Conversation, Convention, or Conversion? A Response to Kar and Radin

Abstract

This is a response to “Pseudo-Contract and Shared Meaning Analysis” by Professors Robin Bradley Kar and Margaret Radin. Their article is a thoughtful and ambitious attempt to find a principled basis in the theory of contract formation for distinguishing what they see as the legitimate portion of the transaction – the “actual agreement” which is “cooperatively communicated” – from that which ought not to be enforced (usually the extensive unread boilerplate or click-through terms). While I am sympathetic to the policy aim, I resist the core of their thesis, which is that there is a discernible “actual agreement” arising from a “shared meaning” that is neither merely the objective manifestations of an agreement nor the individual subjective intentions of the parties. My resistance to the thesis falls into three categories: (a) that the authors have transformed Paul Grice’s conversational maxims from an “is” of description into a normative “ought;” (b) that the thesis is simply a more sophisticated version of a particular conception within contract theory, the problematic “meeting of the minds” metaphor; and (c) that shared meaning is either (i) nothing more than normative “oughts” of linguistic cooperation, no less arbitrary and unpredictable in their application than the unconscionability standards, or (ii) an ontological and epistemological claim that appeals not to rational persuasion but to conversion. As a result, I caution against rushing into shared meaning analysis as a broader basis for understanding contract formation or interpretation.

Keywords: contract formation, Grice, unconscionability, shared meaning, meeting of the minds, objective, subjective, agreement, Cooperative Principle

JEL Classification: K12