FORM AND SUBSTANCE IN PRIVATE LAW ADJUDICATION + Duncan Kennedy * This article is an inquiry into the nature and interconnection of the different rhetorical modes found in American private law opinions, articles and treatises. I argue that there are two opposed rhetorical modes for dealing with substantive issues, which I will call individualism and altruism. There are also two opposed modes for dealing with questions of the form in which legal solutions to the substantive problems should be cast. One formal mode favors the use of clearly defined, highly administrable, general rules; the other supports the use of equitable standards producing ad hoc decisions with relatively little precedential value. My purpose is the rational vindication of two common intuitions about these arguments as they apply to private law disputes in which the validity of legislation is not in question. The first is that altruist views on substantive private law issues lead to willingness to resort to standards in administration, while individualism seems to harmonize with an insistence on rigid rules rigidly applied. The second is that substantive and formal conflict in private law cannot be reduced to disagreement about how to apply some neutral calculus that will "maximize the total satisfactions of valid human wants."1 The opposed rhetorical modes lawyers use reflect a deeper level of contradiction. At this deeper level, we are divided, among ourselves and also within ourselves, between irreconcilable visions of humanity and society, and between radically different aspirations for our common future. The discussion proceeds as follows. Sections I and II address the problem of the choice between rules and standards as the form for legal directives, collecting and organizing the wide variety of arguments that have been found persuasive in different areas of legal study. Sections III and IV develop the dichotomy of individualism and altruism, with the hope of bringing a measure of order to the chaotic mass of "policies" lawyers use in justifying particular legal rules. Sections V, VI and VII argue that the __________________________________________________________________ + Copyright 1976 by Duncan Kennedy. * Professor of Law, Harvard University. Colleagues, friends and family too numerous to list helped me generously in the writing of this article; Philip Heymann, Morton Horwitz, Robert Nozick and Henry Steiner were especially profligate of their time and thoughts. Errors are mine alone. 1 H. HART & A. SACKS, THE LEGAL PROCESS 113 (tent. ed. 1958). 1685 1686 HARVARD LAW REVIEW [Vol. 89:1685 formal and substantive dichotomies are in fact aspects of a single conflict, whose history is briefly traced through a hundred and fifty years of moral, economic and political dispute. Section VIII outlines the contradictory sets of fundamental premises that underlie this conflict. Section IX is a conclusion. I will use the law of contracts as a primary source of illustrations, for two reasons. I know it better than other private law subjects, and it is blessed with an extraordinary scholarly literature full of insights that seem to beg for application beyond the narrow compass within which their authors developed them. For example, much of this article simply abstracts to the level of "private law" the argument of an article by Stewart Macaulay on credit cards.2 It may be useful to take, as a beginning text, the following passage from the Kessler and Gilmore Contracts casebook: 3 The eventual triumph of the third party beneficiary idea may be looked on as still another instance of the progressive liberalization or erosion of the rigid rules of the late nineteenth century theory of contractual obligation. That such a process has been going on throughout this century is so clear as to be beyond argument. The movement on all fronts has been in the direction of expanding the range and the quantum of obligation and liability. We have seen the development of theories of quasi-contractual liability, of the doctrines of promissory estoppel and culpa in contrahendo, of the perhaps revolutionary idea that the law imposes on the parties to a contract an affirmative duty to act in good faith. During the same period the sanctions for breach of contract have been notably expanded. Recovery of "special" or "consequential" damages has become routinely available in situ- ations in which the recovery would have been as routinely denied fifty years ago. The once "exceptional" remedy of specific performance is rapidly becoming the order of the day. On the other hand the party who has failed to perform his contractual duty but who, in the light of the circumstances, is nevertheless felt to be without fault has been protected by a notable expansion of theories of excuse, such as the overlapping ideas of mistake and frustration. To the nineteenth century legal mind the propositions that no man was his brother's keeper, that the race was to the swift and that the devil should take the hindmost seemed not only obvious but morally right. The most striking feature of nineteenth century contract theory is the narrow scope of social ________________________________________________________________________ 2 Macaulay, Private Legislation and the Duty to Read—Business Run by IBM Machine, The Law of Contracts and Credit Cards, 19 VAND. L. REV. 1051, 1056-69 (1966). 