C. Codifications and Restatements

C. Codifications and Restatements

In the creation of the law of contracts the courts have played a decisive role both here and in England. Our federal system of government granted almost complete control over private law to the states. Since the state legislatures failed to play a major role in developing a body of private law, the job remained for the courts.[196] However powerful the forces working toward uniformity, the ideal of a "general law" of contracts was never fully realized, and each jurisdiction remained free to develop its own case law.[197]

So long as commerce remained largely local, this state of affairs did not present a serious problem. But with the growth of commerce into an interstate activity, local differences of law began to impair the usefulness of contract as a planning device. To make matters worse, "the mass of law," as Story observed even in 1820, was accumulating with inordinate rapidity.[198] Inevitably, conflicting decisions appeared even within the same jurisdiction. As a result, uniformity and predictability - the twin goals of any legal system were seriously jeopardized.

It is understandable, therefore, that a movement was begun to eliminate the defects of uncertainty and complexity. The first attempts to harmonize conflicting decisional law took place in commercially significant fields, such as negotiable instruments and sales. With legislative help, sensible common law rules were distinguished from less sensible ones and the good rules given statutory form. In this country, the National Conference of Commissioners on Uniform State Laws drafted model statutes for adoption by state legislatures. This approach succeeded only in part. The Uniform Sales Act, for instance, was never adopted in every state, and the uniform laws did not even cover such subjects as contracts, agency, torts or trusts. In the effort to achieve uniformity, another organization took the lead, using a different technique. The American Law Institute, a private organization of judges, practitioners, and law teachers, set itself the task of "restating" the law in a substantial number of fields so that a judge, lawyer or law teacher could "go to one source, find what the law in point [is] and with confidence state it to be so.”[199] The various Restatements are systems of generalizations drawn from the welter of individual decisions. In form they consist of "concise rules analogous to those in a carefully drawn statute:”[200] accompanied by comments and illustrations. Although they have only persuasive authority, it was hoped that the influence of the Restatements would be "greater than that. . . accorded to any legal treatise, more nearly on a par with that accorded to the decisions of the courts."[201] No doubt, the impact of the Restatements has been substantial: this is certainly true for the Restatement of the Law of Contracts.

Once reform movements got underway, they did not stop with these attempts. Shortly before 1940, the American Law Institute and the Commissioners on Uniform State Laws joined forces and began a campaign to modernize the whole of commercial law by codification.[202] The Uniform Commercial Code (U.C.C.) was the result. The Code has been adopted in all states but Louisiana (which has not adopted Article 2), and substantially affects the general law of contracts. To be sure, the Code does not displace all principles oflaw and equity,[203] but in contrast to the Uniform Sales Act, it does state rules governing significant aspects of the law of contracts, such as offer and acceptance, consideration, and unconscionability, which are not always in harmony with traditional contract rules.[204] To bring the general law of contracts into line with the provisions of the U.C.C., a revision of the Restatement, the Restatement Second, was begun in 1952 and published in 1981. Although its “black-letter” law occasionally departs from the provisions of the U.C.C., the technique used in the Second Restatement is a vast improvement on that employed in its predecessor. It is forward-looking[205] and contains more open-ended provisions; the comments are a good deal more elaborate, and decisional law is always given to illustrate its general rules. Still, one may wonder whether it is the “vocation” of our time (Savigny) of transition to under-take an enterprise like the Restatement, as parts of contract law continue to spin off in a kind of centrifugal process and are made the subject of special legislation, while at the same time the remaining core is reinvigorated by new ideas[206] and changing standards of behavior.[207]



[196] The provisions of the Civil Code drafted in the nineteenth century by David Dudley Field form an exception. Its contract provisions (sometimes in amended form) were enacted in California, Georgia, Montana, the Dakotas, and Idaho. Harrison, The First Half-Century of the California Civil Code, 10 Calif. L. Rev. 185 (1922). Contract law in Louisiana is based on the French Code Civil. See in general G. Gilmore, the Ages of American Law 27, 119 n. 113 (1977).

[197] On case law and common law, see Llewellyn, Our Case Law of Contract: Offer and Acceptance (pt. 1), 48 Yale L.J. 1-9 (1938).

[198] J. Story, Progress of Jurisprudence, in Miscellaneous Writings, 237-238 (1852).

[199] Goodrich, The Story of the American Law Institute, 1951 Wash. U.L.Q. 283, 286. According to Williston, the Restatement endeavors “to restate the law, as it is, not as new law.” 3 A.L.I. Proceedings 159 (1925). Even the famous section 90, qualifying the bargain theory (see Ch. 3., Section 7), is based on existing decisional law. The final draft of the Restatement First was approved in 1932.

[200] Williston, The Restatement of Contracts, 18 A.B.A.J. 775, 777 (1932).

[201] Goodrich, supra note 199, at 283, 286.

[202] On cofidication, its goals and disadvantages, see Pound, Sources and Forms of Law, (pt. 3), 22 Notre Dame Law. 1, 46, 61 (1946); Patterson, The Codification of Commercial Law in the Light of Jurisprudence, 1 N.Y. Law Rev. Commission Report 50 (1950); Gilmore, Legal Realism: Its Cause and Cure, 70 Yale L.J. 1037, 1042 (1961); Hawkland, Uniform Commercial “Code” Methodology, 1962 U. Ill. L.F. 291; Diamond, Codification of the Law of Contracts, 31 Modern L. Rev. 361 (1968); consult also the materials collected in J. Honnold, The Life of the Law, ch. 3 (1964).

[203] U.C.C. Section 1-103 provides as follows:

Supplementary General Principles of Law Applicable

Unless displaced by the particular provisions of this Act, the principles of law and equity, including the law merchant and the law relative to capacity to contract, principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, or other validating and invalidating cause shall supplement its provisions.

[204] Note, 105 U. Pa. L. Rev. 836 (1957).

[205] Wechsler, Restatements and Legal Change: Problem of Policy in the Restatement Work of the American Law Institute, 13 St. Louis U.L.J. 185 (1968).

[206] A survey of the ferment prevailing in today's legal scholarship is to be found in C. Fried, Contract as Promise 1-6 (1981) and in Barnett, Contract Scholarship and the Emergence of Legal Philosophy, A Review of Farnsworth's Contracts, 97 Harv. L. Rev. 1123 (1984); On the Law and Economics movement with its emphasis on efficiency (wealth maximization), see the Symposium, "Change in the Common Law: Legal and Economic Perspectives," 9 J. Legal Stud. (1980), continued in Symposium on Efficiency as Legal Concern, 8 Hofstra L. Rev. 485 (1980). This Symposium contains a challenging reply to the Law and Economics movement by scholars defending the legitimacy of nonnative discourse in Law. See further A. Kronman & R. Posner, The Economics of Contract Law (1979), an anthology with running commentary. On the Critical Legal Studies movement, see the bibliography attached to the article by Duncan Kennedy and Karl E. Klare in 94 Yale L.J. 461, 464-490 (1985). See also Forbach's review of The Politics of Law (D. Kairys ed. 1982), 92 Yale L.). 1041 (1983); p. 64 infra. For the most thorough discussion of the philosophical premises of the Critical Legal Studies approach, see Unger, The Critical Legal Studies Movement, 96 Harv, L. Rev. 561 (1983). An interesting collection of symposium articles on the movement, some more sympathetic than others, may be found in 36 Stan. L. Rev. 1-674 (1984). See further R. Unger, Knowledge and Politics (1975).

[207] Gordley, European Codes and American Restatements, 81 Colum. L. Rev. 140 (1981).