Monday, March 15, 2010
This week, the Blog will feature a series of posts on recent scholarship relating to the relationship between contract and fault or between contract and promissory obligation. These themes are explored in greater detail in the forthcoming book, edited by Omri Ben-Shahar and Ariel Porot, Fault in American Contract Law (Cambridge University Press 2010). Today’s post is about Martha Ertman’s chapter in the volume, “The Productive Tension between Official and Unofficial Stories of Fault in Contract Law,” which can be downloaded from the Social Science Research Network here.
Professor Ertman presents as the “official story” the notion that contracts law is a strict-liability regime and that the state of mind of the breaching party ought to have no role in the assessment of damages. As Justice Holmes put it, “the wicked contract-breaker should pay mo more in damages than the innocent and the pure in heart.” But that official story is supplemented, as is often the case in contracts law, with numerous exceptions in which courts do consider fault either in determining liability or in assessing damages. Professor Ertman argues that these exceptions facilitate rather than undermine contracts law by facilitating ex ante planning.
The chapter comes complete with its own Venn diagram and with some colorful metaphors to help the reader conceptualize the relationship between contract and fault, between contracts damages and tort damages, and between public and private mechanisms for social regulation. But Professor Ertman also hammers her thesis home with evidence from the Restatement (2d) of Contracts, the Uniform Commercial Code and case law to demonstrate that there have always been exceptions to the general rule that contracts law is not about fault. R.2d § 90 permits recovery based on promissory estoppel and thus incorporates a notion of fault to the extent that promisors induce reasonable reliance. UCC § 2-713 permits additional damages in cases of willful breach. In Jacob & Youngs v. Kent, Judge Cardozo would have awarded damages but for his finding that there was an “innocent breach of an inessential term.”
In the final section of her chapter, Professor Ertman draws on George Lakoff’s work on body-based metaphors to suggest ways in which contracts doctrine benefits from the supplement fault-based theories provide to the general strict-liability regime that constitutes the “official story” of contract law. She concludes that while the official story “buttresses the planning or certainty side of contract law,” the unofficial story tempers the law by permitting considerations of fault, thus preventing contracts law from encouraging opportunistic breaches that would undermine the goal of certainty.
Professor Ertman’s chapter is short, but it provides a very useful framework that contracts profs could utilize to help students organize their ideas about contracts damages.