ContractsProf Blog

Some American Reflections on KCON XVII

How was this year's KCON different from other KCONs?  I've been reflecting on that question in the aftermath of the conference.  The conference was large.  There were usually three concurrent sessions going at once.  I can't replicate Nick Mouttotos's feat in yesterday's post by providing an overview of the conference as a whole. Rather, this post is impressionist.

I will highlight three main differences that made this years KCON unique.  They correspond roughly to the conference's three plenary sessions, and then a fourth difference -- a focus on relational contracts theory that really took me by surprise.  The plenary themes were respectively: Hugh Beale on the drivers of difference among national contracts law regimes; Mindy Chen-Wishart on the tendency of asymmetrical contracts towards self-destruction; and Aditi Bagchi on contracts law theory.  In short, the themes were comparative contracts law, regulating consumer contracts and other contracts of adhesion, and theory -- broadly construed.

The conference organizer, Dr. Katarzyna Kryla-Cudna (Kasia), chose well in inviting Hugh Beale (right) to open the conference. After the obligatory apologies for his lack of expertise in comparative law, Professor Beale provided some keen observations not only on his proposed topics -- the drivers of diversity in legal systems -- but also on the ways in which we measure such diversity.  Adopting a functional approach, Professor Beale first noted that, setting aside terminological differences, one finds that contracts law across jurisdictions will often yield the same results in cases arising from similar facts.

That said, there are areas of striking non-uniformity.  One area of concentration during the conference was the doctrine of "good faith" and the related obligations of disclosure and fraud through non-disclosure or concealment.  Beyond Professor Beale's presentation, I learned at the conference there is some movement in the UK to adopt American approaches to the concept of good faith, but European perspectives on the subject persuaded to me that our doctrine of good faith is simultaneously well-developed and under-theorized.  Our courts invoke various good faith doctrines in all sorts of contexts, but we lack an systematic understanding of the doctrine, which perhaps explains a lot of variation in how the doctrine applies in our different jurisdictions. 

Professor Beale also touched on the most foundational differences between common-law and French approaches to formation.  In principle, Professor Beale said, the French take a subjective approach to formation.  At least at the panels I attended, the conference did not return to this theme, and I am glad.  I think my head would have exploded had I tried to work out all the consequences of such an approach to formation.

Professor Beale also introduced the comparative theme of the interaction between contracts doctrine and regulation.  This subject also was explored in multiple panels.  Professor Beale's paper focused on B2B transactions, but many papers explored the realm of consumer contracts. My general sense is that, as a regulatory matter, European approaches are far more protective of consumer interests in the context of contracts of adhesion than is the U.S. But my sense is that relational contracts theory explains why things end up about the same.  Our law allows for some pretty sharp contracting practices, but our service-oriented commercial culture and our class-action mechanism combine to discourage companies from insisting on their legal rights.  Relatedly, Professor Beale touched on the very different role of judges in the common-law and civil-law traditions.  He provided us with a wealth of themes, which were explored in greater depth, and often with an appreciative nod in Professor Beale's direction throughout the conference.  Professor Beale was also active in the sessions providing illustrations and anecdotes from his experience as a Law Commissioner, delivered with the obligatory self-deprecation one expects from UK academics.

Mindy Chen-Wishart's work was at the center of the conference both literally and figuratively.  She presented her work just after lunch on the first day of the conference, just shy of the conference's midpoint and was also the event's honoree, and so her work was also a theme at the conference dinner.  References to her work in other papers throughout the conference make clear that, once again, Kasia made an inspired choice.

Professor Chen-Wishart's theme was consumer contracting and the disconnect between our theories of contracting, whether based in will theory, promise, or assent, and the reality of contracts of adhesion.  Much like Peggy Radin's division of the universe of contracts into World A of negotiation and World B of boilerplate (you can gather links from our dedicated symposium here), Professor Chen-Wishart noted that contract theory assumes negotiations between parties of relatively equal bargaining power.  The reality is nothing like that.  Moreover, Professor Chen-Wishart's presentation focused on the ways in which modern contracts law is self-cannibalizing.  One-sided contractual terms negate the principles that contract theory posits as the reasons why contracts are binding.

Professor Chen-Wishart's presentation interacted with many of the presentations that followed, perhaps because engagement with her work is unavoidable for UK and comparative scholars.  Panelists addressing conference themes of consumer contracting, adhesion contracting, defenses to enforcement of one-sided terms, and regulation of consumer contracts all referenced Professor Chen-Wishart's work and the frameworks she has created for addressing these issues.

The final plenary session featured Aditi Bagchi's work on contract as exchange, a tour de force, piece of scholarship with which future scholarship on the theory of contracts will have to engage.  Professor Bagchi would replace theories of contract sounding in will theory or promise with a focus on the actual work that contracts do in bringing about material exchange. 

Professor Bagchi's conference presentation was stimulating and accessible.  She ably identified the elements of actual contracting left unaddressed by traditional theories of contract sounding in will theory, promise, or agreement.  She then offered an overview of the comparative advantages of her theory of contract as exchange.  It was a stimulating talk that left me wanting more.

Professor Bagchi circulated a draft of her paper which is far deeper, richer, and more philosophically challenging than the conference presentation.  It is also dauntingly complex.  I won't try to say more beyond recommending that readers look out for the paper when it makes its appearance on SSRN or in print.  This is very weighty scholarship, obviously the product of decades of reflection on the subject.  Professor Bagchi's scholarship contains multitudes but then synthesizes that material into a challenging reconceptualization of contracts theory.  She renders the familiar strange and then re-familiarizes it in striking ways.

I can't say that the panels engaged with Professor Bagchi's theories directly.  More so than the other plenary papers, Professor Bagchi was striking out in new directions, building on her prior scholarship but staking out new territory.  Nonetheless, her work is ambitious enough to touch on the conferences major themes beyond contracts theory.  Foundational as it is, it can apply to any national tradition, and her work is intensely engaged in the sorts of problems that arise in a world where the law of contracting has moved from negotiation to adhesion. 

While this year's iteration of the conference supplemented the usual KCON subject matter, there were also some themes missing or downplayed.  The first was pedagogy.  KCON usually includes multiple panels on teaching contracts law.  That subject went unaddressed.  Second, while two panels on innovation addressed the intersection of contracts law and technology, they seem to have focused  on smart contracts and blockchain.  I did not attend either session, so I'm not sure what else they covered.  In any case, I expect that when we return to the U.S. next year for KCON XVIII, the impact of AI on contract drafting and contract interpretation/enforcement will be a pervasive theme.

I hope that we can continue to pursue some of the unique themes of this year's conference next year.  While we have a favored candidate for next year's venue, place and date are yet to be determined.  Stay tuned.

