What we know about contract law and transacting in the marketplace - a review essay of Catherine Mitchell, contract law and contract law practice: bridging the gap between legal reasoning and commercial expectation and Jonathan Morgan, contract law minimalism: a formalist restatement of commercial contract law

Abstract

Since Stewart Macaulay’s pioneering work on the use and non-use of contract law in the market two competing schools of thought have emerged to explain the appropriate way to judge contract disputes before the courts. The first, contextualism, argues that judges, in deciding contract disputes and developing the law, should give effect to the expectations, practices and desires of the business community. The alternative, formalism, argues that since business uses law selectively it would be counterproductive if the law were anything other than predictable. The books reviewed synthesise the scholarship surrounding this debate and, in so doing, each proposes the form of judging thought to be the most suitable. In this review I will argue that when viewed against the arguments of two giants in this field, Macaulay himself and Hugh Collins, it becomes apparent that Mitchell’s careful, well-explained and balanced contextualism is ultimately unpersuasive and that Morgan’s formalist defence makes much more sense. I will also argue, however, that the differences between Mitchell and Morgan are ultimately tactical because both see contract law in instrumental terms. Both understand the role of contract law as being to aid and enhance market exchange but differ over how this is best achieved. I will argue that both are wrong on this point and that there are historical, constitutional and institutional reasons for not seeing contract law in instrumentalist terms.