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Author: Dave Hoffman

Why did our subjects sometimes behave like 19th century legal formalists, and other times like realists from the Wisconsin School of relational contract theory?


Intuitions About Contract Formation

Tess Wilkinson-Ryan and I have a new paper up on SSRN, titled Intuitions About Contract Formation.  In the great Redyip tradition, I thought I’d blog about it. From the abstract:

Legally, much depends on the moment that a negotiation becomes a deal.  Unlike torts or civil procedure or any area of public law, the laws of  promissory exchange only apply to parties who have manifested their assent to be bound. Even so, the moral norms of exchange and promise are quite firmly  entrenched and more broadly applicable than just legal contracts. Norms of promise-keeping and reciprocity, interpersonal courtesy, community reputation—these kinds of intangible goods have real effects on contract behavior. For this reason it is especially surprising that intuitions about formation have gotten so little attention from legal and behavioral scholars. This paper offers five new empirical studies of commonsense approaches to contract formation. The first section of this Article surveys intuitions about what the law of formation is. In a world in which the vast majority of contracts are signed without the advice of counsel, most people have to draw inferences based on their background knowledge and beliefs. It turns out that the colloquial understanding of contract formation is about the formalization of an agreement rather than actual assent.

In the second part of the Article, we tease out the intuitive relationship between formation and obligation. The law of contracts is very clear that  parties’ obligations to one another turn entirely on whether or not they have mutually manifested assent to be bound. And, in fact, we find that behavioral results suggest that legal (or legalistic) formation does enhance commitment to a deal irrespective of its power to impose sanctions; it seems that the law has freestanding normative force. However, we also find that the subjective sense of obligation is not as black or white as the law would predict. Parties are influenced by the natural, informal obligations to one another that build over the course of a transaction, increasing their commitment to the partnership in stages rather than all at once at the moment of formation.

To set the paper up a bit, Tess and I had previously found that when subjects are told they are in legally binding contracts, they lower their guard against exploitation & treat contracting parties like partners.  This raised a question that Intuitions tries to answer:  what are subjects’ naive views about formation?  We show that they differ systematically from the operative doctrinal rules, which creates a window for exploitation — when consumers believe themselves to be in contracts but aren’t. For example, individuals think that payment is contract, not agreement.  In one experiment, for example, we asked:

“Peter is ordering new custom speakers from Audionuts, a mail-order sound system retailer. Peter calls the company and speaks at length to a customer service representative, hashing out the details of his order, which include speakers for his main media unit (TV and stereo system) as well as his portable devices (phone and iPad). Peter and the customer service representative arrive at a final product specification, including a price and delivery date. Peter gives the rep his credit card number, and the charge is immediately posted to his account. Eight days later, Peter receives his speakers in the mail. Inside the box is a piece of paper headed “Terms and Conditions.” The Terms and Conditions sheet includes information about the duration of the warranty (90 days), the dispute resolution process (mandatory arbitration) and the return policy (return within 14 days for full refund for any reason). The Terms and Conditions sheet states at the bottom, “If you do not agree to these terms and conditions, please return the product within 14 days for a full refund.” Peter uses the speakers with no problems for two months.”


Note: payment & acceptance without return dominate over the oral agreement, or reading terms.  (Other experiments replicate this finding on payment, and expand it to signature.)

At the same time, we find that, in the absence of information about law or legal rules, individuals tend to begin to act like partners significantly earlier than the moment where they’ve concluded a deal.  Indeed, a mere offer appears to motivate feelings of reciprocity by the offeree. Why did our subjects sometimes behave like 19th century legal formalists, and other times like realists from the Wisconsin School of relational contract theory? Our tentative conclusion is that subjects themselves draw a distinction between legal and moral obligations. They view their legal obligations as heavily dependent on formal manifestation of assent via signature. But their moral obligations are attendant to both legal formalism and also to more fine-grained moral norms. This is an interesting case in which we see some evidence of a legal context, contract, in which moral norms are not entirely determined by legal norms. But when subjects are told that they are in a contract, in a sense it makes it so.


