The Rise and Fall of Freedom of Contract

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The Rise and Fall of Freedom of Contract (1979) is a legal-historical text on the changes in the concept of freedom of contract by English Professor Patrick Atiyah. It was published by the Oxford University Press, and a paperback edition was released in 1985.

Freedom of contract is the freedom of private or public individuals and groups to form nonviolent contracts without government restrictions. This is opposed to government restrictions such as minimum- or maximum-wage laws, competition laws, economic sanctions, restrictions on price fixing, or restrictions on contracting with second-class citizens or undocumented workers. The freedom to contract is the underpinning of laissez-faire economics and is a cornerstone of free-market libertarianism. Through freedom of contract, individuals possess a general freedom to choose with whom to contract, whether to contract or not, and on which terms to contract.

Patrick Selim Atiyah, was an English lawyer and academic. He was best known for his work as a common lawyer, particularly in the law of contract and for advocating reformation or abolition of the law of tort. He was made a Fellow of the British Academy in 1979.

Contents

Summary

The central theme is that the notion of a contract based on consent (or a "meeting of minds") was almost entirely absent before 1800 in the law. Instead it was based on reliance or the receipt of a benefit. [1] You could revoke a promise, and the concept of an executory contract was unknown. [2] Moreover, courts were more concerned with the fairness of an exchange, and not concerned merely to uphold promises or the parties' will. Damages reflected that, only being for the value of exchange, not the loss of a bargain. [3]

Law system of rules and guidelines, generally backed by governmental authority

Law is a system of rules that are created and enforced through social or governmental institutions to regulate behavior. It has been defined both as "the Science of Justice" and "the Art of Justice". Law is a system that regulates and ensures that individuals or a community adhere to the will of the state. State-enforced laws can be made by a collective legislature or by a single legislator, resulting in statutes, by the executive through decrees and regulations, or established by judges through precedent, normally in common law jurisdictions. Private individuals can create legally binding contracts, including arbitration agreements that may elect to accept alternative arbitration to the normal court process. The formation of laws themselves may be influenced by a constitution, written or tacit, and the rights encoded therein. The law shapes politics, economics, history and society in various ways and serves as a mediator of relations between people.

An executory contract is a contract that has not yet been fully performed or fully executed. It is a contract in which both sides still have important performance remaining. However, an obligation to pay money, even if such obligation is material, does not usually make a contract executory. An obligation is material if a breach of contract would result from the failure to satisfy the obligation. A contract that has been fully performed by one party but not by the other party is not an executory contract.

Then, after 1800, the concept of contractual freedom "rose". Promises and the "intentions" of parties "became the paradigm of contract theory". [4] Atiyah argues that it began with the notion of freedom of property, summed up in the phrase of Sir Edward Coke in Semayne's case that every man's home is his castle. [5] Following that was the transition from a property to a contract based society.

In economics, contract theory studies how economic actors can and do construct contractual arrangements, generally in the presence of asymmetric information. Because of its connections with both agency and incentives, contract theory is often categorized within a field known as Law and economics. One prominent application of it is the design of optimal schemes of managerial compensation. In the field of economics, the first formal treatment of this topic was given by Kenneth Arrow in the 1960s. In 2016, Oliver Hart and Bengt R. Holmström both received the Nobel Memorial Prize in Economic Sciences for their work on contract theory, covering many topics from CEO pay to privatizations.

<i>Semaynes case</i>

Semayne's Case 5 Coke Rep. 91, is an English common law case reported by Sir Edward Coke, who was then the Attorney General of England. In the United States, it is recognized as establishing the "knock-and-announce" rule.

After 1900, however, freedom of contract had had its heyday. Atiyah illustrates how the growth of consumer protection, rent and employment legislation has moved contract back into smaller confines, based on general notions of fairness.

