Document Type

Article

Publication Title

Minnesota Law Review

Abstract

I suggest in this Article an explanation, and in large part a justification, for the courts' reluctance to embrace the theories of adjustment. My argument reflects a substantial doubt, which I believe is shared by the decisions, that the imposition of a duty to adjust mirrors commercial reality, social utility, or individual right. I recognize, as do advocates of a duty to adjust, that contractual expression is necessarily fragmentary due to the incapacity of commercial actors to foretell completely events that might disrupt original expectations. My disagreement with adjustment advocates lies in the conclusions that follow from this premise. From my perspective, the adjustment arguments assume a view of rational commercial behavior that understates the ability of commercial actors to engage in conduct for which they can be considered, from an ethical or behavioral perspective, responsible. I argue that even if commercial actors cannot foretell the occurrence of events, they can plan rationally with the inevitable uncertainty of the future in mind to estimate and control the consequences of those events. If a commercial actor is able to bargain with uncertainty in mind, I suggest the law ought to consider a such bargain the product of a cognitive and analytical process for which the actor can be held accountable, notwithstanding the intervention of specific events that the actor did not predict. The failure of the law to respect decisions made under these circumstances is unjustifiably paternalistic towards individual actors and frustrates individual effort that would otherwise generate greater personal and social welfare. I therefore reject recent commentary that views contract necessarily as a communitarian exercise and instead adopt a conception of contract as a mechanism for individual expression by commercial actors capable of considering and bearing the consequences of reasoned choice. In Part I, this Article proposes a model of decision making that suggests commercial actors are able to bargain rationally concerning "unforeseen" events. The model, therefore, militates against any duty to adjust based on the incapacity of the parties to foretell the future. Part II examines the arguments for a duty to adjust and elaborates the nonadjustment model in light of these arguments, concluding that the principles of relationalism and desert on which advocates of adjustment rely cannot adequately support the imposition of a duty to adjust. Finally, Part III discusses the absoluteness of the nonadjustment model to determine whether the imposition of a duty to adjust might be appropriate in certain situations.

First Page

521

Volume

69

Publication Date

1985

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