Tag: contract law

Sample: 1L Contracts Essay Draft

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They Don’t Really Care About Us: The Virtuous Agent and Efficient Breach

The relationship between law and morality is a rich and complicated topic. Seana Shiffrin[1] argues that contract law and promissory morality diverge in some significant ways. Given the divergence, there is a question of how an agent ought to navigate areas of tension between the norms of contract law and the norms of promissory morality. Shiffrin argues that when tensions are problematic for an agent to cultivate moral virtues, contract law should at least carve out a space for the virtuous agent’s flourishing. This is the foundation that this paper builds on.

The boundaries of this paper are fixed by the current state of contract law and common-sense notions of morality; as such, we will put aside justificatory questions of private law and metaethics. To further clarify, this paper does not take a stance on which mode of analysis of law is the most convincing for tackling these issues in contract law. While I focus on the “moral” approach outlined by Shiffrin, the aim of my paper here (contrary to Shiffrin) is not to undermine, for one, an economic analysis of contract law. Further, I should stipulate that I am not trying to expound any particular substantive normative theory, and I do my best to stay neutral of these discussions and focus just on the structures of normativity.

In this paper, I will first contextualize the discussion by offering a brief background of the debate and laying out the issues Shiffrin begins to address. To narrow this further, I focus on Shiffrin’s views on efficient breach and how conceptions of promissory morality relate to the norms of contract law. Next, I turn to an objection put forth by Barbara Fried[2] and subsequently try to understand Shiffrin’s argument in a more charitable light. I then turn to Steven Shavell[3] and his attempt at vindicating efficient breach. I argue that Shiffrin’s argument against efficient breach, with some slight modifications, can survive the critiques of Fried and Shavell. Both Fried and Shavell offer rigorous challenges which push Shiffrin’s general argument forward. More specifically, insofar as contract law, the cogency of Shiffrin’s view of promissory morality requires a further elaboration of the nature and structure of promises.

The context of the efficient breach debate

The stage of this discussion occurs within the debate between two extremes: “reflectivists,” who think the law ought to reflect moral norms; and “separatists,” who think law and morality can be divorced without much problem. Shiffrin purports to have an intermediate, “accommodationist” view, which generally claims that contract law ought to track morality at some points. The accommodationist view can be carved out in a number of ways. Specific to Shiffrin is the view that contract law ought to minimally “accommodate the needs of moral agency even if it need not or should not enforce morality directly.”[4] Morality is needed as far as it promotes the virtuous agent’s flourishing.

Shiffrin argues that a virtuous agent cannot consistently hold the belief that a promise can be binding and the belief that breaching the promise can be morally justified on the grounds of mere economic welfare.[5] The “virtuous agent” is not fully defined by Shiffrin and the use of the term relies on common sense notions of morality. The term is a placeholder for an agent who cares about morality and strives to conform their actions to what morality requires. Reminiscent of Aristotelian ethics, the virtuous agent’s wellbeing and general flourishing in life is inextricably tethered to morality, so any constraints on their capacity to adhere to moral requirements is also a constraint on their ability to live a good life. How Shiffrin defines the content of the moral requirements and whether there can be good justifications for such constraints are points I will return to later.

The best example in contract law in illuminating this problematic tension between law and morality is efficient breach. The basic idea of efficient breach is that it is sometimes cheaper to pay expectation damages than performing under a contract.Shiffrin parses out two definitions. The “strong” view of efficient breach takes something like a consequentialist approach in that efficient breach is morally justified because it promotes social welfare through economic welfare.[6] The “weak” view of efficient breach drops the moral claim and opens the possibility of efficient breach being morally wrong. However, efficient breach might be justified within contract law—generating completely distinct reasons from moral reasons[7]—because it “facilitates efficient economic transactions.”[8] In support of efficient breach, agents should be encouraged to breach when yielding net economic gain, so “punitive damages must be foregone in order to make breach, and thereby a more efficient system of exchange, more likely.”[9] If the moral agent believes that (all things considered) breach is morally wrong, the economic reasons are not “a sufficient, or even a partial, contributory justification for the law’s content.”[10]

At times, Shiffrin seems to be responding to the separatists’ views. One famous formulation is that a promise to perform (under promissory morality) becomes a promise to perform or pay expectation damages (under contract law). Although we might think that in the world of promissory morality that the breaking of promises is obviously immoral, the norms of contract law are of a different species. In entering a contractual relationship, parties leave their promissory norms at the door and enter into the world of contractual norms. Contractual norms signal to parties that performance is fungible (unlike promissory norms) and can be substituted for economic value. Contractual norms are not promissory norms, and breaches of contract are not the breaking of promises. Since contractual norms are divorce from promissory norms, it would be a category error to bring moral intuitions from the moral realm into the legal realm.

Shiffrin challenges the assumption that contract law can be divorced from the actual practices we engage in. As some economic analyses of contract law purport, the divorce between contract law and morality assumes that the parties involved are rational maximizers who only seek economic incentives. It is possible to think that in the context of contract law, the norms of promises are transformed into economic norms. In the same way a token of gratitude is representative of something more than its market price, perhaps the way to respect people is through money. The costs of breach, some economists argue, is already included in the price. Is there truly no moral duty to perform “because the contract did not explicitly specify that performance should proceed even were A to receive a significantly superior offer for A’s goods?”[11] Shiffrin notes the asymmetry of allowing the seller can unilaterally shift the burden of finding a substitute while the buyer cannot compel the seller to do anything. This is too far removed from how we operate, especially when we pursue moral ends over economics ends. Expectation damages fall short of what morality requires. Shiffrin argues the internal inconsistency of this separatist approach by taking a Kantian approach: she writes, “if this were the universalized response, then agreements would never be made. The same is not true if performance were the universalized response to a promise to perform.”[12] Agreements on this view because an institution that is insensitive to our morality is fundamentally unstable and “could not flourish or perform its function.”[13]

It is important to take note of exactly what Shiffrin is arguing. Shiffrin does not argue that the justification of efficient breach is wrong because it is morally wrong or that it does not lineup with our promissory norms—this would be some version of the reflectivists’ view. Rather, what Shiffrin argues is that the good moral agent cannot consistently endorse efficient breach in their moral lives in a way to promote “the flourishing of just institutions and cultures.”[14] Shiffrin is supposedly neutral towards the moral substance of efficient breach, but finds problem with the moral scope insofar as it leaves no space to “accommodate” the good moral agent living their good moral lives.

