The legal evolution that Maine describes in Ancient Law is not directly challenged in this paper. Whether legal development is generally progressive begs the question. The nature of that progression as a movement from status to contract is what cycle theory rejects. Maine’s thesis is that progressive societies eventually strip away status-based relationships and replace status with a generic freedom of contract where the characteristics of the contracting parties become irrelevant. Isaacs argues that taken from a broader historical context legal development is better characterized as cyclical in nature. In sum, legal development is in perpetual motion moving between status and contract-based relationships.

This paper will focus mostly on the legal development of contract law. Roger Cotterrell notes that, “at the most basic level contract is the legal concept which most directly links law and economy because of the significance of the numerous forms of exchange transactions for economic development.” Based upon this assessment, the development of contract law in the nineteenth to the twenty-first centuries will act as surrogate or example of legal development in general. The paper further argues that cycle theory collapses the dichotomies of contract law—formalism/realism, literalism/contextualism, facilitation/regulation, standards/rules—into an oscillating continuum between these opposite views of legal reasoning and views of contract law. The idea of false dichotomies and non-monists views of contract theory may not be novel in nature but, their exploration through the prism of cycle theory presents a new perspective.

Isaacs was a prolific secular scholar active from 1914 to 1940, as well as, a productive writer of Jewish literature. He was a visionary in many areas of law. He was the first to use the term standard form contracts in his 1917 article The Standardizing of Contract; he developed the now famous competing views of the role of the arbitrator—as agent versus as judge. He recognized the flexibility of the agency and trust concepts, and their future expansion in law. This came to pass with the development of fiduciary duty law. He forcefully argued that industrial society required tort law to recognize areas of strict liability. This came to pass with the adoption of strict product liability. Although, mostly forgotten, and residing deep in the shadows of Karl Llewellyn and Jerome Frank, Isaacs’ was a visionary who is still cited to the present in numerous areas of the law.

This paper will review a number of theories of legal development with a focus upon Henry Sumner Maine’s progression thesis and Nathan Isaacs’ cycle theory. Contract law will provide the area to be tested by the different theories of legal development. Other theories to be discussed include: evolutionary efficiency, evolutionary biology, and Kuhnian theory. In the end, the paper advances a theory of cyclical progression. At the center of this theory is Isaacs’ belief in a principle-based evolution of a living, dynamic law. An offshoot of this theory is the recognition that the dichotomies of contract law are false dichotomies. A theory of “all of the above” accepts that elements of both sides of the dichotomies has always and will always exist in contract. Contract law is formalistic and realistic; literal and contextual; facilitative and restrictive; represented by both standards and rules; and is both freedom and status-based. Finally, contract law, and law generally, is both cyclical and progressive.

After reviewing and noting the gaps in the employment and justice literatures, this article then presents the finding of a survey of 763 participants to measure whether certain variables—procedural and substantive fairness, as well as educating employees on the principle of employment at will—impact the propensities of employees to retaliate and litigate at the time of discharge.

The survey results are significant and striking. We find statistically significant reductions in retaliation and litigation rates when survey respondents are shown scenarios where they are treated with substantive and procedural fairness. We also find that when employees are given significant information about the law ahead of time, their propensity to retaliate and litigate decreases. We learn from this study that when employee expectations are managed using fairness norms and education the outcomes of discharge are profoundly affected. Such knowledge can have significant effects on the litigation and dispute resolution costs of employers who are faced with making difficult decisions regarding layoffs and retention.

The article then concludes by showing how our study in light of psychological contract theory can be used as a guide to reforming employment law. The findings suggest the use of an expanded contextual analysis that serves to benefit employers and employees by matching their expectations and, at the same time, preventing the creation of perceptions of injustice at the time of employment termination.

We believe that this article breaks new ground in the debate over the value and justice of the employment at law rule. The empirical survey and statistical analysis provided opens up new avenues of interdisciplinary research into the roles of norms, expectations, psychological biases, and perceptions of injustice as they relate to employment termination and related outcomes.

We would welcome the opportunity to publish with your journal.

The survey results are significant and striking. We find statistically significant reductions in retaliation and litigation rates when survey respondents are shown scenarios where they are treated with substantive and procedural fairness. We also find that when employees are given significant information about the law ahead of time, their propensity to retaliate and litigate decreases. We learn from this study that when employee expectations are managed using fairness norms and education the outcomes of discharge are profoundly affected. Such knowledge can have significant effects on the litigation and dispute resolution costs of employers who are faced with making difficult decisions regarding layoffs and retention.

The paper then concludes by showing how our study in light of psychological contract theory can be used as a guide to reforming employment law. The findings suggest the use of an expanded contextual analysis that serves to benefit employers and employees by matching their expectations and, at the same time, preventing the creation of perceptions of injustice at the time of employment termination.

