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Restatement (Second) of Contracts and Presentiation
Author(s): Ian R. MacNeil

Source: Virginia Law Review, Vol. 60, No. 4 (Apr., 1974), pp. 589-610
Published by: Virginia Law Review
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COMMENTARY
RESTATEMENT (SECOND) OF CONTRACTS AND

PRESENTIATIONt
Ian R. Macneil*
To presentiate:
"to makeor renderpresentin place or time;to
cause to be perceivedor realizedas present."1 Presentiationis only
a mannerin whicha personperceivesthe future'seffecton the present;
but it dependsupon eventsoutsidethe individualpsyche,eventsviewed
as determining the future.Presentiation is thus a recognitionthat the
courseof thefutureis boundby presentevents,anrdthatby thoseevents
the futurehas for many purposesbeen broughteffectively into the
present.
Althoughwe are surroundedby thisphenomenon,its name was de-
scribedas rareeven fortyyearsago.2 Thus it is not surprising thatthe
termwas neveremployedin a traditional contracttheoryimplicitly re-
quiringtotal presentiation of each contractrelationat the time of its
formationthroughofferand acceptance. This commentaryexplores
presentiationin traditional
contractlaw and thelimitations on itsuseful-
nessin relationalcontractsand relationalcontractlaw. It thenexplores
theresponsesof Restatement Second to thedemandsrespecting presentia-
tionthatrelationalcontractsimposeon contractlaw.
A remarkmade by AnthonyQuinn whileplayingan Eskimoin The
Savage Innocents(1961) illustrates further the conceptof presentiation.
One of thetwo whitemenwithQuinn had fallenthroughtheice in the
midstof a ragingblizzard,and Quinn and the otherhad quicklypulled
him out of the water.The victimwas freezingto deathin spiteof the
tThis commentary is based on a paper I presentedas a memberof the Contracts
RoundtablePanel at the Annual Meetingof the Associationof AmericanLaw Schools,
December29, 1973. The subjectof the panel was "Restatement, Second, Contracts:Its
UnderlyingAssumptionsand Implementation."That paper was in turn related to
Macneil,The Many Futuresof Contracts,47 S. CAL. L. REV. 691 (1974) [hereinafter
cited as Macneil]. Throughoutthiscommentary Restatement Second refersto RESTATE-
MENT (SECOND) OF CoNTRAcrs,Tent. Drafts Nos. 1-7,Revised and Edited (1973), or
to Tent. Draft No. 8 (1973). Tent. Drafts Nos. 1-7, contain Chapters 1-9. Tent. Draft
No. 8 contains Chapter 10.
*Professorof Law and MemberCenterforAdvancedStudies,University of Virginia.
B.A., 1950,Vermont;J.D., 1955, Harvard. I am indebtedto JohnSandersforsomevery
helpfulsuggestionsrespectingrevisionsof this commentary.
1 8 OxpoRD ENGLIsH DIcTIoNARY 1306 (1933).
2Id.
[ 589 ]
590 VirginiaLaw Review [Vol. 60:589
efforts of his friendto slap circulationthroughhis body. Watchingthe

franticefforts, Quinn said, "Your friendis dead." It was a perfectly
sensiblestatement even thoughthe doomed man was stillbreathing, his
heartstillbeating,and his limbsstillmoving. All the eventshad oc-
curred which would cause his death,and therewas not the slightest
chance of avoidingthatevent.
Seldom is recognitionof a presentbindingof the futureso intensely
certainthatwe use the presenttenseto describesomething sureto hap-
pen,but yetto happen.3Recognitionof a presentbindingof thefuture,
particularly verbalizationof thatrecognition, inevitablylags behindthe
extentto whichthefutureis in factbound. No humanmindcan know
all the causes effectingresultsin any complexsequenceof events.4Be-
cause of limitations on knowledgeof causes and effects,our abilityto
presentiate is alwaysa limitedone. Moreover,overtor tacitrecognition
of thoselimitscausesus to thinkmoreof projectingthepresentintothe
futurethan of bringingthe futurebackwards5into the present.Nor-
mally,our thoughtsare of how thepresentwill affectthe future,rather
than of how presenteventshave now fixedthe future.We constantly
speakin termsof planning,of prediction, of expecting,and in a myriad
of othertermstacitlyrecognizingthe limitations of our presentknowl-
edge of the future.The resultis that while presentiation is an ever-
presentphenomenon,it is oftenlikelyto occur at relativelylow levels
of consciousness.6
In view of the conceptualdominanceof projectingthe presentfor-
ward over bringingthe futureback into the present,it is reasonableto
questionwhetherpresentiation is a usefulconceptof contractanalysis.7
An affirmative answerfollowsfromthefact,exploredbelow,thattradi-
3 The melodramatic, "I am dead!", closingmanyan act on thestageis anotherexample.
4 Even if one were to accept in theoryan entirelydeterminist philosophicaloutlook,
the limitationsof finiteknowledgewould preventperfectpresentiation which could
resultfroman infinite understanding of all present,and hence all future,events.
5The very word "backwards"suggeststhat presentiation somehow moves in the
"wrong" direction,which it does if one presupposesexclusivelya linear concept of
timemovingfroma beginningto an ending. In a societydominatedby cyclical con-
cepts of time,"backwards"mightbe a singularlyinappropriate word to describepre-
sentiation.
6 Hence the disuse of the word itself.This statement does not, however,apply to
greatabstractionssuch as economicmodels and contractconcepts.
7Professor Robert Childres,who was kind enough to commenton the paper pre-
sentedto the AALS panel and on the term"presentiation" itself,raised this question
withme.
1974] Presentiation 591
tionalcontractsystems8 are amongthegreatestintellectualexpressionsof

