An Investigation into the Evolution of the Principle of Justice in Contract Law in Light of the Evolution of Economic Literature; From the Classical School to the Behavioral School

Abstract

Whereas contracts are the legal tools for the substantiation of economic transactions, in order to respond to the needs of economic actors in accordance with the evolution of economic approaches, they have changed. Developments in economic schools can be classified in one sense in the form of classical, neoclassical and behavioral schools. The main purpose of the study is to examine the developments of contractual justice from the perspective of economic developments in the context of these schools. Recruiting a descriptive-analytical design, the study revealed that commutative and distributive justices are the foundations of contractual justice and complement each other. Commutative justice has always been the basic principle of contract law; however, its scope has expanded beyond the concept of fair pricing in the pre-classical era. Distributive justice, after the advent of neoclassical economics, became more prominent at the same time as the need for government intervention in the economy to address the side effects of a free economy. The school of behavioral economics, by questioning the hypothesis of rational choice and the neo-classical school of economics, raised the need to pay attention to the cognitive biases of individuals in decision-making, especially in the consumer market and in terms of standard terms. It has, despite the optimization of the concept of justice in contracts, at the same time, created fears of excessive government protectionist interventions in contracts. In general, commutative and distributive justice complement each other in establishing contractual justice.

Keywords

• classical economics
• neoclassical economics
• behavioral economics