Contract Interpretation 2.0: Not Winner-Take-All But Best-Tool-For-The-Job

In a centuries-old debate among contracts scholars, one group supports a presumption favoring a text-centered approach to the interpretation of a writ-ten agreement—the plain meaning taken from the four corners—while oppo-nents urge a broader understanding of context—what the parties intended and the circumstances of their negotiation. The contending positions have so hard-ened that, in a jarring juxtaposition this Essay will reveal, recent academic classifications of the same state laws are exactly opposite to each other: contex-tualists classify certain states as contextualist that textualists say are textualist! Yet despite the persistence of acute polarization, the author also docu-ments—and applauds—promising trends in the literature toward hybridiza-tion and compromise, a search for factors to guide the selection of interpretive tools rather than putting some off limits or setting up default rule presump-tions. While scholars have thus long obscured a common-sense reality, a new wave of research is making it clearer to all sides that text and context are both useful, depending on the details of different jobs. More modern, advanced, and sensible, this new view of contract interpre-tation replaces a stubborn “winner-take-all” approach to the debate with a flexible and practical “best-tool-for-the-job” approach. To illuminate its im-portance and value—call it contract interpretation 2.0—this Essay turns to Warren Buffett’s contracting philosophy and practices. The famous investor and businessman is also a polyglot teacher, and his approach to contracts, especially acquisition agreements and employment arrangements, illustrates the imperative of using the right tool for the job