Two Forms of Formalism in Contract Law

Formalism in contract interpretation has had many defenders and many critics. What lawmakers need, however, is an account of when formalism works and when it does not. This Article addresses that need by providing a general theory of contract exposition and differentiating between two forms of formalism in contract law. Formalities effect legal change by virtue of their form alone, thereby obviating interpretation.

Examples include “as is,” the seal, and sometimes contract boilerplate. Evidentiary formalism, in distinction, limits the evidence that goes into interpretation. Plain meaning rules are an example of evidentiary formalism. This Article provides a detailed analysis of each form of formalism, identifies when they are and are not likely to advance the goals of contract law, and discusses the optimal design of each type.

It recommends legislative expansion of the number of contract formalities.