Recasting the Common Law: The Management of Risk and Relationship
Classical legal theory viewed the common law as a corrective for harms occurring in the past. But in the early twentieth century the common law shifted its focus from reparation to management of ongoing relationship and risk, a forward-looking concept. These developments occurred in contract law through the gradual accommodation of modern distribution systems, including greater toleration of long-term “relational” agreements in which neither price nor quantity were specified. Filling in such “gaps” required objective doctrines about business behavior, however, leading to notable differences in the treatment of commercial and noncommercial contracts. Property law became more “regulatory” of ongoing relationships, particularly in landlord-tenant law and land use. Tort law became recast as a problem in risk management, reflected in Holmes’s external standard and rational expectations negligence theories; development of statistical and actuarial methods for assessing causation and proximate cause; and debate over negligence versus strict liability as tort standards.
common law, tort, contract, property, Holmes, risk management, proximate cause, negligence, strict liability
The Opening of American Law: Neoclassical Legal Thought, 1870-1970
Hovenkamp, Herbert, "Recasting the Common Law: The Management of Risk and Relationship" (2014). Book Chapters. 55.