Contracts: A trade analogy

December 02, 2014 | By WENCONG FA

Fans of the Oakland Athletics know that the team has just made a big trade. Supporters of Pacific Legal Foundation know that PLF’s Free Enterprise Project defends freedom of contract across the country, including the right of parties to be bound by the words of the contract instead of vague notions of abstract justice.

Both contracts and trades are essentially about the same thing: freedom. The freedom to contract, like the freedom to trade, assumes that utility is not finite, that both parties can be better off, and that the parties themselves are in the best position to decide what they want. Some teams prefer home run hitters; others enjoy good pitching; still others choose to win with good defense. Some people appreciate music; others cherish cars; still others like to travel. Some commit future resources to perfect the present. Others trade current labor to enhance the limitless potential of the future.

That is why PLF defends freedom of contract. Replacing the words of the contract with after-the-fact judgments about “justice” would discourage parties from entering into contracts in the first place. That would stop people from doing what they want with their own property, and it would impede their ability to flourish. Freedom of contract means the ability to choose a course of action, even when others may think it is unwise. Whatever Oakland Athletics general manager Billy Beane was thinking, it is his right to choose the players, and his decision will be judged according to the team’s performance.