263
Index 539
common law 89, 2930, 26364, bargain theory of 283, 289

39091, 393, 39697, 42425, requirement 399
47071 theory/doctrine 86, 247, 284, 289,
courts 120, 471 299, 469, 482
English 117, 389, 452, 463, 488 Constitutional courts/judges 216, 218,
systems 12, 145, 152, 430, 503 22024, 22731, 233, 23637,
commons 21113, 422 457, 46465
communications, electronic 118, 128, constitutional norms 530
41416, 435 constitutional values 216, 465
commutative justice 40 constitutional values and freedom of
comparatists 6792
contract 21639
compatible goals, largest number of 2,
constitutionalism, societal 524, 526,
177, 17981, 18687, 190
compensation 26, 40, 127, 165, 168, 52829
387, 484, 503 constitutionalization 195, 515, 526
imperfect 16768 consumer protection 96, 201, 209, 418,
partial 16667 420, 523
competition 104, 109, 183, 195, 292, consumers 3839, 7778, 126, 209,
515, 529 211, 41718, 42122, 433
law 124, 126, 128 consumption 20, 23, 26, 30, 35, 211
damages 12526 contagion 17475
completeness 103, 197, 337, 518 contextual factors 127, 134, 136
complex systems 2, 68, 99, 178, 18485 contextualism 457, 459
complexity 2, 87, 9092, 102, 124, 173, contract clustering 6768, 8790, 92
184, 261 contract doctrine 289, 402, 421, 522
and spontaneous order 17779 contract formation 418, 427, 429,
compromises 118, 149, 45253, 462, 43234, 43840, 442
479 mechanisms 428, 433
conceptualism 101, 256, 287, 295 contract law
concession contracts 114 basic task 1415
conditions for cooperation and common 80, 425, 431
coordination 177, 18182, and Fascism 5557
18586, 18889
harmonization 108, 208, 421
conflict of laws 195, 197, 515, 518, 525,
and National Socialism 5355
529, 53133
conflicts 8283, 91, 103, 126, 277, 337, regulatory, see regulatory contract
339, 52933 law
Congreve, John 343, 34751 Roman, see Roman contract law
connected states 195, 198, 515, 519 systems 8, 10, 12, 1517
conscience 385, 39899 and technological contracts 41114
consensual contracts 20, 23, 3235, 428 theories 717, 202, 250, 283, 288,
consensus 73, 91, 344, 365 296, 308, 358
consent 1924, 2627, 3233, 34344, authoritarian theory, see
35051, 428, 43337, 43940 authoritarian theory of
element of 41112 contract
consequential damages 38 autonomy theories 1, 1112
consideration 2931, 1079, 28390, current 1114
322, 399, 47276, 47882, 49194 doubts about 1417
general theories with application to contractual interpretation 45166

contract law 1314, 16, 254, contractual justice, as legal discourse
287 1068
mixed 14 contractual norms 88, 224, 229, 236
property theories 12 contractual obligations 75, 84, 159, 167,
reliance theories 2, 1213 22223, 233, 285, 322
variation 1516 contractual paradigm 3, 123, 3035,
contract price 4042 3079, 31115, 31719
contract remedies, and regulatory contractual surplus 16364, 170
remedies 12429 contractual terms 3, 15, 122, 22526,
contract theories, see contract law,
229, 23133, 237, 365
theories
contractualism 260
contracticles 2, 67, 90, 92
contracting parties 1112, 5859, 164, contrat sans loi 194, 198, 515, 519
16667, 20515, 225, 32829, control 76, 128, 135, 352, 356, 361, 370,
45354 378
weaker 5758 cooperation, social, see social
contractors 3045, 3079, 311, 31317, cooperation
328, 346, 408, 482 cooperation and coordination,
contracts conditions for 177, 18182,
atypical 5657 18586, 18889
bilateral 145, 14748, 150, 152, Corbin, A. 265, 273, 28992, 299,
15859, 162, 164, 16667 39192, 405, 481
binding 322, 340, 478, 484 correlative duties 218, 22325, 233
click-wrap 437 corruption 316, 324, 330
concession 114 cosmology 31112
consensual 20, 23, 3235, 428 Costantini, C. 36162
electronic 410, 415, 422, 444 costs 26, 124, 130, 163, 170, 180, 417
immoral 32233, 325, 331 legal 167, 169
innominate 2124 transaction 178, 410, 413
insurance 26, 35 counter-parties 470, 47374, 482, 499,
international 19698, 41516, 435, 502
51718 counter-performance 155, 161, 16364,
made under seal 30, 325, 346, 458 170
marriage 310, 34351, 365, 367, 371, courts 4243, 7680, 16063, 16668,
375 22023, 23435, 4026, 47273
racial 31011 Australia 476, 504
real 20, 23, 26, 29 common law 120, 471
of sale 33, 75, 147, 326, 441 constitutional 216, 218, 22024,
sexual 30910 22731, 233, 23637, 457,
standard form 37, 386, 456 46465
stricti iuris 3539, 399 errors 163, 16669
technological, see technological France 34, 106, 461
contracts Germany 3435, 6062, 460, 466
unilateral 14546 Italian 47
written 36, 38, 43, 86, 324, 32728, Supreme Courts 125, 45556,
333, 335 46465, 482, 494, 498
contractual equity 55, 58 United States 4, 31, 149, 418, 445
Index 541
Courtship of Mr Lyon 364, 37275, unilateral 49699