All fiction to some degree takes place in an invented world, with invented people doing unreal things. In a way the upside down definition may be the most useful - fantasy is books published by fantasy imprints and shelved in the fantasy sections. As far as what content makes a book a fantasy book rather than general fiction, it varies with the reader. I guess you know it when you see it. Although magic swords are often a giveaway.


Law and Hard Fantasy Interview Series: Joe Abercrombie

joe_abercrombieThis post is a part of our ongoing interview series with fantasy authors who generally write in the burgeoning genre of gritty / hard / dark epic fantasy.   The series began with this book review post, and continued with interviews of George R. R. Martin and Patrick Rothfuss, and Mark Lawrence.

Today, I’m interviewing Joe Abercrombie.  Joe is the author, most famously, of the “First Law” trilogy, and some more recent spin-offs set in that world.  Joe’s writing is characterized by dark (very, very dark) humor, grit (as in dirt), and an unhealthy amount of revenge.  He’s on twitter, he has a blog, and he was nice enough to agree to answer some questions from me about his writing and its relationship to law.

DH: There’s been a lot of talk in recent years about the collapse of the “fantasy” and “fiction” categories. Is there anything useful about the distinction? If so, what are the minimal characteristics of books that would stay on your fantasy shelf?

JA: Any question about definitions and categorisations is always a complicated one, with lots of confusions and blurry areas. All fiction to some degree takes place in an invented world, with invented people doing unreal things. In a way the upside down definition may be the most useful – fantasy is books published by fantasy imprints and shelved in the fantasy sections. As far as what content makes a book a fantasy book rather than general fiction, it varies with the reader. I guess you know it when you see it. Although magic swords are often a giveaway.

DH: One marker of the trend toward harder / darker fantasy is more fulsome world-building and world-planning. But you are well-known as a guy who hates maps (recent books excepted!) Here’s a practical question: do you sit down and think about the rules of the world before you start to write, or do you start writing and work them out as you go along?

JA: I don’t know that I’d necessarily agree with your first assertion, there. I think a marker of the trend towards harder/darker fantasy is a greater focus on character and internal life over setting and world building, certainly I see that as key in what I’m doing. But you want the backdrop to be consistent and coherent. So you have some ideas about the rules of the world. Certainly you have some strong ideas about the effect certain cultures will have on the way the characters think. That’s the kind of world building I’m most interested in, I suppose you could say, the kind that has a direct effect on the behaviour of the characters, rather than the kind that specifies exactly how many thousand years the tower of Zarb had guarded Dragonfire Pass.

DH: What do you have against maps anyway?

JA: I love maps. I have loads of them. But I don’t necessarily want to share them with the reader. I want the reader to see the action in close up, not wide shot. I want them to be with the characters, not thinking so much about the setting.

DH: Is there any civil law in your world? By that, I mean a system by which contractual breaches and torts are enforced outside of blood feuds, deeds are recorded, property disputes disposed of? What does that system look like?

JA: It depends a little on the culture. In the North there has been a relatively primitive tradition of ownership by clans, judgement by elders and chieftains, but it’s broken down during a period of sustained warfare and a new king has tried to impose a new and much more centralised system, with varying success. The Union, by contrast, has a well-established aristocracy and a complex and extensive centralising bureaucracy, although with a weak king on the throne and a lot of pressure from external threats it’s become rather a corrupt system, prone to being carved into personal fiefdoms by powerful and charismatic individuals in the government. Hardly surprising, in a way, since the whole thing has been explicitly designed to allow one man (Bayaz) to maintain control. The whole thing’s further distorted by the conflict between old power and new money, as the Union has spread to include more diverse cultures and the merchant class has gained in influence.

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Some Rather Good Advice

rasberry martiniFrom the 6th edition of the Summers/White/Hillman Treatise on the UCC, section 2:20.

“Under the present state of the law we believe that there is no language that a lawyer can put on a form that will always assure the client of forming a contract on the client’s own terms . . . If a seller must have a term to reduce its liability but cannot strike a bargain for it, the only answer may be to raise the price, buy insurance, or, as a last resort, have an extra martini every evening and not capitalize the corporation too heavily.”

This is exactly correct, though I can’t recommend martinis.



Welcome Corey Yung

PortraitPlease welcome back Corey Yung (of Kansas).  Corey has blogged for us previously, and we’re so pleased to have him back.

