Contract Law Minimalism Commercial contract law is in every sense optional, given the choice between legal systems and between law and arbitration Its ‘doctrines’ are in fact virtually all default rules Contract Law Minimalism advances the thesis that commercial parties prefer a minimalist law that sets out to enforce what they have decided – but does nothing else The limited capacity of the legal process is the key to this ‘minimalist’ stance This book considers evidence that such minimalism is indeed what commercial parties choose to govern their transactions It critically engages with alternative schools of thought, that call for active regulation of contracts to promote either economic efficiency or the trust and co-operation necessary for ‘relational contracting’ The book also necessarily argues against the view that private law should be understood noninstrumentally (whether through promissory morality, corrective justice, taxonomic rationality, or otherwise) It sketches a restatement of English contract law in line with the thesis Jonathan Morgan is Fellow of Corpus Christi College and University Lecturer in Law, University of Cambridge He was previously Fellow and Tutor in Law at St Catherine’s College, Oxford, and Fellow and Director of Studies at Christ’s College, Cambridge He has for many years also taught English law at Warsaw University and elsewhere in Central and Eastern Europe His teaching and research interests range across the law of obligations and public law The Law in Context Series Editors: William Twining (University College London), Christopher McCrudden (Queen’s University Belfast) and Bronwen Morgan (University of Bristol) Since 1970 the Law in Context series has been at the forefront of the movement to broaden the study of law It has been a vehicle for the publication of innovative scholarly books that treat law and legal phenomena critically in their social, political and economic contexts from a variety of perspectives The series 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Turpin & Tomkins: British Government and the Constitution: Text and Materials Twining: General Jurisprudence: Understanding Law from a Global Perspective Twining: Globalisation and Legal Theory Twining: Human Rights, Southern Voices: Francis Deng, Abdullahi An-Na’im, Yash Ghai and Upendra Baxi Twining: Rethinking Evidence Twining & Miers: How to Do Things with Rules Ward: A Critical Introduction to European Law Ward: Law, Text, Terror Ward: Shakespeare and Legal Imagination Wells & Quick: Lacey, Wells and Quick: Reconstructing Criminal Law Zander: Cases and Materials on the English Legal System Zander: The Law-Making Process International Journal of Law in Context: A Global Forum for Interdisciplinary Legal Studies The International Journal of Law in Context is the companion journal to the Law in Context book series and provides a forum for interdisciplinary legal studies and offers intellectual space for ground-breaking critical research It publishes contextual work about law and its relationship with other disciplines including but not limited to science, literature, humanities, philosophy, sociology, psychology, ethics, history and geography More information about the journal and how to submit an article can be found at http://journals.cambridge.org/ijc Contract Law Minimalism A Formalist Restatement of Commercial Contract Law JONATHAN MORGAN Corpus Christi College, Cambridge University Printing House, Cambridge CB2 8BS, United Kingdom Published in the United States of America by Cambridge University Press, New York Cambridge University Press is part of the University of Cambridge It furthers the University’s mission by disseminating knowledge in the pursuit of education, learning and research at the highest international levels of excellence www.cambridge.org Information on this title: www.cambridge.org/9781107021075 © Jonathan Morgan 2013 This publication is in copyright Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published 2013 Printed in the United Kingdom by CPI Group Ltd, Croydon CR0 4YY