presentiation.9Therefore,presentiation is a usefulconceptualplatform
fromwhichto examineRestatement Second.
Because presentiationdependsupon recognitionof thebindingof the
future,anythingpreventingeitherbindingof the futureor recognition
of that binding frustrates presentiation.Such an impedimentis the
existenceof choice. To the extentthatpeople have choice and we do
not know how they will exerciseit, the futureremainsunbound,and
cannotbe presentiated.10
It is in connectionwithchoice thatthe manifestationof mutualassent
upon which RestatementSecond is primarilyfoundedbecomesso im-
8 The phrase"traditional contractsystems"is not used in a narrowsense,and certainly
not in a pejorativeanti-Willistonian sense. They are the contractsystemsof the Law
Merchant,of Pothier,of Mansfield,of Langdell,of Williston,of the European civil
codes, and in varyingmeasuresof theirmoremodernprogeny,includingCorbin,UCC
Article2, and Restatement Second.
Presentiationvia contractis well illustratedby Patterson'sdescriptionof the goal
of contractdraftersand interpreters:
The ideal resultthatlegal draftsmen seek to attainand thatjudicial interpreters
commonlyseek to findin a writtencontractis thata judge should be able, by
readingthe contractwithoutliftinghis eyes fromthe page, to determineits one
and only "true"meaningin relationto the issuesbeinglitigated.
The Interpretation and Construction of Contracts,64 COLUM.L. REV.833,838 (1964).
Since anythingin a contractis possiblysubjectto litigation, such an ideal goal postu-
latestotalpresentiationat thetimeof theformation of thecontract.A practicinglawyer
friendechoes Patterson:"My experiencehas been of the personstruggling to draw
the maps of 'territoriesto be' with all the attendantfrustrationsand anxietiesimposed
by the assumptionthat the perfectcontractanticipatesand disposesof all possible
futureproblemsand questions."
9 In recentyearsincreasedinteresthas been shownin the linkagebetweenthosedoc-
trines and anothermajor example of presentiationconcepts,economic equilibrium
analysis. See, e.g., R. POSNER, ECONOMICANALYSIS OF LAW 41-65 (1972); Speidel & Clay,
Seller'sRecoveryof Overhead finderUCC Section 2-708(2): Economic Cost Theory
and ContractRemedialPolicy, 57 CORNELL L. REV. 681 (1972); Barton,The Economic
Basis of DamagesforBreachof Contract,1 J.LEGALSTUDIES 277 (1972).
By examiningthepremisesand assumptions of equilibriummodelsit is easyto identify
them as essentiallyan exercisein presentiation.Presentiation
can be seen most dra-
maticallyin models concerningrisk. The currentuse of futurevalue discountedto
presentvalue epitomizespresentiation.
Even if equilibriumanalysisand traditionalcontractsystemswere not conceptually
presentiationsystems,a strongargumentcould be made for examiningthem froma
presentiationstandpoint,
for one sees more of an animal'sskin by rubbingthe fur the
wrongway thanby rubbingit the rightway. Some of thisadvantageis gained even
thoughoverall traditionalcontractsystemsconstitutepresentiation, since their detail
oftenobscuresthisfact.
10This is not to suggestthatwe ever quite totallypresentiate
the future.If we are
rationalwe alwaysrecognizea real possibilityof our perceptionof the futureturning
out to be incorrectbecause of some factorwe did not or could not perceive.
portantto our need and desireto presentiate.Since beforerecorded

historywe have been developingthe notionthatcertainkindsof mani-
festationsof assent,promises,can be used to reduce futurechoice and
enable us to presentiate.When we conclude that a manifestation of
mutualassentto a futureexchangeand to a methodforeffectuating that
exchangeis a promise,when each partybindshimselfnot to changehis
mindand failto carryout theexchange,thenthefuturehas been bound
and presentiationhasbeen accomplished.
The importanceof abilityto presentiate by mutualassentcannotbe
overemphasized.It formsthe basis for the entirecreditstructure.We
tradeaccountsreceivablewithas muchfacilityas we tradedollarbills,
and we tradethemas present,not just future,wealth.1"This is but an
exampleof the role of mutualassentin presentiating futurehumanbe-
haviorso thatpeople may relyupon thatbehaviornow even thoughit
will not occur untillater.'2The abilityto act now on thebasisof some-
thingwhichwe know will not come intobeinguntilthefutureis one of
the mostproductivehumantools. Mutual assentin contractingis one
of themostimportant ways we exercisethisability.
TRADITIONAL CONTRACT LAW AND PRESENTIAIrON
Severalgenerations ago the Germanlegal scholar,Kohler,said, "It is

the provinceof the law of obligationsto draw the futureintothe pres-
ent."13 This is preciselywhat traditionalcontractlaw was designedto
do, by addinglegal sanctionsto the bindingness of mutualassent.This
aspectof traditionalcontractlaw, mosthighlydevelopedin thiscountry
by Williston,was a truly ingeniousintellectualcreation. Primarily
throughmanipulationsof the notion of consent,traditionalcontract
theorycreateda legalstructure whichin theoryattempted to presentiate
not justpartof therelationbetweencontracting parties,but virtuallyall
of it.When a subjectivemeetingof themindsbecametoo narrowa con-
cept upon which to base completepresentiation, the contractstructure
shiftedto an objectivetheoryof contracts, reinforcedby such doctrines
as the parol evidencerule. Unfortunately, sometimesconsent,even ob-
II Accounts receivable are traded at a discount
from future value both because of a
time-interestdiscount and because mutual assent does not ensure total binding of the
future necessary to permit complete presentiation.
12 The role of mutual assent as a presentiatingtechnique includes but exceeds its role
in planning. It also involves the reliability of the plan being carried out, a notion of
bindingness.
13 J. KOHLER, PHILOSOPHY OF LAW 136 (A.
Albrecht transl. 1914).
jective consent,was too vague in commitment or contentto serveas a

basisfortotalpresentiation. The relationcreatedby such vague consent
was excludedfromthe realmof contractaltogether, leavingthe parties
with only the legal reinforcement theymightfindin the law of quasi-
contractor torts. Since thiswas oftenundesirable, the designersof the
structure wentto greatlengthsto inferconsentto suchthingsas reason-
able timesor prices,or to implyconditionsand otherterms.Faced with
inevitableproblemsof mistakes,impossibility, or other frustration of
originalgoals, the theoryutilizedimpliedconditionsin an attemptto
preservethe facade of initialpresentiation by mutualassent.'4When
consentwas stretchedas far as it reasonablycould be or, some would
say, farther, thenthe gap-fillingCorpus JurisContractustook over di-
rectly,exemplified by Williston'sanalysisof impossibility.'
The aim was to establish,insofaras the law could, the entirerelation
at the time of the expressionsof mutual assent.Total presentiation
through100% predictability was soughtas of the time of something
called the acceptance of an offer.'6When possible,the law accom-
plishedthisthroughtheformof givinglegal effectto partypresentiation
as demonstrated by party manifestations of mutualassent.When the
guise of such consensuallyformedlaw was not possible,forexamplein
the case of legal remedieswhich the partiescommonlyfailto articulate
at all, the systemfilledthe gaps by supplyingpresentiation in the form
of predictableand theoreticallypreciserules.
The dominantcharacteristics of a typical17contractlegalsystemaimed
at creatingcompletepresentiation at the timeof mutualassentmay be
summarizedas follows:As muchas possibleof the contentof the rela-
tion,both structureand detail,is forcedinto a patternof mutualassent
expressedat some instantaneouspoint of time; contentnecessaryto
achieve presentiation, but which cannotsensiblybe rationalizedinto a
14 This was sometimescarriedto extremes
too great for Willistonwho called for
greaterfrankness.3 S. WILLISTON,CONTRAcrS,? 1937 (1920).
15Id.
16 If one substitutes
for "presentiated"
the combination"plannedand bound,"the aim
of the Williston systemwas to have the relation totally planned and totally bound from
the momentof mutualassent. A reader finding"presentiated"to be an unduly in-
felicitousword can substitutethis combinationthroughoutand still capture all the
body and much of the spirit of the ideas expressed.
17 "Typical" and not "universal"because therecould easilybe a heavilypresentiated
contractuallegal systemin whichmutualassentis only a triggering deviceforinvoking
a largebody of termspredictableif examined.Indeed thisis a fairdescription
of much
of thepresentlaw relatingto adhesioncontracts,wherethetermsare suppliedoriginally
by one party or by some agency such as a state public utilities commission.
patternof instantaneous mutualassent,will be suppliedeo instanteby