37879 default norms 23032, 236
creativity 96, 105, 254, 379 default rules 15, 154, 164, 436
creditors 54, 56, 79, 157, 224, 226, 233, defeasibility 228, 23132
49798 defenses
critical comparative contract law non-performance 148, 150, 15253,
95109 156, 16066, 16870
cross-border transactions/trade 19496, preclusion rule 166, 169
198, 411, 416, 514, 51617, 519 deference 131, 200, 268, 521, 531
Crunelle-Vanrigh, A. 375 delivery 21, 2631, 34, 43, 153, 325,
365, 431
cryptotypes 104
democratic legitimacy 116, 197, 518
culpa in contrahendo 49496, 499, 502,
deposit 20, 23, 26, 31, 344
5045 depositum 2627, 3031
cultural imagination 36162 descendants 27576, 279, 284
cultures 72, 99100, 102, 105, 355, 362, detriment 276, 28384, 289, 394, 418,
525, 530 504
cumulative effect 201, 522 detrimental reliance 13, 16, 482, 492
dialectics 8687, 322, 339, 341
Dagan, H. 9, 12021 Dickinson v. Dodds 285, 287
damages 1213, 16, 6869, 7477, digital content 423, 44041
15053, 15961, 16364, 167 digital rights management systems
competition law 12526 (DRMSs) 442
consequential 38 digital technologies 410, 413, 424, 428,
expectation 155, 157, 16063, 430, 434, 44041, 444
16768 and meeting of minds 43440
marginal 16061 dignity 82, 2068, 220, 322, 465
money 1213 disability 2089, 211, 233
recovery 4142 disabled people 222, 228, 31718
Roman contract law 3944 diseases 69, 73, 89, 9192
damnation 324, 327, 330, 332 disorder 9192
damnum emergens 39 displacement 12526, 221, 363, 386
daughters 336, 338, 342, 347, 366, 371, disproportionality 42, 44
374, 376 disputes 4849, 126, 176, 34445, 389,
DCFR (Draft Common Frame of 391, 466, 472
Reference) 38, 147, 453, 462, 465 distance 59, 89, 100, 406, 408, 41920,
de fide instrumentorum 402 427, 432
death 246, 250, 25758, 260, 26263, distinctiveness 99, 197, 393, 518
326, 331, 338 distortions 16163, 165, 168, 170, 251,
Death of Contract 293, 297 278
debt 6869, 7576, 78, 90, 92, 22021, distributive justice 117, 135, 21112
280, 331 Doctor Faustus 32232
debtors 27, 54, 56, 223, 22729, 231, documents, written 32829, 364, 457
233, 235 Dracula 35258
decency 2627, 390 Draft Common Frame of Reference 38,
declamations 105, 1078 147, 453, 462, see DCFR
declarations 14647, 230, 251, 45860, DRMSs (digital rights management
484, 49699 systems) 442
Ducote v. Oden 49394 mechanisms 11213, 115, 124,

