The Death of Contract
Encyclopedia
The Death of Contract is a book by American
law professor Grant Gilmore
, written in 1974, about the history
and development of the common law
of contract
s. Gilmore's central thesis
was that the Law of Contracts, at least as it existed in the 20th century United States
was largely artificial: it was the work of a handful of scholars and judge
s building a system, rather than a more organic, historically-rooted development based on the evolution
of case law
. This book is required supplemental reading in the first year program at many U.S. law schools
. A second edition was published in 1995, which was edited with a new introduction by Ronald K.L. Collins.
of Contract, from birth
to death
. He notes that courts had been deciding contract law for centuries before the theory
of contracts was introduced by Christopher Columbus Langdell
. This assertion, that Langdell "invented" the general theory of contracts is somewhat contested by contracts scholars, with Richard Austen-Baker, for example, pointing out the lack of any evidence of any theory of contract authored by Langdell, to prior work by English jurists such as Addison and Leake and to far more developed work by English scholars such as Sir William Anson and Sir Frederick Pollock
, contemporary with Langdell.
Gilmore retains the central idea that the general law of contract is a residual category, that is, what is left after all the specialized bodies of law have been added up. The world of commercial law
, and within it contract law, was largely the product of the Industrial Revolution
. It was created quite rapidly, outlined in little more than a half-century. Initially, for legal greats like Justice Story
, there was no separate theory of contracts. Rather, there were specialized bodies of law that had been developed to address the various needs of the Industrial Revolution. Gilmore alleges, that rather than contract coming first, and the various specialties being developed afterwards, it actually was the opposite, where contract enveloped pre-existing specialties, like negotiable instruments and sales
.
Gilmore credits Langdell with the “almost inadvertent discovery” of contract law, as it was the subject of his very first casebook
. The goal of Langdell’s casebook was to reduce the world of contracts to major underlying principles in a scientific fashion. The theory of contracts created by Langdell is furthered by Oliver Wendell Holmes, Jr.
and Samuel Williston
, which Gilmore calls the Holmes-Williston construct. The theory is described whereby, “no one should be liable to anyone for anything.”, or at least liability shall be strictly limited. Damages in contract were distinguished from damages in tort
, and punitive damages
were not to be allowed. Furthermore, courts were to act as “detached umpires or referees” and only to see that the rules of the game were followed, but not to “see that justice or anything of that sort was done.” Gilmore further describes Holmes’ view on objective interpretation of contract law, as laid out in The Common Law
. Thus, Gilmore states that the theory of contracts was not developed naturally from continual case law
development, such as the decisions by Lord Mansfield, but rather it was an “ivory tower
abstraction” that lived “in the law school
s, not the law courts.” Often the rules of contract were the result of a string of cases being pulled together, with little citation or presentation of the facts, and declared to be a rule in the works of Williston. The problem with contract theory was that “businessman, adapting to changing circumstance, kept doing things differently. The general theory required that, always and everywhere, things remain as they have, in theory, always been.” He illustrates this argument by reference to English case law that had been elevated by the theorists to the status of "rules", in Stilk v Myrick
, Dickinson v Dodds
and Foakes v Beer, all as a way of ensuring that the doctrine of consideration would preclude the enforceability of a contract.
approach to an objective
approach in the theory of contracts. Contract law in the 19th century was experiencing a shift from a formalistic regime toward a more flexible paradigm that tended to uphold the validity of contracts. This was due in part to the Industrial Revolution
and the need to facilitate commerce between parties. The requirement of ceremonial trappings such as seals and ribbons gave way to a more reality based emphasis on consideration as indicia of the parties' intent to contract.
Gilmore begins with an analysis of Raffles v Wichelhaus, otherwise famously known as The Peerless. He continues, noting examples of case objectification by Holmes in his book The Common Law
, and that if the “magician
” can objectify that case, he could do so to anything. According to Holmes, Raffles, is not decided on a failure of the meeting of the minds
, but rather they objectively said two different things. This action was consistent with Holmes’ desire to remove morality from the understanding of law. The importance in objectifying contract law is that it is far easier to litigate. For Holmes, no longer could one void a contract simply because they had made a mistake, the mistake would have to be objectively reasonable. Gilmore finishes the chapter by discussing the reception of the policy of absolute contractual liability in Paradine v Jane into the law of Massachusetts, and the Holmesian theorists disdain for the condoning of special damages in Hadley v Baxendale.
and Arthur Linton Corbin
. Cardozo did this through his judicial opinions, which gave power to the courts to create contracts wherever possible, adding contract terms if necessary, while Corbin did so in his treatise on Contracts (which Gilmore describes as the greatest law book ever written). Corbin’s work takes the opposite stance of Holmes, refuting the idea that contract law was external, rather focusing on the “operative facts” of the cases.