the legal systemin a formas preciselypredictableas possible.Through-
out thiscommentary thesecharacteristics will serveas a touchstonefor
evaluatingthe extentto which a contractlegal systemadheresto or
departsfroma totalpresentiation approach.
No one was ever so naive as to believethat contractlaw could in-
deed achievetotal presentiation, but thereare some kindsof contracts
where close approximations may be possible. Completepresentiation is
mostlikelyto lead to usefuloutcomesin contractsproperlydescribed
as discretetransactions.'8These are contractsof shortduration,with
limitedpersonalinteractions, and with precisepartymeasurements of
easily measuredobjects of exchange,for example money and grain.
They are transactions requiringa minimumof futurecooperativebe-
haviorbetweenthe partiesand not requiringa sharingof benefitsor
burdens.They bind the two partiestightlyand precisely.The parties
view such transactions as deals freeof entangling strings,and theycer-
tainlyexpectno altruism. The partiessee virtuallyeverything connected
withsuch transactions as clearlydefinedand presentiated.If troubleis
anticipatedat all, it is anticipatedonly if someoneor somethingturns
out unexpectablybadly. The epitomeof discretecontracttransactions:
two strangerscome into town fromoppositedirections,one walking
and one ridinga horse.The walkeroffersto buy the horse,and after
briefdickeringa deal is struckin which deliveryof the horseis to be
made at sundownupon the handingover of $10. The two strangers
expectto have nothingto do with each otherbetweennow and sun-
down,theyexpectneverto see each otheragainthereafter, and each has
as muchfeelingfortheotheras hasa Vikingtradingwitha Saxon.19
A high degree of presentiationis possible in truly discretetrans-
actions,becauseit is possibleto approachcompletemutualplanningand
to do so at one pointin time.This completenessand unityof planning
createsa situationwhere it is reasonablefor the partiesto bind them-
selvesto stickrigorouslyby the planning.That in turnpermitsthe ap-
plicationof the legal reinforcing structureof traditionalcontractlaw.
18This is true not only with respectto the completenessof party presentiation
throughconsensualplanning,but also withrespectto the legal responseof givingeffect
to thatconsensualplanningor of fillinggaps.
19The natureof discretetransactionsis exploredin greaterdetail in Macneil,supra
note t. A very large percentageof the illustrations
in RestatementSecond fitsthis
category.However the percentageof discretetransactionillustrations seems lower in
Chapter10, Performance and Non-Performance, thanin otherchapters.
Because of theclose connectionof traditional contractlaw withdiscrete

it is appropriateto referto it as transactional
transactions, contractlaw.
RELATIONALCONTRACTS
ANDPRESENTIATION
Few economic exchanges occur entirelyin the discrete transactional
pattern.20Virtuallyall economicexchangetakesplace in circumstances
characterizedby one or more of the following:The relationsare of
significantduration (for example,franchising).Close whole person
relationsforman integralaspect of the relation (employment).The
object of exchangetypicallyincludesboth easily measuredquantities
(wages) and quantitiesnot easily measured (the projectionof per-
sonalityby an airlinestewardess).21 Many individualswith individual
and collectivepoles of interestare involvedin the relation(industrial
relations). Futurecooperativebehavioris anticipated(the playersand
managementof the Oakland Raiders). The benefitsand burdensof the
relationare to be sharedratherthandividedand allocated (a law part-
nership).The bindingness of therelationis limited(again a law partner-
shipin whichin theoryeach memberis freeto quit almostat will). The
entanglingstringsof friendship, reputation,interdependence, morality,
and altruisticdesiresare integralpartsof the relation(a theatricalagent
and his clients).Trouble is expectedas a matterof course (a collective
bargainingagreement).Finallythe participants neverintendor expect
to see the whole futureof the relationas presentiated at any singletime,
but view the relationas an ongoingintegration of behaviorwhich will
grow and varywitheventsin a largelyunforeseeable future(a marriage;
a familybusiness).
In circumstances such as theforegoingeach exchangeno longerstands
alone as in the discretetransaction,
but is partof a relationalweb. Since
20 This may alwavs have been the case. Gluckmanobservesthat:
[I]n the earlylaw of Europe, as in the law of tribalsociety,most of the trans-
actionsin whichmen and womenare involved,are not specific,singletransactions
involvingthe exchangeof goods and servicesbetweenrelativestrangers.Instead,
men and womenhold land and otherproperty, and exchangegoods and services,
as membersof a hierarchyof politicalgroupsand as kinsfolkor affines.
M. GLUCKMAN, POLITICS, LAW AND RITUAL IN TRIBAL SOCIETY 48-49 (1965). Substitute
termssuch as nuclear family,unions,corporations, agencies,consortia,and customer
relationsfor termssuch as kinsfolkand affines,
and thisobservationis valid forfeudal,
probablyfor capitalist,and certainlyfor post-industrial
society.
21Althoughclearly economic in nature,some exchangerelationsmay involvefeN
easilymeasuredquantitiesof exchange. The best exampleis traditionalmarriage.In
thisrespect,marriageand familyrelationscome closer to the concept of purelyrela-
tional exchangeand contractthan otherformsof relationalexchangein our society,
such as employment.
most actual exchangesare at least partiallyrelational,most contracts

could be called relational.22
It is,however,moreusefulto thinkof trans-
actional and relationalcharacteristicsas creatinga spectrumranging
fromsuch extremesas the highlytransactional horsesellingepitometo
thehighlyrelationalnuclearfamilyor commune.As one movestowards
therelationalend of thisspectrumpresentiation playsa relativelysmaller
role, since increasingaspectsof the relationmustbe leftto futurede-
termination. This factposesproblemsforcontractlaw.
PARTIALLYPRESENTIATED
RELATIONSANDTRANSACTIONAL
CONTRACTDOCTRINE
Any legal doctrinefounded on both freedomof contractand the
conceptof totalpresentiationat some singletemporalpoint,such as the
acceptanceof an offer,will encounterspecial difficulties
if applied to
relationalcontracts.The difficulties
ariseboth fromthe incompleteness
at any given time of the presentiation and the continuously evolving
natureof that presentiation.23
How many thousandpartialpresentia-
tions occur in a lifetimeof employmentwith IBM? Every notice about
parkingspaces,everynoticeof promotion, everynoticeof a pay or even
a social securitywithholdingchange,everyrequestgrantedfor a day
off,every grantedrequestfor a transfer, everyrelativelyinvoluntary
transfer, every alterationof job patterns,every routineassignmentof
work,even a movementto a deskin a moredesiredlocation,constitutes
a partialpresentiation of the relation. As time goes by, these partial
presentiationssupersedeearlieronesand previousaspectsof therelation,
22 While in theory exchanges can perhaps occur without a relational
framework, in
practice this is unlikely to happen. Moreover, no exchange projected into the future
by a promise can ever occur in the absence of at least some relational framework,since
some basis for expecting the promises to be performed must exist. That basis creates
an ongoing relation between the parties, if only that of both being subject to the
King's writ for breach. The nature of relational contracts and the spectrum of which
they are a part are explored in greater detail in Macneil, supra note t.
23 In a deeper sense those are only part of the source of the difficulties.The other
part lies in the dichotomy of preexisting-right-wronginherent in the combination of
freedom (power) of contract and presentiation. Such a dichotomy is inconsistentwith
many of the essential characteristicsof relations. Maintaining the relational fabric must
always supersede effectuatingthe right of the preexisting-right-wrong dichotomy when-
ever the two principles conflict. This is known instinctivelyby the participantsin every
viable relational system,whether it be a system served by customary law (see generally
GLUCKMAN, supranote 20, at 169-213), eastern law (see, e.g.,Cohen, ChineseMediation
on the Eve of Modernization, 54 CALIF. L. REV. 1201, 1207 (1966)), or western contract
law, (see, e.g., Macaulay, The Use and Non-Use of Contractsin the Manufacturing
Industry,9 PRAC. LAWYER #7, 13, 17-18 (1963)).
1974J Presentiation 597
and are in turn eroded and modified. It would require a multi-

