Contract Law - Department Faculty of Law [PDF]

Chapter 9

Contract Law

Contract law is one of the most basic areas of private law. Private law concerns the obligations individuals owe to one another (in contrast to public law, which considers the obligations of citizens to their government, and vice versa). Contract law considers the role of private agreement in creating obligations. One way to think about contract law is to think of it as a way for individuals to impose obligations on themselves. There is no obligation to enter into contracts: no one is forced to enter into an agreement without his or her consent. However, once we decide to make a contract, the law enforces the obligations we have imposed on ourselves. Of course, whether we have imposed obligations on ourselves, either by contract or otherwise, is itself a legal question. In contract law, the parties reach agreement through a formation process that characteristically begins with an offer by the party known at law as the “offeror.” The offeror creates in his or her counterpart, the “offeree,” what is know as “the power of acceptance.” By making an offer, the offeror creates the possibility that the offeree will accept the offer, thereby binding the offeror to the offer as made. If the offeree alters the offeror’s offer, the common law considers this a counteroffer. Now the original offeror becomes the offeree, with the power of acceptance. For a promise to be enforceable at law, the common law requires that the promise be supported by consideration or some substitute therefor. For example, if someone offers to buy your house, that person will offer to buy it at a price. The price offered is itself a promise, albeit a conditional one: “If you accept my offer to purchase, I will pay you $100,000 in cash.” At one time, the law required that all contracts be supported by consideration. Over time, this requirement has been relaxed. In addition to consideration, the law enforces promises where the offeree relies on a promise made by the offeror (assuming the reliance was reasonable). For example, if I promise to make you a car salesperson if you leave your current employment, the mere act of leaving your current employment may be sufficient to keep me to my promise. Once it is clear that the parties have an enforceable agreement (a contract), we must identify the terms of the agreement. Sometimes the parties use the same words but mean different things by them. At other times the parties think they have an agreement when, in fact, they have vastly different assumptions about their agreement (for example, if the parties use a generic term like “chicken,” and there is a variety of types of chicken, it is unclear whether the parties have indeed reached agreement). As you read these opinions, try and summarize the arguments for each position. Do you see strengths and weaknesses in each opinion? Above all, try to identify the presuppositions of each opinion, those points of departure that form the intellectual center of each point of view.

v LOUISE W. HAMER v. FRANKLIN SIDWAY Court of Appeals of New York, Second Division 27 N.E. 256 (1891) Appeal from an order of the general term of the supreme court in the fourth judicial department, reversing a judgment entered on the decision of the court at special term in the county clerk’s office of Chemung county on the 1st day of October, 1889. The plaintiff presented a claim to the executor of William E. Story, Sr., for $5,000 and interest from the 6th day of February, 1875. She acquired it through several mesne assignments from William E. Story, 2d. The claim being rejected by the executor, this action was brought. It appears that William E. Story, Sr. was the uncle of William E. Story 2d., and that at the celebration of the golden wedding of Samuel Story and wife, father and mother of William E. Story, Sr., on the 20th day of March, 1869, in the presence of the family and invited guests, he promised his nephew that if he would refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he became 21 years of age, he

would pay him the sum of $5,000. The nephew assented thereto, and fully performed the conditions inducing the promise. When the nephew arrived at the age of 21 years, and on the 31st day of January, 1875, he wrote to his uncle, informing him that he had performed his part of the agreement, and had thereby become entitled to the sum of $5,000. The uncle received the letter, and a few days later, and on the 6th day of February, he wrote and mailed to his nephew the following letter: ‘Buffalo, Feb. 6, 1875. W. E. Story, Jr.—Dear Nephew: Your letter of the 31st ult. came to hand all right, saying that you had lived up to the promise made to me several years ago. I have no doubt but you have, for which you shall have five thousand dollars, as I promised you. I had the money in the bank the day you was twenty-one years old that I intend for you, and you shall have the money certain. Now, Willie, I do not intend to interfere with this money in any was till I think you are capable of taking care of it, and the sooner that time comes the better it will please me. I would hate very much to have you start out in some adventure that you thought all right and lose this money in one year. The first five thousand dollars that I got together cost me a heap of hard work. You would hardly believe me when I tell you that to obtain this I shoved a jack-plane many a day, butchered three or four years, then came to this city, and, after three months’ perseverance, I obtained a situation in a grocery store. I opened this store early, closed late, slept in the fourth story of the building in a room 30 by 40 feet, and not a human being in the building but myself. All this I done to live as cheap as I could to save something. I don’t want you to take up with this kind of fare. I was here in the cholera season of ’49 and ’52, and the deaths averaged 80 to 125 I was working for, told me, if I left them, to go home, but Mr. Fisk, the gentleman i was working for, told me, if I left them, after it got healthy he probably would not want me. I stayed. All the money I have saved I know just how I got it. It did not come to me in any mysterious way, and the reason I speak of this is that money got in this way stops longer with a fellow that gets it with hard knocks than it does when he finds it. Willie, you are twenty-one, and you have many a thing to learn yet. This money you have earned much easier than I did, besides acquiring good habits at the same time, and you are quite welcome to the money. Hope you will make good use of it. I was ten long years getting this together after I was your age. Now, hoping this will be satisfactory, I stop. One thing more. Twenty-one years ago I bought you 15 sheep. These sheep were put out to double every four years. I kept track of them the first eight years. I have not heard much about them since. Your father and grandfather promised me that they would look after them till you were of age. Have they done so? I hope they have. By this time you have between five and six hundred sheep, worth a nice little income this spring. Willie, I have said much more than I expected to. Hope you can make out what I have written. To-day is the seventeenth day that I have not been out of my room, and have had the doctor as many days. Am a little better to day. Think I will get out next week. You need not mention to father, as he always worries about small matters. Truly yours, W. E. STORY P. S. You can consider this money on interest.

The nephew received the letter, and thereafter consented that the money should remain with his uncle in accordance with the terms and conditions of the letter. The uncle died on the 29th day of January, 1887, without having paid over to his nephew any portion of the said $5,000 and interest. PARKER, J., (after stating the facts as above). The question which provoked the most discussion by counsel on this appeal, and which lies at the foundation of plaintiff’s asserted right of recovery, is whether by virtue of a contract defendant’s testator, William E. Story, became indebted to his nephew, William E. Story, 2d, on his twenty-first birthday in the sum of $5,000. The trial court found as a fact that ‘on the 20th day of March, 1869, William E. Story agreed to and with William E. Story, 2d, that if he would refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until should become twenty-one years of age, then he, the said William E. Story, would at that time pay him, the said William E. Story, 2d, the sum of $5,000 for such refraining, to which the said William E. Story, 2d, agreed,’ and that he ‘in all things fully performed his part of said agreement.’ The defendant contends that the contract was without consideration to support it, and therefore invalid. He asserts that the promisee, by refraining from the use of liquor and tobacco, was not harmed, but benefited; that that which he did was best for him to do, independently of his uncle’s promise,—and insists that it follows that, unless the promisor was benefited, the contract was without consideration,—a contention which, if well founded, would seem to leave open for controversy in many cases whether that which the promisee did or omitted to do was in fact of such benefit to him as to leave no consideration to support the enforcement of the promisor’s agreement. Such a rule could not be tolerated, and is without foundation in the law. The exchequer chamber in 1875 defined ‘consideration’ as follows: ‘A valuable consideration, in the sense of the law, may consist

either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other.’ Courts ‘will not ask whether the thing which forms the consideration does in fact benefit the promisee or a third party, or is of any substantial value to any one. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration for the promise made to him.’ Anson, Cont. 63. ‘In general a waiver of any legal right at the request of another party is a sufficient consideration for a promise.’ Pars. Cont. *444. ‘Any damage, or suspension, or forbearance of a right will be sufficient to sustain a promise.’ 2 Kent, Comm. (12th Ed.). Pollock in his work on Contracts, (page 166,) after citing the definition given by the exchequer chamber, already quoted, says: ‘The second branch of this judicial description is really the most important one. ‘Consideration’ means not so much that one party is profiting as that the other abandons some legal right in the present, or limits his legal freedom of action in the future, as an inducement for the promise of the first.’ Now, applying this rule to the facts before us, the promisee used tobacco, occasionally drank liquor, and he had a legal right to do so. That right he abandoned for a period of years upon the strength of the promise of the testator that for such forbearance he would give him $5,000. We need not speculate on the effort which may have been required to give up the use of those stimulants. It is sufficient that he restricted his lawful freedom of action within certain prescribed limits upon the faith of his uncle’s agreement, and now, having fully performed the conditions imposed, it is of no moment whether such performance actually proved a benefit to the promisor, and the court will not inquire into it; but, were it a proper subject of inquiry, we see nothing in this record that would permit a determination that the uncle was not benefited in a legal sense. Few cases have been found which may be said to be precisely in point, but such as have been, support the position we have taken. In Shadwell v. Shadwell, 9 C. B. (N. S.) 159, an uncle wrote to his nephew as follows: My dear Lancey: I am so glad to hear of your intended marriage with Ellen Nicholl, and, as I promised to assist you at starting, I am happy to tell you that I will pay you 150 pounds yearly during my life and until your annual income derived from your profession of a chancery barrister shall amount to 600 guineas, of which your own admission will be the only evidence that I shall receive or require. Your affectionate uncle, CHARLES SHADWELL

It was held that the promise was binding, and made upon good consideration. In Lakota v. Newton, (an unreported case in the superior court of Worcester, Mass.,) the complaint averred defendant’s promise that ‘if you [meaning the plaintiff] will leave off drinking for a year I will give you $100,’ plaintiff’s assent thereto, performance of the condition by him, and demanded judgment therefor. Defendant demurred, on the ground, among others, that the plaintiff’s declaration did not allege a valid and sufficient consideration for the agreement of the defendant. The demurrer was overruled. In Talbott v. Stemmons, 12 S. W. Rep. 297, (a Kentucky case, not yet officially reported,) the stepgrandmother of the plaintiff made with him the following agreement: ‘I do promise and bind myself to give my grandson Albert R. Talbott $500 at my death if he will never take another chew of tobacco or smoke another cigar during my life, from this date up to my death; and if he breaks this pledge he is to refund double the amount to his mother.’ The executor of Mrs. Stemmons demurred to the complaint on the ground that the agreement was not based on a sufficient consideration. The demurrer was sustained, and an appeal taken therefrom to the court of appeals, where the decision of the court below was reversed. In the opinion of the court it is said that ‘the right to use and enjoy the use of tobacco was a right that belonged to the plaintiff, and not forbidden by law. The abandonment of its use may have saved him money, or contributed to his health; nevertheless, the surrender of that right caused the promise, and, having the right to contract with reference to the subjectmatter, the abandonment of the use was a sufficient consideration to uphold the promise.’ Abstinence from the use of intoxicating liquors was held to furnish a good consideration for a promissory note in Lindell v. Rokes, 60 Mo. 249.... In further consideration of the questions presented, then, it must be deemed established for the purposes of this appeal that on the 31st day of January, 1875, defendant’s testator was indebted to William E. Story, 2d, in the sum of $5,000; and, if this action were founded on that contract, it would be barred by the statute of limitations, which has been pleaded, but on that date the nephew wrote to his uncle as follows:

Dear Uncle: I am 21 years old to-day, and I am now my own boss; and I believe, according to agreement, that there is due me $5,000. I have lived up to the contract to the letter in every sense of the word.

A few days later, and on February 6th, the uncle replied, and, so far as it is material to this controversy, the reply is as follows: Dear Nephew: Your letter of the 31st ult. came to hand all right, saying that you had lived up to the promise made to me several years ago. I have no doubt but you have, for which you shall have $5,000, as I promised you. I had the money in the bank the day you was 21 years old that I intend for you, and you shall have the money certain. Now, Willie, I don’t intend to interfere with this money in any way until I think you are capable of taking care of it, and the sooner that time comes the better it will please me. I would hate very much to have you start out in some adventure that you thought all right, and lose this money in one year. ... This money you have earned much easier than I did, besides acquiring good habits at the same time; and you are quite welcome to the money. Hope you will make good use of it. W. E. STORY. P. S. You can consider this money on interest.

