Tuesday Tips: A Sampling of New Scholarship Available on SSRN
Ryan H. Nelson
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Abstract
While legal scholars debate the merits of mandatory arbitration, a more insidious barrier to justice has quietly proliferated beneath their radar. I call that barrier “pre-arbitral red tape”—that is, procedural condition precedents to initiating arbitration in a pre-dispute agreement between a consumer and a business or between a worker and an employer. For example, new hires may be required to sign a contract agreeing that, if they ever have a dispute with their employer, they must successively attempt to resolve it with their supervisor, the human resources department, and a mediator before they can initiate arbitration. Or consumers buying a product or service may be forced to sign a contract agreeing that, if they ever have a dispute with the seller, they must notify it of their dispute alongside a demand for relief and calculation of damages, wait a few months, and personally attend a conference with the seller to attempt to negotiate a resolution before they can initiate arbitration.
Drawing on an empirical analysis of template agreements from Fortune 500 companies, this Article reveals the aggressive character of these arbitration gatekeeping provisions. After mapping the complex legal landscape governing such terms—most notably, the Federal Arbitration Act of 1925 (“FAA”)—it conducts a comprehensive assessment of their legality. This assessment examines contract formation and enforceability under state law, federal preemption, the delegation of pre-arbitral red tape to the arbitrator, the effects of declining to toll the applicable statutes of limitations during pre-arbitral procedures, and the applicability of severability doctrines. Most significantly, it concludes that pre-arbitral red tape is not only a distinct and under-theorized barrier to justice, but that federal law preempts state laws that would enforce pre-arbitral red tape in FAA-governed agreements. Finally, it considers the implications of these analyses for key stakeholders, resolving that state legislatures and arbitration providers are best situated to combat pre-arbitral red tape. In conclusion, this Article finds that aggressive forms of pre-arbitral red tape have become commonplace in consumer and employment arbitration agreements, subverting access to justice and the FAA’s central goal of prompt and streamlined arbitration, thereby raising the import of stymying their proliferation.
George M. Cohen
Abstract
The so-called objective theory of contract is a foundational pillar of contract law. But the theory is incompletely specified and insufficiently grounded. The thesis of this article is that contract law does not use only one objective theory of contractual intent. Rather, contract law uses four objective theories, each representing distinct (though often overlapping) ways of determining contractual intent. The four objective theories of contractual intent are: objective as evidentiary; objective as manifested; objective as written; and objective as average.
The objective as manifested conception, which is the traditional understanding, determines contractual intent by focusing on words or conduct manifested by the promisor to the promisee, as reasonably understood by the promisee. This conception predominates in formation doctrines such as offer and acceptance, and in certain interpretation doctrines, in particular course of performance and course of dealing. The objective as evidentiary conception determines contractual intent by examining all evidence of contractual intent other than the testimony of the parties. This conception predominates in contract defenses such as unilateral mistake, duress, misrepresentation, and procedural unconscionability. The objective as written conception views writings as the best objective evidence of contractual intent. This conception predominates in the statute of frauds, the parol evidence rule, and the plain meaning rule of interpretation. Finally, the average conception of objectivity determines contractual intent by identifying and applying some external standard of conduct. This conception predominates in doctrines such as limitations on damages, changed circumstances, implied warranties, trade usage, public policy limitations, and standardized terms.
The article then identifies the distinct type of fault underlying each of the objective theories and explains how these theories represent different ways that contract law incorporates fault judgments. The manifestation conception of objectivity takes a particular and comparative approach to fault, focusing on conduct by a promisor that misleads a promisee about the promisor’s contractual intent and the promisee’s response to those manifestations. The objective as evidentiary conception takes a unilateral approach to fault by focusing on objective proof of opportunistic advantage-taking by promisees other than in response to a promisor’s manifestation. This conception also allows promisors to prove the absence of fault. The objective as written conception adopts a narrow role for fault, limited to duties to write and read. This conception presumes that the party who fails to protect its interests by stating them in a writing or by reading the other party’s writing is more at fault. Finally, the objective as average conception sees the average as a default standard, and focuses on the fault of the party who opportunistically asserts idiosyncracy after the fact, or who fails to learn of or contract out of the average.
James Toomey
Abstract
“Agentic” “AI” that can pass the “Turing Test” might behave in ways externally indistinguishable from persons but without our subjectivity or mental states. Under the so-called “objective” theory of contracts, taught as black letter in the common law world for a century, this is purportedly enough for large language models to enter into self-binding contracts. In contrast, this Chapter argues that this possibility offers a reductio in favor the alternative view that takes the “objective” theory as the law’s evidentiary commitment rather than a normative or metaphysical one. For starters, it is not clear that language “agreed upon” by entities without mental states means anything, at least not anything anyone cares about. More generally, there is no normative reason for the law to attempt to enforce the output of probabilistic language models entirely disconnected from subjective intent; the only possible justifications of contract are, in the end, “subjectivist.”
Mark Edwin Burge
Abstract
This article details and advocates for a general methodology for creating a “microexpert” grounded in a user-defined set of legal sources and widelyaccessible tools for integrating generative artificial intelligence (AI) into legal analysis. The study focuses particularly on background contract excuse doctrines of impossibility, impracticability, and frustration of purpose, which are collectively a methodologically challenging area of law to rationalize due to factintensive variables that undermine their predictability. Particular challenges include assessing the foreseeability of the event that led to the contract’s nonperformance, the extent of the hardship or burden on the party seeking excuse, and the purpose of the contract that was allegedly frustrated. The study uses Google’s popular NotebookLM tool to create an AI microexpert grounded exclusively in a fifteen-year corpus of judicial opinions involving parties’ assertions of contractual excuses beyond the express terms of the contract. This source-centric method gives the user maximized control over the body of legal materials while simultaneously mitigating the risk of AI hallucination. The article demonstrates that while this tool does not replace human judgment, it enables legal scholars and practitioners to perform specialized analyses with a depth and scope that are not so efficiently possible if done manually. The study concludes that this method can be replicated in other areas of law, empowering lawyers to create reliable, specialized tools for their work.