Dumoulin, Charles 4142 12829, 132, 134
Dutch law 5023 powers 125, 12728
duties 5052, 7980, 82, 85, 233, private 12427
23537, 398, 400; see also of promises 8, 28, 148, 170
obligations stage 195, 202, 515, 523
correlative 218, 22325, 233 English law 325, 328, 364, 368, 398,
of solidarity 23233, 236 45255, 466, 5034
of tolerance 219, 223, 227, 229, 231, and South Africa 45759
233, 236, 53132 equality 2079, 220, 307, 316, 392, 396,
39899, 405
equity 81, 90, 385, 39596, 398400,
ECHR, see European Convention on
46465, 47071, 474
Human Rights contractual 55, 58
economic analysis 13, 1078, 148, 156, equivalence 5657, 62, 127, 499
200, 521 ergodic systems 178
economic interests 28, 53, 59 error(s) 62, 178, 181, 191, 284, 335,
economic terms 198, 200, 519, 521 401, 451
economics 1314, 1078, 114, 299, 352 court 163, 16669
EDI (electronic data interchange) E-Sign 421, 42526, 435
43536 estates 186, 35354, 373, 440
education 82, 22223, 295, 526 estoppel 400, 47172, 47476, 493, 504
legal 16, 91, 29495, 386 promissory, see promissory estoppel
efficiency 1314, 1078, 162, 166, 168, ethics 331, 334, 379, 400, 406
174, 17677, 358 European Convention on Human Rights
effort (ECHR) 2079
excessive 161, 16366, 170 European integration 96, 417
incentives 167 European Union 28, 112, 202, 416,
optimal choices of 16566 44445, 462, 523
electronic agents 434, 436, 438 Charter of Fundamental Rights 2069
electronic commerce 415, 419, 438, 442 internal market 417, 41920, 444
electronic communications 118, 128, evidence 278, 280, 306, 335, 34243,
451, 45455, 459
41416, 435
extrinsic 461, 463, 466
electronic contracting 41011, 41327,
parol evidence rule 454, 457, 459,
430, 433, 436, 438, 445 461, 466
electronic contracts 410, 415, 422, 444 exceptio inadimpleti contractus 170
electronic data interchange, see EDI exceptio non adimpleti contractus 223,
electronic signatures 415, 419, 42425 233
email 387, 420, 429 exceptionalism 385406
embeddedness, social 52930 exceptionality 22530
empowerment of private actors 194, exceptions, implicit 225, 228, 23132
51415 excessive effort 161, 16366, 170
enforcement 116, 119, 12425, 128, excessive performance effort 16566,
393, 397, 399400, 484 170
bilateral promises 14571 exchange of goods 5355, 63, 158
conventional framing of contract exchange of promises 14849, 169,
problem 15658 350, 365, 428, 430
Index 543
exclusion 78, 98, 135, 308, 31011, France 2829, 42, 80, 155, 460
317, 344, 458 Civil Code 34, 41, 210, 466
expectation damages 155, 157, 16063, courts 34, 106, 461
16768 law 41, 80, 453, 459, 461, 466
expectations 16162, 170, 17576, 265, fraud 284, 329, 331, 348, 389, 39496,
268, 484, 486, 5023 42425, 430
correct 17576 free choice 19697, 345, 51718
reasonable 390, 4034, 476, 482 of forum 199, 520
experimentation 130, 259, 296, 446, free promises 479, 499
506 free will 26, 325, 340, 346, 35152, 375
expressly defeasible norm 23132 freedom 5354, 18687, 189, 191,
extrinsic evidence 461, 463, 466 2078, 232, 23537, 51415
freedom of contract 54, 95, 191, 194,
face-to-face contracting 430 208, 232, 23537, 51415
fair reason 2829 and constitutional values 21639
fairness 14, 38, 120, 390, 392, 46465, protection 173, 18687, 189
505 and spontaneous order 17391
fairy tales 3, 36164, 36869 Fried, Charles 78, 11
faith, bad 38789, 39497, 402, 406, Friedman, Lawrence 25758
505 frustration 7677, 90
family law 54, 2056 Fulbeck, W. 39798
Fascism 4752, 5960, 62 function 82, 84, 100101, 199200,
and contract law 5557 26970, 33940, 35758, 49394
juridical, see juridical Fascism function systems 52829
fathers 27172, 277, 31415, 338, 344, functional approach 8687, 96
346, 37274, 37678 functional differentiation of plural
fault 1, 43, 68, 72, 7478, 95, 265, 296 autonomous orders 52430
Faustus, Doctor 32232 functionalism 8687, 100102
Federal Energy Regulator (FERC) fundamental rights 2068, 22025, 227,
12223 233, 23536, 238, 529, 531
FERC (Federal Energy Regulator) justiciability 220, 236
12223
fidelity 330, 346, 349, 351, 39697, 399
Gaius 20, 32, 73
fides est servanda 385, 401
Fon, V. 158, 167 gaps 84, 120, 132, 22831, 236, 337,
forbearance 145, 147, 476 339, 39899
foreign investment 201, 523 normative 226, 228, 238
foreseeability 12, 4243, 167 Gaus, G. 18283, 190
formalism 48, 101, 292, 295, 300, 403 gender 206, 309, 318, 363
formalities 20, 80, 149, 402, 411, general clauses 60, 9596, 208
42728, 433, 442 general rules 3940, 151, 154, 185,
formation of contracts 81, 84, 14647, 18990, 285, 479, 481
322, 411, 415, 425, 42730 general theories, with application to
forum 199200, 202, 52021, 524 contract law 1314, 16, 254, 287
forum state 195, 515 generality 2, 78, 90, 115, 168, 18485,
Foucault, M. 213, 525 393
fragmentation and universalism 20711 generic sales 3234
Germany 2829, 49, 54, 95, 206, 465; Hayek, F.A. 17374, 17677, 179,
see also juridical National 18184, 18691
Socialism hegemony, jurisprudence 21619
BGB (Brgerliches Gesetzbuch) 49, hermeneutics 86, 263, 339
51, 6061, 106, 207, 20911, heterodoxy 289
459, 461 legacy 1024
Civil Code 3738, 49, 106, 155, 206, heterosexuality 3, 310
459 compulsory 31319
courts 3435, 6062, 460, 466 High Trees case 47176
law 52, 459, 461, 466, 488 Hobbes, T. 305, 309, 312, 399
gifts 21, 44, 325, 328, 34344, 368 Hoffman v. Red Owl Store 483, 505
Gilmore, G. 245300, 483, 486 Hoffmann, Lord 71, 456, 45860, 463
as legal humanist 26096 Holmes, Oliver Wendell 25051,
Ginsberg case 38687, 391, 4056 26365, 26771, 28284, 28890,
global markets 112, 114, 201, 523 292, 29699, 47880
globalization 195, 201, 2056, 209, human body 208, 210, 308, 31416, 318
21214, 522, 52526, 529 human dignity, see dignity
goals 13435, 17477, 17982, 187, human rights 200, 207, 352, 521, 525
189, 304, 306, 41718 husbands 220, 344, 37071, 474
compatibility of 17477
golden rule 454, 457, 460, 466 identification 3, 54, 105, 217, 226,
good faith 35, 3839, 385406, 459, 23638, 339, 341
46266, 469, 499, 5026 identity 32, 21314, 250, 349, 362, 375,
doctrine of 4, 385, 389, 393, 396, 399, 37779, 420
401, 404 ideology 91, 98, 237
duty/obligation 387, 391, 404, 465, and legal arguments 1046
505 illnesses 89, 9192, 223, 228
implication of 4026 immoral contracts 32232
implied covenant of 39091, 4056 imperfect compensation 16768
implied covenant of good faith and imperfect enforcement 169
fair dealing 38788, 392 implicit exceptions 225, 228, 23132
and preemption 38692 implied covenant of good faith 39091,
subjective 246, 505 4056
governance 100, 113, 129, 201, 330, implied covenant of good faith and fair
522 dealing 38788, 392
private 12, 123, 196, 516 implied terms 340, 388, 403, 406
gratuitous loans 3031 implied warranty 3839, 403
Greece 2829, 95 impossibility 62, 176, 185, 259, 284,
Grotius, H. 21 289, 335, 337
supervening 223
Hadley v. Baxendale 41, 4344 inapplicability 3, 225, 228, 230, 232,
harmonization 107, 117, 127, 385, 417, 23637
443 of contractual terms 226, 232, 237
harmonization of contract law in Europe of default norms 23032
108, 208, 421 incentives 107, 148, 15657, 159, 161,
Harris v. Watson 28586 16368, 200, 521
Haubold, J. 42526 economic 159, 200, 521
Index 545
effort 167 reputation 73

