Adam Cherlin Contracts: Gordon 1/23,2008 Contracts Final Exam Question I: A: !

s "rie#ance a"ainst $ano#er %an& '$%( has su)stantial merit des*ite the +act that such credit card contract terms are ,uite common- .e /ill consider three se*arate issues re"ardin" !s contract in turn- First, usin" the doctrine o+ unconsciona)ilit0 /e /ill attem*t to #oid the initial contract, and as such allo/ to /ithhold her *er+ormance- 1he second de+ense a"ainst

$%!s claim that /ill )e considered is /hether the contract contained de+initeness su++icient to satis+0 contract la/- Finall0, it /ill )e ar"ued that !s su)se,uent a"reement in 2arch o+ 2003, to *a0 at 204 interest does not render a consideration o+ the initial contract moot, as the 2arch 2003 a"reement is similarl0 #oida)le on "rounds o+ unconsciona)ilit0, and undue in+luence1he de+ense o+ unconsciona)lit0 re,uires that the contract mani+est )oth *rocedural and su)stanti#e unconsciona)ilit0- 5rocedural unconsciona)ilit0 relates to the manner in /hich the a"reement /as made, /hile su)stanti#e unconsciona)ilit0 relates to the terms themsel#es '6ee Armendariz(- 5rocedural unconsciona)ilit0 is "enerall0 de+ined as clear ine,ualit0 o+ )ar"ainin" *o/er- .hile this ma0 mani+est itsel+ in #arious manners, a contract o+ adhesion is considered *rocedurall0 unconsciona)le on its +ace- 1he credit card contract that $% su**lied to +ormal contract, dra+ted )0 its attorne0s, the terms o+ /hich /as a

had no chance to ne"otiate- 1his

clearl0 meets the de+inition o+ a contract o+ adhesion, and as such the initial contract is *rocedurall0 unconsciona)leA +indin" that this contract is adhesi#e on its o/n /ill not, ho/e#er, render the contract #oid- A +indin" o+ su)stanti#e unconsciona)ilit0 is additionall0 re,uired- 1he Armendariz court delineated t/o #arieties o+ su)stanti#e unconsciona)ilit0: hidden or sur*rise terms, and un+air

Adam Cherlin Contracts: Gordon 1/23,2008 terms that are shocking to the conscience- Althou"h +orm contracts /ith small *rint )arel0 reco"ni7a)le as En"lish are ,uite common in modern credit card contracts, it should nonetheless )e ar"ued that this *ractice is inconsistent /ith contract doctrine, and such contracts should )e +ound #oida)le- 1he contract is ,uestion here certainl0 mani+ests the ,ualit0 o+ 8hidden terms-9 1he term that o):ects to is the a)ilit0 o+ $% to radicall0 ad:ust its interest rates at /ill- 1his

term a**eared in +ine *rint in !s initial mailin" and in the densel0 *rinted terms she /as later mailed- 1he *rintin" o+ this term clearl0 is hidden, )ut the /ordin" o+ the interest ad:ustment term is li&e/ise #a"ue in li&el0 to )e misunderstood- 6*eci+icall0, the +act that this ad:ustment term )ecomes o*era)le i+ the customer 8is determined +or an0 other reason to )e an increased credit ris&-9 It is unli&el0 that an0 indi#idual contractin" +or a credit rate /ill reco"ni7e that 8an0 other reason9 could allo/ ad:ustment ,uite literall0 +or an0 reason- 1he *ro)lem lies in $%!s *ercei#ed credentials- o consumer /ill assume that a ma:or %an& /ould )e a)le to sustain )usiness /hen su):ectin" its customers to such *ractices- As such, the0 /ill li&el0 inter*ret 8an0 reason9 to mean an0 reasona)le reason- 1here is little chance that /as a/are o+ the +act that