Fried’s deflationary challenge

Fried’s challenge to Shiffrin’s argument is that efficient breach is not a moral wrong or contrary to morality, so there is no real problem for the virtuous agent in contract law permitting efficient breach. A look at Fried’s critique, regardless of its success, has the upshot of clarifying the problem Shiffrin outlines. It would be pointless to move onto the premise that efficient breach undercuts the virtuous agent’s wellbeing if we cannot first establish that efficient breach is morally problematic. If efficient breach has nothing to do with morality, then there is no issue and the argument collapses.

The target of Fried’s objection is a reductio type illustration by Shiffrin of what formation looks like on a permissive view of efficient breach: [15]

“I solemnly promise to X but I may fail to do so if something better comes along; moreover, if it does, you can only expect X’s market value from me, although you may need to enlist the help of others to pry it out of my clenched fist. Further, let us now declare that should I fail, it will not be the sort of thing deserving of moral reprobation so long as eventually you are made whole monetarily. Moreover, it is not the sort of thing you may be upset with me over or view as showing my bad character.”[16]

Fried thinks that this illustration is supposed to show the absurdity of efficient breach when it is translated into the language of promissory morality. To Fried, Shiffrin’s issue with efficient breach is that the promise underlying the contract is not really a promise at all because it diverges too much from promissory morality. In other words, whatever threshold there is for something to count as a promise, this vague and ambiguous forecasting of one’s actions has not met it. Yet we are supposed to call this an enforceable contract? Fried responds sympathetically in acknowledging that this does not fit with promissory morality, but adds that this does not fit with contract law either. In contract law, illusory promises are not considered enforceable contracts for much of the same reasons as promissory morality—that is, there is no promise to suffice as good consideration, so no enforceable contract has formed. To Fried, this illustration is misleading at best.

            By and large, Fried has problems with the rhetoric employed by Shiffrin. The illustration can be reformulated in a way which is acceptable in both contract law and promissory morality: “I’m thinking I’ll probably do X, but I have to see what all my options are.”[17] Fried suggests that the discomforts would disappear if Shiffrin phrased things differently.  For instance, “breaching for a price” says more to a separate moral judgment about the character of the promisor than anything about the morality of the promise; that is, what is morally wrong about the illustration is the “jerkiness” of the promisor and “that for no good reason he feels impelled to taunt the promisee with the limited nature of his commitment.”[18] To Fried, there is no divergence between promissory morality and contract law as Shiffrin suggests, and whatever problems are left are really just run-of-the-mill procedural problems (viz. formation and interpretation). These procedural difficulties are morally neutral, so, concludes Fried, there is no real tension with contract law and promissory morality.

Framed as a problem of contract formation, it is natural to think that this has little or nothing to do with morality. However, I think Fried’s objections relies on a very narrow understanding of the illustration. The illustration should not be understood in relation to sophisticated parties drawing up sophisticated contract, like Fried’s counterexamples suggest.[19] There is indeed nothing legally or morally wrong (barring conflicts with public policy issues)with contracts planning for some contingencies of possible breach and building them into the terms.[20] It is a mistake to think that Shiffrin’s argument is directed towards breaching per se being morally objectionable; rather, what Shiffrin argues is that only a small subset of breach is morally objectionable.

The more charitable way to understand Shiffrin’s illustration is that it points out the absurdity of how efficient breach is supposed to be understood when parties making promises fail to specify or foresee breach. This is a subtle point and it is not clear cut, so I should note that this may not be Shiffrin’s actual views. In any case, a stronger argument emerges if we think of the small subset of cases where a party deliberately shirks the moral responsibility of the promise and hides behind the veil of contract law justifications for efficient breach. For example, if I promise to sell you my poodle and instead sell it to somebody else, I have broken my promise to you even if I pay you expectation damages. I could provide you with a justification of my actions to the tune of efficient transactions, the fungibility of poodles, and the egoistic rational maximizer; however, I have still broken a promise. I did not say that, to echo Fried, “I’m thinking I’ll probably sell you the poodle, but I have to see what all my options are.” Maybe if I did, you might accept my contract law justification. But Shiffrin’s illustration is directed towards the small number of scenarios where parties have failed to plan for breach. Shiffrin’s hyperbolic language tries to show that contract law justifications of efficient breach are absurd justifications when operationalized in promissory morality.

It is not difficult to see how employing contract law justifications for breaking promises invokes reactions of moral indignation. As Fried suggests, we might condemn such smarmy characters for their “jerkiness,” but this is not to say that we accept their contract law justification of “breaching for a price,” as if they have a legitimate justification and they are being sore winners. Rather, we do not accept their justification and the source of the condemnation is their inappropriate use of contract law justification where a promissory morality justification is appropriate.

A question arises at this point: Why are we so worried about the subset of cases of breach that are morally problematic? If they are so few and infrequent, does it really matter for the virtuous agent? These are the kinds of questions addressed in the next section. In brief, the small set of problematic cases infect the legitimacy of contract law because it puts unfair barriers on the virtuous moral agent. If the virtuous agent must not break promises, then parts of contract law are practically inaccessible for the virtuous agent. As we will see, Shavell suggests that we might reinterpret the problematic cases in a way that it is not morally objectionable.

Shavell’s reformulation of efficient breach

The previous section showed that Shiffrin’s argument is not (as Fried suggest) merely rhetorical or an issue with formation. Fried helped clarify that most cases of efficient breach are not problematic, yet there are a small number of problematic efficient breach scenarios. Put this way, a plausible way to accommodate the moral agent is by arguing that contract law transforms promissory norms in a way that is morally acceptable.

Perhaps contract law is not entirely divorced from promissory morality, rather it reshapes (as we have already seen in the separatists’ argument) promissory morality and expresses them in a different way. This is the thread that Shavell picks up on. To summarize Shavell, contract law can accommodate the virtuous agent by filling in terms so that they are no longer morally objectionable. The way to go about filling in terms is by looking closely at the counterfactual of what parties would have agreed to if they foresaw the breach. For Shavell, when contractual terms do not explicitly address the breach, the way to interpret the promise is that parties would have permitted the breach if they had considered it. The fact that both parties did not foresee breach and remained silent does not imply that the parties believed breach was immoral.

