The Situationist

Archive for March 9th, 2013

Contracting Blame

Posted by The Situationist Staff on March 9, 2013

complex contracts

Eric Zacks has a superb new situationist article, titled “Contracting Blame,” (forthcoming in the University of Pennsylvania Journal of Business Law, Vol. 15, 2012) available for free download on SSRN.  Here’s the abstract.

This Article explores the impact of the cognitive biases of judges and juries in the context of contract preparation and execution. From rental car contracts to mortgage forbearance agreements, contract preparers include provisions and formatting characteristics that appear to add little to the material terms or understanding of the agreement. These features, however, make perfect sense if one considers the implications of attribution theory, which is based on our tendency to attribute blame for an event to another’s disposition or personality. We are predisposed to blame the victim, which makes us susceptible to misjudgment when examining another’s actions. This Article makes a novel link between behavioral literature and contract preparation and suggests that contract preparers may be able to manipulate adjudicators’ cognitive biases systematically. Exclusive of the economic bargain, contract provisions can provide attributional ‘clues’ about the contracting context that inform and reassure judicial interpreters that a particular contracting party is more blameworthy than another. For example, multiple signature blocks, boldfaced or highlighted warnings, and recitals depicting a particular version of events all reinforce our tendency to perceive the contracting party as being able to act freely without being influenced by his or her situation. In counterproductive fashion, however, these features are often irrelevant to a party’s decisions in the contracting context. In light of the significant implications of the existence and prospective use of such attributional clues for contract law theory and judgment, this Article proposes a broader contextual and adjudicative focus when contemplating contract law reforms.

Download the article here.

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