performance 161, 16365, 170 societal 200, 521
reliance 148, 156, 16366, 170 internal market 417, 41920, 444
social 150, 160, 163 international arbitration 200, 521
index 6768, 70, 7374, 78, 81, 87, international contracts 19698, 41516,
8990, 92 435, 51718
individual autonomy 378, 41012 international transactions 194, 197, 514,
individual interests 50, 52, 56, 124, 347 518
inefficiencies 163, 16567, 171 Internet 41315, 429, 435
influence, poetic 274, 278 interpretation 103, 105, 22728, 234,
information 13, 71, 109, 182, 188, 190,
236, 391, 399400, 473
255, 42122
contractual 45166
information society services 41920
injunctions 69, 369 problem 33243
innominate contracts 2126 of statutes 465
innovation 19, 47, 55, 106, 178, 357 interpreters 86, 1046, 226, 326, 334,
insolvency 163, 16667 451, 460, 46263
level of 168 intertextual authorship 24550
instability 3, 289, 341, 363 intra-textual relations 28283
institutional arrangements 173, 183, invalidity 225, 236, 348
186, 189 invasion 73
institutional structure 97, 109, 189 and behaviour 8385
institutions 3, 13, 50, 55, 62, 412, 417, investments 149, 158, 162, 170, 195,
420 358, 502, 516
social 3, 3034, 354, 409, 411 reliance 15657, 15962, 165, 168
insurance contracts 26, 35 Italy 2829, 151, 155, 272
integration 55, 98, 134, 335 Civil Code 53, 5657, 5961, 33132
intelligibility 83, 335, 533 Constitution 95, 206, 211
intent 2122, 48, 50, 53, 5556, 6061, Fascism, see Fascism
402, 404 law of promise 495500
intentions 322, 325, 365, 389, 39192, legal system 487, 496
399, 459, 46162
common intention 62, 454, 45657, Jorden v. Money 47173
460, 46263 judges 7577, 8387, 9596, 12021,
to create legal relations 47273 21819, 22333, 23538, 27274;
presumed 62, 392, 394, 4034 see also courts
subjective 404, 451, 45354, 45657, revision of contracts by 6163
460 judicial activism 239
interests 4951, 57, 7374, 8890, juridical Fascism 6364
199201, 356, 358, 52022 contract law in courts 5961
contradictory regulatory 197, 518 and juridical National Socialism
economic 28, 53, 59 compared 4953
general 60, 62, 194, 514 keywords and formalisms of debate
individual 50, 52, 56, 124, 347 on 4849
party 200201, 523 protection of weaker contracting
private 116, 12324, 130 party 5759
public 68, 96, 116, 122, 124, 135, juridical National Socialism
19596, 51617 contract law in courts 5961
and juridical Fascism compared legal realism, see realism

4953 legal reasoning 80, 84, 87, 91, 101, 105
protection of weaker contracting legal subject 205, 207, 209, 211, 213,
party 5759 406
revision of contracts by judges 6163 transformation 20514
jurisprudence 282, 287, 289, 33738, legal theory 13, 27475
471, 473, 501, 505 legal traditions 3, 96, 98, 12425, 129,
hegemony 21619 24849, 27374, 285
justice 11617, 180, 333, 338, 392, construction 96100
39698, 4056, 464 Western 112, 115, 129, 135
legal transplants 47087
commutative 40
legality 83, 32829, 344, 464
contractual 106
legislation 9596, 175, 179, 41617,
distributive 117, 135, 21112 419, 424, 444, 446
social 9596, 117, 130, 202, 209, private 196, 19899, 512, 516, 519
303, 317, 512 legislators 11516, 180, 190, 232, 436,
justiciability 218, 225 438, 441, 444
of fundamental rights 220, 236 legitimacy 97, 131, 200, 327, 362, 427,
justifiable reliance 47885, 497, 499 435, 521
justified reliance 469, 478 democratic 116, 197, 518
Justinian 33, 36, 4042, 324, 401 lenders 2628, 3031
juxtaposition 87, 101, 262, 336, 341 Lessius 2223, 2627, 40
letters of patronage 49799
Kafka, F. 370 lex mercatoria 198, 414, 518, 521, 525,
Kant, I. 340, 35253 530, 533
Kelsen, H. 10 liability 72, 7475, 161, 164, 28384,
kenosis 296, 298 49798, 500, 503
knowledge 6768, 90, 100, 185, limited 163, 16669
18788, 21213, 324, 332 pre-contractual 495, 500, 5034, 506
problem 18081 promissory 478, 481
liberal states 194, 198, 201, 515,
Landes, W. 200, 521 51819, 522
Langdell, C.C. 255, 26571, 277, 282, liberalism 52, 212, 214, 512
29295, 297, 299, 478 liberty 82, 85, 173, 175, 179, 186, 189,
language 288, 336, 339, 403, 405, 451, 208
456, 458 limited liability 163, 16669
contractual 114, 385 limited statehood 129
late scholastics 19, 21, 2627, 29, 33, literal meanings 45960, 462
40, 44 literalism 402, 457, 459
law of obligations 53, 55, 68, 453, 457 literary criticism 27778, 282
leases 20, 23, 32, 35, 39, 390, 404, 472 literature 1, 3, 12728, 25961, 27475,
legal community 251, 259, 480, 5056 278, 280, 32259
legal costs 167, 169 livery of seisin 328
legal education 16, 91, 29495, 386 Lloyds litigation 200201, 52122
legal orders 19394, 202, 270, 51213, loans 20, 23, 2628, 30, 32, 35, 74, 485
515, 523, 529 gratuitous 3031
legal persona 352, 35455, 35758, 364 Locke, J. 17374, 186, 188, 191, 305,
legal personhood, acquisition 35258 312, 350, 354
Index 547
loss 3335, 39, 4243, 8384, 168, 170, money 25, 32, 68, 75, 79, 371, 379,
377, 379 47273
Louisiana 487, 491, 493, 495 moral law 326
lucrum cessans 3940 moral obligation 11, 394, 478
morality 54, 60, 82, 178, 465
mail box rule 430, 432 moralization of marriage 349, 351
mandates 20, 32, 35, 200, 457, 521 mothers 71, 222, 348, 36668, 371, 483
mandatory rules 15, 117, 11920, 199, motives 254, 284, 386, 392, 491
358, 461, 520 mutual obligations 145, 150, 158, 169
marginal damages 16061 mutuum 2627, 3032
market integration 41718
market prices 34 narrative voice 37476
market regulation 193, 197, 514, 518 National Socialism 4755, 5763
markets 98, 107, 112, 19495, 199, and contract law 5355
39293, 4056, 51416 juridical, see juridical National
global 112, 114, 201, 523 Socialism
reversal of relationship between law nation-state politics 52829
and market 198200, 51922 natural difference 3089
Marlowe, C. 32332 natural law 396, 48182
marriage 34351, 36569, 371, 402 school 19, 21, 41
contracts 310, 34351, 365, 367, 371, necessity 19091, 218, 332, 335, 348,
375 356, 390, 395
moralization of 349, 351 negotiations 8485, 221, 327, 329, 334,
pacts 343, 347 45455, 48384, 499503
promises of 34344 Netherlands 2829; see also Dutch law
real 345 neutrality, technological 41516
secret 34546 non-breaching parties 1213, 14950,
maxims 5557, 61, 256, 263, 401, 453 15255, 16063, 170
meaning, literal 45960, 462 non-ergodicity 17778
memory 99, 217, 23839, 248, 274, non-performance 75, 7778, 84,
296, 37071, 527 14748, 15053, 156, 15866,
Mephistopheles 325, 32729, 33132 16870
Merchant of Venice 32, 33243, 346 defense 148, 15053, 156, 16066,
metaphors 25557, 27172, 334 16870
methodologies 1, 89, 197, 260, 518, non-state actors 129, 195, 515
52931 non-state law 198, 519
Micklitz, H.W. 11718, 122, 12425, non-state norms 198, 51819
135 non-subjects 211, 21314
Millamant 34850 normative gaps 226, 228, 238
minors 206, 22223, 228 normative preferences 12021, 194,
misinterpretations 27880 515
misrepresentation 92, 276, 367, 387, norms 8688, 176, 18283, 22434,
394 23637, 337, 340, 52930
mock-marriage contracts 372, 376 constitutional 530
model laws 41315, 424, 453, 463 contractual 88, 224, 229, 236
modernity 197, 518, 525, 532 evolution of 18284, 18889
Molina, L. 2122, 2627, 40 expressly defeasible 23132
permissive 23032 parol evidence rule 454, 457, 459, 461,