Corey is an Associate Professor at the University of Kansas School of Law. His scholarship primarily focuses on sexual violence, substantive criminal law, and judicial decision-making. Yung’s academic writings have been cited by state and federal courts, including the Supreme Court of the United States. Before Yung began his professorial career, he served as an associate for Shearman & Sterling in New York and clerked for the Honorable Michael J. Melloy of the United States Court of Appeals for the Eighth Circuit.

Recent Articles:

How to Lie with Rape Statistics: America’s Hidden Rape Crisis, 99 Iowa Law Review (Forthcoming, 2014)

A Typology of Judging Styles, 107 Northwestern University Law Review 1757 (2013)

The Incredible Ordinariness of Federal Penalties for Inactivity, 2012 Wisconsin Law Review 841 (2012)

Beyond Ideology: An Empirical Study of Partisanship and Independence in the Federal Courts, 80 George Washington Law Review 2 (2012)

Flexing Judicial Muscle: An Empirical Study of Judicial Activism in the Federal Courts, 105 Northwestern University Law Review 1 (2011)


I’ve heard people say books are getting more ‘gritty’, meaning more violent and less stylised in general. The realism there might be in terms of warrior not shrugging off their wounds and being fine the next day etc. Researched realism and detailed city/country mechanics are not something I was aware of a movement toward. To me nothing is added by, for example, the author working out a grain distribution network. I’m interested in story and character, not mechanics.

— Mark L.


Law and Hard Fantasy Interview Series: Mark Lawrence

Broken-EmpireI’ve sporadically run an interview series with fantasy authors who generally write in the burgeoning genre of gritty / hard / dark epic fantasy.  (I’m, obviously, a fan.)  The series began with this book review post, and continued with interviews of George R. R. Martin and Patrick Rothfuss.  The series continues today as I interview Mark Lawrence.  Mark is the author of the Broken Empire trilogy, and the forthcoming Red Queen’s War.  His work has been lauded on both sides of the Atlantic (Mark was raised in the U.K., where he works as a research scientist).  He was gracious enough to respond to my email queries, which follow after the jump.

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Sally can’t argue that (on law school exams)

PrintAt most law schools, first year students get back their fall semester grades this week.  This can be a difficult time for students who – often for the first time – are on the bottom half of steep curves.  If you are in that situation, I thought I’d offer one tip that might help you diagnosis a correctable problem with exam-taking technique.  When you get back your exam, and before you look at the model answer, I’d urge you to scan your exam for the following phrases:

  • could argue that; or
  • might argue that; or
  • has an argument…

Every time you see this phrase, highlight it in red ink.  It’s almost certainly leading you down a dark path.

Why is this phrase pernicious?  Because, very often, it signals that you are about to fail to actually evaluate the noted argument. Rather, you will simply list the possibility (in contracts, for example, “A could argue that the correspondence of May 1 was an offer”) and not tell the reader whether or not that claim is a plausible or winning one in court.  Though sometimes professors truly want to see a kitchen sink answer listing every possible claim, most, instead, are testing judgment. Judgment requires one to actually evaluate legal claims, not to list them.  The problem with “argue that” is that it leads you to think that you are actually saying something — implicitly, that the argument raised is plausible? — without articulating the predicate rationale and limiting conditions. I can’t tell you how many times I’ve sat with students in exam reviews, pointed out this phrase, only to have the student tell me that they knew that the argument was a good or bad one, but they failed to put that judgment on the page.  “Argue that” blinds you to your own failure to exercise your situation sense.

The great thing about this tic is that it’s a useful, concrete, red flag for conclusory exam writing, which typically distinguishes average exams from great ones.  If you are working on your computer, you can simply use the find function before handing in the exam to make sure that you haven’t fallen into the trap.  Other tics, like “obviously,” “clearly,” and “certainly,” are similar but aren’t as prevalent on law school exam answers. Eliminating “could argue that” also helps to omit needless words: instead of introducing issues before disposing of them, you can simply fold the analysis into the introductory sentence. Thus: “While the May 1 letter has some of the markings of an offer (it identifies price & amount), it fails to state the timing of delivery and most courts will follow Nebraska Seed in denying formation.”

