Erik Encarnacion, ‘Contract as Commodified Promise’

Abstract:
Many assume that lawmakers should design contract law with the goal of facilitating commercial promises, but neglect the question of which promises qualify as a commercial in nature. This Article argues that this question matters more than one might initially expect. Once we understand commerciality in terms of commodification — roughly, treating something as subject to market norms — surprising recommendations for reform follow. First, if contract law should enforce commodified promises, we should demote the consideration doctrine to a presumption of enforceability rather than a formal requirement. Second, we should adopt a rule, contrary to current doctrine in most jurisdictions, that intending to make a promise legally binding renders it presumptively enforceable. Beyond these reforms, understanding contracts as commodified promises also provides a new lens through which to view recurring debates about the limits we place on the power to contract, including limits on enforcing donative promises, remedies, and efficient breaches. We can even understand the 2008 financial crisis as caused in part by over-commodifying promises. In short, this Article shows how debates about the moral limits of markets, which might have seemed peripheral to contract theory, belong at its very core.

Encarnacion, Erik, Contract as Commodified Promise (March 1, 2017). Vanderbilt Law Review, forthcoming.

First posted 2017-03-04 07:19:58

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