Nick Mouttotos (U. Bremen) & Dan Barnhizer, Summary of the Informed Consent Conference in Bremen

Insights from the Institute for Commercial Law
Informed Consent to Dispute Resolution Agreements Conference 
Universität Bremen, Bremen, Germany 20-21 June 2024

Introduction by Daniel Barnhizer (left)

The theme proposed by the Institute for Commercial Law focused on standard form contracts and choice of law and choice of forum terms. This event, occurring 20-21 June 2024 at the Haus der Wissenschaft in Bremen, brought together scholars from the US, the EU, and other civil law and common law jurisdictions to explore the nature of assent, the history of private autonomy in contract. In terms of organization and administration, this was one of the easiest and most enjoyable conferences I’ve ever attended. Thank you so much to our hosts for the amazing accommodations, the coffees and snacks during breaks, and the incredible dinner at the Bremen Ratskeller. Throughout the conference, I was consistently stunned by the welcome and engagement displayed by the participants and organizers.

As an initial matter, I would like to express my sincere and heartfelt appreciation to Prof. Dr. Gralf-Peter Caliess and Dr. Nicholas Mouttotos for organizing this conference. Additionally, Margit Knipper was absolutely amazing in handling the administrative details for this conference. And finally, many thanks to Zhen Chen for developing and gifting the participants with the conference poster appearing below:

Conference Summary by Dr. Nickolas Mouttotos (below right)

The conference was organized as a moderate split between history (particularly Symeonides), general contract theory, and choice of law / choice of forum scholars. Literally every presenter was fully engaged with the attendees – and for every panel there were more questions and comments raised by the attendees and participants than would fit within the permitted time. Seriously robust, this conference was something to which academia should aspire.

Day One: Party Autonomy and Contract Law

The conference commenced with a keynote speech by Symeon C. Symeonides, the Alex L. Parks Distinguished Professor of Law and Dean Emeritus at Willamette University, who recently celebrated 50 years of contributions in the US conflict of laws field. Symeonides' address, titled "Party Autonomy: Then and Now," provided a historical and contemporary analysis of the principle of party autonomy, highlighting its evolution from the Decree of King Ptolemy VIII in 118 B.C. until its modern adoption in 152 countries, signifying its universal acceptance. Symeonides addressed the principle’s current challenges in delineating the modalities, scope and limitations.

The first session, chaired by Professor Rui Dias from the University of Coimbra, focused on "Consent, Contract, Constitution." Professor Nancy Kim from Chicago-Kent College of Law started the session with a compelling presentation on "Consent and Dispute Resolution Clauses," examining how consent is construed in general under the law but also specifically in the adhesive contract setting. Kim emphasized that consent requires the manifestation of assent, knowledge and voluntariness examining how much of each condition is required for consent to be ‘valid’. Kim noted the importance of dispute resolution clauses on how they affect substantive rights and autonomy interests, something that was taken up by the next presentation by Professor Gralf-Peter Calliess of the University of Bremen, on "Reflexive Contract Law: A Constitutional Framework." Calliess delved into the constitutional right to remedy, which dates back to the Magna Carta Libertatum of 1215, and is nowadays intrinsic to any state operating under the rule of law.  Calliess suggested that a waiver of this right to remedy by contract must be given in full knowledge of the facts, that is to say on the basis of informed consent.

The second session, chaired by Professor Ralf Michaels from the Max Planck Institute for Comparative and International Private Law, explored "Standard Form Contracts and Unfair Terms." Frederick Rieländer, Professor of Law at the University of Bremen compared the Unfair Terms in Consumer Contracts Directive (93/13/EEC) with the US Restatement of Consumer Contracts, providing a transatlantic perspective on consumer protection. Rieländer highlighted the limited effectiveness of the assent doctrine and disclosure requirements under the Restatement of Consumer Contracts and the contrast with the Unfair Contract Terms Directive in the EU that is more focused on transparency. Professor Daniel Barnhizer from Michigan State University discussed "Assent under Adhesion Contracts and the Doctrine of Unconscionability," stressing the nuances of consent in standard form contracts and offering a reimagining in the age of generative artificial intelligence. Barnhizer’s view of a future contract law imagines artificial intelligence as assisting in abandoning the current model of policing assent through proxy in favor of a ‘persuaded assent’ model with AI Shopping Assistants, for example. Dr. Peter McColgan from Humboldt University of Berlin also argued for a new model, one that is based on control with increased scrutiny of mass contract terms, breaking the information bottleneck. McColgan’s presentation was titled "A Farewell to the Information Model in the Law of General Terms and Conditions?" since he favors the complete abandonment of the current model that leads to consent being a legal fiction.

The day wrapped up with a conference dinner at the historic Bremer Ratskeller, where Dr. Claudia Schilling, Senator of Justice and Constitution of the Free Hanseatic City of Bremen, welcomed the attendees.

Day Two: Deliberations on Choice of Law, Jurisdiction, and Arbitration

Day two began with a session on "Choice of Law," chaired by Professor Patrick Leyens from the University of Bremen. Professor Laura Little from Temple University provided insights into the elaboration of the provisions on choice of law found in the Draft Restatement (Third) of Conflict of Laws, in which she serves as an associate reporter. Little emphasized that the Restatement strives for a balancing of various competing values such as liberty, party autonomy and economic efficiency on the one hand, and protecting state interests, reliance on established law and constraining misuse of superior power on the other hand. Professor Kermit Roosevelt III from the University of Pennsylvania, the reporter of the new Restatement of Conflict of Laws, explored the intricacies involved in the choice-of-law analysis and argued that courts confronted with a choice-of-law clause should consider the interests and policies of the state whose law has been selected.

The subsequent session on "Choice of Jurisdiction," chaired by Professor Geneviève Saumier from McGill University, featured Professor John F. Coyle from the University of North Carolina, who discussed the enforceability of choice-of-jurisdiction clauses in the US and the conflation by courts of the notion of notice with consent. Professor Hannah Buxbaum from Indiana University - Bloomington examined the impact of statutory anti-waiver provisions, noting the problems in enforcing such pre-dispute resolution agreements in the consumer context but also their importance in establishing a functioning online dispute resolution mechanism. Professor Marta Pertegás Sender from Maastricht University addressed consent to jurisdiction under the EU Brussels Ia and Hague Choice of Court regimes, noting the absence of the term ‘consent’ in the Brussels Ia Regulation and the emphasis on satisfying the written form requirement found under Article 25.

After lunch, the focus shifted to "Arbitration Agreements" potentially the most controversial of dispute resolution agreements, particularly for consumer contracts. Chaired by Professor Ulrich Schröter from the University of Basel, this session included Professor Stephen J. Ware from the University of Kansas, who spoke on "Contracting Away Constitutional Rights in the United States," and Professor Camelia Toader from the University of Bucharest, who analyzed the legal landscape in Europe with regard to arbitration agreements, providing comparative remarks on how different European countries regulate such agreements. Ware noted the different consent standards that govern various types of dispute resolution clauses in the US, with bench trial clauses usually requiring a higher threshold for establishing consent.

The conference concluded with a wrap-up session chaired by Professor Gralf-Peter Calliess, featuring Dr. Nicholas Mouttotos from the University of Bremen. Mouttotos' presentation, "Towards a Coherent Regulation of Dispute Resolution Clauses?" encapsulated the key themes and discussions of the conference, leaving attendees with much to ponder. Mouttotos highlighted that balancing party autonomy with protecting rights and ensuring fair and informed consent is an ongoing challenge that requires a refinement of our understanding and approach to consent in dispute resolution agreements in particular.