Interestingly enough, Corbin worked with Williston on the Restatement of Contracts. As Gilmore states, “Williston and Corbin held antithetical points of view on almost every conceivable point of law.” As such, Gilmore points out the contradictions with the Restatement itself, citing sec. 75 and sec. 90. While sec. 75 takes a purely Holmesian objective point-of-view, sec. 90 appears to go in the exact opposite direction, allowing for reasonable expectations. Gilmore points to the contradiction of sections as example of the “unspoken cases” as mentioned earlier that didn’t fit the Holmesian model, being presented by Corbin in an un-ignorable fashion. Ultimately, the differing view points resulted in the Restatement coming out “fudged or blurred, pointing equivocally in all directions at once. The Restatement, we might say, ended up uneasily between past and future, which is no doubt the best thing that could have been done.”
However, Gilmore points out that the future wins out, and the Second Restatement
moves towards the direction of sec. 90, “the unwanted stepchild” of the first Restatement. The move is exemplified by the newfound success of plaintiffs looking to recover for the benefit that they conferred on the defendant, even though they ultimately failed to complete their contractual obligations.
Gilmore suggests that the theory of contract law just complicates the obvious. As he states, “In any civilized system the same agreements, provided that they are entered into voluntarily and in good faith, will be enforced - as of course they should be. We did [the same thing] by discovering or inventing, in appropriate cases, ‘exceptions’ from the ‘general rule’ - which makes the resulting pattern look a good deal more complicated than it really is, with the result that people - including lawyers and judges - are sometimes led astray.” Historically, there are examples of “exceptions” carved out even under absolute liability assumptions, thus almost always providing for what would be perceived as a just result. Similarly, the remedies for breach of contract have broadened beyond what was originally allowed.
”. Gilmore pays heed to the justifications for creating a theory of contract in the first place. At the turn of the century, the legal climate was one that feared legal individualism among the states
, and therefore, a general theory of contract law was appealing as it could transcend state lines. At the same time, taking commercial issues and deciding them under contract law and the guise of “questions of law” kept them from being decided by inconsistent and unreliable juries. In closing, Gilmore notes the constantly changing tides of legal thought, and states that “Contract is dead - but who knows what unlikely resurrection the Easter-tide may bring?”
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
law professor Grant Gilmore
Grant Gilmore
Grant Gilmore was an American law professor who taught at Yale Law School, University of Chicago Law School, Moritz College of Law at Ohio State University, and Vermont Law School...
, written in 1974, about the history
History
History is the discovery, collection, organization, and presentation of information about past events. History can also mean the period of time after writing was invented. Scholars who write about history are called historians...
and development of the common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
of contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s. Gilmore's central thesis
Thesis
A dissertation or thesis is a document submitted in support of candidature for an academic degree or professional qualification presenting the author's research and findings...
was that the Law of Contracts, at least as it existed in the 20th century United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
was largely artificial: it was the work of a handful of scholars and judge
Judge
A judge is a person who presides over court proceedings, either alone or as part of a panel of judges. The powers, functions, method of appointment, discipline, and training of judges vary widely across different jurisdictions. The judge is supposed to conduct the trial impartially and in an open...
s building a system, rather than a more organic, historically-rooted development based on the evolution
Evolution
Evolution is any change across successive generations in the heritable characteristics of biological populations. Evolutionary processes give rise to diversity at every level of biological organisation, including species, individual organisms and molecules such as DNA and proteins.Life on Earth...
of case law
Case law
In law, case law is the set of reported judicial decisions of selected appellate courts and other courts of first instance which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis...
. This book is required supplemental reading in the first year program at many U.S. law schools
Law school in the United States
In the United States, a law school is an institution where students obtain a professional education in law after first obtaining an undergraduate degree.Law schools in the U.S...
. A second edition was published in 1995, which was edited with a new introduction by Ronald K.L. Collins.
