Contractual Knowledge: One Hundred Years of Legal Experimentation in Global Markets
Published by EH.Net (August 2017)
Grégoire Mallard and Jérôme Sgard, editors, Contractual Knowledge: One Hundred Years of Legal Experimentation in Global Markets. Cambridge: Cambridge University Press, 2016. xix + 403 pp. $125 (hardback), ISBN: 978-1-107-13091-3.
Reviewed for EH.Net by Victoria Barnes, Max Planck Institute for European Legal History.
This book aims to trace the meaning of the term “contract.” A contract, as it is traditionally understood, is an agreement among parties that comes with a set of expectations about the parties’ performance as well as creating certain legal obligations and rights. These expectations naturally vary. In their edited collection, Grégoire Mallard (Graduate Institute of International Studies, Geneva) and Jérôme Sgard (Sciences Po, Paris) demonstrate how the legal and social construction of a contract has developed over the last hundred years. In doing so, they place a particular emphasis on transactions that take place internationally in global markets. To trace these changes across a number of case studies, Mallard and Sgard create the notion of “contractual knowledge.” This is an unashamedly interdisciplinary and socio-legal concept as the chapters focus on explaining the thoughts of those who made contracts rather than simply those who enforced them in legal proceedings. The edited collection, therefore, considers the views of economists, politicians, diplomats, businesses, lobbyists and investors much more than those in the legal profession or with legal training.
The book begins with an introduction written by the editors and this is where they expound the theory which underpins the entire collection. The explanation here is unusually lengthy and Mallard and Sgard consider their aims, objectives and findings in considerable depth. Since it is tends to be difficult to unite groups of scholars from different jurisdictions — let alone different disciplines — to work in a common legal framework with shared concepts and language, this approach should be commended. The explicit discussion of the theory helps the reader to understand the book’s contribution and it pulls together what could have easily become disparate chapters which were related somewhat distantly.
The edited collection is divided into three parts which consider sovereign debt agreements, the role of international organizations, and the structuring of fields. The variety of subjects and case studies on offer here is exceptional. Chapter 2 is the first substantive analytical chapter and this is an excellent starting point. Juan H. Flores Zendejas takes a long-term perspective of sovereign debt contracts and provides background information and draws parallels between different periods. This imparts a good deal of the historical content needed to appreciate the later chapters of this section. In Chapter 3, W. Mark C. Weidemaier, Mitu Gulati, and Anna Gelpern investigate what happens when governments write contracts by focusing on the construction of modification clauses in sovereign debt contracts. Stephen C. Nelson closes this section with a chapter examining the pari passu clause and also currency denomination.
The second part is led by Sgard’s chapter and this is one of the strongest pieces of the book. Sgard considers the choice of courts for international arbitration. He notes the declining power of national groups and the reasons behind the political choice to eventually establish the International Chamber of Commerce in Paris after short-lived rivals were founded in London and New York. In the next chapter, Yves Dezalay and Bryant G. Garth add to this discussion by examining the corporate and commercial lawyers attached to the International Chamber of Commerce and their national and transnational battles. Chapter 7, by Ariel Colonomos and Mallard, is another excellent contribution which is entitled “The Duty to Repair in Practice: The Hundred Years History of a Legal Concept.” This title is perhaps misleading. It does not cover the provisions about the seller’s duty to repair, replace or refund the value of goods under the Sales of Goods Act or the Uniform Commercial Code as scholars of the United States, Great Britain and the commonwealth countries would probably expect. Rather, it considers divisions over agreements about war reparations from World War I to the Cold War. In Chapter 8, Marco Bertilorenzi and Giuseppe Telesca examine informal modes of regulation as mechanisms which kept prices artificially high. This chapter is highly innovative and it takes a form of prosopography to explore the social capital of financial elites in Italy and France.
Several themes and issues overlap in the final section. Chapter 9, written by Gregory Shaffer and Michael Waibel, investigates money orders and the International Monetary Fund. They dismiss the assumption that soft law or informal rules strengthen as they become clearer over time. Bruce Carruthers in Chapter 10 considers the way investors and regulations use knowledge to value assets. The last chapter returns to the long-run historical analysis drawing the essays together. Susan Block-Lieb and Terence Halliday trace developments in international private and public law using ecology theory with particular emphasis on the Hague Conference on Private International Law, the International Institute for the Unification of Private Law (later known as UNIDROIT) and the UN Commission on International Trade Law (UNCITRAL).
Altogether, the chapters in this book provide a set of valuable and interesting findings. When taken as a whole, they show the international convergence and then fragmentation of contractual knowledge over the course of the twentieth century. They further our understanding of the chronology of this process, while avoiding grand theorizing about when this occurred. They show that in some instances, the fragmentation began much earlier than expected but, in others, divergence began only twenty years ago. Mallard and Sgard do not draw these microstudies together by turning points or periodization but by the scientific framework being developed. In furthering the theoretical concept of contractual knowledge, they demonstrate the multiplicity of actors but also the role of nations in this process of generating beliefs and interpretations. Contractual knowledge was, as these twelve chapters show, not derived from one state or group — despite the power of the United States in the twentieth century and Great Britain in the late nineteenth century.
Overall, this book offers a set of insightful and convincing arguments which explain how governments and other international actors created and shared their interpretations of contracts. These ideas were often disputed by other groups. With a broad coverage of jurisdictions and legal systems, it provides much for those with an interest in globalization, international transactions and the decline of national bargaining power. It will interest readers who are looking beyond the traditional courtroom accounts to see how international commercial practice and understandings developed. The index is also particularly useful for those interested in locating the discussion of people and/or organizations.
Victoria Barnes is a Senior Researcher Fellow at the Max Planck Institute for European Legal History in Frankfurt am Main, Germany. She previously held posts at Georgetown University and the University of Reading and has worked in the facilities of law, business, and history. She has recently published an article in the Journal of Legal History which considers how English courts reacted to the contractual rights which were given to shareholders and company managers.
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