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The Art of Promise and Power of Contract

Dori Kimel, Personal Autonomy and Change of Mind in Promise and in Contract, in Philosophical Foundations of Contract Law 96 (Klass, Letsas & Saprai eds., 2015).

For philosophers of private law, a central puzzle is to explain how people’s voluntary acts of promising and contracting can produce genuine obligations. One popular class of answers points to personal autonomy—or the capacity, real or hypothetical, to bind one’s will through free acts of self-legislation. For those who believe in personal autonomy and its value, there may seem to be relatively few puzzles about promise or contract. Indeed, promise and contract might seem to offer easy cases.

These initial impressions can, however, be misleading. Whether promise and contract can be grounded in concern for personal autonomy will ultimately depend on what personal autonomy is, why it is valuable, and how promise and contract work. While autonomy-based accounts of promise and contract have proven enormously popular in the legal literature, this popularity has not always been matched by sufficiently close attention to these foundational questions. One of the things I appreciate most about Dori Kimel’s work in Personal Autonomy and Change of Mind in Promise and Contract is that he offers an uncommonly rich description of personal autonomy and its value. Rather than exaggerating the ease with which personal autonomy can be used to explain various details of promise and contract, Kimel faces the difficulties head on.

To suggest some difficulties, let me start with three puzzles. Each will figure in my later descriptions of Kimel’s work.

  1. Both promise and contract are cases of strict liability. They give rise to obligations of performance in the first instance, regardless of fault and hence regardless of the quality of the breaching party’s will. If, however, personal autonomy is a capacity to bind one’s will, then shouldn’t contractual and promissory obligations bind nothing more than the will? Why, then, do both seem to guarantee outcomes like performance in the first instance, regardless of fault?
  1. Both promise and contract give rise not only to primary obligations (to perform) but also to secondary obligations (to repair). In neither promise nor contract, however, do parties have complete discretion to choose the reparative obligations that attend to breaches. These reparative obligations can also be quite onerous: often they require performance, or at least a substitute, regardless of fault. Hence, something more than free choice—at least as popularly construed—is needed to explain the full ways the will is bound by promises and contracts.
  1. Both promises and contracts give the promisee (or other contracting party) the authority to demand or waive compliance. This authority is relatively unbridled: it can be exercised with a broad range of attitudes, from generosity to spite. Hence, this authority can be used in ways that undermine the personal autonomy of the original promisor (or contracting party) without any deep autonomy gain to the person with the authority.

These puzzles share a common theme. Each reveals a way in which promissory and contractual obligations may be too onerous to reflect a simple concern for personal autonomy.

But why assume that the concern is simple? Kimel counteracts this assumption by offering a much richer description of personal autonomy than is common in the legal literature. He acknowledges—as surely he must—that personal autonomy involves a capacity to author one’s moral universe through acts of self-legislation. He also agrees that promise and contract can provide useful mechanisms for this self-achievement. Still, Kimel locates one of the central values of personal autonomy in its capacity to help people shape the deep personal relationships and foundational life projects that require some commitment but can help produce meaningful lives. In his words, some exercises of personal autonomy—like those that shape “long-term projects, careers, and relationships”—concern “the meaningful, the lasting, the profound—those choices that can truly be said to be the ones through which a person’s life acquires the particular character and meaning that it has.” (P. 97.)

Self-imposed commitments can thus contribute greatly to the value of personal autonomy. There is, however, a further question as to just how onerous these commitments should be to serve this purpose. Self-authorship of a meaningful life would appear to require both some capacity to commit and some permission to change one’s mind. Kimel explains that:

without straying into the realm of conceiving the self as perpetually fragmented, we can sometimes observe that certain choices that a person has made at some point in the past are now, in quite a profound sense, “no longer hers”; or, indeed, consider a person who remains unwaveringly true to past commitments which no longer meaningfully relate to her present vision of how she ought to live as anything but a model of personal autonomy in action.

(P. 100.)

It will thus help to distinguish two different types of changes of mind that might be prohibited. On the one hand, there are those changes that would, if prohibited by the right moral and legal rules, enhance people’s capacity to self-author coherent and meaningful lives. On the other, there are those changes that would, if prohibited by overly onerous demands, undermine that very same capacity. As is so often the case, the trick will be to get the delicate balance right. Otherwise, promise and contract may sometimes be onerous enough to threaten personal autonomy on its best construal.

Of course, this discussion raises a difficult question as to where precisely to draw the line between these two types of changes of mind. Kimel does not offer any general answer to this question, but he does not need to for current purposes. It is enough to observe that one cannot simply assume, without reflection, that the line is best rendered at the extreme pole that permits no changes of mind. Selves grow and evolve—not just in fragmented and adventitious ways but also in coherent and meaningful ones. These facts greatly complicate questions of how self-authorship should be understood to relate to promises and contracts.