dimensionaland multi-sense movieprojectorto presentpresentiation in
such circumstances.Any contractlaw structurebased on conceptsof
total presentiationat a particularinstantin timemustnecessarilyuse a
slideprojectorwithbut a singleslide.
Faced with the realitiesof relationalcontractsand existingtransac-
tionalcontractlaw, the possibleresponsesof law makersand law re-
statersare somewhatlimited.One responseis simplynot to apply that
law. A secondis to continueto tryto forcerelationalcontractpatterns
into the mold of totallegal presentiation.A thirdis to modifythe de-
tailsof transactionalcontractlaw so thattotalpresentiationis no longer
the actual goal, but to leave totalpresentiation
the apparentgoal of the
theoreticalstructure.A fourthresponseis to develop an overallstruc-
ture of contractlaw of greatergeneralapplicabilitythan now exists
and to mergeboththe detailsand the structure of transactional
contract
law intothatoverallcontractstructure.
RESTATEMENT SECOND AND RELATIONAL CONTRACTS
As the linealsuccessorsof the draftersof Restatement

First,the Re-
portersof Restatement Second have been facedwithchoicesamongthe
responsesdescribedabove. In the tentativedraftsthe Reportershave
incorporatedsomeof all thoseresponsesexceptthefourth.
First, not applying transactionallaw. The RestatementSecond appears

to apply as muchto relationalas to transactional
contracts.If one com-
binesthe variousdefinitions in Sections1 through4 intoa singledefini-
tion includingmany of the phenomenaRestatementSecond would
defineas a contract,one could comeup withthefollowing:
A contractis one or moreexchanges of manifestations

of intentto act
in specifiedways,So made as to justifyeach partyin understanding
thata commitment hasbeenmadeby theotherand forthebreachof
whichthelaw givesa remedy.
It is difficult
to thinkof any moderneconomicexchangenot fitting this
definition,24whetherit occursin a discretetransaction
or is thoroughly
enmeshedin an ongoingrelation.Certainlyeverycorporatecharterand
24 British collective bargaining agreementswere once a lonely exception, as they were
unenforceable at law, and may again become so if the new Labor Government succeeds
in repealing the Industrial Relations Act.
all resultingrelationsbetweenand amongstockholders, managers,bond-

holders,and employeesis "a contract"undersucha definition. The same
is true of every franchise,every collectivebargainingrelation,every
shoppingcenterlease and management agreement, everyrelationof stu-
dent,facultyand university, everyresearchand developmentcontract,
everylicensingagreement, everymarriage.In our societyvirtuallyany
economicrelationis "a contract"undersucha definition.
In spiteof the apparentlybroad scope of Restatement Second's cov-
erage,the Reporterspointout in the introduction thatit "does not deal
with special rulesgoverningparticulartypesof contracts."They ex-
plicitlyexclude agency and partnershipcontracts,both heavilyrela-
tional,and government contracts,which tend normallyin practiceand
oftenin theoryto be heavilyrelational.Presumablythe exclusionary
principleenunciatedcould be construedas applyingto any type of re-
lationalcontractthathas developed"special rules,"includingall those
mentionedin the precedingparagraph.An examinationof the illustra-
tionsemployedin the RestatementSecond suggeststhatthisis not an
unrealisticinterpretationof the Reporter'sintroductory remarks.Ex-
cept in Chapter10, illustrations
strayfromthe transactionalmodelonly
rarely.When theydo it is even rarerthattheyfocuson themanyprob-
lemspeculiarto ongoingrelations.25 One can see the reasonforthisby
examiningone of those doubly rare exceptions,Illustration1, Sec-
tion 21:26
A livesin B's homeand rendersservicesto B overa periodof years,

and afterB's deathclaimsthe valueof the services.By statuteA is
incompetent to testifyto transactions
withB, andthereis no evidence
of a verbalpromise.Amongthe factorsrelevantto a determination
whetherthe servicesweregratuitous are the following:a requestby
B thatA rendertheservices, therelationbetweenA and B, thevalue
of theservicesto B, thealternatives
foregone and hardship suffered
by
A, the financialcircumstances of the parties,the relationbetweenB
and hislegateesor distributees,
and theirconnection withA's services.
Most of the factorsmentionedas pertinentin thisillustration

lie very
uneasilyin the cradle of bargained-for
mutualassentrequiredby Sec-
25Again except in Chapter 10.
26 Restatement Second ?21, Illustration 1 (1973). Footnote references to illustrations
and sections will be omitted in the remainder of this commentary when the source is
indicated by the text. Unless otherwise indicated, all sections and illustrationscited are
from Restatement Second.
1974] Presntiation 599
tion 2127and priorrelatedsections.Factorsof thisnature,however,are

part of the very fabricof ongoingexchangerelations,oftenfar more
importantthanthe fullypresentiated partsof the relation.But to treat
themas independently important in theblack letterpartof Restatement
Second would have requireda total restructuring of the Restatement
Second. Therefore,it is not surprisingthat the Reportersgenerally
avoidedsuchillustrations. If one can relyon theillustrationsratherthan
the black lettersummariesas proofof the pudding,it is reasonableto
conclude that,in spiteof its definitionalinclusiveness,the Restatement
Second is not intendedto applyto theongoingaspectsof relationalcon-
tracts.To the extentthatthisis truea seriousconflictexistsbetweenthe
generalityofitsblackletterlanguageand itsactualapplicability.28
Second, forcing relational contract patternsinto the mold of total legal

presentiation.
The transactional
characterof most of the illustrations
appearsto beliean adoptionof thisresponse.But thegeneralapplicability
of Restatement Second appearsto indicatesome relianceon it. The use
of the illustration
concerningservicesin the home shows thatthe Re-
portersdo indeed somtimestry to force relationalconduct into the
transactionalmold. Anotherexampleof thisis Illustration 10 in Section
140 dealingwithdefensesagainstthirdpartybeneficiaries. The pertinent
black letterrule is:"If a contractceases to be bindingin whole or in
part because of . . . present . . . failure of performance,the rightof any
beneficiaryis to thatextentdischargedor modified."29The comment
particularlypertinentto thisand to Illustration10 is: "Partialdefenses
by way of recoupmentfor breach by the promiseemay be asserted
againstthe beneficiary,
unlessprecludedby the termsof the agreement
27 Section21. Conductas Manifestation of Assent