Chapter 1. Origin
Gilmore begins the Introduction forcefully, stating "We are told that Contract, like God, is dead. And so it is." With that said, Gilmore brings us through the lifeLife
Life is a characteristic that distinguishes objects that have signaling and self-sustaining processes from those that do not, either because such functions have ceased , or else because they lack such functions and are classified as inanimate...
of Contract, from birth
Birth
Birth is the act or process of bearing or bringing forth offspring. The offspring is brought forth from the mother. The time of human birth is defined as the time at which the fetus comes out of the mother's womb into the world...
to death
Death
Death is the permanent termination of the biological functions that sustain a living organism. Phenomena which commonly bring about death include old age, predation, malnutrition, disease, and accidents or trauma resulting in terminal injury....
. He notes that courts had been deciding contract law for centuries before the theory
Theory
The English word theory was derived from a technical term in Ancient Greek philosophy. The word theoria, , meant "a looking at, viewing, beholding", and referring to contemplation or speculation, as opposed to action...
of contracts was introduced by Christopher Columbus Langdell
Christopher Columbus Langdell
Christopher Columbus Langdell , American jurist, was born in the town of New Boston, New Hampshire, of English and Scots-Irish ancestry....
. This assertion, that Langdell "invented" the general theory of contracts is somewhat contested by contracts scholars, with Richard Austen-Baker, for example, pointing out the lack of any evidence of any theory of contract authored by Langdell, to prior work by English jurists such as Addison and Leake and to far more developed work by English scholars such as Sir William Anson and Sir Frederick Pollock
Frederick Pollock
Sir Frederick Pollock, 3rd Baronet PC was an English jurist best known for his History of English Law before the Time of Edward I, written with F.W...
, contemporary with Langdell.
Gilmore retains the central idea that the general law of contract is a residual category, that is, what is left after all the specialized bodies of law have been added up. The world of commercial law
Commercial law
Commercial law is the body of law that governs business and commercial transactions...
, and within it contract law, was largely the product of the Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
. It was created quite rapidly, outlined in little more than a half-century. Initially, for legal greats like Justice Story
Joseph Story
Joseph Story was an American lawyer and jurist who served on the Supreme Court of the United States from 1811 to 1845. He is most remembered today for his opinions in Martin v. Hunter's Lessee and The Amistad, along with his magisterial Commentaries on the Constitution of the United States, first...
, there was no separate theory of contracts. Rather, there were specialized bodies of law that had been developed to address the various needs of the Industrial Revolution. Gilmore alleges, that rather than contract coming first, and the various specialties being developed afterwards, it actually was the opposite, where contract enveloped pre-existing specialties, like negotiable instruments and sales
Sales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
.
Gilmore credits Langdell with the “almost inadvertent discovery” of contract law, as it was the subject of his very first casebook
Casebook
A casebook is a type of textbook used primarily by students in law schools. Rather than simply laying out the legal doctrine in a particular area of study, a casebook contains excerpts from legal cases in which the law of that area was applied. It is then up to the student to analyze the language...
. The goal of Langdell’s casebook was to reduce the world of contracts to major underlying principles in a scientific fashion. The theory of contracts created by Langdell is furthered by Oliver Wendell Holmes, Jr.
Oliver Wendell Holmes, Jr.
Oliver Wendell Holmes, Jr. was an American jurist who served as an Associate Justice of the Supreme Court of the United States from 1902 to 1932...
and Samuel Williston
Samuel Williston
Samuel Williston was an American lawyer and law professor.Early in Williston's career, from 1888 to 1889 he worked as the private secretary to U.S. Supreme Court Justice Horace Gray. In the summer of 1889, he helped to collate laws from various U.S...
, which Gilmore calls the Holmes-Williston construct. The theory is described whereby, “no one should be liable to anyone for anything.”, or at least liability shall be strictly limited. Damages in contract were distinguished from damages in tort
Tort
A tort, in common law jurisdictions, is a wrong that involves a breach of a civil duty owed to someone else. It is differentiated from a crime, which involves a breach of a duty owed to society in general...
, and punitive damages
Punitive damages
Punitive damages or exemplary damages are damages intended to reform or deter the defendant and others from engaging in conduct similar to that which formed the basis of the lawsuit...
were not to be allowed. Furthermore, courts were to act as “detached umpires or referees” and only to see that the rules of the game were followed, but not to “see that justice or anything of that sort was done.” Gilmore further describes Holmes’ view on objective interpretation of contract law, as laid out in The Common Law
The Common Law
The Common Law is a book that was written by Oliver Wendell Holmes, Jr. in 1881. Holmes later became an Associate Justice on the Supreme Court of the United States....
