The third time's the charm, I hope. I've already posted here on the theme of contracts and justice. We first saw an influential federal appellate judge give vent to his loathing of appeals to justice in contracts cases. I suggested that Judge Easterbrook's antipathy toward justice, if taken to its end, would eviscerate the legitimacy of judicial remedies for breach of contract. After all, if it isn't somehow just to sanction contract breachers, then why do it? Perhaps, I surmised, because contract law enhanced welfare but what, I wondered, justified enhancing welfare as the aim of civil government?
Then in part 2 here I responded to the sensible suggestion that perhaps the good judge meant nothing more than that courts should not rewrite contracts to achieve the "just," preferring instead, to enforce that to which the parties agreed, no matter (well, almost no matter) how apparently unjust. That suggestion lead me to pursue the hermeneutical tangent: by what standard are courts to determine what the parties meant? Given that the parties rarely provide a standard of interpretation (and, even if they did, the court would first be required to interpret the standard, ad infinitum), courts should (and do, IMHO), consider the claims of justice, no matter how understood, when choosing a hermeneutic.
Now I've come across a recent working draft of an article by Thomas Joo who teaches at UC-Davis. Titled Contracts, Courts, and the Construction of Consent (abstract here), Joo observes that for over 400 years common law courts have, on the one hand, asserted that party consent created the contract on which courts could adjudicate but, on the other hand, realized that courts can never know whether a party actually subjectively consented when signing on the dotted line, so to speak. Thus, instead of actual consent, contract law relies on manifestations of assent. It doesn't matter if you didn't really agree, you're bound to the meaning of the contract (however determined).
But what justifies that? How can a liberal civil state justify sending the sheriff to seize the property of a losing contract party who never actually agreed to the contract? Joo examines the most common justification for concluding there was consent without proving the state of a party's mind: efficiency. Thus,
Joo works his way through several examples of judicial legerdemain, where courts assert ipse dixit that parties intended the (judicially asserted) efficient result, regardless of any facts to the contrary. I won't track his argument except to observe that Judge Easterbrook is the author of one particular decision featuring efficiency rather than consent. He concludes by observing that the idea of consent is simply a fig leaf to provide rhetorical cover to what courts actually do. Joo seems simply to believe only that courts should be honest, and that no justification for departing from consent need be given:
Then in part 2 here I responded to the sensible suggestion that perhaps the good judge meant nothing more than that courts should not rewrite contracts to achieve the "just," preferring instead, to enforce that to which the parties agreed, no matter (well, almost no matter) how apparently unjust. That suggestion lead me to pursue the hermeneutical tangent: by what standard are courts to determine what the parties meant? Given that the parties rarely provide a standard of interpretation (and, even if they did, the court would first be required to interpret the standard, ad infinitum), courts should (and do, IMHO), consider the claims of justice, no matter how understood, when choosing a hermeneutic.
Now I've come across a recent working draft of an article by Thomas Joo who teaches at UC-Davis. Titled Contracts, Courts, and the Construction of Consent (abstract here), Joo observes that for over 400 years common law courts have, on the one hand, asserted that party consent created the contract on which courts could adjudicate but, on the other hand, realized that courts can never know whether a party actually subjectively consented when signing on the dotted line, so to speak. Thus, instead of actual consent, contract law relies on manifestations of assent. It doesn't matter if you didn't really agree, you're bound to the meaning of the contract (however determined).
But what justifies that? How can a liberal civil state justify sending the sheriff to seize the property of a losing contract party who never actually agreed to the contract? Joo examines the most common justification for concluding there was consent without proving the state of a party's mind: efficiency. Thus,
The supposed identity of consent and efficiency is sometimes invoked as a solution to this problem. If the efficient allocation and the consensual bargain are necessarily the same, the law can find the consensual bargain by identifying the efficient allocation.But here's the rub, according to Joo, "the 'efficient' allocation is at least as difficult to identify and normatively contingent as the “consensual” bargain." There are two problems lurking not far beneath the surface of efficiency. First, on what theory of justice is wealth-maximization or efficiency made the determining factor? In other words, substituting efficiency for consent is inconsistent with political liberalism, which is the presupposition underlying Western political legitimacy. And second, how do courts know what is the efficient result in a particular case? Substituting efficiency for subjective assent is like substituting phrenology for astrology.
Joo works his way through several examples of judicial legerdemain, where courts assert ipse dixit that parties intended the (judicially asserted) efficient result, regardless of any facts to the contrary. I won't track his argument except to observe that Judge Easterbrook is the author of one particular decision featuring efficiency rather than consent. He concludes by observing that the idea of consent is simply a fig leaf to provide rhetorical cover to what courts actually do. Joo seems simply to believe only that courts should be honest, and that no justification for departing from consent need be given:
In fact courts act based on nonconsensual efficiency all the time. They tend, however, to invoke the rhetoric of consent as a fig leaf. The question isn’t why the law doesn’t do this, but why the law seems ashamed when it does it, and thus pretends not to do it.Joo suggests no answer to this question, perhaps because his short paper is only in draft form. Yet, one wonders if something like, say, justice might be relevant. But as Judge Easterbrook so eloquently expressed, the last thing we want to see in contract law is the ugly head of justice.
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