Excuse Doctrine: The Eisenberg Uncertainty Principle

Victor P. Goldberg, Columbia Law School


The world is in a bit of a mess. Oil prices soared to more than $140 per barrel and within months plummeted to below $40. The pound fell from $2 to less than $1.40. Housing and stock prices crashed. Foreclosures, bankruptcies, and bailouts became newspaper staples. When things go awry like this, inevitably many people and firms regret having entered into contracts under more favorable circumstances. Many of them will be looking for ways to limit, or better yet, avoid the consequences. A preeminent contracts scholar, Melvin Eisenberg (2009), has provided them with considerable ammunition in a recent paper, arguing for expanding the domain of the excuse doctrines. His arguments for giving the disappointed contracting party a "get out of jail (almost) free" card, however, are seriously flawed.