Beyond Words: An Empirical Study of Context in Contract Creation

Abstract

This article reports on an empirical study into how judges interpret contracts. In general, the study demonstrates that key participants do look to context for guidance on issues of contract creation. Part II summarizes the modem legal perspective on these questions, as stated in the Restatement (Second) of Contracts, as posited in the scholarly debate about relational contracts, and as exemplified in case law regarding employment contracts. Part III describes a study designed to capture the thinking on these questions of participants in an employment contract. Part IV presents the results obtained from respondents who represented the parties to the contract, namely the employee and the company's human resources manager, as well as results from another important group of respondents-lawyers assigned to represent the employee or the company. Part V summarizes the numerical results and discusses the implications of the study.

Keywords: Contract law, language, relational contract theory, employment, human resources