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Binding Promises

Binding Promises: The Late 20th-Century Reformation of Contract Law

W. David Slawson
Copyright Date: 1996
Pages: 224
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  • Book Info
    Binding Promises
    Book Description:

    During its classical period, American contract law had three prominent characteristics: nearly unlimited freedom to choose the contents of a contract, a clear separation from the law of tort (the law of civil wrongs), and the power to make contracts without regard to the other party's ability to understand them. Combining incisive historical analysis with a keen sense of judicial politics, W. David Slawson shows how judges brought the classical period to an end about 1960 with a period of reform that continues to this day.

    American contract law no longer possesses any of the prominent characteristics of its classical period. For instance, courts now refuse to enforce standard contracts according to their terms; they implement the consumer's reasonable expectations instead. Businesses can no longer count on making the contracts they want: laws for certain industries or for businesses generally set many business obligations regardless of what the contracts say. A person who knowingly breaches a contract and then tries to avoid liability is subject to heavy penalties.

    As Slawson demonstrates, judges accomplished all these reforms, although with some help from scholars. Legislation contributed very little despite its presence in massive amounts and despite the efforts of modern institutions of law reform such as the Conference of Commissioners on Uniform State Laws. Slawson argues persuasively that this comparison demonstrates the superiority of judge-made law to legislation for reforming private law of any kind.

    eISBN: 978-1-4008-2196-9
    Subjects: Law

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. Acknowledgments
    (pp. xi-2)
  4. Introduction
    (pp. 3-8)

    The courts of England began the making of modern contract law in the late eighteenth century. It was then that commerce and industry, stimulated by new forms of long-distance transportation, began the expansion that brought England into the industrial age. The courts of England and the United States had completed the law of what we now call “classi cal contract” by the beginning of the twentieth century. Contract law remained in its classical state until late in the twentieth century, when the courts of the United States began the reforms that are the subject of this book.

    Classical contract had...

  5. 1 Classical Contract
    (pp. 9-21)

    The reforms that are the subject of this book are reforms of the contract law we inherited, which has come to be called classical contract. Classical contract is largely a product of the industrial revolution. The courts of England began creating it almost as soon as the industrial revolution began, which was late in the eighteenth century. One needs to understand classical contract and the forces that shaped it in order to understand the reforms of it and the forces that shaped them. The courts of the United States began the reforms late in the present century.

    People in modern...

  6. 2 Product Dependence and Unequal Bargaining Power
    (pp. 22-43)

    Product dependence and unequal bargaining power are the two conditions that chiefly motivated courts to make the reforms that are the subject of this book.

    There is little to be said about the greater dependence upon products that exists in a modern society, because it is so obvious. The chief source is greater specialization. Each member of society produces only a narrow range of things but consumes or otherwise uses an enormous variety of them. The result is that all are dependent on others for almost everything they need or desire. Lawyers, for example, produce only legal services and in...

  7. 3 Reasonable Expectations
    (pp. 44-73)

    Robert E. Keeton discovered that courts in insurance cases were using an approach he called reasonable expectations in the 1960s. I derived the same approach on theoretical grounds for all contracts. Keeton and I worked independently but by coincidence published our results within a year of each other in 1970–1971. The highest courts of most jurisdictions have since adopted the approach, although some adopted it only for insurance. This chapter gives a history of “reasonable expectations” and tries to bring together its many manifestations under a common set of principles.

    The traditional judicial approach to the insurance contract is a...

  8. 4 Relational Torts
    (pp. 74-103)

    Courts have created duties for parties to certain relationships since time immemorial, but they did not generally create them for contractual relationships until about 1960. I call these new duties relational torts. They are torts because they are imposed by law rather than by contract, and they are relational because they apply only to parties to certain relationships.¹ Relational torts are similar to the duties of the common callings that courts abolished early in the nineteenth century. The duties of the common callings were also imposed by law rather than by contract, and they also applied only to parties to...

  9. 5 Bad Faith Breach and Remedies Reform
    (pp. 104-132)

    Although not every court would define bad faith breach quite the same way, the consensus is that a breach of contract is in bad faith if the breacher knows he has no defense but still tries to avoid liability. A bad faith breach is a tort. In addition to the usual damages for breach of contract, the injured party can recover damages for emotional distress and punitive damages. In a growing number of jurisdictions, he can also recover his litigation costs. Courts now also award some of these additional damages in contract actions not involving a bad faith breach; this...

  10. 6 Article 2 of the Uniform Commercial Code
    (pp. 133-150)

    I explained the relevance of Article 2 of the Uniform Commercial Code in the introduction. Some of the article’s provisions anticipated the reforms and thus created an attitude that facilitated their acceptance; and, courts interpreted certain provisions in a way that made them part of the reforms. On the other hand, other provisions require courts to act contrary to the reforms, many provisions are bad law, and many unnecessarily complicate contract law by arbitrarily differing from the common law of contract. The genesis of Article 2 is also relevant, because it demonstrates the strengths and weaknesses of legislating in comparison...

  11. 7 Choices and Prohibitions
    (pp. 151-174)

    Previous chapters have treated the reforms individually. This chapter treats them as they relate to one another, to Article 2 of the Code, to contract law as a whole, and to the Constitution. These relationships give rise to certain choices and prohibitions. A court could sometimes use more than one of the reforms to reach the same result, and sometimes Article 2 prohibits, or might prohibit, reaching the result one of the reforms would reach. A second set of choices consists of the means by which we might heal the rift that Article 2 created in contract law; I described...

  12. Notes
    (pp. 175-200)
  13. Index
    (pp. 201-206)