Principles Of Contract Law Part I

Introduction

Classical Contract Theory

  • Courts 'felt they were not imposing legal rules but working out implications of what the parties had chosen to do'
  • Based on a respect for voluntary choices
  • Textbooks in the 19th century developed the notion of 'voluntarily assumed obligations'

Criticism of Classical Theory

  • Since dispute often arises out of what the parties haven't agreed upon, the will of the parties cannot be ascertained.
  • Existence of a contract was based on whether a reasonable person thought they wished to enter into such an agreement. Resulting in a tort-like construction of contract law, not the joint will of the parties.
  • If bargaining power is unequal, the drafting will not be representing joint will, but the will of the powerful.
  • Betty Mensch - ownership is at the heart of contracts. Ownership of property is allowed by the state. Thus, contracts are a function of legal order, not the individual will of parties.