This blog post examines the points where freedom of contract and legal regulation collide, covering content that helps understand the limitations of modern contract law—which cannot be explained solely by mutual consent—and the evolving concept of liability.
According to the modern understanding of contracts, which traces back to Savigny and views the essence of a contract as the free agreement of the parties, the reason parties must adhere to a contract with specific terms is precisely because they themselves desired the realization of those terms. So, what if, for example, the contracting parties voluntarily desired the realization of something that disregards civil law provisions and violates public policy? Should such a contract still be considered binding solely because the free agreement of the parties existed? Or does this raise the fundamental question of whether we must modify or abandon the modern understanding of contracts, holding that a contract with content contrary to what the law stipulates cannot bind the parties, no matter how much they desired it?
In many cases, legal professionals understand contracts as the free agreement of the parties’ wills, yet simultaneously accept the explanation that contracts violating good morals are void because the law so stipulates. However, this attitude ultimately holds onto both poles of the dilemma simultaneously, and it is at this point that a more fundamental challenge to the modern understanding of contracts arises.
A similar problem arises in relation to the debate over the theory of manifestation of intent. The traditional voluntaristic perspective seeks to locate the core of a contract solely in the meeting of minds. According to this view, when the internal intent and the externally manifested content do not align, the former—the internal intent—should be recognized as having legal effect. However, doing so risks causing unexpected harm to the counterparty who relied on the manifested content and entered into the transaction. Considering this, the expressive perspective emerged, arguing that legal effects should be recognized based on the externally expressed content rather than the internal intent. This perspective aligns with the modern civil law doctrine and economic regulatory framework aimed at protecting trust between contracting parties and the stability of transactional order. According to this view, the reason for upholding a contract is also found in the fact that the parties intended to realize the expressed content.
This debate ultimately leads to the idea that what the law approves is more important than what the parties genuinely intended. This acknowledges problems with the existing approach to understanding contracts and heralds the arrival of a radical perspective: viewing contractual liability not as an agreement-based responsibility rooted in the content of intent, but ultimately as a statutory liability based on legal provisions. For example, just as a tortfeasor cannot be exempted from liability simply because they do not wish to compensate the victim, it emphasizes that there may be cases where one must enter into or perform a contract whose terms differ from their own will. The reason some scholars recently use the expression “death of the contract” can also be understood within this context.
This shift in how contracts are understood is assessed as having progressed alongside the development of the capitalist economic system. Modern legal systems declared that all individuals, as free and equal beings, could determine their own legal relationships, breaking free from the status-based constraints of the Middle Ages. However, it wasn’t long before practical reflections emerged, arguing that human freedom and equality should not remain mere formal premises but must become substantive goals. This was because the voluntary agreement between contracting parties often resulted in the will of one party, possessing a weaker socio-economic position, being subordinated to the other party’s will under the guise of freedom and equality.
Amid this awareness of the problem, various regulatory legislations emerged to secure social justice and fairness. These legislations institutionally accepted that the binding force of what the contracting parties had superficially agreed upon might not be recognized, and that obligations they had not anticipated could be enforced. Today, various conditions of modern capitalism—such as information asymmetry, platform-based market structures, the complexity of financial products, and strengthened consumer protection—are further intensifying this trend. Consequently, it is becoming increasingly clear that contracts can no longer be explained solely by a simple meeting of minds; their legitimacy can only be established within the categories approved by law.
