by “Freedom to contract” is one of the pillars of libertarian economic theory (the other being “protection of private property rights”). The principle of freedom to contract suggests that government should avoid regulating private transactions because the individual parties to contractual agreements are in the best position to judge the value of their bargain and possess the moral freedom to make their own bargains.
Many conservative Christians take an essentially libertarian approach to freedom of contract. For example, the Acton Institute for the Study of Religion and Liberty, a think-tank with strong Catholic ties, states on its website that “[p]rivate property and the freedom to contract are fundamental human rights, as each person is entitled to enjoy the fruits of his labor.” Theological grounds for this perspective include the inherent worth of the individual as created in the image of God, and the sinful tendency of people with governmental power to abuse that power.
In my judgment, these are valid notions, but they are not the whole story. In his chapter “The Christian Sources of General Contract Law” in the splendid Christianity and Law: an Introduction, pioneering law-and-religion scholar Harold Berman traced Western contract law to its medieval canon law roots. As Berman explained:
In subsequent centuries, many of the basic principles of the canon law of contract were adopted by secular law and eventually came to be justified on the basis of will-theory and party autonomy. It is important to know, however, that originally they were based on a theory of sin and a theory of equity. Our modern Western contract law did not start form the proposition that every individual has a moral right to dispose of his property by means of making promises, and that in the interest of justice a promise should be legally enforced unless it offends reason or public policy. Our contract law started, on the contrary, from the theory that a promise created an obligation to God, and that for the salvation of souls God instituted the ecclesiastical and secular courts with the task, in part, of enforcing contractual obligations to the extent that such obligations are just. (Christianity and Law, at 132).
This broadly social notion of contracts was modified, Berman noted, during the Puritan era. The Puritans’ strong notion of total depravity made them less willing to place the authority to determine which obligations are “just” in the hands of a magistrate. Moreover, the Puritans’ emphasis on order inclined them to seek the meaning of contractual documents in the literal words of the document rather than in an overarching contractual hermeneutic of justice.
However, even for the Puritans, “private” contracts were social obligations within the all-inclusive fabric of God’s covenantal relationships with people. Private contractual relations were not really “private” — they were covenantal relations between people who were also bound in covenantal relation to God. As Berman explained,
the Puritan stress on bargain and on calculability (“order”) should not obscure the fact that the bargain presupposed a strong relationship between the contracting parties within the community. These were not yet the autonomous, self-sufficient individuals of the eighteenth-century Enlightenment. England under Puritan rule and in the century that followed was intensely communitarian. (Id. at 140).
In the Eighteenth and Nineteenth Century Enlightenment, these theories of contract based on justice and covenant were secularized. Justice and covenant were replaced with “the inherent freedom of each individual to exercise his own autonomous reason and will, subject only to considerations of social utility.” (Id.) These Enlightenment ideas “broke many of the links not only between contract law and moral theology but also between contract law and the comunitarian postulates which had informed both Catholic and Protestant legal traditions.” (Id. at 140-41).
It is a shame, I think, that contemporary Christian discourse about law seems to focus so heavily on notions of individual freedom to contract that seem more post-Christian than Christian. We seem to be left with two options: the current prevailing secular legal theory of contracts, which is strictly realist and pragmatic and elides any notion of higher values, and the religious right’s libertarian view of contract, which elevates the individual far above the community. I agree with Berman: “[w]e may learn from history . . . that there is a third possibility: to build a new and different theory on the foundation of the older ones.” (Id. at 141).
I can’t speak to “contemporary Christian discourse about law” but I will say there are in fact more than the “two options” cited here. While “reliance” and “transfer” contract theories are realist if not pragmatic (as is all the ‘law and economics’ inspired stuff) in s pejorative sense, this is not necessarily the case with “promissory” theories, going back of course to Charles Fried’s classic exposition, Contract as Promise (1981) but found as well in Aristotelian versions (cf. Thomas Gordley). Even classical contractarian political theory as far back as Hobbes is minimally moralist (and perhaps more than that if we accept the recent expositions of Hobbes’s moral and political philosophy by S.A. Lloyd). Now while some promissory contract accounts are clearly, in the end, consequentialist or conventionalist, not all of them are, for example, and arguably, Scanlon’s.
Indeed, historically speaking, the dominant tradition takes contract law to be normatively based on the prior moral notion of a promise and the nature of promissory obligation. Although not in fashion today, a recent example of a work in this genre is Stephen A. Smith’s book, Contract Theory (2004). And an “autonomy” based theory NEED NOT be in the form of a libertarian apology, as some ethical theories, for instance, those of eudaimonistic provenance, subscribe to a robust notion of moral autonomy but one in conjunction with equally robust conceptions of (moral) community and the common good.
Finally, in addition to Smith, Seana Valentine Shiffrin has initiated a renewal of the promissory theory tradition as part of her broader argument that “law should accommodate the needs of moral agency. Although the law should not aim to enforce interpersonal morality as such, the law’s content should be compatible with the conditions for moral agency to flourish” (please see her article, ‘The Divergence of Contract and Promise,’ Harvard Law Review, Vol. 120 (2007): 708-753).
I should have said I presume secular legal theory need hardly forswear any notion of “higher values,” as is seen, for instance, in the secular natural law tradition (from the Stoics through Grotius and evidenced in international law justifications of jus cogens norms and in the recent work of Larry May), in aretaic legal theory (Larry Solum), or in the work of Nigel Simmonds (cf. Law as a Moral Idea, 2007) or Neil Duxbury (cf. his discussions of the significance of ‘golden rule’ reasoning). As the late Iris Murdoch made clear, the invocation of “higher values” is not the monopoly of religions, Christian or otherwise,” as the Platonic account of the Good makes clear (or the later Stoic conception of divine reason for that matter).
Erratum: “as evidenced in the Platonic account of the Good(or the later Stoic conception of divine reason for that matter).”
I would hope any Christian discourse about law applicable to contract theory would be sensitive to the gross disparities in power and knowledge between “bargaining” parties: as between, say, (individual and unorganized) workers and corporations or consumers and corporations…. This would help address the attenuated notion of freedom intrinsic to “freedom to contract” ideology but so as to maintain a commitment to freedom consonant with equality: as in equal distribution of the capacity of “freedom to” and “freedom from”…analogous at the international plane to requiring as a condition of assent to free trade the terms of “fair” trade….