a**l0in" +or a 2ac0!s discount card /ould allo/ $% to raise her interest to o#er three times its ori"inal *ercenta"e1hat +act that these terms are hidden also *recludes an0 claim on $%!s *art that the contract /as not adhesi#e, due to the o*t;out clause, /hich allo/s the customer to cancel +urther usa"e and retain their ori"inal interest rate i+ /ritten notice is made in 30 da0s- 1his is not su++icient to render the contract non;adhesi#e, )ecause the o*t;out term itsel+ is hidden- 1he "eneral *u)lic, un#ersed in the intricacies o+ contract mani*ulation /ill not )e accustomed to sendin" +ormal /ritten notice, and /ill not to loo& +or such terms- 1here+ore, :ust as the 6u*reme Court +ound in Adams v. Circuit City Stores Inc., such an o*t;out clause /ill not sa#e a contract

Adam Cherlin Contracts: Gordon 1/23,2008 +rom a +indin" o+ adhesion1he second #arieties o+ su)stanti#e unconsciona)ilit0 is li&e/ise a**lica)le here- 1he terms $% set +orth in its interest ad:ustment clause are mani+estl0 un+air and shoc&in" to the conscience- 1his )an& ad#ertises its credit card as a /a0 o+ relie#in" hea#0 interest *a0ments, and encoura"es its customers to trans+er de)t to the card to this end, then uses this #ulnera)ilit0 to en+orce un+oreseen and de#astatin" increases in its customers< credit- %0 en"a"in" in this *ractice $% is a)le to +urther entra* its customers to continue *a0ment at its un+oreseen and outra"es interest rate )ecause consumer /ill +ear de+aultin", and dama"in" their credit ratin", as E#erett, $%!s re*resentati#e, threatened /ith- 1hus, e#en i+ the court rules that the 8small

*rint9 issue /ith the interest ad:ustment clause is not unconsciona)le due to its customar0 usa"e, it nonetheless can +ind the contract unconsciona)le on the "rounds o+ its shoc&in" un+airnesso/ i+ the court rules in our +a#or, and #oids the contract )ecause o+ unconsciona)ilit0, the ,uestion remains as to /hat remed0 is a#aila)le to - I+ the contract is deemed #oid, /e should demand that she )e a)le to /ithhold her *er+ormance o+ the contract, i-e- that she is not re,uired to *a0 an0 interest on the )ase o+ her de)t- I+ this is "ranted, $% /ill onl0 )e entitled to *a0ment o+ the )ase o+ !s de)t, minus the amount o+ interest she has alread0 *aid- IF the amount has *aid in interest has alread0 exceeded the )ase o+ the de)t, then she should see&

restitution o+ that amount, )ecause $% has )een un:ustl0 enriched )0 its ille"al dealin"sFurthermore, i+ the e#ents that surround s dealin"s /ith $% ha#e caused her credit ratin" to )e ne"ati#el0 a++ected, a tort claim a"ainst $% should )e +iled /hich attem*ts to see& dama"es +or *ain and su++erin", as /ell as *uniti#e dama"es to *re#ent Credit Com*anies +rom +urther dis"race+ul dealin"s- =r, alternati#el0, can see& reliance dama"es a"ainst $% +or the dama"e

to her economic condition that resulted +rom rel0in" on $% to deal /ith her de)t, rather than a

Adam Cherlin Contracts: Gordon 1/23,2008 more honest %an&- 1he *ossi)le amount o+ dama"es can recei#e in either #enue should )e

com*ared and the ri"ht amount should )e *ursued- %ecause dama"e to one!s credit ratin" can lead to su)stantial economic detriment, and such dama"es are not reco#era)le under a tort claim, it is *ossi)le that the reliance claim /ill )e "reater, )ut he +acts must )e +urther researchedAnother route in see&in" to #oid and $%!s initial contract is to claim it lac&s

de+initeness- 6eemin"l0, the customer o+ a credit com*an0 is *a0in" interest in return +or the )an& in ,uestion holdin" its de)ts tem*oraril0- >nder classical contract doctrine +or the a"reement to )e #alid, the terms must )e de+inite- >nder the ad:ustment terms, a"reed to *a0