The trial court found as a fact that ‘said letter was received by said William E. Story, 2d, who thereafter consented that said money should remain with the said William E. Story in accordance with the terms and conditions of said letter.’ And further, ‘that afterwards, on the 1st day of March, 1877, with the knowledge and consent of his said uncle, he duly sold, transferred, and assigned all his right, title, and interest in and to said sum of $5,000 to his wife, Libbie H. Story, who thereafter duly sold, transferred, and assigned the same to the plaintiff in this action.’ We must now consider the effect of the letter and the nephew’s assent thereto. Were the relations of the parties thereafter that of debtor and creditor simply, or that of trustee and cestui que trust? If the former, then this action is not maintainable, because barred by lapse of time. If the latter, the result must be otherwise. No particular expressions are necessary to create a trust. Any language clearly showing the settler’s intention is sufficient if the property and disposition of it are definitely stated. A person in the legal possession of money or property acknowledging a trust with the assent of the cestui que trust becomes from that time a trustee if the acknowledgment be founded on a valuable consideration. His antecedent relation to the subject, whatever it may have been, no longer controls. 2 Story, Eq. Jur., s 972. If before a declaration of trust a party be a mere debtor, a subsequent agreement recognizing the fund as already in his hands, and stipulating for its investment on the creditor’s account, will have the effect to create a trust. Day v. Roth, 18 N. Y. 448. It is essential that the letter, interpreted in the light of surrounding circumstances, must show an intention on the part of the uncle to become a trustee before he will be held to have become such; but in an effort to ascertain the construction which should be given to it we are also to observe the rule that the language of the promisor is to be interpreted in the sense in which he had reason to suppose it was understood by the promisee. White v. Hoyt, 73 N. Y. 505, 511. At the time the uncle wrote the letter he was indebted to his nephew in the sum of $5,000, and payment had been requested. The uncle, recognizing the indebtedness, wrote the nephew that he would keep the money until he deemed him capable of taking care of it. He did not say, ‘I will pay you at some other time,’ or use language that would indicate that the relation of debtor and creditor would continue. On the contrary, his language indicated that he had set apart the money the nephew had ‘earned,’ for him, so that when he should be capable of taking care of it he should receive it with interest. He said: ‘I had the money in the bank the day you were 21 years old that I intend for you, and you shall have the money certain.’ That he had set apart the money is further evidenced by the next sentence: ‘Now, Willie, I don’t intend to interfere with this money in any way until I think you are capable of taking care of it.’ Certainly the uncle must have intended that his nephew should understand that the promise not ‘to interfere with this money’ referred to the money in the bank, which he declared was not only there when the nephew became 21 years old, but was intended for him. True, he did not use the word ‘trust,’ or state that the money was deposited in the name of William E. Story, 2d, or in his own name in trust for him, but the language used must have been intended to assure the nephew that his money had been set apart for him, to be kept without interference until he should be capable of taking care of it, for the uncle said in substance and in effect: ‘This money you have earned much easier than I did.... You are quite welcome to the money. I had it in the bank the day you were 21 years old, and don’t intend to interfere with it in any way until I think you are capable of taking care of it; and the sooner that

time comes the better it will please me.’ In this declaration there is not lacking a single element necessary for the creation of a valid trust, and to that declaration the nephew assented. The learned judge who wrote the opinion of the general term seems to have taken the view that the trust was executed during the life-time of defendant’s testator by payment to the nephew, but, as it does not appear from the order that the judgment was reversed on the facts, we must assume the facts to be as found by the trial court, and those facts support its judgment. The order appealed from should be reversed, and the judgment of the special term affirmed, with costs payable out of the estate. All concur.

QUESTIONS AND DISCUSSION POINTS 1. This case considers the meaning of “consideration.” The Court clearly indicates that consideration is necessary to form a binding contract. Does the Court indicate why the law imposes a requirement of consideration? 2. One question raised by the facts of this case is the nature of the “agreement” between uncle and nephew. What sort of “agreement” or “understanding” was it? Does the nature of the “arrangement” matter? If so, how? 3. What is the relationship of the concepts of consideration and bargain? If there is a bargain between the parties, does that mean that there is necessarily consideration present? Or, is it the case that consideration is a requirement independent of bargain? 4. Does it matter to the Court that the nephew would have benefited from the “arrangement” whether he received the promised $5,000 or not? Additionally, to what extent does it matter that the uncle never received any benefit from the agreement? Or did he? 5. Try expressing the consideration requirement in one or two sentences, and see if it is possible. After doing that, try to think again of the justification(s) for the consideration requirement. Does your formulation of the consideration requirement embody that (those) justification(s), and if so, how well? 6. Can you think of promises the law should not enforce? If there are promises the law should not enforce, how do you distinguish between enforceable and unenforceable promises?

v C & J FERTILIZER, INC., Appellant, v. ALLIED MUTUAL INSURANCE COMPANY, Appellee Supreme Court of Iowa 227 N.W.2d 169 (1975) OPINION: This action to recover for burglary loss under two separate insurance policies was tried to the court, resulting in a finding plaintiff had failed to establish a burglary within the policy definitions. Plaintiff appeals from judgment entered for defendant. We reverse and remand. Trial court made certain findings of fact in support of its conclusion reached. Plaintiff operated a fertilizer plant in Olds, Iowa. At time of loss, plaintiff was insured under policies issued by defendant and titled “Broad Form Storekeepers Policy” and “Mercantile Burglary and Robbery Policy.” Each policy defined “burglary” as meaning: ... the felonious abstraction of insured property (1) from within the premises by a person making felonious entry therein by actual force and violence, of which force and violence there are visible marks made by tools, explosives, electricity or chemicals upon, or physical damage to, the exterior of the premises at the place of such entry....

On Saturday, April 18, 1970, all exterior doors to the building were locked when plaintiff’s employees left the premises at the end of the business day. The following day, Sunday, April 19, 1970, one of plaintiff’s employees was at the plant and found all doors locked and secure. On Monday, April 20, 1970, when the employees reported for work, the exterior doors were locked, but the front office door was unlocked. There were truck tire

tread marks visible in the mud in the driveway leading to and from the plexiglas door entrance to the warehouse. It was demonstrated this door could be forced open without leaving visible marks or physical damage. There were no visible marks on the exterior of the building made by tools, explosives, electricity or chemicals, and there was no physical damage to the exterior of the building to evidence felonious entry into the building by force and violence. Chemicals had been stored in an interior room of the warehouse. The door to this room, which had been locked, was physically damaged and carried visible marks made by tools. Chemicals had been taken at a net loss to plaintiff in the sum of $9,582. Office and shop equipment valued at $400.30 was also taken from the building. Trial court held the policy definition of “burglary” was unambiguous, there was nothing in the record “upon which to base a finding that the door to plaintiff’s place of business was entered feloniously, by actual force and violence,” and, applying the policy language, found for defendant. Certain other facts in the record were apparently deemed irrelevant by trial court because of its view the applicable law required it to enforce the policy provision. Because we conclude different rules of law apply, we also consider those facts. The “Broad Form Storekeepers Policy” was issued April 14, 1969; the “Mercantile Burglary and Robbery Policy” on April 14, 1970. Those policies are in evidence. Prior policies apparently were first purchased in 1968. The agent, who had power to bind insurance coverage for defendant, was told plaintiff would be handling farm chemicals. After inspecting the building then used by plaintiff for storage he made certain suggestions regarding security. There ensued a conversation in which he pointed out there had to be visible evidence of burglary. There was no testimony by anyone that plaintiff was then or thereafter informed the policy to be delivered would define burglary to require “visible marks made by tools, explosives, electricity or chemicals upon, or physical damage to, the exterior of the premises at the place of ... entry.” The import of this conversation with defendant’s agent when the coverage was sold is best confirmed by the agent’s complete and vocally-expressed surprise when defendant denied coverage. From what the agent saw (tire tracks and marks on the interior of the building) and his contacts with the investigating officers “... the thought didn’t enter my mind that it wasn’t covered....” From the trial testimony it was obvious the only understanding was that there should be some hard evidence of a third-party burglary vis-avis an “inside job.” The latter was in this instance effectively ruled out when the thief was required to break an interior door lock to gain access to the chemicals. The agent testified the insurance was purchased and “the policy was sent out afterwards.” The president of plaintiff corporation, a 37-year-old farmer with a high school education, looked at that portion of the policy setting out coverages, including coverage for burglary loss, the amounts of insurance, and the “location and description.” He could not recall reading the fine print defining “burglary” on page three of the policy. Trial court’s “findings” must be examined in light of our applicable rules. Ordinarily in a law action tried to the court its findings of fact having adequate evidentiary support shall not be set aside unless induced by an erroneous view of the law. It follows, the rule does not preclude inquiry into the question whether, conceding the truth of a finding of fact, the trial court applied erroneous rules of law which materially affected the decision. Beneficial Finance Company of Waterloo v. Lamos, 179 N.W.2d 573, 578 (Iowa 1970) and citations. Extrinsic evidence that throws light on the situation of the parties, the antecedent negotiations, the attendant circumstances and the objects they were thereby striving to attain is necessarily to be regarded as relevant to ascertain the actual significance and proper legal meaning of the agreement. The question of interpretation, i.e., the meaning to be given contractual words, is one to be determined by the court unless the interpretation depends on extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence. Construction of a contract means determination of its legal operation—its effect upon the action of the courts. “[Construction] [of a contract] is always a matter of law for the court.” 3 Corbin on Contracts § 544, p. 227. “[Courts] in construing and applying a standardized contract seek to effectuate the reasonable expectations of the average member of the public who accepts it.” Restatement (Second) of Contracts, supra, § 237, comment e , p. 540. Trial court in the case sub judice [this is a reference to the trial court below], concentrating on the policy “definition” of burglary, limited its consideration of the facts to the issue whether there was evidence which satisfied that provision. Thus we find the language “There was no physical damage to the exterior of the building to evidence felonious entry to the building by force and violence”; “There is nothing in the record upon which to base a finding that the door to plaintiff’s place of business was entered feloniously, by actual force and violence”; “The evidence in this case is just as consistent with a theory that an employee entered the building with a key as

it is to a theory that the building was entered by force and violence.” (Emphasis supplied.). Trial court never made a finding there was or was not a burglary. We have noted its examination of the evidence was tailored to fit the policy “definition” of burglary: “‘Burglary’ means the felonious abstraction of insured property (1) from within the premises by a person making felonious entry therein by actual force and violence, of which force and violence there are visible marks....” (Emphasis supplied.). Nor did trial court consider the evidence in light of the layman’s concept of burglary (who might well consider a stealing intruder in his home or business premises as a burglar, whether or not the door was entered by force and violence) or the legal definition of burglary, hereinafter referred to. Trial court made no determination regarding burglary in those contexts. Insofar as trial court was construing the policy—that being a matter of law for the court—we are not bound by its conclusions. Neither are we bound by trial court’s rule this case is controlled by the fine-print “definition” of burglary, if that rule was erroneously applied below. Trial court did find “[There] does not appear to have been a discussion of the policy provisions between the parties at the time the policy was secured.” That finding is well supported: there is no evidence plaintiff knew of the definition of burglary contained in the policy until after the event. But both parties agree there was conversation concerning the type of insurance and the property to be insured. While plaintiff’s president’s testimony is ambivalent as to whether it occurred before or after the predecessor policies were issued, the defendant’s agent was clear the conversation occurred before any policies were delivered. There is nothing about trial court’s factual findings which precludes this court from construing said contract to arrive at a proper determination of its legal operation as between these parties, or from considering whether the decision appealed from resulted from the application of an erroneous rule of law. And if the definition of “burglary” in defendant’s policy is not enforceable here, then trial court’s finding there was no evidence of forcible entry through an outside door is not controlling in the disposition of this case. Plaintiff’s theories of recovery based on “reasonable expectations,” implied warranty and unconscionability must be viewed in light of accelerating change in the field of contracts. I. Revolution in Formation of Contractual Relationships Many of our principles for resolving conflicts relating to written contracts were formulated at an early time when parties of equal strength negotiated in the historical sequence of offer, acceptance, and reduction to writing. The concept that both parties assented to the resulting document had solid footing in fact. Only recently has the sweeping change in the inception of the document received widespread recognition: Standard form contracts probably account for more than ninety-nine percent of all contracts now made. Most persons have difficulty remembering the last time they contracted other than by standard form; except for casual oral agreements, they probably never have. But if they are active, they contract by standard form several times a day. Parking lot and theater tickets, package receipts, department store charge slips, and gas station credit card purchase slips are all standard form contracts.... The contracting still imagined by courts and law teachers as typical, in which both parties participate in choosing the language of their entire agreement, is no longer of much more than historical importance. —W. Slawson, Standard Form Contracts and Democratic Control of Lawmaking Power, 84 Harv. L. Rev. 529 (1971)

With respect to those interested in buying insurance, it has been observed that: His chances of successfully negotiating with the company for any substantial change in the proposed contract are just about zero. The insurance company tenders the insurance upon a ‘take it or leave it’ basis.

