Yesterday I noted (here) the passing of E. Allan Farnsworth who, among his other accomplishments, was the reporter for the Restatement (Second) of Contracts. While I have some strong disagreements with it, I think that the Second Restatement is a masterpiece of neoclassical contract law, blending the best of “classical” formal rules with “neoclassical” qualifications. I simply cannot imagine the present American Law Institute (who produces all the Restatements) improving on it in my professional lifetime.
Having said this, I wonder if the Restatement project has proven to be a good idea. On this issue I am influenced by the skepticism of–nay, downright hostility to–the Restatement project I have heard expressed by contracts professor Marcus Cole of Stanford. The problem is a contradiction built into the concept of a “Restatement.” It is supposed to be “restating” (and systematizing) the law as it has evolved in the common law system–which presupposes that the evolutionary common law process is an important source of wisdom. Yet once promulgated, a Restatement tends to freeze that common law evolution in amber at the moment of its creation. True, Restatements as we all know are more than mere restatements. But whatever “reforms” it may include are themselves also frozen in time.
To the extent state court judges view the Restatement as a safe harbor that insulates them from reversal, they fail to take responsibility for improving the law of contracts as they are confronted with new cases that put stress on old doctrine. To take a concrete example, adding Promissory Estoppel to the first Restatement was an improvement over the Bargain Theory of consideration standing alone. The general formulation of Section 90 allowed judges to reach right results in a highly undertheorized context. By now, however, our decades long experience with the operation of the doctrine–combined with the excellent theorietical and empirical scholarship of recent years–puts courts in an excellent position to provide more rule-like guidance to potential litigants than now provided by the open-ended generalities of Section 90 that say little more to judges than “do the right thing.”
Yet there is little incentive for state court judges, with much on their plates and a fear of reversal, to develop such doctrine when the authority of the Restatement is at hand. On balance, I think this is a great loss. The common law evolutionary system is a great source of knowledge that provided much of the substance of both Restatements. But now that flow of knowledge has been reduced to a trickle due, at least in part, to their existence. While some principles of justice are eternal, legal doctrine must evolve to fit these principles to new contexts and provide guidance to other judges, lawyers, and even parties. On balance, I think that the Restatements greatly inhibit this evolution. (I say much more about the need for an evolutionary discovery mechanism in law in Chapter 6 of The Structure of Liberty.)
If we are going to have a Restatement at all–and we are–I would keep the Restatement Second around for a long time. I have little faith that a committee of law professors today could improve upon it–as witness the debacle of revising Article 2 of the Uniform Commercial Code. But apart from its elegance and admirable substance, another reason for its retention is a dearth of additional evolved judicial wisdom to incorporate into a Restatement Third.
Update: A reader writes in defense of Restatements:
I think you underestimate the value and effect of Restatements. In a state like Utah, Restatements are extremely helpful, in part because there is relatively little case law to draw on within the state. Multi-state surveys are some help, but one is left with little in the
way of guidance about which states the court should or will look to for guidance. The Restatements give reasonably practical guidance on a host of issues. They have declined as a part of legal academics, but from the perspective of practice the restatements are still a positive. I have doubts that trial judges anywhere particularly concern themselves with appellate review. The numbers and process make it sort of unlikely.
Update: Another reader writes (in part):
And when difficult points come up, it is state-court cases deciding them that get cited. I do not think most judges would feel comfortable deciding a case on the authority of a broad statement like section 90 without looking for on-point authority; all the more so for their clerks. And in this process common law gets made, more or less just as it always has. (Which raises another point—did influential treatises predating the Restatements similarly ossify the common law in your view? E.g. Blackstone, Story, Wigmore, Williston. Have the Restatements just taken the role of what used to be single-professor efforts?)
Interesting point. My sense is that the Restatement has far more “authority” than an individual treatise writer, perhaps because of its collective provenance. And I also think that, at least on contracts, a good deal of the caselaw on which courts rely are cases that previously adopted Restatement propositions. This is one reason why portions of the first Restatement of Contracts remains in effect in some states, having previously been adopted by judges in previous decisions.
Update: For an extention of these concerns to the area of international law see The TransAtlantic Assembly blog.
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