Conclusion

The Institute for Commercial Law conference was a remarkable event that fostered deep discussions on critical aspects of contract and commercial law. It provided a platform for sharing perspectives between the US and Europe, identified challenges in addressing choice of law and choice of forum clauses in adhesive contracts, and explored innovative ideas for dealing with the problem posed by standard form contracts in identifying assent. The diverse range of topics and the high caliber of presentations made it a significant contribution to the field. The proceedings of the conference will be published as a Special Issue at the German Law Journal, an open access journal of the Cambridge University Press, in early January 2025.

Call for Papers, Obligations XI: Private Law Inside and Out

The Eleventh Biennial Conference on the Law of Obligations will be held at Harvard Law School from July 8–11, 2025. The conference will be co-hosted by Harvard Law School and Melbourne Law School, and will be co-convened by John Goldberg, Andrew Robertson and Henry Smith. The biennial Obligations Conferences bring together scholars and practising lawyers from across and beyond the common law world to discuss current issues in private law. Obligations XI will be the first conference in the Obligations series to be held in the United States.

The conference theme is intended to provoke discussion about the inside and outside of private law. The conference will focus on the contrast between ‘internalist’ and ‘externalist’ perspectives on the law in this field. It will also consider the boundaries and relationships between private law and morality, private law and economic efficiency, and private law and other policy goals. A central aspiration of this iteration of Obligations is to give private law scholars working in different intellectual traditions an opportunity to identify previously underappreciated overlaps and synergies, and thereby help to break down methodological barriers to an improved understanding of the field.   

Both established and early-career legal scholars are invited to submit proposals to present papers addressing the conference theme, either at a general level or in relation to any aspect of the law of obligations broadly conceived – contract, property (including intellectual property), torts, unfair competition, and unjust enrichment, as well as equity and other topics within or closely related to private law. Papers exploring relevant issues from a civil law perspective are also welcome. Anyone wishing to offer a paper should submit a working title and an abstract (of no more than 500 words) by email to [email protected] by August 15, 2024. Papers will be selected on the basis of quality, originality, engagement with the conference theme and fit with other papers being presented at the conference. Those proposing papers will be notified by October 1, 2024 whether their papers have been accepted. A waiting list may be established, depending on the level of interest. Late submissions will be considered for inclusion in the waiting list. Presenters whose proposals were accepted for the cancelled 2020 conference are encouraged to resubmit their proposals if the work has not been published in the meantime.

Speakers will be asked to submit fully written draft papers by June 15, 2025 for distribution to conference participants via a password-protected website. It is expected that a small number of selected papers closely focused on the conference theme will be published in an edited collection following the conference. Presenters whose offers of papers are accepted will be expected to meet their own travel and accommodation costs and pay a discounted registration fee. A small number of travel grants are available to support the attendance of scholars travelling from countries that have been underrepresented at previous Obligations conferences. Those wishing to apply for a travel grant should include a short statement with their paper proposals indicating that they wish to be considered for a travel grant, setting out an indicative budget and detailing all available sources of institutional financial support.

The Final Program(me) for KCON XVII

Is now available online here.

 

 

 

KCON XVII This Week in Bristol

It's finally here!

20 June 2024, 8.30 AM - 21 June 2024, 4.30 PM
Clifton Hill House, BS8 1BT

The University of Bristol Law School is pleased to host the 17th Annual International Conference on Contracts (KCON XVII) on 20th - 21st June 2024. KCON is the largest annual international academic conference dedicated to contract law and related areas of commercial law. It brings together contract law scholars, practitioners, and graduate students from around the world. Junior scholars are encouraged to participate, both as presenters and commentators.

KCON affords an opportunity to present and discuss ideas on a wide range of topics at every level of development, including recently published articles, articles accepted for publication but not yet in print, works in progress, thought experiments, preliminary ideas, and pedagogical innovations. It also provides an opportunity to network with colleagues and potential collaborators or mentors from other parts of the world.

Conference Lifetime Achievement Award to honour Professor Mindy Chen-Wishart

Professor Mindy Chen-Wishart will receive the conference’s Lifetime Achievement Award at the conference dinner on June 20, 2024. The Award honours individuals whose careers have been spent in legal academia and who have made major contributions to legal education, contract law scholarship, and the practice of commercial law. Professor Chen-Wishart is the fifteenth person to be so honoured.

Mindy Chen-Wishart is a Professor of Law at the National University of Singapore, an Emeritus Professor of the Law of Contract at Oxford University and an Emeritus Fellow in Law at Merton College, Oxford. She was the Dean of the Faculty of Law of the University of Oxford until 30 September 2023. She was formerly a Senior Lecturer at Otago University in New Zealand and Rhodes Research Fellow at St Hilda’s College, Oxford. She is the author of Contract Law (7th ed), an editor of Chitty on Contracts (currently in its 35th ed), and is leading a six-book series on the Contract Laws of Asia published by Oxford University Press. Her article on ‘Legal Transplant and Undue Influence’ was named the best article in the International and Comparative Quarterly in 2013. She has lectured to the Judicial College in the UK, Hong Kong and Taiwan. Over her career, she has taught a wide range of private and public law subjects.

The Deadline for Submissions for KCON XVII Approaches!

17th Annual International Conference on Contracts (KCON XVII)
20 June 2024, 8.30 AM - 21 June 2024, 4.30 PM
Clifton Hill House, BS8 1BT
Call for Papers and Abstracts

We cordially invite your submissions for the conference. The conference theme is intentionally broad. Proposals relating to any aspect of contract law are welcome. Presentations at past conferences have included studies from doctrinal, theoretical, empirical, historical, economic, critical, international, comparative, pedagogical and interdisciplinary perspectives. All are welcome once again. We also welcome papers and presentations comparing civil law and common law treatment of contract issues. Papers that focus on a single civil law jurisdiction should be put in a wider context.

Expressions of interest in presenting, along with draft titles and abstracts should be submitted to [email protected]. The deadline to submit an abstract is Thursday 15th Feburary 2024. Proposals submitted earlier will be accepted on a rolling basis. Speakers whose papers are accepted will be expected to present in personand to pay the conference fee of £160.

Conference Lifetime Achievement Award to honour Professor Mindy Chen-Wishart

We are pleased to announce that Professor Mindy Chen-Wishart will receive the conference’s Lifetime Achievement Award at the conference dinner on June 20, 2024. The Award honours individuals whose careers have been spent in legal academia and who have made major contributions to legal education, contract law scholarship, and the practice of commercial law. Professor Chen-Wishart is the fifteenth person to be so honoured.

Mindy Chen-Wishart is a Professor of Law at the National University of Singapore, an Emeritus Professor of the Law of Contract at Oxford University and an Emeritus Fellow in Law at Merton College, Oxford. She was the Dean of the Faculty of Law of the University of Oxford until 30 September 2023. She was formerly a Senior Lecturer at Otago University in New Zealand and Rhodes Research Fellow at St Hilda’s College, Oxford. She is the author of Contract Law (7th ed), an editor of Chitty on Contracts (currently in its 35th ed), and is leading a six-book series on the Contract Laws of Asia published by Oxford University Press. Her article on ‘Legal Transplant and Undue Influence’ was named the best article in the International and Comparative Quarterly in 2013. She has lectured to the Judicial College in the UK, Hong Kong and Taiwan. Over her career, she has taught a wide range of private and public law subjects.