(1) The manifestation of assentmay be made wholly or partlyby writtenor
spokenwords or by otheracts or by failureto act.
(2) The conduct of a partyis not effectiveas a manifestation of his assent
unlesshe intendsto engagein the conductand knowsor has reasonto know that
the otherpartymay inferfromhis conductthathe assents.
(3) The conductof a partymay manifestassenteven thoughhe does not in
fact assent.In such cases a resultingcontractmay be voidablebecause of fraud,
duress,mistake,or otherinvalidating cause.
Restatement Second ? 21.
28These commentsare addressedprimarilyto Chapters 1 through9 and not to
Chapter10,whichappearedin the 8thTentativeDraft.
29 Restatement Second ? 140.
or considerations
of fairnessor public policy."30 Illustration10, taken
from Lewis v. BenedictCoal Corp. :31
A collectivebargainingagreementbetweenA, a labor union,and many

coal operators,includingB, provides that each operatorwill pay 40
cents to C, trusteeof a welfarefund for coal miners,for each ton of
coal mined. In violationof the agreementA calls a strikeof B's em-
ployees. B is not entitledto deduct the resultingdamagefromthe pay-
mentsdue to C.
Illustration 10 follows Illustration9 in which precisely the opposite re-

sult is reached:
In exchange for a conveyance of one parcel of land by B to A, A

conveys anotherparcel of land to B subject to a mortgagein favorof
C, which B assumesand agreesto pay, and A also agreesto pay money
to B at a later date. In an action by C on B's promise,B can offset
any part of the sum payable by A which is due and unpaid.
These two illustrationsare distinguishableonlyon thebasisof thetrans-

actionalcharacterof Illustration 9, and the relationalcharacterof Illus-
tration10. It was the presenceof multiplepoles of interestand the on-
going interplayof all the countlessexchangerelationsinvolvedwhich
led to the resultin the case fromwhich Illustration10 was taken,a
resultcontraryto the black letterstatement in Section 140. Neverthe-
less,thisrelationalcase is presentedas illustrativeof thattransactional
mode of thinking.Apparentlythe vague language "considerations of
fairnessor public policy" set out in the commentis the explanationfor
thisinconsistency.32
Anotherexampleof the forcingof relationalproblemsinto an un-
accommodating formatbasedon presentiation principlescan be,observed
by comparingIllustration3, Section 21B and Illustrations 2 and 8 of
Section45. Illustration3, Section21B reads:
A, an emiployrer,issuesto B, an employee,a "certificate

of benefit",
promising statedsumsincreasing payable
yearly, to a named bene-
ficiaryif B dies while stillin A's employ.The certificate
provides
30 Id., comment c.
31 361 U.S. 459 (1960).
32 It was precisely his unwillingness to
take account of the relational aspects of the
case which led Mr. Justice Frankfurterto dissent and urge a result which would have
been consistentwith the black letter statementin Section 140.
thatit "constitutes
no contract"and "confersno legal right."The
quotedlanguagemaybe readas reservinga powerof revocation only
untilB dies.
This purportsto illustratea black letterrule that "a manifestation

of
intentionthata promiseshallnot affectlegal relationsmay preventthe
formation of a contract."33 Illustration
2, Section45 reads:
A, an insurancecompany,issuesa bulletin
to itsagents,entitled
"Extra
EarningsAgreement," providingfor annualbonus paymentsto the
agentsvaryingaccordingto "monthly premiums in force"and "lapse
ratio,"but reservingthe rightto changeor discontinue the bonus,
individually
or collectively,
withor withoutnotice,at anytimebefore
payment.Thereis no offeror promise.
Illustration
8, Section45 reads:
In January A, an employer,
publishesa noticeto hisemployees, prom-
isinga statedChristmasbonusto anyemployeewho is continuously in
A's employfromJanuary to Christmas.B, an employeehiredby the
week,readsthenoticeand continues at workbeyondtheexpiration of
thecurrentweek. A is boundby an optioncontract, and if B is con-
tinuously in A's employuntilChristmasa noticeof revocation of the
bonusis ineffective.
Both of the Section45 illustrations

purportto illustrate
the black letter
rule:34
Wherean offerinvitesan offeree to acceptby rendering a perform-

ance and does not invitea promissoryacceptance,an optioncontract
is createdwhentheofferee tendersor beginstheinvitedperformance
or tendersa beginningof it.
The case of the bonusto the insuranceagentsillustrates the yieldingof

thatblack letterrule to "a manifestationof intentionwhich makesre-
liance" on the offerer's
promises"unjustified," a principleexpressedin
Sections2 and 24.
In none of thesethreeillustrations
does the black letterrule founded
on mutualassentand presentiation supply an adequate basis for deci-
sion. Anyone who has struggledthroughteaching Tilbert v. Eagle
33 Restatement
Second ? 21B.
34
Id.)? 45.
Lock Co.5 and Spoonerv. ReserveLife InsuranceCo.,36on which the

firsttwo of the threeillustrationsare based,will recallthe inconsistency
of the literalmanifestations of assentwith the entiresettingsand pur-
posesof themanagements in makingtheproposals.Only examination of
the relationalsettingin which the proposalswere made revealsprin-
ciples for determining whetherreliancewas justified, reliancenot pri-
marilyon the manifestations of quasi-non-assent but primarilyon the
relationsof which thosemanifestations were only a smallpart.This is
also true in the thirdillustration, where the bonus promisebecomes
irrevocableas soon as the employeehas startedperformance.Under
Restatement Second the promisewould becomeirrevocableirrespective
of thesettingin whichthepromisewas madeor in whichtherevocation
occurred,or indeed irrespectiveof the fact that the employercould
escape performanceby laying off the employee at any time before
Christmas, an actionwhichwould certainlybe encouragedby the rule
applied in the illustration.Taking into considerationsuch factorsis
probablyinappropriatein a transactionalcontext,but in a relational
contextit is absolutelyessentialto a wise resolutionof disputes.The
Shulman-Hayesdebates37on the role of the labor arbitratordemon-
stratethe utterpovertyof a pure mutualassentapproachto problems
of thisnaturein a relationalcontext.
The numberof RestatementSecond examplesof forcingrelational
problemsinto functionallyunaccommodatingtransactionalmolds is
limitedbecause the numberof illustrations raisingrelationalproblemsis
so small.38Nevertheless, given the dominanceof relationalcontracting
in our society,it is hard to believethatthe squeezingintoRestatement
black letterlaw of any representative selectionof problemsfromcon-
tractualrelationswould fail to reveal difficulties similarto those dis-
cussed.These difficulties will occur in any theoreticalstructuregiving
a substantiallyhigherdegree of primacyto presentiation created by
manifestations of mutual assentthan the participantsin that relation
giveto thosemanifestations.
35 116 Conn. 357, 165 A.205 (1933).