Shiffrin is not so convinced by Shavell’s approach. Shiffrin questions whether there “is a moral duty to perform only if the parties would have explicitly agreed to perform had they squarely faced the contingency that is the occasion for the breach.”[21] Promissory norms are not mapped onto contracts in the way Shavell describes. There needs to be more explanation as to why absent explicit agreement “we should invoke the apparatus of hypothetical contractarianism.”[22] There are certainly some implied rules in the norms of promise keeping, too. If I miss a promise to meet you because of an emergency, you excuse me. It is possible that this contingency is built into the promise, but it would be odd to include the deliberate breaking of a promise. Silence might not imply that the parties believe breached to be immoral, but using this silence towards an inference that parties permit breach is to take a mile from a given inch. Consider the example of shoplifting policies:

“[A] vendor may adjust her prices given the predicted rate of shoplifting at her store and the expected payout of insurance. As theft rises her prices may rise. However reasonable, that does not mean that she consents to the theft or its possibility. Nor does it mean that consumers who buy the goods at those prices consent to the thievery or to pay on behalf of the thieves. They may understand that everyone must shoulder the burden imposed by thieves and, in effect, pay the thieves’ way, but finding that remedy reasonable does not amount to (and should not amount to) consenting to the activity giving rise to the remedial reaction.”[23]

It is certainly possible to imagine that a vendor is indifferent to shoplifting because there are mechanisms in place to level out the expected economic loss. But this seems to imagine the vendor as cold, calculating, and amoral. The point becomes clearer if we imagine that, say, the payout of insurance netted slightly more than the loss of the theft. Would the vendor encourage theft? Would the non-shoplifting consumer shouldering some of these costs be insouciant towards the vendor encouraging theft to make a profit? Certainly not. Perhaps contracts ought to be responsive to the belief that there is a “special premium on performance.”[24]

As Shavell correctly identifies, much of this discussion turns on individual moral beliefs and what is deemed to be an acceptable practice. However, Shavell makes the unique move of approaching this as an empirical question. Rather than pumping intuitions or engaging in conceptual analysis, Shavell opts for a “limited survey” and appeals to “a recent study by psychologists” to validate his claims about individuals’ moral beliefs on breach.[25] The problem with this move, I think, is that the question about what beliefs are acceptable for parties for counterfactual contract agreement is not apt for the experimental approach. This is not to say that this methodology is completely irrelevant or that his survey is a complete disaster—it is indeed important to assess the norms of the public for justifying coercive law. Rather, the question here is what reasons contract law ought to endorse, and this separate from the question of what reasons individuals in fact endorse.[26] Should contract law prioritize promissory morality over economic efficiency? If so, where does it derive its normative force? Shavell seems to suggest that the normative grounds are the practical reasons held by everyone (e.g. it is in everybody’s interest to reasonably accommodate economic efficiencies), and supports this claim with empirical data to show that people in fact hold these practical reasons. But questions of justification cannot be answered by looking at what individuals already believe.

The issue of conflating the justificatory question with a descriptive one becomes clear if we imagine a dissenter. If a dissenter claims that the counterfactual agreement is not what they agree to and that the breach is still unfair, then it is difficult on Shavell’s view to see what justification can be given to the dissenter. Even if the majority of people believed that breaching is in fact what they would have agreed to if they had foreseen it, it does not lend any support for the dissenter. It seems Shavell would be forced to call this dissenter unreasonable and their irrationally can be coercively overridden. This is problematic because the methodology leads to self-defeating result. The law does not function to impose the will of the majority and trump individual rights as soon as they do not fit with the majority’s beliefs. The question of justifying coercive law must be answered in the abstract.

Let us now take stock of the argument brewing behind the scenes.  

[1] Contract law ought to reasonably accommodate the flourishing of virtuous agents.

[2] There are a (small) number of efficient breach scenarios which promote morally objectionable actions.

[3] Virtuous agents cannot flourish under laws which promote any morally objectionable actions.

Therefore, contract law cannot permit efficient breach.

I take the first premise for granted given the limits of this paper. This paper thus far has focused mostly on the second premise. We learned from Fried that the number of efficient breach scenarios that are morally objectionable is a lot smaller than we might have initially thought. The small number of problematic scenarios cannot be easily excised or transformed in the way Shavell has suggested. At this point, one might question the first premise, especially as it relates to the second premise: in what sense is the permission of a small number of problematic scenarios an unreasonable accommodation?[27] The answer is that I take it that, in morally objectionable efficient breach scenarios, the virtuous agent has a disadvantage to somebody who is willing to act contrary to morality; in effect, the virtuous agent is being punished for acting in accordance with morality.[28] If this disadvantage cannot be justified (which is what I think), then it does not matter if it is a small or large number of scenarios. A similar issue might be raised with the third premise—namely, is it true that the virtuous agent cannot flourish because of a small number of scenarios? This depends on one’s ethical views.[29]

In the last stretch, I will try to sketch the ethical structure needed to support the argument above. My aim is to tease out some of the ethical positions that have been in the background of this paper. I want to suggest that a consequentialist ethics is not suited for this particular argument, but I raise some challenges that other normative ethical views might face.

The ingredients for the morality of promises

In defining a morality of promises, it is useful to look at what kind of normative force of morality is supposed to have in our practical deliberation.  Put differently, we have a plurality of reasons for actions at any given moment (legal reasons, moral reasons, prudential reasons, etc.) and some reasons are weightier than others. For instance, reasons to keep my promise of meeting you at the café might outweigh competing reasons to indulge in a nap at home. In these terms, for Shiffrin, moral reasons seem to have a special overriding status in that it overrides other competing reasons—their “overridingness” quality is what defines the reasons as “moral”. I understand Shiffrin to be taking a view that moral reasons override all other reasons, so a part of what makes moral reasons “moral” is their elevated normative status. In contrast, Shavell might be thought of as more aligned with a consequentialist decision procedure whereby what is “moral” is the result of weighing competing practical reasons; on this view, whatever is the most pressing reason is “moral,” because it best satisfies some particular set of ends.

