Contract\u27s Convert Meddlers

Scholars of contract law typically examine contracts as bargains between two parties. This approach elides an additional, key function of many contracts: to shape existing relationships to the satisfaction of a third party, often one more economically powerful than either of the two bargainers. Third-party litigants, especially creditors, have historically advocated for their own interests and interpretive paradigms so strongly that they have sometimes gained priority over the actual intentions of the two bargainers. This Article recovers the story of how a group of frequent-flier third parties—mainly creditors of small businesses—shifted the rules of contracts between partners in early America. By arguing for reinterpretation of small business contracts, creditors fundamentally transformed labor and ownership practices. Curiously, third-party influence on contracts is rarely studied by either historians or legal scholars. This Article follows its tracks through the slow evolution of common law doctrine across the nineteenth century. Today’s contract law still chooses between the interests of third parties and those of contracting parties themselves. These choices, however, go unacknowledged and undertheorized both by the courts making them and in later analysis. Contract law therefore allocates the burdens imposed by unfavorable interpretive rules without examining who will bear the cost or why they should. Uncovering this hidden element of doctrine allows us to appraise whether it matches the values that contract law intends to uphold