. Thus, Gilmore states that the theory of contracts was not developed naturally from continual case law
Case law
In law, case law is the set of reported judicial decisions of selected appellate courts and other courts of first instance which make new interpretations of the law and, therefore, can be cited as precedents in a process known as stare decisis...
development, such as the decisions by Lord Mansfield, but rather it was an “ivory tower
Ivory Tower
The term Ivory Tower originates in the Biblical Song of Solomon , and was later used as an epithet for Mary.From the 19th century it has been used to designate a world or atmosphere where intellectuals engage in pursuits that are disconnected from the practical concerns of everyday life...
abstraction” that lived “in the law school
Law school
A law school is an institution specializing in legal education.- Law degrees :- Canada :...
s, not the law courts.” Often the rules of contract were the result of a string of cases being pulled together, with little citation or presentation of the facts, and declared to be a rule in the works of Williston. The problem with contract theory was that “businessman, adapting to changing circumstance, kept doing things differently. The general theory required that, always and everywhere, things remain as they have, in theory, always been.” He illustrates this argument by reference to English case law that had been elevated by the theorists to the status of "rules", in Stilk v Myrick
Stilk v Myrick
Stilk v Myrick [1809] is an English contract law case of the High Court on the subject of consideration. In his verdict, the judge, Lord Ellenborough decided that in cases where an individual was bound to do a duty under an existing contract, that duty could not be considered valid consideration...
, Dickinson v Dodds
Dickinson v Dodds
Dickinson v Dodds 2 Ch D 463 is an English contract law case, heard by the Court of Appeal, Chancery Division, that held that notification by a third party of an offer's withdrawal is effective just like a withdrawal by the person who made an offer....
and Foakes v Beer, all as a way of ensuring that the doctrine of consideration would preclude the enforceability of a contract.
Chapter 2. Development
Developing on the discussion of the first chapter, Gilmore begins by focusing on the change from a subjectiveSubjectivity
Subjectivity refers to the subject and his or her perspective, feelings, beliefs, and desires. In philosophy, the term is usually contrasted with objectivity.-Qualia:...
approach to an objective
Objectivity (philosophy)
Objectivity is a central philosophical concept which has been variously defined by sources. A proposition is generally considered to be objectively true when its truth conditions are met and are "mind-independent"—that is, not met by the judgment of a conscious entity or subject.- Objectivism...
approach in the theory of contracts. Contract law in the 19th century was experiencing a shift from a formalistic regime toward a more flexible paradigm that tended to uphold the validity of contracts. This was due in part to the Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...
and the need to facilitate commerce between parties. The requirement of ceremonial trappings such as seals and ribbons gave way to a more reality based emphasis on consideration as indicia of the parties' intent to contract.
Gilmore begins with an analysis of Raffles v Wichelhaus, otherwise famously known as The Peerless. He continues, noting examples of case objectification by Holmes in his book The Common Law
The Common Law
The Common Law is a book that was written by Oliver Wendell Holmes, Jr. in 1881. Holmes later became an Associate Justice on the Supreme Court of the United States....
, and that if the “magician
Magic (illusion)
Magic is a performing art that entertains audiences by staging tricks or creating illusions of seemingly impossible or supernatural feats using natural means...
” can objectify that case, he could do so to anything. According to Holmes, Raffles, is not decided on a failure of the meeting of the minds
Meeting of the minds
Meeting of the minds is a phrase in contract law used to describe the intentions of the parties forming the contract. In particular it refers to the situation where there is a common understanding in the formation of the contract...
, but rather they objectively said two different things. This action was consistent with Holmes’ desire to remove morality from the understanding of law. The importance in objectifying contract law is that it is far easier to litigate. For Holmes, no longer could one void a contract simply because they had made a mistake, the mistake would have to be objectively reasonable. Gilmore finishes the chapter by discussing the reception of the policy of absolute contractual liability in Paradine v Jane into the law of Massachusetts, and the Holmesian theorists disdain for the condoning of special damages in Hadley v Baxendale.
