Mark P. Gergen

Negligent Misrepresentation as Contract

The article argues negligent misrepresentation — and by extension, much of the law of economic negligence — should be treated as part of contract law, and not as part of the law of negligence. Much of the article is an intellectual history of contract law through the early years of the 20th century, and of negligence law from the mid-20th century to the present. The article juxtaposes classical theories of contract and the dominant modern theory of negligence. The theories combine analytical rigor and value neutrality, which makes them very appealing to legal minds. The theories have mirror image weaknesses. Classical theories of contract reduce contract to a perfect sphere of private legislation. The dominant modern theory of negligence gives the negligence principle of liability for harm carelessly caused a potentially limitless reach. Negligence law can reach as far as a court concludes reason justifies. The article shows that negligent misrepresentation came to be treated as a tort because classical theories of contract excluded it from the field of contract. The dominant modern theory of negligence makes it possible to subsume this body of law in negligence, but at the cost of eliding the relational nature of the claim. Treating negligent misrepresentation as a problem of contract improves both fields by loosening contract and restricting negligence, while emphasizing the relational nature of the claim.The article also engages with current scholarly debates about the “best” theory of contract and negligence. It argues the best theory to account for the core of each field of law poorly accounts for the periphery of the field. Classical theories of contract brilliantly account for the core of contract law but overly restrict the field, excluding obligation informally undertaken. The dominant modern theory of negligence brilliantly accounts for the core of negligence law but does not explain the field’s limits. The article also challenges the prevailing view that 19th century legal theorists thought the law could be derived axiomatically from eternal principles. The article shows the better theorists could fairly be described as “pragmatic conceptualists.” This is the self-description of a group of US torts theorists who are the leading critics of the dominant theory of negligence, including John Goldberg and Benjamin Zipursky. The article offers a sympathetic account of their theory of tort law, as well the theory of Robert Stevens, who is a leading English critic of the dominant theory of tort law. But the article concludes with a challenge to their theories as either being vacuous or as limiting the reach of tort in undesirable ways.

Territoriality and the Perils of Formalism

Recently in this journal1 Donald Regan published a pair of essays on CTS Corp. v. Dynamics Corp. of America.2 Much of the first essay elaborates his theory that what the Supreme Court should be doing and what it is doing3 under the dormant commerce clause is checking state laws adopted with a substantial protectionist purpose.4 The rest of the first essay and all of the second essay develop a different check on state lawmaking power in interstate affairs: a rule that states may not regulate conduct beyond their borders. He calls this the extraterritoriality principle. Elsewhere I have questioned whether Regans theory of protectionism is sufficient to explain what the Court is and should be doing under the dormant commerce clause.5 Here I want to question the extraterritoriality principle. My argument is that it works poorly, if it works at all, as a check on the regulatory authority of states. I also make the broader point that Regans two proposals are overly formal. They blind us to what should be our real concerns when reviewing state laws that affect out-of-state interests and may generate an intolerable number of bad results. At the end I briefly sketch an alternative approach to these problems that is more openended.