More information is available here.

Jeffrey Lipshaw on the Passing of Charles Fried

Charles Fried:  A Personal Appreciation 
Jeffrey Lipshaw

In 2004, I was the general counsel of a chemical company, flirting with the law school in our city about joining its faculty in some capacity to run a center on entrepreneurship and law.  It quickly became apparent that the only way to do the job correctly was to be a full-fledged member of the faculty.  The dean advised me, regretfully, that I was not qualified to join the faculty as I had never published any scholarly articles.  At the time I was twenty-five years out of law school, and I am pretty sure that I had no idea what a legal scholarly article was.  But we were in the throes of trying to comply with Sarbanes-Oxley, and I knew intuitively that there was a disconnect between the corporate governance aims of the statute and what its algorithms actually required.  I had done a lot of reading on moral philosophy that I thought might be helpful.  With the confidence that only complete ignorance could justify, I blithely replied, “Fine, I’ll publish a scholarly article.”

Matthew W. Hutchins of the Harvard Law Record,
CC BY 2.0, via Wikimedia Commons

So I started reading.  And quickly discovered the dominance of “law and economics,” and particularly this fellow Richard Posner.  And I was aghast at the reductionism, the disdain for moral intuition that had been so important in my career.  At some point, I found my way to the issue of the Harvard Law Review containing Posner’s 1997 Oliver Wendell Holmes Lecture on “The Problematics of Moral and Legal Theory,” as well as the responses from luminaries like Ronald Dworkin, Anthony Kronman, and Martha Nussbaum.  One of the responses that struck home for me was titled “Philosophy Matters,” by a person named Charles Fried.  To this day, his parting shot at Posner sticks with me:  “As so often happens, the skeptic here is a disappointed absolutist, taking his revenge on the world for depriving him of all the right answers at once.”

Which led me to Contract as Promise, and the arguments that there were reasons for the social institution of contract law other than those capable of being reduced to economists’ curves. 

Fast forward to fall 2005.  I was visiting at Wake Forest and through this very blog had become friends with Frank Snyder, its founding editor. As I recall, the gatherings now referred to as K-CON were just getting underway by way of Frank and others.  I said to Frank, “2006 will be the 25^th anniversary of the publication of Contract as Promise in 1981.  You should organize a retrospective around it.”  To which Frank replied, “Great idea. Call Fried.” This was funny. I was a less than nobody visiting professor, and I was going to call Charles Fried? I can’t now remember if I called, emailed, or wrote a letter, but I did get a very cordial voicemail back in which he thanked me but said he was already committed to a number of things and wouldn’t be able to get involved.

Fast forward to 2010.  I had now been on the faculty at Suffolk for several years.  One of the professors in Suffolk’s philosophy department, Nir Eisikovits, was a lawyer and close with a number of people on the law faculty.  I can’t remember why, but I met with Nir and the chair of the philosophy department, Greg Fried.  Somewhere in the conversation, Greg mentioned that his father was on the Harvard faculty, and it finally sunk in that he meant Charles.  To which my response was “Really?  Five years ago I tried to get him involved in a 25^th anniversary retrospective on Contract as Promise.  Do you think he’d be interested in doing one at Suffolk for the 30^th?” Within a week, I was sitting with Charles in his HLS office, jotting down the names of the people he thought I should invite, the first of which was Richard Posner, as my “anchor” participant.  Posner promptly accepted (but withdrew later).  The result was a day-long symposium in 2011, with the following participants (in addition to Charles, who closed the proceeding), all of whom came in large part because of their intellectual and personal regard for Charles: Tim Scanlon, Robert Scott, Barbara Fried, Jean Braucher, Randy Barnett, Gregory Klass, Brian Bix, Richard Craswell, Avery Katz, Alan Schwartz, Daniel Markovitz, George Triantis, Juliet Kostritsky, Seana Shiffrin, Curtis Bridgeman, John C.P. Goldberg, Henry Smith, Roy Kreitner, and Nathan Oman.

One of the great pleasures was that I picked Charles up at his house and hosted him through the day.  Sometime later he invited me to the public debate he and Greg had with Alan Dershowitz at the Brattle Theater on whether torture could ever be justified (Dershowitz: yes; Frieds: no), and the after-party at which I wandered around starstruck (I turned around and accidentally bumped into Stephen Breyer). 

If you want evidence of Charles Fried’s intellectual legacy, see Volume 45, Issue 3 of the Suffolk University Law Review.  It will be there forever.  But his friendship and graciousness are what I remember, and it will always be a highlight of my professional life.

KCON XVII: Call for Papers for 2024 Conference in Bristol, England

17th Annual International Conference on Contracts (KCON XVII)
University of Bristol Law School
June 20–21, 2024

The University of Bristol Law School is pleased to host the 17th Annual International Conference on Contracts (KCON XVII) on June 20–21, 2024. KCON is the largest annual international academic conference dedicated to contract law and related areas of commercial law. It brings together contract law scholars, practitioners, and graduate students from around the world. Junior scholars are encouraged to participate, both as presenters and commentators.

KCON affords an opportunity to present and discuss ideas on a wide range of topics at every level of development, including recently published articles, articles accepted for publication but not yet in print, works in progress, thought experiments, preliminary ideas, and pedagogical innovations. It also provides an opportunity to network with colleagues and potential collaborators or mentors from other parts of the world.

Conference Lifetime Achievement Award to honour Professor Mindy Chen-Wishart

We are pleased to announce that Professor Mindy Chen-Wishart (right) will receive the conference’s Lifetime Achievement Award at the conference dinner on June 20, 2024. The Award honours individuals whose careers have been spent in legal academia and who have made major contributions to legal education, contract law scholarship, and the practice of commercial law. Professor Chen-Wishart is the fifteenth person to be so honoured.

Call for papers and abstracts

We cordially invite your submissions for the conference. The conference theme is intentionally broad. Proposals relating to any aspect of contract law are welcome. Presentations at past conferences have included studies from doctrinal, theoretical, empirical, historical, economic, critical, international, comparative, pedagogical and interdisciplinary perspectives. All are welcome once again. We also welcome papers and presentations comparing civil law and common law treatment of contract issues. Papers that focus on a single civil law jurisdiction should be put in a wider context.

Expressions of interest in presenting, along with draft titles and abstracts should be submitted to [email protected]. The deadline to submit an abstract is Thursday, February 15, 2024. Proposals submitted earlier will be accepted on a rolling basis. Speakers whose papers are accepted will be expected to present in person. Participants, including speakers, will be required to register for the conference and to pay the conference fee of £160.

Getting to Bristol

Bristol Airport is located eight miles (13 km) south of the city and has scheduled flights to many UK and European cities. Bristol is also easily reached from London Heathrow airport, either by a direct National Express coach service, or by rail.

