The Common Law of Contract: Essential or Expendable?

This chapter explores the declining sphere of applicability and influence of contract law – the common law in particular - over the contracting process. It does not rehearse the well-worked grounds for scepticism about the role of contract law in a modern economy. Rather, it explores the irony that the terminal threat to contract law may come ultimately from contract itself. Relieved of the main responsibility for policing business-to-consumer contracts, the common law of contract should have found itself back in the relatively familiar territory of regulating the ‘arm’s length’ commercial agreement. However, in the process of exchange between independent firms, the rules of the common law of contract are mostly defaults which apply only to the extent the parties do not stipulate for anything else. The law’s role is simply to enforce the self-regulation of the parties. The system of public contract law is therefore undermined by what are essentially private rule systems created through contractual mechanisms, the enforcement of which is justified by reference to freedom of contract. The implications of the diminishing practical importance of contract law are explored. Finally, the paper considers the future threat to domestic contract law posed by advances in information and communication technology (such as the phenomenon of ‘smart contracts’). It concludes that while ostensibly further contributing to the redundancy of the common law, these developments may hold the key to its future development.