unexpressed 22829, 231, 233, 238 466
notaries 32829, 331, 492 partial compensation 16667
novation 221, 231 partnership 20, 32, 35
party autonomy 2, 193202
objective factors 46061 distributional effects 200202,
objective theory 28485 52224
obligations 6971, 7475, 14547, in global context 51233
14951, 15455, 158, 22023, theoretical representations 51416
22728; see also duties theoretical repsresentations 19396
party choice 15, 197, 199, 201, 518,
bilateral 149, 154, 222, 22728, 234
520, 523
contractual 75, 84, 159, 167, 22223,
party interests 200201, 523
233, 285, 322 Pateman, C. 305, 309
law of 53, 55, 68, 453, 457 patriarchal law 370, 380
moral 11, 394, 478 patrimony 353, 368, 37677
mutual 145, 150, 158, 169 patronage, letters of 49799
recognition of 49697 payments 39, 75, 153, 158, 22022, 326
obligors 155, 365, 374, 377 payoffs 154, 159, 164, 176, 182
offer and acceptance 88, 90, 365, 409, PECL (Principles of European Contract
411, 414, 431, 438 Law) 107
offerees 145, 322, 340, 350, 430 performance 2327, 5456, 75, 7779,
offerors 340, 43032, 489 14557, 15960, 16265,
operational rules 9798, 1058 399400
optimal choices of effort 16566 actual 14546, 158
optimal choices of effort and reliance efforts 157, 16061, 166
16566 excessive 16566, 170
optimal effort 165, 167, 169 incentives 161, 16365, 170
optimal performance 15657 optimal 15657
efforts 166, 169 probability of 168
optimal remedies 148, 15657, 162, 170 promised 156, 158, 489
order of actions 173, 182, 18485, specific 13, 16
19091 withholding of 151, 160
ordering, private 2, 112, 119, 121, permission 196, 23031, 517
19394, 393, 51213, 515 permissive norms 23032
otherness 249, 373 personality 70, 220, 332
over-regulation 198, 519 Philippines 151, 155
overriding mandatory rules 194, 197, PICC, see Principles of International
514, 517 Commercial Contracts
owners 28, 3133, 42, 76, 79, 352, 354, plaintiff in default preclusions 15456,
373 165, 170
ownership 21, 79, 8283, 88, 352, 354, planners 17980, 187
356, 358 plural autonomous orders 52430
pluralism 52425, 529
pacts 323, 32527, 329, 344, 346, 365, poetic influence 274, 278
377 poetics of law 26096
Parisi, F. 151, 158, 167 poets 274, 276, 27879, 298
parody 25455, 326 strong 27677, 296
Index 549
policy choices 112, 13335 private autonomy 2, 58, 96, 117, 123,
political community 313, 31516, 319 133, 322, 417
political economy 2, 193, 512 private enforcement 12427
of private ordering 513 private governance 12, 123, 196, 516
political orders 54, 184, 312 private interests 116, 12324, 130
political power 50, 55, 57, 5964 private law 47, 4950, 52, 5556,
political theory 1, 9, 303 9597, 117, 120, 122
politics 3, 48, 64, 178, 213, 294, 312, doctrine 201, 392, 522
52526 socialization of 9596
Pollock, F. 31 private legislation 19899, 512, 519
polycentricity 134 and technical design 19698, 51619
Portia 32, 332, 33442 private ordering 2, 112, 119, 121, 194,
Portugal 2829, 95 393, 51213, 515
Posner, R.A. 200, 333, 389, 394, 470, political economy of 193, 513
521 private regulation 113, 121, 123, 132
Pothier, R. 4142, 401, 453, 46061, private regulators 115, 118, 124, 128
464 probability of performance 168
Pothiers rule 4243 profits 3940, 107, 371, 374, 377, 401
power 97, 1089, 12528, 275, 3079, loss of 39, 43, 503
33536, 37072, 52526 promisees 2832, 14547, 15759,
bargaining 128, 191, 485 46970, 480, 484, 48990, 49597
political 50, 55, 57, 5964 promises 1113, 2123, 2831, 14547,
preclusion rule 148, 15556, 159, 394400, 4026, 47276, 48497
16370 bilateral, see bilateral promises
for bilateral breach 16465, 170 commercial 48183
defense 166, 169 enforcement of 8, 28, 148, 170
pre-contractual liability 495, 500, exchange of 14849, 169, 350, 365,
5034, 506 428, 430
precursors 27576, 278, 28283, 289, free 479, 499
298 Italian law of promise 495500
predecessors 276, 278, 280, 298, 376 of marriage 34344
predictability 102, 199, 201, 520, 522 reciprocal 148, 156
preemption 385406 Scots law of promise 48795
and good faith 38692 simple 346, 489
preferences, normative 12021, 194, unilateral 470, 488, 49597
515 promisors 2728, 3032, 7677,
prescriptive theories 89, 15 15758, 46970, 48485, 48990,
presumed intentions 62, 392, 394, 49597
4034 promissory estoppel 4, 289, 299,
price system 18788 469506
prices 2324, 3335, 4243, 187, 372, applicability 48081
38788, 400401, 472 application 481, 485
Principles of International Commercial codification 491
Contracts (PICC) 453, 462 definition 46970
privacy 82, 35657, 418 Dutch law 5023
private actors 196, 19899, 441, 517, English discipline 47077
51920 evolution of North American
empowerment of 194, 51415 discipline 47787
Italian law of promise 495500 reasonable person 39, 82, 365, 403, 458,
Scots law of promise 48795 460, 462
promissory liability 478, 481 reasonable reliance 13, 501
proof 15, 76, 84, 126, 272, 32829, 331, reasonableness 4, 68, 8687, 9092,
398 390, 462, 464, 469
burden of 76, 78 notion 8082
property 7071, 7375, 79, 8283, and rights 7983
9596, 186, 18990, 35158 reasoning 72, 82, 8587, 99, 166,
property rights 12, 79, 206, 352, 441 22627, 229, 232
property theories 12 reasoning methods 85, 87, 89, 92
prospective imaginations 3, 247, 273, receipt 430, 43233
275 rule 42932
protection of freedom of contract 173, reciprocal promises 148, 156
18687, 189 recognition of obligations 49697
Protestantism 34445 recovery 12, 3941, 4344, 164, 385,
public economic regulation 195, 515 472, 489
public goals 11314 rectification 69, 90, 340, 458
public interest(s) 68, 96, 116, 122, 124, redeployment value 163
135, 19596, 51617 regulation 11136, 193, 19597, 231,
public policies 19495, 198, 200, 464, 38688, 41011, 42324, 51618
51415, 519, 521, 53132 mapping relationship with contract
public policy rule 465 law 11112
public regulation 12223, 199, 520 market 193, 197, 514, 518
public regulators 115, 124, 128 policy choices 112, 13335
publicity 253, 32829 private 113, 121, 123, 132
Pufendorf, S. 22, 351 state 198, 387, 390, 402, 411, 519
punishment 342, 36970 typologies 11215
regulators 114, 118, 122, 12526, 131,
quasi-contracts 15556, 299, 400 133
queer theory 309, 319 private 115, 118, 124, 128
queering contractual paradigm between public 115, 124, 128
law and political theory 275, regulatory approaches 117, 131, 409,
30319 41718, 44344
regulatory contract law 2, 11112,
racial contract 31011 13236
Radin, J. 352, 354, 434 beyond Western legal tradition
Raffles v. Wichelhaus 288 12933
rationality 8182, 309, 316, 327, 378, in the making 11524
532 regulatory purposes 113, 116, 128,
Rawls, J. 303, 306, 317 13233
real contracts 20, 23, 2632 regulatory remedies 115
realism 3, 262, 287, 289, 292, 295, 298 and contract remedies 12429
realists 287, 289, 481 regulatory role 114, 116, 122, 442
reason, law of 398 regulatory state 111, 116, 122, 12932,
reasonable expectations 390, 4034, 197, 517
476, 482 regulatory systems 112, 117, 129,
reasonable people 404 13536
Index 551
regulatory tools 11213, 116, 131, damages 3944

