By: Nicholas Walter*
Abstract
For as long as contract law has been a discipline, it has been talkedof as a science: a rigid, knowable set of rules that only need to be understood and applied correctly. Moreover, making contracts is exclusively in the control of the parties to them. Therefore, if parties want to guarantee a particular result, all they have to do is study the rules of contracting and draft a contract that does what they want. This is reflected in various phrases that courts frequently use: courts tell us that they “do not make contracts for the parties,” and are simply applying “generally applicable principles of contract law.”
This Article argues that this view of contract law is false. Courts do make contracts for the parties. Therefore, we are not in perfect control of our contracts. Moreover, courts make contracts in different ways. The phrase “generally applicable principles of contract law” does not accurately reflect the reality of contract law. Not only do courts make contracts, but they lead us to believe that contracts are all subject to the same rules—when they are not.
All this suggests that our contracts are much less predictable than courts imply they are. But there is more. The structure of the court system itself militates against predictability. The discretionary nature of high court judicial review in various jurisdictions, such as California and New York, allows a divergence between how contract law is expounded and how it is actually applied. And jurisdictions with non-discretionary high court review are not any likelier to have a more precise contractual jurisprudence.
This Article argues that we would be better off if it was acknowledged that the contracts we enter into are, to some degree, inherently unpredictable. Doing so would align the rhetoric of contract law with its reality and make it more likely that contracting parties actually obtain the results they seek.
* Adjunct Professor, Fordham Law School; J.D., Yale Law School; M.A., B.A., University of Oxford. The views expressed are my own and do not represent those of any institution I am or have been affiliated with. More importantly, nor do the mistakes. I thank Robert Leider, Ben Johnson, Doug Mayer, Lee Wilson and numerous other colleagues and friends for thought-provoking comments and discussions.