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Abstract
Contract is the quintessential legal institution of a market economy, but the contemporary philosophy of contract law is dominated by promissory and autonomy theories that tend to treat contract's role in facilitating commerce as little more than a happy accident. It is thus striking that in his ambitious effort to generate a purely transactional theory of contract law Peter Benson places markets at that center of his account of transactional fairness. His argues that the abstract equality of contracting parties requires equality of exchange, an equality mediated by the just price. Echoing the scholastic tradition, Benson identifies the just price with the competitive market price. We thus have a fascinating example of an anti-functionalist, anti-distributive theory of contract that nevertheless incorporates the market as an important theoretical element. In this essay, I evaluate Benson's use of markets, placing it within both the broader discussion of markets in contract law theory and in the larger argument that he is making about contract law. Ultimately, Benson justifies the appeal to markets not because of any attractive distributional features of competitive prices but because such prices have a formal structure that satisfies the demands of Benson's formal theory. It is an ingenious and subtle argument. However, I am not ultimately persuaded. While I think that the rule for unconscionability cases that Benson extracts from his concept of equality of exchange is defensible, I am not persuaded by Benson's formal approach to the fairness of markets. Rather, I will argue that competitive markets often do not have the formal features that Benson ascribes to them. Furthermore, a key aspect of his understanding of transactional fairness is best understood as resting on an attractive distributional feature of competitive markets rather than on their formal structure.