So let us return to the three puzzles mentioned at the start of this essay with the aid of this more nuanced description of personal autonomy. Some of these puzzles should seem less mysterious but others more so. For example, because personal autonomy’s value lies in part in its capacity to help people shape meaningful personal relationships, it should be less mysterious why promises and contracts create special relationships that give promisees (or other contracting parties) the authority to demand or waive compliance. At the same time, however, it should be more puzzling why this authority is relatively unbridled. If no norms govern this authority, then its exercise need not be sensitive to fault; to the norms that sustain special personal relationships (and help give personal autonomy its value); or to changes of mind that might enhance personal autonomy if allowed. Unbridled authority can thus threaten personal autonomy.

Rather than shrink from such difficulties, Kimel highlights them in beautifully precise fashion. He then goes on to suggest ways in which promise and contract might be less onerous than they initially appear. His goal is to try to square promise and contract with a concern for personal autonomy, properly construed.

For example, with respect to the first puzzle (concerning strict liability), Kimel points out that one can promise to try to perform rather than to perform. Hence, whether fault is relevant to promissory breach is itself a matter of choice by the promising party. The same is true with respect to contract. Hence, the semblance of strict liability in promise and contract may be overwrought. Turning to the second puzzle (concerning the non-voluntary and seemingly onerous nature of reparative obligations in promise and contract), Kimel points out that the content of reparative obligations in morality and law is rarely under parties’ complete subjective control. Although the content of these obligations might appear overly onerous in promise and contract, at least in contract this content has a relatively straightforward connection to the will: upon breach, one is typically required either to perform or to place the victim in as good a position as if the chosen performance had occurred. Kimel argues—persuasively enough—that this is most likely true of promise as well. These facts thus soften the objection.

Turning to the third puzzle (concerning the relatively unbridled discretion that promises and contracts give to other parties to demand or waive compliance), Kimel observes that promises are often embedded in thick personal relationships that express people’s personal autonomy. (I will turn to contracts in a moment.) These relationships are, in turn, typically governed by their own internal norms, which help give them—and hence many exercises of personal autonomy—their special value. These norms can generate independent claims on promisees’ conduct, which limit the ways that promisees should exercise their otherwise-unbridled promissory authority to demand or waive compliance. Because these norms help explain personal autonomy’s value and why commitment is consistent with freedom, these limitations will often be sensitive to considerations of fault and changes of mind that are autonomy-enhancing. To illustrate with an everyday example, while loving relationships might typically require commitment, love can also require that one set one’s partner free if circumstances change enough that neither party is capable of continued fulfillment in the relationship. These requirements are separate from any that arise from promise, and they are not necessarily inconsistent with the requirements of love.

But what, then, of contract? One of Kimel’s most important observations is that contracts typically arise without the thick relational background that makes many promises less threatening to personal autonomy. As he puts the point:

parties to contract are invited to relate to each other predominantly as parties to contract; the relational background, in this instance, is at best a contingency: much of the very point of the institution is the way in which it avails itself to those who are not already interlocked in meaningful personal relationships.

(P. 113.) Now, this is probably a bit of an overstatement, given the relational aspects of commercial arrangements that people like Stewart Macaulay have famously highlighted. Still, there is no doubt that an important disanalogy exists. Indeed, one of the special freedoms of the marketplace, in which most contracts are embedded, is the freedom to choose without having to justify one’s choices to other persons. Although this freedom may be less expansive in the context of deep personal relationships—in part because this freedom would interfere with the distinctive value of deep personal relationships—commercial relationships seem to me to preserve much more of this peculiar market freedom. Hence, the commercial norms that Macaulay describes often involve requirements like good faith and fair dealing, but rarely the full commitments of friendship or marriage.

Still, a clear implication of the discussion thus far is that contract law may well pose a bigger threat to personal autonomy than promise. Just as he did with promise, Kimel offers several suggestions to resolve these tensions. For reasons I will explain, I do not believe these suggestions are quite as strong. This is not necessarily a criticism of Kimel, however, because I get the sense that he too has less conviction about contract. Still, it will be useful to consider his suggestions.

As an initial matter, Kimel points out that contract law is less onerous than it could be in common law jurisdictions because it focuses on bilateral exchanges as opposed to unilateral gifts. This limitation allows for more changes of mind and hence might be viewed as autonomy preserving—at least insofar as “[i]t is plausible to think that entirely unreciprocated undertakings are particularly likely to become the object of a change of mind, or that the capacity to act on a change of mind of this sort merits particularly robust protection.” (P. 114.) But is the first assumption really so plausible when so many people change their minds every day about the value of ordinary products they have purchased? And even if the first assumption were plausible, considerations like these should at most ground a legal rule of thumb—not a rule as general as the common law consideration requirement (even given its well-known exceptions). With respect to the second assumption, unilateral promises can also further deep commitments and foster special personal relationships that might be impossible if one were to require a quid pro quo. Hence, it is not all that clear that changes of mind that arise after unilateral promises typically merit special protection. Given what autonomy is, I worry, finally, about the view that one can autonomously guarantee outcomes (like performance or its fair market value), as opposed to autonomously binding the will. Whereas relational norms may help cure this problem in relation to promise, it is less clear that they do so when it comes to contract.

