“Narrating Bankruptcy / Narrating Risk,” 98 Northwestern University Law Review 303 (2003)
Contract making stands at the center of Western law in the modem era. The social contract is the font of our legitimate collective authority. The commercial contract releases our economic energies. The marriage contract initiates some of our most intimate relations. No less a liberal luminary than John Stuart Mill described the purpose of government as "enforcing contracts." For Sir Henry Maine, the most distinctive feature of modem political life was the movement "from status to contract." And William Graham Sumner announced that "in the United States more than anywhere else, the social structure is based on contract."
Contract breaking, by contrast, haunts the peripheries of our legal traditions. To be sure, the law of contract making has long concerned itself with the consequences of contract breaking. As Holmes famously noted, the law of contracts leaves a promisor "free to break his contract if he chooses." Contract breaking, after all, is what the law of contract breach and contract remedies is all about. But western legal systems in the modem era have also developed elaborate mechanisms for absolution from contract obligations. Indeed, there is a major Western power with a long and exceptionally favorable history of such policies toward contract breaking. This nation has written into its constitution the idea that individuals can contract debts, and yet then be allowed to walk away from them. Moreover, there is in this nation a massive administrative apparatus dedicated to facilitating contract breaking. An entire class of judges convenes to oversee contract breaking. A prominent cadre of the bar earns significant fees by reworking old obligations and helping individuals and firms get a fresh start after failing to live up to their agreements. And an entire industry has grown up around the business of reorganizing firms no longer able to meet their debt payments.
Date of Authorship for this Version
Witt, John F., "Narrating Bankruptcy / Narrating Risk" (2003). Faculty Scholarship Series. Paper 394.