Note 66 — Chapter VII

Contract-keeping is peculiarly the moral rule applicable to mercantile transactions. To apply it without modification to the dealings of employers and wage-earners is to intrude the mercantile standard into the industrial sphere. This is what we are now witnessing. The industrial standard is only in process of development and clarification, and the accepted mercantile standard is really in conflict with it. Among merchants it is of the very essence of their transactions that a contract shall not be invalidated, despite the injurious consequences to one or the other party which it may turn out later on to involve. The security of commercial transactions would be gone if revision of the contract should be permitted whenever consequent loss appears. Again, and this is particularly important, merchants are assumed to be on a footing of equality in dealing with one another, equally free in accepting or rejecting a proposed contract, equally competent to take care of their respective interests. The relation of employers to wage-earners however is not that of economic equals, but of the economically stronger with the economically weaker. And this difference is of cardinal importance in determining the rule of justice as it should obtain in the industrial sphere. I do not of course intend to imply that an agreement between employer and wage-earners once made should not as a rule be kept as scrupulously as that between merchant and merchant. What I affirm is that in view of the greatness of the injury possibly inflicted upon the weaker, the economically stronger party is bound at least to share the responsibility with the weaker for the essential fairness of the terms of the agreement before it is finally completed. Nay, I would go a step farther, and say that despite the indispensable condemnation of contract-breaking, provision should be made for possible revision in cases where it can be shown that exceptional hardships have appeared, unforeseen and unforeseeable at the time when the agreement was made.