Contract’s Constitutive Core: Solving Problems by Making Deals

Abstract

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.

Keywords: Problem solving, legal process, torts, Contracts, Courts, Theory, Jurisprudence, Adjudication