Few persons solicited to take policies understand the subject of insurance or the rules of law governing the negotiations, and they have no voice in dictating the terms of what is called the contract. They are clear upon two or three points which the agent promises to protect, and for everything else they must sign ready-made applications and accept ready-made policies carefully concocted to conserve the interests of the company. The subject, therefore, is sui generis, and the rules of a legal system devised to govern the formation of ordinary contracts between man and man cannot be mechanically applied to it. The concept that persons must obey public laws enacted by their own representatives does not offend a fundamental sense of justice: an inherent element of assent pervades the process.

But the inevitable result of enforcing all provisions of the adhesion contract, frequently, as here, delivered subsequent to the transaction and containing provisions never assented to, would be an abdication of judicial responsibility in face of basic unfairness and a recognition that persons’ rights shall be controlled by private lawmakers without the consent, express or implied, of those affected. A question is also raised whether a court may constitutionally allow that power to exist in private hands except where appropriate safeguards are present, including a right to meaningful judicial review. The statutory requirement that the form of policies be approved by the commissioner of insurance, § 515.109, The Code, neither resolves the issue whether the fine-print provisions nullify the insurance bargained for in a given case nor ousts the court from necessary jurisdiction. In this connection it has been pertinently stated: Insurance contracts continue to be contracts of adhesion, under which the insured is left little choice beyond electing among standardized provisions offered to him, even when the standard forms are prescribed by public officials rather than insurers. Moreover, although statutory and administrative regulations have made increasing inroads on the insurer’s autonomy by prescribing some kinds of provisions and proscribing others, most insurance policy provisions are still drafted by insurers. Regulation is relatively weak in most instances, and even the provisions prescribed or approved by legislative or administrative action ordinarily are in essence adoptions, outright or slightly modified, of proposals made by insurers’ draftsmen. Under such circumstances as these, judicial regulation of contracts of adhesion, whether concerning insurance or some other kind of transaction, remains appropriate. See also 3 Corbin on Contracts § 559, p. 267.

The mass-produced boiler-plate “contracts,” necessitated and spawned by the explosive growth of complex business transactions in a burgeoning population left courts frequently frustrated in attempting to arrive at just results by applying many of the traditional contract-construing stratagems. As long as fifteen years ago Professor Llewellyn, reflecting on this situation in his book “The Common Law Tradition—Deciding Appeals,” pp. 362–71 wrote, What the story shows thus far is first, scholars persistently off-base while judges grope over well-nigh a century in irregular but dogged fashion for escape from a recurring discomfort of imbalance that rests on what is in fact substantial non agreement despite perfect semblance of agreement. (pp. 367–368). The answer, I suggest, is this: Instead of thinking about ‘assent’ to boiler-plate clauses, we can recognize that so far as concerns the specific, there is no assent at all. What has in fact been assented to, specifically, are the few dickered terms, and the broad type of transaction, and but one thing more. That one thing more is a blanket assent (not a specific assent) to any not unreasonable or indecent terms the seller may have on his form, which do not alter or eviscerate the reasonable meaning of the dickered terms. The fine print which has not been read has no business to cut under the reasonable meaning of those dickered terms which constitute the dominant and only real expression of agreement, but much of it commonly belongs in. (p. 370)

In fairness to the often-discerned ability of the common law to develop solutions for changing demands, it should be noted appellate courts take cases as they come, constrained by issues the litigants formulated in trial court—a point not infrequently overlooked by academicians. Nor can a lawyer in the ordinary case be faulted for not risking a client’s cause on an uncharted course when there is a reasonable prospect of reaching a fair result through familiar channels of long-accepted legal principles, for example, those grounded on ambiguity in language, the duty to define limitations or exclusions in clear and explicit terms, and interpretation of language from the viewpoint of an ordinary person, not a specialist or expert. Plaintiff’s claim it should be granted relief under the legal doctrines of reasonable expectations, implied warranty and unconscionability should be viewed against the above backdrop. II. Reasonable Expectations This court adopted the doctrine of reasonable expectations in Rodman v. State Farm Mutual Ins. Co., 208 N.W.2d 903, 905–908 (Iowa 1973). The Rodman court approved the following articulation of that concept: The objectively reasonable expectations of applicants and intended beneficiaries regarding the terms of insurance contracts will be honored even though painstaking study of the policy provisions would have negated those expectations. 208 N.W.2d at 906. Restatement (Second) of Contracts, supra, § 237, comments e and f , pp. 540–41; 1 Corbin on Contracts § 1, p. 2 (“That portion of the field of law that is classified and described as the law of contracts attempts the realization of reasonable expectations that have been induced by the making of a promise”); 7 Williston on Contracts § 900, pp. 33–34

(“Some courts, recognizing that very few insureds even try to read and understand the policy or application, have declared that the insured is justified in assuming that the policy which is delivered to him has been faithfully prepared by the company to provide the protection against the risk which he had asked for.... Obviously this judicial attitude is a far cry from the old motto ‘caveat emptor.’“).

At comment f to § 237 of Restatement (Second) of Contracts, supra pp. 540–41, we find the following analysis of the reasonable expectations doctrine: Although customers typically adhere to standardized agreements and are bound by them without even appearing to know the standard terms in detail, they are not bound to unknown terms which are beyond the range of reasonable expectation. A debtor who delivers a check to his creditor with the amount blank does not authorize the insertion of an infinite figure. Similarly, a party who adheres to the other party’s standard terms does not assent to a term if the other party has reason to believe that the adhering party would not have accepted the agreement if he had known that the agreement contained the particular term. Such a belief or assumption may be shown by the prior negotiations or inferred from the circumstances. Reason to believe may be inferred from the fact that the term is bizarre or oppressive, from the fact that it eviscerates the non-standard terms explicity agreed to, or from the fact that it eliminates the dominant purpose of the transaction. The inference is reinforced if the adhering party never had an opportunity to read the term, or if it is illegible or otherwise hidden from view. This rule is closely related to the policy against unconscionable terms and the rule of interpretation against the draftsman.

Nor can it be asserted the above doctrine does not apply here because plaintiff knew the policy contained the provision now complained of and cannot be heard to say it reasonably expected what it knew was not there. A search of the record discloses no such knowledge. The evidence does show, as above noted, a “dicker” for burglary insurance coverage on chemicals and equipment. The negotiation was for what was actually expressed in the policies’ “Insuring Agreements” the insurer’s promise “To pay for loss by burglary or by robbery of a watchman, while the premises are not open for business, of merchandise, furniture, fixtures and equipment within the premises....” In addition, the conversation included statements from which the plaintiff should have understood defendant’s obligation to pay would not arise where the burglary was an “inside job.” Thus the following exclusion should have been reasonably anticipated: Exclusions. This policy does not apply: (b) to loss due to any fraudulent, dishonest or criminal act by any Insured, a partner therein, or an officer, employee, director, trustee or authorized representative thereof.

But there was nothing relating to the negotiations with defendant’s agent which would have led plaintiff to reasonably anticipate defendant would bury within the definition of “burglary” another exclusion denying coverage when, no matter how extensive the proof of a third-party burglary, no marks were left on the exterior of the premises. This escape clause, here triggered by the burglar’s talent (an investigating law officer, apparently acquainted with the current modus operandi, gained access to the steel building without leaving any marks by leaning on the overhead plexiglas door while simultaneously turning the locked handle), was never read to or by plaintiff’s personnel, nor was the substance explained by defendant’s agent. Moreover, the burglary “definition” which crept into this policy comports neither with the concept a layman might have of that crime, nor with a legal interpretation. See State v. Murray, 222 Iowa 925, 931, 270 N.W. 355, 358 (1936) (“We have held that even though the door was partially open, by opening it farther, in order to enter the building, this is a sufficient breaking to comply with the demands of the statute”); State v. Ferguson, 149 Iowa 476, 478–479, 128 N.W. 840, 841–842 (1910) (“It need not appear that this office was an independent building, for it is well known that it is burglary for one to break and enter an inner door or window, although the culprit entered through an open outer door....); see State v. Hougland, 197 N.W.2d 364, 365 (Iowa 1972). The most plaintiff might have reasonably anticipated was a policy requirement of visual evidence (abundant here) indicating the burglary was an “outside” not an “inside” job. The exclusion in issue, masking as a definition, makes insurer’s obligation to pay turn on the skill of the burglar, not on the event the parties bargained for: a bona-fide third party burglary resulting in loss of plaintiff’s chemicals and equipment. The “reasonable expectations” attention to the basic agreement, to the concept of substance over form, was appropriately applied by this court for the insurer’s benefit in Central Bearings Co. v. Wolverine Insurance

Company, 179 N.W.2d 443 (Iowa 1970), a case antedating Rodman. We there reversed a judgment for the insured which trial court apparently grounded on a claimed ambiguity in the policy. In denying coverage on what was essentially a products liability claim where the insured purchased only a “Premises-Operations” policy (without any misrepresentation, misunderstanding or overreaching) we said at page 449 of 179 N.W.2d: In summation we think the insured as a reasonable person would understand the policy coverage purchased meant the insured was not covered for loss if the ‘accident’ with concomitant damage to a victim occurred away from the premises and after the operation or sale was complete.

The same rationale of reasonable expectations should be applied when it would operate to the advantage of the insured. Appropriately applied to this case, the doctrine demands reversal and judgment for plaintiff. We reverse and remand for judgment in conformance herewith. REVERSED AND REMANDED. DISSENT BY: LeGrand, J. I dissent from the result reached by the majority because it ignores virtually every rule by which we have heretofore adjudicated such cases and affords plaintiff ex post facto insurance coverage which it not only did not buy but which it knew it did not buy. The majority revokes, at least for this case, the principle that in law cases tried to the court the findings are binding on us if supported by substantial evidence and that we view the evidence in its most favorable light to sustain rather than defeat those findings. While it may be very well to talk in grand terms about “mass advertising” by insurance companies and “incessant” assurances as to coverage which mislead the “unwary,” particularly about “fine-print” provisions, such discussion should somehow be related to the case under review. Our primary duty, after all, is to resolve this dispute for these litigants under this record. There is total silence in this case concerning any of the practices the majority finds offensive; nor is there any claim plaintiff was beguiled by such conduct into believing it had more protection than it actually did. Like all other appeals, this one should be decided on what the record discloses—a fact which the majority concedes but promptly disregards. Crucial to a correct determination of this appeal is the disputed provision of each policy defining burglary as “the felonious abstraction of insured property by a person making felonious entry by actual force and violence, of which force and violence there are visible marks made by tools, explosives, electricity or chemicals upon, or physical damage to, the exterior of the premises at the place of such entry.” The starting point of any consideration of that definition is a determination whether it is ambiguous. Yet the majority does not even mention ambiguity. The purpose of such a provision, of course, is to omit from coverage “inside jobs” or those resulting from fraud or complicity by the assured. The overwhelming weight of authority upholds such provisions as legitimate in purpose and unambiguous in application. Once this indisputable fact is recognized, plaintiff’s arguments virtually collapse. We may not—at least we should not—by any accepted standard of construction meddle with contracts which clearly and plainly state their meaning simply because we dislike that meaning, even in the case of insurance policies. Nor can the doctrine of reasonable expectations be applied here. We adopted that rule in Rodman v. State Farm Mutual Automobile Insurance Company, 208 N.W.2d 903, 906, 907 (Iowa 1973). We refused, however, to apply it in that case, where we said: The real question here is whether the principle of reasonable expectations should be extended to cases where an ordinary layman would not misunderstand his coverage from a reading of the policy and where there are no circumstances attributable to the insurer which foster coverage expectations. Plaintiff does not contend he misunderstood the policy. He did not read it. He now asserts in retrospect that if he had read it he would not have understood it. He does not say he was misled by conduct or representations of the insurer. He simply asked trial court to require the policy to cover his loss because if he had purchased his automobile insurance from another company the loss would have been covered, he did

not know it was not covered, and if he had known it was not covered he would have purchased a different policy. Trial court declined to do so. We believe trial court correctly refused in these circumstances to extend the principle of reasonable expectations to impose liability.