A catalogue record for this publication is available from the British Library Library of Congress Cataloguing in Publication Data Morgan, Jonathan (Jonathan Edward) Contract law minimalism : a formalist restatement of commercial contract law / Jonathan Morgan pages cm – (Law in context) ISBN 978-1-107-02107-5 (Hardback) Contracts Commercial law Contracts–Philosophy I Title K840.M68 2013 346.020 2–dc23 2013008749 ISBN 978-1-107-02107-5 Hardback Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate For Sophie 275 Select bibliography Rotherham, C., ‘“Wrotham Park damages” and 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contract law minimalism, 159 alternative dispute resolution (ADR) business-made rules, arbitration in relation, 174 choice of, 173, 181–2 as evidence of parties’ expectations of contract law, 189–91 legal recognition, 174–5 norms in commercial practice, 197–9 see also arbitration; mediation arbitration adherence to law, 197 as alternative to contract law, 87, 94, 101–2, 109–10, 165, 174–5, 181–2, 189–90, 201, 241–2 arbitrators’ discretion, 201–2 business-made dispute resolution rules in relation, 174 compromise approach, 196 confidentiality of, 165, 167, 191–2, 197, 199 as to contract liability, 135–6 by contracting parties, 191–3 corporate usage, 191 cost of, increase in, 231–2 custom in relation, 134, 174, 202–3 enforcement by, 115 enforcement of customary rules, 199–200 ‘flexible relationism’, 204 formal rules of, 131 formalistic approach, 173, 208–13, 215 litigation distinguished, 190 mediation distinguished, 190, 193, 195 monetary value of London-based, 176–7 multinational oil arbitrations, 202 popularity, 190–1, 195–7 as ‘privatised’ law, 174–5 public domain information as to, 199 unfair terms legislation in relation, 177–8 use of transnational commercial law, 201 see also adjudication ‘assumption of risk’ approach to contract liability, 135–6 Bernstein, Lisa on codified custom, 133–5 on dispute resolution, 103–8 empirical research, 208 on extra-legal norms, 74–5 on formalism in private legal systems, 208–13 ‘neoformalism’, 89–90 on private commercial law, 115, 131, 215–17 on standard forms, 206–7 Birks, Peter taxonomic conception of private law, 1–2, 16, 24, 27–36, 40, 244 ‘Brandeis brief ’ use of, 161 breach of contract see efficient breach business failure efficiency in relation, 108–9 capacity to contract generally, 158–9 issues summarised, 172 judicial regulation, 159–68 statutory regulation, 168–72 Charny, David on non-legal sanctions, 75–6 choice of law abolition of, 175 282 Index choice of law (cont.) as alternative to contract law, 87 automatic respect to, 177 contract terms as to, 112–13, 182–3 by corporations, 175–6 as evidence of parties’ expectations of contract law, 182–4 mandatory rules in relation, 174–5 option for, 94 quality considerations, 189, 215 reasons for choice, 184–9 specified choice, 201 co-operative law of contract see relational contracting Coase, Ronald theorem, 47–8, 51, 53–4, 56, 61, 72–3 Collins, Hugh on arbitration, 197 on commercial reputation, 75 contract law theory, 96–7, 138–9, 142, 144–5, 153, 162–8 on dispute resolution, 103–4, 107–8 on offer and acceptance, 221 commercial arbitration see arbitration commercial contract law see contract law commercial relationship efficient ending of, 108 commercial rules see private commercial law common law rules efficiency of, 163, 179–80 common mistake doctrine void contracts in relation, 240 compensation adequacy, 14, 249 awarded from profits, 16 corrective justice in relation, 25–6 full compensation limited, 15–16, 47, 249–50 liability, 135 mitigation as alternative, 47 for onerous contract terms, 152 penalty clauses in relation, 248–9 protection of ‘expectation interest’, 22, 45 ‘right to performance’ in relation, 252 supercompensatory remedies, 247–8 use of, 5–6 competence see capacity to contract confidentiality of arbitration, 165, 167, 191–2, 197, 199 arbitration as to confidential information, 193 consequential loss liability for, 135 consequential loss rule efficiency of, 249 consideration price