Doing Deals with Aristotle - Today

Abstract

Just like the consumer who has no interest in the vendor's "terms-in-the-box," modern contract law is stuck between a rock and a hard place. The rock is that the law is built on a paradigm of contract behavior that we all now agree is outdated. The hard place is that many contract theorists, especially law-and-economics scholars, believe that there is nothing contract law can or should do about it - just like that consumer and the terms-in-the-box.

This article proposes a fresh way forward: Aristotelian just exchange. Paradoxically, the Aristotelian standard for what makes an exchange just—"each benefits, but neither at the expense of the other"— is what modern contractors already strive to do. Emerging economics research, not well-known in law, proves it. Existing contract scholarship either ignores this research, or believes it’s not relevant to law. This is a missed opportunity.

This article shows both how people and firms really contract, and explains how what they are already doing is, in key respects, Aristotelian. The article then shows what contract law might look like if it were reimagined to analyze the deals contractors strive to make: agreements where each benefit, but neither at the expense of the other. To make this concrete, the article considers a thoroughly modern problem in contract law —whether to enforce later-coming "terms-in-the-box," which require no affirmative assent from the recipient. In the end, I conclude that we shouldn’t give up on law; instead, we should actively rethink what we expect from contract law analysis.

Keywords: relational contract behavior, transaction cost economics, behavioral economics, jurisprudence, contract