Interpreting Contracts: Justice and Intent

When they interpret contracts, courts look to the intent of the parties and what justice requires. Libertarians and contemporary will theorists agree that they should look to the parties’ intentions, but they have little room for justice, which they regard as either irrelevant or inherent in voluntary exchanges. Egalitarian liberals are concerned about distributive justice, relational justice and background justice. They have trouble relating this concern to what the parties actually intended. We believe that that what matters is the principle of commutative justice that neither party should enrich himself at the other party’s expense. Consequently, a party who has been compensated to assume a risk should not be allowed to renege when the risk materializes. That principle ensures the fairness of an exchange and places the risks where the parties would wish them to be. It is a principle on which jurists can agree whether they are liberals or not.