Where the Action Is: Macro and Micro Justice in Contract Law

DOIhttp://doi.org/10.1111/1468-2230.12518
Publication Date01 Jul 2020
AuthorZhong Xing Tan
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Modern Law Review
DOI: 10.1111/1468-2230.12518
THE
MODERN LAW REVIEW
Volume 83 July 2020 No. 4
Where the Action Is: Macro and Micro Justice in
Contract Law
Zhong Xing Tan
In contemporary private law theory the relationship between ‘macro’ theories of distributive
justice and the ‘micro’ site of interpersonal transactions remains under-explored. In this paper, I
draw on the ‘macro’ theory of justice articulated by John Rawls and offer an account of ‘micro
contractual justice’ that helps us understand how the micro domains of contracting introduce
particular relational constraints on the infusion of distributive considerations into contract
law, resulting in constrained conception of ‘relational Rawlsianism’ operating in contractual
domains. My framework providesa bridge between the macro and micro, helping us understand
how they are in various senses separate yet interlocking, and also provides a ‘third way’ between
all or nothing positions on the place of distributive justice in contract.
‘[T]he correct regulative principle for anything depends on the nature of that
thing ...’
1
INTRODUCTION
When John Rawls declared that ‘Justice is the first vir tue of social institutions,
as truth is of systems of thought’,2he appeared to have in mind a ver y specific
notion of justice, despite the grand sweep of his assertion. More accurately,
one might say that Rawls was contemplating ‘macro’ questions of distr ibutive
justice – those which concern the devising of fair and effective schemes of social
cooperation and the allocation of resources among groups and communities.
Assistant Professor, Faculty of Law, National University of Singapore. I am grateful to Andrew
Halpin, James Penner, Mike Dowdle, Arie Rosen, Nicole Roughan, Justin Tan, Andrew Simester,
Yip Man, Goh Yihan, Lusina Ho and other participants of the 2nd Asian Private Law Workshop
(May 2019) held at Hong Kong UniversityFaculty of Law for thoughts and comments on the project.
My thanks are also due to the anonymous referees for their invaluable suggestions. The title of this
paper takes a leaf out of the book of G.A. Cohen, ‘Where the Action Is: On the Site of Distributive
Justice’ (1997) 26 Philosophy and Public Affairs 3.
1J.Rawls,A Theory of Justice (Cambridge, MA: Harvard University Press, rev ed, 1999) 25.
2ibid,3.
C2020 The Author. The Modern Law Review C2020 The Modern Law Review Limited. (2020) 83(4) MLR 725–760
Where the Action Is: Macro and Micro Justice in Contract Law
What is the connection between ‘macro’-level distributive justice and con-
tract law – the normative landscape concerning ‘micro’-level bilateral trans-
actions between individuals? The distinction between the ‘macro’ and ‘micro’
has often been alluded to by various commentators, though the precise de-
marcation point between the two domains remains elusive. Reiter refers to
‘macro’ organising principles of society in contrast to the ‘micro’ domain of
private individuals’ law-making;3Ramsay contrasts ‘macro’ questions of the
distribution of power and societal resources with ‘micro’ questions of credit
regulation;4while Wertheimer distinguishes political questions of justice from
the wrongfulness of transaction-based exploitation.5Insofar as the distinction
might possess some value, we might take it as a point of departure for a more
textured understanding of the operations of distributive justice.
In contemporary private law theory, the leading normative accounts have
at times failed to give this question the attention it demands. Rights-based
and corrective justice theorists often see distributive justice as an exclusively
macro issue, with the micro being limited to the rectification of wrongs.6
At the opposing end, critical and progressive scholars tend to eschew a clear
conception of distributive justice at either the macro or micro level, preferring
to invoke the ter minology of ‘tensions’ such as individualism versus altruism,7
or community versus contract.8This paper is animated by the thought that
these accounts do not adequately capture the nature of distributive justice as it
operates in the macro and micro spheres,or br idge the gap betweenthe two. My
starting point for considering the movement between the macro and micro is
the liberal egalitarian position that John Rawls articulated in A Theory of Justice,9
Political Liberalism10 and Justice as Fairness: A Restatement.11 This arguably remains
the dominant conception of justice in the contemporary liberal tradition and
functions as the pivot around which the literature on distributive justice has
flourished, be it at the level of the family, state or global community. The
micro domain I will explore is the law of contract. My inquiry into this
intersection between the Rawlsian and contract law literatures is assisted by
the work of a number of prominent commentators, including Kronman,12
3 B.J. Reiter, ‘The Control of Contract Power’ (1981) 1 OJLS 347, 348.
4 I. Ramsay, ‘Consumer Credit Law, Distributive Justice and the Welfare State’ (1995) 15 OJLS
177, 179.
