When is an illicit promise morally or legally binding? Perhaps the most famous fictional illicit promise of all time is the one that appears in William Shakespeare’s Merchant of Venice. (I am indebted to my friend and colleague Nate Oman, who has explored the historical and commercial contexts of Shylock’s immortal pound-of-flesh pact at length in his book The Dignity of Commerce: Markets and the Moral Foundations of Contract Law (University of Chicago Press 2016). Also, as an important aside, although the character of Shylock the moneylender can be portrayed in a negative or stereotypical light, at the same time, Shylock’s motives and actions can also be seen in a more sympathetic light. In the words of the great Jewish actor Jacob Adler, who played the role of Shylock on the stage, Antonio is “far from the chivalrous gentleman he is made to appear. He has insulted [Shylock] and spat on him, yet he comes with hypocritical politeness to borrow money of him.” Jacob Adler, A Life on the Stage (Applause Books 1999), p. 345. Also, Portia’s plea for mercy can be seen as empty cheap talk. After all, she herself shows little mercy toward Shylock and ends up resorting to trickery and deception in court to defeat Shylock’s contract. Worse yet, from a due process perspective, the procedures used in Shylock’s case at the end of the play are a mockery of justice, with Portia, a party with an interest in the outcome of the case, acting as Shylock’s judge.)
In Shakespeare’s Elizabethan morality tale, which is set in the Republic of Venice during the Late Middle Ages, the character of Shylock agrees to loan a large sum of ducats to Bassanio without interest in exchange for the legal right to take a pound of Antonio’s flesh in the event of default. Assuming Shakespeare’s Shylock was acting immorally when he insisted on this dramatic penalty clause, the immortal pound-of-flesh pact in The Merchant of Venice illustrates the internal tension between our deep moral intuitions and the mercenary mercantile logic of the Rialto in Shakespeare’s play. As Nate Oman has noted, our moral intuitions and sense of fair play tell us Shylock’s pound-of-flesh pact should not be enforced in the interest of individual justice, but at the same time, the free flow of commerce and the greater good–the integrity of Venetian trade in future deals–demands that all voluntary bargains be enforced. To paraphrase Prince Hamlet: to enforce or not to enforce, that is the question! Simply put, although this fictional agreement was the product of one playwright’s literary imagination, it dramatically illustrates the problem of illicit promises. Specifically, what is the moral and legal status of such a monstrous promise? After all, the parties voluntarily and knowingly consented to these terms, however heinous. Now, what if Shylock and Bassanio had inserted an arbitration clause into their loan agreement? I will consider that very possibility in my next blog post.
prior probability 