regulation in relation, 150 consumer credit regulation efficiency of, 150–2 consumers honouring of contract, 147 contract formation contract liability in relation, 225 offer and acceptance in relation, 220–5 restatement of contract law, 219–28 contract law alternatives to see alternative dispute resolution (ADR); arbitration; mediation breach of contract see efficient breach characteristics of, co-operative law of see relational contracting core task, corporations in relation, 10–13 default rules see default rules European law see Draft Common Frame of Reference (DCFR); unfair terms, EU directive and regulations expectations see contracting parties formalism see formalism formalist restatement of see restatement below instrumentalism in relation see instrumentalism ‘interpretive’ research methodology, liability, 8–10 Macaulay’s theory see Macaulay, Stuart moral-promissory approach see moralpromissory approach optional nature, 91–4 relevance generally, 71 relevance questioned, 71–2 remedies, 13–17 restatement conclusion, 252–3 desirability questioned, 69–70 formation of contract, 219–28 general introduction to, 218–19 as to implied terms, 237–42 283 Index interpretation of contract, 228–37 prohibition of misconduct, 242–6 remedies, 247–52 social norms in relation, 72–8 social sciences in relation generally, 41–2 void contracts see entries at void see also capacity to contract; contract law minimalism; honouring of contract; relational contracting contract law minimalism choice of regimes, 112–13 concept generally, 89–90 dispute resolution in relation, 103–8 evidence in favour see contracting parties expectations of commercial parties, 94–8 extra-legal norms in relation see extra-legal norms general introduction to, 87–8 hypothesis, 98–103 limits of adjudication as key argument for, 159 mediation in relation, 193–6 optional nature of contract law, 89–90 scope, 108–11 support generally, 215–17 contract liability agency, 10–11 arbitration, 135–6 ‘assumption of risk’ approach, 135–6 business planning for, 95 commercial need for enforceable liabilities, 252 for consequential loss, 135 contract formation in relation, 225 of corporations, 3–4, 8–10, 17 criminal law in relation, 12 exclusion for misrepresentation, 246 exclusion of, 112–13 existence of data as to rates of, 170 imposition of, 105–6, 135–7, 185–6, 210–11, 219 limitation, 119, 136 non-contractual liability in relation, 225–8 performance in relation, 43–4 predictable amount of, 80–1 preservation of, 93 property law liability in relation, 48–9 redistributive rules of, 154, 156–7 signature as ground of, 224–5 source in ‘paper deal’, 245–6 strict liability establishment, instrumentalism in relation, justification of, phenomenon of, tradition of, 8, 133, 139–40, 245–6 tax in relation, 156 tort liability in relation, 25–6, 32, 156, 160, 170, 178–9 transaction costs grounds of, 49–50, 72–3 unfair terms in relation, 149–50 unfairness as to exclusion of, 112–13 variation in fault, vicarious liability, 10–11 contract terms acceptance, 221–2 ‘back of form’ terms, 78 choice-of-law terms, 182–3 choice of regimes as to, 112–13 classification ex ante, 233–4 compensation for onerous terms, 152 contracting-out of default terms, 55, 92–3, 109–10, 175 corporate communication and control in relation, 79 cost–benefit analysis applied to, 105–6 court-supplied terms, 102 courts’ approach, 96–7 customary rules in relation, 204–8 default rules as to, 218 disagreement over, 133–4 dispute terms drafting of, 101–2 non-use of, 79 drafting costs, minimisation, 197–8 efficient breach in relation, 45–6 enforcement, 52 formal approach to enforcement, 208–13 ignorance of, 221–2 implied terms breach of, 138 customary terms, 133 restatement of contract law, 237–42 imposed by forms, 223–4 interpretative issues, 136–7 knowledge of, 221–2 late payment, 81–2 mandatory rules, 149, 174–5 mimicking by efficient breach, 45–6 modifications legally binding, 134–5 non-use of dispute clauses, 80–1 as norm source, 198, 213–15 284 Index contract terms (cont.) as to observable matters, 105 opportunism-curbing, 