Legal education is monumentally difficult. Legal “rules” are not “rules” in the sense most people understand them; they are, instead, formulations intended to reach just results based on the evidence in individual lawsuits.

In making the point set forth in the title of my post, it is worth repeating the message I sent this morning to my Contracts students, who are in the midst of studying for the first semester exams. My students are in the midst of making the transition from the lay understanding of legal “rules” as “rules” of the sort that govern the outcome of scientific experiments to the professional understanding that legal “rules” are professional terms of art used to articulate arguments intended to achieve justice in individual cases. It is not an easy transition to make, and it is a transition from a way of perceiving rules that seems to dominate the thinking of the vast majority of mankind to a way of perceiving rules as man-made constructs intended most of all to do justice to individuals.

As I wrote to my students, focusing on legal issues relating to the interpretation of disputed contract terms (the last subject of our semester’s study):

In trying to understand the law we are applying, consider the teachings of the teachings of the Chuang-tzu, a collection of writings from the fourth, third and second centuries B.C.:

Great understanding is broad and unhurried; Little understanding is cramped and busy.

Trying to understand the rules that pertain to contract interpretation will not come through a cramped and busy effort to memorize the “parol evidence rule” and the rules regarding when evidence outside of a writing is permitted to interpret the writing.

Instead, understanding contract interpretation will come first from from a broad and unhurried consideration of what language the parties are disputing the interpretation of. Then you must understand why each party considers his interpretation the correct one. What evidence does each party have that his interpretation is correct? How persuasive do you consider that evidence?

If one side’s interpretation is more persuasive, that will likely be the correct one. One must first consider the writing setting forth the purported agreement, the purposes of the purported agreement, the situations of the parties, and any other evidence that may bear on the meaning of the written agreement. Only after considering all these matters (which can range far and wide) and coming to some individual, human understanding of whether one person’s interpretation or the other’s is more persuasive can on go back to the rules to and use those rules to show how the rules and the evidence together will lead to that more persuasive result.

Thus, for example, in Thompson v. Lilly, 26 N.W. 1 (Minn. (1885), the buyer of logs insisted the seller did not supply logs of as high a quality as the parties had agreed the seller would provide. The parties had written the following brief agreement:

AGREEMENT.

Hastings, Minn., June 1, 1883.

I have this day sold to R. C. Libby, of Hastings, Minn., all my logs marked ‘‘H. C. A.,’’ cut in the winters of 1882 and 1883, for ten dollars a thousand feet, boom scale at Minneapolis, Minnesota. Payments cash as fast as scale bills are produced.

[Signed] J. H. Thompson,

Per D. S. Mooers.

R. C. Libby.

The Minnesota Supreme Court concluded that “[t]he written agreement . . . , as it appears on its face, . . . purports to be a complete expression of the whole agreement of the parties as to the sale and purchase of these logs, solemnly executed by both parties.” Thus, the court concluded that the buyer could not prevail on his claim that he and the seller had in fact agreed that the logs he had purchased were supposed to be of a higher quality than those logs the seller actually supplied.

But there really is nothing in the written agreement itself to preclude the reasonable possibility that the parties had also agreed that the logs marked “H.C.A” would be of the higher quality the buyer had not received. What is it about that 3 line agreement that suggests that it is the exhaustive statement of all the terms the parties agreed to?

Admittedly, there are a few things you might point to to support the court’s conclusion: the writing states price, it states the identifying marks on the buyer’s logs, and it states the delivery place and times. We might infer that if it includes all of those things it must include everything the parties had agreed upon.

But are we to suppose that in 1883 Minnesota in a sale between a logging company and a lumber buyer the technical requirements of the parol evidence rule were foremost in the buyer’s and seller’s minds? And are we to suppose the 3 line agreement was intended as the height of formality. And when, for example, would “winter” begin in Minesota — November, December 21, at first frost? To suppose the seller of logs and the buyer of logs would have put into the writing something they considered important is to be naive about how commercial transactions really take place (even today in the vast majority of commercial transactions, and even among investment bankers in the high flying world of Wall Street finance in which I once practiced).

In other words, if you merely start with the proposition that the parol evidence rule excludes the consideration of evidence regarding the content of a contractual agreement that is not contained in a final and complete written record of the agreement, you hardly have a convincing argument that the decision in Thompson v. Lilly must have been correct.

