The Political Morality of Convergence in Contract

One of the most interesting recent developments in contract law has been an academic and political effort to integrate private law. The proposed Common European Sales Law was ultimately withdrawn, and a series of setbacks, including the British referendum to exit the EU, has recast the politics of convergence. But it remains an objective for many European scholars. This essay considers the wisdom of convergence on a single law of transactions from the perspective of philosophical contract theory. The essay proceeds by disaggregating the rights at stake in contract law. It characterises the formal right to contract and describes its moral impetus as one that should underwrite contract law in all states, especially liberal states. But the essay argues that the legitimate contours of the formal right are contingent on tenets of political culture that vary across Member States. Similarly, substantive regulation of contract is morally compulsory and serves universal interests; the essay takes regulation of permissible work and remuneration for work as examples. But the rules and standards that best advance those moral interests depend on economic facts specific to individual political communities. The essay concludes by arguing that contract law is a poor tool by which to accelerate political and economic convergence

Production Liability

It is well known that many consumer goods are produced under dangerous working conditions. Employers that directly supervise the production of these goods evade enforcement. Activists and scholars have argued that we must hold the manufacturers and retailers that purchase goods made in sweatshops accountable. However, there has been little movement toward such accountability. Responsibility for the conditions under which goods are made—what I call “production liability”—entails assigning responsibility for workers to firms that do not directly employ them. Production liability, therefore, conflicts with deep intuitions about the boundaries of individual responsibility. This Article offers a moral and economic defense of production liability that is responsive to that challenge. The Article identifies the particular moral responsibility that manufacturers bear as a public form of complicity. It further considers the economic logic of assigning legal liability to such firms and the optimal form that liability should take. This Article makes the case that production liability can update our legal regime for employment in the way that products liability did for consumer law

Varieties of Employee Ownership: Some Unintended Consequences of Corporate Law and Labor Law

Theories of employee ownership implicitly assume that its essential features are the same in all countries. In fact, employee ownership varies considerably across institutional environments. In this paper, I compare its development in the United States, Germany, and Sweden to show that the institutional background - in particular, the existing bodies of corporate and labor law - against which a program of employee ownership arises determines its course. Background institutions determine the cost of worker control over management, the cost of collective decision-making, and the expected gains from risk-bearing. Those consequences of corporate and labor law in turn determine whether employee ownership legislation transfers, or creates incentives for firms to transfer, a share of profits to workers (residual income rights); or whether legislation instead empowers workers to raise the present and/or deferred price of labor in proportion to profitability (control). Workers and their representative organizations push (or allow) only those employee ownership programs that secure what is absent but feasible in light of their existing range of tools. Even when employee ownership is a viable program, employee ownership legislation can only augment, not revise, the present institutional resources of organized labor

The Challenge of Radical Reform in Pluralist Democracies

Martijn Hesselink proposes a new European charter of private law that would correct the deficiencies in private law identified by Katharina Pistor. While Hesselink aims to achieve radical reform by way of radical democracy, this article argues that radical democracy is unlikely to realise a radically progressive vision of private law. Citizens of wealthy, post-industrial democracies lack certainty about both the material consequences of reform and the demands of justice. Because their caution renders them averse to far-reaching, bundled reform packages, public discourse in post-industrial societies as we find them is more likely to produce incremental than radical substantive reform

Separating Contract and Promise

Contract has been conceptualized as a species of promise. Treating contractual promise as a kind of promise highlights certain important aspects of contracting, but it also obscures essential differences between legally binding and everyday, or what I will call “private,” promises. The moral character of a private promise depends on the fact that it is not only freely made but also freely kept. Most contractual promises are not intended to have and (by definition) do not have this voluntary character. A promisor essentially opts out of the private practice of promising when she assigns to a third party the authority to coerce performance of her promise. In making a private promise, a promisor creates a sufficient reason to perform the content of her promise: the very fact of her promise. To the extent she creates a second sufficient reason – liability in the case of breach – the first reason does no work, or, there is no way for the independent sufficiency of the first reason to manifest itself objectively. Similarly, in being made a private promise, a promisee is given ground for belief that the promisor will perform: again, the fact of promise. To the extent the promisee is independently assured of performance, she cannot objectively rely on the fact of promise alone. The act of contracting removes one from the moral world of private promise. Some contractual promises co-exist with private promises of the same content. But their co-existence is uneasy, because invoking the specter of the law undermines the commitment contained in a promise from the perspective of both promisor and promisee. The content of that commitment is possible only within a close personal relationship. It entails a combining of interests that were previously separately held by promisor and promisee. In a private promise, the promisor undertakes to give the promisee’s relevant interests weight equal to or greater than her own. The specter of legal liability creates a reason for performance stemming from the separateness rather than the unity of interests between promisor and promisee. A sincere intent on the part of the promisor to perform for reasons unrelated to legal obligation does not dissipate this tension any more than a sincere intent on the part of the more powerful party in a dispute to resolve that dispute fairly would ren der her unilateral decision just. Once we have disentangled private and legal promise, we can begin to adjust the boundaries and defaults of contract law accordingly. Because private promises are private, contract law should make it relatively costly for parties to bring the law to bear on such commitments; indeed, it already does. When public policy dictates affording a legal remedy for the breach of private promise, we can mitigate the conflict between private and legal promise by minimizing their overlap. This can be (and, in part, already is) done by limiting the remedies for breach to ones which the private promise did not contemplate. In fact, the remedy should deviate from both the obligations imposed by private promissory norms and the remedy usually awarded in commercial cases. In the context of personal relationships, reliance damages should be the preferred remedy. Reliance damages redress the injury inflicted by breach of the promise, in which the state may have a legitimate interest, but do not have the effect of either coercing performance or rendering the promisee indifferent to performance. In other contexts, the distinction between private and legal promise calls for an expansion of the domain of contract. For example, promises made in the context of radical inequality in power, as in most employment circumstances, are often located outside the law. A promisor with vastly superior bargaining power need not promise in the contractual form in order to induce the desired conduct by the promisee; the promisor has no incentive to submit the unequal relationship to legal authority. ‘Downward’ promises between hierarchically situated persons are not easily enforced by the state. Thus, performance of those promises usually remains at the discretion of the promisor. Such promises are false private promises. To the extent we see the depersonalization of the employment relationship as an important achievement of the liberal market economy, this account clarifies one task of contract law: the displacement of private promise in the realm of employment. Just as parties should have to go out of their way to make a private promise legally binding, legal defaults should make it relatively onerous for employers to avoid legal consequence when they make promises to their employees

