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A Summary of the Philosophy of Contract

A Summary of the Philosophy of Contract

The Theories of World A

(p.55) Chapter Four A Summary of the Philosophy of Contract
Margaret Jane Radin
Princeton University Press

This chapter discusses the main streams of contract philosophy in order to elucidate the extent to which boilerplate is a permissible means of creating contractual obligation. In particular, it considers the deep embeddedness—the ineradicability—of the notion of voluntariness. It also compares and contrasts the economic efficiency theory of contract with the various theories based more directly on freedom of the will. The chapter first provides an overview of contract theory, focusing on autonomy (rights) and welfare theories, reliance theory, and equivalence of exchange theory. It then describes the basic premises of the economic theory of law, the role of incentives in maximizing social welfare, contract law, and property and liability rules. It shows that the existing philosophical theories of contract depend on the core notions of voluntariness, freedom of choice, or consent, thus making it difficult to incorporate boilerplate into the theories of contract.

Keywords:   contract philosophy, boilerplate, contractual obligation, voluntariness, economic efficiency, contract theory, economic theory, incentives, property rules, liability rules

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