August 01, 2012

Advance Sheet: The Rise and Possible Fall Of Tortious Interference

Contracts used to be a solemn and sactionable agreement--what happened?

Robert E. Shapiro

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Contract claims seem so yesterday, don’t they? It wasn’t always so. Once upon a time, say 600 years ago or more, contracts were all the rage, the coming thing. Having emerged slowly from their dark origins in trespass law, they became the darling of the common lawyers under the guise of assumpsit. And not just the common lawyers. Political theorists saw great merit in the idea that a society already becoming dominated by transactions strictly commercial could itself be understood as a kind of bargain, where people would agree not to tread on each other’s rights. This became a social contract enforced by a supreme power that, while not a party to the bargain itself, could, like God himself, have a near monopoly of force and apply heavy sanctions for departure from the contract terms. In this way, man had a means to emerge from his natural condition—characterized by the war of every man against every man—and escape a life that, in Thomas Hobbes's memorable phrase, would otherwise be “solitary, poor, nasty, brutish and short.”

The next 400 years or so were the heyday of the solemn and sanctionable agreement, featuring day-to-day promises that were nevertheless taken very seriously, often sealed or sworn to for that purpose, as well as the more fearsome, near-permanent social contract itself. It was no coincidence that a society understood as a collection of bargains or agreements lent itself to, if it was not caused by, the mercantile expansion of these ensuing centuries. Adam Smith was thus able to play a leading role in the drama created by such thinkers as Hobbes and John Locke, who had perhaps taken some of their own cues from the common lawyers themselves.

But a further revolution was yet to come. Ultimately, the strict rules of contract proved too confining. Instead of fostering commercial activity, they began to burden it, holding people to agreements that were inefficient. Something more needed to be done. And so, during the nineteenth century, the solemnity of contracts was drained out of them. Largely as a result of his highly influential Origins of the Common Law, Oliver Wendell Holmes famously made contracts a “choice” between performance and damages.

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