Gregory Klass’s article, What Might Contract Theory Be?, was published in the collection, Understanding Private Law, a volume honoring Stephen A. Smith, the eminent Contract and Private Law Theory scholar who passed away far too young (shortly before this volume’s publication). Klass’s article focuses on an influential discussion in the first chapter of Smith’s influential work, Contract Theory.1 In that chapter, Smith sets out the criteria he believes should be used to evaluate theories of contract law. In particular, Smith offers four criteria: fit, coherence, morality, and transparency.2 In Klass’s discussion, he asks good, probing questions of each of Smith’s categories and the way that Smith applies them. (Pp. 183-89.) However, Klass’s most important challenge may be the following, general one: should a theorist of contract law (or other doctrinal areas of law) be essentially an outside spectator to the practice, or essentially a (kind of) participant in the practice?
Whether theorists should be (or should treat themselves as being) participants or observers has been an active dispute for some time in the related area of general theories about the nature of law. Many of the best-known theories of law take primarily an observer’s attitude towards the subject – law, legal norms, the legal system. At the same time, at least since the work of H. L. A. Hart, they have simultaneously given significance to the “internal point of view,” the fact that some of those in the practice accept the law (as giving them reasons for action).3 By contrast, Ronald Dworkin presented a theory of law, and an approach to theorizing about law, in which the theorist is a participant in the practice, and “no firm line divides jurisprudence from adjudication or any other aspect of legal practice.”4 Hart’s response to Dworkin on this matter was simple: that whatever value there might be to a theory built entirely from an insider’s perspective, “there is an important place for general and descriptive jurisprudence”.5
As Klass reports, Smith, in Contract Theory, takes Hart’s position for contract law theory: endorsing incorporating the internal point of view (P. 182),6 but combining this with a participant’s perspective. By way of critique, Klass argues that, at least for common law jurisdictions (like the United States), where judges have both the authority and the responsibility to alter and improve the law while resolving individual disputes, the theorist should take the participant’s perspective, not a spectator’s perspective. (P. 190.)7 The judge and the lawyer considering a question of contract law – in particular, if it is a question of first impression or if there is a reasonable argument for revising existing law – will argue in terms of a “rational reconstruction” of precedent. Rational reconstruction takes the prior decisions and re-characterizes them in a way that makes them as good as they can be relative to the justifications of that area of law, or relative to the justifications for law generally. Such rational reconstruction, it can be seen, requires, or at least benefits from, the sort of resources one could find in a theory of contract law: views about the overall objectives of contract law as well as the intermediate-level objectives of various contract law doctrines and principles. So the theorist of contract law effectively is doing the same thing as the advocate or the judge: “participa[ting] in the shared project of using available materials to achieve the best possible law of contract”. (P. 191.)
How we should best understand and evaluate theories of doctrinal areas of law remains an underdeveloped area of legal philosophy. Stephen Smith offered an important early analysis, and Gregory Klass has now contributed valuable refinements to Smith’s views. But Klass’s article also raises new questions. For example, if Klass’s argument is tied to the nature of common law decision-making, does that mean that one might (should) have an entirely different theory of contract law for civil law legal systems?
- Oxford U. Pr., 2004.
- Smith, Contract Theory at 7.
- H. L. A. Hart, The Concept of Law, a56-58, 88-91 (3rd ed. 2012).
- Ronald Dworkin, Law’s Empire, 90 (Harvard, 1986).
- Hart, The Concept of Law, 243.
- See Smith, Contract Theory at 15.
- Klass endorses Smith’s rejection of Dworkin’s position, not (in Klass’s case) because Dworkin takes an insider’s perspective, but based on why (according to Klass) Dworkin takes that perspective. As Klass puts it, Dworkin believes that “one must participate in a legal practice to understand it,” while Klass characterizes his own view as being that “the theorist might want to do more than render the law intelligible. They might also want to make it better.” (P.190.)