an amount o+ mone0, to )e determined, +or $% holdin" her de)t- !s *er+ormance is le+t almost com*letel0 unde+ined- 1he +act that the initial interest rate /as set at 3-??4 is lar"el0 irrele#ant i+ $% is a)le to chan"e the rate at /ill- It /ould )e a&in to sales contract in /hich % a"ree to )u0 6!s car +or some amount o+ mone0, I /ill *a0 0ou ei"ht;thousand dollars no/, )ut 0ou 6 can demand more mone0 at an0 *oint in the +uture +or the car that /as sold- 1hat scenario certainl0 lac&s de+initeness, and is doctrinall0 identical to the contract $% created$% /ill li&el0 ar"ue that the initial interest rate o+ 3-??4 is de+inite, )ecause the consumer can loc& in that rate, )0 cancelin" their card!s +urther use )0 /ritten notice /ithin 30 da0s o+ the terms chan"e )0 $%- It is clear, ho/e#er, that $% has no ex*ectation that customers /ill actuall0 do as much, and sim*l0 inserts this o*t;out clause in a hidden manner, in order to de+lect claims o+ inde+initeness- 1he 30;da0 limit is clearl0 ar)itrar0, there is no concei#a)le need +or $% to &no/ its customer!s intent o o*t;out in that time +rame- I+ $% sti*ulated in its contracts that customers could o*t;out o+ its interest chan"es )0 +l0in" +rom e/ to Alas&a @0 times in the month +ollo/in" the interest chan"e it /ould )e identical, )ecause neither that, nor the /ritten notice re,uirement ha#e an0 li&elihood o+ occurrin"- 1here is scarcel0 an instance

Adam Cherlin Contracts: Gordon 1/23,2008 ima"ina)le /here a customer /ould &no/in"l0 and +reel0 acce*t 20;304 interest rate increases, sim*l0 +or the 8*ri#ile"e9 to )orro/ +urther +unds +rom $%$% /ill similarl0 cite >-C-C- A 2;20? to +urther de+lect the *ro)lem o+ inde+initeness, /hich states, 8An a"reement modi+0in" a contract /ithin this Article needs no consideration to )e )indin"-9 1he0 /ill ar"ue that their contract modi+ication /as a"reed u*on, and the +act that did not "et an0thin" in return +rom $% is irrele#ant under >-C-C- standards- 1here are three ar"uments a"ainst this claim- First, A 2;20? deals /ith a #alid contract, /hich had de+inite terms that /ere su)se,uentl0 altered- 1his scenario is entirel0 di++erent +rom ours, in /hich there /as no initial a"reement, rather $% sim*l0 stated +rom the outset that /as to *a0 an amount o+

interest to )e determined )0 $% at an0time and e++ecti#el0 +or an0 reason- 6econd, as the o++icial comment on A 2;20? states, 8modi+ications made thereunder must meet the test o+ "ood +aith im*osed )0 this Act-9 1he same ,ualities o+ the contract that *rom*ted our ar"ument +or its unconsciona)ilit0, /ill testi+0 to the +act that $%!s interest modi+ications /ere not made in "ood +aith- It had no ex*ectation that /ould )e a/are o+ her o*t;out a)ilit0, and too& ad#anta"e o+

this +act in )ad +aith to im*ose se#ere increases in her interest rate- Finall0, althou"h the >-C-C*resents doctrinal conce*ts seemin"l0 "enerall0 a**lica)le, it must )ee remem)ered that its terms are meant to a**l0 onl0 to sales contracts, and *rimaril0 those )et/een commercial entities- Contract modi+ication is common*lace and ex*ected /hen occurrin" )et/een or"ani7ations /hich ha#e re*eated and cordial dealin"s- A 2;20? merel0 exists to ac&no/led"e this *ractice in the e#ent that those entities! cordialit0 is re*laced )0 animus- 1his is ,uite distinct +rom the dealin"s o+ an indi#idual consumer in relation to a lar"e +aceless cor*orate entit0- 1he consumer themsel#es is su):ect to unaltera)le and nonne"otia)le term, and ex*ect that the cor*oration /ill )e similarl0 8loc&ed in-9 1here+ore, >-C-C- A 2;20?!s *rinci*les ha#e

