American Contract Law Research Articles

The Baby and the Bath Water: The American Critique of European Contract Law

This paper aims to contribute to a larger research agenda concerning the possibility of meaningful transatlantic dialogue about private-law reform. Both the European Union and the United States regulate private autonomy extensively. In spite of contextual similarities, there are several barriers making dialogue among legal scholars difficult. In particular, the conversation about social justice, an important element of private law reform within the European Union, is now quite marginal in American contract law scholarship. In U.S. legal academia, social justice is a matter for moral philosophers, development economists, and constitutionalists. Against this background, this paper takes a close look at a recent transatlantic exchange in matters of private law reform – a Chicago Law School conference on a proposed Common European Sales Law – and identifies a few counter-intuitive points of convergence between U.S. and European scholarship. Along the way, the paper also highlights structural and discursive incompatibilities, but concludes that the dialogue is, as a whole, valuable and should be kept alive. In designing a post-national architecture of autonomy, Europe may draw better lessons from U.S. regulatory experiences if it deconstructs, first, the wholesale pro-market rhetoric of otherwise relevant literature. When this is done, the payoffs of American commentaries become more appreciable. Taking the lead from some Chicagoan insights, this paper recommends customizing the empirical investigation of EU markets so as to factor socio-economic asymmetries into the equation of private law reform.

Wanted!: A Practical Application of the Foreign Sovereign Immunities Act to Foreign Reward Offers

In 1976, Congress sought to codify the application sovereign immunity with the passing of the Foreign Sove-reign Immunities Act (FSIA). As foreign governments began to routinely act as participants in international commerce, Congress intended the FSIA waive sovereign immunity where a foreign government engages in commercial activity that has a “direct effect” in the United States. This exception permits suits against foreign governments in U.S. courts when there is a breach a commercial contract that directly affects economic interests in the United States. Under American contract law, a binding unilateral contract may form when one party performs the acts requested in an open offer, such as providing the whereabouts of a wanted fugitive in return for a reward. A recent 11th Circuit case, Guevara v. Republic of Peru, displayed the court’s inconsistent application of the FSIA’s commercial activity exception to fugitive reward offers, and prohibits the judicial enforcement of these con-tracts, even when offered by a foreign government and en-tered into on U.S. soil. The Guevara decision illustrates the unsettled interpretation and application of the FSIA by U.S. courts, and may have very damaging effects on U.S. participation in the pursuit of international fugitives.

Contract’s Constitutive Core: Solving Problems by Making Deals

This article offers a positive, interpretive analysis of American contract law as an ongoing problem-solving enterprise. The article observes that solving problems is central to all life on this planet; that problem solving, both private and public, is the primary focus of American law generally and contract law in particular; and that many different decision-makers, including single individuals, small groups of collaborators, deal-making adversaries, large organizations, and governmental institutions, rely on a variety of deliberative processes in reaching and implementing solutions. The article uses this problem-solving perspective to explain American contract doctrine, including aspects that traditional bargain theory explains only with difficulty, if at all. In developing its central thesis, the analysis distinguishes between contract’s constitutive core and its regulative penumbra. The core empowers private actors to interact more effectively in reaching and implementing solutions to private problems. The penumbra consists of normative regulations that courts apply both to deal-making and to deals. When parties bring contracts claims to court, the plaintiff must show that the promises she relies on were part of an effort by the parties to use contract’s core to solve problems. Once assured of that premise, courts use the regulative penumbra to lend assistance, often enthusiastically, in interpreting, implementing, and sometimes salvaging deals struck by the parties. The article does not judge the rightness or wrongness of these judicial responses or the system of which they are part. Rather, the article contents itself with explaining what is really going on, and why.

