The Formality of Contractual Obligation
Files
Description
I argue in this chapter that all of contract law is formal in content. I first develop and defend the sense of content formality that I have in mind and then turn to argue that contract law is formal in that sense. Even if I am unpersuasive on the second claim, I hope that the notion of formality I develop will seem illuminating. It is striking that content formality, my focus, is hardly at all mentioned in the several rather exhaustive discussions of form and substance in the law of obligations to be found in this volume. My starting point is the account of content formality introduced by Patrick Atiyah and Robert Summers in Form and Substance in Anglo-American Law, along with their account of interpretive formality for the sake of contrast. I will also draw on Lon Fuller’s celebrated discussion of formality in contract in his 1941 article ‘Consideration and Form’. Like Fuller, I will use US enforceability doctrine for my main examples. A legal rule has greater content formality, according to Atiyah and Summers, to the extent that it is shaped by fiat and/or the extent to which it is under- or over-inclusive with respect to its objectives.3 An obvious example of a rule shaped by fiat would be the rule still found in several US states that contracts under seal are subject to an extended statute of limitations period of 20 years. An example of a rule over-inclusive with respect to its objective is the Statute of Frauds requirement of the Uniform Commercial Code that applies to contracts for the sale of goods valued at $500 or more. This is over-inclusive because it renders unenforceable some actual and well-considered exchange agreements. Atiyah and Summers note that it is not always easy to tell whether a rule has high content formality, because it is not always easy to see what the purposes of the rule are. This is a crucial point that I will spend some time with. Atiyah and Summers’ own account of content formality is inadequate, however. Before turning to develop an alternative account of content formality, it will be helpful to consider interpretive formality in some detail, in order to bring the distinctiveness of content formality into clearer focus. Interpretive formality is a matter of the resources that may legitimately be used in interpreting a rule – there is high interpretive formality if the interpreter is limited to the semantic content of the rule and is not permitted to read it in light of its understood purposes, or in light of other substantive concerns such as background principles of law or morality. Atiyah and Summers rightly note that ‘Legal systems vary greatly in the degree to which they permit interpreters to go behind the verbal expression of the law and thus engage in reasoning that is more substantive than formal in deciding what the law itself is in the first place’. One of the main arguments of their book is that the US allows for much more substantive interpretation by judges than does England. Ben Chen and Jeffrey Gordon in Chapter 16 of this volume argue persuasively that there has been some convergence over the last 30 years, in part due to the rise of textualist statutory interpretation in the US. It nonetheless remains true that interpretation of contract law’s common-law rules in state and federal courts in the US is strongly substantive, sometimes startlingly so. As for statutes, the most important one for contract law, the Uniform Commercial Code (UCC), itself stipulates that it ‘must be liberally construed and applied to promote its underlying purposes and policies’ and it goes on helpfully to list them.
Source Publication
Form and Substance in the Law of Obligations
Source Editors/Authors
Andrew Robertson, James Goudkamp
Publication Date
2019
Recommended Citation
Murphy, Liam B., "The Formality of Contractual Obligation" (2019). Faculty Chapters. 1978.
https://gretchen.law.nyu.edu/fac-chapt/1978
