The Ambitions of Contract as Promise Thirty Years On ... - UCL

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Ambitions of Contract As Promise 24 August 2012 discussion draft: do not quote or reproduce without permission claimant is the obligor, or of reasonable care if the claimant is an innocent third party, as for instance a holder in due course. But these are not arguments about real, though second-order, agreement; they are arguments about the efficiency or fairness of various benefits and burdens, or about the proper allocation of social resources in adjudicating disputes. Imagine the extreme case in which the purported obligee insists that it is not his signature on the document at all, that it is a forgery. There are burdens of proof, evidentiary rules and limits to how much time a court will devote to resolving the issue. These procedural rules can be made to look like Schwartz and Scott’s arguments about interpretive rules; but such agreement on background procedural matters is hypothetical, the kind that Robert Nozick has written are not worth the paper they are not written on. The two can be brought closer together, as in cases of what are called fraud not in the execution but in the inducement. The victim of the fraud does not claim, for instance, that he was told that he was just giving his autograph (the rest of the document artfully folded over). Rather he makes the more attenuated claim that he was led to believe that this mortgage agreement is just a formality necessary to obtain a loan on quite different terms. Scott and Schwartz carefully confine their argument to agreements between business people—what the UCC calls agreements between merchants—where the majoritarian default rule with 32
Ambitions of Contract As Promise 24 August 2012 discussion draft: do not quote or reproduce without permission considerable plausibility may be taken to be a rule of actual, second-order agreement. And in general, it is not possible to escape, even in the most throughgoingly subjective regime, the possibility of error and therefore the necessity of a rule that assigns the risks of such error without ultimate recourse to the parties’ actual agreement. This is the notion of state and law writ not large but small. V. Randy Barnett in Contract Is Not Promise; Contract Is Consent 64 and A Consent Theory of Contract, 65 goes much further on the textualist front. He argues that contract law not only favors formality and writing in agreements among merchants, as noted by Schwartz and Scott, but that the whole fabric of contract law is woven on the warp and woof of objectivity. 66 If, as Contract as Promise insists, promise is morally binding because it is the willing invocation by a free moral agent of a convention that allows him to bind his will, 67 and if promise were indeed the moral and political basis for contract law, as 64 Randy E. Barnett, Contract Is Not Promise; Contract Is Consent, 45 SUFFOLK U. L. Rev. 647 (2012). 65 Randy E. Barnett, A Consent Theory of Contract, 86 COLUM. L. REV. 269 (1986). 66 See id. at , 302–03. Learned Hand wrote that the objective meaning binds the parties, even “were it proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them.” Hotchkiss v. Nat’l City Bank of N.Y., 200 F. 287, 293 (S.D.N.Y. 1911). See also RESTATEMENT (SECOND) OF CONTRACTS, § 2 cmt. b (1981). 67 FRIED, supra note 1, at 7-17. 33
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The Ambitions of Contract as Promise Thirty Years On ... - UCL

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