09 October 2012

Contracts, Justification and Pluralism

Way back in 2008 when I presented at McGeorge Law School in Sacramento what turned into Principled Pluralism and Contract Remedies (abstract here), "pluralism" as the operative term in contract theory was only beginning to come in vogue. Contract scholars had, to be sure, been proffering pluralistic justifications for contract law, especially remedies for breach of contract, but few were bandying the term as their distinctive approach. In fact, most scholars were still trying to justify contract law in terms of one or the other of the single pathways of autonomy, efficiency, or virtue.

But the times have changed. Now pluralism seems to be at the leading edge of theorizing about contract law. And Roy Kreitner's piece On the New Pluralism in Contract Theory (the abstract not on the SSRN network but you can find the article in volume 45 of the Suffolk University Law Review) is, to mix some metaphors, at the cusp of that leading edge. Kreitner's work is primarily descriptive although at the end he displays his predilections when he brings pluralistic theory to bear on a particular form of contract (corporate merger agreements).

Pluralism in contract theory arises because no single theory has succeeded in persuading all or even most scholars that it provides the key to unlock the entire phenomenon of contract law. The three (well, really two) primary accounts of contract law are grounded in personal autonomy or in efficiency. A third approach, albeit one that is not widely followed, justifies contract law in terms of the virtues necessary for human flourishing. Some autonomy-based theories like Charles Fried's Contract as Promise work well but only for the elements of contract law that have to do with contract formation; others like Randy Barnett's consent theory are more capacious Yet none are as finely grained as the efficiency folks who purport to justify virtually all contract rules in terms of some definition of utility or another.

Despite their precision, efficiency theories have their own weaknesses ranging from lack of liberal political justification to the increasing confusion (or sophistication, if you prefer) introduced from the behavioral sciences. Take a look at some comments on Hanoch Dagan's latest work at my Law's Ambivalence post here for some more details about the latter problem and my article Principled Pluralism and Contract Remedies (abstract here) about the former.

As Kreitner puts it, contemporary pluralist fall somewhere into a continuum of two "border-land" approaches: one that "recognizes the importance of seemingly distinct values or principles of central importance ... and then attempts to reconcile them without eviscerating either one" and the others that are "critical of the very possibility of theory" yet who don't give up all hope that theoretical knowledge is possible. Between the two borders (Kreitner deliberately, I believe, and for good reason, doesn't use the term "extremes"; after all, even proponents of a non-theoretical approach to the law like my teachers at the University of Wisconsin do so by advancing a sort of "theory of the non-theoretical") there's plenty of room to maneuver.

I think that one of the most valuable contribution of On the New Pluralism is Kreitner's typology of pluralisms. Rather than simply reworking contract theories from the top down, so to speak, Kreitner also categorizes competing pluralisms from the bottom up based on the nature of contract parties (human beings or organizations) or the types of contracts (defined in terms of relational pairs of contract parties). But there's even more in On the New Pluralism such as where Kreitner discusses what I would characterize as post-modern approaches to contract theory that range from maintaining simultaneously incompatible norms in contract law so long as we can agree on their relative priority at the level of "law in action" to a frank confession that there is and cannot be any "theory of theories" that will work: it's pluralism all the way down.

The frank acknowledgment that no single theory of contract law can capture the entire phenomenon is a positive development. Bringing the competing theories together still, I believe, remains a worthwhile goal. Perhaps a conference on pluralism is in order.

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