137–48 penalty clauses and compensation in relation, 248–9 peripheral terms, fairness, 109, 149–50, 152 practices differing from, 134–5 scope of regulation, 109 sheltering behind, 79–80 unfair terms legislation, 110–12, 148–50, 177–8, 224–5 use of void, 78 contracting-out contract law obsolescence due to, 174 decision for, 101 of default terms, 55, 92–3, 109–10, 175 facilitation by minimalism, 116 contracting parties ADR usage, 189–91, 197–9 arbitration usage, 191–3 expectations as to contract law ADR usage as source of evidence, 189–91 choice of law as source of evidence generally, 175–6 parties’ choice, 182–4 reasons for choice, 184–9 design of efficient laws, 176–82 generally, 94–8, 173–5 minimalism hypothesis see contract law minimalism support for minimalist approach generally, 215–17 mediation usage, 193–6 norm creation by see extra-legal norms preference for formalism, 42, 60, 173–4, 182, 185–6, 197, 202, 213–17 contractual discretion unfairness as to, 138 ‘contractualisation’ efficiency of, 129–30 corporate profits compensation awarded from, 16 corporations arbitration usage, 191 choice of law, 175–6 communication and control in relation to contract terms, 79 contract law in relation, 10–13 contract liability of, 3–4, 8–10, 12, 17 expectations as to contract law see contracting parties fairness norms in relation, 59 as homo economicus, 55–6 lex mercatoria in relation, 202 liability for breach of contract, 3–4, 17 multinational litigation, 7–8 multinational oil arbitrations, 202 position in contract law, as relational contract, 65 reputational issues, 75 specific performance orders not made against, 13–14 standard form usage, 213 tax avoidance and redistributive contract rules, 156 unfair terms protection for small firms, 111 corrective justice as basis of private law, 1–2, 25–7 compensation in relation, 25–6 cost–benefit analysis of contract terms, 105–6 cost considerations formalism in relation, 198 courts see judicial regulation custom see extra-legal norms damages see compensation default rules contracting-out, 55, 92–3, 109–10, 175 efficiency of, 88–9, 99–100, 117–22 enforcement of relational norms effects, 125–31 practicability, 131–7 extent, 114–17 Hadley v Baxendale, 119 regulation of opportunism, 137–48 relational contracting in relation, 122–5 wealth redistribution via, 148–57 dispute resolution contract law minimalism in relation, 103–8 drafting of terms, 101–2 non-use of terms, 79 division of labour efficiency of, 62–3 Draft Common Frame of Reference (DCFR) critique, 36–8 as pan-European contract law, 1–2 economic analysis of law see law and economics economic efficiency see efficiency 285 Index economic integration efficiency from, 62–3 efficiency absence of contract, 129–30 of anti-opportunist terms, 147–8 assumption as to own rules, 92–3 business failure in relation, 108–9 of codified and of informal custom distinguished, 206 commercial and statutory rules contrasted, 200 of commercial norms, 200–1 of common law rules, 163, 179–80 concern for, 5–6 of consequential loss rule, 249 of consumer credit regulation, 150–2 context-specificity of, 211 of ‘contractualisation’, 129–30 of custom, 123, 206 of default rules of contract, 88–9, 99–100, 117–22 demand for ‘efficient’ laws, 182 discernment of, 238–9 and duty to mitigate, 15 from economic integration, 62–3 ending of commercial relationship, 108 ensuring contract efficiency, 204 fairness in relation, 154 goal of, 1, 114, 117, 158, 241–2, 252 of hierarchical organisations, 63 incentives for, insolvency in relation, 73–4 interaction of formal rules with relational norms, 131 judicial capacity to regulate, 159 judicial inefficiency and use of dedicated regulators, 168 law and economics focus on, 153–4 of lex mercatoria, 202 of minimalism, 89 of non-disclosure duty, 245 presumption as to standard forms, 224 principle of, 37–8 of remedies, calculation of, 247–8 in rule design, 181 of sanctions, 126 standard forms in relation, 207–8, 224 supply of efficient rules, 101–2, 115–16 taxation in relation, 154–7 theories of, 5–6 wealth redistribution