Questions

If you have any questions, please contact Dr Katarzyna Kryla-Cudna (left) at [email protected].

Today! Central States Law School Association Annual Conference

Today, I and four of my colleagues will be presenting at the Central States Law School Association conference at Oklahoma University in Norman.  It's just like SEALS, except that it is intimate, nowhere near the ocean, not during the summer, and only lasts two days.  In short, it's nothing like SEALS, but still.  

I will be present work that I have developed on this very blog. See, e.g. this article uploaded to SSRN (I have since revised it, but you get the idea) and this blog post.  Also this one and this one, which links to six other posts on the subject.  In short, I write on the interaction of contracts law the First Amendment in recent Supreme Court jurisprudence.  My colleagues will presenting on patent-law judging (Tim Hsieh), felony murder (Maria Kolar), prescriptive jurisdiction and conflict of laws (Eric Laity), and a non-naturalist reading of legal realism (Trevor Wedman).

And here we are, except for Trevor, whom we haven't gotten up on our website yet, but we are very excited to have him with us!

And we're all looking forward to seeing old friends and making new ones at CSLSA this weekend.

Save the Date, KCON XVII in Bristol, England

Nearly a score of years ago, a conference was born one summer in Gloucester, England.  It has since become traditional for contracts scholars to meet in sunnier climes during stormier seasons.  But in 2024, we will be returning to our roots.

Can't wait!

Contract Drafting Conference at Emory Law School!

As the summer winds down and the fall ramps up, please consider taking a refreshing break by traveling to Atlanta on October 6-7 for Emory’s 8^th Biennial Conference on the Teaching of Transactional Law and Skills.  Our theme gets back to basics:  “Preparing Future Lawyers to Draft Contracts, Do Deals, and Take Care of Business.”  Transactional law and skills educators from around the country will meet to talk shop, but also to enjoy each other’s company once again.  Pause now to register, submit a proposal, or nominate a colleague for the Tina L. Stark Award for Teaching Excellence.  For more information, click here:  Emory's Transactional Law and Skills Conference.  We look forward to seeing you in October!

Blog Editor Emeritus Frank Snyder and the Commemoration of Priday's Mill

in 1850, a mill was established for the Hadley brothers.  Three years later, their crankshaft broke, and they sent the broken shaft off to serve as a model for a replacement.  So contracts history was made.  One hundred and fifty years later, the International Conference on Contracts was born and that first iteration of the conference included a visit to the site of the Hadley brothers' mill, known as the City Flour Mills but also as Priday's Mill.  

The site was being converted into a block of flats, but inspired by the conference, the city of Gloucester erected a commemorative plaque:

Frank Snyder, this blog's founding editor, was also part of the crew that organized that first conference, and he was invited back to Gloucester for the unveiling of the plaque.  Next year, KCON XVII will return to England for the first time since that inaugural conference, and Frank will no doubt continue his central organizational role.

What great unveilings await us as KCON enters its third decade of existence?

Reminder: COVID and the Casebook Registration Closes April 14th!

Temple Law School and the University of Wisconsin Law School are hosting a Workshop 4/21/23 at Temple Law School:  Contract Law in Action:  COVID and the Casebook.  This free workshop (hybrid and in-person) will focus on (i) the effect of the last few years on the delivery of Contracts teaching materials (e.g., what is the role of the Contracts casebook?); and (ii) how, in early hindsight, have our predictions about COVID and Contract doctrine, documented in a 2021 issue of Law and Contemporary Problems, played out?

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We have great panelists, including Ed Cheng (Vanderbilt), Sarah Dadush (Rutgers), Pamela Foohey (Cardozo), Bob Hillman (Cornell), Dave Hoffman (Penn), Marissa Jackson (Richmond), Thomas Joo (UC-Davis), Kish Parella (W&L), Dylan Penningroth (Berkeley), Mitra Sharafi (Wisconsin), Andrew Schwartz (Colorado), Gordon Smith (BYU) and Rip Verkerke (UVA), 

We hope you can join us.  The registration link is here.  Please note that registration closes April 14, 2023.

Jonathan Lipson, Rachel Rebouche, Wendy Epstein, Gilat Bachar (organizers).

Shawn Bayern Book Panel: "Autonomous Organizations" at FSU Law

Friend of the blog and FSU College of Law Professor Shawn Bayern is the author of AUTONOMOUS ORGANIZATIONS (Cambridge University Press 2021). Professor Bayern proposes a novel way to use limited liability companies (LLCs) to give legal personhood to software, including artificial intelligence, and carefully explains why doing so isn’t as alarming as it sounds.

The book forum is on Thursday, April 6 from 3:00 PM at the FSU College of Law Main Classroom Building – Room 310. Guest discussants include Susan Morse of the University of Texas Law School, Anthony Casey of the University of Chicago Law School; and Anthony Niblett of the University of Toronto Faculty of Law.

CLE is being applied for this event. 
Register now. (https://fsu.forms-db.com/view.php?id=1427318) ;

 Thursday, April 6 at 3:00pm to 5:00pm

 Main Classroom Building (Law School) (LAW), 310
506 W Pensacola St., Tallahassee, FL

COVID and the Casebook Workshop at Temple University Beasley School of Law

Temple Law School and the University of Wisconsin Law School will host a workshop April 21, 2023 at Temple (Philadelphia) focusing on recent changes in Contracts pedagogy and law: (i) the effect of the last few years on the delivery of Contracts teaching materials (e.g., what is the role of the Contracts casebook?); and (ii) how, in early hindsight, have our predictions about COVID and Contract doctrine, documented in a 2021 issue of Law and Contemporary Problems, played out?

Anticipated speakers/participants will include Ed Cheng (Vanderbilt), Sarah Dadush (Rutgers), Pamela Foohey (Cardozo), Bob Hillman (Cornell), Dave Hoffman (Penn), Marissa Jackson (Richmond), Kish Parella (W&L), Dylan Penningroth (Berkeley), Mitra Sharafi (Wisconsin), Andrew Schwartz (Colorado), Gordon Smith (BYU) and Rip Verkerke (UVA), among others.

BACKGROUND

The COVID-19 pandemic taught us a great deal about the role and teaching of Contracts.  Many feared widespread breach and litigation; others worried about how to teach the law of promising (and breach) through a flat screen.  Some of us worried about both.

With memories still fresh, we wanted to gather those who participated in those discussions, and to welcome newcomers, to assess what we thought in the moment, and where we think COVID’s lingering effects will take Contracts scholarship and teaching.

On the educational side, we have learned that we can do many (but not all) things virtually or remotely.  The pandemic appears, for example, to have accelerated a trend toward the disaggregation of educational content in general.  Now, we use (consciously or not) videos, podcasts, YouTube clips and other online content to supply or supplement content for Contracts class.  Indeed, there are now free and freemium materials from which one could teach an entire Contracts course. And, given increased focus on racial injustice as it manifests in various legal and social systems, many who teach Contracts seek to reckon more deliberately with the legacy of structural racism and inequality.

