Rational Ignorance, Rational Closed-Mindedness, and Modern Economic Formalism in Contract Law
This article argues that modern economic formalism is nothing more than an argument for purportedly rational ignorance and closed-mindedness in courts. Although individuals may well be ignorant in many circumstances, courts ordinarily should not strive to be. The article first describes why rational ignorance and (to coin a phrase) “rational closed-mindedness” in individuals fail to generalize to courts. It then responds in detail to a leading formalist argument in contract law, demonstrating some characteristic failures of formalist arguments.