Justifying Fair Price Rules in Contract Law
8 Pages Posted: 1 Aug 2015
Date Written: July 30, 2015
Abstract
This article discusses the introduction of a general “fair price rule” in (European) contract law. According to such a rule, prices that create a “significant imbalance in the parties’ rights and obligations” would not bind the disadvantaged party. Justifying this rule cannot be avoided by holding, as Martijn Hesselink does, that in light of a “reasonable pluralism of worldviews,” the issue is one which a democratically elected lawmaker has to decide. A welfarist (economic) conception of justice best explains the existing (European) rules on contract formation and price, and it also casts a long and dark shadow over a general “fair price rule.”
Keywords: Fair Price Rules, Laesio Enormis, Contract Law, Justice, Efficiency
JEL Classification: K12
Suggested Citation: Suggested Citation