Yet here the majority would extend the doctrine far beyond the point of refusal in Rodman. Here we have affirmative and unequivocal testimony from an officer and director of the plaintiff corporation that he knew the disputed provision was in the policies because “it was just like the insurance policy I have on my farm.” I cannot agree plaintiff may now assert it reasonably expected from these policies something it knew was not there. For these several reasons—the principal one being that the findings of the trial court have substantial evidentiary support—I would affirm the judgment. Moore, C.J., Rees and Uhlenhopp, JJ. join this dissent.

QUESTIONS AND DISCUSSION POINTS 1. In comparing the Majority and Dissenting opinions, it is important to identify the precise points of disagreement between them. Do you think the Majority and Dissent agree on the meaning of “contract”? Can you identify the ways in which they differ? And if you decide that the Majority and Dissent have different conceptions of contract, how do you decide between them? 2. Does it matter that the plaintiff in this case probably never read the contract? Should that fact be held against him? 3. Would it matter if the plaintiff both needed insurance and could not get a better definition of “burglary” from another insurance company? What if the bank required insurance on the property because the property was mortgaged—would that fact make a difference? 4. Do you believe the plaintiff’s building was burglarized? Do you think the Majority thought so? 5. What if you knew that the only reason the definition of “burglary” was so written was to prevent “inside jobs”? Would that make a difference to you in deciding this case? 6. What are the precise objections of the Dissent to the Majority opinion? 7. The Majority opinion suggests that the bargaining power of the parties is an important consideration in establishing the rights and obligations of the parties. What are the court’s arguments for this proposition? Do you find them persuasive? 8. The opinion makes reference to the work of Karl Llewellyn, whom we know as one of the leading figures of American legal realism. Should Llewellyn’s views play a role in deciding this case? What authority do his views have? If they have authority, why is this so?

v ORA LEE WILLIAMS, Appellant, v. WALKER-THOMAS FURNITURE COMPANY, Appellee United States Court of Appeals, District of Columbia Circuit 350 F.2d 445 (1965) J. SKELLY WRIGHT, Circuit Judge: Appellee, Walker-Thomas Furniture Company, operates a retail furniture store in the District of Columbia. During the period from 1957 to 1962 each appellant in these cases purchased a number of household items from Walker-Thomas, for which payment was to be made in installments. The terms of each purchase were contained in a printed form contract which set forth the value of the purchased item and purported to lease the item to appellant for a stipulated monthly rent payment. The contract then provided, in substance, that title would remain in Walker-Thomas until the total of all the monthly payments made equaled the stated value of the item,

at which time appellants could take title. In the event of a default in the payment of any monthly installment, Walker-Thomas could repossess the item. The contract further provided that ‘the amount of each periodical installment payment to be made by (purchaser) to the Company under this present lease shall be inclusive of and not in addition to the amount of each installment payment to be made by (purchaser) under such prior leases, bills or accounts; and all payments now and hereafter made by (purchaser) shall be credited pro rata on all outstanding leases, bills and accounts due the Company by (purchaser) at the time each such payment is made.’ The effect of this rather obscure provision was to keep a balance due on every item purchased until the balance due on all items, whenever purchased, was liquidated. As a result, the debt incurred at the time of purchase of each item was secured by the right to repossess all the items previously purchased by the same purchaser, and each new item purchased automatically became subject to a security interest1 arising out of the previous dealings. On May 12, 1962, appellant Thorne purchased an item described as a Daveno, three tables, and two lamps, having total stated value of $391.10. Shortly thereafter, he defaulted on his monthly payments and appellee sought to replevy [take back (ed.)] all the items purchased since the first transaction in 1958. Similarly, on April 17, 1962, appellant Williams bought a stereo set of stated value of $514.95.2 She too defaulted shortly thereafter, and appellee sought to replevy all the items purchased since December, 1957. The Court of General Sessions granted judgment for appellee. The District of Columbia Court of Appeals affirmed, and we granted appellants’ motion for leave to appeal to this court. Appellants’ principal contention, rejected by both the trial and the appellate courts below, is that these contracts, or at least some of them, are unconscionable and, hence, not enforceable. In its opinion in Williams v. Walker-Thomas Furniture Company, 198 A.2d 914, 916 (1964), the District of Columbia Court of Appeals explained its rejection of this contention as follows: Appellant’s second argument presents a more serious question. The record reveals that prior to the last purchase appellant had reduced the balance in her account to $164. The last purchase, a stereo set, raised the balance due to $678. Significantly, at the time of this and the preceding purchases, appellee was aware of appellant’s financial position. The reverse side of the stereo contract listed the name of appellant’s social worker and her $218 monthly stipend from the government. Nevertheless, with full knowledge that appellant had to feed, clothe and support both herself and seven children on this amount, appellee sold her a $514 stereo set. ‘We cannot condemn too strongly appellee’s conduct. It raises serious questions of sharp practice and irresponsible business dealings. A review of the legislation in the District of Columbia affecting retail sales and the pertinent decisions of the highest court in this jurisdiction disclose, however, no ground upon which this court can declare the contracts in question contrary to public policy. We note that were the Maryland Retail Installment Sales Act, Art. 83 ss 128–153, or its equivalent, in force in the District of Columbia, we could grant appellant appropriate relief. We think Congress should consider corrective legislation to protect the public from such exploitive contracts as were utilized in the case at bar.

We do not agree that the court lacked the power to refuse enforcement to contracts found to be unconscionable. In other jurisdictions, it has been held as a matter of common law that unconscionable contracts are not enforceable. While no decision of this court so holding has been found, the notion that an unconscionable bargain should not be given full enforcement is by no means novel. In Scott v. United States, 79 U.S. (12 Wall.) 443, 445, 20 L.Ed. 438 (1870), the Supreme Court stated: If a contract be unreasonable and unconscionable, but not void for fraud, a court of law will give to the party who sues for its breach damages, not according to its letter, but only such as he is equitably entitled to.

Since we have never adopted or rejected such a rule, the question here presented is actually one of first impression. Congress has recently enacted the Uniform Commercial Code, which specifically provides that the court may refuse to enforce a contract which it finds to be unconscionable at the time it was made. 28 D.C.CODE § 2–302 (Supp. IV 1965). The enactment of this section, which occurred subsequent to the contracts here in suit, does not mean that the common law of the District of Columbia was otherwise at the time of enactment, nor does it preclude the court from adopting a similar rule in the exercise of its powers to develop the common law for the District of Columbia. In fact, in view of the absence of prior authority on the point, we consider the congressional

adoption of s 2–302 persuasive authority for following the rationale of the cases from which the section is explicitly derived.3 Accordingly, we hold that where the element of unconscionability is present at the time a contract is made, the contract should not be enforced. Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. Whether a meaningful choice is present in a particular case can only be determined by consideration of all the circumstances surrounding the transaction. In many cases the meaningfulness of the choice is negated by a gross inequality of bargaining power.4 The manner in which the contract was entered is also relevant to this consideration. Did each party to the contract, considering his obvious education or lack of it, have a reasonable opportunity to understand the terms of the contract, or were the important terms hidden in a maze of fine print and minimized by deceptive sales practices? Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain.5 But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the agreement are not to be questioned6 should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.7 In determining reasonableness or fairness, the primary concern must be with the terms of the contract considered in light of the circumstances existing when the contract was made. The test is not simple, nor can it be mechanically applied. The terms are to be considered “in the light of the general commercial background and the commercial needs of the particular trade or case.” Corbin suggests the test as being whether the terms are “so extreme as to appear unconscionable according to the mores and business practices of the time and place.” 1 CORBIN, op. cit. We think this formulation correctly states the test to be applied in those cases where no meaningful choice was exercised upon entering the contract. Because the trial court and the appellate court did not feel that enforcement could be refused, no findings were made on the possible unconscionability of the contracts in these cases. Since the record is not sufficient for our deciding the issue as a matter of law, the cases must be remanded to the trial court for further proceedings. So ordered. DANAHER, Circuit Judge (dissenting): The District of Columbia Court of Appeals obviously was as unhappy about the situation here presented as any of us can possibly be. Its opinion in the Williams case, quoted in the majority text, concludes: “We think Congress should consider corrective legislation to protect the public from such exploitive contracts as were utilized in the case at bar.” My view is thus summed up by an able court which made no finding that there had actually been sharp practice. Rather the appellant seems to have known precisely where she stood. There are many aspects of public policy here involved. What is a luxury to some may seem an outright necessity to others. Is public oversight to be required of the expenditures of relief funds? A washing machine, e.g., in the hands of a relief client might become a fruitful source of income. Many relief clients may well need credit, and certain business establishments will take long chances on the sale of items, expecting their pricing policies will afford a degree of protection commensurate with the risk. Perhaps a remedy when necessary will be found within the provisions of the “Loan Shark” law, D.C.CODE §§ 26–601 et seq. (1961). I mention such matters only to emphasize the desirability of a cautious approach to any such problem, particularly since the law for so long has allowed parties such great latitude in making their own contracts. I dare say there must annually be thousands upon thousands of installment credit transactions in this jurisdiction, and one can only speculate as to the effect the decision in these cases will have. I join the District of Columbia Court of Appeals in its disposition of the issues.

QUESTIONS AND DISCUSSION POINTS

1. The plaintiff is a merchant of furniture and home furnishings (including stereo equipment). To guarantee payment for purchases made on credit, which the merchant advanced, the Walker-Thomas company required that not only the immediate item purchased, but all property ever purchased by a customer be pledged as security for the unpaid purchase price of any item purchased. Do you think such an arrangement is fair to the purchaser? Can you think of arguments in defense of such a practice? 2. The majority opinion makes reference to the Uniform Commercial Code (UCC), specifically Article 2, the sales article. This statute contains a section, number 2–302, which prohibits enforcement of “unconscionable” contracts. Can you tell what it is about the contracts in this case that the court found to be unconscionable? Was it the substance of the agreements—their terms—or was it the conditions under which the agreements were entered into? 3. What grounds does the court use to support its decision that the contract is unenforceable? Is there a common law answer to the question posed by the case? If not, what is the source of law in the case? Is this source an appropriate one for resolution of the question posed by the case? 4. Critics of this decision often say that decisions of this sort increase the costs of goods and credits, thereby raising prices for everyone. Are you persuaded that this claim is true? Even if it is true, does it matter? 5. What do you think of the Dissent’s argument that Mrs. Walker seemed to understand perfectly well what she was agreeing to? If she did understand the agreement, do you think the decision undermines her autonomy?

v In the Matter of BABY M, a pseudonym for an actual person Supreme Court of New Jersey 537 A.2D 1227 (1988) WILENTZ, C.J. In this matter the Court is asked to determine the validity of a contract that purports to provide a new way of bringing children into a family. For a fee of $10,000, a woman agrees to be artificially inseminated with the semen of another woman’s husband; she is to conceive a child, carry it to term, and after its birth surrender it to the natural father and his wife. The intent of the contract is that the child’s natural mother will thereafter be forever separated from her child. The wife is to adopt the child, and she and the natural father are to be *411 regarded as its parents for all purposes. The contract providing for this is called a “surrogacy contract,” the natural mother inappropriately called the “surrogate mother.” We invalidate the surrogacy contract because it conflicts with the law and public policy of this State. While we recognize the depth of the yearning of infertile couples to have their own children, we find the payment of money to a “surrogate” mother illegal, perhaps criminal, and potentially degrading to women. Although in this case we grant custody to the natural father, the evidence having clearly proved such custody to be in the best interests of the infant, we void both the termination of the surrogate mother’s parental rights 109 N.J. 396, 537 A.2D 1227, and the adoption of the child by the wife/stepparent. We thus restore the “surrogate” as the mother of the child. We remand the issue of the natural mother’s visitation rights to the trial court, since that issue was not reached below and the record before us is not sufficient to permit us to decide it de novo. We find no offense to our present laws where a woman voluntarily and without payment agrees to act as a “surrogate” mother, provided that she is not subject to a binding agreement to surrender her child. Moreover, our holding today does not preclude the Legislature from altering the current statutory scheme, within constitutional limits, so as to permit surrogacy contracts. Under current law, however, the surrogacy agreement before us is illegal and invalid. I. Facts