Now, you could argue that this is all needlessly pedantic mutterings over style points, when the real skills that ought to separate good from bad exams concern doctrine.  But, if you did make that argument, you’d be wrong. Being conclusory – that is, assuming the conclusion in question and failing to analyze why the answer follows from the facts – is the key sin on most issue-spotter exams.  You can learn to be less conclusory over time by training yourself to see it in your writing.  And, if you got bad news this week, spotting conclusory writing before it’s graded will go a long way toward better news in May.


First Day of Civil Procedure

Today’s the first day of  Civil Procedure I at Temple. I like teaching the course: the material is complicated enough to make class time worthwhile; student expectations are very low and exceeding them is  a cinch; some deep problems of institutional design arise which offer rich material for good discussion.  Plus, it’s now on the Multistate Bar!  That said, I’ve some concerns about the course — you might call them existential, or (if you are disposed to be less charitable) “unduly repetitive.”

First, almost every civil procedure course taught to 1Ls in this country focuses on federal procedure.  I’ve argued before (using the image heading this post) that this is an odd choice. Why do the FRCP dominate over state rules? The best argument is that they prepare student for multi-jurisdictional practice. The second best argument is that many state procedural regimes ape federal law – a story of the latent triumph of the Swift regime that I might write about someday soon. But, honestly, I’ve a sneaking suspicion that most law professors teach federal procedure because they simply don’t know the current  state procedural practice at the school where they teach.  Note: practice, not rules – that is, it’s difficult to keep up with changes in the on-the-ground practice of procedural change in state court when you have another full-time job and aren’t regularly jousting in court. For example, in Philadelphia, there’s a Discovery Court.  That Court has some rules.  But those rules’ application varies so widely between judges, and changes yearly as judges rotate, that teaching the rules themselves would be insanity.  By contrast, the federal system is relatively uniform, transparent and stable.  A full-time law professor can teach the federal rules & federal cases and provide students a fair approximation of the lay of the land.  Thus, for all of the plausible reasons in the world, we teach procedural rules which are often irrelevant to the work of most graduates.

Second, most Civ Pro courses allocate time based on available case law. Hence: more days on personal jurisdiction, and fewer on discovery.  Again, this decision makes some pedagogical sense. If the first year is about learning how to read cases, jurisdiction cases certainly provide illustrative examples of doctrinal evolution. That’s true especially since the hard questions of internet jurisdiction are likely to remain largely unsettled. But how about the time spent on Erie? Though that case is iconic, I doubt that Erie issues come up very often in real cases.  It’s sort of like the Contract course’s focus on consideration and promissory estoppel instead of interpretation.

At the same time, the real billable output of procedural questions is often document review & consequent deposition practice.  Though many professors teach some variant of deposition practice as a part of a procedure course, none that I’m aware of require students to engage in the “skill” of document review of a large set of irrelevant results.  This may be changing: some schools are teaching students how to use technological solutions to review requests, though typically such experiences are divorced from the basic procedure course and instead segregated into a law & tech class. But it’s hard to imagine that you could actually shape a first year course around discovery.

Third, very few casebooks, and thus very few courses, spend significant time on the intersection of contract and procedure outside of the forum selection context.  Maybe that’s because there’s no there there.  Or maybe it’s for ideological reasons.  Regardless, it’s obviously true that civil cases are being eaten up by arbitral proceedings, whose largely-secret and evolving procedures are very difficult to study in the first year.

What’s the upshot? The course is called procedure, but it’s far more typically taught as a legal process course driven by due process concerns & the Matthews test. That’s not a terrible thing, though it does present a bit of truth-in-advertising concern, no?  Perhaps Law Schools should rename Civil Procedure as “Some Musings on the Constitutional Roots of Procedural Problems.”


Flat-Rate Law School Tuition?

