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Valparaiso Univ. Law School

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Thursday, March 18, 2010

Fault Lines in Contracts Theory IV: Chapin Cimino

Chapincimino In this, the last in our series on the fault lines in contract law, we introduce Chapin F. Cimino's "Virtue and Contract Law," which is forthcoming in the Oregon Law Review and comes "highly recommended" from the Legal Theory Blog.  In her article Professor Cimino presents virtue theory as a means of escaping what she characterizes as the “dominant theoretical dichotomy” confronting contracts scholars, that between consequentialism (which informs law and economics) and deontology (which informs rights-based theories).  Professor Cimino recommends virtue theory to private law scholars because of its “symbiotic focus on both the means and ends of law.”  Virtue theory is uniquely positioned to help us understand contracts as both economic and social things and thus to better capture the parties’ intent.

In Part I of her article, Professor Cimino argues that consequentialist approaches focus on the ends of contracts rules – do they make the parties better off? – while deontological approaches focus on the means – does the rule require the parties to do what is morally justifiable?  Because of their different focuses, contracts theorists tend to argue in each other’s blind spots, resulting in a theoretical logjam.  Courts too, focusing either on consequentialist ends or rights-based means, render rulings that neglect either one component or the other of the dynamics of contracting.

Aristotle  In Part II, Professor Cimino explains the Aristotelian concept of “virtue” with which she is working and its application to contracts law.  “Virtue” is not the same as morality; rather, it is a “moral and intellectual disposition” that leads a person to choose right action.  Choice is crucial to Aristotelian virtue.  A virtuous act is one taken voluntarily and not in response to a duty to act.  The virtue of justice in the context of contracting involves transactions in which each party gets no more and no less than her due.

Part III is an ambitious literature review, in which Professor Cimino describes the revival of interest in virtue theory in intellectual history, political theory and legal theory.  This section builds to a discussion of a recent collection of essays, Virtue Jurisprudence.  That valuable volume raises more questions than it answers, which is not surprising given that it is the first of its kind, and Professor Cimino proposes to expand on the work begun therein by exploring the relation of law and virtue in the context of contracts law.

In Part IV, Professor Cimino develops her application of virtue theory to contracts law, arguing that virtue theory best enables courts to capture “the single most foundational concept in contract: the parties’ intent.”  While virtue theory has largely been applied in public law contexts, its application to contracts law makes sense given the social relationship that arises between contracting parties.  While existing approaches privilege either the means or the ends of contracting, virtue theory permits one to theorize the parties’ intent as to both aspects of the contractual exchange.  With respect to intent, courts either tend towards an approach that maximizes efficiency or one that promotes promise keeping, but the parties likely were trying to do both.  In a brief section that touches very closely on the concerns of the papers that were the subjects of earlier posts in this series, Professor Cimino cites to evidence suggesting that lay people assume that there is a moral component to contracting that leads them to want to award higher damages in cases of more morally culpable breach.  On this basis, Professor Cimino argues that non-lawyer parties clearly care about the means of contracting. 

Finally, Professor Cimino shows how her virtue theory can be deployed to help courts get at the parties’ intentions when filling in “reasonableness” terms and in delineating the implied covenant of good faith and fair dealing.  With respect to “reasonableness,” Professor Cimino suggests that a virtue-based approach would seek to determine not what is reasonable, but what was the “natural” intent of the parties, with an eye to protecting their expectations with respect to both promise-keeping and efficiency.  The shift is subtle but significant and one of which courts are fully capable, especially as something like virtue theory seems to have informed aspects of the Uniform Commercial Code.  Similarly, Professor Cimino finds elements of virtue theory embodied in the Official Comments to the Restatement (2d) § 205, which explicates the duty of good faith and fair dealing in terms of both the means and the ends of contracts. 

The paper thus elegantly develops an abstract apparatus and then deploys it strategically to illustrate not only its logical force and usefulness but also its proximity to our inarticulate intuitions about contract interpretation.  As I was considering Professor Cimino’s theory in connection with my own litigation experience, I could think of several examples of trial judges who, without any familiarity with the Nichomachean Ethics, decided issues with a keen eye to both the means and ends underlying the parties' intent.

[Jeremy Telman]

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