Several days ago I posted this on Judge Frank Easterbrook's rant about justice in the context of contracts. Someone asked if Easterbrook was simply saying that courts should interpret contracts as written. Well, I suppose, although he's rather animated about such a prosaic nostrum.
But the simplicity of the sentiment--which virtually no one denies--is rendered a bit more complex when we ask how courts should interpret "what the parties wrote." Anyone familiar with a field like literary interpretation should realize that the answer is not as straightforward as we might like to think. Should the court interpret the contract language according to what the judge believes it meant? Or what the parties thought it meant? Or what an innocent third party bystander would have thought? Or what a sophisticated commercial party would have thought? Or should we just punt the question of meaning to the jury and tell 'em to go at it?
The answer to this question, a question of hermeneutics, can rarely be answered by looking to the written form of the contract. The answers (and there are many floating around among different courts) generally involve an interplay between what a court believes to be its own (in)competence, judicial economy, and, yes, justice. Contract law doesn't answer pre-contractual questions. A court's understanding of justice often does.
But the simplicity of the sentiment--which virtually no one denies--is rendered a bit more complex when we ask how courts should interpret "what the parties wrote." Anyone familiar with a field like literary interpretation should realize that the answer is not as straightforward as we might like to think. Should the court interpret the contract language according to what the judge believes it meant? Or what the parties thought it meant? Or what an innocent third party bystander would have thought? Or what a sophisticated commercial party would have thought? Or should we just punt the question of meaning to the jury and tell 'em to go at it?
The answer to this question, a question of hermeneutics, can rarely be answered by looking to the written form of the contract. The answers (and there are many floating around among different courts) generally involve an interplay between what a court believes to be its own (in)competence, judicial economy, and, yes, justice. Contract law doesn't answer pre-contractual questions. A court's understanding of justice often does.
Good point, Professor Pryor, I guess the bottom line is that it's a shame we don't have a "Legislative History" to help determine what discussions were had in forming the contract. That has its own numerous pitfalls and many judges go there way too quickly, but maybe if there were a plain language "Preamble" at the beginning of contracts, perhaps it would help in the administration of "justice" in these cases. Many contracts are so poorly drafted that nobody can tell what the parties really meant.
ReplyDeleteParties regularly insert a merger clause in their contracts. Even though such clauses almost always invoke a strong form of the parol evidence rule, they should not exclude parol that goes to meaning rather than to establish a term of the contracts. But the difference bewteen interpreting an existing term and adding a new one may be thin indeed.
ReplyDeleteBut to your point--that parties should provide for an explicit standard of interpretation--I don't know why more don't do it. In the real world, I think sophisticated commercial parties prefer a plain [to the judge] meaning rule but that frequently works to the detriment of unsophisticated folks.
Scott, to your point of hermeneutics, it is in fact the crux of the problem. Unfortunately, there is no solution to the problem. Even ignoring Hobbs (and our inability to sense the world accurately), basic communication theory states that we communicate with each other over noisy conduits. We will never achieve a point where communication (spoken, sung, written, painted) will ever be accurate and not require interpretation. I remember Francis Shaffer saying once that his L'Abri students would spend hours and hours discussing the meaning of a word, understanding acutely that they could not understand each other until they had a common understanding of what they were saying.
ReplyDeleteAll we can hope for is a common set of rules for interpretation. Of course, the rules themselves will need interpretation (and thus enters the circular nature of the problem yet again).
Which leads us yet again, not to hermeneutics, but epistemology, the nature of truth, revelation, and faith. I.e., our dependence on the One who has revealed Himself and His truth. And we see once again how broken we really are!
Happy thoughts for a Sunday!
Hi Scott. This reminds me of legal standards for informed consent. States recognize a variety of standards, including the "professional practice" standard-- which asks what a physician in the area would usually tell a patient, the "reasonable person" standard, which asks the jury to decide what a hypothetical reasonable person would want to know about the upcoming procedure, and the "subjective" standard, which asks what the actual person in question would have wanted to know (if they had known it was at issue). I think the reasonable person standard is the best of three, as many do, mostly because it seems better than allowing physicians to set an arbitrary standard. All three of the standards have flaws, though. I tend to think that asking a jury about what hypothetical reasonable people would mean would be a good standard for contracts too. What's the most popular standard for contracts?
ReplyDeleteThe rule has long been that contract interpretation is a matter of law, not fact. Thus judges, not jurors, usually decide what the term of a contract means. That still leaves open the question by what standard should the judge determine meaning, a question that has a variety of answers depending on the jurisdiction. Although not phrased in terms of the hypothetical "reasonable person," that's about what judges do, supplemented by the judge's own experience.
ReplyDelete