George Mason School of Law

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George Mason School of Law

Contracts II

Illegality: Perfectionism

F.H. Buckley

fbuckley@gmu.edu

When Are Promises Not Binding?

1. Perfectionism The Enforcement of Morals

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When Are Promises Not Binding?

1. Perfectionism The Enforcement of Morals

2. Paternalism Vices of capacity

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When Are Promises Not Binding?

1. Perfectionism The Enforcement of Morals

2. Paternalism Vices of capacity

3. Vices of Consent Fraud, Duress

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When Are Promises Not Binding?

1. Perfectionism The Enforcement of Morals

2. Paternalism Vices of capacity

3. Vices of Consent Fraud, Duress

4. Unconscionability Substantive Unfairness?

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Perfectionism

The subject has immoral preferences which the perfectionist would reform

As contractual enforcement benefits the parties, courts might enforce morality by refusing to enforce immoral agreements

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We’ve already seen an example of this

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That’s an example of protecting third partiesBut this is about reforming the individual

Anti-perfectionism (neutralism)

Mill’s harm principle: “The only purpose for which power can

rightfully be exercised over any member of a civilized community, against his will, is to prevent harm to others.” Mill, On Liberty (1859)

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John Stuart Mill & Harriet Taylor

The Film Version

With Hugh Grant as JSM

The Film Version

And Emma Thompson As Harriet Taylor

The Film Version“Hi Mom. Hi Dad. I’m home!”

And Jerry Mathers As The Beaver

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Perfectionism defies stereotypes

Right-wing perfectionism Drug laws Sexual immorality Same sex marriage

Left-wing perfectionism Smoking Expansive civil rights laws Same sex marriage

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Perfectionism in the Law

Contracts rendered illegal by statute: Watts v. Malatesta

Contracts illegal at common law: Baby M

WattsEx turpi causa oritur non actio

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A suitable case for perfectionism?

Watts

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If a contract is illegal, what’s the best contract law response? No remedy of any kind?

Ex turpi causa oritur non actio In pari delicto, portior est conditio defendentis

Or NY Penal Code § 994, which reverses this?

How do the incentive effects cut?

Watts

Π Δ

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$37,500

$37,500 +++

Π sues under NY Penal Law § 994 to recover his losses.

Can Δ offset against this claim his far greater losses to Π?

WattsIn pari delicto, portior est conditio defendentis

How did the In pari delicto maxim apply? Crane on the mischief rule.

Was it fairly applied here? Crane’s dissent

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Watts

Just how do professional gamblers collect their winnings?

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Remember Nick the Chin?

How do professional gamblers collect their winnings?

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I’m tinkin’ youse should pay what youse owe

A special case

Contracts in restraint of trade

Why do cartel arrangements tend to break down?

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Hewitt Does marriage matter?

“Merely lacking legal formality”: Is that how you see marriage?

Does the state have an interest in promoting it?

Is child support a separate issue?

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Baby M

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How do you imagine Mary Beth Whitehead?

Baby MMary Beth Whitehead

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Baby MMary Beth Whitehead

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Baby MThe Sterns

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Baby M

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Why did the Whiteheads enter into the contract?

Baby M

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Why did the Sterns not have their own children?

Baby M

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What was the problem with the name “Melissa”?

So what did the court hold?

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So what did the court hold?

Contrary to statute

Contrary to public policy

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What about the following?

A futures contract for a kidney?

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What about the following?

A futures contract for a kidney?

A sale of a kidney?

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What about the following?

A futures contract for a kidney?

A sale of a kidney?

A sale of one’s eyes?

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So what did the court hold?

Contrary to statute

Contrary to public policy

Sara Elizabeth Whitehead or Melissa Sterns?

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Baby MWho’s got the better c.v.?

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Who is more likely to:subscribe to The New Republic? attend an Arthur Miller play?read a Jonathan Franzen novel?

Baby M

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Was it relevant that “most of his family had been destroyed in the Holocaust.”

Baby M

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Did Whitehead’s extreme attachment to her daughter render her an unfit mother?

Surrogacy Contracts

Should they be enforced? Note that the industry has expanded,

AFTER Baby M. Are there ground rules you’d adopt to

make it more palatable? Is this merely about the surrogate’s

capacity to contract?

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Two kinds of Perfectionism

Private Perfectionism overrules personal choice to make the subject a better person

Social Perfectionism overrules personal choice to protect third parties from moral externalities

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Social Perfectionism

Mill’s harm principle: “The only purpose for which power can

rightfully be exercised over any member of a civilized community, against his will, is to prevent harm to others.” Mill, On Liberty (1859)

But what counts as a harm?

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Physical spillovers

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Moral spillovers?

Couture, Les Romains de la decadence, 1847

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Social Capital

Physical Capital

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Social Capital

Physical capital Human Capital

Intelligence and health Private virtue, good character

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Social Capital

Physical capital Human Capital Social Capital

Do you have any preferences about your neighbors and fellow citizens?

Republic of Defection: Edward Banfield’s Montegrano,

The Moral Basis of a Backward Society

What’s wrong with hog-dog fights?

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What’s wrong with hog-dog fights?

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Social Capital

What were the externality concerns in Baby M? Was it simply the child, as the casebook

suggests? Are surrogate parents any worse than

natural parents? Posner and Landes on baby-selling

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So what kind of social virtues would one look for?

The Bourgeois Virtues Honesty Fidelity Prudence Moderation Reciprocity

The Romantic Virtues Transcendence, Passion

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How to Protect Social Capital?

The Hart-Devlin Debate Lord Devlin, The Enforcement of Morals H.L.A. Hart, Law, Liberty and Morality

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How to Protect Social Capital?

The Hart-Devlin Debate Lord Devlin, The Enforcement of Morals H.L.A. Hart, Law, Liberty and Morality

Devlin’s Disintegration Thesis Just how does a society disintegrate Is change always for the worst?

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Neutralism and Slippery Slopes

The Battle of the Slippery Slopes. The Perfectionist fears that a slight

change in moral habits will lead to the Decline and Fall of our civilization.

The neutralist fears that any kind of Perfectionism will lead to Holy Fascism.

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Can the state be trusted to legislate morals?

No one expects the

Spanish Inquisition!

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Can the state be trusted to legislate morals?

President Johnson signs the 1964 Civil Rights Act

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Do laws have expressive effects?

President Johnson signs the 1964 Civil Rights Act

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Can the state be trusted to legislate morals?

Jim Crow laws were legislated by the states

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George Mason School of Law

Contracts II

Paternalism

F.H. Buckley

fbuckley@gmu.edu