3 F. KESSLER & G. GILMORE, CONTRACTS, CASES AND MATERIALS 1118 (2d ed. 1970) [hereinafter cited as KESSLER & GILMORE]. 1976] FORM AND SUBSTANCE 1687 duty which it implicitly assumed. In our own century we have witnessed what it does not seem to fanciful to describe as a socialization of our theory of contract. My purpose is to examine the relationship between the first and last sentences of the quoted passage. What is the connection between the "erosion of the rigid rules of the late nineteenth century theory of contractual obligation" and the "socialization of our theory of contract?" I will begin by investigating the formal concept of a rigid rule. I. THE JURISPRUDENCE OF RULES The jurisprudence of rules is the body of legal thought that deals explicitly with the question of legal form. It is premised on the notion that the choice between standards and rules of different degrees of generality is significant, and can be analyzed in isolation from the substantive issues that the rules or standards respond to.4 A. Dimensions of Form 1. Formal Realizability. — The first dimension of rules is that of formal realizability. I will use this term, borrowed from Rudolph von Ihering's classic Spirit of Roman Law, to describe the degree to which a legal directive has the quality of "ruleness." The extreme of formal realizability is a directive to an official that requires him to respond to the presence together of each of a list of easily distinguishable factual aspects of a situation by interven- _________________________________________________________________ 4 The principal sources on the jurisprudence of form with which I am acquainted are: 6 J. BENTHAM, THE WORKS OF JEREMY BENTHAM 60-86, 508-85 (Bowring ed. 1839); 2 AUSTIN, LECTURES ON JURISPRUDENCE 939-44 (4th ed. 1873); 3 R. VON IHERING, DER GEIST DES ROMSICHEN RECHT § 4, at 50-55 (1883) [available in French translation as R. VON IHERING, L’ESPRIT DU DROIT ROMAIN (Meulenaere trans. 1877); future citations are to French ed.]; 2 M. WEBER, ECONOMY AND SOCIETY 656-67, 880-88 (Ross & Wittich eds. 1969); Pound, The Theory of Judicial Decision, III, 36 HARV. L. REV. 940 (1923); Fuller, Consideration and Form, 41 COLUM. L. REV. 799 (1941); von Mehren, Civil Law Analogues to Consideration: An Exercise in Comparative Analysis, 72 HARV. L. REV. 1009 (1959); Macaulay, Justice Traynor and the Law of Contracts, 13 STAN. L. REV. 812 (1961); Fried, Two Concepts of Interests: Some Reflections on the Supreme Court's Balancing Test, 76 HARV. L. REV. 755 (1963); Friedman, Law, Rules and the Interpretation of Written Documents, 59 NW. U.L. REV. 751 (1965); Macaulay, supra note 2; Dworkin, The Model of Rules, 35 U. CHI. L. REV. 14 (1967); K. DAVIS, DISCRETIONARY JUSTICE: A PRELIMINARY INQUIRY (1969); P. SELZNICK, LAW, SOCIETY AND INDUSTRIAL JUSTICE 11-18 (1969); Kennedy, Legal Formality, 2 J. LEG. STUD. 351 (1973); R. UNGER, LAW IN MODERN SOCIETY 203-16 (1976); A. KATZ, Vagueness and Legal Control of Children in Need of Supervision, in STUDIES IN BOUNDARY THEORY (unpublished manuscript on file at Harvard Law Review, 1976). 1688 HARVARD LAW REVIEW [Vol. 89:1685 ing in a determinate way. Ihering used the determination of legal capacity by sole reference to age as a prime example of a formally realizable definition of liability; on the remedial side, he used the fixing of money fines of definite amounts as a tariff of damages for particular offenses.5 At the opposite pole from a formally realizable rule is a standard or principle or policy. A standard refers directly to one of the substantive objectives of the legal order. Some examples are good faith, due care, fairness, unconscionability, unjust enrichment, and reasonableness. The application of a standard requires the judge both to discover the facts of a particular situation and to assess them in terms of the purposes or social values embodied in the standard.6 It has been common ground, at least since Ihering, that the two great social virtues of formally realizable rules, as opposed to standards or principles, are the restraint of official arbitrariness and certainty. The two are distinct but overlapping. Official arbitrariness means the sub rosa use of criteria of decision that are inappropriate in view of the underlying purposes of the rule. These range from corruption to political bias. Their use is seen as an evil in itself, quite apart from their impact on private activity. Certainty, on the other hand, is valued for its effect on the citizenry: if private actors can know in advance the incidence of official intervention, they will adjust their activities in advance to take account of them.