in relation, 154, 156 see also law and economics efficient breach contract terms in relation, 45–6 economic analysis of, 26 efficiency of, 247–8 encouragement of, 10, 14, 23 inducing breach in relation, 17 performance in relation, 249 remedies in relation, 15 empirical analysis law and economics in relation, 50–3 enforcement of contract terms see contract terms European law see Draft Common Frame of Reference (DCFR); unfair terms, EU directive and regulations ‘expectation interest’ compensation for, 22, 45 expectations as to contract law see contracting parties extra-legal norms arbitration and custom in relation, 134, 174, 202–3 arbitration as source, 189–90, 198 codification, 204–8 contract terms as source, 213–15 customary practices differing from contract terms, 134–5 dispute-resolving norms in commercial practice, 197–9 efficiency of, 123, 131, 206 enforcement of relational norms effects, 125–31 practicability, 131–7 of fairness, 58–9 formalism, 208–13 as lex mercatoria, 199–204 social norms and contract law in relation, 72–8, 85–6 fairness of arbitration, 195–6, 204 assessment of, 242–3 assumption as to own rules, 92–3 consumers’ incentive, 147 definitional issues, 245 distributional fairness see wealth redistribution efficiency in relation, 154 embodied in contract law, 108 286 Index fairness (cont.) enforcement of, 59–60, 89, 108–11, 125, 142, 148, 157, 185–6, 241–2 enhancement of, 238 formalism in relation, 185–6 norms in relation to corporations, 59 norms of, 58–9 offer and acceptance in relation, 58–9 opportunism in relation, 147–8 performance in relation, 44–5 of peripheral terms, 149–50 pervasiveness in contract law, 219 presumption as to standard forms, 224 in public law, 19–20 quality considerations in relation, 182–3 relevance in commercial law, 91 self-interest in relation, 58–60 test of attitudes to, 58–9 see also unfairness fault see contract liability ‘flexible relationism’ arbitration in relation, 204 formalism in arbitration, 131, 173, 191–2, 215 as basis of private law, 1–2 commercial preference for, 42, 60, 173–4, 182, 185–6, 197, 202, 213–17 corporate communication and control in relation, 79 cost considerations, 198 custom in relation, 203–8 decline in arbitral practice, 204 in contract law, 158 divergence from practice, 82–5, 123–4 extra-legal norms, 208–13 formalist approach to interpretation, 123, 125, 136–7, 148 informality supposedly preferred, 69–70, 72–82, 85–6, 123–4, 130 late payments legislation, 81–2 minimal law of contract see contract law minimalism nature of contract law, 7–8, 186–8 ‘neoformalism’ and law and economics, 154 in private legal systems, 208–13 quality in relation, 189 as regulatory strategy, 167–8 restatement of contract law see contract law trust building in relation, 129–31 see also standard forms formation of contract see contract formation forms see standard forms Fried, Charles moral-promissory theory, 1–2, 26 full compensation see compensation Hadley v Baxendale efficiency of default rules, 119 Hart, H L A concept of law, 74 hierarchical organisations efficiency of, 63 Hobbes, Thomas on law and society, 67, 72, 98–9, 105, 124 homo economicus corporations as, 55–6 goal of efficiency, 252 honouring of contract arrangement binding in honour only, 226–7 codes of honour, 211 consumers’ incentive, 147 ‘dishonourable’ behaviour, 226–7 test of honour, 67 illegality illegal lending, 151–2 opportunism in relation, 141 implied terms see contract terms informality see formalism insolvency efficiency in relation, 73–4 instrumentalism contract law in relation generally, 1, 3–4 justifications for instrumental approach generally, 19–21, 38–40 preference over moral-promissory approach, integration efficiency from, 62–3 intention to create legal relations disclaimer of, 109–10 negation of, 175 interpretation of contract formalist approach, 123, 125, 136–7, 148 restatement of contract law, 228–37 Jordan v Duff & Phelps Inc regulation of opportunism, 145–6 judicial regulation approach to contract terms, 96–7 capacity to regulate efficiency, 159 287 Index contract law capacity, 