But if you look at the evidence recounted in the opinion (and the absence of certain evidence) the wisdom of the result (if not the clarity of the reasoning) becomes much, much more apparent — the buyer is claiming the agreement included a promise that the logs the seller was providing would be of a higher quality than the logs that were delivered. And while the writing in and of itself doesn’t inherently exclude that possibility in any conclusive way I can fathom, what evidence does the buyer have that the agreement included a promise of higher quality logs? Only the buyer’s own self-serving testimony. There is no corroborating testimony from, say,  others in the logging trade in 1883 Minnesota that an agreement on quality like that insisted upon the buyer would be expected. There is no documentary evidence outside of the 3 line agreement regarding the parties’ negotiations. There is no evidence that the buyer’s purposes for buying the logs should have indicated to the seller that higher quality logs were what the buyer expected. There is no indication the price the buyer agreed to pay reflects a market price for logs of a higher quality than that which he received.

In short, apart from the buyer’s self-serving testimony, there is no evidence of any sort that any agreement on the quality of the logs had been reached. In the absence of any evidence other than the buyer’s self-serving testimony in support of his position, the court conclusion that the three-line agreement contains all the material terms of the agreement does in fact seem convincing. If, on the other hand, others in the trade suggested the quality of the logs would not have been included in the written agreement or that the price in the agreement reflected a price for higher quality logs, the court would have had a much more difficult time suggesting the three line agreement contained all the material terms of the agreement.

Thus, the parol evidence rule does its job in this case — it prevents the dispute from ending up as a trial in which the buyer’s uncorroborated and self-serving sworn statements will be weighed by a jury against the writing and the seller’s sworn statements. But if we merely considered the 3 line agreement without considering what other evidence the buyer had (or did not have) in support of his position, the parol evidence rule in and of itself would have provided a very poor guide to determining whether there would be any justifiable basis for a trial on the buyer’s claims.

To engage in the extra effort of trial in Thompson v. Lilly would have been unreasonable as a matter of the administration of justice in that there seems no persuasive reason in the first place to believe the buyer. Trials are expensive and burdensome affairs. And keeping the case from trial prevents a jury from being persuaded by improper factors (such as preferring the buyer as a person to the seller). Thus, the court invoked the technical rule — the parol evidence rule — to produce an outcome that seems fair, just, and in accord with a common sense view of the evidence.

In other words, the legal rules and their proper application arise from the evidence the parties bring to bear. The rules do not predetermine disputes that are predictable before they arise. Instead, they provide the legal language (developed over the centuries’ long development of the common law) in which to couch the just conclusions compelled by the evidence.

So, as I explained to my students, when you are trying to figure out on an exam how to answer a question, consider first: what question you are you trying to answer. Then consider what evidence you have from each side of the dispute that helps persuade one way or another in answering that question. Then weigh that evidence and consider what we are primarily trying to determine in contract law: what the parties intended to agree to.

Then, and only then, use the rules to structure the presentation of your understanding of the proper resolution to the dispute. You are likely being asked to present your personal and human understanding as an intelligent adult being asked to solve a previously unsolved problem for the first time in your life. You are not merely being asked to repeat material your professor asked you to learn but to apply that learning to resolve new problems in a creative and original way no one other than you can be relied on to answer — that’s what you’re going to be doing as a lawyer!

I do not mean to minimize the importance of knowing the rules. You must know the rules. The rules are the language the law uses to structure the presentation of your persuasive explanations. Merely to give a recitation of your personal reaction to the evidence without reference to the rules is not to act as a lawyer. But the rules will only make sense to you if you use them to come to a result that makes sense to you as a human being.

You also have to keep in mind that rules in contract law sometimes serve purposes other than merely giving effect to what the parties intended. Rules such as the statute of frauds, for example, will in the absence of clear and convincing evidence of agreement avoid the administrative difficulties and expense of full-blown trial in certain types of important cases in which the parties have not supplied either the formal requirements evidencing such agreements or can supply other evidence as convincing as those formal requirements.

Again, this is not to discount the importance of the rules. You must know the rules to articulate your arguments in a manner that makes sense to lawyers, judges, and law professors. You are now a member of a profession, and you must communicate in the language of the profession. But you will never persuasively apply those profession-specific rules without first understanding the human disputes, the evidence, and the ways that evidence persuades human beings as to the merits of the disputes. Then, and only then, can you begin to structure your arguments in a manner that usefully employs the technical legal rules.

As a final note, my disquisition here should put to rest the myth — even one propounded by the Chief Justice of the U.S. Supreme Court as a means of obtaining confirmation in the course of a farcical political show — that applying legal rules to resolve legal disputes is the same as calling balls and strikes.