Adam Cherlin Contracts: Gordon 1/23,2008 little *lace in determinin" the #ia)ilit0 o+ and $%!s contractand

1he +inal issue that must )e considered is the 2arch 2003 a"reement )et/een E#erett, $%!s re*resentati#e, in /hich

a"reed to &ee* her account o*en +or +ear o+ credit ratin"

dama"e and acce*ted a 204 interest rate- $% /ill ar"ue that e#en i+ the o#er ar"uments are "ranted, that this su)se,uent a"reement renders that discussion moot, as a"reed to a ne/

contract /ith a loc&ed in interest rate o+ 204- $o/e#er, this a"reement should )e similarl0 #oided on "rounds o+ undue in+luence- In Alaska Packers v. Domenico the court in#alidated a contact +ormed )0 the *arties, )ecause the *ac&ers demanded hi"her /a"es at a time that Comenico /as una)le to +ind re*lacements- In other /ords, /hen due to one *art0!s machinations a situation is set u* /here)0 the other *art0 has no o*tion to re+use the court can #oid the contact on "rounds o+ undue in+luence- 1he situation /ith !s 2arch 2003 a"reement matches the Alaska case almost exactl0- =ne *art0, $%, set u* a s0stem /here it could char"e ar)itraril0 hi"h interest rates- .hen sou"ht to esca*e the interest rates )0 ta&in" out loans to

exit her a"reement, $% +orced her to sa0 on /ith them des*ite their rates, throu"h the threat o+ ill a++ectin" her credit ratin" )ecause o+ de+ault- $o/e#er, it is o)#ious that the de+ault here /as created )0 $%, as it /as not a de+ault on the loan *a0ment itsel+, )ut rather a +ailure to o*t;out in /ritin", a term /hich $% had no ex*ectation /ould )e +ul+illed- In this situation $% created a situation, intentionall0, in /hich had no o*tion )ut to ac,uiesces to $%!s demands- As such

the 2arch 2003 a"reement should )e #oided on the "rounds o+ undue in+luenceAs a +inal note, i+ the court is reluctant to #oid !s contract on these doctrinal "rounds )ecause o+ the *ractices descri)es *er#asi#eness in the industr0, a line o+ ar"ument )ased on *u)lic *olic0 concerns should )e en"a"ed- It is clear to an0 morall0 uncorru*ted indi#idual that $%!s *ractices are *ur*ose+ull0 desi"ned to *re0 on indi#iduals una/are o+ contract intricacies-

Adam Cherlin Contracts: Gordon 1/23,2008 Its attem*t to lure in #ictims /ith *romises o+ lo/ interest, and then suddenl0 chan"e its terms *oses a su)stantial ris& to a lar"e *ortion o+ the *u)lic- As such the court should in#alidate the contact on this )asis alone i+ necessar0-

%: 1he *ro)lem o+ ex*loitati#e credit card contracts is *er#asi#e in modern America- 1hese com*anies attem*t to ex*loit the *u)lic!s consumerism, lar"el0 +ueled )0 mar&etin" industries, and loc& consumers into inesca*a)le credit card de)t, /hich can )e increased on a /himEes*ecta)ilit0 is "ranted to the industries *ractices )0 rel0in" *artiall0, thou"h not in a )indin" manner, on credit re*ort institutions that "i#e ,uasi;scienti+ic su**ort +or the %an&s! ex*loitati#e *ractices- As is o+ten the case /ith statistics, the0 can, and o+ten are mani*ulated to suit the interests o+ *arties +inanciall0 connected- %ecause the credit re*ort industr0!s sole client is )an&in" and credit com*anies, the *ro)lem o+ corru*tion is li&el0- It is in credit re*ort com*anies interest to *lease its customers, i-e- )an&s, )0 "i#in" un+a#ora)le credit re*orts to those in de)t to it, thus :usti+0in" immense interest rate increases- %ecause o+ the entrenched and +ormall0 res*ecta)le ,ualit0 o+ these *ractices it is necessar0 to ta&e le"islati#e action to re"ulate such *racticesA *ossi)le solution is to outla/ ad:usta)le interest rates entirel0 +rom the loan *rocess1hat is to sa0, *art0 initiated rate ad:ustment- .hen a lender to credit card com*an0 acce*ts an indi#idual into their *ro"ram the0 must *resent a +ixed rate o+ interest )ased on their e#aluation o+ their current status- 1hus, the credit ratin" industr0 /ould still ser#e some *ur*ose, )ut /ould not )e as susce*ti)le to corru*tion- %an&s /ill ar"ue that in+lation /ould render +ixed interest economicall0 un#ia)le, )ut i+ a re"ulator0 a"enc0 set the rate o+ interest ad:ustment )ased on

