Week 1

The Laws Of Contract

1. What is the classical understanding of a contract? The Classical understanding of a contract is a mutual agreement between two parties both engaged in a transaction. According to the classical contract theory, contract laws therefore allow the parties to undertake the desired transaction within a set of new private laws that achieve the desired outcome of all parties involved.

2. Outline the ten ways of understanding contact law? The first understanding is that, according to Charles Fried, a contract is based upon promise. Randy Barnett suggests however that contact is based upon the consent in the transferring of entitlements. The Second understanding is to see contracts as based in moral obligations. According to Fried this moral obligation arises from the promise made during the contract. The third understanding is that contract is based on consent. Barnett suggests that rather than a promise the contact is based on consent that implies a moral force. The fourth understanding is that contract is a mechanism that allows for economically efficient transactions. This view according to Michael Trebilcock is an economic standpoint. Michael suggests that contracts exist in order to prevent opportunistic behaviour by forcing moral obligations and also setting out rules and guidelines for both parties saving time and expenses. Michael also suggests that the role played by contacts is to fill in gaps in contracts and to address the market failures like misinformation and pressures. The fifth understanding is viewed as a rich combination of normative approaches and theories of obligation (Hillman, The Richness of Contract Law (1998), pp 6-7). The leading component of this unifying theory is Robert Hillman. A sixth way of understanding contact law is based upon the Critical Legal Studies movement. The understanding suggests that contacts implement a set of contradictory rules allowing for the masking of outside issues for the purpose of protecting the powerful and their interests. The seventh way of understanding contract law is through gender. Contracts can be seen as negative for women by representing a masculine viewpoint. This is seen through the disregard for cooperation and other values such as respect. The eighth way of understanding contacts is through social relationships. It is said that the outside relationship between parties affects the behaviours during

the contractual process. It is stated that the social relationships may be more important than the parties legal rights. The ninth way of understanding contacts is in the form of regulation. Contract law significantly affects the validity of contracts. Interpretation of language and gaps in agreement are all variables that affect the contractual agreement. The final way of understanding contracts is through its doctrinal context as part of the law of obligations. There are three fundamental obligations -The obligation to perform promise -The obligation to not cause harm to others -The obligation to restore unfair and unjust gains

3. Choose one approach that challenges or provides an alternative theory of contract, and briefly outline the approach. Charles Frieds promise theory is based upon an underlying structure of moral principles that form what is known as promise principle. It is this promise principle that allows an individual to agree to obligations that were previously non-existent. Therefore in essence a contract is a promise and a contract must be kept much like a promise must be kept. This theory suggests that the courts should not manipulate contracts in order to redistribute wealth. 4. Outline three approaches of feminist contract theory. The first approach is the Identical Treatment Approach that denies any significant differences between men and women. The approach aims to keep a genderless approach to contact law in an attempt to treat both genders the same. The Second approach is the Difference Approach which is based on the political, physical, social and psychological differences between men and women. Equality can only be achieved if all these differences are taken into account pertaining to contractual law. The third and final approach is the Subordination Approach which suggests that the gender differences are due to the subordination of women. Thus suggesting that the gender of the parties must be taken into account when resolving contractual disputes. It is the first theory that I find more persuasive. The function of the law is to remain impartial to all. The differences in contract are based on agreement between to parties. Ths agreement is based upon a set of private laws according to the classical theory. These private sets of laws operate outside of the law itself. Therefore any changes made must be subject to the impartial nature of common law and thus treat both parties as ambiguous individuals rather than gendered individuals.