Academic

Leib on Contracts & Friendships

By Lawrence Solum

Ethan J. Leib (University of California - Hastings College of the Law) has posted Contracts and Friendships (Emory Law Journal, Vol. 59, 2010) on SSRN. Here is the abstract:

his article aims to give the relational theory of contract some new life, sharpening some of its claims against its competitors by refracting its theory of relational contracts through an analogy to friendship. In drawing the analogy between friendships and relational contracts and revealing their morphological similarities, I offer a provocative window into friendship's contractual structure - and into relational contracts' approximation of friendships. The analogy I develop in the article is poised to replace the "relational contract as marriage" model, prevalent among relationalists. The new model developed here is more honest to relational contract theory and to marriage - and helps relational contract theory produce some new insights, support old ones, and revise some of its normative agenda.

And from the paper:

Friendships and relational contracts have several basic structural features in common. In both types of relationships, there is an understanding that parties contemplate a ?long-term commitment to pursue shared goals, the fulfillment of which will enhance the joint welfare of the parties.?70 Although parties are never fully expected to engage in complete selflessness in fulfilling their mutual commitment to one another in either friendships or relational contracts, they are generally supposed to be taking their partners? interests as independent reasons for action.71

In pursuing their relationships in the cases of both friendships and relational contracts, parties will often furnish gifts and favors to one another,72 and the nature the gift-giving is rarely a matter of pure altruism.73 These reciprocated gifts and favors signal commitment and consideration of one another?s interests over and above the commitment and consideration that result from ?mere? commercial exchange in one-shot discrete transactions. There is a deliberate effort in both types of relationships to show especial partiality.74

The requirements for behavior in either relationship are rarely well-specified. Indeed, because there is a high degree of interdependence between the parties, complexity results, with a set of rather varied duties within the relationship; we enter these relationships without fully knowing what we shall be called upon to do.75 Uncertainty in our basic responsibilities is constitutive of the relationships ? and they rely heavily on implicit and tacit understandings.76

Highly recommended. Download it while its hot!

Full post as published by Legal Theory Blog on March 17, 2009 (boomark / email).