False consensus bias in contract interpretation

Lawrence Solan, Terri Rosenblatt, Daniel Osherson

Research output: Contribution to journalReview articlepeer-review

15 Scopus citations

Abstract

Psychologists call the propensity to believe that one's views are the predominant views, when in fact they are not, "false consensus bias." In the interpretation of contracts, false consensus bias should be of special concern when a dispute arises over whether an event fits within contractual language. In this Essay, we report experimental studies conducted with laypeople and judges. Lay individuals, when presented with scenarios relevant to insurance contracts that have led to inconsistent results among courts, do not understand contractual language uniformly. Because they are subject to false consensus bias, these individuals believe that their interpretation is the normal interpretation, even when it is not. This holds true whatever the scenario, whatever the interpretation, and whichever party will be assisted by one interpretation or the other. Judges presented with the same scenarios also exhibited false consensus bias. These studies suggest that judges should take seriously the disagreement of other judges in determining whether contractual language is subject to multiple interpretations. Otherwise, litigants may become unwilling participants in a lottery whose result is determined by the idiosyncratic interpretation of the judge assigned to their case. Concern about the reasonable expectations of the parties should also be taken into account.

Original languageEnglish (US)
Pages (from-to)1268-1299
Number of pages32
JournalColumbia Law Review
Volume108
Issue number5
StatePublished - Jun 1 2008

All Science Journal Classification (ASJC) codes

  • Law

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