Contract Exposition and Formalism

Formalism in contract law has had many defenders and many critics. What courts need, however, is an account of when formalist approaches work and when they do not. This article addresses that need by developing a general theory of the rules of contract interpretation and construction—contract “exposition.” The theory distinguishes inter alia two forms of formalism. Formalities effect legal change by virtue of their form alone, and thereby obviate interpretation. Examples from contract law include “as is”, the seal and boilerplate terms. Formalities work when parties intend their legal effects, that is, when they perform juristic acts. Plain meaning rules, in distinction, function by limiting the evidence that goes into interpretation. Plain meaning rules thereby give extra weight to the semantic, or literal, meaning of the parties’ words, though not to the full exclusion of the parties’ purpose or intentions, or pragmatic meaning. Like formalities, plain meaning rules are well suited to juristic acts, although they do not presuppose them. Many rules of contract law, however, are designed to attach legal consequences to parties’ nonjuristic acts, when parties might not be thinking about the legal effect of their words. When applying those rules, formalism of either form is more likely to result in erroneous outcomes. After canvassing other factors relevant to the choice between formalist and nonformalist rules of contract exposition, this article applies the theory to critically evaluate how courts determine whether a writing is integrated, an important but understudied component of the parol evidence rule