Another suggestion that Kimel makes is that expectation damages, which are the standard remedy for contractual breach, give contracting parties the option to pay damages in lieu of performance. This fact might be understood to be autonomy enhancing because it preserves a greater ability to change one’s mind. Expectation damages thus soften other parties’ unbridled authority to demand performance. When changes of mind occur in market contexts, these changes are, moreover, less likely to undermine the deep personal relationships and commitments that give life meaning. Still, if personal autonomy really requires broader permission to change one’s mind in commercial contexts, then why not limit damages to reliance damages? If—as we are presently assuming—these changes of mind really are autonomy enhancing, then reliance damages would at least ensure that the other party suffers no harm. Does the other party really have an autonomy interest in more?

In my view, problems like these will remain so long as contract is viewed too closely on the model of promise. Given his extraordinarily rich descriptions of the role that personal autonomy can play in shaping meaningful lives, Kimel rightly suggests that promising should be understood as an art if is to capture this value. He then says that contract should be understood on the same model, but I am less sure. As I explain in Contract as Empowerment, 83 U. Chi. L. Rev. 759 (2016), I think contract may be closer to a power—and, in particular, a power to use promises to influence others’ actions in circumstances that reasonably require the legal enforceability of a promise for the influence to work. Especially among relative strangers in the modern marketplace (and hence in the absence of thick personal relationships that can generate sufficient trust), legal enforceability is sometimes needed for promissory commitments to influence others’ actions. This fact explains why legal (and not just moral) authority to demand compliance might be needed. See id. This explanation only applies, however, to promises that seek to induce a return promise or performance from another party—and, hence, to promises that are supported by consideration and involve bilateral exchange. See id. (also explaining why some promissory estoppel claims, which have hidden consideration, are therefore rightly treated as warranting expectation damages, whereas others should be limited to reliance damages).

Importantly, to influence action in this context, contracting parties often need to give their counterparties an assurance of more than just reliance damages in the event of non-performance. See id. Parties must typically provide a legal assurance of either performance or its fair market value—regardless of any fault for non-performance. See id. An assurance of this kind is also sufficient to influence action in most commercial settings. These facts explain why contract law, viewed as a power, focuses on expectation damages and not more. See id. If contract is a power that is specially adapted to the modern marketplace, it should therefore tend toward the strict liability we see; it should involve reparative obligations that focus on expectation damages and are not completely subject to parties’ control; and it should give other contracting parties relatively unbridled authority to demand or waive compliance—subject only to the relational duties of good faith and fair dealing.

So construed, contract law gives people a power, and hence a freedom, that they would not otherwise have in the marketplace. To the extent that contract law is empowering in this sense, its rules are ones that each could freely agree to be bound by on the condition that all others similarly agree. Hence, many otherwise puzzling features of contract can be understood to promote personal autonomy. But unlike promises—which may well preserve this connection by facilitating special relationships “that have the propensity to shape a life, make it into the kind of life that it is” (P. 99)—contracts rarely involve anything so momentous. The value of contractual empowerment seems to me lie elsewhere: in its giving ordinary people, and sometimes certain associations (like churches or corporations), the ability to meet their many varied needs and interests through the modern marketplace. Contract is not more important than promise because of this fact. It is not exactly less. It is just different.

Herein lies the key to understanding how contract law might be genuinely squared with concern for personal autonomy. Kimel is nevertheless surely right about another point. He warns that “[i]t cannot be assumed too casually that by facilitating the capacity to make legally-binding agreements—by creating a law of contract—the state invariably enhances rather than endangers the personal autonomy of those who may deploy it.” (P. 115.) Whether the dimension of personal autonomy that contract law promotes is closer to what Kimel identifies in promise or what I see in contract, one must therefore continue to ask whether the right connection exists in practice. I worry about this in the information age because corporations increasingly attach mass boilerplate to consumer contracts and courts increasingly enforce many terms that are rarely read or understood by consumers. These terms are rarely subject to consumers’ meaningful influence or choice. In these circumstances, much of what passes as “contract enforcement” may therefore be too disempowering and too onerous to promote personal autonomy.

Cite as: Robin Kar, The Art of Promise and Power of Contract, JOTWELL (June 13, 2016) (reviewing Dori Kimel, Personal Autonomy and Change of Mind in Promise and in Contract, in Philosophical Foundations of Contract Law 96 (Klass, Letsas & Saprai eds., 2015)), https://juris.jotwell.com/the-art-of-promise-and-power-of-contract/.