Some economic theorists have presented accounts of contract law that are amoral. Shiffrin is correct to think that such views of law are impoverished, but it having morality regulate laws can also lead to deficiencies.  Shiffrin may go a bit too far with the idea of a virtuous agent.[30] Contract law does not need to make room for the moral saint; rather, it needs to make room for the morally decent person. Contract law certainly needs to capture dimensions of moral responsibility and blame.[31] As Fried suggests, there might be a more attenuated approach to incorporating morality into contract law which shows deference to other policy concerns.[32]

We therefore need an account of how to understand contract law within an ethical system. Some legal theorists have defended a rights-based account of contracts. They usually start with the idea that everybody deserves respect as free and equal persons simply in virtue of being human. This involves equal respect for autonomy and people can recruit others to help pursue their goals. On the rights-based view, promises are understood as an exchange of rights. Coercively taking a right by breach is unacceptable and they can appeal to enforce the promise through coercive means to reinstate the right. This is certainly very convincing, but to imply some revisionist takes on current doctrines in contract law. 

Another (I think) plausible starting point could take a closer look at the normative structure of intimate relationships and special obligations. The starting point would be the relation instead of the individual (and individual rights). Underscoring the relational aspect of promises can arrive at the reciprocal respect between parties while maintaining the flexibility of negotiating the norms of the relationship. For example, Aristotle’s view of friendship can be a useful model for understanding contracts—specifically, the wellbeing of parties become conjoined and there emerges a resultant mutual flourishing. Friendships, like contracts, generate special obligations that are often idiosyncratic to the parties.

Conclusion

This paper has argued in line with Shiffrin against efficient breach. It is still possible to argue against any one of the premises or challenge the argument’s jurisprudential assumptions. Nothing has been said about the nature of contracts within a polity or the nature of promises within morality. In saying this I do not mean to imply that progress is impossible without first addressing these fundamental questions. Shiffrin provides a strong argument for the role morality plays in the normative underpinnings of contract law. By way of modest suggestion, a fruitful direction for further investigation is a comparison between promissory norms between strangers and promissory norms between intimates. This may shed light on why we take performance to be so special.

[1] S Shiffrin, “The Divergence of Contract and Promise” (2007) 120 Harvard L Rev.

[2] B Fried, “What’s Morality Got To Do With It?” (2009) 120 Harvard L Rev.

[3] S Shavell, “Why Breach of Contract May Not Be Immoral Given the Incompleteness of Contracts” (2009)

[4] S Shiffrin, “Could Breach of Contract Be Immoral?” (2009) 107 Michigan L Rev.

[5] Supra note 1, at 731.

[6] Ibid at 730.

[7] Ibid at 732.

[8] Ibid at 730.

[9] Ibid at 732.

[10] Ibid at 731.

[11] Supra note 4, at 1562.

[12] Ibid at 1565.

[13] Ibid at 1566.

[14] Supra note 1, at 733.

[15] Another interesting point that Fried highlights is the knowledge of the parties and the specifics of what they are agreeing to when they form the contract. Fried gives the example of a carpenter hired and a contract lacking specifications of performance standards and remedies. Does the individual understand that failure of the carpenter to meet her specifications gives her only expectation damages, which are further limited by Hadley rule (i.e. the inability to collect for hard-to-quantify losses)? This is a procedural problem about “when should apparent consent to stated and implied terms be treated as binding?” See supra note 2, at 56.

[16] Supra note 1, at 728-9.

[17] Supra note 2, at 58.

[18] Supra note 2, at 60.

[19] Supra note 2, at 58.

[20] It is unclear what kinds of promissory norms are generated in these kinds of contracts. One explanation might be that promissory norms are quite thin and only require that we do not deviate from our agreements.

[21] Supra note 3, at 1560.

[22] Supra note 3, at 1561.

[23] S Shiffrin, “Must I Mean What You Think I Should Have Said?” (2012) 98:1 Virginia L Rev 175.

[24] Supra note 4, at 1566-7.

[25] Supra note 3, at 1579.

[26] This is a familiar problem made famous by David Hume and is often called the “is-ought” problem.

[27] Shiffrin’s answer is that the virtuous agent cannot consistently hold the belief that a promise can be binding and the belief that breaching the promise can be morally justified on the grounds of economic welfare. It is not spelled out exactly how she comes to the view that these are inconsistent beliefs, but I take it that this is connected to her view of morality. See supra note 1, at 731.

[28] Note that the law does not command agents to contravene morality, but merely permits efficient breach. But the suggestion that the law “promotes” breaching behavior is a subtler move. If breaking promises is understood as contravening morally objectionable, then laws which promote breaking promises also promotes something morally objectionable. The virtuous agent presumably cannot engage in breaching behavior whereas others can and narrows the options when engaging in contractual practices. They are faced with the dilemma of facing a market disadvantage in contracts or engaging in immoral behavior. It seems in either case, their wellbeing is undermined.

[29] The combined contentiousness of the second and third premises admittedly lead to worries about the cogency of the argument as a whole.

[30] Shiffrin argues elsewhere that the traditional doctrine of expectation damages needs to be replaced for specific performance and punitive damages. This also is supposed to flow from what morality requires of us.

[31] As some philosophers suggest, the locus of responsibility is tethered to the idea that one has the power of choice and ability to do otherwise.

[32] And Fried would argue that the current state of contract law already does this, for instance, through its conscionability doctrine.

1L Study Material: Contract Law Summary

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The law of contracts

Contract law does some really useful things for society. Small scale, it can help plan stuff between people. For instance, maybe I agree to mow the lawn for you everyday and you agree to pay me money. What happens if I mow your lawn and you don’t pay me money? How can I make sure that doesn’t happen?

Well, luckily, the government helps me out with that. Sometimes there are laws about how to hire somebody the right way — maybe I’m not allowed to mow the lawn naked. Maybe you think I should be allowed to, and maybe some other boring people disagree. How should we settle that?

Things get complicated. Under the government, contract law has its own way of doing things. Going back to the lawn mowing example, if you skimp out on paying me, I can talk to you, complain to your wife, say that I’ll never mow your lawn again, threaten to tell your neighbors, ask my dad to step in, or maybe take the money when you go to sleep. Obviously, that last one is against the law. So what can I do? Well, I play by the game of contract law, and if you cheat, I can tell big brother and have the strong arm of the law choke slam your ass. Contracts between you and me, without the law, doesn’t have this threat. Remember, the government can kick anyone’s ass.

The game of contract law is a complicated one. You can learn the rules, but the hardcore players learn the meta. Metagaming transcends the rules or specific doctrines and tries to figure out how the rules come about. Game developers want to make sure that the rules are clear to players, apply throughout the game without glitches, don’t clog up the servers, have a fair outcome, and helps all players out. Making rules around this meta has to make players happy and make sure that even the noobs are having fun (and not getting their armor trimmed). Okay, enough of this gaming metaphor.