In February 1985, William Stern and Mary Beth Whitehead entered into a surrogacy contract. It recited that Stern’s wife, Elizabeth, was infertile, that they wanted a child, and that Mrs. Whitehead was willing to provide that child as the mother with Mr. Stern as the father. The contract provided that through artificial insemination using Mr. Stern’s sperm, Mrs. Whitehead would become pregnant, carry the child to term, bear it, deliver it to the Sterns, and thereafter do whatever was necessary to terminate her maternal rights so that Mrs. Stern could thereafter adopt the child. Mrs. Whitehead’s husband, Richard, was also a party to the contract; Mrs. Stern was not. Mr. Whitehead promised to do all acts necessary to rebut the presumption of paternity under the Parentage Act. N.J.S.A. 9:17–43a(1),-44a. Although Mrs. Stern was not a party to the surrogacy agreement, the contract gave her sole custody of the child in the event of Mr. Stern’s death. Mrs. Stern’s status as a nonparty to the surrogate parenting agreement presumably was to avoid the application of the baby-selling statute to this arrangement. N.J.S.A. 9:3–54. Mr. Stern, on his part, agreed to attempt the artificial insemination and to pay Mrs. Whitehead $10,000 after the child’s birth, on its delivery to him. In a separate contract, Mr. Stern agreed to pay $7,500 to the Infertility Center of New York (“ICNY”). The Center’s advertising campaigns solicit surrogate mothers and encourage infertile couples to consider surrogacy. ICNY arranged for the surrogacy contract by bringing the parties together, explaining the process to them, furnishing the contractual form, and providing legal counsel. The history of the parties’ involvement in this arrangement suggests their good faith. William and Elizabeth Stern were married in July 1974, having met at the University of Michigan, where both were Ph.D. candidates. Due to financial considerations and Mrs. Stern’s pursuit of a medical degree and residency, they decided to defer starting a family until 1981. Before then, however, Mrs. Stern learned that she might have multiple sclerosis and that the disease in some cases renders pregnancy a serious health risk. Her anxiety appears to have exceeded the actual risk, which current medical authorities assess as minimal. Nonetheless that anxiety was evidently quite real, Mrs. Stern fearing that pregnancy might precipitate blindness, paraplegia, or other forms of debilitation. Based on the perceived risk, the Sterns decided to forego having their own children. The decision had special significance for Mr. Stern. Most of his family had been destroyed in the Holocaust. As the family’s only survivor, he very much wanted to continue his bloodline. Initially the Sterns considered adoption, but were discouraged by the substantial delay apparently involved and by the potential problem they saw arising from their age and their differing religious backgrounds. They were most eager for some other means to start a family. The paths of Mrs. Whitehead and the Sterns to surrogacy were similar. Both responded to advertising by ICNY. The Sterns’ response, following their inquiries into adoption, was the result of their long-standing decision to have a child. Mrs. Whitehead’s response apparently resulted from her sympathy with family members and others who could have no children (she stated that she wanted to give another couple the “gift of life”); she also wanted the $10,000 to help her family. Both parties, undoubtedly because of their own self-interest, were less sensitive to the implications of the transaction than they might otherwise have been. Mrs. Whitehead, for instance, appears not to have been concerned about whether the Sterns would make good parents for her child; the Sterns, on their part, while conscious of the obvious possibility that surrendering the child might cause grief to Mrs. Whitehead, overcame their qualms because of their desire for a child. At any rate, both the Sterns and Mrs. Whitehead were committed to the arrangement; both thought it right and constructive. Mrs. Whitehead had reached her decision concerning surrogacy before the Sterns, and had actually been involved as a potential surrogate mother with another couple. After numerous unsuccessful artificial inseminations, that effort was abandoned. Thereafter, the Sterns learned of the Infertility Center, the possibilities of surrogacy, and of Mary Beth Whitehead. The two couples met to discuss the surrogacy arrangement and decided to go forward. On February 6, 1985, Mr. Stern and Mr. and Mrs. Whitehead executed the surrogate parenting agreement. After several artificial inseminations over a period of months, Mrs. Whitehead became pregnant. The pregnancy was uneventful and on March 27, 1986, Baby M was born. Not wishing anyone at the hospital to be aware of the surrogacy arrangement, Mr. and Mrs. Whitehead appeared to all as the proud parents of a healthy female child. Her birth certificate indicated her name to be Sara Elizabeth Whitehead and her father to be Richard Whitehead. In accordance with Mrs. Whitehead’s request, the Sterns visited the hospital unobtrusively to see the newborn child.

Mrs. Whitehead realized, almost from the moment of birth, that she could not part with this child. She had felt a bond with it even during pregnancy. Some indication of the attachment was conveyed to the Sterns at the hospital when they told Mrs. Whitehead what they were going to name the baby. She apparently broke into tears and indicated that she did not know if she could give up the child. She talked about how the baby looked like her other daughter, and made it clear that she was experiencing great difficulty with the decision. Nonetheless, Mrs. Whitehead was, for the moment, true to her word. Despite powerful inclinations to the contrary, she turned her child over to the Sterns on March 30 at the Whiteheads’ home. The Sterns were thrilled with their new child. They had planned extensively for its arrival, far beyond the practical furnishing of a room for her. It was a time of joyful celebration—not just for them but for their friends as well. The Sterns looked forward to raising their daughter, whom they named Melissa. While aware by then that Mrs. Whitehead was undergoing an emotional crisis, they were as yet not cognizant of the depth of that crisis and its implications for their newly-enlarged family. Later in the evening of March 30, Mrs. Whitehead became deeply disturbed, disconsolate, stricken with unbearable sadness. She had to have her child. She could not eat, sleep, or concentrate on anything other than her need for her baby. The next day she went to the Sterns’ home and told them how much she was suffering. The depth of Mrs. Whitehead’s despair surprised and frightened the Sterns. She told them that she could not live without her baby, that she must have her, even if only for one week, that thereafter she would surrender her child. The Sterns, concerned that Mrs. Whitehead might indeed commit suicide, not wanting under any circumstances to risk that, and in any event believing that Mrs. Whitehead would keep her word, turned the child over to her. It was not until four months later, after a series of attempts to regain possession of the child, that Melissa was returned to the Sterns, having been forcibly removed from the home where she was then living with Mr. and Mrs. Whitehead, the home in Florida owned by Mary Beth Whitehead’s parents. The struggle over Baby M began when it became apparent that Mrs. Whitehead could not return the child to Mr. Stern. Due to Mrs. Whitehead’s refusal to relinquish the baby, Mr. Stern filed a complaint seeking enforcement of the surrogacy contract. He alleged, accurately, that Mrs. Whitehead had not only refused to comply with the surrogacy contract but had threatened to flee from New Jersey with the child in order to avoid even the possibility of his obtaining custody. The court papers asserted that if Mrs. Whitehead were to be given notice of the application for an order requiring her to relinquish custody, she would, prior to the hearing, leave the state with the baby. And that is precisely what she did. After the order was entered, ex parte, the process server, aided by the police, in the presence of the Sterns, entered Mrs. Whitehead’s home to execute the order. Mr. Whitehead fled with the child, who had been handed to him through a window while those who came to enforce the order were thrown off balance by a dispute over the child’s current name. The Whiteheads immediately fled to Florida with Baby M. They stayed initially with Mrs. Whitehead’s parents, where one of Mrs. Whitehead’s children had been living. For the next three months, the Whiteheads and Melissa lived at roughly twenty different hotels, motels, and homes in order to avoid apprehension. From time to time Mrs. Whitehead would call Mr. Stern to discuss the matter; the conversations, recorded by Mr. Stern on advice of counsel, show an escalating dispute about rights, morality, and power, accompanied by threats of Mrs. Whitehead to kill herself, to kill the child, and falsely to accuse Mr. Stern of sexually molesting Mrs. Whitehead’s other daughter. Eventually the Sterns discovered where the Whiteheads were staying, commenced supplementary proceedings in Florida, and obtained an order requiring the Whiteheads to turn over the child. Police in Florida enforced the order, forcibly removing the child from her grandparents’ home. She was soon thereafter brought to New Jersey and turned over to the Sterns. The prior order of the court, issued ex parte, awarding custody of the child to the Sterns pendente lite, was reaffirmed by the trial court after consideration of the certified representations of the parties (both represented by counsel) concerning the unusual sequence of events that had unfolded. Pending final judgment, Mrs. Whitehead was awarded limited visitation with Baby M. The Sterns’ complaint, in addition to seeking possession and ultimately custody of the child, sought enforcement of the surrogacy contract. Pursuant to the contract, it asked that the child be permanently placed in their custody, that Mrs. Whitehead’s parental rights be terminated, and that Mrs. Stern be allowed to adopt the child, i.e., that, for all purposes, Melissa become the Sterns’ child. The trial took thirty-two days over a period of more than two months....

Soon after the conclusion of the trial, the trial court announced its opinion from the bench. 217 N.J.Super. 313, 525 A.2d 1128 (1987). It held that the surrogacy contract was valid; ordered that Mrs. Whitehead’s parental rights be terminated and that sole custody of the child be granted to Mr. Stern; and, after hearing brief testimony from Mrs. Stern, immediately entered an order allowing the adoption of Melissa by Mrs. Stern, all in accordance with the surrogacy contract. Pending the outcome of the appeal, we granted a continuation of visitation to Mrs. Whitehead, although slightly more limited than the visitation allowed during the trial. Although clearly expressing its view that the surrogacy contract was valid, the trial court devoted the major portion of its opinion to the question of the baby’s best interests. The inconsistency is apparent. The surrogacy contract calls for the surrender of the child to the Sterns, permanent and sole custody in the Sterns, and termination of Mrs. Whitehead’s parental rights, all without qualification, all regardless of any evaluation of the best interests of the child. As a matter of fact the contract recites (even before the child was conceived) that it is in the best interests of the child to be placed with Mr. Stern. In effect, the trial court awarded custody to Mr. Stern, the natural father, based on the same kind of evidence and analysis as might be expected had no surrogacy contract existed. Its rationalization, however, was that while the surrogacy contract was valid, specific performance would not be granted unless that remedy was in the best interests of the child. The factual issues confronted and decided by the trial court were the same as if Mr. Stern and Mrs. Whitehead had had the child out of wedlock, intended or unintended, and then disagreed about custody. The trial court’s awareness of the irrelevance of the contract in the court’s determination of custody is suggested by its remark that beyond the question of the child’s best interests, “[a]ll other concerns raised by counsel constitute commentary.” 217 N.J.Super. at 323, 525 A.2d 1128. Mrs. Whitehead contends that the surrogacy contract, for a variety of reasons, is invalid. She contends that it conflicts with public policy since it guarantees that the child will not have the nurturing of both natural parents— presumably New Jersey’s goal for families. She further argues that it deprives the mother of her constitutional right to the companionship of her child, and that it conflicts with statutes concerning termination of parental rights and adoption. With the contract thus void, Mrs. Whitehead claims primary custody (with visitation rights in Mr. Stern) both on a best interests basis (stressing the “tender years” doctrine) as well as on the policy basis of discouraging surrogacy contracts. She maintains that even if custody would ordinarily go to Mr. Stern, here it should be awarded to Mrs. Whitehead to deter future surrogacy arrangements. In a brief filed after oral argument, counsel for Mrs. Whitehead suggests that the standard for determining best interests where the infant resulted from a surrogacy contract is that the child should be placed with the mother absent a showing of unfitness. The Sterns claim that the surrogacy contract is valid and should be enforced, largely for the reasons given by the trial court. They claim a constitutional right of privacy, which includes the right of procreation, and the right of consenting adults to deal with matters of reproduction as they see fit. As for the child’s best interests, their position is factual: given all of the circumstances, the child is better off in their custody with no residual parental rights reserved for Mrs. Whitehead. II. Invalidity and Unenforceability of Surrogacy Contract We have concluded that this surrogacy contract is invalid. Our conclusion has two bases: direct conflict with existing statutes and conflict with the public policies of this State, as expressed in its statutory and decisional law. One of the surrogacy contract’s basic purposes, to achieve the adoption of a child through private placement, though permitted in New Jersey “is very much disfavored.” Sees v. Baber, 74 N.J. 201, 217, 377 A.2d 628 (1977). Its use of money for this purpose—and we have no doubt whatsoever that the money is being paid to obtain an adoption and not, as the Sterns argue, for the personal services of Mary Beth Whitehead—is illegal and perhaps criminal. N.J.S.A. 9:3–54. In addition to the inducement of money, there is the coercion of contract: the natural mother’s irrevocable agreement, prior to birth, even prior to conception, to surrender the child to the adoptive couple. Such an agreement is totally unenforceable in private placement adoption. Sees, 74 N.J. at 212–14, 377 A.2d 628. Even where the adoption is through an approved agency, the formal agreement to surrender occurs only after birth (as we read N.J.S.A. 9:2–16 and –17, and similar statutes), and then, by regulation, only after the birth mother has been offered counseling. N.J.A.C. 10:121A-5.4(c). Integral to these invalid provisions of the surrogacy contract is the related agreement, equally invalid, on the part of the natural mother to cooperate with,

