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    Rights statement: This article has been accepted for publication by Edinburgh University Press in Edinburgh Law Review, http://www.euppublishing.com/doi/abs/10.3366/elr.2017.0435 Copyright © 2017. Edinburgh University Press.

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Adam Smith and the Social Foundation of Agreement: Walford v Miles as a Relational Contract

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>1/09/2017
<mark>Journal</mark>Edinburgh Law Review
Issue number3
Volume21
Number of pages29
Pages (from-to)376-404
Publication statusPublished
Original languageEnglish

Abstract

That the reception in subsequent case law of Leggatt J's outstanding discussion of good faith in Yam Seng Pte Ltd v International Trade Corporation Ltd has been disappointing demonstrates the continuing failure to appreciate the normative constitution of economic exchange and the law of contract.
This paper re-examines the concept of economic exchange which may be derived from the work of Adam Smith in order to show that Smith did not conceive of exchange as a system of solipsistic self-interest but as self-interest which is formed on the basis of the mutual respect of the parties to the exchange.
The significance of Smith’s views for the law of contract will be demonstrated by a re-examination of the rejection of good faith in Walford v Miles in light of those views. Whilst it is moot whether the law of contract should recognise a general doctrine of good faith, that law must become self-conscious of the mutual respect it requires of parties to a contract which is indicated in the concept of good faith.

Bibliographic note

This article has been accepted for publication by Edinburgh University Press in Edinburgh Law Review, http://www.euppublishing.com/doi/abs/10.3366/elr.2017.0435 Copyright © 2017. Edinburgh University Press.