Abstract

Chapter Fourteen concludes by asking why do landmines persist in the contract documents for many financial markets, and can the problems they cause be solved either through state or collective action. One culprit is agency costs—the costs that result from drafters’ failure to meet the markets’ demand for both speed and accurate documentation. A failure to revise or even review the artifact contract inevitably leads to strategic manipulations, blunders, and obsolescence. Another culprit is the textualist mode of interpretation where courts give language a plain meaning even when it violates common commercial usage or understanding. Once we understand the production process, we cannot simply assume either that contract words mean what the parties meant for them to mean or that the parties are capable of correcting any errors going forward. In a world where production costs impede the scrutiny of precise language at the drafting stage, there is an argument for a “landmine exception” to the dominant textualist view. But there is no easy way to implement this exception under current contract doctrine. If contract interpretation doctrine remains resistant to reform, the landmine problem might also be addressed by stimulating networks of drafters to coordinate on removing mutations to the standard form. But this, too, is a daunting challenge especially in thick liquid markets. Perhaps the best hope for solving the contract production paradox is to elevate the plight of the drafting lawyer so that the profession itself can be mobilized to create mechanisms for coordinating landmine removal.