Contracts as Plans

This Article offers an original theory of contract law that draws from recent work in the philosophy of action and legal theory. Human beings are essentially planning creatures. Making plans and following through with them is crucial to everyday practical reasoning, both for individuals acting alone and individuals acting together. This somewhat intuitive point was not fully appreciated in the philosophy of action as recently as twenty years ago, when Michael Bratman began to point out the inadequacies of the then-dominant view of rationality. Recently, Scott Shapiro has been applying Bratman’s insights on practical reasoning to debates in legal theory to great effect, developing what he calls the planning theory of law. According to the planning theory, laws are plans for citizens, developed and applied by legal institutions to solve coordination problems that result from individuals living together in otherwise unplanned communities.In this Article, the author proposes a new theory of contract law informed by these insights. First, the author surveys the current leading theories of contract and explains why a new theory is needed. Then, he argues that viewing contracts as plans designed to solve a particular coordination problem better accounts for how we are able to make exchanges over time, even in situations where the parties involved might otherwise not be able to trust one another. A planning theory of contract law takes the view that whatever ends a society might want to achieve, those ends are more likely to be achieved if the parties have the ability to create contracts, that is, to adopt legally obligatory plans to make exchanges. The theory does not seek to justify a particular body of contract law. Rather, as the author argues, it explains the fundamental doctrines of our current law better than the presently available theories.By viewing contracts as plans, it becomes clear that a better understanding of planning brings a better understanding of contract law. It follows that advances in the philosophy of practical reasoning as it treats plans also bring insight into contract law. In the final Part of the Article, the author shows how these insights go beyond an accurate description of the established central doctrines of contract law and can lead to a better resolution of more controversial issues. The author also gives a few indicative examples that offer suggestions for further study. At the very least, the author hopes to establish that contract scholars should pay attention to scholarship on practical reasoning just as they have long studied moral philosophy and economics.

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