The Methodological Commitments of Contemporary Contract Theory

Jody S. Kraus, Columbia Law School


Autonomy and economic theories of contract seem to provide incompatible accounts of contract law. In this Chapter, I argue that what appear to be first-order disagreements over particular contract doctrines are really implicit second-order disagreements reflecting the divergent methodological commitments of autonomy and economic theories. I argue that autonomy theories accord priority to the normative project of justifying existing contract doctrine, treat contract law as consisting in the plain meaning of doctrine, require contract theory to explain the distinctive character of contract law, and take the ex post perspective in adjudication. In contrast, economic theories accord priority to the positive project of explaining existing contract theory, treat contract law as consisting in the outcomes of cases, strive to explain away, rather than explain, the distinctiveness of contract law, and take the ex ante perspective in adjudication. I demonstrate how the apparent disagreements between autonomy contract theories, such as Charles Fried's and Peter Benson's theories, and economic theories, such as Charles Goetz and Robert Scott's contract theory, reflect these opposing methodological commitments, rather than direct disagreements over particular contract doctrines. I also demonstrate that these theories' opposing perspectives in adjudication do not, as Richard Craswell has famously argued, necessarily disable all autonomy theories from addressing the problem of contractual gaps. I conclude that genuine progress on the first-order questions of contract law can be made only by first identifying and then adjudicating the methodological disagreements between different kinds of contract theories.