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Tom Stilp JD, MBA/MM, LLM, MSC
Contracts provide “security and stability to human affairs” and are “vital to the welfare of society.” Rotkiske v. Klenn, 890 F. 3d 422, 425 (3 rd Cir. 2018), citing Gabelli v. S. E. C., 568 U.S. 442- 448-49
(2013).
Based on the fundamental belief in freedom of contract and honoring the legal intentions of competent contracting parties, there exists an almost sacred concern in our law for protection of the integrity of a written contract.
The old maxim, “there is no deal until money changes hands,” reflects the simplicity of any transaction but ignores the intricacy of the accomplishment. Contracts provide a fascinating interplay between the public and private arenas. Essentially private agreements, contracts create value for the parties. People adhere to agreements because their adherence develops a reputation for trustworthiness and avoids the value-redistributing effects of lawsuits. Nonetheless, people may breach contracts when it is value-maximizing to do so. When contracts are breached, the parties move to the courts for public enforcement of their agreement.
A written contract is thought to be more reliable evidence of the parties’ intentions than recollection, past conversation, or material outside of the contract. The Illinois Supreme Court has commented: “The object of judicial construction . . . is to determine the intent of the parties and to carry it out, but it is not the function of a court to modify the document or create new terms different from those to which the parties have agreed.” Northern Trust Co. v. Tarre, 86 Ill.2d 441, 427 N.E.2d 1217, 1221, 56 Ill.Dec. 671 (1981). See also In re Estate of Ierulli, 167 Ill.App.3d 595, 521 N.E.2d 654, 658, 118 Ill.Dec.372 (3d Dist. 1988). A problem arises, however, when the written contract is not complete or can be read with different meanings. One party may take advantage of another.
And when a judge interprets an agreement, judgments can be biased based on a search for information. Social psychologists have shown that when people search for new information, they want to confirm pre-existing beliefs. This is called “confirmation bias.”
Judges, for example, work backwards by looking for information that supports the desired result. The approach is opposite of what should occur, namely, that judges perform the analysis first then allow the results to drive the conclusion.
Knowing how, and when, a particular judge has “confirmation bias” takes years of experiential learning. Having taken over 150 cases to trial, we are able to assess the best way to present a contract interpretation to get a favorable ruling.
