Contextualizing Contract Law: An LPE 101 Reading List

Luke Herrine—

Contract is, of course, part of the core legal infrastructure that makes markets possible. But it is more than that. As an ideal type, it is at the core of all individualist social, moral, and political theories that seek to account for human sociality while avoiding social structure. Contract represents the ideal of being able to choose how to calibrate others’ demands with one’s own life plan. It presents the possibility of a social obligation that is not imposed upon one from the outside—by family or tradition or etiquette or the state. The rational choice theories that form the basis for neoliberal economic thought do not just understand chosen obligation as an ideal or a possibility: it is how they model all social institutions, even highly complex ones. No wonder “social contract” has been such an enduring model of the legitimate exercise of state power in the liberal tradition.

Theories based on the contractual ideal have proven especially useful for justifications of capitalist ordering. When the law has taken such theories too seriously, it has found it easy to endorse and even mandate all sorts of market-mediated exploitation as necessary to a free society. Lochner and its ilk were supposed to protect freedom of contract, after all.

The contractual ideal and the promissory morality that comes with it is part of our culture, and not just our legal culture. Even those of us who have been on the business end of exploitative contracts—for debt, for labor, for rent, for whatever else–have a hard time shaking the notion that we are obligated to do what we said we would (even if we didn’t know what we “said we would” via the fine print): that we chose, and therefore have responsibility for, the rules imposed upon us.

Thinking about—and teaching—contract from an LPE perspective requires denaturalizing with this tendency of thought and the forms of moral, political, and legal justification that have grown out of it. And doing that requires dealing with contracts not as the shadows of an ideal Form but as institutions shaped by socio-legal context. It requires dealing with the law of contract not as a self-contained and coherent body of judge-made doctrine but as an overlapping set of rules that deal with different contractual forms in different contexts. And it requires highlighting how the decontextualized contractual ideal can serve ideological functions when used as a map for this complex terrain.

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Labor Relationships & and the Legal Vision of 1L Contracts

Sanjukta Paul—

Contracts is more than an area of law; it is a key piece of the vision we lawyers bring to many other areas of law. The 1L Contracts course supplies a foundation-stone of the “pre-analytic vision” with which lawyers will eventually think about many other things, including labor relationships. Labor regulation as such is addressed only in the optional upper-level curriculum, and it is relatively marginalized even there. As a result, many lawyers, notably in the commercial and business sphere, will bring to their dealings with labor issues the contracts “vision.” That vision ultimately tends to erase the law’s deep involvement in constituting labor relationships. It thus tends to furnish apparent justification for the exercise of power by the already-powerful, in pursuit of private ends rather than the public interest, on the stage created and sustained by law.

The specific pre-analytic vision transmitted by the conventional Contracts curriculum is of atomistic individuals contracting at arms’ length. In this vision, any pre-contracting power differentials, including those power differentials that are created or sustained by law, are rendered invisible. In our historical imagination this vision is symbolized by ‘the Lochner Era,’ which was characterized by the frequent judicial invocation of contract principles to either invalidate or undermine democratic attempts to structure labor relations and markets more generally.

But apart from ignoring, for example, “the background distribution of property rights,” this vision also sits uneasily with the present-time legal constitution of labor relationships. Moreover, perhaps because of its foundation in the pre-analytic vision of contracts, commercial law is generally selective about when it chooses to treat labor contracts as “special” on the one hand, or as instances of a more general type on the other. Continue reading

The Public Law of Private Promising, And Not Even That: LPE 101 for Contracts

Noah Zatz—

What would a 1L Contracts course look like from a law and political economy perspective? I can’t claim to have designed my course from the ground up to answer that question—and indeed I am intentionally more eclectic than that. Nonetheless, several of my choices—about how to thematize the material and what to include at all—clearly reflect an LPE approach.

From start to finish, I present Contracts—perhaps the quintessential “private law” topic—as a study in public power. That is among the main reasons to start with remedies (as many Contracts professors do). Ultimately, the question is whether a government institution (a court) will render a judgment and back it up with the threat of publicly authorized violence: seizing property to satisfy a judgment or throwing someone in jail for contemptuously defying a court order. I underline this point on the first day of class by assigning a recent ACLU report on incarceration for nonpayment of private consumer debt. This reading also challenges conventional field boundaries, enabling students to follow a thread of debt and poverty that connects their Contracts class to Ferguson and racialized mass incarceration.

The publicness of Contracts goes beyond the brute fact that it is law. Rather, the field reflects policy judgments about when to make the force of law available to private parties. Although invocations of party intent typically submerge this point, it actually appears on the surface of the most conventional place to start Contracts: the very first section of the Restatement (Second) of Contracts. “A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.”  Well then, when and how does “the law” (speaking for we, the people) choose to transform private promises into legal duties? Continue reading

State Power and the Construction of Contractual Freedom: Labor and Coercion in Bailey v. Alabama

Noah Zatz – 

If forced to choose, I might pick Bailey v. Alabama as my favorite contract law case. That is, if it even counts as one. Which is pretty much my point. Decided in 1911, Bailey is a criminal case – Lonzo Bailey was convicted for fraud.  It is also a constitutional case – the Supreme Court struck down the conviction as violating the Thirteenth Amendment’s prohibition of involuntary servitude. A labor case, too – the criminal statute specifically targeted workers who took advances on wages and then later quit before paying the debt. And a race case, though the Court denied it – Alabama’s “false pretenses” statute was one cog in the wheel of Jim Crow neoslavery. But yes, also a contracts case (in a libertarian’s casebook, no less!) because the Court used the case to erect a boundary between criminal and civil consequences for breach of contract.

This overflowing of conventional doctrinal boundaries makes Bailey the perfect vehicle to deliver key insights of a Law & Political Economy approach. So much so that I will do it over multiple posts.

In this first installment, Bailey punctures the ubiquitous conceit that there is or could be an autonomous sphere of economic life – “the free market” – that stands apart from politics, from contests over whether and when to authorize the coercive exercise of governmental power. That contrast between economic freedom and political power is ubiquitous, as in the language contrasting “private” law with government “intervention” in the market (via “public” law). This conceit renders unremarkable what might seem contradictory: a ubiquitous politics that abhors government regulation (of “the economy”) yet thirsts for a state that is “tough on crime.” Continue reading