Ipse Dixit: The Restatement (Second) of Contracts and the Modern Development of Contract Law

Abstract

This article considers how courts have responded to the inclusion of six innovative rules in the Restatement (Second) of the Law of Contracts. It observes that most courts simply have deferred to the new rules. In the vast majority of cases, courts gave no reasons for their decisions to embrace the six rules. They simply cited them as they would cite a statute or code and did not question their authority. This practice raises an important normative question: Should courts follow the Restatement (Second) as readily as they currently do? The article concludes that, although some arguments counsel against deference to an academic work such as the Restatement (Second), on balance, the practice does more good than harm. By deferring to the Restatement (Second), courts have tended to promote uniformity and certainty in the law of contracts and to conserve judicial resources. Although deference to the Restatement (Second) may alter the substance of the law in some jurisdictions, such changes generally do not have deleterious consequences.

Keywords: Restatement, contracts, judicial deference

JEL Classification: K12