FOUNDATIONS OF PUBLIC CONTRACTS: A COMPARATIVE VIEW (EDWARD ELGAR 2022), BY JOSÉ GUILHERME GIACOMUZZI

Public contracts have been rarely subjected to comparative legal research. Foundations of Public Contracts: A Comparative View is a contribution to start filling this gap by studying US, French, and Brazilian laws. The choice of these three legal systems is not casual. Comparative law, being essentially dialectical, develops by antagonisms. Among the influential Western liberal legal systems, the two that differ most sharply are the American one and the French one. Brazil is perhaps the Western country that most reflects the opposing Anglo-American and French legal systems. This move only enriches the delicate topic of ‘legal transplants’, which has fascinated comparatists for decades.

States are treated differently when they contract with a private party in these three legal systems (and many others): the state enjoys the power to unilaterally change contracts or even terminate contracts for its convenience and the power to supervise the contract and apply sanctions and penalties to the contractor unilaterally. Besides, when acting in its sovereign capacity, the state possesses the power to escape from some contractual responsibilities, while their contractual duties almost always bind private parties. These privileges deviatefrom private-law parameters. In this sense, they are exceptional, “exorbitants”

The primary concern of Foundations of public contracts is to understand where these prerogatives come from, how they have been constructed, and how they operate within the three legal systems studied in the book. In doing so, the book explores and contrasts the historical, philosophical, social, and political background in which the idea of public contracts has developed in each country. In short, Foundations of public contracts emphasizes “material” sources of law.

Formal versus material sources of law and positivism

Foundations of public contracts employs an unusual lingo for common lawyers. In using civilian legal parlance, the book emphasizes ‘material’ or ‘substantive’ above ‘formal’ or ‘dogmatic’ sources of law, the latter being mandatory like statutes (lois) and legal precedents (jurisprudence),or optional like scholarly work (la doctrine) and customary law.  Material sources of law are les forces créatrices du droit, ‘the creative forces of law’, an expression consecrated in 1955 by Georges Ripert (1880-1958).

In Continental law, the ‘theory of sources’ was originated as a new paradigm of law, a positivist construction forged by the Exegetical School in France and the Historical School in Germany in the nineteenth century. It was a political movement against the then reigning natural order, of which natural law was part. In France, la loi, now located at the epicentre of the Modern State, dethroning the King’s will, was considered the only source of law, its source formelle par excellence. The Historical School has helped forge the division, unclear but existent, between sources formelles and matérielles, the latter coined to separate form and substance. This is the germ from which the theory of sources have flourished. Foundations of public contracts is constructed against this background.

In Chapter 1, by emphasizing material sources, Foundations of public contracts also aims at deflating the endless debate over comparative-law researches’ structure, scope, role, function, the object of inquiry, aims, epistemology, and, perhaps, even methodology. The book assumes that what matters is the purpose of comparison and focuses on why similarities and differences exist, what function they play within the legal systems, and what is their epistemological role in shaping the law of the three legal systems under scrutiny. Moreover, contrary to what seems to have been a fashioned, even iconoclast mood in comparative-law theory, which downgrades “positivism”, Foundations of public contracts assumes that positivism (adequately understood) is the most precise methodology.

The book’s motto, in short, is this: material sources are at work whenever the law is created, either by legislators or judges or administrators or agencies; material sources are part of the law, whenever and no matter how lawmakers consider them; material sources inform the content of the ‘formal’ or ‘dogmatic’ sources of law. Thus, knowing material sources is essential to understanding the law of a given community. 

Accordingly, contrary to what mainstream comparative-law research proclaims, no legal positivist ignores material sources or les forces créatrices du droit. For positivists, material sources are to be taken into account as factors that affect formal sources. But how? Positivists usually recognize interpretation as the activity through which material sources go into the meaning of legal provisions. Legal methodology (méthologie juridique), sources of law, and legal reasoning are intimately related concepts. Foundations of public contracts take this idea seriously.

Following the positivism of Hartian lineage, Foundation of public contracts does not ignore that law and adjudication are intrinsically political and that jurisprudence is part of a more general political theory. So are comparative public law and legal theory. While not falling into the trap of a murky concept of ‘culture’, the positivist methodology of conceptually separating, but not isolating, formal and material sources is a tool that helps us to understand our legal institutions better and not merely know them. Thus, Foundations of public contracts takes clearness as the primary purpose of the conceptual separation of law from other realms: by separating––but not isolating––law from morals and different assumptions behind the law, we can morally criticize the law and eventually improve it. In doing this, Foundations of public contracts explores jurists and lawyers’ mentalités.

In Chapter 2, the book gives an overview of the most relevant black letter rules about exceptionalism/exorbitance. It prepares the ground to dig deeper in the search for material sources.