On the theory/doctrine/practice side, it appears that many of our worst systemic fears about COVID were not realized.  While there was (and remains) plenty of litigation, the vast majority of problems appear to have been resolved consensually, whether through standstills or workouts or the like.  Yet, some of those resolutions were better than others.  Many front-line workers (here and abroad) may have been left with the very short end of the stick, for example.

For those of you who may have participated in the Contract and COVID (K-COVID) workshops hosted by Temple (or contributed to the resulting symposium issue of Law and Contemporary Problems, Contract in Crisis), this will be an opportunity to discuss developments since then.  We also welcome and encourage new or aspiring Contracts teachers (and those who may be new to these issues) to join us.

This will be a continuation of the Kidwell Lecture, which has historically been held every year or so at Wisconsin, named in honor of Professor John Kidwell.  Speakers including Lisa Bernstein, Cathy Hwang and (most recently) Rachel Rebouché have presented Contracts scholarship in the “law in action” tradition (or critiquing it).  

KCON/ContractsProf Blog Brain Trust Assembled

Sorry terrorists, you missed your opportunity.  Last weekend in Fort Worth, current contributors and founding geniuses of both KCON and the Blog were gathered in one place.  You could have taken us all out with a targeted strike, but here we are (Mark Edwin Burge, Wayne Barnes, Frank Snyder, Sid DeLong, and the author (foreground)) laughing at you!

Carol Chomsky, creator, muse, caretaker, peacekeeper, and curator of the AALS Contracts Listserv, was also in the room!  Nancy Kim, was our designated survivor, monitoring all from a secure, undisclosed location.

KCON XVI ENJOYED BY ALL!

I think the headline speaks for itself.  But here are some images in case any are unpersuaded.  

Here we have our name up in lights at the beautifully restored New Isis Theater, where we had an event (below) and dinner, during which we honored living legend Bill Henning.

Once inside, Keith Rowley (pictured left or right, who can tell?) led us through a discussion of various clips from movies and television in which the law of contracts or contract negotiation plays a central role.  

Above is Frank Snyder presenting Bill Henning with a lifetime achievement award to add to his trophy case (photo credit Andrea Tosato).

Even the panels were fun, witness these satisfied panelists, Rachel Arnow-Richman, Tamar Meshel, the author, and Orit Gan.

Thanks to our TAMU hosts, founding genius Frank Snyder, blog contributing editor Mark Edwin Burge, and host extraordinaire Wayne Barnes.  

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part IV: Nancy Kim

The Dynamic Theory of Contracts
Nancy Kim

There are many theories of contract law but in my opinion the one that best explains what contract law is and what it should be is Professor Mel Eisenberg’s dynamic theory of contracts.  Prof. Eisenberg described his theory in a symposium article, The Emergence of Dynamic Contract Law, 88 CAL. L. REV. 1743 (2000) and further expounded on it in his masterful book, Foundational Principles of Contract Law (2018).  In his article, Eisenberg states that rather than being used to support doctrine, principles of contract law should reinforce social values.  He explains that doctrines are not “self-evident or established by deduction”; rather “social values… underlie doctrinal stability.” (at 1753) In Eisenberg’s view, contract law should be “individualized rather than standardized, subjective rather than objective, complex rather than binary, and dynamic rather than static.” (at 1745) 

In  Foundational Principles of Contract Law, Eisenberg elaborates on four underlying principles of contract law.  These four principles are: 

1. The aim of contract law should be to effectuate the objectives of parties to promissory transactions, provided appropriate policy and moral conditions, such as freedom from duress and fraud, are satisfied, and subject to appropriate constraints, such as capacity and legality. 

This is the first and most basic underlying principle of contract law.

2. The conditions to and the constraints on effectuating the objectives of parties to promissory transactions, and the way in which those objectives are to be ascertained, should consist of those rules that best take into account all applicable and meritorious policy, moral, and empirical propositions. When more than one such proposition is applicable a court should exercise good judgment to give each proposition appropriate weight considering the issue at hand and, based on those weights, should either subordinate some propositions to others or formulate a rule that is the best vector of the applicable propositions, given their relative weights and the extent to which an accommodation can be fashioned that reflects those weights.
3. Where contracting parties have not explicitly or implicitly addressed an issue, the issue should be governed by a default rule whose content is determined in the same way that the condition to and the constraints on effectuating the parties’ objectives should be determined.
4. The remaining rules of contract law- such as those that govern the enforceability of promises, remedies for breach of promise, excuse for nonperformance of enforceable promises, the effect of nonfulfillment of conditions, the rights of persons who are not parties to a contract but would benefit by its performance-should also be determined in the same way.

But how should a court determine the weighting of various policy, moral and empirical propositions?  This is where dynamic contract law might appear to stall because it intersects with real world judges who come to the bench with their own worldview and values.  Certainly, there is plenty of lip service to the belief that judges only call balls and strikes, but those calls can be pretty subjective.  A judge with a law and economics worldview might weigh efficiency more heavily than equity.  A judge with a distributive justice worldview might weigh equity more heavily than efficiency or predictability.  Dynamic contract law considers a multiplicity of values.  Furthermore, rather than relying upon the text as the sole basis for determining contractual obligations, a dynamic approach considers the context of social and business interactions, the background norms and practices that are the implied terms of contracts.

A dynamic approach is reflected in the Restatement Second of Contracts rather than the formalistic approach of the Restatement First.  Dynamic contract law prioritizes what the parties expect to get out of the transaction and is manifested by the standard of reasonable expectations.  Reasonable expectations essentially starts with the (actual, subjective) intent of the parties, and assesses it within the context of social norms and the need to protect the security of transactions.  The contractual language helps prove what those expectations are but is not be determinative if there is other persuasive evidence. 

Eisenberg explains that generally there are three basic categories of contract theories:  formalist, interpretive, and normative.  Formalist theories “treat doctrine as autonomous from policy and morality.”  (p. 9) In other words, doctrine is self-evident and axiomatic, and rules are what matters, rather than a way to get to what matters.  Interpretive theories seek to rationalize or justify the doctrine.  They seek to explain why the law is the way it is, rather than aspire to something better.  The problem with interpretive theories is that their application “will often result in an undesirable body of contract law because the aim of the theory is not to produce the best possible contract law but only an intelligible order in the law.” (p. 16).  Normative theories seek to formulate “the best possible rules” of contract law.  They can be monistic or pluralistic.  Dynamic contract law is normative and pluralistic. 

But how does dynamic contract law fit into the contracting world we live in today, where adhesive terms hijack people who have no intention of entering into a legally binding “transaction” – who may not read or even see the terms - and where courts recognize those terms as contracts?  How can it explain cases like ProCD v. Zeidenberg and Fteja v. Facebook, Inc., which ignore contracting realities and intent?  In a world where contracts formed by “reasonable notice and manifestation of consent” vastly outnumber those formed by mutual assent, is dynamic contract law obsolete? 

