Contract Law and the Legislature

Autonomy, Expectations, and the Making of Legal Doctrine

TT Arvind, Jenny Steele, TT Arvind, Jenny Steele

• Publisher: Hart Publishing
• Year: 2020
• ISBN:
  9781509926114
• Edition: 1
• Topic: Diritto
• Subtopic: Diritto contrattuale

This volume revisits some of the key debates about the nature and shape of contract law, in light of the impact that statutes have had on its development. With contributions from leading contract law scholars, it fills a significant gap in existing theoretical and doctrinal analyses of contract law, which rely primarily on cases to put forward accounts of the general principles and structure of contract law. Statutory rules are, typically, seen as being specific instances of legal regulation that carve out exceptions to these general principles for specific reasons of policy. This treatment of these rules has resulted in an incomplete understanding of the nature of contract law and the principles that underpin it. By drawing specifically on contract statutes, the volume produces a more complete picture of modern contract law. A companion to the ground-breaking Tort Law and the Legislature: Common Law, Statute and the Dynamics of Legal Change (Hart Publishing, 2012) this collection will have a significant impact on the study of contract law.

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Introduction: Legislation and the Shape of Contract Law

TT ARVIND AND JENNY STEELE

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I.Contract and the Missing Legislature: Implications

Conventional theoretical accounts of contract law are skewed towards cases. Statutes have tended to feature sparsely, if at all, in accounts of the structure of contract law or of the fundamental principles of contract doctrine. Typically, they have been seen as providing a set of glosses on the general principles (that emerge from the case law), or as carving out exceptions to those general principles for specific reasons of policy – for example, to protect groups such as consumers or employees. Statutes may be seen as dealing with special cases, rather than the general core of contract. Or they may be seen as having limited shelf life, and minimal influence in any broader sense. For enduring principles and the core of what contract is about, the usual message is that we should look to the cases. So far as statutes are concerned, we should simply be aware of what they do to alter this general picture.

The focus of private law scholarship has begun to shift in recent years, as private lawyers begin to devote rather more attention to statutes. If spelled out expressly (rather than simply being implicitly allowed to frame the debate), the traditional view described above would not now be so widely accepted. This volume is published, therefore, at a time when scholarly interest in statutes is growing.¹ Nevertheless, the implications of this growing interest for particular areas of private law remain to be worked through. In an earlier collection on the role of legislation in tort law, we explored some possible reasons for the general exclusion of legislation from the study of tort; and emphasised what inclusion of statutes showed us about the dynamics of legal change and development.² Our concern was, in part, that accounts of the historical development of tort treated the study of statutes as belonging almost to a different discipline, so that statutes were cast as extraneous influences on the law of tort. Behind the present collection, which turns our attention to the law of contract, is a slightly different set of concerns.

Again, we suggest that a focus on statutes does more than raising a series of interesting but discrete questions and problems. But in the present volume, the emphasis is less on the history and development of the law – though naturally, historical accounts do feature in the collection. Part of the difference in focus is explained by the fact that contract is generally considered to be a more cohesive subject than the law of tort, dealing with one particular form of relationship. In this collection, our main concern is with the impact of incorporating statutes when seeking to identify the core features and essential nature of the subject that is defined as the law of contract. Paying attention to statutes raises the very real possibility that the subject is in fact less cohesive and less subject to articulation in terms of a few guiding principles than is often supposed. For example, it is a distinctive aspect of this collection that it incorporates a number of socio-legal studies of diverse contexts in which the law of contract is currently pressed into service. These essays, in the final part of the volume, encourage consideration of the different ways in which contract law might intervene in markets or seek to pursue other regulatory goals. The chapters between them, as we will explain, show that the tendency to sideline statutes has been inclined to create a reductionist picture of the core features and concerns of the law of contract. The cohesiveness of the subject is to some extent revealed to be overdone, and identifying the ‘core’ of contract becomes more difficult. Nor is this just a matter of the picture being muddied by particularist intervention into a small number of sectors. Statutes have been influential in shaping the law in virtually every sector of contracting. The purpose of this volume, taken as a whole, is to provide windows through which to revisit some of the key debates about the very nature and shape of contract law in the light of the impact that statutes have had on its development. The volume raises the question of whether focusing specifically on contract statutes produces an altered picture of the shape of contract law and identification of a different and more complex set of ‘core’ concerns. Between them, the chapters in this volume offer an unambiguous ‘yes’ in answer to this question.

In this introductory chapter, we begin, in section II, by outlining the key themes and questions taken up by the contributions to the volume. We identify three significant gaps which these contributions begin to fill in exploring the role of contract statutes. We then begin to sketch out how the contributions, when put together, alter our understanding of the contours of contract as a subject. In section III, we illustrate how these contributions call into question some key features of the traditional approach to studying contract law. We suggest that attention to a broad range of contract statutes challenges not just doctrinal accounts of contract, but also the theoretical apparatus we use to discuss the structure and foundations of contract law. In particular, a thorough integration of statute into our picture of the law of contract calls into question the apparent centrality of party ‘autonomy’, which has seemed to lie at the heart of contract theory. A concluding chapter presents a new approach to mapping contract theory, which is able to accommodate the full diversity of perspectives introduced by the present chapters, rather than defining some of them simply in terms of a contrast with a received view of the core of contract.³ In this Introduction, we articulate one aspect of the changed agenda suggested by the contributions, and begin to build a new way of assessing the success or failure of contract law’s regulation of transactions, given the altered concerns revealed by bringing statute squarely into the frame. Assessed purposively, what is it that the law of contract attempts to do? And what factors will tend to lead to success, or failure in these goals?