13536 and Fascist and National Socialist
reliance 13, 2829, 15763, 16566, private law 5153
168, 47274, 48285, 49598 innominate contracts 2126
detrimental 13, 16, 482, 492 real contracts 20, 23, 2632
incentives 148, 156, 16366, 170 rejection of Roman distinctions
investments 15657, 15962, 165, 2123
168 when contracts are binding 2035
justifiable 47885, 497, 499 romantic agony 28081, 296
justified 469, 478 Rome Convention 19596, 199,
reasonable 13, 501
51617, 520
theories 2, 1213
Rome I Regulation 193, 195, 197,
remedies
for bilateral contracts 16064, 166, 51618, 520
168 Romeo and Juliet 34347
contract, see contract remedies Rousseau, J.J. 305, 312
optimal 148, 15657, 162, 170 Rudden, Bernard 6770, 93
regulatory, see regulatory remedies rules
Renaissance 3, 32223 golden 454, 457, 460, 466
reproduction 31314, 318, 373 operational 9798, 1058
rescission 69, 153 positive 87, 312
resources 13, 40, 1089, 129, 188, procedural 88, 186
21213, 44142, 444
responsibility 151, 276, 314, 327, Sacco, R. 104, 147
49698, 503, 529 sacrificial victims 374, 37677
Restatements 3031, 145, 29092, 388, safety 72, 287, 333, 349, 378
474, 47681, 483, 5056 Sage, L. 371
restitution 11, 151, 155, 343 sale 2021, 2324, 26, 3235, 67, 69,
resurrection 258, 29899 221, 272
review 122, 218, 22022, 251, 255, 481 contract of 33, 75, 147, 326, 441
reviewing reviewers 25060 generic 3234
revision 280, 361, 364, 49293 of goods 69, 391, 426
revocation 43132 schemes of intelligibility 2, 82, 8587,
rhetoric 257, 32324, 327, 330, 334 8990, 92
rights 8991, 17374, 2057, 209, scholastics, late 19, 21, 2627, 29, 33,
21920, 23334, 343, 356 40, 44
human 200, 207, 352, 521, 525 Scotland 2829, 74
property 12, 79, 206, 352, 441 law of promise 48795
and reasonableness 7983 seal, contracts made under 30, 325, 346,
social 195, 201, 207, 209, 211, 218, 458
515, 523 secrecy 328, 353, 35658
subjective 226, 23233, 237 secret marriages 34546
risk 2526, 3334, 42, 12728, 132, securities 74, 195, 325, 32728, 332,
174, 176, 431 346, 354, 515
Roman contract law 1944 seisin, livery of 328
consensual contracts 20, 23, 3235 selection processes, intra-group 183,
contracts bonae fidei 3539 186
contracts stricti iuris 3539 self-determination 96, 98, 372
self-expression 280 duty of 23233, 236

