Shysters be Gone! part I

Contract law has, at its core, the ethical imperative, “Don’t be a Shyster!”

We impose a lot of positive duties with law in a complex “evolved” society. These are the things we tell people they are expected to do, in contrast with laws that tell people the things they are not to do. For example, most people think of the relationship between law and society in Biblical terms: Thou shalt not kill, and so on. A positive corollary to it would be, Thou shalt preserve life.

The first example of a positive duty that comes to mind is the Duty of Care, by which I mean, of course, the imposition by law of an obligation to be aware of foreseeable circumstances and therefore not to be negligent (not to be confused with the Standard of Care, which is a matter of fact; see Law of Torts, 2nd ed., Chapter 2, Section E(4) – “Formulating the Duty of Care”, by Philip Osborne (Irwin, 2003)). Thus the rule, Don’t be negligent, is actuated through a positive Duty of Care.

But the Duty of Care seems to apply to section seven type stuff; it operates to ensure, at a civil level, the sorts of basic freedoms that the Charter gives us in s.7 (security of the person, etc.). The Duty of Care gives us the freedom to walk down the street without breaking your ankle on unsalted ice, or not to have a piano fall on your head, or not to find snail remains in your ginger beer.

But there is no guarantee in the Charter, or any other magna carta kind of document, not to get duped. Yet we do have such a freedom generated in civil law by mercantile law, in particular, by the rules governing contracts.Why does mercantile law create a positive duty not to be a shyster? If you abuse a position of dominance to draft a lopsided contract that takes advantage of the other person’s lack of sophistication or or negotiation skill, the contract fails! Are sophistication and negotiation skills not elements of business acumen? In other words, isn’t such a contract merely an example of the better business person using their talents? Why do we demand that the playing field be levelled in contract law?

Whence comes the ethical imperative, “Don’t be a Shyster!”?

I hope, as we explore this question, to look at the roots of this duty – to see that it is not so much a matter of policy and social engineering, but rather a matter of a society – as a collective organism – having a survival instinct.