Managing Moral Risk: The Case of Contract

The concept of moral luck describes how the moral character of our actions seems to depend on factors outside our control. Implications of moral luck have been extensively explored in criminal law and tort law, but there is no literature on moral luck in contract law. I show that contract is an especially illuminating domain for the study of moral luck because it highlights that moral luck is not just a dark cloud over morality and the law to bemoan or ignore. We anticipate moral luck, i.e., we manage our moral risk, when we take into account the possibility that our actions might result in serious harm to others for which we would be morally responsible, and adjust our conduct accordingly. Moral risk is present in contract both at the stage of contract formation and, later, when we must decide whether to breach or whether to accommodate a request for modification. We negotiate these risks both through collective background institutions that limit the harms we can inflict on others and through the rules of contract law itself, which align our material and moral interests

The Perspective of Law on Contract

What is the perspective of law on contract? This Article will consider two dimensions of the perspective we offer students. Part I will consider how we present the nature of contract law. That is, it will explore the extent to which traditional methods of teaching unduly underplay indeterminacy and disagreement. In that Part I distinguish between inductive and deductive legal reasoning and suggest we may give short shrift to the former in teaching. Part II will consider the attitude of the law toward contract as a social practice. Here I distinguish between internal and external perspectives on law and suggest that many professors may be inclined to systematically favor one perspective over the other. We should strive to help students integrate those perspectives

Intention, Torture, and the Concept of State Crime

Notwithstanding the universal prohibition against torture, and almost universal agreement that in order to qualify as torture, the act in question must be committed intentionally with an illicit purpose, the intentional element of torture remains ambiguous. I make the following claims about how we should interpret the intent requirement as applied to states. First, state intent should be understood objectively with reference to the apparent reasons for state action. The subjective motivation of particular state actors is not directly relevant. While we focus on subjective intent in the context of individual crime because of its relation to culpability and blameworthiness, in the context of state crime we should be concerned with preserving the legitimacy of political authority, and the conditions for legitimacy turn on the apparent reasons rather than subjective motivations behind state action. Second, the primacy of questions of legitimacy also makes irrelevant the distinction between specific and general intent. Instead, state-directed torture that is committed secretly and in a manner that removes it from public scrutiny should be regarded as quasi-criminal. Finally, the official interpretation of the Convention against Torture (CAT) adopted by the United States is flawed because it imposes a specific intent requirement that is not objective, and accords ambiguous weight to publicity. In doing so we make a double error: We treat state crimes as essentially the same as individual crime, and we fail to distinguish between the quasi-criminal and humanitarian functions of the CAT To identify a state act as torture, courts should ask whether alleged acts (which otherwise meet the actus reus of torture) appear to have been motivated by radical indifference to the suffering of the torture victim and the aim of stripping her and/or other members of the political community of their humanity. Only to the extent they seek to further establish the acts as quasi-criminal should courts ask whether the alleged acts were committed secretly or in a manner calculated to avoid accountability

Law and the Moral Dynamics of Collective Action

Many moral demands on social groups cannot be met without cooperation among group members. In some cases, individual action does not advance the collective moral interest at all without some threshold level of cooperation by other group members. Is an individual required to act as if others will cooperate even if she knows that they will not? This Article argues that individuals may take into account the reality of pervasive noncooperation and decline to attempt cooperation. Only ex ante mandatory rules can solve moral collective action problems. In a political community, those rules are public law. The most compelling argument in favor of recognizing individual duties to attempt cooperation is that we may not predict that other people will fail to comply with their moral duties. A variety of legal rules reveal discomfort with such “agent predictions” in the context of criminal law, tort law, and First Amendment law. This Article will show, however, that legal shifts in several doctrinal areas, especially tort law, not only tolerate but, in some cases, appear to require that individuals make agent predictions. This trend is consistent with contemporary thinking about how people relate to contingent features of our environment. This Article will parse out permissible and impermissible agent predictions. The agent predictions at issue in moral collective action problems are usually permissible. This Article articulates and defends a “no-martyr principle” that denies a duty to (attempt to) contribute to collective endeavors that are futile in the light of sound agent predictions. While such conduct is virtuous, it is not compulsory. Private law rules (in tort and contract law) largely respect the no-martyr principle. This Article shows how public law gets around it and why we should use mandatory rules issued by the state rather than moral exhortation of individuals to solve moral collective action problems