A Comment on Language and Norms in Complex Business Contracting

29 Pages Posted: 15 Dec 2002

See all articles by Claire A. Hill

Claire A. Hill

University of Minnesota Law School

Abstract

Complex contracts, such as those governing loans and acquisitions, create a state of the world - parties entering into a contract thereby become bound. The contract expressly summons up legal consequences for every promise it contains. But the relationship between the promises and the law's force is attenuated. Very often, contract provisions set the stage rather than provide the script: accommodation seems more the rule than the exception. Indeed, for most contracting parties, the law's specter is one of many reasons to do what they promised to do, and often, not the most important reason. Parties also feel constrained by reputational and other extralegal forces within the complex contracting community. Moreover, the process of contracting itself can serve to elicit information and compliance. The combination of legal and extralegal forces permits parties to craft a constrained, yet flexible, relationship - probably the best the parties can do given the limits of language, knowledge and imagination.

Keywords: contracts, acquisitions, legal consequences, contracting parties, contracting, business contracting, complex contracts, contractual provisions, loan agreements

JEL Classification: I0

Suggested Citation

Hill, Claire Ariane, A Comment on Language and Norms in Complex Business Contracting. Chicago-Kent Law Review, Vol. 77, No. 1, 2001. Available at SSRN: https://ssrn.com/abstract=332984 or http://dx.doi.org/10.2139/ssrn.332984

Claire Ariane Hill (Contact Author)

University of Minnesota Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States
612-624-6521 (Phone)

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