3647 Wash. 2d 454, 287 P.2d 735 (1955).
37 Hays, The SupremeCourt and Labor Law, October Term, 1959,60 COLUM. L.
REv. 901 (1960); Shulman, Reason,Contract,and Law in Labor Relations,68 HARV. L.
REV. 999 (1955).
38Again excepting Chapter 10. But even in this chapter few examples of forcing
appear because it adopts more fully the third response discussed below.
Third,modifyingthe detailsof contractlaw so thattotalpresentiation

is no longerthe goal, while leavingit the apparentgoal. Some of the
illustrationsalready mentionedare also examplesof this responseto
dealingwithrelationalcontracts,in thatthe detailsof thoseillustrations
contradictthe 100% mutualassentnotionsof theblack letterrulesthey
purportedlyillustrate.But the greatestnumber,the most important,
overt,and successfulexamplesof thispatternare in the extensively re-
visedChapters9 and IO.39 In Chapter9, The Scope of ContractualRe-
lations,thisis especiallytrue of the firstfourtopics: meaning,fairness
and publicinterest,adoptionof a writing,and usage.
Chapter9 retainsin its overallstructurea focus on presentiation by
manifestations of mutualassent,stillimplyingthateverything is planned
and thatthe partiesbecome bound to thatplanningat a particularin-
stant,stillignoringany relationalcontext. But the detailsoftenimply
an awarenessof relationalaspects. Here thereis not theoccasionalillus-
trationwith unexplainedrelationalresults,but a great deal of careful
thoughtabout and explicitrecognitionof relationsand theirproblems.
This is notto suggestthatthisrecognitiondominatesthechapter,or that
thereare no instancesof hindering thesatisfaction
of relationalneedsby
an insistenceupon fittingrelationsinto transactionalmodes.40Nor is
thereany generalframingor even generalovertrecognitionof a rela-
tionalconcept. Nevertheless, considerSection228(4) :41
Wherean agreement involvesrepeatedoccasionsforperformance by

eitherpartywithknowledgeof the natureof the performance and
opportunityforobjectionto it by theother,any courseof perform-
ance acceptedor acquiescedin withoutobjectionis givengreatweight
in theinterpretation
of theagreement.
This sectionis stillkeyedto thenotionthatwhatis soughtis neitherthe

essenceof the relationas it has developedin the courseof performance
39There are a numberof possible reasons for the adoption of this responsein
Chapters9 and 10. The most importantmay be the greaterdifficulty of escaping
relationalconsiderations
in the subjectareas of thesechaptersthanin the subjectareas
of chaptersdealingwith such mattersas mutualassentin formation, considerationand
contractbeneficiaries.
The ad hoc and sporadicuse of thisresponsein previouschapters
producesno principlesthatcan be articulated.
40 E.g., RestatementSecond ? 228, comment g at 514; id., illustrations12, 13 at 514-15.
41 Unfortunately,Section 228(4) is somewhatunderminedby the hierarchyof stan-
dards of interpretation set out in Section 229, in which course of performanceis
"generally"given less weightthan expressterms. This preferencecan oftenbe quite
inappropriatein long termongoingrelations.
nor consideration of how bestto makethe relationwork effectively in

the future,but ratherthe originalpresentiation by manifestationsof
assent. In many instancesthis will have become obsolete,long since
overruledor currently unworkable.When coupledwithcommentrefer-
ences to the possibilityof waiver,modification of agreement,and mis-
take,however, the rule be
may quite workable in a largepercentageof
relationalsituations.Not the best rule possible,not one which could
best focus our attentionon the functionalissuesof relations,but one
whichwill work. Certainlyit is a vastimprovement overitspredecessor,
old Section235(e):42
If theconductofthepartiessubsequent to a manifestation
of intention
indicatesthatall thepartiesplaceda particular
interpretation
uponit,
thatmeaningis adoptedif a reasonablepersoncould attachit to the
manifestation.
There runsthroughthesesectionsa threadof an hereticalnotionof

differing levelsof assent;considerfor example,the discussionof super-
sededstandardtermsin Section229,commentf,and commente: "People
commonlyuse generallanguagewithouta clear consciousnessof itsfull
scope and withoutawarenessthatan exceptionshouldbe made." The
discussionof fillinggaps in Section 230, commentd, and the introduc-
tion of the good faithconceptin Section 231, also reflectthe apostasy
of the Reporter.This is not a nailingof the challengeto the church
door,but a subtleworkingfromwithin. Nevertheless, heresyit is, for
100% presentiation by manipulation of manifestationsof mutualassent
presupposesthat all manifestations are eitherequal or totallyignored.
In theworldof transactional doctrinetherecan be no talkof 95% com-
mitmentor 67% commitmentor 22% commitmentwhen someone
says: "I accept."43 But the idea of a rangeof commitment is the very
natureof relations;no commitment in ongoingrelationsis ever quite a
100% commitment and nothingthataffectsothersin ongoingrelations
is everquiteproductiveof zero commitment.
A reviewof Chapter9 revealsquite a substantialefforton the part
of the Reporterto adjust withinan overalltransactional structurethe
detailsof the Chapterso thattotalpresentiation is no longerthe actual
goal.
42 RESTATEMENT OF CONTRACTS ? 235(e) (1932).
43What happens when such heresy is permittedwithin a transactional format is well
demonstratedby the difficultiesafflictingUCC 2-207.
Chapter10, Performanceand Non-Performance, is the mostchanged

of all of theRestatement Second chaptersin termsof rearranging, reduc-
tionin numberof sections,and terminology.44 But whatis thischapter's
approachto presentiation? 45 To answerthatquestionrequiresa brief
considerationof presentiation relativeto the problemsof uncertainty
which always afflictcontracts.Exchange cannotbe projectedvery far
into the future40 withoutthe partiallyunknown,47 risk, becoming a
factor. With considerationof riskinevitablycome both "if" and "if
not." "If" and "if not" are the antithesisof presentiation, since they
presupposealternativefutures,and presentiation requiresa recognition
thatthefutureis determined.
The effectof the existenceof "if" and "if not" on presentiation can
be limitedin two relatedways. One is to reducethe "ifs"themselves by
makingmorecertainthe occurrenceof the contingencies; anotheris to
maketheconsequencesof thealternatives as similaras possible.Consider
thefollowing:I contractwithyou to purchase100 sharesof XYZ stock
at $80 per share,paid in advance. The fact thatyou may or may not
performyour promiseto deliverthe sharescreatesan "if" preventing
me frompresentiating my ownershipof the shares. But, to the extent
that circumstancesmake it more certainthat you will perform,the
smallerthe "if," and the moreable am I to presentiate my ownership.48
The otherway to reducethesignificance of "if" is to reducethe differ-
ence in consequencesthatflowfromthealternatives.In thehypothetical
stock sale, if the legal systemprovidesme with an inexpensiveand
effectiveway of securingfromyou the exact economicequivalentof
100 sharesof XYZ stock,the difference betweenyour deliveringthose
44 For example, the dropping of such old familiars as "concurrent conditions" and
replacing "failure of consideration" with "failure of performance." The Director of
the American Law Institute,in the Foreword to Tentative Draft No. 8 encompassing
Chapter 10, states, however:
Here, as has so often been the case in our re-working of what many think the
greatest of the first restatements,the opportunities presented for improvement
inhere less in substantive revisions than in drafting changes in the interest of
compression, simplificationand precision.
45 The analysis is not intended to be a comparison with the original
Restatement,
and the comments following should not be understood as comparative in that sense.
46For a discussion of the idea of projecting exchange into the future, see Macneil.
supra note t. Promise is a vital, but by no means exclusive, method of projection.
47Partially unknown because the wholly unknown, e.g., nuclear radiation in the 16th
century,does not affectpresentiation.
48This is true irrespective of the nature of the circumstances causing the reduction.
They may consist of my knowledge that you are the most upright person I know,
or that you are immensely concerned about your credit rating,or that the legal system
provides an effectiveand inexpensive remedy against people breaking such promises.
shares("if") and your not doingso ("if not") becomesverysmall. In

