Justice and Harsh Results: Beyond Individualism and Collectivism in Contracts

Abstract

The strict enforcement of contract terms can have harsh results. Whether a court should enforce harsh contractual terms has generally been addressed from either an individualist perspective (i.e., Charles Fried, Randy Barnett), in which individual autonomy is given priority, or a collectivist perspective (i.e., P.S. Atiyah, Richard Posner), in which social values are given priority. Both individualism and collectivism are descriptively and normatively flawed approaches to the problems presented by harsh contractual terms. The individualist approach requires the enforcement of any terms upon which the parties agree, leading to a sacrifice of justice. But the collectivist approach disregards the will of the parties, leading to a sacrifice of the individual. A Thomist approach, however, combines the strengths and avoids the weaknesses of individualism and collectivism by holding that contracts are voluntary normative relationships, and emphasizing the necessity of promise-keeping as a means for promoting the common good.This article considers these issues in the context of the famous contracts case Jacob & Youngs v. Kent, in which Judge Benjamin Cardozo’s majority opinion represents the collectivist perspective and Judge Chester McLaughlin’s pointed dissent represents the individualist perspective. Jacob & Youngs has never been analyzed from a Thomist perspective, and this article demonstrates that such an approach yields an analysis superior to that of either an individualist or collectivist approach to the case.Also, this article demonstrates that Jacob & Youngs was wrongly decided on the basis of material misrepresentations of fact and law. This article corrects important misunderstandings about this canonical case, many of which have been perpetuated by prominent authors over the years.