Just Exchange: A Theory of Contracts

Just Exchange: A Theory of Contracts

Just Exchange: A Theory of Contracts

Just Exchange: A Theory of Contracts


Buckley's book fills a prominent hole in the literature, explaining economic terms and jargon with welcome clarity and examining the moral basis of free contracting, as well as those case where bargaining rights might reasonably be restricted.


To breed an animal capable of promising - isn't that just the paradoxical task which nature has set herself with mankind, the peculiar problem of mankind?

Nietzsche, On the Genealogy of Morals

We are now in a better position to evaluate the foundational questions of contract theory and to recognize wrong turns. It is very much a wrong turn to begin by asking why promises are binding. That is simply the way that the institution works; it is what it means to promise. As John Rawls noted, asking why that should be the case is like asking why batters do not get four strikes.

Instead of asking why our promises and contracts are binding, the first question for contract theory is why such institutions are valuable. Why might members of a non-promissory society wish to adopt them, could they somehow be given the choice? Why is contract law a more valuable institution than, say, baseball? The answer is trust. What the institutions of promising and contract law crucially supply is the element of trust which makes promises credible and which permits promisees to rely on promisors. Without the trust created by contract law, opportunities for gain from joint projects would be lost and our society would be poorer.

An institutional perspective is necessarily a consequentialist one. We cannot evaluate the costs and benefits of adopting an institution without looking at the consequences of doing so. This is not to say that only narrow economic consequences count and that broader social considerations are ruled out of order. If the material benefits from contract law were somehow exceeded by the social costs of a coarser and more grasping society, the consequentialist would oppose its adoption, as would the economist. All consequences matter, even though problems of quantification make comparisons difficult. For now we assume that contractual regimes are benign and defer an examination of contract law's spillover effects until Chapter 9.

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.