Hoffman v. Red Owl Stores: The Rest of The Story

Hoffman v. Red Owl Stores is one of the most famous 20th century cases in American contract law, usually credited both with expanding the reach of the promissory estoppel doctrine and with opening up the issue of liability for precontractual reliance. It is a staple in contracts casebooks. By fortunate circumstance we have located the plaintiff, who retains a vivid memory about many of the circumstances in his famous case. We have interviewed him and we have examined the full trial record as well as the briefs on appeal. In this article we tell the story of what we have learned about this famous case, including what happened after the appellate decision. We conclude that a fuller understanding of the facts provides information about a promise that was made, yet was not described in the Court’s opinion. This promise supports the outcome of the litigation. Justice was done! The plaintiff substantially relied to his detriment after receiving specific assurances from an authorized agent of the defendant that he would receive a franchise if he relied by selling his bakery building and business. Reimbursing precontractual reliance in this circumstance can be done without creating a rule that would justify reimbursement of precontractual reliance in all circumstances.

The untranslatability of law?

As a direct consequence of the idiosyncrasies of its sources and interpretive procedures, every legal system has its own kind of language. In particular, the language of American contract law presents a variety of lexical features that often make them ‘untranslatable’ into Spanish. With American English serving as the lingua franca of the vast majority of commercial transactions worldwide, translating its legal texts into Spanish is an imperative, especially within the scope of bilateral commercial agreements between Spain and the USA. Through a close analysis of the terminological traits of this field, this article identifies and discusses fuzzy terms (false cognates or ‘false friends’) along with technical terms, whose similarity in both languages and Latin origin renders their translation problematic. Through the analysis and comparison of the legal meanings and contexts of these terms in both languages, this study aims to make a contribution to their translation.

Good Faith: A Semiotic Approach

The meaning, function and desirable scope of good faith in contractual performance is one of the most pervasive problems of European as well as American contract law. Yet, the discussion seems to be locked into a set of inescapable dilemmas which frequently reappear as a typical, but unsatisfactory part of academic contributions and judicial opinions; namely, the controversies between an individualist ethics of freedom of contract and the opposing altruist value of interpersonal responsibility, between the danger of judicial arbitrariness and the demand for equitable flexibility, and, finally, between the legitimacy of judicial law making and the insistence on judicial restraint. This article attempts to show a pattern behind this structure, consisting of a relatively small set of typical arguments which appear in ordered pairs of diametrical oppositions such as those mentioned above. This suggests that good faith language is much less tailored to context and much more dependent on a preexistent structure of stereotyped arguments than it usually appears in the practice of legal discourse. This insight implies a new assessment of the cogency of argument patterns deployed in theoretical and doctrinal statements on good faith.

Economic Reasoning and the Framing of Contract Law : Sale of an Asset of Uncertain Value

By analyzing two American contract law decisions, the paper illustrates the usefulness of economic analysis in framing the inquiry. The cases have a common feature, unrecognized by the courts : they both deal with the production and transfer of information regarding the sale of an asset of uncertain value. One involves the combination of an option and a lockup to encourage the buyer to produce information. The other involves contingent compensation to convey the seller's assurance of the quality of the assets. Once this is recognized, the outcomes are straightforward.

The Religious Sources of General Contract Law: An Historical Perspective

In his dramatic, if not mystical, account of the birth, growth, senescence, and death of American contract law, and of its ultimate dissolution into the law of tort, Grant Gilmore certainly did not intend to join forces with those who would later seize on his story as evidence that both contract and tort, and, indeed, law all together, are merely artificial devices to support a hierarchical and hegemonic political structure and to facilitate economic exploitation of the weak by the strong. Yet Gilmore's expose of the logical circularities and fallacies of contract doctrine (especially as it is taught in first-year courses in American law schools) does add fuel to the already raging fires of skepticism—skepticism not only about the coherence of individual branches of the legal tree (contracts, torts, property, etc.) but also about the validity of doctrinal legal analysis and ultimately of law itself.Arthur Corbin—Gilmore's mentor and the hero of his book—did not share that skepticism, although he strongly opposed the rigidities of the then prevailing contract doctrine, especially as represented in the teachings of his friend and rival, Samuel Williston. Unlike Williston, Corbin was prepared to give a contractual remedy for losses caused by reliance on a promise, and thus to bring contract and tort into a common focus. He was also more willing than Williston to expand concepts of fairness at the expense of strict liability for breach. Nevertheless, Corbin did not doubt, and surely did not seek to undermine, the coherence of contract law.

The Effects of Frustration in the English and American Contract Law

The Effects of Frustration in the English and American Contract Law