Private Law Theory

ABSTRACT
Which determinants of inequalities of bargaining power between contracting parties’ ought to be legally relevant? The answer depends on our theory of contract. Most will agree that inequalities that erect procedural impediments to freely negotiated agreements are problematic. For those who view contract law as an instrument for maximizing social welfare or as a site of pure procedural justice such inequalities will be the main or exclusive focus. But if morally valid contracts are the parties’ expression of duties they owe one another as a matter of justice, this is an unsatisfying stopping point. The law should care not only about inequalities that facilitate the exploitation of persons’ lack of market opportunities to extract terms better than could be obtained in a competitive market, but also about the exploitation of disadvantages arising from systemic background injustice.

Stone, Rebecca, The Inequality of Bargaining Power Principle (January 4, 2024). UCLA School of Law, Public Law Research Paper No 24-2; Research Handbook on the Philosophy of Contract Law (Prince Saprai and Mindy Chen-Wishart eds, Edward Elgar Publishing, Forthcoming).