Against Deregulation

Felipe Jiménez*

In Deregulating Contracts, Alan Schwartz and Simone Sepe have made an important and ambitious contribution to contract theory. In their view, we have been way too conformist about contract law.¹ Their argument is that both welfarist and deontological considerations suggest that our law of contracts should be radically reformed.² More specifically, they argue that contract law should abandon its current approach to what they call “procedural terms” (remedial clauses, interpretative clauses, renegotiation provisions, and the like) and adopt the same hands-off approach that, within limits, it takes regarding “substantive terms” (quantity, quality, and price terms).³

Despite the value of Schwartz and Sepe’s contribution, I must say I remain skeptical. Even assuming, arguendo, that the economic basis of their argument is correct, Schwartz and Sepe’s moral argument is far from conclusive. Unless one adopts an extremely narrow and implausible conception of political morality (which, in their own argument, Schwartz and Sepe correctly avoid⁴), their case for deregulation is not persuasive. Indeed, the considerations of political morality that Schwartz and Sepe allude to fail to support, in my view (and despite the many virtues displayed by their ambitious and sophisticated argument), the case for deregulation.

Here is the structure of this response. In Part I, I offer a brief summary of Schwartz and Sepe’s argument. As I will note there, I will not discuss the argument that Schwartz and Sepe make regarding the inefficiency of mandatory procedural rules in contract law. Instead, I will only focus on the other normative arguments offered by Schwartz and Sepe. Thus, in Parts II, III, and IV, I go over three of the substantive arguments (outside of efficiency) offered by Schwartz and Sepe in favor of their proposal: distributive justice, autonomy, and rights. In Part V, I revisit an objection (based on Seana Shiffrin’s work on unconscionability⁵) that Schwartz and Sepe themselves discuss. Finally, Part VI focuses on the social world that Schwartz and Sepe envisage arising if we adopt their suggested reform.

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© 2026 Felipe Jiménez. Individuals and nonprofit institutions may reproduce and distribute copies of this Article in any format at or below cost, for educational purposes, so long as each copy identifies the author, provides a citation to the Notre Dame Law Review, and includes this provision in the copyright notice.

*Professor of Law and Philosophy, University of Southern California Gould School of Law; Profesor Adjunto Extraordinario, Universidad Adolfo Ibáñez (Chile). Many thanks to Scott Altman and Crescente Molina for comments on a previous draft and to the editors of the Notre Dame Law Review for inviting me to write this response and for their editorial work.

1 See Alan Schwartz & Simone M. Sepe, Deregulating Contracts, 101 NOTRE DAME L. REV. 279 (2026).

2 See id. at 294–95.

3 See id. at 312–13.

4 See id. at 323–24.

5 See Seana Valentine Shiffrin, Paternalism, Unconscionability Doctrine, and Accommodation, 29 PHIL. & PUB. AFFS. 205 (2000).