Collective Action and Contract Rights

The possibility of collective action is essential to human freedom; yet, as Rousseau famously argued, individuals acting together allow themselves to depend on one another's choices and thereby jeopardize one another's freedom. These two facts jointly constitute what I call the normative problem of collective action . I argue that solving this problem is harder than it looks: it cannot be done merely in terms of moral obligations; indeed, it ultimately requires putting in place a full-fledged system of contract rights. The point has important ramifications for contract theory: the role that contract rights play in reconciling collective action and freedom turns out to be crucial to understanding how—and by whom—these rights can legitimately be enforced. It also explains why expectation damages should be the standard remedy for breach of contract.