Classical contract law, associated with 19th century laissez-faire liberalism, wanted the government out of everyone’s business. Think Ron Swanson. People should be free agree to whatever they want, whenever they want, and with whomever they want. It’s all between you and Ron. The law should only step in so that when you break the contract with Ron, Ron doesn’t have to murder you with his bare hands.

But things get trickier as the world gets more complicated. If the government is going to interfere with you two, it needs to make sure everybody is on the same page about what contracts are. Is a contract just a piece of paper with words? What if you sign it drunk? With a gun to your head? What if you don’t understand the words on the paper? What if they trick you? What if it’s not paper you’re signing? What if they want your pinky instead?

Contract Remedies

Okay, when I said the government will kick your ass, I didn’t mean it literally. Usually, they just take your money. In exceptional cases, they’ll make you do other stuff.

In a case, Warner Bros v. Nelson, an actress breaking her contract didn’t have to pay money. Her acting was priceless. So, they made her stop acting for a while as punishment. Oh, sweet justice.

Again, normally it’s money they take. Why? For one, contracts aren’t like murder and the government hitting your pockets will probably stop you from breaking your promises. Two, daddy government doesn’t care that much and wants you two to stop bickering and get over it. Three, maybe everybody can win, or it can be “Pareto optimal”. Maybe your brother promises to give you a Squirtle, but your brother’s friend want that same Squirtle for a Charizard; so, instead of making your brother give you his Squirtle, it’s better for the family if I make your brother give you his other starter, Bulbasaur. Being able to trust that people will do what they say allows you to do so much more. As Thomas Hobbes wrote, “Covenants, without the sword, are but words.”

Listen, if you followed the rules and your big brother broke them, we want to help you out — you get the “benefit of the bargain”. Your brother doesn’t get to back out of his deal without giving you what you’re owed. If the street value of a Squirtle is 100 yen and you end up with a Bulbasaur worth 80 yen, your brother should throw in an extra 20 yen with the Bulbasaur so it’s like he’s keeping his word. If he didn’t have a Bulbasaur to give you, maybe he should give you the full 100 yen.

Formation of Agreement

So, you can make whatever contract with whoever you want. But what does a contract look like within the game of contract law? The golden standard is complete subjective agreement. The fancy Latin term is “consensus ad idem”, which means “a meeting of the minds”. My Pikachu for your Jigglypuff — in the flip side, you’re thinking: “my Jigglypuff for your Pikachu”. But how would the government know what we’re thinking? We need ways of signaling what we are agreeing to — for instance, a written document.

So how do we get to agreeing on something. Well, it starts with one of us offering something. I walk up to you and say that I want your Jigglypuff, and maybe you’d give it to me if I gave you my Pikachu. I have communicated my offer to you. Here, you might tell me you don’t like that deal and to go away, or you might like it and say that you’ll take that deal (you communicate your acceptance). If you accept and tell me you accept, then we have an agreement. So far it’s very intuitive and it comes naturally to us. Still, it’s like a formula: have an offer, communicate it, accept or reject it; and, if you accept, communicate the acceptance. This is a sequence for bilateral negotiations, which is a fancy way of saying it’s a two-way street. So far so good, but things can go so, so wrong.

What if the offer I communicate to you is something difficult for you to understand because I’m a big company with a lot of lawyer who can draft 50 page contracts? You need procedural protection. What if I’m trying to sell you water in a place that doesn’t have any water around? It’s an offer you can’t really refuse, and you need substantive protection.

Canadian Dyers v. Burton

Okay, let’s take a closer look at how offer and acceptance can get muddy. First, a case from the Ontario Supreme Court, all the way from 1920. The Canadian Dyers Association (CDA) wanted Burton’s property, and Burton replied back that $1650 was the lowest he would care to sell it at. A year passes and they ask again, and Burton replies that the last price is the lowest he is “prepared to accept.” CDA takes this as an offer and accepts by sending a cheque for $500. Burton’s lawyer sends a draft of the deed and is ready to close for the 1st of next month. There was some more back and forth with “no trouble”, but on the 5th of next month, Burton’s lawyer says there’s no contract and returns the $500 cheque.

The problem here is when Burton said the price he quoted was what he was “prepared to accept”. It doesn’t seem like an offer. It seems like something before an offer. It seems like an invitation to treat. This sexy little term just means a you’re inviting an offer or willing to negotiate; it’s like a little dating phase before getting into bed. Now, before you say Burton was asking for it, contract law really does look at more than just the words people say. It also looks at conduct. What kinds of words and conduct matter? An expression of a willingness to be legally bound.

An offer is saying that you’re willing to play the game of contract law and follow its rules. In Burton’s case, he set a clear price and went out drafted a deed then picked a closing date. His conduct is more than just negotiation. He had the chance to stop it or say he wanted more money; instead, he went on drafting the deed. He straight up paid for the hotel room and took all his clothes off. He was ready to go.

Pharmaceutical Society of Great Britain v. Boots Cash Chemist

Let’s look at another example, this time from 1953. This was when self-service was becoming cool. You pick the drugs yourself, cool guy. The issue here is what self-service stores are doing: is it an offer or invitation to treat. If it is an offer, then we get into hot waters. It could mean that when a customer picks it up, the customer accepts the offer and a contract is complete. So if you grab some rat poison for your cold, the pharmacist would have to break the contract to stop you from taking it home; or if you grab the poison by accident, you don’t have to break the contract to put it back. Instead, the smart judges said that it’s not the store making the offer, it’s the customer. Self-service stores just give you the convenience to picking stuff out and carrying to the register for the store; once you’re at the register, you’re making an offer: “Please, sir, may I purchase this at the price written on the sticker?” The store will probably accept and the contract is complete — offer and acceptance. If you buy the poison, the store won’t accept; if you don’t want something, you can put it back — everybody is a winner.

Carlill v. Carbolic Smoke Ball Co.

Now, what about advertisements? Are they an offer or invitation to treat? One interesting case involves a “smoke ball” claiming to be a influenza cure. It said that anybody who got influenza after using it would be paid 100 pounds, and claimed to deposit 1000 pounds in the bank to prove that they were serious. Well, Carlill took the smoke ball and got sick. The company didn’t want to pay out and said that the advertisement was mere puff. They said the offer was so vague that it couldn’t possibly be a contract with everybody in the world. The judge didn’t agree. It’s the offeror who sets the terms and if they set vague terms, then it’s their fault. Moreover, it’s not an offer for everybody in the world, it’s an offer to everybody who met the terms. It is a unilateral contract, which takes performance to be acceptance. Carlill accepted by taking the smoke ball. The contract is not all puff, they said all this to attract customers (and the customer paid), and the company deposited 1000 pounds to show that they were serious.