Contents

See also

Atiyah's Accidents, Compensation and the Law (2006) is a legal text, which marked the first of Cambridge University Press's "Law in Context" series. It was originally authored by English legal scholar, Patrick Atiyah in 1970 and has been taken over by Professor Peter Cane since the 4th edition in 1987. The thrust of the book is that the law of tort should be abolished, especially as relates to the law on personal injuries, and should be replaced with a no fault state compensation system. Its arguments are in tune with the establishment in the 1970s of such a system in New Zealand, with the Accident Compensation Commission.

Just price

The just price is a theory of ethics in economics that attempts to set standards of fairness in transactions. With intellectual roots in ancient Greek philosophy, it was advanced by Thomas Aquinas based on an argument against usury, which in his time referred to the making of any rate of interest on loans. It gave rise to the contractual principle of laesio enormis.

Notes

  1. Ch. 6 and p. 499
  2. Ch. 7
  3. pp. 142, 195, 199–200
  4. p. 420
  5. pp. 85–86, 116

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Justice Concept of moral fairness and administration of the law

Justice, in its broadest context, includes both the attainment of that which is just and the philosophical discussion of that which is just. The concept of justice is based on numerous fields, and many differing viewpoints and perspectives including the concepts of moral correctness based on ethics, rationality, law, religion, equity and fairness. Often, the general discussion of justice is divided into the realm of social justice as found in philosophy, theology and religion, and, procedural justice as found in the study and application of the law.

Social contract

In moral and political philosophy, the social contract is a theory or model that originated during the Age of Enlightenment and usually concerns the legitimacy of the authority of the state over the individual.

Due process Requirement that courts respect all legal rights owed to people

Due process is the legal requirement that the state must respect all legal rights that are owed to a person. Due process balances the power of law of the land and protects the individual person from it. When a government harms a person without following the exact course of the law, this constitutes a due process violation, which offends the rule of law.

Social justice is a concept of fair and just relations between the individual and society. This is measured by the explicit and tacit terms for the distribution of wealth, opportunities for personal activity, and social privileges. In Western as well as in older Asian cultures, the concept of social justice has often referred to the process of ensuring that individuals fulfill their societal roles and receive what was their due from society. In the current global grassroots movements for social justice, the emphasis has been on the breaking of barriers for social mobility, the creation of safety nets and economic justice.

Opposition to copyright movement dissenting the nature of current copyright law

Opposition to copyright or anti-copyright is opposition to the current state of copyright law, or perhaps copyright as a concept. Opposition groups often criticize philosophical, economical, or social rationales of such laws and the laws' implementations, the benefits of which they claim do not justify the policy's costs to society. Adherents advocate for changing the current system, though different groups have different ideas of what that change should be. Some call for remission of the policies to a previous state—copyright once covered few categories of thing and had shorter term limits—or they may seek to expand concepts like Fair Use that allow permissionless copying. Others seek the abolition of copyright itself.

Consideration under American law

Consideration is the central concept in the common law of contracts and is required, in most cases, for a contract to be enforceable. Consideration is the price one pays for another's promise. It can take a number of forms: money, property, a promise, the doing of an act, or even refraining from doing an act. In broad terms, if one agrees to do something he was not otherwise legally obligated to do, it may be said that he has given consideration. For example, Jack agrees to sell his car to Jill for $100. Jill's payment of $100 is the consideration for Jack's promise to give Jill the car, and Jack's promise to give Jill the car is consideration for Jill's payment of $100.

A quasi-contract is a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems.

Legal positivism is a school of thought of analytical jurisprudence largely developed by legal thinkers in the 18th and 19th centuries, such as Jeremy Bentham and John Austin. While Bentham and Austin developed legal positivist theory, empiricism set the theoretical foundations for such developments to occur. The most prominent legal positivist writing in English has been H. L. A. Hart, who in 1958 found common usages of "positivism" as applied to law to include the contentions that:

  1. laws are commands of human beings
  2. there is no necessary connection between law and morality, that is, between law as it is and as it ought to be.
  3. analysis of legal concepts is worthwhile and is to be distinguished from history or sociology of law, as well as from criticism or appraisal of law, for example with regard to its moral value or to its social aims or functions
  4. a legal system is a closed, logical system in which correct decisions can be deduced from predetermined legal rules without reference to social considerations
  5. moral judgments, unlike statements of fact, cannot be established or defended by rational argument, evidence, or proof

Critical legal studies (CLS) is a school of critical theory that first emerged as a movement in the United States during the 1970s. Critical Legal Studies adherents claim that laws are used to maintain the status quo of society's power structures; it is also held that the law is a codified form of society's biases against marginalized groups. Despite wide variation in the opinions of critical legal scholars around the world there is general consensus regarding the key goals of Critical Legal Studies:

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Lex mercatoria, often referred to as "the Law Merchant" in English, is the body of commercial law used by merchants throughout Europe during the medieval period. It evolved similar to English common law as a system of custom and best practice, which was enforced through a system of merchant courts along the main trade routes. It functioned as the international law of commerce. It emphasised contractual freedom and alienability of property, while shunning legal technicalities and deciding cases ex aequo et bono. A distinct feature was the reliance by merchants on a legal system developed and administered by them. States or local authorities seldom interfered, and did not interfere a lot in internal domestic trade. Under lex mercatoria trade flourished and states took in large amounts of taxation.

Good faith (law)

In contract law, the implied covenant of good faith and fair dealing is a general presumption that the parties to a contract will deal with each other honestly, fairly, and in good faith, so as to not destroy the right of the other party or parties to receive the benefits of the contract. It is implied in every contract in order to reinforce the express covenants or promises of the contract. A lawsuit based upon the breach of the covenant may arise when one party to the contract attempts to claim the benefit of a technical excuse for breaching the contract, or when he or she uses specific contractual terms in isolation in order to refuse to perform his or her contractual obligations, despite the general circumstances and understandings between the parties. When a court or trier of fact interprets a contract, there is always an "implied covenant of good faith and fair dealing" in every written agreement.

Consideration concept of legal value in connection with contracts

Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts. The concept has been adopted by other common law jurisdictions, including the US.

Title-transfer theory of contract

The title-transfer theory of contract (TTToC) is a legal interpretation of contracts developed by economist Murray Rothbard and jurist Williamson Evers. The theory interprets all contractual obligations in terms of property rights, viewing a contract as a bundle of title transfers. The TTToC stands in oppositions to most mainstream contract theories which view contractual obligations as the result of a binding promise. Proponents of the approach often claim it is superior on grounds of both consistency and ethical considerations. The TTToC is often supported by libertarians.

Intention to create legal relations', otherwise "intention to be legally bound", is a doctrine used in contract law, particularly English contract law and related common law jurisdictions.

The history of English contract law traces back to its roots in civil law, the lex mercatoria and the industrial revolution. Modern English contract law is composed primarily of case law decided by the English courts following the Judicature Acts and supplemented by statutory reform. However, a significant number of legal principles were inherited from recording decisions reaching back to the aftermath of the Norman Invasion.

Seana Valentine Shiffrin is Professor of Philosophy and Pete Kameron Professor of Law and Social Justice at the University of California, Los Angeles. Shiffrin's work has been widely influential and spans issues in moral, political and legal philosophy, as well as matters of legal doctrine, that concern equality, autonomy and the social conditions for their realization. Shiffrin's recent work has primarily focused on freedom of speech, truth-telling, promising, and the place of the law in building moral character. She is an associate editor of Philosophy and Public Affairs. and was elected a Fellow of the American Academic of Arts and Sciences in 2010.

The history of contract law dates back to Ancient civilizations.

References

The Modern Law Review is a peer-reviewed academic journal published by John Wiley & Sons on behalf of Modern Law Review Ltd. and which has traditionally maintained close academic ties with the Law Department of the London School of Economics. The Modern Law Review has been identified as the "pre-eminent United Kingdom law journal" in a ranking based on statistical data from the 2001 Research Assessment Exercise.