Articles in Slate and  the Times make a convincing psychological and economic argument against discounting tuition, especially outside of super-elite institutions. The data suggest that schools ought to offer fixed, lower, rates which all students pay equally.  If widely adopted, no-haggle tuition pricing would be both revenue neutral and significantly more transparent than the current system. So why don’t law schools follow the model? Off the top of my head:

  1. Student scholarships are donor-magnets; and
  2. The Prisoner’s Dilemma.

Donor preferences would be a tough nut to crack.  In a world of increasingly stretched resources, schools are going to be loath to abandon a tried-and-true way of activating their alumni networks. Except for at those super-elite schools, pitches in support of faculty (scholarly) resources or curricular offerings are often tough sells.  I suppose that donors could be channeled into other kinds of student support, but there’s nothing quite as compelling as helping individuals access legal education.

The second problem is also a doozy.  Look at what happened to J.C. Penny.  However, it’s not as if every day low pricing is impossible.  For instance, if the federal government were to condition aid on granular tuition transparency, I think we’d see uniform pricing rather quickly. To see why, imagine a world where all students’ real costs were knowable. There’d be immediately and power leveling pressure from the student body.  The easiest solution would be to eliminate discounts but charge a lower real rate. However, I’ve not seen proposals on the table to change accreditation in this direction, and the current system is clearly hostile to a no-discount tuition strategy. Thus, we’re going to continue to live in a world where every student coming in the door pays something different.



Executives Say the Funniest Things

The now week-old expose of disarray in the front-office of the Seattle Mariners contains many great tidbits.  From the discussions of nitpicking the fonts in a powerpoint deck, to the puffery about sabermetrics, it suggests that baseball teams’ front-offices look very much like the rest of corporate america.  And here’s the anecdote to prove it:

“[Team manager Eric] Wedge described how, starting in 2011, [team President Chuck] Armstrong would visit his office and gravely say things like: ‘Howard [Lincoln, the Mariner's CEO] sent me down here and … we’ve got to win.’

Wedge would shrug in agreement, telling him he wanted to win every night. But he’s like, ‘No, we’ve really got to win. We’ve got to go 5-2 on this trip. We’ve got to win tonight.’”

We’ve really got to win.  Most of the time, it’s more or less optional! Needless to say, in a universe where success is determined by quarterly returns and flexible GAAP accounting, this is exactly the kind of direction that leads to cooking the books.  Sadly for the Mariners, their success was harder to manufacture.


Stipulated Damages, Exculpatory Clauses and Unconscionability

On re-reading Discover Bank v. Superior Court (Cal. 2005) I found myself getting hung up on a conceptual problem you might be able to help me with.  The Discover Bank court considered the validity of class action arbitration waivers. Holding such waivers unconscionable as a matter of law, the court halted (that is, until Concepcion) arbitration’s inexorable conquest of consumer litigation.  The court reasoned was that such waivers presented issues of both procedural and substantive unconscionability.  Procedural, the waivers were default-forcing “bill stuffers” and consequently not meaningfully chosen.  Substantively, “they may operate effectively as exculpatory contract clauses . . . because . . . damages in consumer cases are often small . . and the class action is often the only effective way to halt and redress [wrongdoing.]“

The question I have is what distinguishes “exculpatory clauses” – typically thought to be against public policy – from ordinary “stipulated damages” clauses, which are subject to reasonableness review. I unaware of any scholarship that tries to define exactly what stipulated damages are (and are not). Consider two possibilities:

  • To the extent that stipulated clauses are broadly defined, so as, for example, to include bespoke procedure, courts’ permissive treatment of stipulated damage clauses would seem to then imply vastly more private-party control over remedies than the traditionally-narrow scope that the term stipulated damage implies.
  • But perhaps such clauses are narrowly defined – that is, the stipulation must relate only to damages flowing from the contract (i.e., a term that limited parties’ ability to seek specific performance would not count as a stipulated damages clause, nor would a waiver of damages for a tort). In that case the Discover Bank court’s categorical move is more defensible, but it’s not obvious that the line between damage and remedy makes sense analytically.

A third possibility is that stipulate damage reasonableness review is limited to scenarios where some remedies remain on the table, regardless of whether the remedy arises out of a claim related to the contract or not; the categorical public policy bar from Discover Bank applies when all remedies are precluded.  Discover Bank is, again, a bad case for that claim, since not all contract remedies were precluded, only those which would deter future harms.

Anyway, it’s a puzzle.  Thoughts?