5 A. Wertheimer, Exploitation (Princeton, NJ: Princeton University Press, 1996) 6-7.
6 Generally stated, though there are various details that differ between accounts: see E.J. Weinrib,
Corrective Justice (Oxford: OUP, 2012); A. Ripstein, Private Wrongs (Cambridge, MA: Harvard
University Press, 2016); A. Beever, Rediscovering the Law of Negligence (Oxford: Hart Publishing,
2007).
7 D. Kennedy, ‘Form and Substance in Private Law Adjudication’ (1976) 89 Harvard Law Review
1685.
8 R. Unger, The Critical Legal Studies Movement: Another Time, A Greater Task (London: Verso,
2015) ch 6.
9 Rawls,n1above.
10 J. Rawls, Political Liberalism: Expanded Edition (New York, NY: Columbia University Press,
2005).
11 J. Rawls, Justice as Fairness: A Restatement E.I. Kelly (ed) (Cambridge, MA: Harvard University
Press, 2001).
12 A. Kronman, ‘Contract Law and Distributive Justice’ (1980) 89 Yal e L aw J ou r na l 472.
726 C2020 The Author. The Modern Law Review C2020 The Moder n LawReview Limited.
(2020) 83(4) MLR 725–760
Zhong Xing Tan
Kordana and Tabachnick,13 Scheffler,14 and most recently, Freeman,15 who
have at different times and through overlapping arguments worked to advance
the macro Rawlsian conception of justice into the micro domain of contract,
a view which I shall call expansionism.
My goal is to present a more refined account of the relationship between
macro and micro justice by engaging with the expansionist thesis, and
identifying where these commentators have gone astray in assuming that
Rawlsian justice, without appropriate constraint or modification, works as a
normative conception of contractual justice.16 In broad strokes, my thesis is
as follows. Micro justice concerns the operation of distributive considerations
in the micro-transactional sphere of contract. As compared or contrasted with
macro justice in the Rawlsian account, the scope of micro justice is subject,
firstly, to a relative positionality constraint, which suggests that considerations
of justice have application depending on the relative situational positions of
contracting parties, which may or may not map up to structural group-based
disadvantages at the societal or macro level. Secondly, the site of micro justice is
subject to an interpersonal proximity constraint: as contract concerns an interper-
sonal site of interaction, obligations of justice are only triggered if a particular
disadvantage comes within a contracting party’s sphere of competence or
‘neighbourhood’, such that she has the ability and opportunity to respond, as
contrasted with the site of macro justice which concerns background institu-
tions through which society-wide redistributive aims are achieved. Thirdly, the
sense or content of micro justice is subject to a reciprocity constraint: as different
domains of contract involve relationships with varying degrees of reciprocity,
the content of contractual justice may vary from a Rawlsian baseline of what
we owe eac h oth er qua citizen in the macro realm, to more demanding norms
of cooperation and sharing of burdens and benefits qua contracting parties.
Micro justice in contract thus emerges as a constrained conception of
Rawlsian distributive justice in the context of a contracting relationship, sen-
sitive to the positions of the parties involved, the capacity of a would-be
advantage-taker to respond to conditions of disadvantage, and the normative
landscape shaping the bargain. In short, micro justice works as a form of
‘relational Rawlsianism’. The normative framework I offer provides a bridge
between the macro and the micro, and helps us understand how they are in
various senses separate yet interlocking.
In the final part of the essay I will shift gears to highlight how the micro
justice account of relational Rawlsianism is better able to handle a number of
13 K.A. Kordana and D.H. Tabachnick, ‘Rawls and Contract Law’ (2005) 73 George Washington
Law Review 598, 632.
14 S. Scheffler, ‘Distributive Justice, the Basic Structure and the Place of Private Law’ (2015) 35
OJLS 213.
15 S. Freeman, Liberalism and Distributive Justice (New York, NY: OUP, 2018) ch 5.
16 My account is hence not meant to be exhaustive, and in this paper references to ‘justice’ are
limited to the Rawlsian distributive tradition. I do not seek to engage directly with other
monistic accounts such as those in the law and economics ‘efficiency-maximisation’ tradition,
or pluralistic accounts that seek some balance between autonomy, community and efficiency,
see further P. Saprai, Contract Law Without Foundations (Oxford: OUP, 2019) and H. Dagan and
M. Heller, The Choice Theory of Contracts (Cambridge: CUP, 2017).
C2020 The Author. The Modern Law Review C2020 The Moder n LawReview Limited.
(2020) 83(4) MLR 725–760 727

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