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Nonparty Interests In Contract Law, Omri Ben-Shahar, David A. Hoffman, Cathy Hwang Feb 2022

Nonparty Interests In Contract Law, Omri Ben-Shahar, David A. Hoffman, Cathy Hwang

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Contract law has one overarching goal: to advance the legitimate interests of the contracting parties. For the most part, scholars, judges, and parties embrace this party primacy norm, recognizing only a few exceptions, such as mandatory rules that bar enforcement of agreements that harm others. This Article describes a distinct species of previously unnoticed contract law rules that advance nonparty interests, which it calls “nonparty defaults."

In doing so, this Article makes three contributions to the contract law literature. First, it identifies nonparty defaults as a judicial technique. It shows how courts deviate from the party primary norm with surprising …