Erik Encarnacion (The University of Texas School of Law) has posted Discrimination as Bad Faith on SSRN. Here is the abstract:
Courts and commentators often treat antidiscrimination principles as alien to contract law and expressed exclusively by civil rights statutes. This Article argues that the separation is mistaken on contract law’s own terms: a wrongfully discriminatory exercise of contractual discretion is presumptively a violation of the duty of good faith and fair dealing, a mandatory contractual obligation inherent in almost all contracts.
The argument holds under both theories that dominate U.S. good-faith doctrine. Under Robert Summers’s excluder theory, discriminatory performances violate the community standards of decency, fairness, and reasonableness that orient the doctrine. Under Steven Burton’s recapture theory, a party that reduces the value of a contract for the other party for invidiously discriminatory reasons ordinarily recaptures an opportunity that the parties could not reasonably have expected to remain available after formation. Because the bad faith nature of discriminatory performance follows from the leading accounts of existing doctrine, this Article’s conclusions do not require reforming doctrine or adopting a revisionist theory of contractual equality.
This Article’s analysis has broader payoffs. It offers courts an analytical framework for navigating statutory pre-emption and distinguishing easy from hard cases, and cautions legislatures against foreclosing common-law development of antidiscrimination norms. Theoretically, the argument bears on the debate between what the Article calls “separationists,” who cabin antidiscrimination values to civil rights statutes, and “integrationists,” who see such values as pervading private law. By showing that a cornerstone doctrine of contract law yields antidiscrimination content, the Article lends support to relational justice and other pluralist accounts of private law over narrower alternatives, while suggesting that separationism’s grip on other areas of the law of the market deserves similar scrutiny.
Highly Recommended!
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