The Metaphysics of Contracts

by Joel Levin

The dreary battle surrounding contract continues undeterred, uneducated, unrepentant, refusing experience and unflinchingly dull. The question continually posed: what is contract? Is the reality identical to that well-known historical metaphor: a meeting of the minds? (Where, of course, is an issue. In what space or room does the meeting take place?) But then what should we say about the dropping of coins into a vending machine with the result of a soft-drink in return, or how should we judge the mental interaction between a mute customer stacking groceries on the conveyor belt and the impassively glum cashier dropping them, once counted, into plastic bags? What is our contract analysis of this scene? Does it mean that the circumstances of mutual assent have occurred, and if they have, when and how, and about what?

Maybe being a contract or having a contract means no more than there are bilateral exchanged promises mutually relied upon, or at least reasonably relied upon? Let us put aside the problem of what are promises and how often we make them — I ask the grocery clerk if the price on the juice can is correct and he responds “I guess,” and then takes my money; where is there any traditional, ordinary, comprehensible, reasonable instance of a promise? Let us further put aside the problem of how to treat the many promises we fail to enforce, consider, or label “contract” — New Year’s resolutions, proclamations of eternal love, protestations that one will never again repeat the latest offending behavior, agreements to retain or save one’s place in a line or queue — and even why should we enforce promises. Let us simply ask why should we consider a promise plus something (mysterious) to be a contract. Certainly, promises to make promises, promises to donate gifts, or promises to improve oneself do not, to our ordinary way of thinking, create contractual action. More problematic, what type of ghostly mental entity is a promise, and how do we recognize it? Distinguishing promises from predictions, bragging, affirmations, vows, performative speech acts, forecasts, or poorly framed descriptive statements is part of this problem, with the speakers’ and listeners’ intention and understanding often being vague, ambiguous or inchoate — even if one had hard-and-fast categories. However, the deeper problem is semantic: how do contractual intentions expressed through (putative) promises become understood, and what are the behavioral, mental, and neural nexuses which are involved?

Lawyers, business persons, economists and ordinary bargainers, of course, routinely ignore the definitional problems inherent in the concept of contract and just get directly into the terms and performance of the deals. In fact, with the aid of political theorists and free enterprise celebrants, contract is generally applauded without analysis and absent definition. If such celebrants are asked whether all freely (usually freedom meaning an absence of unproblematic coercion, such as having a gun to one’s head: that is, robbery and shot-gun marriages are certainly banned, but most contracts formed as a result of economic coercion are allowed) given, exchanged promises between adults should be enforced, their affirmants are embarrassed when the introduction of blackmail, usury, or indentured servitude contracts are mentioned. Two strategies become available at this point. One could simply take the view that definition is irrelevant, that one proverbially knows a contract when one sees it. The actor playing Shylock never entered into an actual contract, while those in the audience who purchased tickets actually did. No one is truly confused, no real problems exist, and formulating a precise definition is an exercise as useless here as in the cases, of say, personhood, maturity, or obscenity.

The answer to this protest is that confusion does occur: in fact, it reigns. What do we say of form sales contracts unread by purchasers, or what of insurance contracts with terms and conditions mailed months after the initial premium is paid, or what of surrogate motherhood arrangements or pillow-talk palimony agreements? What of contracts based on mistakes, misapprehension, minority, imbecility or impossibility? What of perhaps the majority of personal service contracts: performance begins before an agreement to perform is completed, or despite the fact that no agreement ever occurs. Someone begins rehabilitation on your house with only a vague or incomplete agreement as to compensation for overtime or additional work, how mistakes will be handled, what are the consequences of delay by either party, or whether there should be a retainage and for how much at the work’s completion. What is the agreement? Examples of contract problems are more ready than examples of contract paradigms. (Of course, those concerned with the ethical and legal implications inherent in certain contracts, such as abortion issues in in vitro surrogate contract, free speech issues, palimony or voided pornography sales, would suggest that even contracts which appear paradigmatic are problematic, a suggestion which cuts against the definition avoidance strategy).

The second strategy is to avoid theory, simply count up all those things we believe to be contract and call it a day. In fact, that is the dismal approach taken after sixty years of work by thousands of legal scholars in approving the Second Restatement of Contracts. It begins:

Section 1. Contract defined

A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty.

The definition combines two bad features at the outset: it is promised-based and it is tautological. Contracts are those events which form the class of contract contenders, such contenders being counted as successful if the law treats them as contract, and so enforces them. We are back with Moliere’s learned doctor’s explanation of what it is in opium which puts people to sleep: the virtues dormative, or sleep-producing power. What is invited (contract as virtues dormative) is the same as what is being explained. More directly, why bother to have contract? Why not just say that we should enforce what we enforce?

The deeper problem with using such listings in lieu of a definition is the need for a generative legal grammar to analyze future social situations. The set of potential contracts situations is infinite. It not only includes those times we buy, sell, borrow, lend, mortgage, secure, lease, rent, build, repair, construct, insure, enroll, marry, print, publish, air, broadcast, entrust, ship, send, mail, adopt, franchise, indenture, retain, employ, minister to, advise, audit, doctor, transfer, hire, and appoint through the vehicle of contract. It is that we seem to be able to mix, match, shuffle, and integrate concepts to achieve, or attempt to achieve, our individual life goals, projects, intentions and desires. We need a set of rules and principles that will allow us to handle new situations as they arise, and do so in a manner which is not tardy, ad hoc or without guidance, certainty or rationality.

What I want to suggest here is the following picture of contract: contracts have a mentalistic component and a social component, neither resting implicitly or explicitly on promise or subjective agreement, and both understandable only through the two, at times conflicting, moral justifications of freedom and justice. Further, those things which we label “contracts” are part of a family of public acts, and like a family (to push the metaphor) share family resemblances. We see an individual with fair skin, red hair, and blue eyes, but we do not disqualify this putative Celtic because another feature, perhaps freckles, is missing. We put families and groups together by counting up shared features, without the expectation or necessity of exact congruence. Let us see whether this shared core with fuzzy edges also characterizes contracts.