Monday, February 20, 2023
Contracts as Contracts
Despite—or maybe because of—its richness as a legal subject, there has been a persistent attempt to reduce contract law to simple or even singular propositions. In Contract as Promise, Charles Fried aimed to explain contract law in terms of the morality of promises. Based I think on Fried’s title, many articles have been titled in the same pattern, presenting contracts as something else. Not all of those articles are reductive, but their titles perhaps reflect a commonplace impulse to argue that contract law has some singular purpose that can be achieved in a straightforward way.
In this post I want to highlight three related lessons I have learned from Mel Eisenberg’s work. They each resist the tendency to oversimplify contract law.
The first lesson is that no singular discipline or methodology—for example, no isolated axiomatic, economic, or philosophical approach—is sufficient to describe or justify the rules of contract law. Classical contract law was an elaborate system of axioms; it has eroded, as Mel’s work has shown in detail, because it was not responsive to social propositions—like business norms, moral norms, and policy. There is little reason to apply a rule just because professors in 1880 thought it was “logical,” particularly when they assumed potentially arbitrary premises. Law is not imposed on us by aliens or by the past, and its goal is not to make professors happy when they admire its structure or simplicity.
Unlike the old axiomatic commentators, the Chicago-style law-and-economics analysis of law pays attention to policy—but only to one kind of policy and only in its own limited way. Like the axiomatic scholars, the more militant forms of the law-and-economics movement have tended to assume their conclusions—just in more sophisticated ways. Also, the movement for the most part ignores morality, which Mel’s work has shown is another important pillar of contract law.
Modern philosophical attempts to unify or reduce contract law suffer from similar problems, either because they focus too much on a single moral proposition (rather than many) or because they try to analyze contract law at the wrong level of generality. For example, when legal philosophers try to connect contract law to abstract and high-level values, like liberal democracy, they tend not to do very well. I once mentioned this last point to Mel, observing that it was odd to try to defend modern contract law in terms specifically of the values of liberal democracy, because the common law didn’t arise in such a political system and because many rules of contract law are arguably functionally similar around the world (though they can be discussed with very different terminology). Mel responded, with his characteristic humor and insight, by saying something like: “People still want to make money in a dictatorship.”
The second lesson is that to explain and improve law, we need imagination; relying on convention alone isn’t enough. Many of the errors of the classical axiomatic scholars seem to have arisen just from conceptual blinders—taking something conventional as if it were mandatory. For example, in a well-known exchange on the floor of the ALI, Williston seemed to express the belief that a contract either must be enforceable by expectation damages or not enforceable at all; there was no middle ground. As it happens, this appears to be a commonplace mistake; I have seen students make it, for example—that is, I have seen them regard Williston’s idea on the point as intuitive and obviously right. But clearly there is no absolute restriction against, say, reliance damages or some other enforcement mechanism; there at least is a debate to be had about remedies.
In his work, Mel has argued specifically against “binary” conceptions of the law—the idea that rules must have an “on/off” quality, with no middle ground—and I take his work to be an example of the proposition that there is often further imaginative work to do in improving law. Features of some legal rules may represent zero-sum games, but the law as a whole is not zero-sum in the same way, and thoughtful new ideas to analyze doctrine can work like any other development in technique, technology, or art.
The third lesson is that law is dynamic—it must change because society changes. In civil-law systems particularly, but also in much commentary on the common law, people talk as if “certainty” is a first-order goal for the law on its own—and maybe for some people it is even the primary value of the law. On the contrary, certainty is useful or right only because of other values that it serves as a shorthand or proxy for; for example, undermining parties’ reasonable reliance on a rule is unfair. If we really believed certainty were as important as some legal commentators say it is, we would (for example) outlaw all technological and social progress.
The vision of contract law that Mel’s work points toward is one that is responsive to social concerns and dynamic in the face of change. Contract law in particular has changed markedly in the last 100 years, which is fortunate because many and perhaps most of the rules in contract law 100 years ago were entirely wrong—as Mel has, again, shown in detail.
To be clear, the absence of grand theories does not imply the absence of principle. Instead, what Mel did over decades was to develop, systematically, analyses that elaborated and expanded principles. His work in contract law charts new but always meticulously justified categories of cases. It explains sound cases but is willing to reject wrongly decided ones. It incorporates insights from other disciplines but doesn’t accept their purported conclusions uncritically. It always exercises judgment.
In the end, contract law isn’t more or less than contract law, and contracts are contracts—not just promises, not easily explained as property or through tort law, not all reducible to simple propositions of college-level economics. If nothing else, maybe in honor of Mel’s work we can give up the series of article titles that treat contract law as if it must really be something else.
Related posts from the Mel Eisenberg Symposium:
Posts from the second week:
Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part V: Introducing the Second Week