thatcase I am muchmoreable to presentiate the economiceffectof the
sale thanwould be possiblein the absenceof such an availableremedy.
The conceptof condition,whichconstitutes the core of Chapter10,49
is a majorway by whichpartiesto a plannedfutureexchangecan deal
withthe countless"if" and "if not" problemsinherentin the planning.
It is conciselydefinedin Restatement
Second:
A conditionis an event,notcertainto occur,whichmustoccur,unless

its non-occurrence is excused,beforeperformanceundera contract
becomesdue.50
By creatingconditions,bothtechniquesforreducingtheimpactof "if"
and "if not" are utilized,and presentiationbecomes that much more
feasible. But conditionsare not the only way eitherthe partiesor the
legal systemcan deal withthe partiallyunknown. Partiesmay provide
foralternative performances dependingupon circumstances, e.g.,double
indemnityprovisionsin lifeinsurancepolicies,or stipulatedprocedures
and stipulatedsubstantiveremediesin the eventof disputes.51 The most
importantalternative techniqueavailableto or at leastused by the legal
systemis providingremediessuch as damageswhen an "if not" occurs.
It is thesetwo techniques,conditionsand damages,withwhichChapter
10 is concerned.52
Viewed as a presentiating mechanism53the law has two major roles
to play respectingthe "if" and "if not" problems.One is to determine
what happenswhen the "if not" occurs. More particularly, the law
should definewhat will happenin such a way as to make it less likely
thatthe "if not" will occur in the firstplace and to make the practical
differences between"if" and "if not" as smallas possible.The second
role is to deal in advancewithall the "ifs"and "if nots"withwhichthe
partiesthemselves have failedto deal. To theseendsit suppliesitsentire
setof remedialprocesses,and also interpretation and gap-filling
processes
whichconstitute themajoractivitiesofcourtsin contractdisputes.
49 But asalreadynotednot the core of its terminology.
60Restatement Second ? 250.
51 Insurance,suretybonds,limitations of liability,indemnity,
and self-helpremedies,
to mentiona few,are alternativemethods.
52 These two techniquesreflectthe two kindsof legal presentiation,
thatfoundedon
consent(in factor theoryor both) and thatfoundedon gap filling,discussedearlier,
textat note 16 supra; rules respectingconditionstypicallyconstitutethe formerand
rulesrespectingdamagestypicallyconstitute the latter.
53 The primaryrole I have earlierattributedto traditional
transactional
contractlaw.
In chapter10 the Restatement Second concentrateson interpretation

and gap-fillingrespectingperformanceand non-performance, and on
the conditionv. damagemethodsof dealingwiththe "if" and "if not"
problems.This bringsus back to the questionof the approachof the
Chapterto presentiation. As impliedearlier,the morepreciselyplanned
is thelegal responseto whatthepartiesplan and do not plan themselves,
the greaterthe degreeof presentiation apparentlybeingimposedby the
legal system.In Chapter10 it is fairto say thatwe findthe mostcom-
prehensiverecognitionyet in Restatement Second of the limitsof legal
presentiation of ongoingrelations.54There is stillmuchterminology and
languagefoundedon theidea thatthepartiespresentiate virtuallyevery-
thing,but it is by no means as pervasiveas in most earlierpertinent
chapters.55Moreover,the changesof terminology tendto shiftin anti-
presentiationaldirections;forexamplethe older"promisesforan agreed
exchange"is more orientedtowardspresentiation than is Restatement
Second's "promisesexchangedfor an exchangeof performance."Be-
cause of changessuch as these,comingupon whole sectionscut loose
froma presentiational base is not surprising.Probablythe highpointis
the Section 267 incorporationof seven circumstances significantin de-
termining whenremaining dutiesundera contractare discharged:
1. Extentto whichtheinjuredpartywillbe deprivedof thebenefit

whichhe reasonably expected;
2. Extentto whichtheinjuredpartycan be adequatelycompensated
forthepartof thatbenefit of whichhe will be deprived;
3. Extentto whichthepartyfailingto perform or to offerto per-
formwill sufferforfeiture;
4. Likelihoodthatthe partyfailingto perform or to offerto per-
formwill cure his failure,takingaccountof all the circumstances
includingany reasonableassurances;
5. Extentto whichthe behaviorof the partyfailingto perform
or to offerto performcomportswith standardsof good faithand
fairdealing;
6. Extentto whichit reasonablyappearsto the injuredpartythat
delaymaypreventor hinderhimin makingreasonablesubstitute ar-
rangements;
54 Its very name reflects this recognition: "Performance and Non-Performance,"
re-
places earlier chapters denominated, (1) "Conditions; and Breach of Promise as an
Excuse for Failure to Perform a Return Promise" and (2) "Breach of Contract."
55 That is excluding chapters dealing with capacity or the statute of frauds where
the concepts concerning us here are not much in issue and perhaps also excluding
Chapter 9.
7. Extentto whichtheagreement providesforperformancewithout

delay,but a materialfailureto perform or to offerto performon a
statedday does not of itselfdischargethe otherparty'sremaining
dutiesunlessthe circumstances,includingthe languageof the agree-
ment,indicatethatperformance or tenderby thatday is important.
The commentsquiteproperlyreferto thestandardof materiality created

by thefirstfiveof theseas "impreciseand flexible."
56 This is nottheim-
precisionof sloppylegal planning;it is the imprecisionessentialto the

operationof ongoingrelations.So too is the "imprecision"extantin the
sixthand seventhcircumstances.
This is not to suggestthatChapter10 constitutes a sufficiently
rela-
tional handlingof presentiation to deal adequatelywith a greatrange
of relationalcontracts,including,for example,collective bargaining
agreementsor even franchising arrangements. But it certainlyseems
to effecta recognitionin terminology, organization,content,and illus-
trations,of very significantrelationalaspectsof contractperformance
and non-performance.58
Fourth,developmentof an overallstructureof contractlaw for both