The article begins by surveying the policy choices incumbent in drafting the CISG and by reviewing the basic tenets of EAL. These tenets are then used as a metric for measuring the efficiency of specific CISG rules. The article examines both the efficiency of rules taken in isolation and the global efficiency of the CISG as an international sales law generally. The rules selected for analysis come from two categories (1) instances where the common and civil laws conflicted and one of the conflicting rules was adopted and (2) instances where the drafters created a new rule unique to the CISG. Specific rules analyzed include writing and evidentiary rules, contract formation rules, contract interpretation rules, and the law of liquidated damages.

The article concludes by offering a practical scheme limiting the role of contract interpretation, as well as assessing the value of Comparative EAL. In the area of contract ambiguity and interpretation, the article articulates a theory of particularized consent to narrow the gap between subjective and objective consent. The article also illustrates that Comparative EAL in relation to the CISG can be used at three levels of analysis—two descriptive and one normative. The first level of analysis asks given the choices that the drafters were presented did they adopt the efficient options? The second level of analysis asks whether jurisprudential developments in the application of CISG rules have made the rules more or less efficient. The normative analysis involves taking the findings of the comparative efficiency analysis to ask what changes should be considered to make international sales law more efficient?

The article begins by surveying the policy choices incumbent in drafting the CISG and by reviewing the basic tenets of EAL. These tenets are then used as a metric for measuring the efficiency of specific CISG rules. The article examines both the efficiency of rules taken in isolation and the global efficiency of the CISG as an international sales law generally. The rules selected for analysis come from two categories (1) instances where the common and civil laws conflicted and one of the conflicting rules was adopted and (2) instances where the drafters created a new rule unique to the CISG. Specific rules analyzed include writing and evidentiary rules, contract formation rules, contract interpretation rules, and the law of liquidated damages.

The article concludes by offering a practical scheme limiting the role of contract interpretation, as well as assessing the value of Comparative EAL. In the area of contract ambiguity and interpretation, the article articulates a theory of particularized consent to narrow the gap between subjective and objective consent. The article also illustrates that Comparative EAL in relation to the CISG can be used at three levels of analysis—two descriptive and one normative. The first level of analysis asks given the choices that the drafters were presented did they adopt the efficient options? The second level of analysis asks whether jurisprudential developments in the application of CISG rules have made the rules more or less efficient. The normative analysis involves taking the findings of the comparative efficiency analysis to ask what changes should be considered to make international sales law more efficient?

The paper examines the use of contract to create value and uses for examples, the commodification of information, licensing and IT outsourcing, and franchising. From there, the paper explores the use of contracts to sustain a competitive advantage (strategic contracting) and to create shared competitive advantages (strategic collaboration). It uses the creation and use of patent pools to illustrate both strategic uses of contract law. The next part focuses on the use of contracts to mitigate uncertainty in business transactions. It explores the strategic use of existing contract doctrines, the use contracts to insure performance and to deter opportunistic behavior, and the use of contracts to develop a preventive legal strategy. This is followed by the examination of contracting for innovation and contracts’ role in creating private governance structures, such as strategic joint venturing.

The final parts explore the use of contract as metaphor in nexus of contact theory in corporate law, psychological contract theory in employment law, and the potential abuse of the freedom of contract paradigm in limited liability company law. The paper then examines strategic responses to regulation by asking whether strategic avoidance or non-compliance to regulations has a place in a company’s legal strategy? The paper concludes by asking how does strategic contracting impact contract law? It answers the question by arguing that contract law change is inevitable due to a feedback loop.

Isaacs and CLR are especially worthy subjects for study given the current economic crisis. It is a crisis, much like the Great Depression, that has spurred many people to question core capitalistic premises, such as the superiority of minimal government regulation of business and the structuring of financial instruments through freedom of contract. CLR’s merger of anti-formalism and an idealism inspired by the Jewish legal tradition resulted in its rejection of Lochner-era judicial decision-making while supporting an attack on the constitutionality of New Deal interventionism.

CLR asserts that although legal rules provide indeterminate answers in hard cases, principled-guided rules will lead to a correct answer. CLR calls on judges to continuously strive to uncover underlying objective principles and to understand their historical evolution. Isaacs sought to blend an evolving, but cyclical, organic theory of legal development with the pragmatism needed to make rules workable. To do this, the contingent nature of law must be contained within a framework of moral, political, and cultural values. This framework characterizes CLR as both a critical and positive theory of the legal order. This fusion of an organic natural law with the inherent indeterminacy of legal conceptualism moves beyond rules to a principle-based contextualism.

We use previously neglected archival material, found in the Harvard Law and Harvard Business School’s “Special Collections,” as well as other archives, to connect Isaacs to major figures in the Legal Realist Movement. Isaacs’ broad contextual framework allowed him to play a pioneering role in the development of the social-scientific study of law and the critique of legal formalism that was the basis for the Legal Realist Movement. However, his belief in the integrity of the legal order moved him beyond rule skepticism. His understanding of the dynamic nature of law provided insights into constitutional interpretation, cycle theory of legal development, status-based regulation of standard form contracts, re-conceptualization of law, and the need for an interdisciplinary approach to law study and reform.