The Classical Legacy and Modern English Contract Law

Published date01 July 1996
Date01 July 1996
DOIhttp://doi.org/10.1111/j.1468-2230.1966.tb02103.x
REVIEW
ARTICLE
The Classical Legacy and Modern English Contract Law
Dona1
Nolan"
Jack Beutson and Daniel Friedmann (eds),
Good
Faith and Fault in Contract
Law,
Oxford: Clarendon Press,
1995,
xlviii
+
531
pp, hb
S55.00.
Introduction
Discussions about English contract law are characterised by a deep division of
opinion between traditional and critical contract lawyers. The gulf between the two
schools centres on their attitudes towards the classical model of contract, the
general theory of voluntary obligation which developed in the second half of the
last century. While the traditionalists
have
remained largely faithful to the classical
model, critical scholars have launched a sustained attack on central tenets
of
the
classical vision. As a result, the modem English law of contract, which owes its
existence as a coherent entity to the classical lawyers, threatens to abandon
the
belief system of its creators. There is considerable force in the radical critique of
classical contract law. But there
is
also
a
danger that the critical lawyers will end
up throwing the baby out with the bathwater.
For
much of the work of the classical
lawyers continues to
be
both relevant and valuable to modem contract law. The
challenge facing contract lawyers today
is,
therefore, to identify which features of
the classical law should
be
discarded and which retained.
The essays in the collection under review,
Good Faith and Fault
in
Contract
Law
(hereafter
Good Faith'),
indicate that three central aspects of the classical
conception of contract are in the firing line. First, the emphasis on the
independence and distinctiveness of contractual obligation. Secondly, the ideology
of freedom of contract and the prominence given by that ideology to the autonomy
of
the
contracting parties. And, finally, the ideal of a unified law of contract
characterised by rules
of
general application.
The independence
of
contract
A central aim
of
the classical project was to carve a clear contractual space out of
the general law of obligatiom2
So
the assertion that contract,
as
an independent
source of obligation,
was
in decline3
or
even dead4 represented a fundamental
*School of Law, King's College London.
I
am
grateful
to
Lionel Bently,
Mark
Lunney, Ken Oliphant and Adam Tomkins for their helpful comments
on
an earlier draft.
1
All
page numbers refer
to
Good
Faith
unless otherwise indicated.
2 Gilmore,
The
Death
of
Conrracr
(Ohio: Columbus Press, 1974) p 87.
3 See Atiyah,
The Rise
and
Fall
ofFreedom
of
Contract
(Oxford: Clarendon Press, 1979) pp 716-726;
cf his more recent comments in
An Introduction
ro
the
Law
of
Contract
(Oxford: Clarendon Press,
5th
ed,
1995),
at pp 27-34.
4
Gilmore,
op
cir
n2.
603
0
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July).
Published by Blackwell Publishers.
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and
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[Vol.
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challenge to classical theory. But
the
predictions of the ‘death
of
contract’ school
are not borne out by the experience of the last
15
or
20
years, during which
contract’s role
in
our society has expanded considerably. The political domination
of
the New Right has led to a massive shift from the administrative to the
contractual allocation of resources. The public sector has been subjected to the
rigours of ‘contractualisation,’ with the establishment of internal markets in
organisations such
as
the National Health Service.’ Provision of services is
increasingly ‘contracted-out’ to specialist firms in preference to in-house workers.
The privatisation of state-owned companies
has
transferred important industries
from the public to the private sector and contracts are required to link together the
scores
of
autonomous companies to which this process gives birth. Many of these
changes (such as privatisation and contracting-out) have led to a genuine
expansion in the domain
of
contract, while others have resulted in ‘quasi-
~ontractual’~ relationships which look like contracts and employ contractual
language, but are not in fact legally enforceable.’
The vitality of the contractual idea is also reflected in the way that contract is
used as a metaphor for the relationship between citizen and state.8 In the
UK,
the
Citizen’s Charter programme initiated by John Major is a recent example’ and, in
the United States in
1994,
the Republican party took control
of
both Houses of
Congress on the platform of a ‘Contract with America.’ On
a
more theoretical
level, the ideas which underpin the influential Communitarian movement have a
distinctly contractual flavour, emphasising as they do the need for reciprocity in
the citizedgovernment relation.l0
The classical contract lawyers created a separate contractual space by
conceptualising contract as an
institution
or thing, as opposed to a legal
response
to particular events.” Entry into the institution of contract was made subject to a
set of institutive rules (consideration, offer and acceptance, and
so
forth) which
delimited the contractual domain and served to differentiate contract from other
modes of legal ordering, most obviously tort. Two themes together serve to explain
these institutive rules. The first is that entry into a contract was to be voluntary:
legal institutions are facilitative rather than coercive, and only those who wish to
make use of them should
be
bound by their rules. The second theme is the
protection of detrimental reliance, which derives its importance from the role
contracts play
as
instruments of forward planning. The interplay of these themes
5
6
7
8
9
10
11
See generally Harden,
The Contracting State
(Buckingham: Open University Press, 1992).
This usage is unrelated to the now discredited description of restitutionary obligations
as
‘quasi-
contractual’: for
a
convincing attack on the terminology of quasi-contract
in
the restitutionary context,
see Birks,
An
Introduction
to
the
Law
of
Restitution
(Oxford: Clarendon Press, 1985) pp 29-39.
For example, the arm’s-length relationship between executive agencies created by the Next Steps
programme of civil service reform and their parent departments has been described
as
contractual ‘in
every sense but the technical one’: Freedland, ‘Government by Contract and Public Law’
[
19941 PL
86,
88.
See
also
the ‘contracts’ between GP fundholders and hospital trusts: National Health Service
and Community Care Act
1990,
s4(3), discussed by Hughes, ‘The Reorganisation of the National
Health Service: The Rhetoric and Reality
of
the Internal Market’ (1991) 54 MLR
88.
This is true of other relationships too; see eg Pateman,
The Sexual Contract
(Cambridge: Polity Press,
1988).
See Barron and Scott, ‘The Citizen’s Charter Programme’ (1992)
55
MLR 526.
See eg Etzioni,
The Spirit
of
Communify: Rights, Responsibilities and the Communitarian Agenda
(New York: Times Books, 1994), at p263
(‘At
the heart of the Communitarian understanding of social
justice is the idea of reciprocity’).
On legal institutions, see MacCormick, ‘Law
as
Institutional Fact’ (1974)
90
LQR 102; and
MacCormick and Bankowski, ‘Speech Acts,
Legal
Institutions and Real Laws’ in MacCormick and
Birks (eds),
The Legal Mind
(Oxford: Clarendon Press, 1986).
0
The Modem
Law
Review Limited
1996
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