Legal Philosophy Forum: The Normative Ineffectiveness of Contract Law

Speaker: Crescente Molina (University of Oxford)

Abstract

The Normative Ineffectiveness of Contract Law

In this essay, I argue that the law of contracts is normatively passive or ineffectual. I maintain that the law of contracts should not be understood as a set of commands which impact (create, modify, or terminate) the obligations and rights of contracting parties, or as a set of legal ‘power-conferring’ norms, as some writers have argued (e.g., H.L.A Hart). I shall argue that the law of contractual formation and interpretation, and contractual adjudication in general, is aimed at solving disputes between promisors and promisees. Thus, I shall argue that, in a strict sense, there are no legal norms that create, modify, or extinguish contractual duties and rights, nor legal norms that enable us to create these duties and rights. Contractual duties and rights are created, modified, and terminated only when promissory duties and rights are so. Thus, the law of contracts has mainly what I call a mirroring function: it aims to identify, internalise, and systematise a set of norms (i.e., the norms of the morality of promising) that are not part of the legal system. The structure of the essay goes as follows.

In Section 1, I argue that there is there is no legal obligation to keep our contracts. The obligation to keep our contracts is exclusively promissory in nature, and the law does not contribute to its obtaining. I argue that when legal authorities order the parties to perform their contracts, they are just mirroring a pre-existing duty, and thus not impacting the parties’ duties. Moreover, I maintain that there are no legal power-conferring norms that give people a power to impact their contractual duties and rights. Though there are such rules, they are not legal in nature, that is, they are not grounded in the actions of legal institutions. In Section 2, I argue that promising and contracting are identical normative phenomena. I maintain that the law of contractual formation and interpretation vastly converges with the morality of promising formation and interpretation, and that the rights and duties that contracts gives rise to, including the so-called ‘remedial’ rights in case of breach, are all promissory in nature. In Section III, I discuss the problem of which promises ought to be ‘enforced’ by the law. I maintain that all valid promises are in principle enforceable. Yet, I give three reasons that explain why legal systems tend to enforce only some promises. In any case, I hold, the debate about which promises ought to be enforced by the law has nothing to do with the question of why contracts bind. Here I maintain that they bind exclusively because they are promises, and that the law does not contribute to their distinctive bindingness.

About the Speaker

Crescente is a Dphil candidate at the University of Oxford. His research concerns moral and legal philosophy. In particular, he is interested in the structure of basic moral phenomena such promising, consenting, gift-giving, and forgiving, and in understanding how the law contributes to shaping these phenomena’s nature and importance. Along these lines, his doctoral dissertation explores the nature and normativity of promises, and the relationship between promises and contracts.

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