The Dignity of Commerce: Markets and the Moral Foundations of Contract Law

312 Pages·2016·2.992 MB·English

by  Nathan B. Oman

The Dignity of Commerce

The Dignity of Commerce
Markets and the Moral Foundations
of Contract Law
nathan b. oman
the university of chicago press chicago and london
The University of Chicago Press, Chicago 60637
The University of Chicago Press, Ltd., London
© 2016 by The University of Chicago
All rights reserved. Published 2016.
Printed in the United States of America
25 24 23 22 21 20 19 18 17 16 1 2 3 4 5
isbn- 13: 978- 0- 226- 41552- 9 (cloth)
isbn- 13: 978- 0- 226- 41566- 6 (e- book)
doi: 10.7208/chicago/9780226415666.001.0001
Library of Congress Cataloging-in-Publication Data
Names: Oman, Nathan, author.
Title: The dignity of commerce : markets and the moral foundations of
contract law / Nathan B. Oman.
Description: Chicago ; London : The University of Chicago Press, 2016. |
Includes bibliographical references and index.
Identifiers: lccn 2016017327 | isbn 9780226415529 (cloth : alk. paper) |
isbn 9780226415666 (e-book)
Subjects: lcsh: Contracts—Moral and ethical aspects. | Commerce—Moral
and ethical aspects. | Law—Philosophy.
Classification: lcc k840 .057 2016 | ddc 346.07—dc23 LC record
available at https://lccn.loc.gov/2016017327
♾ This paper meets the requirements of ansi/niso z39.48- 1992 (Permanence of Paper).
for morris sheppard arnold,
scholar, jurist, and sage of hippie zen capitalism

Contents
Preface ix
chapter 1. Introduction: Shakespeare and the Predicament of
Contract Theory 1
part 1
chapter 2. Well- Functioning Markets and Contract Law 23
chapter 3. The Moral Consequences of Well- Functioning
Markets 40
chapter 4. Contract Law, Efficiency, and Morality 67
part 2
chapter 5. Consideration 89
chapter 6. Remedies 112
chapter 7. Boilerplate 133
chapter 8. Pernicious Markets and the Limits of Contract Law 160
Conclusion 183
Notes 185
Bibliography 263
Table of Authorities 287
Index 293

Preface
In a sense, I began this book my first semester in law school. I spent a
year and a half before beginning law school working as a Senate staffer
while my wife completed her graduate degree. I arrived at law school pre-
pared to dive into the great debates over constitutional structure that I
had seen played out in the grinding legislative process on Capitol Hill. To
my surprise, however, I found that the mysteries of the common law, es-
pecially the common law of contracts, captured my imagination. I wanted
to understand where what seemed to be the great buzzing, bubbling mass
of contract doctrine had come from and what it could possibly be doing.
I realized that “Why does the law enforce contracts?” is a question to
which one could offer multiple answers and that the shape of legal doc-
trine would change depending on which approach one adopted. Fifteen
years on, this book offers my considered answer to that question.
When the time came to pursue my research agenda, I turned to the
philosophy of contract law. There I discovered what struck me as a deeply
unsatisfying division between economic theories of the law and autonomy
theories of the law. I found myself persuaded by the normative criticisms
of efficiency but dismayed by the dismissal of economic approaches to
contract law. It struck me as implausible to assume that the normative
justification of contract law was unconnected to the incentives that the law
created— incentives that had been studied with such ingeniousness by law
and economics scholars. I also felt that economic theorists were funda-
mentally correct in their focus on market actors and the way in which the
law structured market interactions.
My earliest publications explored the division between economic and
autonomy theories, seeking possible ways of reconciling them together.1
I confess that I had a difficult time finding a theoretical approach that I