Relational Formalism and the Construction of Financial Instruments

43 Pages Posted: 30 May 2011 Last revised: 31 May 2012

See all articles by Jonathan Yovel

Jonathan Yovel

NYU School of Law - Straus Institute for the Advanced Study of Law and Justice; University of Haifa - Faculty of Law; Yale Law School

Date Written: May 29, 2011


Legal formalism and legal relationalism are traditionally thought of as defining opposite poles of jurisprudential analysis. This study develops a new position, “relational formalism,” as it emerges from practices of commercial law and financial law in particular. As an interpretation of practice, relational formalism - although maintaining the precedence of formalist construction over functional analysis - does so while responding to practical concerns and interests entailed by relations. It argues that legal formalism needs not be an expression of positivistic commitments, and can be approached on relational grounds.

The study empirically analyzes a well-known problem of financial instruments and negotiability (an area traditionally characterized as intensely formalistic) to support both the tenability of relational formalism and its theoretical and practical fruitfulness. It claims that tacit judicial divergence over formalism, rather than specific doctrinal differences, best explains conflicting outcomes in similar cases in various US jurisdictions. It then applies performative linguistics to sustain a relational construction of formalism independently of its normative appeal. Finally, it contrasts a view of private law as a “model for action” with its view as an interpretative, bottom-up lens for approaching practice.

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Keywords: Commercial Law, Negotiable Instruments, Relational Contract Theory, Legal Formalism, Adjudication, Speech Act Theory, Pragmatice, Performativity, Linguistics, Jurisprudence, Law & Society

Suggested Citation

Yovel, Jonathan, Relational Formalism and the Construction of Financial Instruments (May 29, 2011). American Business Law Journal, Vol. 48, No. 2, pp. 371-407, 2011, Yale Law School Faculty Scholarship Series No. 33, Available at SSRN:

Jonathan Yovel (Contact Author)

NYU School of Law - Straus Institute for the Advanced Study of Law and Justice ( email )

New York
United States

University of Haifa - Faculty of Law ( email )

Mount Carmel
Haifa, 31905

Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
203.435.5911 (Phone)

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