normative theories pose by urging courts to pursue efficiency, fairness, good faith and the protection of individual autonomy. Such theories need, but so far lack, a meta principle that tell which of these goals should be decisive when they conflict. We attempt to make progress here with a more modest approach--to set out and defend a normative theory to guide decisionmakers in the regulation of business contracts. 3 The theorys affirmative claim, in brief, is that contract law should facilitate the efforts of contracting parties to maximize the joint gains(the"contractual surplus")from transactions. The theorys negative claim is that contract law should do nothing else. Both claims follow from the premise that the state should choose the rules that regulate commercial transactions according to Rev. 821(1992). Efficiency theories tend to have a more limited scope. Positive articles analyze broad doctrinal patterns in the attempt to find fundamental consistency between these patterns and the efficiency norm, but the authors do not purport to provide a fully descriptive theory of contract law. See, e.g, Charles J. Goetz robert e Scott, Enforcing Promises: An Examination of the Basis of Contract, 89 Yale L J. 1261(1981): lan Ayres robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 Yale L J 729(1989) Normative economic theories, on the other hand, typically evaluate discrete doctrines by the efficiency norm. See e.g., Charles J. Goetz and Robert E. Scott, Liquidated Damages, Penalties and the Just Compensation Principle, 77 Colum. L. Rev. 554(1977); Alan Schwartz, The Case for Specific Performance, 89 Yale. L J. 271(1979); Christine Jolls, Contracts as Bilateral Commitments: A New Perspective on Contract Modification, 26J Leg. Stud. 203 (1997); Robert E. Scott, The Case for Market Damages: Revisiting the Lost Profits Piccle, 57U Chi L Rev. 455 (1990) effort, tha he problems that pluralist theories without meta norms pose are nicely illustrated in Melvin ey ownure's purports to solve the" broad scope of contract problem "by proposing overlapping sets of norms. See Melvin A Eisenberg,, The Bargain Principle and its Limits, 95 Harv. L. Rev. 741(1982): Melvin A Eisenberg, The Theory of Contracts in THE THEORY OF CONTRACT LAW: NEW ESSAYS (Peter Benson ed 2000). For example, Eisenberg's schema restricts the domain of freedom of contract by norms of reciprocity, trust, and fairness He recognizes that this "multi-value" approach can generate conflicting social propositions. When conflicts actually occur,the lawmaker must make a legal rule that gives a proper weight and role to each of the conflicting values or goals in the context at hand. Further, when social propositions conflict, the legislature must exercise good judgment concerning the weight or role to give to each proposition in the issue at hand. Eisenberg, The Theory of Contracts at 243-44. Eisenberg recognizes that his theory lacks a metric that would tell the lawmaker just how to give the proper"weight and role " to each social proposition or value when conflicts occur. Since courts or legislatures are likely to be involved when the relevant social propositions or values arguably favor more than one party type or interest group, pluralist theories such as Eisenberg's tend to be least helpful when they are most needed 'In a thoughtful critique of autonomy and efficiency theories of contract, Michael Trebilcock concludes that both theory types are"valid in their own right, but without a"meta-theory that weights and ranks these various values", both values should be pursued in various social contexts according to the relative competency of different legal institutions to perform effectively. See Trebilcock, supra note l, at 248. This article takes up Trebilcock's invitation and proposes a normative theory that fits business contracts, the subsidiary category of contractual relationships that the law most affectsRev. 821 (1992). Efficiency theories tend to have a more limited scope. Positive articles analyze broad doctrinal patterns in the attempt to find fundamental consistency between these patterns and the efficiency norm, but the authors do not purport to provide a fully descriptive theory of contract law. See, e.g., Charles J. Goetz & Robert E. Scott, Enforcing Promises: An Examination of the Basis of Contract, 89 Yale L. J. 1261 (1981); Ian Ayres & Robert Gertner, Filling Gaps in Incomplete Contracts: An Economic Theory of Default Rules, 99 Yale L. J. 729 (1989). Normative economic theories, on the other hand, typically evaluate discrete doctrines by the efficiency norm. See e.g., Charles J. Goetz and Robert E. Scott, Liquidated Damages, Penalties and the Just Compensation Principle, 77 Colum. L. Rev. 554 (1977); Alan Schwartz, The Case for Specific Performance, 89 Yale. L. J. 271 (1979); Christine Jolls, Contracts as Bilateral Commitments: A New Perspective on Contract Modification, 26 J. Leg. Stud. 203 (1997); Robert E. Scott, The Case for Market Damages: Revisiting the Lost Profits Puzzle, 57 U. Chi. L. Rev. 455 (1990). 2 The problems that pluralist theories without meta norms pose are nicely illustrated in Melvin Eisenberg’s effort, that purports to solve the “broad scope of contract problem” by proposing overlapping sets of norms. See Melvin A. Eisenberg,, The Bargain Principle and its Limits, 95 Harv. L. Rev. 741 (1982); Melvin A. Eisenberg, The Theory of Contracts in THE THEORY OF CONTRACT LAW: NEW ESSAYS (Peter Benson ed. 2000). For example, Eisenberg’s schema restricts the domain of freedom of contract by norms of reciprocity, trust, and fairness. He recognizes that this “multi-value” approach can generate conflicting social propositions. When conflicts actually occur, “the lawmaker must make a legal rule that gives a proper weight and role to each of the conflicting values or goals in the context at hand.” Further, “when social propositions conflict, the legislature must exercise good judgment concerning the weight or role to give to each proposition in the issue at hand.” Eisenberg, The Theory of Contracts at 243-44. Eisenberg recognizes that his theory lacks a metric that would tell the lawmaker just how to give the proper “weight and role” to each social proposition or value when conflicts occur. Since courts or legislatures are likely to be involved when the relevant social propositions or values arguably favor more than one party type or interest group, pluralist theories such as Eisenberg’s tend to be least helpful when they are most needed. 3 In a thoughtful critique of autonomy and efficiency theories of contract, Michael Trebilcock concludes that both theory types are “valid in their own right”, but without a “meta-theory that weights and ranks these various values”, both values should be pursued in various social contexts according to the relative competency of different legal institutions to perform effectively. See Trebilcock, supra note 1, at 248. This article takes up Trebilcock’s invitation and proposes a normative theory that fits business contracts, the subsidiary category of contractual relationships that the law most affects. 3 normative theories pose by urging courts to pursue efficiency, fairness, good faith and the protection of individual autonomy. Such theories need, but so far lack, a meta principle that tells which of these goals should be decisive when they conflict.2 We attempt to make progress here with a more modest approach -- to set out and defend a normative theory to guide decisionmakers in the regulation of business contracts.3 The theory’s affirmative claim, in brief, is that contract law should facilitate the efforts of contracting parties to maximize the joint gains (the “contractual surplus”) from transactions. The theory’s negative claim is that contract law should do nothing else. Both claims follow from the premise that the state should choose the rules that regulate commercial transactions according to