self-regulation 201, 414, 523 Somma, Alessandro 47
sellers 13, 3235, 40, 106, 400 sources of law 55, 219, 226, 293, 411
separation approach 13132 South Africa 45166
service providers 421, 43233, 438 continental European and
services 5356, 7375, 7879, 331, supra-national comparisons
38788, 420, 426, 44041 45963
sex 309, 31112, 314, 318, 34849, 358 developing approach 45357
sexual contract 30910 and English law 45759
sexuality 206, 315, 370 good faith, Constitution and African
Shakespeare, William customary law 46365
Merchant of Venice 32, 33243, 346 sovereign states
Romeo and Juliet 34347 liberal 195, 516
Shavell, S. 156 like-minded community of 194, 514
ships 76, 78, 88, 287, 353, 401 sovereignty 195, 300, 330, 512, 516
Shylock 33240, 342 state 119, 194, 236, 408, 413, 514,
signatures 329, 353, 425 524, 533
electronic 415, 419, 42425 Spain 22, 2829, 95
signing 37, 307, 323, 329, 35051, 400, special constitutional protection
501 22223, 22829, 231, 23436
silence 250, 253, 489 specific performance 13, 16
simple promises 346, 489 speculation 106, 250, 254, 357
Simpson, A.W.B. 19 spicilge 270
social classes 206, 209, 212 sponsalia 344
social context 100101, 211, 342 spontaneity
social contract 3079, 317, 379 actual 18891
social cooperation 173, 177, 212 in origin 18690
requirements for 17477 spontaneous order 2
social embeddedness 52930 and complexity 17779
social function 95, 130 definitions 18289
social game 17577, 188 explanation of principle 18486
social incentives 150, 160, 163 and freedom of contract 17391
social institutions 3, 3034, 354, 409, theory of 177, 179, 183
411 and utilitarianism 17981
social justice 2, 9596, 117, 202, 209, stability 3, 102, 115, 342, 347, 35455,
303, 312, 317 486
social optimum 16063, 165 Stair, Viscount (James Dalrymple)
social orders 97, 175, 177, 181, 183, 337 48790
social rights 195, 201, 207, 209, 211, standard form contracts 37, 386, 456
218, 515, 523 standard terms 426, 445
social values 52, 98, 131 state intervention 119, 123, 132, 414
socialization of private law 9596 state law 198, 386, 388, 413, 415, 442,
societal constitutionalism 524, 526, 519, 532
52829 state regulation 198, 387, 390, 402, 411,
societal interests 200, 521 519
software 178, 425, 44041 state sovereignty 119, 194, 236, 408,
solicitors 74, 353, 35657 413, 514, 524, 533
solidarity 106, 207, 20910, 213, 233 Statute of Frauds 42425, 430
Index 553
Stilk v. Myrick 285 United States 42427

stipulatio 2021, 3638 technological neutrality 41516
Stoker, Bram 265, 35258 technology 40814, 41718, 42021,
structural approach 82, 100, 1023 425, 42728, 430, 44043, 445
structural scheme 82, 8586 as content 44043
structuralism 103 as tool 42740
sub-contractors 201, 523 termination 79, 15051, 38788
subjective good faith 246, 505 terms
subjective intentions 404, 451, 45354, contractual 3, 15, 122, 22526, 229,
45657, 460 23133, 237, 365
subjective rights 226, 23233, 237 implied 340, 388, 403, 406
subjectivity 100, 207, 213, 352, 377 standard 426, 445
subject/object dichotomies 211, 213 unfair 37, 224, 236, 444
suboptimal performance effort 166, 169 territoriality 19394, 51314
substance 79, 84, 253, 255, 262, Teubner, G. 52627, 532
29091, 332, 341 textbooks 81, 84, 8990
subversion 347, 364, 374 theorists 8, 1016, 19, 23, 33, 173, 208,
suitors 332, 336, 342 280
sum-positive games 17677, 188 Tigers Bride 364, 372, 37680
sunk investment 161 tolerance, duty of 21923, 227, 229,
supermarkets 8889 231, 233, 236, 53132
supervening impossibility 223 torts 8, 11, 6770, 73, 77, 83, 9596,
suppliers 75, 201, 523 299
supra-national model rules 462, 465 traditional contract law 2, 111, 11516,
supremacy 57, 31112, 529 11819, 121, 133, 13536, 40911
Supreme Courts 125, 45556, 46465, transaction costs 178, 410, 413
482, 494, 498 transaction types 1617, 87
surplus, contractual 16364, 170 transactions 59, 61, 6869, 79, 353,
surpluses 150, 155, 158, 16466 356, 43536, 46061
Switzerland, Constitution 21011 commercial 348, 353, 417
symbols 248, 308, 357, 36871, 380 cross-border 19496, 198, 411, 416,
symmetric-value contracts 166 514, 51617, 519
symmetry 85, 16465 international 194, 197, 514, 518
synecdoche 105, 249, 272 Transylvania 353, 355
systematizers 19, 44 trespass 69, 83, 262
trust 307, 332, 404, 48586
technical design 19698, 51619 truth 8788, 32324, 32627, 33031,
technological contracts 40846 33435, 339, 343, 39798
digital technologies and meeting of
minds 43440 ubuntu 46465
European normative framework UCC (Uniform Commercial Code) 35,
41624 39, 152, 388, 391, 426, 505
new lex mercatoria 41427 UCITA (Uniform Computer
from post to instant messaging Information Transaction Act)
42934 42324, 426, 438, 44344
relationships among technology, law UETA (Uniform Electronic Transaction
and contract law 41114 Act) 421, 42426, 435
Ulpian 39, 397 US, see United States

