By: Scott J. Burnham
A society could enforce all promises. I recall a student from a South Pacific island who said that was the way of her society. She was appalled by my casual references to dirty promise breakers, convinced that they really were the scum of the earth.[1] On the other hand, a society could enforce few promises or require a great many hoops to be jumped through in order to make them enforceable. We could, for example, create a government agency without whose imprimatur a contract would not be enforceable.[2]
Part of the maturation process in children as they grow into adults is recognition of the different levels of promising. The three-year-old lives in a world in which all promises are enforceable and will whine at the top of his voice, “but you promised,” as though that alone were enough to ensure enforceability. A few years later, kids have wised up to the point that they know you have to say “cross my heart and hope to die” to really mean it, but they also know you can deny enforceability by crossing fingers behind the back while uttering the words of commitment.[3]
In most societies, the contracting process falls between those two extremes. One of the jobs that contract law must perform in any society is to draw the line between “just talk” and “serious talk.” As Professor Nancy Kim ably points out, that line is drawn in different places and in different ways by different societies.[4]
Many societies use an exchange of bodily fluids to seal the deal. Kim uses the example of the promise written in blood in Kim v. Son, but, significantly, that was a promise rather than a bargained-for exchange.[5] That one-sided promise can be contrasted with the blood oath, exemplified by a scene in the movieMongol: The Rise of Genghis Khan, in which Genghis and his childhood friend cut their palms with a knife and then shook hands, the intermingling of their blood connoting a serious deal indeed.[6] In the HBO series Deadwood, which I took to be a parable about the creation of civilization out of chaos, the making of a contract was a civilizing act.[7]A serious deal in the Dakota Territory was indicated in not quite as dramatic a fashion as in Mongolia. There, the parties spit into their palms and then shook hands.[8] I suppose the ultimate exchange is found in the marriage contract, which is initially sealed with a kiss (“you may now kiss the bride”), but then must be consummated in another fashion to forestall avoidance.
In a pluralistic society, we recognize disparate forms of contract-making. As self-governing societies, Indian tribes are free to apply their customs and usages ahead of applicable federal and state law. For example, the Confederated Salish and Kootenai Tribes of the Flathead Reservation in Montana make clear that tribal customs and usages have preeminent importance. Their codified laws provide:
Laws applicable in civil actions. (1) In all civil actions, the Tribal Court shall first apply the applicable laws, Ordinances, customs and usages of the Confederated Salish and Kootenai Tribes and then shall apply applicable laws of the United States and authorized regulations of the Department of the Interior. Where doubt arises as to customs and usages of the Tribes, the Tribal Court may request the advice of the appropriate committee which is recognized in the community as being familiar with such customs and usages. Any matter not covered by Ordinances, customs and usages of the Tribes or by applicable federal laws and regulations may be decided by the Court according to the laws of the State of Montana.[9]
As another example, Lisa Bernstein took us behind the scenes of the diamond business in New York City, a setting in which a serious deal is indicated by a handshake and the utterance of the Yiddish phrase, mazel u’broche (luck and blessing)—the exchange of abstract words now standing in for the bodily fluids.[10]
Nevertheless, I am not as sure as Kim is that we should recognize these forms of contract making in our state and federal court systems. Our larger society has for centuries groped toward a standard for the enforceability of contracts that would lend predictability to commercial transactions. It is hard to imagine one party taking another to court and claiming, “This agreement is not enforceable—he didn’t say ‘mazel u’broche,’ your honor!” This would never happen, of course, because in the New York diamond society, the parties do not take each other to the public courts, but resolve their disputes in a private forum.[11] And in private, the decision maker is free to recognize diverse manners and mores.
Most societies—and most significantly commercial society—recognize that when both parties have affixed their signatures to a document, either physically or electronically, a contract is formed—even in a transnational agreement.[12] This ritual has become the norm, and its widespread recognition minimizes disputes. The disputes will continue to arise in the outlier cases, where the parties have indicated their agreement according to some other norm.