The standard of  “reasonable notice and manifestation of consent” used in wrap contract cases (clickwrap, browsewrap, etc) is itself dynamic as it accommodated changes in contracting culture driven by technology.  But the way that the standard has been applied often ignored intent and weighed too heavily the values of efficiency and predictability, while ignoring other values. Dynamic contract law starts with intent and while it recognizes the value of efficiency and its role in contracts law, it recognizes other values as well.  Dynamic contract law expressly rejects single-value approaches and so does not rationalize or justify the ProCD line of cases that ignore contracting realities and seem to value only transactional efficiency.  It is a theory, not magic.  It explains what the law and by extension, judges, should do, but it has no power to make them do it.    

The early Internet contracting cases reflected a certain judicial unfamiliarity with technology, a reluctance to stifle online commerce, and a deference to a definition of efficiency which was both too narrow (as it was limited to eliminating transactional hurdles) and paternalistic (as it presumed what consumers wanted and ignored what they themselves said they wanted).  However, more recent cases have shifted toward an application of the standard that better reflects the online contracting experience and the various considerations raised by a particular contract.  More notice is required for certain provisions (e.g. arbitration, fees) than for others (e.g. codes of conduct).  Several cases suggest that the blanket assent approach is being replaced, at least in the online context, with a specific assent requirement.  The Ninth Circuit, perhaps the most dynamic of courts, in cases like Berkson v. Gogo and the more recent, Berman v. Freedom Financial Network, LLC have taken a close and careful look at the context in which terms are presented, as well as what those terms are.  State courts have been even more dynamic in their approach, and have engaged in a careful contextual analysis to determine online assent to specific terms, including the “website flow” and whether the drafter could have presented terms in a more visible manner.  The contextual, fact-intensive inquiry that many courts are now engaging in when assessing notice indicates that a course correction is taking place regarding how the standard of reasonable notice and manifestation of consent is being applied. Dynamic contract law is alive and well.

A symposium on Eisenberg’s work would not be complete without at least some discussion of his teaching.  I had the great fortune of being a student in Prof. Eisenberg’s small contracts session.  I had absolutely no interest in the subject or anything having to do with corporate or business law.  Of course, I knew that Eisenberg was a giant of contract law which only made the prospect of being in his small section more terrifying as there would be no place to hide if he called on me. 

It was clear that he expected the most from us 1Ls, but his were reasonable expectations -- he was not the kind of professor who sought to dominate or humiliate his students like some Prof. Kingsfield clone.   Prof. Eisenberg made the subject of contracts interesting, less about boring fine print and more about the actions (and yes, intent) of people and businesses.  His love for the subject was contagious and his kind, respectful, and inclusive manner of soliciting participation made what could have been an intimidating subject my all-time favorite.  Notably for such a prolific and serious scholar, Prof. Eisenberg discussed practical issues that I would remember years later as a practicing attorney.  Rules such as the parol evidence rule were taught in context, and he pointed out where doctrine (e.g. modifications) could be changed by contract (e.g. a NOM clause) and vice versa, and how both could be affected or altered by legislation.  As a teacher, too, Eisenberg’s approach to contract law was dynamic.

Related posts from the Mel Eisenberg Symposium:

Virtual Symposium: Mel Eisenberg and Contracts Law Scholarship

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part I: Shawn Bayern

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part II: Douglas Baird

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part III: Ethan Leib

Posts from the second week:

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part V: Introducing the Second Week

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VI: Mark Gergen

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VII: Jennifer Martin

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VIII: Harris Hartz

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part IX: Hila Keren

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(A): Response to Ethan Leib

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(B): Response to Nancy Kim

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(C): Response to Sid DeLong

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part III: Ethan Leib

My Relationship with Mel Eisenberg About Relational Contracts
Ethan J Leib

When I was a fresh-faced contracts professor in San Francisco, I was lucky enough to be invited to Mel Eisenberg’s class to defend a paper I was then publishing about relational contract theory.  It felt exciting to be welcomed to the big leagues by a leading light in the field – but also daunting to be subjected to scrutiny by someone I was criticizing and by someone who knew a lot more contract law than I would ever know.  The class was deeply stimulating and the students especially probing and thoughtful.  I met a future co-author in that class, an intellectual partnership that continues to inform my scholarship. 

But what I remember most – and the thing that shaped me most from that encounter – was Mel’s graciousness in engaging a young punk with sympathy and care.  Experiencing someone who knows it all dealing with a know-it-all in a workshop setting provided a model for how I come to workshops today: Is there something I can learn here?  Mel showed me how it is done, and I can still remember him asking me seriously rather than facetiously, “Do you think I am making a mistake, and am too rigidly interested in rules rather than standards in my approach to relational contract theory?”  He saw intellectual exchange as a way to see his own thinking from others’ standpoints – and more than any specific paper of Mel’s, this is the most important mode of thinking he added to my life back when I was still impressionable.

I’ll admit I came to Chapter 54 of his Foundational Principles of Contract Law hoping to see him convinced by our dialogue.  I had tried to impress upon him all those years ago that searching for a “relational contract law” that would apply only to “relational contracts” with specialized rules was not really the objective of a thoroughgoing relational contract theory.  Although he was always happy to concede that many contracts do not fit the paradigm of contracts between strangers that occur in a single moment in time in a perfect market, as classical contract law often seemed to assume, he remained skeptical that the acknowledgement that many real-world contracts involve dynamic and ongoing relationships could do more than inform our economics and sociology.  In short, he always felt that until one could really successfully define in a legally operationalizable way “relational contracts” there could be no “relational contract law.”  In his recent book, he sticks to his guns, highlighting why using duration or incompleteness won’t do the trick in dividing the world between relational and discrete contracts.

I’m sticking to my guns, too.  There is nothing legally impossible about a spectrum approach if one is comfortable with loose standards and judicial discretion.  Here is what Mel says about that: “Under this approach a contract is characterized as lying at the discrete end of the spectrum if it has less of certain characteristics—for example, less duration, less personal interaction, less future cooperative burdens, and less in the way of units of exchange that are difficult to measure—and as lying at the relational end of the spectrum if it has more.”  (735)  Mel doubles-down here to say that the spectrum approach works if you are doing economics or sociology but not law: “the enterprise of contract law entails the formulation of rules and a spectrum approach is inadequate to that enterprise because it cannot be operationalized . . . Rules whose applicability depends on how many relational indicia a contract has . . . would be rules in name only.”  (735) 

By my lights, the law routinely uses a set of indicia to make legal categorizations.  Contract and tax lawyers will easily be able to think of the employee/independent contractor distinction as an example (even if they aren’t sure whether it is a 9-factor test, a 20-factor test, or a 3-factor test).  Notwithstanding that some want bright-line rules rather than multi-factor analysis, it would be hard not to acknowledge that these efforts to classify workers are legal rather than merely economic or sociological.

Thus it seems to me still, all these years later, that Mel continues to prefer not to adopt the spectrum approach largely because it feels too messy to him and isn’t “rule-like” enough to his taste.  There is nothing wrong with that sensibility, of course, but it doesn’t prove that relationalists are unable to advocate for a spectrum approach in the law.  I also don’t think the spectrum approach ultimately requires a legal system to proliferate regimes that toggle between different types of contracts necessarily; one could have one law and one “good faith” requirement – and then implement it differentially depending on relational dimensions.  What counts as good faith for two companies in a multi-decade relationship may be different from what it requires for two companies in a new venture dealing far at arms’ length. 

