This chapter deals, first, with the divergence between the way we talk about contract law and actual contract experience. Second, the chapter considers some implications of this divergence, and of current contracting practices, for how we should think about our obligation to keep contracts and how the government should regulate contracts. To some extent, the exploration is one regarding what role theory can and does play and whether our current theories of contract law might be doing more to legitimate unjust practices than to explain the doctrinal area.

THE GAP BETWEEN IDEAL AND REALITY

The ideal of freedom of contract (and its corollary, freedom from contract) is that one takes on contractual liability to the extent, and only to the extent, that one has freely chosen to do so. This is an ideal that is not always fully realized, for a variety of reasons, many of them relatively “innocent” and uncontroversial – for example, the move from subjective to objective tests for formation and interpretation, and some grounds for liability that have some but not all the elements of a valid contract (e.g., promissory estoppel, promissory restitution, and unjust enrichment). These modifications have been imposed to serve interests of economic efficiency and/or fairness.