Reasonable Expectations in Socio-Cultural ContextFaculty Scholarship
AbstractUnder the objective theory of contract, courts interpret the intent of the parties in adopting a particular contractual term according to the reasonable meaning of that term, or the meaning that a reasonable person would assign to that term. Courts adopt the objective theory to determine all aspects of the understanding between the parties-from the determination of contract formation, to an evaluation of the meaning of written or spoken terms, to an assessment of contract performance. In a series of articles, Professor Melvin Eisenberg explained how modern contract law evolved from the will theory to the classical model, and from the classical model to a more responsive and dynamic model. This Article argues in favor of such a progression. An objective theory of contract erroneously replaces the parties' intent with a reasonableness standard. Reasonableness should be the product of weighing subjective intent against societal considerations, not a factor used to make such a determination. When one of the parties lacks the requisite subjective intent, a court may nevertheless enforce a contract when a failure to do so would cast doubt on the security of transactions and thus endanger our credit economy. A dynamic approach better serves a dynamic society. In the modern global and technologically driven marketplace, the objective theory of contract incompletely captures-in fact, in some cases, even undermines-contract law's objective of promoting individual autonomy. This Article further argues that in order for modern contract law to be truly "dynamic," it must take into consideration the social and cultural backgrounds and social identities of the parties. This Article proceeds in four parts. Part I discusses the role that social identity and experience play in contract law and introduces the tension between sociocultural dissonance and an objective approach. Part II analyzes the difference that culture makes by examining a recent case involving two Korean-born businessmen. Part III analyzes the difference that gender makes by examining a case involving divorce and in vitro fertilization. This Article concludes that courts should consider contextual factors, including the background and identity of the parties, in order to better achieve the goal of contract law-to protect the reasonable expectations of the parties.
Citation InformationNancy S. Kim, Reasonable Expectations in Socio-Cultural Context, 45 WAKE FOREST L. REV. 641 (2010).