Models of Contract Law I
An empirical evaluation
Our work on the Australian Contract Code proceeded on the hypothesis that codified contract law is better than case law, and utility would be increased by stating the law in the form of broad principles. The aim of Models of Contract Law I was to investigate experimentally whether it would be beneficial to codify Australian contract law in this form. This research was funded by an Australian Research Council 'SPIRT' Grant and the Law and Justice Foundation of New South Wales. Models of Contract Law (2005) gives a detailed account of the methodology and results of this research.
We conducted 3 Experiments.
- Experiment 1. 300 law students who had been taught Contract law were asked to decide one of 10 contract disputes based on appellate cases that resulted in split decisions, using one of 3 law models: Australian Case Law, UNIDROIT Principles of International Commercial Contracts (UPICC), and the ACC. They were also asked to respond to a number of 'Likert propositions' relating to the utility of their law model.
- Experiment 2. A replication of Experiment 1, using 600 law students working in pairs.
- Experiment 3. 900 non-law students read pairs of judgments, one for the plaintiff and one for the defendant, each based on one of the 3 law models, and responded to a number of Likert propositions relating to their utility.
The most important result of our research was a clear finding that codified contract law has greater utility than case law.
Our results also indicated that adopting the ACC would increase rather than decrease predictability. Decision-makers using the ACC agreed with each other as often as users of the other models, and achieved greater consensus in easier cases. The ACC was also more likely to lead to just outcomes, was easier to understand, and took less time to apply.
As the ACC is a code of broad principles, while the UPICC and case law are detailed law models, we concluded that our Models of Contract Law (2005) results had important implications for the debate in law on the utility of broad principles and detailed rules. We explore these implications in The Common Law of Contracts: are broad principles better than detailed rules? An empirical investigation (2005).
Our findings contradict widely held assumptions that broad principles are inferior to detailed rules. Because this issue remains controversial, we are exploring it more deeply in our current projects 'Are broad principles better than detailed rules?' Models of Contract Law II, and 'Coherence Based Reasoning and Models of Contract Law' Models of Contract Law III.