and not to contest, proceedings to terminate her parental rights, as well as her contractual concession, in aid of the adoption, that the child’s best interests would be served by awarding custody to the natural father and his wife—all of this before she has even conceived, and, in some cases, before she has the slightest idea of what the natural father and adoptive mother are like. The foregoing provisions not only directly conflict with New Jersey statutes, but also offend long-established State policies. These critical terms, which are at the heart of the contract, are invalid and unenforceable; the conclusion therefore follows, without more, that the entire contract is unenforceable. A. Conflict with Statutory Provisions The surrogacy contract conflicts with: (1) laws prohibiting the use of money in connection with adoptions; (2) laws requiring proof of parental unfitness or abandonment before termination of parental rights is ordered or an adoption is granted; and (3) laws that make surrender of custody and consent to adoption revocable in private placement adoptions. 1. Our law prohibits paying or accepting money in connection with any placement of a child for adoption. N.J.S.A. 9:3–54a. Violation is a high misdemeanor. N.J.S.A. 9:3–54c. Excepted are fees of an approved agency (which must be a non-profit entity, N.J.S.A. 9:3–38a) and certain expenses in connection with childbirth. N.J.S.A. 9:3–54b.1 Considerable care was taken in this case to structure the surrogacy arrangement so as not to violate this prohibition. The arrangement was structured as follows: the adopting parent, Mrs. Stern, was not a party to the surrogacy contract; the money paid to Mrs. Whitehead was stated to be for her services—not for the adoption; the sole purpose of the contract was stated as being that “of giving a child to William Stern, its natural and biological father”; the money was purported to be “compensation for services and expenses and in no way ... a fee for termination of parental rights or a payment in exchange for consent to surrender a child for adoption”; the fee to the Infertility Center ($7,500) was stated to be for legal representation, advice, administrative work, and other “services.” Nevertheless, it seems clear that the money was paid and accepted in connection with an adoption. The Infertility Center’s major role was first as a “finder” of the surrogate mother whose child was to be adopted, and second as the arranger of all proceedings that led to the adoption. Its role as adoption finder is demonstrated by the provision requiring Mr. Stern to pay another $7,500 if he uses Mary Beth Whitehead again as a surrogate, and by ICNY’s agreement to “coordinate arrangements for the adoption of the child by the wife.” The surrogacy agreement requires Mrs. Whitehead to surrender Baby M for the purposes of adoption. The agreement notes that Mr. and Mrs. Stern wanted to have a child, and provides that the child be “placed” with Mrs. Stern in the event Mr. Stern dies before the child is born. The payment of the $10,000 occurs only on surrender of custody of the child and “completion of the duties and obligations” of Mrs. Whitehead, including termination of her parental rights to facilitate adoption by Mrs. Stern. As for the contention that the Sterns are paying only for services and not for an adoption, we need note only that they would pay nothing in the event the child died before the fourth month of pregnancy, and only $1,000 if the child were stillborn, even though the “services” had been fully rendered. Additionally, one of Mrs. Whitehead’s estimated costs, to be assumed by Mr. Stern, was an “Adoption Fee,” presumably for Mrs. Whitehead’s incidental costs in connection with the adoption. Mr. Stern knew he was paying for the adoption of a child; Mrs. Whitehead knew she was accepting money so that a child might be adopted; the Infertility Center knew that it was being paid for assisting in the adoption of a child. The actions of all three worked to frustrate the goals of the statute. It strains credulity to claim that these arrangements, touted by those in the surrogacy business as an attractive alternative to the usual route leading to an adoption, really amount to something other than a private placement adoption for money. The prohibition of our statute is strong. Violation constitutes a high misdemeanor, N.J.S.A. 9:3–54c, a thirddegree crime, N.J.S.A. 2C:43–1b, carrying a penalty of three to five years imprisonment. N.J.S.A. 2C:43–6a(3). The evils inherent in baby-bartering are loathsome for a myriad of reasons. The child is sold without regard for

whether the purchasers will be suitable parents. N. Baker, Baby Selling: The Scandal of Black Market Adoption 7 (1978). The natural mother does not receive the benefit of counseling and guidance to assist her in making a decision that may affect her for a lifetime. In fact, the monetary incentive to sell her child may, depending on her financial circumstances, make her decision less voluntary. Id. at 44. Furthermore, the adoptive parents may not be fully informed of the natural parents’ medical history. Baby-selling potentially results in the exploitation of all parties involved. Ibid. Conversely, adoption statutes seek to further humanitarian goals, foremost among them the best interests of the child. H. Witmer, E. Herzog, E. Weinstein, & M. Sullivan, Independent Adoptions: A Follow-Up Study 32 (1967). The negative consequences of baby-buying are potentially present in the surrogacy context, especially the potential for placing and adopting a child without regard to the interest of the child or the natural mother. 2. The termination of Mrs. Whitehead’s parental rights, called for by the surrogacy contract and actually ordered by the court, 217 N.J.Super. at 399–400, 525 A.2d 1128, fails to comply with the stringent requirements of New Jersey law. Our law, recognizing the finality of any termination of parental rights, provides for such termination only where there has been a voluntary surrender of a child to an approved agency or to the Division of Youth and Family Services (“DYFS”), accompanied by a formal document acknowledging termination of parental rights, N.J.S.A. 9:2–16, –17; N.J.S.A. 9:3–41; N.J.S.A. 30:4C–23, or where there has been a showing of parental abandonment or unfitness. A termination may ordinarily take one of three forms: an action by an approved agency, an action by DYFS, or an action in connection with a private placement adoption. The three are governed by separate statutes, but the standards for termination are substantially the same, except that whereas a written surrender is effective when made to an approved agency or to DYFS, there is no provision for it in the private placement context. See N.J.S.A. 9:2–14; N.J.S.A. 30:4C–23. N.J.S.A. 9:2–18 to 20 governs an action by an approved agency to terminate parental rights. Such an action, whether or not in conjunction with a pending adoption, may proceed on proof of written surrender, N.J.S.A. 9:2–16, –17, “forsaken parental obligation,” or other specific grounds such as death or insanity, N.J.S.A. 9:2–19. Where the parent has not executed a formal consent, termination requires a showing of “forsaken parental obligation,” i.e., “willful and continuous neglect or failure to perform the natural and regular obligations of care and support of a child.” N.J.S.A. 9:2–13(d). See also N.J.S.A. 9:3–46a,47c. Where DYFS is the agency seeking termination, the requirements are similarly stringent, although at first glance they do not appear to be so. DYFS can, as can any approved agency, accept a formal voluntary surrender or writing having the effect of termination and giving DYFS the right to place the child for adoption. N.J.S.A. 30:4C-23. Absent such formal written surrender and consent, similar to that given to approved agencies, DYFS can terminate parental rights in an action for guardianship by proving that “the best interests of such child require that he be placed under proper guardianship.” N.J.S.A. 30:4C-20. Despite this “best interests” language, however, this Court has recently held in New Jersey Div. of Youth & Family Servs. v. A.W., 103 N.J. 591, 512 A.2d 438 (1986), that in order for DYFS to terminate parental rights it must prove, by clear and convincing evidence, that “[t]he child’s health and development have been or will be seriously impaired by the parental relationship,” id. at 604, 512 A.2d 438, that “[t]he parents are unable or unwilling to eliminate the harm and delaying permanent placement will add to the harm,” id. at 605, 512 A.2d 438, that “[t]he court has considered alternatives to termination,” id. at 608, 512 A.2d 438, and that “[t]he termination of parental rights will not do more harm than good,” id. at 610, 512 A.2d 438. This interpretation of the statutory language requires a most substantial showing of harm to the child if the parental relationship were to continue, far exceeding anything that a “best interests” test connotes. In order to terminate parental rights under the private placement adoption statute, there must be a finding of “intentional abandonment or a very substantial neglect of parental duties without a reasonable expectation of a reversal of that conduct in the future.” N.J.S.A. 9:3–48c(1). This requirement is similar to that of the prior law (i.e., “forsaken parental obligations,” L.1953, c. 264, s 2(d) (codified at N.J.S.A. 9:3–18(d) (repealed))), and to that of the law providing for termination through actions by approved agencies, N.J.S.A. 9:2–13(d). See also In re Adoption by J.J.P., 175 N.J.Super. 420, 427, 419 A.2d 1135 (App.Div.1980) (noting that the language of the termination

provision in the present statute, N.J.S.A. 9:3–48c(1), derives from this Court’s construction of the prior statute in In re Adoption of Children by D., 61 N.J. 89, 94–95, 293 A.2d 171 (1972)). In Sees v. Baber, 74 N.J. 201, 377 A.2d 628 (1977) we distinguished the requirements for terminating parental rights in a private placement adoption from those required in an approved agency adoption. We stated that in an unregulated private placement, “neither consent nor voluntary surrender is singled out as a statutory factor in terminating parental rights.” Id. at 213, 377 A.2d 628. Sees established that without proof that parental obligations had been forsaken, there would be no termination in a private placement setting. As the trial court recognized, without a valid termination there can be no adoption. In re Adoption of Children by D., supra, 61 N.J. at 95, 293 A.2d 171. This requirement applies to all adoptions, whether they be private placements, ibid., or agency adoptions, N.J.S.A. 9:3–46a, –47c. Our statutes, and the cases interpreting them, leave no doubt that where there has been no written surrender to an approved agency or to DYFS, termination of parental rights will not be granted in this state absent a very strong showing of abandonment or neglect. That showing is required in every context in which termination of parental rights is sought, be it an action by an approved agency, an action by DYFS, or a private placement adoption proceeding, even where the petitioning adoptive parent is, as here, a stepparent. While the statutes make certain procedural allowances when stepparents are involved, the substantive requirement for terminating the natural parents’ rights is not relaxed one iota. It is clear that a “best interests” determination is never sufficient to terminate parental rights; the statutory criteria must be proved. In this case a termination of parental rights was obtained not by proving the statutory prerequisites but by claiming the benefit of contractual provisions. From all that has been stated above, it is clear that a contractual agreement to abandon one’s parental rights, or not to contest a termination action, will not be enforced in our courts. The Legislature would not have so carefully, so consistently, and so substantially restricted termination of parental rights if it had intended to allow termination to be achieved by one short sentence in a contract. Since the termination was invalid, it follows, as noted above, that adoption of Melissa by Mrs. Stern could not properly be granted. 3. The provision in the surrogacy contract stating that Mary Beth Whitehead agrees to “surrender custody ... and terminate all parental rights” contains no clause giving her a right to rescind. It is intended to be an irrevocable consent to surrender the child for adoption—in other words, an irrevocable commitment by Mrs. Whitehead to turn Baby M over to the Sterns and thereafter to allow termination of her parental rights. The trial court required a “best interests” showing as a condition to granting specific performance of the surrogacy contract. Having decided the “best interests” issue in favor of the Sterns, that court’s order included, among other things, specific performance of this agreement to surrender custody and terminate all parental rights. Mrs. Whitehead, shortly after the child’s birth, had attempted to revoke her consent and surrender by refusing, after the Sterns had allowed her to have the child “just for one week,” to return Baby M to them. The trial court’s award of specific performance therefore reflects its view that the consent to surrender the child was irrevocable. We accept the trial court’s construction of the contract; indeed it appears quite clear that this was the parties’ intent. Such a provision, however, making irrevocable the natural mother’s consent to surrender custody of her child in a private placement adoption, clearly conflicts with New Jersey law. Our analysis commences with the statute providing for surrender of custody to an approved agency and termination of parental rights on the suit of that agency. The two basic provisions of the statute are N.J.S.A. 9:2– 14 and 9:2–16. The former provides explicitly that [e]xcept as otherwise provided by law or by order or judgment of a court of competent jurisdiction or by testamentary disposition, no surrender of the custody of a child shall be valid in this state unless made to an approved agency pursuant to the provisions of this act.... There is no exception “provided by law,” and it is not clear that there could be any “order or judgment of a court of competent jurisdiction” validating a surrender of custody as a basis for adoption when that surrender was not in conformance with the statute. Requirements for a voluntary surrender to an approved agency are set forth in N.J.S.A. 9:2–16. This section allows an approved agency to take a voluntary surrender of custody from the parent of a child but provides stringent requirements as a condition to its validity. The surrender must be in writing,

