[ Pobierz całość w formacie PDF ]
.The as-cendance of objective theory is often presented either as part of the progressof rationality in contracts, or as part of a progressive dominance of businessinterests and their desire for stability in contract law, but such progress nar-ratives should be viewed with suspicion.20A look at some case law fleshes out the puzzling quality of the conflictover subjective and objective theories.Courts were generally in agreementthat contracts would only be valid where the parties really intend and agreethat the goods are to be delivered by the seller, and the price to be paid18.The most famous expression of the strict objective view is Judge Learned Hand s statement:A contract has, strictly speaking, nothing to do with the personal, or individual, intent of theparties.A contract is an obligation attached by the mere force of law to certain acts of the parties,usually words, which ordinarily accompany and represent a known intent.If, however, it wereproved by twenty bishops that either party when he used the words intended something else thanthe usual meaning which the law imposes on them, he would still be held, unless there were mu-tual mistake or something else of the sort.Hotchkiss v.National City Bank, 200 F.287, 293 (S.D.N.Y.1911), aff d, 201 F.664 (2d Cir.1912), aff d,231 U.S.50 (1913).For theoretical defense of the objective theory see, Samuel Williston, Mutual Assentin the Formation of Contracts, 14 Ill.L.Rev.85 (1919).19.See E.Allan Farnsworth, Contracts 117 18 (3d ed.1999).20.See Friedman, Contract Law in America, 86 87; Lon Fuller, Consideration and Form, 41 Colum.L.Rev.799, 808 (1941); Horwitz, Transformation of American Law, 201. 112 s p e c u l a t i o n s o f c o n t r a c tby the buyer. 21 The repeated phrase betrays the central sticking point: theelusive quality called real intent. The language employed in an Iowa Su-preme Court case from just before the turn of the century is suggestive here.The defendant refused to pay debts to a broker on orders to buy grain,claiming that the transactions were wagering contracts, and void.The court,in deciding whether the trial court was justified in admitting the uncom-municated motive or intention of the defendant into evidence, wrote:It is not enough, to render a contract void, that the buyer intends it as agambling contract, unless the seller participates in that intention; that is, if,in the case at bar, the defendant, in ordering the purchase of the oats, onlyintended a speculation upon margins, without delivery of grain, and theplaintiff purchased the grain for actual delivery, it would not be a gamblingcontract.To make the contract void as between these parties, the intentionto make a gambling contract must have been mutual.22As far as the objective theory of contracts is concerned, this passage high-lights the ambiguity of the courts treatment of wager contracts.On the onehand, the normal situation is to expect mutual intention even where nonereally exists, so long as there are manifestations of intent.The manifesta-tions of intent are taken as a proxy for real intent, deemed unnecessary.Williston s exposition of the objective theory is clear on this point: Thewords and acts of the parties are themselves the basis of contractual liability,and not merely evidence of a mental attitude required by the law.In otherwords.an expression of mutual assent, and not the assent itself, is the es-sential element of contractual liability. 23 Here, however, real mutual intentis not only unnecessary to the contract, it is fatal.In other words, there isone kind of contract that cannot suffice with objective manifestations ofintent: the gambling contract.But when you succeed in making the gam-bling contract, you undermine the commodities contract.The emphasis on real intent seems to suggest a clinging to subjective theory, but perhapsthis is a case of objective theory at the extreme: the contract exists as valid21.Embrey v.Jemison, 131 U.S.336, 344 45 (1889); emphasis added.The court continues:If, under guise of such a contract, the real intent be merely to speculate in the rise or fall of prices.then the whole transaction constitutes nothing more than a wager, and is null and void.[I]n thiscountry, all such contracts are held to be illegal and void as against public policy.Gambling isnone the less such because it is carried on in the form or guise of legitimate trade.22.Counselman v.Reichart, 72 N.W.490, 491 (Iowa 1897).23.Williston, Mutual Assent, 87. c o n t r a c t s f o r f u t u r e s 113only where there is no mutual intention.24 However, despite theoretical basisfor the proposition, it presents a more coherent polemic for the objectivetheory than the cases will support.25 In fact, the courts shy away from fixeddeterminations on the question of whether they adhere to an objective orsubjective theory, allowing juries to divine the real intent of the partiesthat is supposed to determine the outcome of the cases.d e t e r m i n i n g t h e i n t e n t o f t h e p a r t i e sBeyond the theoretical question of subjective or objective accounts of con-tract, the central problem in the commodities trading cases, viewed as agroup, is how to determine intent.An influential Supreme Court decision,Irwin v.Williar, laid down an oft-quoted formulation for the task.26 In thatcase, plaintiffs were brokers who sued for a debt incurred by a partnership,the surviving partner of which was the defendant
[ Pobierz całość w formacie PDF ]