Mentalités and the relevant material sources

Chapter 3 explores the relevant characteristics that inform legal actors’ mentalités in the US, France, and Brazil, by contrasting three dichotomies: empiricism versus rationalism; systematic versus non-systematic thinking and the role of the doctrine; and finally, and more critically, the two conceptions of the general interest, a ‘Rousseaunian’ or ‘transcendental’, versus a ‘utilitarian’ conception.

Chapter 4 deals with the public-private law dichotomy in the context of public contracts and explores the epistemological role that the (lack of) dichotomy plays in each legal system by emphasizing the dichotomy’s political character. Chapter 5 focuses on the liability for sovereign acts in the three legal systems by opposing the still alive sovereign immunity doctrine in the US versus the responsabilité sans faute in France (and Brazil); the theories reflect, unsurprisingly, competing conceptions of state and individual. Finally, by contrasting two kingship models, the influence (or lack of it) of Roman law, and two conceptions of individualism (taken from Tocqueville’s Democracy in America), the Chapter paves the way for the rest of the book.

Chapters 6, 7, and 8 scrutinize more directly the state responsibility and its related doctrines (sovereign acts doctrine, unmistakability, fait du Prince/fato do Príncipe, imprévision/imprevisão), as well as the most relevant cases that deal with exceptional norms governing public contracts in each legal system, demonstrating the importance of material sources for understanding formal sources of law, namely courts’ decisions. Chapter 9 tackles a particular topic, terminations for convenience of the government, a multifaceted topic in all three countries.

Foundations of public contracts, in conclusion, calls attention to the current fashion towards the unity of law, unity meaning the mastering of liberal, private-law parameters, following the predominant ideological force in the Western world from the 1980s onwards. If the contract is an archetype concept in law, it would be surprising if the public contract theory had not been affected by the same intellectual mood. Would the liberal wave be strong enough to alter the French and Brazilian conception of public contracts, unifying public and private contracts, as liberals would suggest?

This would be a conceptual revolution in France and Brazil. When revolutions happen, they do not start at the surface of the formal sources; they operate at the foundational level, in material sources of law. From that perspective, Foundations of public contracts concludes that the Brazilian legal system is more willing to change its conception of public contracts and accept liberal values than the French system is, for a simple reason: Brazil does not have a strong idea of state as France have. As history has shown, Brazilian law has been, in a pendular move, shifting its model of state between the French “stateness” and American “statelessness”, being today in a liminal moment: It is by no means a coincidence that formal sources, from recently enacted laws to scholarly work and legal decisions, have exposed the American Neoliberal ethos that lies at the foundations of the move.

Nevertheless, from a comparative law viewpoint, that hesitation is less shocking than an eventual transformation of the concept of le contrat administratif, vitally entrenched in the French legal system. Foundations of public contracts shows that in France, unlike in the US, an entire legal structure, different from the common law, was constructed to accommodate le droit politique, le droit administratif, and, consequently, les décisions unilatérales de l’Administration and les contrats administratifs. All these concepts are explored throughout Foundations of public contracts. It has not been easy to sap all that structure, constructed as it was to support a rejoiced system of Administrative Justice, which, unsurprisingly, Tocqueville opposed, for being an institution of the Old Regime. 

However, Foundations of public contracts highlights that the dispute over the conception of public interest has got to Rousseau’s soil, having stirred up French legal scholarship, so much so that there are recent attempts to forge new concepts around which the entire gear of droit administratif would spin, the intérêt général néo-moderne, which would amalgamate the notions of intérêt général and concurrence, according to Guylain Clamour in his Intérêt général et concurrence. Essay sur la pérennité du droit public en économie de marhé (Dalloz, 2006). According to the neo-modern general interest, l’intérêt général, for centuries adamantine to le droit administratif,is no longer monolithic but fragmented into a plurality of public interests, responding to a political philosophy deeply embedded with liberal, pluralist values.

This move, of course, reflects the neoliberal wave that overflowed many Western legal systems in the last four decades. However, is the liberal wave strong enough to play down the French conception of contrat administratif, which has been gasconading for so long? Does the ‘essence’ of public contracts remain intact, or should the private contracts’ philosophy speak for all? As Benoît Plessix has recently stated: ‘fashion is the unity of law, and the contract appears as the common concept’s archetype’ (Droit administratif général, LexisNexis, 3rd ed, 2020, p. 1221. Briefly, unity of law equates public and private contracts with mastering private-law parameters. As a reaction, Plessix vented, revealingly, that the Conseil d’État, the French institution par excellence, is ‘culturally, the best rampart to the Anglo-Saxon utilitarianism’ (ibid, p. 618). Being as French as it gets, that idiom is, for a comparatist, tremendously rich. The book explores these ideas through the lenses of material sources of law.

Foundation of public contracts is, in short, only a building block in a larger enterprise of theorizing about a largely neglected subject.

Posted by JOSÉ GUILHERME GIACOMUZZI (Universidade Federal do Rio Grande do Sul).