Today’s organization of production and services along global value chains (GVCs) uses contracts as central building blocks, yet is largely disconnected from contract law’s dominant epistemology and social imaginary. This article charts when, how and why GVCs have appeared on the radar of contract scholars and unravels the related methodological and disciplinary challenges. Rather than treating GVCs as a ‘legal concept’ in a strict sense that might command the application of particular rules, I propose to understand them as a ‘legal heuristic’: GVCs require contract law to revisit its constitutive role for matters of distribution, participation and equality under globalization. Towards this, GVCs need to be understood as organizational arrangement and simultaneously as a stage in the evolution of a global political economy. Beyond the classical confines of ‘contract governance’, this brings into the picture the wide array of formal and informal technologies of ‘contract governmentality’. Together with the material, technological or informational infrastructure, these are referred to as ‘code’ of GVCs, suggested here as focus of future contract law research on GVCs.
Contract is a central trope of transnational ordering. In the shadow of the various attempts to harmonize contract law at the transnational level (such as through UNIDROIT), the very institution of contract already forms the backbone of transnational interaction. Yet, as this chapter outlines, contract theory is for the most part ill-prepared to capture the constitutive role of contracts in the regulation and critique of transnational social institutions, such as global value chains or digital platforms. In such scenarios, beyond being geared toward efficiency between parties, contracts embody a plurality of rationalities and interests and form a discursive space. Albeit often in a fragile way, contracts emerge as equivalents of political institutions inasmuch as the state legal order no longer provides substantial background justice. The chapter surveys how realist and critical traditions in contract theory, in both their US and European variants, are presently being recalibrated to properly reconstruct transnational social conflicts.
Since contracts form a basic institution of every legal order, the interdisciplinary orientation of concepts of contracts reveals socio-legal inclinations of a legal order more broadly. Contrasting the UK and US Common Law of contracts with developments under German law, this Article examines the relation between normative and social science approaches, notably rooted in economics, economic sociology, and social theory in the genealogy of contract law. A shared leitmotif over the 20th century has been the drive to account for the societal embeddedness of contract. However, conceptualizations of “Contract and Society” differ considerably between legal orders in their disciplinary ingredients and design. In the US, and to a lesser extent also in the UK, the rather continuous reception of legal realism has paved the way for broad interdisciplinary perspectives on contract law, ranging from classical socio-legal, empirical work (e.g., Macaulay), economics (e.g., Williamson), sociology (e.g., Powell), and critical theory (e.g., Kennedy) to today’s landscape, where essentially instrumental and ideal-normative theories compete. Alternatively, in Germany, where the realist heritage was more ephemeral, the transformations of contract law were processed from within legal discourse and foremost in their effects on private autonomy as conceptualized, for example, in German idealism, discourse theory and critical theory. Similarly, the “constitutionalization” of contract law—even if championed for fostering private law’s reflexivity—has, for the most part, defied a socio-legal orientation. Finally, the Article highlights the path dependencies with which these different starting points translate in current debates around the role of contract in transnational governance.
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