Contract Law : A Fundamental Concept Of Relational Contract

2490 Words10 Pages
Whither Contract Law? Contract law is a fundamental concept of relational contract theory, it plays an important role in business and has always been an important topic for discussion in sociology, economy, commercial studies, and other sciences, though the term “contract” can have various meanings, it is most often used to denote methods of conducting exchanges, it implies planning the bargain with careful forecasting of its potential consequences and also the use of legal sanctions to ensure the success of the exchange or compensate for its failure. However, contract should not be equaled to the exchange procedure itself, it also should not be applied exclusively to written agreements and documents that accompany the transaction.…show more content…
The main concern of this frame is identification of duties and rights that are made explicit in formal papers, accepted standards, and other documents required by contract law. In Geoffrey Miller paper "Bargains on the Red-Eye: New Light on Contract Theory", two other approaches to the concept of contract law were introduced. The article discusses formalist and contextualist distinction in contract theory on the example of New York and California contract law . New York uses formalist approach, this methodology attributes considerable importance to the form of the contract, New York judges take critically any attempts to change contracts in order to make them more equitable, the written contract is considered to be rigid and is supposed to have only one interpretation. California uses contextualist approach, this implies that contracts can be rejected or re-written if it is required because of moral reasons or public policy needs, contract is aimed at the identification of the parties’ commercial relationships in the context of maximal justice, reason, and equity. However, both approaches have a common view on freedom of contract, contractual freedom is fundamental to the formal approach, it is reflected in the impossibility to violate private arrangements, even though they might be rather inequitable, transactions cannot be reformed to achieve justice or fulfill moral duties since
Open Document