Chapter 3. Decline and Fall
Gilmore’s first point is that contract law was never as neat and tidy as the casebooks tried to make it appear. Cases were selected and reported in the texts as long as they fit the categories already created. The theory of contract as formulated by Holmes and Williston, was disassembled by Benjamin N. CardozoBenjamin N. Cardozo
Benjamin Nathan Cardozo was a well-known American lawyer and associate Supreme Court Justice. Cardozo is remembered for his significant influence on the development of American common law in the 20th century, in addition to his modesty, philosophy, and vivid prose style...
and Arthur Linton Corbin
Arthur Linton Corbin
Arthur Linton Corbin was a professor at Yale Law School and a scholar of contract law. He helped to develop the philosophy of law known as legal realism, and wrote one of the most celebrated legal treatises of the Twentieth century, Corbin on Contracts.-Early life:Corbin was born in Linn County,...
. Cardozo did this through his judicial opinions, which gave power to the courts to create contracts wherever possible, adding contract terms if necessary, while Corbin did so in his treatise on Contracts (which Gilmore describes as the greatest law book ever written). Corbin’s work takes the opposite stance of Holmes, refuting the idea that contract law was external, rather focusing on the “operative facts” of the cases.
Interestingly enough, Corbin worked with Williston on the Restatement of Contracts. As Gilmore states, “Williston and Corbin held antithetical points of view on almost every conceivable point of law.” As such, Gilmore points out the contradictions with the Restatement itself, citing sec. 75 and sec. 90. While sec. 75 takes a purely Holmesian objective point-of-view, sec. 90 appears to go in the exact opposite direction, allowing for reasonable expectations. Gilmore points to the contradiction of sections as example of the “unspoken cases” as mentioned earlier that didn’t fit the Holmesian model, being presented by Corbin in an un-ignorable fashion. Ultimately, the differing view points resulted in the Restatement coming out “fudged or blurred, pointing equivocally in all directions at once. The Restatement, we might say, ended up uneasily between past and future, which is no doubt the best thing that could have been done.”
However, Gilmore points out that the future wins out, and the Second Restatement
Restatement (Second) of Contracts
The Restatement of the Law of Contracts is one of the most well-recognized and frequently-cited legal treatises in all of American jurisprudence. Every first year law student in every law school in the United States is exposed to it, and it is probably the most-cited non-binding authority in all...
moves towards the direction of sec. 90, “the unwanted stepchild” of the first Restatement. The move is exemplified by the newfound success of plaintiffs looking to recover for the benefit that they conferred on the defendant, even though they ultimately failed to complete their contractual obligations.
Gilmore suggests that the theory of contract law just complicates the obvious. As he states, “In any civilized system the same agreements, provided that they are entered into voluntarily and in good faith, will be enforced - as of course they should be. We did [the same thing] by discovering or inventing, in appropriate cases, ‘exceptions’ from the ‘general rule’ - which makes the resulting pattern look a good deal more complicated than it really is, with the result that people - including lawyers and judges - are sometimes led astray.” Historically, there are examples of “exceptions” carved out even under absolute liability assumptions, thus almost always providing for what would be perceived as a just result. Similarly, the remedies for breach of contract have broadened beyond what was originally allowed.
Chapter 4. Conclusions and Speculations
Gilmore begins the final chapter by stating that perhaps, “we might say that what is happening is that ‘contract’ is being reabsorbed into the mainstream of ‘tort’”. The artificial divisions that were used to carve contract theory out of tort a hundred years ago have all but crumbled. With all of the exceptions in contract law, liability in contract is no longer very different from liability in tort, and the merging of damages is not far behind. Quite comically, Gilmore suggests that the merging of contracts and torts should be reflected in legal education in a class called “ContortsContorts
Contorts is a portmanteau, or a combination of "contracts" and "torts" originated by Grant Gilmore in his book The Death of Contract. The generally informal term refers to the continual or persistent "tortification" of Contract law...
”. Gilmore pays heed to the justifications for creating a theory of contract in the first place. At the turn of the century, the legal climate was one that feared legal individualism among the states
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
, and therefore, a general theory of contract law was appealing as it could transcend state lines. At the same time, taking commercial issues and deciding them under contract law and the guise of “questions of law” kept them from being decided by inconsistent and unreliable juries. In closing, Gilmore notes the constantly changing tides of legal thought, and states that “Contract is dead - but who knows what unlikely resurrection the Easter-tide may bring?”