Monday, November 8, 2021
Robert A. Hillman (Cornell University), Health Crises and the Limited Role of Contract Law, Cornell Legal Stud. Rsch. Paper No 21-17 (2021):
The COVID-19 pandemic of 2020-21 has focused our attention on contract law’s response when unanticipated circumstances make performance impractical or frustrated or performance would cause harm to the public. The pandemic has disrupted contracts between landlord and tenant, employer and employee, universities and students, to name a few, but has contract law provided a clear path to determine who must bear the risk of loss of such events? The purpose of this essay is to suggest that current contract law’s many and varied, sometimes even contradictory, rules and principles relevant to shaping a response to a health crisis can offer only limited guidance to courts and lawyers in the challenging cases. Further, contract law’s uncertainty in these cases reinforces the more general perspective that judicial decisions in contract cases (and more generally) often depend, not on doctrine, but on a pragmatic analyses of the facts, policies and equities. Although this taste of realism is not a revelation, in fact, there may be no better example of the limits of contract law, as administered by courts, than its response to contract disputes during a public health crisis.
Part I of this essay inventories the plethora of contract law issues raised when a health crisis makes performance problematic and when no federal or state regulation is in place to resolve the dispute. Part II assesses what such circumstances reveal about the nature of contract law: First, contract law’s set of responses reinforce legal theorists who have long argued that, at least in hard cases, contract law is subjective and uncertain. Second, contract law’s main contribution in such cases is to identify the questions that should be asked and to provide a roadmap to follow. Part III, the Conclusion, offers a word about post-pandemic contract law.