must be in such form as is required for the recording of a deed, and, pursuant to N.J.S.A. 9:2–17, must be such as to declare that the person executing the same desires to relinquish the custody of the child, acknowledge the termination of parental rights as to such custody in favor of the approved agency, and acknowledge full understanding of the effect of such surrender as provided by this act. If the foregoing requirements are met, the consent, the voluntary surrender of custody shall be valid whether or not the person giving same is a minor and shall be irrevocable except at the discretion of the approved agency taking such surrender or upon order or judgment of a court of competent jurisdiction, setting aside such surrender upon proof of fraud, duress, or misrepresentation. [N.J.S.A. 9:2–16.] The importance of that irrevocability is that the surrender itself gives the agency the power to obtain termination of parental rights—in other words, permanent separation of the parent from the child, leading in the ordinary case to an adoption. N.J.S.A. 9:2–18 to 20. This statutory pattern, providing for a surrender in writing and for termination of parental rights by an approved agency, is generally followed in connection with adoption proceedings and proceedings by DYFS to obtain permanent custody of a child. Our adoption statute repeats the requirements necessary to accomplish an irrevocable surrender to an approved agency in both form and substance. N.J.S.A. 9:3–41a. It provides that the surrender “shall be valid and binding without regard to the age of the person executing the surrender,” ibid.; and although the word “irrevocable” is not used, that seems clearly to be the intent of the provision. The statute speaks of such surrender as constituting “relinquishment of such person’s parental rights in or guardianship or custody of the child named therein and consent by such person to adoption of the child.” Ibid. (emphasis supplied). We emphasize “named therein,” for we construe the statute to allow a surrender only after the birth of the child. The formal consent to surrender enables the approved agency to terminate parental rights. Similarly, DYFS is empowered to “take voluntary surrenders and releases of custody and consents to adoption[s]” from parents, which surrenders, releases, or consents “when properly acknowledged ... shall be valid and binding irrespective of the age of the person giving the same, and shall be irrevocable except at the discretion of the Bureau of Childrens Services [currently DYFS] or upon order of a court of competent jurisdiction.” N.J.S.A. 30:4C-23. Such consent to surrender of the custody of the child would presumably lead to an adoption placement by DYFS. It is clear that the Legislature so carefully circumscribed all aspects of a consent to surrender custody—its form and substance, its manner of execution, and the agency or agencies to which it may be made—in order to provide the basis for irrevocability. It seems most unlikely that the Legislature intended that a consent not complying with these requirements would also be irrevocable, especially where, as here, that consent falls radically short of compliance. Not only do the form and substance of the consent in the surrogacy contract fail to meet statutory requirements, but the surrender of custody is made to a private party. It is not made, as the statute requires, either to an approved agency or to DYFS. These strict prerequisites to irrevocability constitute a recognition of the most serious consequences that flow from such consents: termination of parental rights, the permanent separation of parent from child, and the ultimate adoption of the child. Because of those consequences, the Legislature severely limited the circumstances under which such consent would be irrevocable. The legislative goal is furthered by regulations requiring approved agencies, prior to accepting irrevocable consents, to provide advice and counseling to women, making it more likely that they fully understand and appreciate the consequences of their acts. N.J.A.C. 10:121A-5.4(c). Contractual surrender of parental rights is not provided for in our statutes as now written. Indeed, in the Parentage Act, N.J.S.A. 9:17–38 to –59, there is a specific provision invalidating any agreement “between an alleged or presumed father and the mother of the child” to bar an action brought for the purpose of determining paternity “[r]egardless of [the contract’s] terms.” N.J.S.A. 9:17–45. Even a settlement agreement concerning parentage reached in a judicially-mandated consent conference is not valid unless the proposed settlement is approved beforehand by the court. There is no doubt that a contractual provision purporting to constitute an irrevocable agreement to surrender custody of a child for adoption is invalid. In Sees v. Baber, supra, 74 N.J. 201, 377 A.2d 628, we noted that a natural mother’s consent to surrender her child and to its subsequent adoption was no longer required by the statute in private placement adoptions. After tracing the statutory history from the time when such a consent had been an essential prerequisite to adoption, we concluded that such a consent was now neither necessary nor sufficient for the purpose of terminating

parental rights. Id. at 213, 377 A.2d 628. The consent to surrender custody in that case was in writing, had been executed prior to physical surrender of the infant, and had been explained to the mother by an attorney. The trial court found that the consent to surrender of custody in that private placement adoption was knowing, voluntary, and deliberate. Id. at 216, 377 A.2d 628. The physical surrender of the child took place four days after its birth. Two days thereafter the natural mother changed her mind, and asked that the adoptive couple give her baby back to her. We held that she was entitled to the baby’s return. The effect of our holding in that case necessarily encompassed our conclusion that “in an unsupervised private placement, since there is no statutory obligation to consent, there can be no legal barrier to its retraction.” Id. at 215, 377 A.2d 628. The only possible relevance of consent in these matters, we noted, was that it might bear on whether there had been an abandonment of the child, or a forsaking of parental obligations. Otherwise, consent in a private placement adoption is not only revocable but, when revoked early enough, irrelevant. The provision in the surrogacy contract whereby the mother irrevocably agrees to surrender custody of her child and to terminate her parental rights conflicts with the settled interpretation of New Jersey statutory law. There is only one irrevocable consent, and that is the one explicitly provided for by statute: a consent to surrender of custody and a placement with an approved agency or with DYFS. The provision in the surrogacy contract, agreed to before conception, requiring the natural mother to surrender custody of the child without any right of revocation is one more indication of the essential nature of this transaction: the creation of a contractual system of termination and adoption designed to circumvent our statutes. B. Public Policy Considerations The surrogacy contract’s invalidity, resulting from its direct conflict with the above statutory provisions, is further underlined when its goals and means are measured against New Jersey’s public policy. The contract’s basic premise, that the natural parents can decide in advance of birth which one is to have custody of the child, bears no relationship to the settled law that the child’s best interests shall determine custody. See Fantony v. Fantony, 21 N.J. 525, 536–37, 122 A.2d 593 (1956); see also Sheehan v. Sheehan, 38 N.J.Super. 120, 125, 118 A.2d 89 (App.Div.1955) (“WHATEVER THE AGREEMENT OF THE PARENTS, The Ultimate determination of custody lies with the court in the exercise of its supervisory jurisdiction as parens patriae.”). The fact that the trial court remedied that aspect of the contract through the “best interests” phase does not make the contractual provision any less offensive to the public policy of this State. The surrogacy contract guarantees permanent separation of the child from one of its natural parents. Our policy, however, has long been that to the extent possible, children should remain with and be brought up by both of their natural parents. That was the first stated purpose of the previous adoption act, L.1953, c. 264, s 1, codified at N.J.S.A. 9:3–17 (repealed): “it is necessary and desirable (a) to protect the child from unnecessary separation from his natural parents....” While not so stated in the present adoption law, this purpose remains part of the public policy of this State. See, e.g., Wilke v. Culp, 196 N.J.Super. 487, 496, 483 A.2d 420 (App.Div.1984), certif. den., 99 N.J. 243, 491 A.2d 728 (1985); In re Adoption by J.J.P., supra, 175 N.J.Super. at 426, 419 A.2d 1135. This is not simply some theoretical ideal that in practice has no meaning. The impact of failure to follow that policy is nowhere better shown than in the results of this surrogacy contract. A child, instead of starting off its life with as much peace and security as possible, finds itself immediately in a tug-of-war between contending mother and father. The surrogacy contract violates the policy of this State that the rights of natural parents are equal concerning their child, the father’s right no greater than the mother’s. “The parent and child relationship extends equally to every child and to every parent, regardless of the marital status of the parents.” N.J.S.A. 9:17–40. As the Assembly Judiciary Committee noted in its statement to the bill, this section establishes “the principle that regardless of the marital status of the parents, all children and all parents have equal rights with respect to each other.” Statement to Senate No. 888, Assembly Judiciary, Law, Public Safety and Defense Committee (1983) (emphasis supplied). The whole purpose and effect of the surrogacy contract was to give the father the exclusive right to the child by destroying the rights of the mother. The policies expressed in our comprehensive laws governing consent to the surrender of a child stand in stark contrast to the surrogacy contract and what it implies. Here there is no counseling, independent or otherwise, of the natural mother, no evaluation, no warning.

The only legal advice Mary Beth Whitehead received regarding the surrogacy contract was provided in connection with the contract that she previously entered into with another couple. Mrs. Whitehead’s lawyer was referred to her by the Infertility Center, with which he had an agreement to act as counsel for surrogate candidates. His services consisted of spending one hour going through the contract with the Whiteheads, section by section, and answering their questions. Mrs. Whitehead received no further legal advice prior to signing the contract with the Sterns. Mrs. Whitehead was examined and psychologically evaluated, but if it was for her benefit, the record does not disclose that fact. The Sterns regarded the evaluation as important, particularly in connection with the question of whether she would change her mind. Yet they never asked to see it, and were content with the assumption that the Infertility Center had made an evaluation and had concluded that there was no danger that the surrogate mother would change her mind. From Mrs. Whitehead’s point of view, all that she learned from the evaluation was that “she had passed.” It is apparent that the profit motive got the better of the Infertility Center. Although the evaluation was made, it was not put to any use, and understandably so, for the psychologist warned that Mrs. Whitehead demonstrated certain traits that might make surrender of the child difficult and that there should be further inquiry into this issue in connection with her surrogacy. To inquire further, however, might have jeopardized the Infertility Center’s fee. The record indicates that neither Mrs. Whitehead nor the Sterns were ever told of this fact, a fact that might have ended their surrogacy arrangement. Under the contract, the natural mother is irrevocably committed before she knows the strength of her bond with her child. She never makes a totally voluntary, informed decision, for quite clearly any decision prior to the baby’s birth is, in the most important sense, uninformed, and any decision after that, compelled by a pre-existing contractual commitment, the threat of a lawsuit, and the inducement of a $10,000 payment, is less than totally voluntary. Her interests are of little concern to those who controlled this transaction. Although the interest of the natural father and adoptive mother is certainly the predominant interest, realistically the only interest served, even they are left with less than what public policy requires. They know little about the natural mother, her genetic makeup, and her psychological and medical history. Moreover, not even a superficial attempt is made to determine their awareness of their responsibilities as parents. Worst of all, however, is the contract’s total disregard of the best interests of the child. There is not the slightest suggestion that any inquiry will be made at any time to determine the fitness of the Sterns as custodial parents, of Mrs. Stern as an adoptive parent, their superiority to Mrs. Whitehead, or the effect on the child of not living with her natural mother. This is the sale of a child, or, at the very least, the sale of a mother’s right to her child, the only mitigating factor being that one of the purchasers is the father. Almost every evil that prompted the prohibition on the payment of money in connection with adoptions exists here. The differences between an adoption and a surrogacy contract should be noted, since it is asserted that the use of money in connection with surrogacy does not pose the risks found where money buys an adoption. Katz, “Surrogate Motherhood and the Baby-Selling Laws,” 20 Colum.J.L. & Soc.Probs. 1 (1986). First, and perhaps most important, all parties concede that it is unlikely that surrogacy will survive without money. Despite the alleged selfless motivation of surrogate mothers, if there is no payment, there will be no surrogates, or very few. That conclusion contrasts with adoption; for obvious reasons, there remains a steady supply, albeit insufficient, despite the prohibitions against payment. The adoption itself, relieving the natural mother of the financial burden of supporting an infant, is in some sense the equivalent of payment. Second, the use of money in adoptions does not produce the problem—conception occurs, and usually the birth itself, before illicit funds are offered. With surrogacy, the “problem,” if one views it as such, consisting of the purchase of a woman’s procreative capacity, at the risk of her life, is caused by and originates with the offer of money. Third, with the law prohibiting the use of money in connection with adoptions, the built-in financial pressure of the unwanted pregnancy and the consequent support obligation do not lead the mother to the highest paying, ill-suited, adoptive parents. She is just as well-off surrendering the child to an approved agency. In surrogacy, the highest bidders will presumably become the adoptive parents regardless of suitability, so long as payment of money is permitted.

