Rethinking Contract Law and Contract Design

Rethinking Contract Law and Contract Design

Rethinking Law series

Victor P. Goldberg

Rethinking Contract Law and Contract Design presents a rich array of ideas that reassess the law and economics of contractual relations. Victor P. Goldberg uses a transactional framework to critically analyse and re-evaluate contract doctrine and specific legal cases. This important work examines particular contractual precepts whilst conducting a detailed exercise in legal archaeology, challenging readers to reconsider significant legal decisions by forensic exploration of records, briefs, and other materials, including the staple cases of textbooks and casebooks.

Chapter 15: Traynor (Drennan) v. Hand (Baird): much ado about (almost) nothing

Victor P. Goldberg

Subjects: economics and finance, law and economics, law - academic, commercial law, law and economics, law of obligations


Most Contracts casebooks feature either Baird v. Gimbel or Drennan v. Star Paving to illustrate the limits on revocability of an offer. In this chapter an analysis of the case law yields three major conclusions. First, as is generally known, in the contractor–subcontractor cases, Drennan has prevailed. However, both it and its spawn, Restatement 2d 87(2), have had almost no impact outside that narrow area. Moreover, almost all the cases involve public construction projects—private projects account for only about 10 percent of the cases. This suggests that private parties have managed to resolve the problem contractually. Public contract law is encrusted with regulations, which courts and contracts scholars have ignored. The result is a peculiar phenomenon—a supposedly general contract doctrine that applies only in a specific context, but which ignores the features of that context.

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