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Kronman on Contract: A Study in the Relation Between Substance and Procedure in Normative and Legal Theory

Published online by Cambridge University Press:  09 June 2015

Tim Dare
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Extract

Anthony Kronman’s 1980 article “Contract Law and Distributive Justice” has become something of a classic in the philosophy of private law. Kronman argued that any theory of contract which relied upon voluntariness was necessarily concerned with distributive justice, since voluntariness was itself a distributive notion. The argument targeted libertarian accounts of contract. Given the distributive nature of voluntariness, the claim went, libertarians could not give an adequate account of contract without violating their own injunction against appeal to the “fair division of wealth among the members of society”(472). It is easy to see why Kronman’s article attracted so much attention. The idea that voluntariness is not distributive is central not just to libertarianism but to liberalism generally. Kronman’s critique, though targeting a not terribly common species of liberalism, threatens the genus itself.

Type
Research Article
Information
Canadian Journal of Law & Jurisprudence , Volume 7 , Issue 2 , July 1994 , pp. 331 - 348
Copyright
Copyright © Canadian Journal of Law and Jurisprudence 1994

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References

1. Kronman, Anthony T., “Contract Law and Distributive Justice” (1980) 89 Yale L. J. 472 CrossRefGoogle Scholar. It is the first part of the article, from pages 475-97 which has become something of a classic and which is the subject of this paper. Subsequent references will be made in parentheses in the text.

2. See, for instance, Lucy, W.N.R., “Contract Law as a Mechanism for Distributive Justice”, infra fn 3;Google Scholar Murphy, Jeffrie & Coleman, Jules, Philosophy of Law, rev’d ed. (Boulder, CO: Westview, 1990) at 169;Google Scholar Alexander, Larry & Wang, William, “Natural Advantages and Contractual Justice” (1984) 3 L. & Phil. 281;CrossRefGoogle Scholar Richardson, Megan, “Contract Law and Distributive Justice Revisited”(1990) 10 Legal Studies 258;CrossRefGoogle Scholar Wang, William, “Reflections of Contract Law and Distributive Justice: A Reply to Kronman” (1982) 34 Hastings L. J. 513.Google Scholar Kronman’s article is also anthologised: See for instance Feinberg, Joel & Gross, Hyman Philosophy of Law, 3rd ed. (Belmont, CA: Wadsworth, 1986).Google Scholar

3. The same point is made by Lucy, W.N.R. in his “Contract as a Mechanism of Distributive Justice” (1989) 9 Oxford J. of Legal Stud. 132 at 132.CrossRefGoogle Scholar

4. Sandel, Michael, Liberalism and the Limits of Justice (Cambridge: Cambridge University Press, 1982) at 107.Google Scholar

5. “Duress, whatever form it takes, is a coercion of the will so as to vitiate consent.” Pao On v. Lau Yiu Long, [1980] A.C. 614 at 635.

6. “Their Lordships have not been referred to any authority that a court of equity would restrain a suit at law where there was no victimisation, no taking advantage of another’s weakness, and the sole allegation was contractual imbalance with no undertones of constructive fraud.” Hart v. 0’Conner, [1985] A.C. 1000 at 1024 per Lord Brightman (PC). For academic defences of a procedural construal of unconscionability, see Epstein, Richard, “Unconscionability: A Critical Reappraisal” (1975) 18 J. of Law and Econ. 293,CrossRefGoogle Scholar and Leff, Arthur, “Unconscionability and the Code—The Emperor’s New Clause” (1967) 115 U. Penn. L. Rev. 485.CrossRefGoogle Scholar

7. So that a claim of undue influence will be met if evidence can be adduced to show that the contract was the act of a ‘free and independent mind’, “[i]t is necessary for the donee to prove that the gift was the result of the free exercise of independent will.” Inche Noriah v. Shaik Allie Bin Omar, [1929] A.C. 127 at 135.

8. “If a contract is stigmatised as ‘unfair’, it may be unfair in one of two ways. It may be unfair by reason of the unfair manner in which it was bought into existence; a contract induced by undue influence is unfair in this sense. It may also, in some contexts, be described...as ‘unfair’ by reason of the fact that the terms of the contract are more favourable to one party than to the other. In order to distinguish this ‘unfairness’ from procedural unfairness, it will be convenient to call it ‘contractual imbalance’....In the opinion of their Lordships, to accept the proposition...that a contract with a person ostensibly sane but actually of unsound mind can be set aside because it is ‘unfair’ to the person of unsound mind in the sense of contractual imbalance, is unsupported by authority, [and] is illogical....” Hart v. O’Conner, [1985] A.C. 1000 at 1017-27 per Lord Brightman (PC).

9. “Since a contract is an agreement..., and involves the idea of consent, only those who have the power to give consent can contract. This excludes those considered as lacking such power through being under the age of majority or through having a disordered mind.” Fridman, G.H.L., The Law of Contract in Canada, 2nd ed. (Toronto: Carswell, 1986) at 126.Google Scholar

10. “It may be that extreme intoxication will so deprive a person of his reason as to render his consent void .... Where drunkenness is not such as to deprive a party of his reason, but merely of his business sense, the contract is at most voidable”. Halsbury’s Laws of England, vol.9, 4th ed. (London: Butterworths, 1980) para. 299.