159–68 inefficiency of, and use of dedicated regulators, 168 judicial control of arbitration abolition of, 181 absence of, 197 review of awards, 174–5 supply of contract terms, 102 see also adjudication late payment legislation as to contract terms, 81–2 law and economics critiqued generally, 43–50, 60 economic efficiency of default rules of contract, 117–22 emphasis on efficiency, 153–4 empirical analysis in relation, 50–3 ‘neoformalism’ in relation, 154 ‘rational actor’ theory critiqued, 53–8 self-interest theory critiqued, 58–60 see also Coase, Ronald; efficiency; Posner, Eric law of contract see contract law lex mercatoria codified custom in relation, 204–5 concept, 198 efficiency of, 202 extra-legal norms as, 199–204 uncodified norms of, 173–4 liability see contract liability; non-contractual liability litigation arbitration distinguished, 190 loans illegal lending, 151–2 loss efficiency of consequential loss rule, 249 Macaulay, Stuart contract law theory, 71, 78–85, 107, 121–4, 128–9, 146 MacNeil’s relational contract theory in relation, 66, 95–9, 124, 173, 223 Macneil, Ian relational contract theory, 49–50, 58, 64–9, 82–4, 95–9, 103–5, 124–5, 132–3, 143–4, 159, 173, 224 mandatory terms see contract terms mediation arbitration distinguished, 190, 193, 195 contract law minimalism in relation, 193–6 merchant arbitrators see arbitration minimalism see contract law minimalism misconduct restatement of contract law as to prohibition, 242–6 misrepresentation exclusion of liability for, 246 mistakes common mistake doctrine and void contracts, 240 mitigation alternative to compensation, 47 efficiency in relation, 15 moral-promissory approach defences, 1–2 influence, 1–2 instrumental approach preferred, Smith’s theory see Smith, Stephen A theories of contract, 21–4 multinationals see corporations neoclassical law and economics see law and economics ‘neoformalism’ see formalism non-contractual liability contract liability in relation, 225–8 non-disclosure duty efficiency of, 245 norms see extra-legal norms observable matters contract terms as to, 105 offer and acceptance contract formation in relation, 220–5 correspondence between, 78 fairness in relation, 58–9 overbidding in relation, 44–5 revocability of unaccepted offer, 81 rules of, 26 standard forms in relation, 207 oil arbitrations lex mercatoria in relation, 202 opportunism efficiency of anti-opportunist terms, 147–8 fairness in relation, 147–8 Jordan v Duff & Phelps Inc., 145–6 regulation by default rules of contract law, 137–48 overbidding offer and acceptance in relation, 44–5 288 Index parties to contracts see contracting parties penalty clauses compensation in relation, 248–9 performance contract liability in relation, 43–4 efficient breach in relation, 249 fairness in relation, 44–5 ‘right to performance’, compensation in relation, 252 specific performance orders, non-use against corporations, 13–14 peripheral terms see contract terms Posner, Eric law and economics theory, 24–5, 48, 50–3, 60, 73, 75, 121–2, 200, 214–16 Posner, Richard ‘Brandeis brief ’, 161 on Hadley v Baxendale, 119 on Jordan v Duff & Phelps Inc., 145–6 law and economics theory, 8–9, 27, 52–3, 119–21, 147–8, 152, 163, 166–7, 224, 244–5, 248–9 price regulation consideration in relation, 150 private commercial law business practice in relation, 104 definition, 115 dispute resolution, 165 dispute resolution rules in relation to arbitration, 174 efficiency, 123 formalism in private legal systems, 131, 208–13 importance of, 172 preference for, 208–9 relational contract theory in relation, 123 utility of, 115 see also standard forms private law bases of, 1–2 moral-promissory theories, 24–7 taxonomic approach, 1–2, 16, 24, 27–36, 40, 244 ‘private ordering’ concept overview, 76–8 ‘privatised’ law arbitration as, 174–5 profits compensation awarded from, 16 prohibition of misconduct restatement of contract law, 242–6 property law liability contract liability in relation, 48–9 public domain information as to arbitration, 199 public law fairness in, 19–20 quality considerations formalism in