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On Barnett's Theory of Default Rules

Published online by Cambridge University Press:  22 April 2016

Mikko Wennberg
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Extract

This discussion is a critique of Professor Randy E. Barnett's solution to the problem of filling in gaps in incomplete contracts. The articles discussed are “The Sound of Silence: Default Rules and Contractual Consent” (1992) and “Rational Bargaining Theory and Contract: Default Rules, Hypothetical Consent, the Duty to Disclose, and Fraud” (1992).

Type
Discussion
Information
Canadian Journal of Law & Jurisprudence , Volume 16 , Issue 1 , January 2003 , pp. 147 - 158
Copyright
Copyright © Canadian Journal of Law and Jurisprudence 2003

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References

1. See, e.g., Fried, Charles, Contract as Promise (Cambridge, MA: Harvard University Press 1981) at 57:Google Scholar “The moral force behind contract as promise is autonomy: the parties are bound to their contract because they have chosen to be.”

2. According to Fried, ibid, at 57–73, rules governing gaps in contract fall outside of contract law proper. Fried thus admits that his will theory cannot capture a great part of modern contract law.

3. In a similar manner Burton, Steven J., “Default Principles, Legitimacy, and the Authority of Contract” (1993) 3 S. Cal. Interdisc. L. J. at 117 has argued: “Google ScholarConsent-based default principles respect the autonomy of the contract, but valid consent cannot reach beyond the agreement as needed to provide a legitimate basis for enforcing all needed default rules.”

4. Craswell, Richard, “Contract law, Default Rules, and the Philosophy of Promising” (1989) 88 Mich. L. Rev. 489 at 515.CrossRefGoogle Scholar

5. Barnett, Randy E., “The Sound of Silence: Default Rules and Contractual Consent (1992) 78 Virginia L. Rev. 821 at 861–62 [hereinafter Barnett 1992a]CrossRefGoogle Scholar and Randy E. Barnett, “Rational Bargaining Theory and Contract: Default Rules, Hypothetical Consent, the Duty to Disclose, and Fraud” (1992) 15 Harv. J. L. & Pub. Pol’y- 783 at 789. [hereinafter Barnett 1992b]

6. Ibid. 1992(b) at 790.

7. Coleman, Jules L ,. Risks and Wrongs (New York: Cambridge University Press, 1992) at 171.Google Scholar

8. Barnett 1992(b), supra note 5 at 790.

9. Barnett 1992(a), supra note 5 at 875; emphasis added.

10. Barnett 1992(b), supra note 5 at 790.

11. Barnett 1992(a) supra note 5 at 882.

12. Barnett 1992(b) supra note 5 at 791.

13. See Barnett, Randy E., “A Consent Theory of Contract” (1986) 86 Colum. L. Rev. 269 at 300.CrossRefGoogle Scholar

14. Ibid, at 299.

15. Barnett 1992(a), supra note 5 at 876; emphasis added.

16. Bamett 1992(a), supra note 5 at 858.

17. Barnett 1992(a), supra note 5 at 876.

18. Barnett, supra note 13 at 300.

19. As Kalevitch, Lawrence, “Gaps in Contracts: A Critique of Consent Theory” (1993) 54 Montana L. Rev. 169 at 179 has noted:Google Scholar “understanding contract as a voluntary behavior under liberal principles promotes the actual intentions of the parties not the use of the most rational hypothetical intentions.”

20. This is of course not to say that expressions of consent do not carry any moral force by creating expectations in other people, but it is more problematic to call it a consent-based justification.

21. Barnett 1992(a), supra note 5 at 899.

22. “Our subjectively-made promises may create moral obligations for us to fulfill our commitment. The moral basis for the legal commitment entailed by contracts, however, is, in part, that contracts serve to coordinate resource use by establishing appearances that people can rely upon”, Barnett 1992(a) explains his view supra note 5 at 900.

23. Barnett, supra note 13 at 306.

24. See, e.g., Feinman, Jay M. (1983) 30 UCLA L. Rev. “Critical Approaches to Contract Law” 829 at 837 where he argues:Google Scholar “The law is presumably one factor shaping standards of social and especially commercial behavior. People’s ‘expectations’ and merchants’ notions of ‘good faith‘ are to some extent dependent on the positive, public expressions of norms by contract law itself.”

25. Barnett, supra note 13 at 315.

26. This may be a purely customary rule.

27. Barnett insists that his theory is a consent theory. Barnett, supra note 13 at 305, writes. “A consent analysis is genuinely interested in the actual intentions of the parties….”

28. Without this element, Barnett’s justification for his objective theory of consent would rely on arguments based on the value of subjective consent: objective consent is the best evidence of parties’ subjective intentions.

29. According to Barnett 1992(a), supra note 5 at 899: “persons are held responsible prima facie for creating an appearance of consent to create legal relations, notwithstanding any subjective reservations they may harbor.”

30. Ibid, at 875.

31. Ibid, at 900.

32. Barnett 1992(b), supra note 5 at 791.