While it may be desirable for the larger society to have a uniform standard for contract formation, there is no such standard for contract performance. Farnsworth makes a useful distinction between “contract law” and “the law of the contract.”[13] The former represents the social norms by which our legal system determines what makes an agreement enforceable, and what defenses are good against it.[14] The latter represents the private ordering of performances under the agreement.[15] There the parties are free to dictate terms, subject of course to the police power of the state to supervise them.
I think the case of In re Marriage of Witten[16] falls into the performance category, for there is no question that the parties followed the U.S. norm during the formation process.[17] Even if the parties violated public policy in the process, they nevertheless reached an agreement, and the court takes upon itself the job of finding appropriate terms to replace the unenforceable ones. This is a tough case, and Kim exhibits sensitivity to the differences in the intentions of the parties. The search for the parties’ subjective intent might be helpful to the Witten plaintiff ex post, but I fear that if we get there by torturing contract law, the result may be less helpful to others ex ante. Do we want to favor one party because that party provided more consideration, a contractual oxymoron if there ever was one? The fact that one party assumed a greater burden is more relevant in reliance analysis, when we need to measure the extent of the reliance. But even there the reliance must be reasonable, and it does not seem reasonable for a party to expect her intended use of the goods to govern when she expressly agreed that unenumerated uses were subject to mutual agreement. And when addressing contractual gaps, do we really want courts to fill them with the terms the particular parties would have agreed to, as opposed to those that are reasonable? While the former approach has some appeal, the latter will prevent the dominant party in a contract of adhesion from obtaining unduly favorable terms.[18]
Just as the socialization process makes us aware of how to make a deal binding in our own society, we also become aware that the rules may differ in other societies. A number of years ago, when I was a Fulbright Specialist in Uruguay, we Fulbrighters were invited to meet with the U.S. Consul. After he droned on for a while, he asked if we had any questions, and someone asked what a consul does. He responded that he was often called in when U.S. citizens were entangled in the foreign legal system. “Americans don’t carry the Constitution abroad with them,” he gravely intoned. “I do,” I responded, whipping out the pocket Constitution I was using in the class I was teaching there. In spite of my wise-guy remark, he had a point: Americans may have an expectation that U.S. law applies when they are abroad, but the more reasonable expectation is that when you are in Rome, the law of Rome applies.
We are all members of different societies for different purposes. I am now an American, now of Anglo-American descent, now a law professor, now a commercial lawyer, now a teacher abroad, now a poker player.[19] I make agreements in all of these societies. For purposes of entering into an agreement that I expect to be enforced in the U.S. courts, I should recognize that I am in American society, subject to the objective standards of U.S. contract law. One of the bounties of that law is that I can use my freedom of contract to make an agreement within a smaller society, but I recognize that when I seek enforcement of that agreement, I must look to that smaller society rather than to the courts of the larger society.
[1]. A good example of a society that takes its contracts seriously is the Ferengi, the merchant class of the universe in the television series Star Trek: Deep Space Nine. In the episode Body Parts, after a doctor tells a Ferengi named Quark he is going to die shortly, Quark sells his desiccated remains on the Ferengi Futures Exchange. He then learns that the doctor was mistaken, but the purchasing party insists on specific performance—his right under Ferengi law. Quark ultimately decides to breach the contract and, as a consequence, is banished from Ferengi society. Star Trek: Deep Space Nine: Body Parts (CBS television broadcast June 10, 1996). [2]. Perhaps we could appoint Elizabeth Warren to head it up. [3]. I invite an anthropologist to explain to me why those particular words and that particular gesture are considered effective to facilitate and prevent formation, respectively. [4]. See generally Nancy S. Kim, Reasonable Expectations in Sociocultural Context, 45 Wake Forest L. Rev. 641 (2010). [5]. See id. at 652–60 (discussing