Examining substantive fairness as a basis for binding-character of contract

Abstract

From a legal point of view, one cannot expect the unfair distribution of contractual resources to be enforced. For the fair distribution of these resources, two theories of substantive fairness & procedural fairness have been proposed. According to the theory of substantive fairness, a fair criterion should be considered in advance for the outcome of the contract and care should be taken that the parties to the contract do not violate this criterion. Contrary to this theory, procedural fairness whose followers claim that there is no consensus on a particular type of distribution, try to control the formation process of the contract to make it fair, rather than considering the outcome of the contract. The main a priori criterion for fair distribution proposed in substantive fairness is the application of just price. There are serious doubts as to whether a just price can be considered as a good basis for making contracts binding and enforceable, because the justification for the need to a certain type of distribution under the name of justice is difficult due to disagreement over the concept of justice in the modern world. At the same time, accepting such a basis will make it impossible to justify the invalidity of other illegitimate contracts concluded at a just price. Of course, assuming the acceptance of the theory of substantive fairness, specified legal effects arise from the contract in order to restitute the situation of injured party, which , in turn, face with many difficulties especially in the case of price fluctuation.

Keywords

• binding-character
• substantive fairness
• procedural fairness
• distributive justice
• commutative justice