The Vanishing Freedom to Choose a Contractual Partner

Article excerpt



An individual's right to choose a contractual partner marks an intersection between fundamental rights and basic contract law. As a fundamental right, the freedom to choose is emblematic of individual liberty and personal autonomy, values that lie at the core of a liberal society. The freedom to choose a contractual partner also contributes to a principal goal of the law of contract by enabling individuals to satisfy their preferences through market transactions. Using freedom of contract, everyone can choose from whom to purchase an item or service. Yet the right to choose a contractual partner also implies the right to reject someone. To enjoy an unfettered choice, a person must be able to reject a partner for good reasons, bad reasons, or no reasons at all. This power of rejection has impacts on others: the rejected partner may be denied an opportunity to obtain a job, or prevented from obtaining a valued service, or even deprived of an essential need such as food and shelter. Sometimes these adverse consequences result from efficient and rational decisions: the candidate for the job was rejected because the employer reasonably believed another applicant was superior. These adverse consequences may arise, however, for reasons that seem inappropriate or invalid, as when a person is rejected as a contractual partner on grounds of race, nationality, sex, sexual orientation, religion, union membership, or simply because his or her appearance is perceived as abnormal.

The unfettered right to choose a partner and the correlative right to reject someone present market societies with a dilemma. On the one hand, the general commitment to freedom of the individual and a free market supports an unrestricted right to choose. On the other hand, the consequences of such choices on rejected groups may comprise a denial of equal opportunity in the market and social exclusion. Under the pressure of this dilemma, liberal societies have been rethinking the scope of the freedom to choose contractual partners. Laws prohibiting discrimination on invidious grounds have placed substantial restrictions on the right to reject a contractual partner. In the past, market transactions were typically regarded as part of the private realm, where individual choices should normally be respected by upholding contracts and by respecting refusals to enter contracts. Now the freedom to choose a contractual partner is restricted by legislation in particular contexts (such as employment) combined with reference to particular criteria (such as sex, race, and disability). The task now is to understand how and why the new boundary is drawn between fields in which choices are constrained in the public interest and those in which the unfettered freedom to choose contractual partners is preserved. The private realm of the market, where choices of contractual partner are still none of the law's business, outside of the regulatory controls of the anti-discrimination laws, has certainly shrunk in the past half century.

In order to understand how the new boundary around the private sphere in market transactions is drawn, section II explains why an analysis of the competing rights of individuals helps to illuminate the issue. Having described this framework of competing rights as a tool for explaining how the public interest may be understood in this context, the next section briefly describes the traditional protection afforded by the common law to unfettered freedom of choice of contractual partner. Section IV follows with an outline description of the scope of anti-discrimination laws in Europe and the United States, paying particular attention to the lines drawn between regulated market conduct and an unregulated private sphere. Section V explores an aspect of those laws that limits their scope to offers of sales and services to the public as opposed to purely private transactions. The sixth section then considers how this boundary drawn by anti-discrimination laws has been questioned by the European Court of Human Rights, perhaps to the extent of denying that any truly private sphere of unfettered choice should continue to exist. …