blood contracts in the context of Kim v. Son, No. G039818, 2009 WL 597232 (Cal. Ct. App. Mar. 9, 2009)). [6]. Mongol: The Rise of Genghis Khan (Picturehouse 2007). [7]. Deadwood (HBO television broadcast Mar. 21, 2004–Aug. 27, 2006). [8]. Id. [9]. Laws of the Confederated Salish and Kootenai Tribes, Codified § 4-1-104 (2003), available at http://www.cskt.org/documents/laws-codified.pdf. [10]. Lisa Bernstein, Opting Out of the Legal System: Extralegal Contractual Relations in the Diamond Industry, 21 J. Legal Stud. 115, 121–22 (1992). [11]. Id. at 124–30. [12]. Farnsworth astutely observes that when two parties sign an agreement, the first to sign is making the offer and the second is making the acceptance. See E. Allan Farnsworth, Contracts § 3.5, at 113 (4th ed. 2004) (“Traditional analysis, in terms of an offer followed by acceptance, may adequately describe the agreement process in simple transactions in which, for example, one party presents a printed form for the other to sign or both exchange letters or facsimiles.”). The plot of the Deadwood episode Full Faith and Credit turned on this convention. Deadwood: Full Faith and Credit (HBO television broadcast July 2, 2006). Hustetler, an Irish-American stable owner, left town abruptly, and Steve, an African-American, took care of the animals in the stable, entitling him to a claim for restitution, but Hustetler could not reach a settlement with him. The sheriff worked out a deal for Steve to buy the stable, with the nascent bank—another civilizing influence—providing a secured loan. All parties agreed to this, but Hustetler refused to sign first, for that would mean he was making an offer to his perceived inferior; he would, however, accept Steve’s offer by signing second. Steve unfortunately saw it the same way. Frustrated, the sheriff took the problem to Sol, the hardware-store owner, the only Jew in town, who represented the merchant class. With Solomonic wisdom, Sol proposed a solution: there would be two copies of the agreement, and at an appointed hour, when the sheriff fired his pistol in the air, each party would sign his copy at a separate location. Id. Thus does contract law bring its civilizing power to the world, preventing the outbreak of what Corbin called “private war.” 11 Joseph M. Perillo, Corbin on Contracts § 55.8, at 30 (rev. ed. 2005). [13]. Farnsworth, supra note 11, § 7.1, at 413. [14]. See id. [15]. See id. at 414. [16]. In re Marriage of Witten, 672 N.W.2d 768, 772 (Iowa 2003). [17]. For Kim’s view on In re Witten, see Kim, supra note 4, at 660–68. [18]. Farnsworth, supra note 9, § 7.16, at 486. [19]. A good example of enforcement of a contract in poker society came up in the 2005 World Series of Poker (“WSOP”). A participant named Barry Paskin, in hopes of bringing out his animal-like traits, had refrained from bathing or changing his clothes for a week, eliciting demands from his tablemates that he be banished. As he was removed from the room, Paskin screamed, “Show me a rule that says you can’t smell bad!” See Rule Changes at the WSOP: Take a Shower—and Be on Time, Coinflip.com (Apr. 12, 2010, 7:07 p.m.), http://www.coinflip.com/news/rule-changes-wsop-take-shower-and-be-time.html.
I can oblige him. Rule 1 of the Poker Tournament Directors Association Rules approaches the matter with a broad sweep, evoking the Common Law of Poker: “Floor people are to consider the best interest of the game and fairness as the top priority in the decision-making process. Unusual circumstances can on occasion dictate that decisions in the interest of fairness take priority over the technical rules.” Rules, Poker Tournament Directors Ass’n, http://www.pokertda.com/rules.pdf (last visited Mar. 7, 2011).
The WSOP unfortunately goes to the opposite extreme, trying to legislate for every possible situation. Section IV, Player Conduct and Tournament Integrity, Rule 37B now provides in part:
All participants are entitled to expect civility and courtesy from one another at every Tournament table and throughout the Tournament area. Any individual who encounters behavior that is not civil or courteous—or is abusive in any way—is encouraged to immediately contact a Tournament official. This shall include, but is not limited to, any player whose personal hygiene has become disruptive to the other players seated at their table. The determination as to whether an individual’s personal hygiene is disruptive to other players shall be determined by the Tournament Staff which may, in its discretion, implement sanctions upon any such player who refuses to remedy the situation in a manner satisfactory to Rio.
2010 World Series of Poker Official Tournament Rules, World Series of Poker, http://www.wsop.com/pdfs/2010/2010-WSOP-Rules.pdf (last visited Mar. 7, 2011).