Fourth, the mother’s consent to surrender her child in adoptions is revocable, even after surrender of the child, unless it be to an approved agency, where by regulation there are protections against an ill-advised surrender. In surrogacy, consent occurs so early that no amount of advice would satisfy the potential mother’s need, yet the consent is irrevocable. The main difference, that the unwanted pregnancy is unintended while the situation of the surrogate mother is voluntary and intended, is really not significant. Initially, it produces stronger reactions of sympathy for the mother whose pregnancy was unwanted than for the surrogate mother, who “went into this with her eyes wide open.” On reflection, however, it appears that the essential evil is the same, taking advantage of a woman’s circumstances (the unwanted pregnancy or the need for money) in order to take away her child, the difference being one of degree. In the scheme contemplated by the surrogacy contract in this case, a middle man, propelled by profit, promotes the sale. Whatever idealism may have motivated any of the participants, the profit motive predominates, permeates, and ultimately governs the transaction. The demand for children is great and the supply small. The availability of contraception, abortion, and the greater willingness of single mothers to bring up their children has led to a shortage of babies offered for adoption. See N. Baker, Baby Selling: The Scandal of Black Market Adoption, supra; Adoption and Foster Care, 1975: Hearings on Baby Selling Before the Subcomm. On Children and Youth of the Senate Comm. on Labor and Public Welfare, 94th Cong.1st Sess. 6 (1975) (Statement of Joseph H. Reid, Executive Director, Child Welfare League of America, Inc.). The situation is ripe for the entry of the middleman who will bring some equilibrium into the market by increasing the supply through the use of money. Intimated, but disputed, is the assertion that surrogacy will be used for the benefit of the rich at the expense of the poor. See, e.g., Radin, “Market Inalienability,” 100 Harv.L.Rev. 1849, 1930 (1987). In response it is noted that the Sterns are not rich and the Whiteheads not poor. Nevertheless, it is clear to us that it is unlikely that surrogate mothers will be as proportionately numerous among those women in the top twenty percent income bracket as among those in the bottom twenty percent. Ibid. Put differently, we doubt that infertile couples in the low-income bracket will find upper income surrogates. In any event, even in this case one should not pretend that disparate wealth does not play a part simply because the contrast is not the dramatic “rich versus poor.” At the time of trial, the Whiteheads’ net assets were probably negative—Mrs. Whitehead’s own sister was foreclosing on a second mortgage. Their income derived from Mr. Whitehead’s labors. Mrs. Whitehead is a homemaker, having previously held part-time jobs. The Sterns are both professionals, she a medical doctor, he a biochemist. Their combined income when both were working was about $89,500 a year and their assets sufficient to pay for the surrogacy contract arrangements. The point is made that Mrs. Whitehead agreed to the surrogacy arrangement, supposedly fully understanding the consequences. Putting aside the issue of how compelling her need for money may have been, and how significant her understanding of the consequences, we suggest that her consent is irrelevant. There are, in a civilized society, some things that money cannot buy. In America, we decided long ago that merely because conduct purchased by money was “voluntary” did not mean that it was good or beyond regulation and prohibition. West Coast Hotel Co. v. Parrish, 300 U.S. 379, 57 S.Ct. 578, 81 L.Ed. 703 (1937). Employers can no longer buy labor at the lowest price they can bargain for, even though that labor is “voluntary,” 29 U.S.C. § 206 (1982), or buy women’s labor for less money than paid to men for the same job, 29 U.S.C. § 206(d), or purchase the agreement of children to perform oppressive labor, 29 U.S.C. § 212, or purchase the agreement of workers to subject themselves to unsafe or unhealthful working conditions, 29 U.S.C. §§ 651 to 678. (Occupational Safety and Health Act of 1970). There are, in short, values that society deems more important than granting to wealth whatever it can buy, be it labor, love, or life. Whether this principle recommends prohibition of surrogacy, which presumably sometimes results in great satisfaction to all of the parties, is not for us to say. We note here only that, under existing law, the fact that Mrs. Whitehead “agreed” to the arrangement is not dispositive. The long-term effects of surrogacy contracts are not known, but feared—the impact on the child who learns her life was bought, that she is the offspring of someone who gave birth to her only to obtain money; the impact on the natural mother as the full weight of her isolation is felt along with the full reality of the sale of her body and her child; the impact on the natural father and adoptive mother once they realize the consequences of their conduct. Literature in related areas suggests these are substantial considerations, although, given the newness of surrogacy, there is little information. See N. Baker, Baby Selling: The Scandal of Black Market Adoption, supra;

Adoption and Foster Care, 1975: Hearings on Baby Selling Before the Subcomm. on Children and Youth of the Senate Comm. on Labor and Public Welfare, 94th Cong. 1st Sess. (1975). The surrogacy contract is based on, principles that are directly contrary to the objectives of our laws. It guarantees the separation of a child from its mother; it looks to adoption regardless of suitability; it totally ignores the child; it takes the child from the mother regardless of her wishes and her maternal fitness; and it does all of this, it accomplishes all of its goals, through the use of money. Beyond that is the potential degradation of some women that may result from this arrangement. In many cases, of course, surrogacy may bring satisfaction, not only to the infertile couple, but to the surrogate mother herself. The fact, however, that many women may not perceive surrogacy negatively but rather see it as an opportunity does not diminish its potential for devastation to other women. In sum, the harmful consequences of this surrogacy arrangement appear to us all too palpable. In New Jersey the surrogate mother’s agreement to sell her child is void. Its irrevocability infects the entire contract, as does the money that purports to buy it. For affirmance in part, reversal in part and remandment—Chief Justice WILENTZ and Justices CLIFFORD, HANDLER, POLLOCK, O’HERN, GARIBALDI and STEIN—7. Opposed—None.

QUESTIONS AND DISCUSSION POINTS 1. Among the many issues raised by this case, the paramount issue is the question of freedom of contract. The Court finds the contract between the parties to be unenforceable. How many different arguments does the court make in support of its conclusion that the contract is unenforceable? 2. Consider the Court’s first argument, to the effect that the contract is unenforceable because it conflicts with the law of New Jersey, specifically the statute that prohibits using money in connection with an adoption. The Court seems to dismiss the parties’s efforts to avoid this statute. Is there any way the contract might have been redrafted to avoid the reach of the statute? 3. The Court takes an overall negative view of using contract as a way of adopting children. The Court’s concerns all center around the best interests of the child. Is the Legislative and Court animosity to payment for private adoption based on anything more than faith that the State and not private corporations is in the best position to assess what is in the best interests of the child? If it were possible to “privatize” the adoption process (i.e., to have private agencies perform all the tasks now done by the State), would the objections to private adoptions be met? 4. The Court makes a “public policy” argument against the surrogacy contract. The general claim is that the long-term effects of the surrogacy arrangement cannot be appreciated. But do any or all of these criticisms also apply to adoption which, of course, is permitted by law? 5. The Court concludes that Mrs. Whitehead failed to understand the surrogacy contract. Are you persuaded that this is the case? If her consent to the surrogacy arrangement is superfluous to the Court’s decision, why is this issue discussed at all?#CONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAW1. A security interest is a lien on personal property. If payment of the underlying debt is not made in accordance with the terms of the contract, the lien holder may seize the liened property, and sell it, in order to satisfy the amount owed. 2. At the time of this purchase her account showed a balance of $164 still owing from her prior purchases. The total of all the purchases made over the years in question came to $1,800. The total payments amounted to $1,400.CONTRACT LAW #3. See Comment, § 2–302, Uniform Commercial Code (1962). Compare Note, 45 VA.L.REV. 583, 590 (1959), where it is predicted that the rule of § 2–302 will be followed by

analogy in cases which involve contracts not specifically covered by the section. Cf. 1 STATE OF NEW YORK LAW REVISION COMMISSION, REPORT AND RECORD OF HEARINGS ON THE UNIFORM COMMERCIAL CODE 108–110 (1954) (remarks of Professor Llewellyn).# CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAW4. See Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960). A.2d at 86, and authorities there cited. Inquiry into the relative bargaining power of the two parties is not an inquiry wholly divorced from the general question of unconscionability, since a one-sided bargain is itself evidence of the inequality of the bargaining parties. This fact was vaguely recognized in the common law doctrine of intrinsic fraud, that is, fraud which can be presumed from the grossly unfair nature of the terms of the contract. See the oft-quoted statement of Lord Hardwicke in Earl of Chesterfield v. Janssen, 28 Eng. Rep. 82, 100 (1751): ... (Fraud) may be apparent from the intrinsic nature and subject of the bargain itself; such as no man in his senses and not under delusion would make.... And cf. Hume v. United States, supra Note 3, 132 U.S. at 413, 10 S.Ct. at 137, where the Court characterized the English cases as “cases in which one party took advantage of the other’s ignorance of arithmetic to impose upon him, and the fraud was apparent from the face of the contracts.” See also Greer v. Tweed, supra Note 3.5. FN8. See RESTATEMENT, CONTRACTS s 70 (1932); Note, 63 HARV.L.REV. 494 (1950). See also Daley v. People’s Building, Loan & Savings Ass’n, 178 Mass. 13, 59 N.E. 452, 453 (1901), in which Mr. Justice Holmes, while sitting on the Supreme Judicial Court of Massachusetts, made this observation: ... Courts are less and less disposed to interfere with parties making such contracts as they choose, so long as they interfere with no one’s welfare but their own.... It will be understood that we are speaking of parties standing in an equal position where neither has any oppressive advantage or power.... 6. This rule has never been without exception. In cases involving merely the transfer of unequal amounts of the same commodity, the courts have held the bargain unenforceable for the reason that “in such a case, it is clear, that the law cannot indulge in the presumption of equivalence between the consideration and the promise.” 1 WILLISTON, CONTRACTS s 115 (3d ed. 1957).CONTRACT LAW #7. See the general discussion of “Boiler-Plate Agreements” in LEWELLYN, THE COMMON LAW TRADITION 362–371 (1960).# CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAW1. N.J.S.A. 9:3–54 reads as follows: a. No person, firm, partnership, corporation, association or agency shall make, offer to make or assist or participate in any placement for adoption and in connection therewith 1. Pay, give or agree to give any money or any valuable consideration, or assume or discharge any financial obligation; or 2. Take, receive, accept or agree to accept any money or any valuable consideration. b. The prohibition of subsection a. shall not apply to the fees or services of any approved agency in connection with a placement for adoption, nor shall such prohibition apply to the payment or reimbursement of medical, hospital or other similar expenses incurred in connection with the birth or any illness of the child, or to the acceptance of such reimbursement by a parent of the child. c. Any person, firm, partnership, corporation, association or agency violating this section shall be guilty of a high misdemeanor.CONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW ## CASES IN STATUTORY INTERPRETATION, CONTRACT LAW, TORT LAW, AND PUBLIC LAWCONTRACT LAW #