Law Commons^™

Feel-Good Formalism, Mitu Gulati, Anna Gelpern

Faculty Scholarship

This essay highlights a phenomenon that has no place in the conventional theory of sophisticated business contracts: the term that makes no sense as an enforceable promise, one that defies functional explanation, one that drafters blush to rationalize in retrospect or chalk up to honest mistake. The subset of contract drafters who stop and think about the term before the contract is signed know that it has little enforcement or other instrumental value. Even if a court were to enforce such a term, its interpretation would be extremely hard to predict at signing. Nevertheless, such clauses get included in contracts …