The lesson here is that the advertisement is sufficiently detailed enough to outline that they’re willing to be bound and the plain meaning that ordinary people (not people in the advertising biz) would consider it a serious offer. The terms they set are clear: use the smoke ball as per the direction and within a period of term get sick, then you get the money. They didn’t expect you to reply back with an acceptance, they wanted you to go out and buy it (and that performance is acceptance). A lot of power is given to the offeror (they are the master) to set the terms; if they don’t use their power to their advantage (i.e., by making grand promises), then it’s their fault. We see something similar in Goldthorpe v. Logan where a newspaper ad claimed “Results Guaranteed” for hair removal — she got her $100 back.

Another lesson learned is that an offeror can say that they don’t need communication of acceptance. For instance, if you offer a reward for finding your dog — a unilateral contract (reward for dog) — then you don’t want people to waste time saying they accept. Go find the dog, perform and we have a contract; I will give you the reward if you have my dog. Still, for most advertisement, it’s usually taken to be an invitation to treat, unless we see the weird cases where the wording is specific enough to indicate a willingness to be bound. Something like, “Reward for this lost dog,” read in its plain meaning, is specific enough to indicate an offer of a unilateral contract.

One takeaway is that the game of contract law is about looking at intentions from the outside. Nobody can get into the intention in your head. So contract law looks at “objective” manifestations, like words and conduct.

Christie v. York Corp.

Alright, so the offeror can set the terms. How far does the freedom to contract go? Can they refuse people on the basis of their skin color. In this next case we see a black man walking into a bar. The punchline is that he is refused service based on the color of his skin, so he sued to bar. Now, how far can the offeror discriminate who they make an offer to? We don’t want anything against public order, but racism wasn’t so bad at the time. Still, it’s not fair to hold out on beer if you’re the only one serving beer in the whole town, so monopolies don’t get complete freedom. Same goes for really important stuff, like food. The moderators want to let the players play and don’t want to interfere as much as possible, but they also want the players to play nice. There are good reasons to turn people away: for instance, if it would violate regulations, or if the person is drunk or underaged, or if they’re trying to buy out all of your stock for profit. Subsequent legislation, like the Human Rights Code, has prohibited refusal on discriminatory grounds.

Formation of Agreement: Communication of Offer

The type of contract law we have been focusing on is under common law. This is different because it gives us a formula for bilateral agreements: offeror makes an offer, and that offer is communicated to the offeree; the offeree can reject and terminate the process, or the offer can assent through acceptance; if the communication of acceptance is required by the offer, then the offeree must communicate the acceptance to the offeror, and thus an agreement is formed.

Williams v. Carwardine

A guy was murdered and his brother posted a $20 reward for information. Beaten close to death by her husband, Ms. Williams gave information that her husband was the murderer. It was clear the main motive for her confession was to clear her conscious. When she didn’t die, she wanted the reward, and the courts ruled that it didn’t matter what her motivation for giving the information was. What was important was that she met the terms of the offer and accepted by performing; in doing so, there was a unilateral contract formed.

Acceptance

Even if motivation mostly doesn’t matter for the acceptance of an offer, knowing that there is an offer is important. In Carwardine, a reward posted to the general public gives some reason to believe that the offeree had read it or come upon it. She also knew about the reward since she was so close to the case. In the case of R. v. Clarke, however, the Clarke went the extra mile to say that he didn’t know when he was giving information leading to an arrest. He made it very clear that he was only giving information to clear his own name. Since you can’t agree to something you don’t know about.

Livingstone v. Evans

Alright, another piece of land deal. This time Evans proposes to sell for 1800, and Livingstone replies by saying “Send lowest cash price. Will give 1600 cash. Wire.” Evans responds, “Cannot reduce price.” So Livingstone wrote to accept the 1800 offer, but Evans changes his mind and says he doesn’t want to sell anymore. Alright, so let’s break this down in terms you would understand. I offer my nudes if you show me your nudes. You don’t accept this offer; you reject my offer and present a counter-offer: my nudes for showing your face. The first offer is off the table. But then I reply by saying that I can only do nudes for nudes; “cannot reduce price” to just showing your face, I need tits and vag. Here, I am renewing the original offer (or presenting the same offer again). It’s like saying “take it or leave it”. You accept and send me nudes, and I say no deal. By saying something as ambiguous after the offer is rejected, I am renewing the offer for you to accept; if you accept, there is a contract formed.

We learn here that acceptance must be absolute and unequivocal. “No” means “no,” and rejects of an offer terminates the offer. Any counter-offer terminates the offer. In Hyde v. Wrench, offering a different price (950 instead of the offered 1000) means rejection. But a counter-offer needs to be differentiated from a mere inquiry as to whether the offeror will modify the terms (in Stevenson, Jacques & Co. v. McLean, they asked if they could accept credit instead of cash). For example, if I want nudes for nude, maybe you ask me if showing your left titty is okay. Still, there needs to be a match between the terms of acceptance and the terms of the offer. This is sometimes called the mirror image rule.

Butler Machine Tool Co. v. Ex-Cell-o Corp

Welcome to the “battle of the forms.” In this corner, we have Butler Machine selling machinery for 75535 with a price variation clause (stating they’d change the price of manufacturing costs went up). In the next corner, we have Ex-Cell-o, stating they accept but on their terms with no price variation clause. Butler Machine came back saying they accept your order with a letter restating the price variation clause. No response from Ex-Cell-o. Ding-ding; time to pay up, and they activated their trap card: the price variation clause, adding 2892 to their total. Judges decisions: Butler Machine! The last shot wins.

Dawson v. Helicopter Exploration Co.

In this case, there was a military guy who knew about this sweet mineral spot, and he wanted the help of a helicopter to go out to scout it. He talked to the company and they agreed on the condition that he could get leave from the Naval Reserve and they could find a helicopter pilot; moreover, if he was legit and they found some sweet minerals, they would give him 10% interest. When they found a pilot, they told him but he heard from somebody else that it was a bad time to explore the area. When they didn’t hear back from Dawson, they went ahead without him and found some sweet minerals. The court found that there was a contract and that they didn’t meet the condition by not taking Dawson out on the helicopter.

