The Equitable Dimension of Contract

By Smith, Henry E. | Suffolk University Law Review, Summer 2012 | Go to article overview

The Equitable Dimension of Contract

Smith, Henry E., Suffolk University Law Review


Contract theory has long been preoccupied with the common law. Contracts is taught in the first year of law school along with the other "common law subjects." The rise of the modern view of contracts as involving mutually dependent undertakings--as opposed to the earlier independent covenants model--was carried out by the common law courts. Contracts are usually enforced with damages, the classic common law remedy. From proto-realists like Holmes, through the realists and their successors in law and economics, theorists have emphasized the law and downplayed the special role of equity, as developed over the centuries by Chancery and building on a tradition of thought going back at least to aristotle. Equity is treated either with disdain as useless moralizing or with impatience as a mere proto-version of freewheeling contextualized inquiry that the law courts should be engaging in without artificial constraints of a separate "equity." Whether they have been antimoralists, formalists, realists, or consequentialists, commentators have been quite unified in their preference for contract law over equity.

This orientation to the common law, narrowly conceived, is even true of Charles Fried's landmark book Contract as Promise, (1) which did much to bring a moral approach to contracts back into the spotlight. In this Essay I will argue that Fried conceded too much to the conventional exclusive focus on the common law, but that once we recapture an older tradition of equity, the central role of morality in contracts comes more clearly into view. Equity is the missing dimension from contract theory.

This older tradition uses equity as a structured safety valve to deal with the opportunism arising from the simple structures of the common law. At the same time, equity as a safety valve can be justified on both deontological and consequentialist approaches to contract law. Thus, the Kantian and utilitarian views of contract can converge at the descriptive level. If so, then the disagreement between promise theorists like Fried and legal economists is a foundational rather than a descriptive one.


Fried's great innovation was to place contract on a moral footing. More specifically, as his title reflects, Fried argues for the centrality of the moral obligation of promise to the law of contract. To do so, he must explain why not all promises are enforced, and why the law does not allow an unconstrained and therefore "tyrannical" direct implementation of judicial views on morality through courts' remedial responses to contract.

Fried was not writing on a blank slate, even if it was one from which morality had largely been erased. Two currents made a morals-based theory of contract implausible at the time he wrote. On the one hand, starting with proto-realists like Holmes, some had grown skeptical of traditional and a priori moral notions in the law and sought to put them on a more objective footing. (2) on the other, the realists and their successors saw a need for a wider version of morality, to include social and class justice and distributive concerns, rather than corrective justice or personal morality. (3) Such expansive notions could then be part of the greater context to which realist courts could and should respond when deciding in common law mode. Interestingly, modern law and economics, which is often taken as a main counterpoint to Fried's Kantian theory of contract, partakes somewhat of both of these currents. In law and economics, notions of fairness are often (but not always) dismissed as fussy ex post thinking that gets in the way of more generalizable rules that can better guide ex ante behavior with proper incentives. (4) At the same time, much of traditional law and economics incorporates a version of utilitarianism and cost-benefit analysis that tends, despite some attention to administrative cost, to treat contextual information as presumptively relevant, although more recently, especially in contracts, a new formalism has emerged--to which i will return. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • A full archive of books and articles related to this one
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)


1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

Cited article

The Equitable Dimension of Contract


Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Citations are available only to our active members.
    Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25,

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

    Already a member? Log in now.