11. “If mistake operates at all it operates so as to negative or in some cases to nullify consent.” Bell v. Lever Brothers Ltd, [1932] A.C. 161 at 217, Atkin, per Lord (HL);Google Scholar “The law is clear that under certain circumstances mistake may exclude real consent; if each party meant some definite thing but not the same thing as the other party meant, their minds never met.... While contracts attempted to be made under such circumstances are sometimes said to be vitiated by ‘fundamental error,’ in reality that which prevents the contract being formed is not the existence of error but the nonexistence of true consent.” Morrison v. Burton (1955), 15 W.W.R. 667 at 671, Egbert J, per.Google Scholar

12. “... [FJrustration occurs whenever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.” Davis Contractors Ltd v. Fareham Urban District Council, [1956] A.C. 696 at 729, per Radcliffe, Lord.Google Scholar

13. Indeed, on Kronmany’s account the notion of advantage-taking is broad enough to capture all contractual exchanges, not just those which seem to involve impropriety: “The term ‘advantage-taking’” he writes “is often used in a pejorative fashion, to refer to conduct we find morally objectionable or think the law should disallow. I mean the term to be understood in a broader sense, as including even those methods of gain the law allows and morality accepts (or perhaps even approves). In this broad sense, there is advantage-taking in every contractual exchange. Indeed, in mutually advantageous exchanges, there is advantage-taking by both parties.” “Contract Law and Distributive Justice”, supra note 1 at 48.

14. Murphy, Jeffrie & Coleman, Jules, Philosophy of Law, revised ed., supra note 2 at 1.Google Scholar

15. The last line in this quote in fact appears in a footnote. The reference is of course to Galiie’s, W.B. “Essentially Contested Concepts” 56 Proc. Arist. Soc. 167.Google Scholar

16. The doctrine has been subject to considerable discussion and criticism. For examples of both, see Gray, John, “On the Contestability of Social and Political Concepts” (1977) 5 Pol. Theory 331;Google Scholar Gray, John, “Political Power, Social Theory, and Essential Contestability” in Miller, David & Siedentop, Larry, eds, The Nature of Political Theory (Oxford: Clarendon press, 1983) 75;Google Scholar Swanton, Christine, “On the Essential Contestedness of Political Concepts” (1985) 95 Ethics 811;CrossRefGoogle Scholar Lukes, Steven, Power: A Radical View (London: Macmillan, 1974);CrossRefGoogle Scholar Maclntyre, Alasdair, “The Essential Contestability of Some Social Concepts” (1974) 84 Ethics 1–9;CrossRefGoogle Scholar and Lucy, W.N.R., “Rights, Values, and Controversy” (1992) 5Can. J. of Law and Juris. 195.CrossRefGoogle Scholar

17. Gallie, supra note 15 at 193–94: “So long as contestant users of any essentially contested concept believe, however deludedly, that their own use of it is the only one that can command honest and informed approval, they are likely to persist in the hope that they will ultimately persuade and convince all their opponents by logical means. But once let the truth out of the bag—i.e. the essential contestedness of the concept in question—then the harmless if deluded hope may well be replaced by a ruthless decision to cut the cackle, to damn the heretics and to exterminate the unwanted.”

18. For a selection of recent treatments of the idea of a modus vivendi see Rawls, John, “The Idea of an Overlapping Consensus” (1981) 7 Oxford J. of Legal Stud. 1 (substantially reprinted as Lecture IV in his Political Liberalism (New York: Columbia University Press, 1993));Google Scholar Larmore, Charles, Patterns of Moral Complexity (Cambridge: Cambridge University Press, 1987);CrossRefGoogle Scholar and Gibbard, Allan, Wise Choices, Apt Feelings: A Theory of Normative Judgment (Cambridge, Mass: Harvard University Press,1990)238–43.Google Scholar

19. Kronman, Anthony T., “Contract Law and Distributive Justice” (1980) 89 Yale L. J. 472 at 483 n. 29.CrossRefGoogle Scholar

20. Wollheim, Richard runs this dilemma against Dickie’s institutional theory of art in his Art and Its Objects, 2nd ed. (Cambridge: Cambridge University Press, 1980) 157–66.Google Scholar

21. Randy Bamett illustrates this strategy in contract theory when he rejects certain procedural approaches on the grounds that they cannot explain why certain kinds of contract, such as those for slavery or murder, are unenforceable: “If..agreements of these types were reached in conformity with all ‘rules of the game’, a theory which looks only to the rules of the game to decide issues of enforceability cannot say why such an otherwise ‘proper’ agreement should be unenforceable.” “A Consent Theory of Contract” (1986) 86 Colum. Law Rev. 269 at 290.Google Scholar

22. Beehler, Rodger, “Waiting for the Rule of Law” (1988) 38 U. Tor. L. J. 298 at 299.CrossRefGoogle Scholar

23. Ibid, at 300.

24. See e.g. Hart’s, H.L.A. The Concept of Law (Oxford; Oxford University Press, 1961), especially chapter 9.Google Scholar

25. As the previous footnote suggests, much of what is said here connects with more general jurisprudential debates, and in particular with the perennial dispute between positivism and natural law theory. Positivists are proceduralists, but few deny that substantive (moral) concerns have at least evaluative force. What they do deny is that such concerns are relevant to the status of procedurally derived laws as laws.