Bayesian Contractual Interpretation

Courts seeking the most likely intent of contracting parties should interpret contracts according to Bayes’s rule. The best interpretation of a contract reflects both the prior likelihood (base rate) of a pair of contracting parties having a given intention and the probability that the contract would be written as it is given that intention. If the base rate of the intention associated with the simplest reading of the contract is low, then Bayes’s rule implies that the simplest reading is not necessarily the interpretation of the contract that most likely captures the intention of the parties. The Bayesian framework explains when default rules should be more or less sticky and helps to define the appropriate role of boilerplate language in contractual interpretation

On Discovering Doctrine: Justice in Contract Agreement

I pursue here what might be termed “doctrinal jurisprudence”: Study of the way facts (including rules) become legal doctrine, specifically here how idiosyncratic perceptions concerning “justice” facts support the development of contract agreement doctrine. This Article investigates the relationship between the way we encounter data (including laws, and specifically a contract law) and what we may conclude about the Law, as doctrine, that emerges from that encounter

Contracting in the shadow of the law

Economic models of contract typically assume that courts enforce obligations on the basis of verifiable events. As a matter of law, this is not the case. This leaves open the question of optimal contract design given the available remedies that are enforced by a court of law. This paper shows that standard form construction contracts can be viewed as an optimal solution to this problem. It is shown that a central feature of construction contracts is the inclusion of governance covenants that shape the scope of authority, and regulate the ex post bargaining power of parties. Our model also provides a unified framework for the study of the legal remedies of mistake, impossibility and the doctrine limiting damages for unforeseen events developed in the case of Hadley vs. Baxendale

Foreword: Hadley v. Baxendale and the Seamless Web of Law

If I tried to discuss all the papers, I would give them only a superficial reference; there are too many to cover with any depth. I did, however, want to discuss some fine examples of the conference and then consider the broader issues that they raise about Hadley as an artifact of the common law, both the common law of the mid-nineteenth century and the common law of the early twenty-first. As the title of the conference suggests, Hadley illustrates how wide-ranging and intertwined the common law is, both in geographic and cultural terms and in terms of its flexibility as the world around us changes