Adam Cherlin Contracts: Gordon 1/23,2008 their calculations o+ in+lation, then this com*laint +orm the )an&in" industr0 /ould )e resol#edA similar ar"ument /ill )e made that /ith this schema )an&s /ill ha#e to char"e hi"her interest rates u*+ront to co#er *ossi)le losses, and consumers /ill )e hurt- 1his ar"ument is dece*ti#e, ho/e#er- Currentl0 lender co#ers losses )0 raisin" indi#idual interest rates accordin" to their o/n :ud"ments- 1his hurts the indi#idual a++ected to a de"ree unima"ina)le in seemin"l0 ci#ili7ed societ0, /hereas, o#erall rate increase /ould s*read the ris& across all consumers, thus lessenin" the )urden to a mana"ea)le le#el, /ith the added )ene+it o+ remo#in" +raud and dece*tion +rom the credit industries *ractices%an&s /ill li&el0 ar"ue that )0 im*edin" their a)ilit0 to ad:ust interest rates, the "o#ernment /ill e++ecti#el0 ruin their )usiness, )0 eliminatin" mar&etin" #ia)ilit0- Credit card com*anies /ill not )e a)le to send out mail, declarin" lo/ interest rates, )ecause it /ill need to examine the indi#idual a**licant more care+ull0 )e+ore *romisin" a +ixed lo/ interest rate- 1his, ho/e#er, is exactl0 the t0*e o+ acti#it0 that this re"ulation /ould see& to cur)- 1he lendin" industr0 harms the *u)lic "reatl0 )0 *romisin" loan contracts that it has no intention o+ +ul+illin"1his re"ulation /ould im*ose sorel0 needed disci*line on the lendin" industries *ractices- 1here is no *olic0 concern that /ould re,uire the state o+ a)ide )0 lenders! unconsciona)le contracts sim*l0 to sa#e them the trou)le o+ ad:ustin" their dece*ti#e mar&etin" strate"iesAlthou"h this de"ree o+ re"ulation /ould li&el0 ha#e drastic e++ects on the lendin" industr0, such re"ulation is not /ithout *recedent- 1he dece*ti#e contractin" *ractices o+ li+e insurance resulted in hea#0 le"islati#e intrusion, )ecause o+ the mani+est and o#er/helmin" in:ustice o+ that industr0!s *ractices- 1he current crisis in the lendin" industr0 is se#ere, and intolera)le enou"h to /arrant similarl0 drastic measuresQuestion II:

