 Another explanatory puzzle is broader and focuses not on specific doctrines but rather on contract law’s generic structure. The economic approach is free to focus on efficiency and to disregard both distributive fairness and freedom only insofar as it ignores the inequities and vulnerabilities that figure in the lives of natural persons. The most sophisticated economists recognize this and limit the domain of their arguments to contracts among firms owned by diversified shareholders (see, e.g., Schwartz &amp; Scott 2003). This focus on firms suits the efficiency standard: firms are artificial entities, so that concerns about freedom and autonomy are irrelevant to regulating their behavior. Moreover, the diversified holdings of the natural persons who own the firms cause legal rules to have no distributive effects across owners since the owners hold shares in firms that are benefited as well as those that are burdened by every legal rule. The firms that the economic approach focuses on are, therefore, mere instrumentalities of shareholders who, insofar as they own (or could own) diversified portfolios, are all more or less identically situated with respect to every transaction that contract law might regulate. This suggests that the economic approach abandons a basic presupposition from which the study of contract law as the law of agreements ordinarily begins. Contracts, intuitively understood, involve coordination among multiple parties with distinct interests. But there is a sense in which the transactions modelled by economic theory ultimately involve only one such party: the diversified shareholder who stands behind the firms on both sides of every contract. This is of course an idealized model, and actual firms will often have differentiated owners. Nevertheless, the model casts doubt on whether transactions among firms should be understood, in the end, to be agreements at all.