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The Objective Standard of Interaction in Contract Law: The Reasonable Person

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Reasonableness and Responsibility: A Theory of Contract Law

Part of the book series: Law and Philosophy Library ((LAPS,volume 101))

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Abstract

In this chapter, I claim that contractual interactions should be approached from the perspective of thereasonable person. This chapter develops in more detail the idea of the reasonable person. I show how it can be used to explain several contractual doctrines. In particular, I argue for an objective test of contract formation and against a subjective account. Finally, against both communitarian and feminist objections, I argue that this Rawlsian idea provides a better justification for the legitimate use of state coercion.

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Notes

  1. 1.

    See, in general, Rawls, “Justice as Fairness: Political But Not Metaphysical,” inJohn Rawls: Collected Papers,ed. Samuel Freeman (Cambridge: Harvard University Press, 1999), 388.

  2. 2.

    Under this conception of persons, people also have the capacity for a sense of justice, that is, the capacity to understand, to apply, and to act from the public conception of justice. Seeidem at 233.

  3. 3.

    Rawls,Justice as Fairness—A Restatement (Cambridge: The Belknap Press of Harvard University Press, 2001), 24.

  4. 4.

    John Rawls,Political Liberalism (New York: Columbia University Press, 1993), 53.

  5. 5.

    Idem at 50.

  6. 6.

    Idem at 54.

  7. 7.

    See Bruce Chapman,Rational Choice and Reasonable Interactions (2006), 81 Chicago-Kent L. Rev. 75 at 79.

  8. 8.

    Arthur Ripstein,Equality, Responsibility, and the Law (Cambridge: Cambridge University Press, 1999), 206.

  9. 9.

    It has been suggested to me that while my discussion of objective versus subjective standards for contract enforcement is based upon a particular understanding of the subjective standard, there are other possible ways to interpret this idea. For example, subjective accounts of contracts maynotentail enforcing one party’s private understanding over that of another, as I suggest; rather, where the two parties’ subjective understandings do not match, there simply is no agreement because no party’s understanding is given priority. The English caseRaffles v. Wichelhaus((1864) 2 H & C 906) has been put forward as an example of this alternative interpretation. In this famous case, the plaintiff had agreed to sell the defendant cotton that would arrive from Bombay to Liverpool on a ship called “Peerless.” The problem was that there wasn’t just one ship with that name. One of the Peerless ships would arrive in October and the other one in December. The defendants argued that they had intended to accept the cotton that was shipped in the October Peerless, but not the cotton shipped in December. When the December Peerless arrived, the defendants refused to buy. The plaintiffs argued that whether the cotton had been shipped in October or in December was irrelevant because the purpose of naming the ship in the contract had been to make the contract void in case the ship were to sink before reaching its destination. The court finally held for the defendants. It stated that the parties had failed to reach an agreement because, for there to be one, the parties must agree on what is being contracted; otherwise, there cannot be a binding contract. Now, I think that pointing to a case likeRafflesdoes not present a strong objection to my approach because, precisely, this case reveals that, when the parties have different subjective understandings of their interaction, and a subjective approach is adopted, one of the parties prevails. InRaffles, the court decided that the defendant’s account of the interaction, rather than that of the plaintiff’s, was right. A different reading of the case would say that, from an objective account of their interaction (and regardless of what each of the parties separately thought they were doing in common), there was no agreement. I am grateful to an anonymous reviewer for pressing me on this point.

  10. 10.

    O. W. Holmes,The Common Law [1881] (Boston: Little Brown, 1963), 86–87.

  11. 11.

    See Bruce Chapman,supra note 7 at 78; Arthur Ripstein,supra note 8; Catherine Valcke, “The “Common Will” of Offer and Acceptance” (2005), Nexus Magazine at 37.

  12. 12.

    See Peter Benson, “Philosophy of Property Law,” inThe Oxford Handbook of Jurisprudence and Philosophy of Law,ed. Jules Coleman and Scott Shapiro (New York: Oxford University Press, 2002), 752 at 786, n. 50.

  13. 13.

    (1871). L.R. 6 Q.B. 597.

  14. 14.

    See Chapman,supra note 7 at 79. For an example of the subjective approach, seeDickinson v Dodds, (1876), 2 Ch. D. 463 (C.A.), which is sometimes taken to be an example of a subjective theory of contracts and of contract formation in particular. In this case, the court held that no contract of sale had been formed between the parties because, at the time when the offeree purported to accept the offer, he already knew that the offeror no longer intended to sell to him. The private intentions of the parties were externally observable in the case. The offeree, Dickinson, had been informed by someone else that Dodds, the offeror, had offered or had agreed to sell the property to someone else. Although the offer had been withdrawn, Dickinson had not yet been formally notified by Dodds. The fact that it was not Dodds but someone else who had informed Dickson of the withdrawal was considered irrelevant.

  15. 15.

    I borrow this idea from Catherine Valcke, “Comparative Law as Comparative Jurisprudence—Objectivity and Subjectivity in the English, French, and German Law of Contractual Mistake” (Paper presented to the Special Workshop on Ethics, Economics and the Law at the XXII World Congress of Philosophy of Law and Social Philosophy, May 2005) [unpublished].

  16. 16.

    Ibid.

  17. 17.

    J. Chabas, De la declaration de volonté en droit civil française 81–82 (Syrey, 1931), cited in Valcke,supra note 15.

  18. 18.

    For this objection, I rely on R.A. Duff, “Choice, Character, and Criminal Liability” (1993), 12 Law and Philosophy 345 at 381. In that essay, Duff discusses—although not at length—individualist and communitarian conceptions of criminal responsibility. I find Duff’s explanation of some of the basic communitarian tenets useful for the point I am trying to develop.

  19. 19.

    Idem at 382.

  20. 20.

    Stephen Mulhall and Adam Swift, “Rawls and Communitarianism,” inThe Cambridge Companion to Rawls,ed. Samuel Freeman (Cambridge: Cambridge University Press, 2003), 460.

  21. 21.

    Idem at 471.

  22. 22.

    Supra,note 18.

  23. 23.

    Idem at 362.

  24. 24.

    Idem at 382–383.

  25. 25.

    This argument has also been made by non-communitarian writers. See, for instance, S.A. Smith, “Performance, Punishment and the Nature of Contractual Obligation” (1997), 60 Mod. L. Rev. 370.

  26. 26.

    See, in general, Dori Kimel,From Promise to Contract—Towards a Liberal Theory of Contract (Oxford: Hart Publishing, 2003).

  27. 27.

    Rawls,supra note 4, at 139–40, 217. For a discussion of this point, see Stephen Mulhall and Adam Swift, “Rawls and Communitarianism”supra note 292 at 466.

  28. 28.

    Rawls,supra note 4 at 50.

  29. 29.

    Idem at 146, n. 13 cited in Mulhall and Swift,supra note 20 at 468–469.

  30. 30.

    See, in general, Mayo Moran,Rethinking the Reasonable Person (Oxford: Oxford University Press, 2003). For an interesting review of Moran’s book, see Jeremy Horder, “Can the Law Do Without the Reasonable Person?” (2005), 55 U. Toronto L.J. 253.

  31. 31.

    Ibid.

  32. 32.

    Ripstein,supra note 8 at 6–8.

  33. 33.

    Ibid.

  34. 34.

    Rawls,supra note 4 at 23.

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Hevia, M. (2013). The Objective Standard of Interaction in Contract Law: The Reasonable Person. In: Reasonableness and Responsibility: A Theory of Contract Law. Law and Philosophy Library, vol 101. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-4605-3_7

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