Adam Cherlin Contracts: Gordon 1/23,2008 1he ,uestion o+ /hether or not in+ormall0 coha)itin" cou*les should )e "rated le"al reco"nition to *romises made in that relationshi* *resents numerous di++iculties- 1he essence o+ the *ro)lem is the in+ormal nature o+ these arran"ements themsel#es- 2ore o+ten than not, indi#iduals li#in" in these situations are not certain o+ the extent o+ the others commitment, and li&el0 are un/illin", or a+raid to ma&e such issues ex*licit- onetheless, the indi#iduals in these scenarios o+ten are *romised, and *romise in turn certain economic interests /hich are intert/ined /ith their romantic relationshi*- I+ a man a"rees to su**ort his *artner throu"h school, and does so +or a num)er o+ 0ears /ith the ex*ectation that the same /ill )e returned in &ind at a later date, does this constitute a )indin" contractual a"reement, or sim*l0 a "i+t /ith the ho*e o+ reci*rocit0F Furthermore, it is *ossi)le that all such arran"ements ha#e the im*lied term, 8so lon" as the relationshi* *ersists-9 %ecause indi#iduals t0*icall0 do not enter into such mutuall0 su**orti#e arran"ements /ith non;romantic +riends and ac,uaintances, it /ould seem that the romantic in#ol#ement itsel+ is a *redicate o+ the a"reement- I+ so, does its dissolution render the contract ino*era)le at such an e#ent, or can the romantic in#ol#ement )e seen as a *er,uisite +or the a"reement to occur, )ut not a condition o+ its continued #ia)ilit0F A standard )ased a**roach /ould )e a)le to deal /ith *articular situations and determine, /ith *ro*er e#idence, ho/ to ans/er these ,uestions on an indi#idual )asis- $o/e#er, discretionar0 re"imes can )e di++icult to im*lement, certainl0 it /ould )e here /here the :ud"e /ould )e as&ed to consider the nature o+ the indi#iduals relationshi*, an issue li&el0 misunderstood )0 the *arties themsel#es- As such the three rules /ill )e considered as the0 relate to exce*tional cases, as /ell as standard cases, /ith the "oal o+ e#aluatin" their res*ecti#e a)ilit0 to a**roximate the standard that lies at the core o+ this ,uestionCra+t 6tatute 1 *ro*oses that a"reements )et/een in+ormall0 coha)itin" cou*les should

Adam Cherlin Contracts: Gordon 1/23,2008 )e unen+orcea)le, unless the a"reement can )e sho/n to )e inde*endent o+ their romantic relations- 1his *ro*osal *ri#ile"es the understandin" o+ coha)itation /hich sees all a"reements )et/een *arties as "i+ts, or *romises de*endant on the continued #ia)ilit0 o+ their romantic in#ol#ement- It does, ho/e#er, allo/ the :ud"e to consider exce*tional cases /here *urel0 economic a"reements occur )et/een the *arties- 1his a**roach has the ad#anta"e o+ ac&no/led"in" the in+ormal nature o+ such relationshi*s, and allo/s indi#iduals to en"a"e in such relationshi*s /ithout +ear o+ continued contractual o)li"ation- I+ the court /ere to "rant coha)itants the same *rotections as married cou*les, there /ould )e e++ecti#el0 no distinction )et/een the t/o manners o+ li#in"- 1his is not an ar"ument )ased on the anachronistic notion o+ *romotin" marria"e, )ut rather that indi#iduals should )e allo/ed to li#e to"ether, i+ the0 *lease, /ithout +ear o+ massi#e +uture economic )urden- 1he esca*e #al#e o+ allo/in" en+orcea)ilit0 i+ inde*endence +rom the relationshi* is +ound is essential to this a**roach- It allo/s the :ud"e not onl0 to en+orce o)#iousl0 economic arran"ements )et/een the t/o, )ut concei#a)le is a manner in /hich mani+est in:ustice can )e *re#ented )0 classi+0in" the a"reement as 8inde*endent9 to allo/ en+orcea)ilit0- 1his discretionar0 a)ilit0 is li&el0 to )e utili7ed, as it is a clear *i"eonhole /hich /ill ma&e :ud"es less +ear+ul in its im*lementation, )ut is #a"ue enou"h to allo/ +or the usa"e descri)ed a)o#e, /ho can trul0 determine /hat is or is not totall0 inde*endent +rom romantic in#ol#ementCra+t 6tatue 2 is the mirror ima"e o+ Cra+t 1, in terms o+ its e++ect o+ indi#iduals! actionsIt ex*licitl0 allo/s :ud"es discretion to en+orce a"reements /here mani+est in:ustice /ill occurAlthou"h this o*tion attem*ts to limit the sco*e o+ en+orcea)ilit0 )0 statin" 81he remed0 /ill )e limited s :ustice re,uires,9 this /ill not )e su++icient to allo/ coha)itants the +reedom to li#e to"ether /ithout su)stantial +ear o+ economic entra*ment- 1he discretionar0 standards *ro#ided

