This article examines the implications for contract law of Rawls' theory of justice as fairness. It argues that contract law as an institution is part of the basic structure of society and as such subject to the principles of justice. Discussing the basic structure in relation to contract law is particularly interesting because it is instructive for both contract law and Rawlsian theory. On the one hand, justice as fairness has clear normative implications for the institution of contract law. On (...) the other hand, this discussion forces us to critically assess the meaning and appeal of the concept of a basic structure in justice as fairness. (shrink)

The Rawlsian texts appear not to be consistent with regard to the status of the right of freedom of association. Interestingly, Rawls's early work omits mention of freedom of association as among the basic liberties, but in his later work he explicitly includes freedom of association as among the basic liberties. However, freedom of association would appear to have an economic component as well (e.g., the right to form a firm). If one turns to such “private ordering” (e.g., contract, partnership, (...) and corporate law), we find a similar ambiguity in the Rawlsian texts, as well as sharp divisions in the contemporary literature on Rawlsianism. This ambiguity has engendered widespread confusion over the scope of the two principles of justice—leading to the contemporary dispute over the breadth of what Rawls calls the “basic structure” and the question of whether the principles of justice are properly understood to govern private ordering. There is significant disagreement over the breadth of Rawls's basic structure—one aspect is whether the principles of justice apply to the private law. In a controversial passage in Political Liberalism Rawls addresses this question. This passage has, however, led commentators to reach divergent conclusions. We argue that this disagreement is explained by an instructive confusion in the passage over the distinction between what we characterize as “pre-institutional” and “post-institutional” freedom (vis-á-vis contract and property). The passage, we argue, illicitly shifts from invoking the post-institutional sense of “freedom” to the pre-institutional sense, thereby causing significant though understandable disagreement. Rawls's lapse into the pre-institutional conception of “freedom” provides interpretive grounds for the narrow understanding of the basic structure. If Rawls, however, had invoked the sense of “freedom” to which he is entitled at this stage of his theory—the post-institutional conception—such disagreement need not have arisen. (shrink)

This article asks whether firms should exempt employees when they object to elements of their work that go against their conscience. Fairness requires that we follow the rules of an organization we have joined voluntarily only if these rules express mutual advantage. In corporations, I argue that subordination and exemption provides for mutual advantage better than subordination plus right of exit. This is because agents want to protect their conscientious convictions, even in hierarchical organizations geared towards efficient preference satisfaction. Thus (...) exemptions should be granted in unforeseeable circumstances, provided the costs are limited. (shrink)