relationsand transactions.Above it was suggestedthat therewas a
fourthresponseavailableto law makersand restaters, thatof developing
a total contractlaw structureto deal with both relationsand trans-
actions,and fitting
transactional doctrine9into such a structure.Men-
tion of a fourthresponsewas not meantto suggestthatsuch a course
reallywas open to the Reporters.Indeed had theyadoptedit the ALI
would and should have firedthem. A Restatementis not the proper
vehicleto achievesuch a result.
One mightargue thata surveyof contractlaw, all contractlaw not
just thatwhich contractteachersare accustomedto call contractlaw,
would, if the surveywere outcome-oriented, revealbehavioralpatterns
among legislators,judges, administrators, arbitrators,mediators,and
56 RestatementSecond ? 266, comment a.
57 E.g., the concepts relating to separate contracts in Section 256, comment d, seen
quite inadequate to deal with difficultieswhich might arise respecting quality in one
or more shipmentsof goods by a franchiserpursuant to a long term franchiseagreement.
58 An aside: I am impressed with Chapter 10 (and to some extent with Chapter 9)
by what seems to be a much more direct focus on practical and functional issues than
the more abstract terminology of the original Restatement. It appears that the Reporters
have opened windows and let in a good deal of needed light.
59 Including the presentiation doctrine, which has a role whenever the transactional
factor is present, and that factor is always present in some degree.
above all, participants, adequate to justifyRestatingthat law. But no

such surveyhasbeen or is likelyto be made,giventhemassiveness of the
task and any sensiblecost-benefit analysisof undertaking it. Even if it
were made,the similarity-of-outcome patternswhich existamongsuch
diverserelationsas automobiledealer franchises, collectivebargaining,
and the internaloperationsof corporations,have at the presenttime,
few,if any,commondoctrinalpatterns. Thus, even if such an outcome-
orientedsurveyhad been available,theReporterswould have beenfaced
with the task of developingnew doctrinesto link and describethe
principlesunderlyingthe similarities in behavior. Again this is not a
functionof a Restatement;it presupposesa body of doctrinealready
considerablydevelopednotonlyby theformallawmakerssuchas courts,
administrative agencies and legislatures,but also developed in the
scholarlysenseand,above all in thecustomsand mannersof thesociety.
The questionraisedby a failureto followthisfourthroutehasnothing
to do with what the Reportersshould or should not have done. The
questionraisedis a morebasic one concerningthewisdomof attempting
to restateanew the law of transactionalcontractsat a time when so
much contractlaw concernsrelationswhich much of the transactional
doctrineis so ill-fittedto serve. Rather than attemptto answer this
question,which is beyond the scope of this commentary, or to sum-
marize,I shouldlike to suggestthatthe notionof a trulygeneralcon-
tractlaw is now at what mightbe called the pre-Pothier stage.We are
at roughlythe same stage respectinga combinedrelationaland trans-
actional contractlaw as was the 18th centuryconcerningwhat later
evolvedas 19thand early 20thcenturytransactional contractlaw. We
see a greatdeal of it aroundus in variousapparentlyseparatepieces,we
realizethatthereare commonthreads,but we have juststartedthinking
aboutputtingthemtogether.60
Restatement Second will likelyhave an uneveneffecton the promo-
tionof a synthesis of relationaland transactional
contractlaw. Its reten-
tionof presentiation as thestructural touchstoneand the sourceof most
of its detailwill serveas both an obstacleand a spurto the synthesis of
a generalcontractlaw structure.This retentionwill constitutean ob-
staclebecause Restatement Second is an important source of law and a
spurbecause the inadequaciesof presentiation in relationalcontractsare
becomingincreasinglyapparent. Its many recognitions,especiallyin
60 See, e.g., P. SELZNICK, LAW, SOCIETY, AND INDUSTRIAL JUSTICE (1969), especially
chapters 1 and 2; Summers, CollectiveAgreements and the Law of Contracts, 78 YAL1'
L.J. 525 (1969). See also Macneil, supra note t.
610 VirginiaLaw Review
Chapters9 and 10, of the functionallimitationsof presentiation will

similarlyhavea dual effect.On the one hand,Chapters9 and 10 supply
manyavenuesby which courtscan reach relationalresultsin relational
contracts,therebyrelievingthe manifoldpressuresagainstthe transac-
tionalsystemwhich would probablyotherwisedevelop. On the other
hand,thoserecognitionsof the limitsof presentiation constitutea sub-
stantialintroduction of relationalconcepts into contract
transactional
law. They may prove highlysubversiveof the transactional structure
and therebyfosterthesynthesis of a morecomprehensive structure.

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Restatement (Second) of Contracts and Presentiation

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RESTATEMENT (SECOND) OF CONTRACTS AND

efforts of his friendto slap circulationthroughhis body. Watchingthe

tionalcontractsystems8 are amongthegreatestintellectualexpressionsof

portantto our need and desireto presentiate.Since beforerecorded

TRADITIONAL CONTRACT LAW AND PRESENTIAIrON

Severalgenerations ago the Germanlegal scholar,Kohler,said, "It is

jective consent,was too vague in commitment or contentto serveas a

patternof instantaneous mutualassent,will be suppliedeo instanteby

Because of theclose connectionof traditional contractlaw withdiscrete

most actual exchangesare at least partiallyrelational,most contracts

and are in turn eroded and modified. It would require a multi-

RESTATEMENT SECOND AND RELATIONAL CONTRACTS

As the linealsuccessorsof the draftersof Restatement

First, not applying transactionallaw. The RestatementSecond appears

A contractis one or moreexchanges of manifestations

all resultingrelationsbetweenand amongstockholders, managers,bond-

A livesin B's homeand rendersservicesto B overa periodof years,

Most of the factorsmentionedas pertinentin thisillustration

tion 2127and priorrelatedsections.Factorsof thisnature,however,are

Second, forcing relational contract patternsinto the mold of total legal

27 Section21. Conductas Manifestation of Assent

A collectivebargainingagreementbetweenA, a labor union,and many

Illustration 10 follows Illustration9 in which precisely the opposite re-

In exchange for a conveyance of one parcel of land by B to A, A

These two illustrationsare distinguishableonlyon thebasisof thetrans-

A, an emiployrer,issuesto B, an employee,a "certificate

This purportsto illustratea black letterrule that "a manifestation

Both of the Section45 illustrations

Wherean offerinvitesan offeree to acceptby rendering a perform-

The case of the bonusto the insuranceagentsillustrates the yieldingof

Lock Co.5 and Spoonerv. ReserveLife InsuranceCo.,36on which the

35 116 Conn. 357, 165 A.205 (1933).

Third,modifyingthe detailsof contractlaw so thattotalpresentiation

Wherean agreement involvesrepeatedoccasionsforperformance by

This sectionis stillkeyedto thenotionthatwhatis soughtis neitherthe

nor consideration of how bestto makethe relationwork effectively in

There runsthroughthesesectionsa threadof an hereticalnotionof

Chapter10, Performanceand Non-Performance, is the mostchanged

shares("if") and your not doingso ("if not") becomesverysmall. In

A conditionis an event,notcertainto occur,whichmustoccur,unless

In chapter10 the Restatement Second concentrateson interpretation

1. Extentto whichtheinjuredpartywillbe deprivedof thebenefit

7. Extentto whichtheagreement providesforperformancewithout

The commentsquiteproperlyreferto thestandardof materiality created

precisionof sloppylegal planning;it is the imprecisionessentialto the

Fourth,developmentof an overallstructureof contractlaw for both

above all, participants, adequate to justifyRestatingthat law. But no

Chapters9 and 10, of the functionallimitationsof presentiation will

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