Pseudo-Contract & Shared Meaning Analysis

Abstract

Over the last several decades, courts and legal scholars have struggled with whether or when to consider boilerplate text as contract. In a series of ad hoc fixes reminiscent of the “epicycles” that tried to square Ptolemaic geocentric theories of planetary motion with recalcitrant observations, contract law has been shifting away from its traditional focus on enforcing parties’ actual agreements. This shift has been transforming the meanings of central contract law concepts. We view the shift as an untheorized paradigm slip, inviting a generalized theory of contract as assumption of risk and allowing private obligations to be created unilaterally without actual agreement. This sort of obligation is still called “contract.” But it is pseudo-contract. The recent paradigm slip into pseudo-contract raises a complex blend of linguistic, factual, conceptual, normative and doctrinal problems. Under the mantle of contract, the problems of pseudo-contract have been largely hidden. In this article we develop a more nuanced and coherent method of analysis — “shared meaning analysis” — which courts and other legal analysts can use to determine when any particular piece of boilerplate text does, or does not, contribute meaning to a contract.

Shared meaning analysis draws on the linguistic distinctions between “speaker meaning” and “sentence meaning” to develop a contemporary definition and method of discerning the “shared meaning” of a contract. These distinctions are critical for a proper identification of the scope and content of parties’ actual agreements — indeed for understanding what contract and freedom of contract are — and courts and parties rely on them routinely though implicitly.

To explain the linguistic distinctions and their significance for contract law, we launch our analysis by developing several seminal insights into the dependence of meaning on social cooperation from the language philosopher Paul Grice. We build on his insights in order to distinguish contractual from non-contractual uses of boilerplate and to provide the resources needed to prevent contract from slipping into pseudo-contract. We pay particular attention to diagnosing deceptive or misleading uses of boilerplate. Finally we show how shared meaning analysis applies generally to many varieties of contracts, by providing examples that range widely (from clickwrap contracts with consumers to high-end boilerplate contracts between sophisticated parties).

Keywords: Boilerplate, Pseudo-Contract, Arbitration, Grice, Contract, Interpretation, Objective Theory, Cooperation, Market, Paradigm Slip, Clickwrap, Online, Contract of Adhesion, Speaker Meaning, Sentence Meaning, Shared Meaning, ISDA, Pari Passu, High-End Boilerplate, Deception, Consumer

JEL Classification: D11, D18, D82, D83, D86, F11, B25, F34, G18, B52, G28, J41, K12, K22, K30, K40, L14, L15, N00, 033