The No Retraction Principle and the Morality of Negotiations

Abstract

The central philosophical puzzle about contract law involves the ground upon which contractual obligation arises. Omri Ben-Shahar's intriguing essay, Contracts Without Consent: Exploring a New Basis for Contractual Liability, proposes a new theory of contractual liability and contains the seeds of an appealing new approach to this puzzle. In place of the traditional agreement-based conception of contractual liability under which, as Ben-Shahar says, "a contract forms only when the positions of the two parties meet, Ben-Shahar proposes a new regime. His proposal imagines that offers and counteroffers generate a converging sequence of liability, under the principle that "[a] party who manifests a willingness to enter into a contract at given terms should not be able to freely retract from her manifestation." Ben-Shahar's contribution to the philosophical foundations of contract does not figure prominently in his own presentation of this principle of "noretraction," however, which emphasizes an economic approach. Indeed, Ben-Shahar expressly admits that "[i]t is beyond the scope of [his] Essay to inquire into the philosophical underpinnings of the non-rejectability of an individual's own representations." I shall therefore devote these pages to bringing out some of the philosophical ideas that are immanent in Ben-Shahar's view but that are not emphasized in his own account of this view. Although these ideas differ markedly from my approach to the philosophical foundations of contract, I shall not, in the main, try to test Ben-Shahar's views against my own. I prefer, instead, to present a sympathetic reconstruction of Ben-Shahar's position.