Tywood Industries v. St. Anne-Nackawic Pulp & Paper Co.

St. Anne asked for a quote from Tywood and it had some terms and conditions. It didn’t have an arbitration clause. They sent back a quote and talked about it — still no arbitration clause. St. Anne sends purchase orders asking the seller (Tywood) to accept, sign, and return a copy — bang: arbitration clause. The seller doesn’t sign or bring back a copy, but does deliver the goods. The seller sues for the price of the goods, the buyer springs the arbitration clause: what now? Alright, the terms don’t match perfectly, but all the important stuff is agreed upon, except this arbitration clause. It looks like the buyer accepted the terms on the first round — the first blow is what matters here. The arbitration clause showed up too late, and the buyer didn’t point it out; moreover, the buyer didn’t complain when they didn’t get the form back signed.

Changing the Contexts of Formation of Contract

Welcome to the digital era. If you’ve been on the internet for any amount of time, you’ve agreed to stuff you haven’t read. There are a bunch of things moderators are worried about in adding this feature to the game. Here are a few. Information: you don’t read anything and you probably wouldn’t understand it either, and maybe the digital medium exacerbates that. Power: companies are getting huge, and noobs are making contracts with maxed out players; something fishy might be going on, like in Z.I. Pomey Industrie v. ECU-Line N.V. or Douez v. Facebook (and their forum selection clause). Negotiation and market alternatives: not agreeing to Facebook terms; good luck going to Myspace, loser.

Old rules continue to apply for new cases. In ProCD v. Zeidenberg, it was established that shrink-wrapped licenses count as an offer that you accept when you buy it and don’t return it. It’s sort of like a unilateral contract in between the self-service store and an advertisement. In Rudder v. Microsoft Corp, “click-wrapped” agreements of checking off a box while you scroll mindlessly down the page of terms and conditions were deemed acceptable.

Offer and Acceptance: continued

We saw that the offeror is given a lot of power to set the terms. They can use their power recklessly, like for advertising smokeballs or hair removed, or they can use it for convenience, like in shrink-wraps or click-wraps.

Eliason v. Henshaw

In this case, we see a really clear formulation of the doctrine that acceptance must be in the manner prescribed by the offer. A letter from the buyer (Eliason) was sent stating they wanted to purchase flour, and they wrote, “Please write by return of wagon whether you accept out offer.” The letter reached Henshaw, but the wagoner said he wouldn’t be going back, so he replied back by post about accepting the offer. The letter reached the buyer, but the buyer said it was too late and they failed to accept in the manner prescribed.

Felthouse v. Bindley

Still, offerors can dictate the forms and time for acceptance, they can’t push you to do something to reject the contract. Like if I tell you, “if you blink, it means you accept my contract of giving me all the money you have.” The same (generally) goes for silence. Here, we see an uncle (Felthouse) negotiating to buy a horse from his nephew for 30.15, and saying he’ll consider the horse his if his nephew doesn’t reply. The nephew didn’t reply. Then an auctioneer (Bindley) sold it by accident, and the uncle sues the auctioneer. However, the judge said the uncle had no claim to the horse since no contract was made.

Saint John Tug Boat Co Ltd.. v Irving Refining Ltd.

But there are exceptions to the silence-is-not-acceptance rule. Here, Irving needed tug boats to tow oil tankers and hired St. John to have the boat available. Irving’s president changed and nobody agreed to the services going forward, but they had their tugboat on standby and it was used to tow some tankers. The monthly bill was sent and seen but wasn’t paid. In this case, a reasonable person wouldn’t have assumed that they were offering to work for free. In the same vein, if you buy a CD and take it home, you not returning might be considered an acceptance of the licenses on the CD.

Communication of Acceptance

When the communication is instant, the communication of acceptance is usually instant since it reached the offeror right away. This “receipt” rule also says that the acceptance is made wherever the offeror receives the acceptance – for instance, if I tell you that I accept on the border of South Korea, and you’re on the North Korean side, then the acceptance is in North Korea. This was established with the instant communication of Telex in Brinkibon Ltd. v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH. This receipt rule is likely to apply whenever the communication is more instantaneous (e.g. speaking), under the control of the sender (e.g. nobody control your words), and the receipt is easily confirmed (e.g. they’re right in front of you).

Household Fire and Carriage Accident Insurance Company (Limited) v Grant

Sometimes communication of acceptance is sent by post. This creates a delay in receiving the communication of acceptance, or it could get lost somewhere. In this case, Grant wanted to buy share and Household Fire accepted his offer to buy the share (and added his name to the list); however, their communication of acceptance never reached Grant. The judge ruled that the contract was binding as soon as they put their communication of acceptance in the mail. This is called the postal rule. (This rule doesn’t always apply, especially in cases where the delay of snail mail would lead to absurdity, like a contract on melting ice cream.)

Holwell Securities Ltd. v Hughes

In the same way offerors can stipulate that an acceptance be communicated by wagon instead of post, the offeror can sidestep the postal rule by requiring that the offer of acceptance reach them. In this case, Hughes gave Holwell 6 months to buy a property, but stipulated that their acceptance had to be a notice in writing. Howell sent a cheque and letter of acceptance within the 6 months (time limit and writing requirement met), but the letter was never delivered to Hughes (no notice to offeror). With no notice, the court rules, Holwell failed to meet the manner of acceptance prescribed.

Termination of Offer

Revocation of an offer gives more power to the offeror. Anytime before acceptance, the offeror may revoke the offer.

Dickinson v. Dodds

In this case, Dodds gave an offer to Dickinson to sell the house, with a promise to keep the offer open until June 12 at 9 AM (this is sometimes called a firm offer). Dickinson learns from his agent that Dodds sold the property to somebody else. Dickinson gives his acceptance to Dodds but says it is too late. Despite the promise, Dodds can revoke the offer at anytime. Still, the revocation of the offer has to be communicated to the offeree; it was just dumb luck that Dickinson found out from his agent.  The revocation shows that the offeror is no longer willing to be legally bound. Despite the offeree’s disappointed reliance and expectation, the firm offer was just a bare promise without consideration, or a nudum pactum (“naked promise”).

An option contract supported by consideration can limit the revocability of an offer by the offeror, like in Mountford v. Scott and Politzer v. Metropolitan Homes.