unbridled freedom of choice 201, 522 utilitarianism and spontaneous order
unburiable contract 245300 17981
UNCITRAL (United Nation
Commission on International validity 85, 226, 229, 323, 32629, 331,
Trade Law) 413, 415 343, 346
unconscionability 38, 394, 418, 439 valuers 75, 8990
under-enforcement 12728 values 1317, 5052, 5455, 5960,
unexpressed norms 22829, 231, 233, 9697, 16264, 16768, 2078
238 vis maior 34
unfair terms 37, 22425, 236, 444 Vogenauer, S. 46061
UNIDROIT Principles 107, 453, 462 volition 386, 402
UNIDROIT rules 198, 518
Uniform Commercial Code, see UCC waivers, class action 386
Uniform Computer Information Walking Dead 174
Transaction Act, see UCITA Waltons Stores (Interstate) Ltd v. Maher
Uniform Electronic Transaction Act, 471, 476
see UETA warranties 221, 340, 344, 403
unilateral breach 15053, 155, 15960, implied 3839, 403
16365, 170 Way of the World 343, 34751
unilateral contracts 14546 wealth 82, 159, 16768, 355, 36768,
unilateral declarations 49699 371, 378, 395
unilateral promises 470, 488, 49597 wealth level 16768, 355
United Kingdom, see English law; weddings 328, 345, 36869, 403
Scotland Weir, Tony 36, 6870, 73, 75, 90, 9293
United Nation Commission on Western legal tradition 112, 11524,
International Trade Law, see 129, 135
UNCITRAL Westphalian model 193, 195, 514, 516
United States 12032, 175, 38586, Williston, S. 31, 265, 282, 28485, 287,
41518, 42324, 44345, 47677, 28990, 478, 481
5045 withdrawal, unjustified 496, 499
courts 4, 31, 149, 418, 445 witnesses 36, 32829, 331, 335, 338,
E-Sign 421, 42526, 435 346, 486, 488
exceptionalism 385406 women 235, 30812, 314, 318, 339,
Federal Energy Regulator (FERC) 34546, 34851
12223 and contracts 36180
promissory estoppel 471, 47687 words and things 7074
Restatements 3031, 145, 29092, written contracts 36, 38, 43, 86, 324,
388, 474, 47681, 483, 5056 32728, 333, 335
Supreme Court 199, 385, 401 written documents 32829, 364, 457
technological contracts 42427 written law 238, 33536, 339
UCC (Uniform Commercial Code)
35, 39, 152, 388, 391, 426, 505 Yablon, C. 296, 298
universalism and fragmentation 20711
unjustified withdrawal 496, 499 Zimmermann, R. 37, 40, 457

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JOBNAME: Monateri PAGE: 1 SESS: 2 OUTPUT: Tue Mar 21 15:52:53 2017

COMPARATIVE CONTRACT LAW

Pier Giuseppe Monateri - 9781849804516

RESEARCH HANDBOOKS IN COMPARATIVE LAW

Comparative Constitutional Law

Methods of Comparative Law

Comparative Law and Society

Comparative Labor Law

Comparative Tort Law

Comparative Competition Law

Comparative Law and Economics

Comparative Criminal Procedure

Comparative Law and Regulation

Comparative Contract Law

Pier Giuseppe Monateri - 9781849804516

Comparative Contract Law

Pier Giuseppe Monateri

RESEARCH HANDBOOKS IN COMPARATIVE LAW

Cheltenham, UK + Northampton, MA, USA

Pier Giuseppe Monateri - 9781849804516

The editor and contributing authors severally 2017

All rights reserved. No part of this publication may be reproduced, stored in a

Edward Elgar Publishing, Inc.

A catalogue record for this book

Library of Congress Control Number: 2016944271

This book is available electronically in the

ISBN 978 1 84980 451 6 (cased)

Typeset by Columns Design XML Ltd, Reading

Pier Giuseppe Monateri - 9781849804516

List of contributors vii

PART I CONTRACT LAW: THEORIES AND GENEALOGIES

1 Theories of contract law 7

PART II MARKET VALUES AND THEIR CRITIQUES: PRIVATE

7 Enforcing bilateral promises: a comparative law and economics

Pier Giuseppe Monateri - 9781849804516

vi Comparative contract law

11 Freedom of contract and constitutional values: some exceptional

PART III REPRESENTATIONS AND NARRATIVES

12 The unburiable contract: Grant Gilmores discontinuous parabola

PART IV GLOBAL CONTEXT AND LOCAL FRAMES

16 The wrecking ball: good faith, preemption and US exceptionalism 385

Pier Giuseppe Monateri - 9781849804516

Giuseppe Bellantuono is Associate Professor of Comparative Private

Pier Giuseppe Monateri - 9781849804516

viii Comparative contract law

Pier Giuseppe Monateri - 9781849804516

Pier Giuseppe Monateri - 9781849804516

x Comparative contract law

of law/customary law (with reference to contracting), comparative con-

Pier Giuseppe Monateri - 9781849804516

United States) where he was Fulbright fellow. He has been a researcher

Pier Giuseppe Monateri - 9781849804516

xii Comparative contract law

Sapienza (2005) and a Ph.D in Comparative Law from the University of

Pier Giuseppe Monateri - 9781849804516

Milan (Statale), where he was appointed Professore Ordinario per Chiara

Pier Giuseppe Monateri - 9781849804516

Pier Giuseppe Monateri - 9781849804516

Pier Giuseppe Monateri - 9781849804516

2 Comparative contract law

Pier Giuseppe Monateri - 9781849804516

cases of contractual terms inapplicability, seems to construct a kind of

Pier Giuseppe Monateri - 9781849804516

4 Comparative contract law