The Maze of Contemporary Contract Theory and a Way Out.

This article critically examines contemporary contract theories, arguing that they remain constrained by 19th-century liberal philosophies and fail to adequately address fundamental questions about why contracts are binding, when relief is warranted for unfair contracts, and the source of implied contract terms. It proposes a revival of the Aristotelian tradition, which views contracts of exchange as voluntary acts of commutative justice aimed at enabling each party to obtain what they value more in return for what they value less, without unjust enrichment. The authors contrast this with modern theories—including law and economics’ preference satisfaction, Kantian autonomy, and Rawlsian liberalism—highlighting their philosophical limitations and inability to fully explain contract bindingness, fairness, and implied terms. The Aristotelian framework integrates the purpose of contracts, the parties’ intentions, and justice, offering a coherent explanation for contract enforceability, fairness (especially regarding market prices and risk allocation), and the role of implied terms, while distinguishing economic fairness from other notions such as distributive justice and personal autonomy. The article also discusses doctrines like mistake, frustration of purpose, and unconscionability in light of this framework, emphasizing that contracts are binding when parties voluntarily assume compensated risks and that relief is appropriate when contracts are economically unfair or impose burdens offensive to dignity or moral standards.