This is, of course, a step that not all contract scholars will be equally willing to take. Some would be reluctant to accept a regulatory analysis of the law of contract, preferring to approach the subject in terms of simple rules of interpersonal engagement, or in terms of a simple set of rules necessary to support spontaneous private ordering. Our concluding chapter tackles this issue head-on. In that chapter, we use the lessons learned from the various contributions to suggest the limitations of simple approaches, and to elaborate in more detail some of the diverse regulatory guises that contract may take. There, we argue that once statutes are taken into account, contract law can be seen to be built on a view of contractual transactions which incorporates at least four distinct types or views of transactions. We suggest that a number of the problems that are currently encountered in practice in relation to contract law are a result of the failure of contract scholars as well as judges and legislators to capture this diversity, tending to treat just one category as forming the core of the law of contract.

Overall, therefore, we conclude this collection by arguing that this broader picture of contracting points towards a reconsideration of the singular role played so far by the idea of party autonomy in contract theory. Through the enriched picture of the law of contract produced by the contributions as a whole, a broader range of evaluative considerations can be recognised, which will enable scholars to capture the normative complexity and richness of modern contract law. In this Introduction, we begin to explain how the various chapters contribute an appreciation of this greater complexity to study of contract law.

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II.Putting Statutes at the Core: Three Key Themes

We suggested above that there has been relatively little attention devoted to the variety of ways in which common law and statute interact within the law of contract. In this section, we suggest that there are three fundamental gaps in the way the statutory role of contract law is currently approached. Seeking to address these gaps has helped to inform the structure of the volume.

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A.The Long-term Impact of Statutes

In conventional doctrinal contract scholarship, statutes are not treated as telling us anything significant about the general principles of contract law. They create singular exceptions to general principles, but do not themselves have a long-term impact on those general principles, or the general approach of the law to contracting. The study of legislation in the field of contract, in consequence, almost by definition occupies the periphery rather than the core of contract scholarship. Little if any attention is paid to different ways in which statutes may affect the path of the law; the paths to development they close off; other paths they may open; and the impact they have on the tools available to the law when new situations arise.

It is precisely this that is the focus of all the chapters in Part I of the book, in which the contributions consider the long-term effect of contract statutes on the development of contract doctrine, including in ways that are unlikely to have been intended by their drafters. One set of chapters considers the way in which the creation of a statutory remedy, or a statutory right, affects the development of pre-existing common law remedies (Burrows),⁴ both generally, and in specific relation to consumer protection legislation (Paterson and Bant).⁵ Here, the underlying purpose of the legislation may have significant and expanding effects, sometimes by analogy, in the development of the law. Statutory purposes are, so to speak, embraced by the common law. Indeed, as Burrows points out, many statutes rely at least partially on the pre-statutory common law surviving, so that statutory values are unavoidably woven into the fabric of the common law. Nevertheless, as both contributions discuss, the failure of judges and jurists to fully consider the importance of this relationship has sometimes led to the courts choosing to freeze or ossify the common law, rather than develop it in a way that recognises a common purpose which common law and statutory rights or remedies are intended to serve. Here, a theoretical distinction between statutory and common law sources is arguably too rigidly maintained by the courts, at least in certain contexts.

A second set of chapters shows almost the reverse outcome. These chapters focus specifically on the unexpected, unforeseen and unpredictable ways in which nineteenth century attempts to address the problems caused by having separate courts of common law and equity has shaped the substantive law of contract, looking in particular at Lord Cairns’ Act (Arvind and Steele)⁶ and the Judicature Acts (MacMillan).⁷ In these instances, the changes wrought may be long-lasting and even dramatic, and yet these do not reflect the ambitions or purposes of the legislation. The outcome is more far-reaching than the intention. How do we typify the relationship between the legislature, and the developing law in the courts, in these instances? One answer is to focus on the empowering aspect of these statutes, as they enable the courts to develop new substantive legal tools. The empowering role of legislation can easily be overlooked given the tendency to favour substantive accounts of the law over accounts based on the roles and motives of different institutions. Ironically perhaps, giving less emphasis to the role played by the legislature (a specific set of actors with specific motivations) can lead to broader effects from legislation, as courts simply absorb and develop the tools that have been offered to them, as though the origin of such tools is a neutral factor. The legislature here makes possible, or acts as catalyst for, some far-reaching developments in the substantive law, but a perspective which is dominated by substance over process, institutions, or historical development, will tend to minimise awareness of the profound influence of legislation. As MacMillan points out, this can give a quite false sense of the inevitability of the content of the law of contract, which is at odds with the contingency of its development.

A final chapter by Swain looks at the complex challenges posed by a series of partial contract codifications in New Zealand.⁸ The process of these reforms was very different from the nineteenth-century developments charted in the chapters by MacMillan and by Arvind and Steele, the reforms emanating from recommendations of a modern Law Reform Committee. Rather, Swain invites us to consider how bold and long-lasting the seemingly modest reforms inspired by the Committee actually are. In breaking down the barriers between representations and contractual terms, and between contractual rights and remedies, Swain argues that the long-term impact of the reforms put together is more considerable than may at first appear: the changes are ‘radical reform done quietly’. In common with the above chapters...