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Adam Cherlin Contracts: Gordon 1/23,2008 are so #a"ue as to encom*ass almost an0 scenario- Consider, +or exam*le, i+ an unem*lo0ed man li#es +or a num)er o+ 0ears /ith a /oman /ho *ro#ides him /ith economic sustenance- Ima"ine that the /oman demanded at some *oint that the man contri)ute economicall0, and he *ersuaded her to su**ort him +or another 0ear to 8+inish his no#el-9 Althou"h the man relies hea#il0 on the 8*romise9 o+ the /oman, it /ould )e clearl0 un:ust to +orce her to continue his su**ort in the e#ent o+ their romantic relationshi*!s dissolution, and 0et such a rulin" /ould )e consistent /ith this dra+t!s terms- I+ the le"islature /ants to allo/ +or coha)itation, /ithout the o)li"ations o+ marria"e, then it /ill )e )estiar0 to allo/ +or such *romises to )e made /ithout le"al en+orcea)ilit0- Indeed, it is unli&el0 that the /oman in our scenario understood that her *romise /as de*endent o+ the im*licit assum*tion o+ their relationshi*!s continued #ia)ilit0Cra+t 6tatue 3 de*arts +rom the #irtues o+ Cra+t 1, in a direction o**osite that o+ dra+t 2.hile 2 /ould result in the o#er en+orcement o+ coha)itants *romises, 3 /ould result in its under en+orcement- %oth dra+ts 1 and 2 allo/ :ud"es some discretion in en+orcement, thus ta&in" a h0)ridi7ed rule/standard a**roach- Cra+t 3, in contrast su""ests a non;discretionar0 +ormal a**roach- o a"reements /ill )e en+orced unless in /ritin"- In e++ect this dra+t /ould render all coha)itants *romises unen+orcea)le, exce*t in the most unli&el0 o+ scenarios, a /ritten contractE#en in the +ormal arran"ement o+ marria"e, ante;nu*tial a"reements are ta)oo, and undesira)le )0 the *arties, it is e#en less li&el0 such /ritten documentation /ill occur in the more #olatile relationshi* )et/een coha)itants- In the 8I!ll su**ort 0ou throu"h school i+ 0ou su**ort me9 scenario coha)itants /ill ta&e on su)stantial )urden, and li&el0 ex*ect return inde*endent o+ their relationshi*, e#en i+ the0 do not /ish to ma&e this ex*licit at the time- >nder the re"ime o+ this dra+t, no such a"reements /ill )e en+orcea)leIt should )e o)#ious +orm the *receedin" discusiion that Cra+t 6tatute 1 is +a#ored )0 this

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Adam Cherlin Contracts: Gordon 1/23,2008 author- It allo/s coha)itants the +reedom to li#e to"ether /ithout +ear o+ su)stantial economic o)li"ation, and is consistant /ith the lar"el0 in+ormal ,ualit0 o+ such relationshi*s, and the *romises made therein- Cra+t 3 is +ar too s/ee*in" in its exclusion o+ all in+ormal a"reements, /hile Cra+t 1 ma&es the en+orcea)ilit0 o+ exce*tional cases *ossi)le, 0et allo/s them to remain exce*tions- It is not the le"islature!s intention to +orce marria"e;li&e o)li"ations on coha)itants, as Cra+t 2 /ould result in, )ut rather sim*l0 to remo#e the ta)oo on en+orcement, in exce*tional cases /here contractual a"reements ha#e occurred, or mani+est in:ustice /ould result +rom a lac& o+ en+orcement-

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