That seems like a relationalist contract law even Mel could live with – and it doesn’t seem to require a singular technical definition of a relational contract.  I always like to point out the first line of Eastern Air Lines, Inc. v. Gulf Oil Corporation to my students: “Eastern Air Lines, Inc. and Gulf Oil Corporation, have enjoyed a mutually advantageous business relationship involving the sale and purchase of aviation fuel for several decades.”  Isn’t this just a judge setting the stage for his decision-making by telling us that relationships matter in the application of contract law?  Isn’t that enough to help remind us that there is such a thing as relationalist contract law, after all?

Related posts from the Mel Eisenberg Symposium:

Virtual Symposium: Mel Eisenberg and Contracts Law Scholarship

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part I: Shawn Bayern

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part II: Douglas Baird

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part IV: Nancy Kim

Posts from the second week:

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part V: Introducing the Second Week

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VI: Mark Gergen

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VII: Jennifer Martin

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VIII: Harris Hartz

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part IX: Hila Keren

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(A): Response to Ethan Leib

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(B): Response to Nancy Kim

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(C): Response to Sid DeLong

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part II: Douglas Baird

Unscrambling Excuse
Douglas Baird

The domain of classical contract law has discrete boundaries and hard edges. Legally enforceable promises are limited to bargained-for exchanges. There must be an offer and an acceptance. A contract exists, or it does not. You receive expectation damages or nothing. Such rigid traditionalism, however, no longer captures what contract law is about, if it ever did. Mel Eisenberg’s corpus, in particular his exemplary work on excuse, makes this manifest.  See Melvin A. Eisenberg, Impossibility, Impracticability, and Frustration, 1 J. Legal Analysis 207 (2009).

Boundedly rational parties do not always precisely spell out their contracts to account for the unexpected, and hence promises that appear unqualified on their face should not be understood literally. If a bargain rests upon assumptions about future states of the world, the deal is sensibly called off if those assumptions for unexpected reasons do not hold. You agree to rent my theater for an evening and, through no fault of mine, it burns down. In this event, we each should go our separate ways. Similarly, if I have an apartment that overlooks the King’s coronation, and you are eager to see it, it is too bad for both of us if the event is called off. I lose the handsome sum from letting out my apartment for a day, and you lose the chance to entertain your friends with a spectacular view of the pageant.

Frustration and excuse are heavily fact dependent. The doctrine in the first instance is merely a default term. Dickered contracts contain elaborate force majeure clauses. We can spill ink over what counts as excuse or frustration, but Mel Eisenberg shows that this is not what is conceptually hard. The problem comes from what happens next. Money may have changed hands, and both parties might have spent money in reliance on the contract. Unexpected events typically bring with them a loss, and someone must bear it. This makes it fruitless to reduce excuse and frustration to a simple yes/no, on/off affair. Any coherent account of excuse and frustration must couple the finding of excuse or frustration with the appropriate relief. The egg must be unscrambled.

It is well accepted that restitution operates in this environment. If one party pays the other in advance, that party should be able to get its money back. But beyond this, much hard thinking needs to be done. It might seem that reliance damages should have no role to play. Both parties to a contract spend money in anticipation of the performance, and it makes little sense for each party to hold the other liable for her expenses. But the two parties do not necessarily stand in symmetrical positions. Often it is too simple to say that no one was responsible. The theater owner, while not at fault, controlled the theater and had some capacity to reduce the chance of fire. Even when excuse applies, some parties may be more at fault or better positioned than another.

Mel Eisenberg (right) draws on a series of old Massachusetts cases to shed light on the problem. A general contractor’s contract to build a hospital was cancelled and awarded to another bidder instead. The general contractor then faced its own subcontractors, and the doctrine of excuse applied. The general contractor could not be sued for expectation damages. The cancelation of the main contract called off the contract between the general contractor and the subcontractor. ­At the same time, however, the general contractor was, at least to some extent, responsible for the contract being voided. The subcontractor should be able to recover some of its reliance expenditures. See Albre Marble and Tile Co., Inc. v. John Bowen Co., 338 Mass 394 (1959).

What remains a mystery is how far this idea extends. The testing excuse case is one in which the unexpected event keeps both parties from performing and money passes from one to the other. Consider two singers. They agree to perform together at a specific time and specific venue and then split the gate. One singer faces $100 in expenses that the other does not. To ensure that they come out even in the end, the second singer gives $50 to the first. An unforeseeable act of God renders the venue unusable and the joint performance is cancelled. What happens now? If the first singer had been spent none of the $100 she received from the second, the second singer should have a restitution action for $50. But what if the $100 has been spent? Does the second singer still get her $50 back? It might seem that the two singers invested in a joint enterprise and should share the losses equally.

Assume that your intuition suggests that the losses should be shared in this case, and the second singer is not entitled to recover the $50 she gave to the first. How much does one have to change the facts to alter your intuition and for you to find that one party can recover what she has given the other notwithstanding the expenses the other has incurred? Consider, instead of two singers, there is a couple that engages a restaurant for their wedding reception and pays in advance. Power is lost halfway through the event. It is not the fault of either party, and the contract explicitly lists a power failure as an event of excuse. The unhappy wedding couple can obtain restitution of the money they gave to the venue less any benefit they received before the power failed. Facto v. Pantagis, 915 A.2d 59 (N.J. App. 2007). But does it make sense that the venue bears the entire loss for the food that is uneaten and has to be thrown out?

I suspect that many share my intuition that the couple should have an easier time recovering the money they have paid notwithstanding the substantial loss the restaurant faces, but how is the restaurant different from the first singer? English law allows some account to be taken for the out-of-pocket reliance costs as an offset against restitution in excuse cases. See Gamerco SA v. ICM/Fair Warning (Agency) Ltd., [1995] E.M.L.R. 263 (High Court, Queen’s Bench). But when exactly should this happen?

The genius of Mel Eisenberg’s work here, as elsewhere, shows how best to cope with such questions. He does not confront this problem in particular, but his work does suggest, perhaps, that regardless of where one draws the line, the wedding couple has a better chance of recovery than the first singer. To be sure, the restaurant is not at fault for the power failure. If it were, there would be no excuse. Nevertheless, it is possible to lay some responsibility at its doorstep, and it is not something that rigid formalism should require us to ignore. Again, the law of excuse, like the law of contract, need not be a rigid, yes/no, on/off affair.

Related posts from the Mel Eisenberg Symposium:

Virtual Symposium: Mel Eisenberg and Contracts Law Scholarship

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part I: Shawn Bayern

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part III: Ethan Leib

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part IV: Nancy Kim

Posts from the second week:

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part V: Introducing the Second Week

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VI: Mark Gergen

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VII: Jennifer Martin

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part VIII: Harris Hartz

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part IX: Hila Keren

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(A): Response to Ethan Leib

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(B): Response to Nancy Kim

Virtual Symposium on the Contracts Scholarship of Mel Eisenberg, Part X(C): Response to Sid DeLong