relation, 189 ‘rational actor’ theory critiqued, 53–8 redistribution of wealth see wealth redistribution relational contracting co-operative law of contract, 69–70 contract law doctrine in relation, 66–9 corporations as, 65 and default rules of contract see contract law efficient ending of relationship, 108 New Institutional Economics, 61–4 see also Macaulay, Stuart; Macneil, Ian remedies calculation of efficiency, 247–8 contract law, 13–17 efficient breach in relation, 15 phenomenon of, restatement of contract law, 247–52 see also compensation reputational issues of corporations, 75 restatement of contract law see contract law Richman, Barak D ‘private ordering’ concept, 76–8 ‘right to performance’ compensation in relation, 252 risk ‘assumption of risk’ approach to contract liability, 135–6 sanctions efficiency of, 126 Schwartz, Alan on default rules, 115–16 ‘neoformalism’, 89–90, 99–100 on rules and standards, 213–14 Scott, Robert ‘neoformalism’, 89–90, 99–100, 213–14 self-interest theory critiqued, 58–60 289 Index signature facilitation of unfair terms, 223–4 as ground of contract liability, 224–5 small businesses unfair terms protection, 111 Smith, Adam on efficiency of division of labour, 62–3 self-interest theory, 58 Smith, Stephen A moral-promissory theory, 1–2, 4, 26 on taxonomic conception of private law, 31–3 theory critiqued, 4–8, 17–18 social norms contract law in relation, 72–8, 85–6 social sciences contract law in relation generally, 41–2 see also law and economics specific performance orders non-use against corporations, 13–14 standard forms contract terms imposed by, 223–4 efficiency in relation, 207–8, 224 facilitation of unfair terms, 223–4 offer and acceptance in relation, 207 statutory regulation contract law capacity, 168–72 strict liability see contract liability tax avoidance by corporations redistributive contract rules in relation, 156 taxation efficiency in relation, 154–7 taxonomy private law, 1–2, 16, 24, 27–36, 40, 244 termination of relationship efficiency in, 108 terms of contract see contract terms tort law moral-promissory approach, 1–2 tort liability contract liability in relation, 25–6, 32, 156, 160, 170, 178–9 tort of inducing breach of contract efficient breach in relation, 17 trade rules see private commercial law transaction costs as ground of contract liability, 49–50, 72–3 trust building formalism in relation, 129–31 unfair exchange contract as, 241 unfair terms arbitration in relation, 177–8 contract liability in relation, 149–50 EU directive and regulations, 149–50 facilitation of, 223–4 inquiry into, 243 legislation, 110–12, 121, 148–9, 177–8, 224–5, 248–9 small businesses protection, 111 unfairness assessment of, 141 as to contractual discretion, 138 as to exclusion of liability, 112–13 measure of, 52–3 regulation of, 152 in standard forms, 207–8 see also fairness vicarious liability see contract liability Vogenauer, Stefan on choice of law, 187–9 on demand for law, 182–4 on state marketing of law, 176–82 void contract common mistake doctrine in relation, 240 void contract terms use of, 78 wealth redistribution contract liability in relation, 154, 156–7 efficiency in relation, 154, 156 fairness in relation, 108–9 tax avoidance and redistributive contract rules in relation, 156 via default rules of contract law, 148–57 Weber, Max on law and capitalism, 98–9 Weinrib, Ernest J corrective justice theory, 1–2, 24–7, 29, 33–6, 40 Williamson, Oliver relational contracting theory, 61–4 ... Library of Congress Cataloguing in Publication Data Morgan, Jonathan (Jonathan Edward) Contract law minimalism : a formalist restatement of commercial contract law / Jonathan Morgan pages cm – (Law. .. irrelevance of the law (of contract) ? 71 Part III Contract law minimalism Defining contract law minimalism, or the ‘new formalism’ Against regulation through contract law 114 The limited capacity of. .. instrumental approach 19 Part II Social sciences and the law of contract A critique of neoclassical law and economics 43 Relational contracting: trust, business and law 61 Extra-legal norms: