The level of responsibility that corporations should take for human rights violations that take place in their supply chains is heavily debated. Most would agree that corporations are responsible for their own business activities and negative impacts that may result from them, but the level to which they should or can be held accountable for impacts further up the supply chain is much less clear. Soft law in the form of international frameworks attempts to include the activities up the chain (i.e. via relationships, influence or indirect impacts) and we are now seeing domestic legislation requiring corporate disclosure or due diligence, or both, with respect to supply chains. This perhaps suggests that corporations should be held accountable for their supply chains. We tend to turn to the court system to determine whether companies can actually be held accountable. Using the Canadian context to illustrate, we are seeing cases proceed against Canadian companies whose foreign subsidiaries are responsible for human rights atrocities.Footnote ¹ However, a recent unsuccessful attempt at a class action lawsuit against a large Canadian company for the actions of its suppliers and sub-suppliers in the Rona Plaza disaster in Bangladesh in 2013, suggests that the Canadian courts are not ready to extend liability for the actions of suppliers down the chain to Canadian companies.Footnote ²

Tjon Soei Len’s book suggests a novel new approach to holding companies accountable for what takes place in their supply chains. This approach evaluates the contract between consumers and retailers from a capabilities perspective on minimum justice. The question ‘should mutually beneficial contracts that impair the basic capabilities of others elsewhere be invalid under a regime of contract law?’Footnote ³ is explained, explored and answered. The introduction and chapter 1 set out the task and key questions to be considered, as well as key developments in European contract law. Chapter 2 develops the capabilities perspective on minimum justice and applies it to contract law. In chapter 3 it is contended that sweatshops are indeed morally objectionable. Chapter 4 lays out the necessary background on sweatshops in the garment supply chain and the connection of these sweatshops to consumers in Europe. This sweatshop example is then used in chapter 5 to analyse whether or not mutually beneficial contracts that impair the basic capabilities of others elsewhere are invalid under current rules of contract law in Europe. Conclusions are set out in chapter 6.

The book’s introduction claims that our consumer transactions do not reflect the costs of decent production and both consumers and retailers have knowledge of the deplorable conditions under which many of our goods are made. The idea that society sets minimum standards for private conduct by asking what private transactions will be supported through state power in contract law is introduced in chapter 1. Recognizing that contract law typically seeks to protect weak or vulnerable contracting parties, the author focuses on the balance between societal interests and the interests of strong contracting parties. In addressing this balance, she maintains that markets play a pivotal role in the meeting of basic needs and contract law governs conduct in the market and accordingly, contract law should consider social justice. She points to the overlap of public and private law in other instances in European law, such as the protection of certain categories of people like consumers or employees, as support for the consideration of social justice outcomes involving third parties in contract law. Finally, the global setting is explored, expanding the balance to one between global societal interests and the contracting parties. Tjon Soei Len observes that our activities have ‘global implications that are increasingly observable, measurable and foreseeable.’Footnote ⁴

Chapter 2 develops the relationship between a capabilities approach to minimum justice and contract law in detail. The author recognizes Amartya Sen as the original developer of the capabilities concept in human development, and then she focuses on Martha Nussbaum’s normative framework for minimum justice in terms of capabilities. Nussbaum lists different areas where minimum justice requires substantive freedom, namely the areas of: life, bodily integrity, senses, emotions, practical reason, affiliation, other species, play, and control over one’s environment. Tjon Soei Len explains that this list serves the purpose of creating a decently just society, specifically providing that all individuals have the ability to pursue reasonable conceptions of good. Nussbaum asserts that responsibility for securing basic capabilities for all lies with the state, and more broadly with other global actors such as corporations or consumers. Nussbaum takes this further by suggesting that national states shape structures that extend national borders which questions whether ‘a society can claim to be minimally just if it supports contractual relations (of its own members) that are detrimental for others elsewhere.’Footnote ⁵ Tjon Soei Len asserts that one of the functions of contract law is to determine which agreements between private parties can be enforced using state power, and contacts that are immoral, illegal or contrary to public policy can be found to be invalid. Using the capabilities approach, Tjon Soei Len posits such limitations as part of what should (or should not) fundamentally be recognized as a contract versus constraints on private contractual relations.

The first part of chapter 3 describes features of sweatshops such as low wages, excessive hours, hazards, and degrading and abusive practices such as mental and verbal abuse. These features are further explored in the context of the garment industry where outsourcing to low-cost production locations is common, retailers are in powerful bargaining positions and consumers demand quick access to fashionable products at low costs. The author also details dominant arguments used to morally legitimize sweatshops, such as a lack of a better alternative for workers and the need to respect the voluntary choices that sweatshop workers make, and then refutes the arguments, most notably by focusing on the background conditions that limit the choices available. The chapter ends with the important consideration of whether sweatshops are in fact negative externalities of consumer transactions for sweatshop products, particularly when compared with modern slavery. The capabilities approach answers this for us in the affirmative.

Chapter 4 details contractual objections to the normative argument that consumer contracts can be held invalid for immorality. These objections include consumer ignorance, privity of contract, distance between the consumer transaction and sweatshop, and the separation between moral and legal norms. This chapter also details the methodology used to test the hypothesis of contractual invalidity for immorality of the consumer contracts related to the hypothetical sweatshop – case-based legal comparison.

The original question is tested in chapter 5 by considering whether a consumer contract for clothes in a store, where both the consumer and retailer are aware of the sweatshop production conditions for the clothes, could be found to be invalid on the grounds of contract immorality in Europe generally, and in the Netherlands, Germany, France and England specifically. While there is no general European contract law instrument at present, and attempts to create such an instrument have not referenced contract immorality directly, there is a potential basis for this in the Draft Common Frame of Reference (DCFR). Considering the test case in each of the national jurisdictions noted, all of the legal systems allow for some type of argument regarding the consideration of the interests of third parties or society as a whole, but there are no direct precedents. Tjon Soei Len offers well-reasoned arguments in each of the national systems. In the Netherlands, Germany and England, it seems that knowledge of the sweatshop conditions would be required on the part of both consumer and retailer (although ‘should have been aware’ suffices in the Netherlands and Germany), whereas the knowledge of only one party is sufficient in France. The out-of-country location of the sweatshop does not appear to quash the argument in any of the jurisdictions, but this is less certain in Germany. Finally, the author suggests that public opinion may play a significant role in how any court ultimately balances the interests of third parties and society as a whole against the freedom to contract.

Chapter 6 provides a detailed summary of the capabilities perspective to minimum justice as applied to contracts, and reviews the conclusions of the application of the test case to the examined European legal systems. The author concludes by recommending that: contract law’s minimum standards should include justice towards others beyond national borders, the EU should actively consider minimum standards that are applicable to conduct on its market, and the activist agenda should include a contract test case.

Minimum Contract Justice thoroughly sets out arguments that could be contained in a contract test case. The detail on the different legal regimes in Europe is particularly helpful and could be the starting point of such an analysis in other jurisdictions. As markets and contracts become increasingly global, the application of the analysis and arguments to regional or international instruments is also of value. The reader is left with the question of the practical implications of a consumer contract being found to be invalid – as the parties themselves are not bringing the action or seeking the court’s assistance in enforcing the contract, what is the practical consequence of a consumer contract being found to be unenforceable? The author is very clear that answering this question is not the purpose of the book. Finally, at times, the book could be more succinct as some arguments are repetitive. They are important arguments though, and Tjon Soei Len presents a novel approach to addressing human rights in the supply chain, for which she should be commended.