Contract and tort as finite and infinite games

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Contract does not care how well you mean, just whether you met standard

The rules of tennis care not whether you flubbed the ball off the frame or ripped it savagely from the middle of the string bed, but whether it went over the net and into the court, and thereafter cares nothing beyond whether your opponent managed to hit it back — and again, with how much form, style or cunning is not the point.

In one sense, the JC approves: this is the ultimate in substance over form, and in a world which bureaucratises the prefer the formal, it is something we should all be glad about. But surely there is a difference between form and style. It may be true that MacEnroe beat Borg on that sweltering Wimbledon day in 1982, but is that mark in the win column what the world remembers? When we trot down to the court for our weekly hit with the sclerotic old fogies that can be bothered to take us on, is it the outcome, or the moments of drama we go through in getting there, however inexpert, that we savour?

We make no bones about it: the JC’s most effective shots are ungainly shanks that scrape over the net at a right angle to the direction in which they were aimed. But one in twenty comes off as hoped and that is enough to keep him coming back, even if these are not usually the ones that win the points.

It is the same with a transactional contract. (Here we distinguish a relationship contract, being one of those architectural arrangements under which we set ourselves up so that we might in later times, if the mood catches us, transact. These are, by nature, designed with infinity in mind.)

Likewise, a transactional contract sets out tersely who should do what and by when. Once inked, it is a set of rules designed to wipe out any doubt. It cares nothing for form: not how diligent one’s preparation, honorable one’s intention, acumen but whether the outcome you agreed to deliver came about. This is the allocation of risk: if I have sold my motor vehicle to you, it is not your problem it is stolen from me, and more than it is mine that your fairy godmother has given you a new car, the night before delivery. We have set our rules and we must go ahead with it.

A contract is a finite game in the broader infinite game of commercial life. It is as if you have pegged off a rectangle, agreed upon some rules and must now batter the subject matter back and forth to the terms of the agreement, abiding by the laws you have laid down until everyone has done what they said they would do. There is even a referee of sorts, though the cost of engaging VAR is usually beyond the proportions of the contest.

In contract, there is always scope for a cheapest to deliver strategy — in the confines of a sporting contest it is explicitly the best strategy, within a single contract it is rationally the best strategy.

Compare this with tort. When strangers meet, there being no prior agreement between them as to who must does what, the law of civil wrongs intervenes. Here Tort cares little about outcome but intention and defensibility of conduct.

In this regard, just as a zero-sum contest like a sport is an infinite game so is a specific transaction contract. But not a framework contract. And the law of sort sets the ground runs for an infinite game.

See also

• VAR as a metaphor for litigation