The Demands of an Interpretive Theory of Contract
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Professor Robin Kar’s Contract as Empowerment represents a thoughtful and ambitious effort to introduce a unified general theory of contract law that, in his words, “offers a fundamental reinterpretation of the basic principles that animate contract law” and that, on this basis, can harmonize the “central doctrinal challenges for modern contract theory.”
We would like to thank the workshop participants at University of Michigan Law School, Northwestern University Law School, Notre Dame Law School, University of Toronto Law School, Stanford Law School, and N.Y.U. School of Law; and conference participants at the 2024 American Law and Economics Association Meeting for many helpful comments and suggestions. We are most grateful to Jonathan Morad Artal (Stanford Class of 2025) and Andrea Lofquist (Michigan Class of 2024) for their valuable research assistance and comments on earlier drafts.
We would like to thank the workshop participants at University of Michigan Law School, Northwestern University Law School, Notre Dame Law School, University of Toronto Law School, Stanford Law School, and N.Y.U. School of Law; and conference participants at the 2024 American Law and Economics Association Meeting for many helpful comments and suggestions. We are most grateful to Jonathan Morad Artal (Stanford Class of 2025) and Andrea Lofquist (Michigan Class of 2024) for their valuable research assistance and comments on earlier drafts.
The flexibility to renegotiate can facilitate long-term contracting and thereby beneficial reliance investments and risk allocation. The prospect of modification can induce contracting parties who expect their bargaining power to improve to enter into contracts earlier and realize the advantages of longer-term relationships. Otherwise, those parties might decline to contract or delay until those opportunities realize, thereby foregoing the benefits of long-term risk allocation or reliance investments. The parties decide not only whether, but also when, to make legally binding commitments to each other. Courts should be more lenient in enforcing contract modifications that, prompted by a shift in bargaining power, may have only a redistributive effect. Parties can design under-compensatory damages that would provide a credible threat of breach ex post to facilitate ex post modification. Requiring good faith in modification (along with damages) can constrain possible holdup and protect reliance investments and risk allocation.
For very helpful feedback on prior versions of this piece, I thank Russell Engler, David Luban, David Hoffman, Tal Kastner, Timothy Mulvaney, Michael Pollack, Tanina Rostain, Kathryn Sabbeth, Emily Saltzberg, Emily Satterthwaite, Jessica Steinberg, Neel Sukhatme, and Josh Teitelbaum. This Article benefited from presentations at the Harvard-Yale-Stanford Junior Faculty Forum, the Law and Society Association Annual Meeting, the 2024 Access to Justice Roundtable, the Property Worksin- Progress Workshop, the State and Local Courts Workshop, and the State and Local Government Law Workshop. Emmeline Basco provided excellent research assistance and Yi Yao provided excellent assistance with data analysis. I am very grateful to the editors of The University of Chicago Law Review for their outstanding editorial work. All errors are my own.
Eviction cases make up over a quarter of all cases filed in the federal and state civil courts and have enormous consequences for tenants, who are nearly always unrepresented by counsel. These cases overwhelmingly settle, yet settlement scholars have entirely overlooked eviction both empirically and theoretically. The Article presents results from the first empirical study of eviction settlement negotiations. The study involved rigorous analysis of an original dataset of over one thousand hand-coded settlements, observations of settlement negotiations in the hallways of housing court, and dozens of interviews. The findings demonstrate that unrepresented tenants—who make up the vast majority of tenants in the eviction system—have no meaningful influence over settlement terms. Rather, the terms are set by landlords and their attorneys. Drawing on the empirical findings and scholarship about contracts of adhesion, the Article develops the theoretical concept of “settlements of adhesion.”
For helpful comments on earlier drafts, I thank Sania Anwar, Ian Ayres, Abbe Gluck, Adi Goldiner, Hanoch Dagan, Doron Dorfman, Klaas Eller, Elizabeth Emens, Jasmine Harris, Avery Katz, Craig Konnoth, Juliet Kostritsky, Shirley Lin, Daniel Markovits, Petros Mavroidis, Jamelia Morgan, Szymon Osmola, David Pozen, Jessica Roberts, Emily Rock, Elle Rothermich, Kate Sapirstein, Ani Satz, Michael Ashley Stein, Karen Tani, and Cristina Tilley, as well as participants in the Junior Scholars Conference at Northeastern School of Law (2024), the Junior Faculty Forum at Richmond School of Law (2024), the 47th Health Law Professors Conference (2024), and the Ninth Annual Health Law Works-in-Progress Retreat at Seton Hall Law School (2025). Lastly, I thank the editors of The University of Chicago Law Review for their insightful and helpful edits and suggestions.
In this Article, Yaron Covo argues that disability rights law in the United States is shaped not only by civil rights statutes but also by contract law doctrines. Contract law surfaces in the disability rights context through judicial determinations of accommodations negotiations and spending clause language in disability rights statutes. The Article argues that this intertwining has eroded rights under statutes meant to promote equality and protect vulnerable classes. The Article concludes with two recommendations: replacing the “individualized” negotiation model with a uniform model and adding certain mandatory rules and defaults in the disability rights context.