In Byrne v Van Tienhoven (re-sold tin plates and accepted by telegram), we see that the postal rule doesn’t apply to communication of revocation.

In Errington v. Errington and Woods, a father leaves his son a house on the condition that he make the mortgage payments. Here, we see that unilateral contracts are not revoked while the offeree has commenced performance. If you started look for the dog, the offer of the reward can’t be revoked.

Barrick v. Clark

A lapse in an offer happens after a time expressly fixed by the offer. If there is nothing expressly fixed the reasonable time an offer lapses can be determine by words and conduct. In this case, 7 weeks of negotiations happen with Clarke offering to purchase Barrick’s land for 14,500. Barrick wants 15,000 and Clarke goes on a hunting trip; however, Clarke’s wife receives the letter and asks to hold offer open for another 10 days. Thirteen days later, Barrick sells the land to someone else.

Auctions and Tenders

Problems occur when there are multiple bidders. In auctions, bids are taken as offers and the acceptance happens with the bang of the hammer. This might mean that before the hammer, the bids can be withdrawn before the hammer and the offer of the highest bid can be rejected. A way out of this is hold the auction “without reserve,” where the offer will be sold to the highest bidder.

Tenders, not the chicken kind, are a formalized process for bidding to supply goods or services (e.g. construction or supplies). An invitation to tender is an invitation to treat.

M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd.

Here, things get weird. An invitation to tender was invited and MJB Enterprises submits tender as do 3 others. The invitation to tender included a “privilege clause,” which said that the lowest tender wont necessarily accepted. But one of the bidders entered a bid that was not compliant with the terms set, and the Defence company went with them. The others played by the rules of submitting the tender, but the winner didn’t — the winner should be disqualified.

R v. Ron Engineering

A call for tenders went out with a requirement of a 150,000 deposit (to show they were serious). Ron Engineering submitted their bid that was accidentally too low, and sued to get their money back. The specific terms and conditions of the call for tenders made this an offer instead of an invitation to treat. The invitation to tender is considered, in such specific cases, a unilateral contract which binds you to entering the second contract of doing the job.

Certainty of Terms

In theory, we can deal with ideal scenarios and try to form principles around them to buff out the sharp edges. However, in practice, people are bad communicators and the law has to account for that. For instance, parties have incomplete or inexact expressions but still go on dealing with each other — this is especially true for long business relationships. The aim is to preserve the contract relationship — “verba ita sunt intelligenda ut res magis valeat quam pereat” or “words are to be so understood that the subject-matter may be preserved rather than destroyed.” Still, the law is not here to make stuff up or interpolate into the contract more than what is intended. If there’s vagueness in terms of the material terms of the contract, then there is no contract formed.

It’s not always clear what counts as essential or material terms (e.g. a price variation clause or an arbitration clause), but in this case it is clear. In Mary and Butcher ltd. v. R., there is no price, nor is there time for payment or delivery. It’s an incomplete contract. At best, they have an “agreement to agree,” and this is no contract. This is because an agreement to agree is a clear acknowledgement that the parties have no agreement at the time (although there is some wiggle room here). A concern for the law with incomplete or uncertain terms is that they wont know when parties are performing their obligations or not, so it wont know whose side to take when there’s a dispute.

Many weasel words are used to keep things vague. In R. v. CAE Industries, we see words like “assurances” or “best efforts” to meet terms. In Hillas and Co. Ltd. v. Arcos Ltd., there is silence on things like timing or quantity and vagueness in other descriptions, but the court has enough to keep the contract going since they both intend on keeping the contract. When the courts do try to construct a meaning, it moves forward with the understanding that the parties intended on creating a contract. With the uncertain terms, the court will try to move forward with an objective approach for a reasonable construction of factors, like language, context, external standards, conduct, shared industry norms, statutory laws, third parties, or a standard of reasonableness.

Generally, a contract will be found if there is something to determine the terms, like an arbitration clause. We find that in Hillas and Co. Ltd. v. Arcos Ltd, but also in Foley v. Classique Coaches Ltd. (where they agreed to sell land provided they use the gas station, but they suddenly stopped using the gas station).

Enforcement of Promises – Consideration

Consideration is a technical term referring to the thing given or the benefit exchanged within a contract. An enforceable contract must have consideration (or, alternatively, a deed — signed, sealed, delivered, etc.; even more rarely, an estoppel) in one form or the other, and it’s important to note early on that consideration isn’t always monetary. The requirement for consideration is a quirk that is debated and other legal systems don’t always require this; sometimes, even judges express their regret in enforcing this element of a contract. For example, in Brantford General Hospital v. Marquis Estate, Ms. Marquis clearly intended to provide charitable support to the hospital, but after her death it was not enforceable because there was no consideration to form a contract. It seems weird to add this requirement of consideration when other doctrinal requirements have already tested that the parties have a serious intention towards a promise, and it might even create unfair scenarios where the reliance and expectations of the promisee are disappointed. Some justification for the need for consideration might be that contract law only supports agreement where there is an exchange; moreover, there is a need to distinguish the institution of contract law from other institutions of interaction (e.g. gift exchange or other areas of permissions). It also protects parties and guarantees that a promise has been bought (or that there is an exchange) — again, it would be weird to enforce things like gifts or acts of charity.

We see that without consideration, even words and signatures are not enough to make a promise enforceable. In Dalhousie College v. Boutilier Estate, Boutilier signed a solicitation to make donations to the college; however, there was no consideration made, and the vague mention of supporting the school wasn’t enough of a benefit to Boutilier to be considered a valid consideration. In Dickinson v. Dodds, we already saw that the lack of consideration made the firm offer (to keep the offer open) a “nudum pactum”, but the 100 in Politzer v Metropolitan Home Ltd was good consideration to make the firm offer enforceable.

Currie v. Misa

We see a host of different modes of consideration that is legally valuable. In Carlil v. Carbolic Smoke Ball, we see an act and inconvenience of Carlil counts as consideration. In Hamer v. Sidway, an uncle pays his nephew to refrain from drinking, swearing, and other fun stuff until age 21 for 5000; the nephew is legally entitled to do this, but this forbearance counts as good consideration on the part of the nephew. Similarly, the forbearance can be a legal entitlement to reframe from suing, like in B.(D.C.) v. Arkin (Zellers illegitamately tried to hold the mom accountable for her son’s shoplifting).