Consideration as Contract: A Secular Natural Law of Contracts

By Dranias, Nicholas C. | Texas Review of Law & Politics, Spring 2008 | Go to article overview

Consideration as Contract: A Secular Natural Law of Contracts


Dranias, Nicholas C., Texas Review of Law & Politics


I. INTRODUCTION

The need to protect reasonable reliance is chanted like a mantra amongst many contract law theorists. Unfortunately, many of these theorists do not distinguish between protecting reliance based on one's own established property rights or protecting reliance based on a "reasonable expectation" of receiving benefits from others. They do not even appear to recognize the distinction. Nevertheless, on a closer analysis, the distinction is as plain as the difference between self-reliance and reliance upon others.

Freedom of contract is founded on self-reliance and a "decentralized, individualistic economic and political order."1 To the extent that contract law views people as interdependent "cogs in the machine," rather than independent, self-responsible individuals, the law undermines freedom of contract.2 Moreover, so long as contract law remains uncommitted to either view of human nature, it is doomed to anarchic interpretation.3 But the road towards a regimented economy and an unpredictable common law need not be traveled.4

Tracking the history of political and legal philosophy, first generally, then in American jurisprudence, Parts II and III of this article show that freedom of contract blossomed, and withered, along the same philosophical and historical path as natural law theory. Then, the article discusses how the confused philosophy underlying modern contract law is the source of the long-threatened "death of contract."

To ensure the continued viability of contract law, the article urges a return to the valuable insight that law should be grounded in morality. But rather than relying upon religious prescriptions, Part IV of this article outlines a fact-based conception of morality and natural law, which draws upon contemporary Aristotelian philosophers. And in Part V, this theory is used to construct a secular natural law of contracts that restores the element of consideration to its central role in contract formation.

From formation to breach, the proposed secular natural law of contracts reflects a proper government's duty to protect an individual's pursuit of a flourishing, independent existence. As such, it aims to cut through the philosophical confusion that still threatens to choke off freedom of contract.

II. THE CLASH BETWEEN NATURAL LAW AND LEGAL POSITIVISM

Before one can understand the rise and fall of the various theories of contract law, one must understand the fundamental philosophical forces at work in the history of jurisprudence. Classified into the two broadest categories, legal philosophy has long involved a clash between those who viewed law as deriving its justification from natural principles of morality and those who viewed law as having, and needing, no justification other than the force that backs it.' Those falling into the first class have been deemed proponents of "natural law."6 The second class of legal philosophers represents a much older, prephilosophical tradition best exemplified by the words of Thrasymachus in Plato's Republic: "I say that justice is simply what is good for the stronger."7 Although the natural law approach has had many proponents, both ancient and modern, many agree that St. Thomas Aquinas and John Locke are the towering figures in the field.8

A. A Brief History of Natural Law

The term "natural law" unfortunately lumps together some very different philosophies. Natural law philosophers generally subscribe to the view that there are natural principles of justice grounded in true moral principles.9 Nevertheless, there was, and is, much disagreement over the derivation of these moral principles. There are natural lawyers who purport to derive principles of morality, and thus law, from God's nature as reflected by his Biblical edicts. There are also natural lawyers who derive principles of morality from human nature as revealed by observation.10 Most theorists offer an eclectic mixture of argument from both secular and allegedly divine sources. …

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