Stone Soup Mini-Course: More About Macaulay’s Noncontractual Relations in Business Article

In the last post in this Stone Soup mini-course, I summarized Stewart Macaulay’s classic article using qualitative methods, Noncontractual Relations in Business.  This post elaborates.

When I was a sociology grad student at Wisconsin, I got a chance to meet Stewart Macaulay, a really charming guy who was on the law school faculty.  I remember hearing him talk about his article about noncontractual relations in business.  He described having conversations over dinner with his father-in-law, a corporate executive, who thought that what Stewart was teaching in his contracts course about the way business works was “silly” – or probably something more colorful than that.

This article was part of a major tradition in the law-and-society literature to document the “gap” between the “law on the books” and the “law in action.”  I loved reading articles like that because I felt that I learned the way the world really works, not just some two–dimensional theory that missed important stuff.  (For a recent review of gap studies, see Jon B. Gould & Scott Barclay, Mind the Gap: The Place of Gap Studies in Sociolegal Scholarship, 8 Annual Review of Law and Social Science 323 (2012), available on Westlaw.)

As Stewart describes in the Crime and Custom article below, as a young law professor he was practicing sociology without a license, falling in with some supportive mentors who advised him about the noncontractual relations study.  This short article was published in a top sociology journal and is rightly considered as a classic.

(A footnote: In Crime and Custom, he describes that, when he was an undergraduate at Stanford, sociology was considered as an easy course, suitable for football players.  A popular joke was that the exams in all the sociology courses were the same.  They consisted of only one true-false question: “Sociology is too a science.”  If you complete the present mini-course and agree that qualitative research really is good social science, you will get an A+.)

The subtitle of Stewart’s article indicates that it was a “preliminary study.”  As described below, he didn’t follow it up because he focused on other projects – a common scholarly phenomenon.  For our purposes, I want to highlight the fact that one can get valuable insights from a qualitative study with a relatively small sample.  Of course, one shouldn’t rely on any single study, regardless of the research method or sample size.  To have good confidence, you should consider the findings of any study in the context of other studies, like noting the results of multiple polls of presidential approval.  Below, Stewart cites other studies with consistent findings, thus increasing confidence in his conclusions.

In the course of writing the preceding post, about cool qualitative research, I exchanged emails, asking Stewart to confirm my recollections.  He wrote the following email, which I reprint with his permission.

Filling Out the Story of Noncontractual Relations in Business

The background of Noncontractual Relations in Business is described in my Crime and Custom in Business Society, 22 J. of Law and Society 248 (1995) and my interview in Halliday & Schmidt, Conducting Law and Society Research:  Reflection on Methods and Practices 14-25 (Cambridge Press 2009).

My father-in-law, Jack Ramsey, was the retired General Manager of S.C. Johnson & Sons (Raid, Pledge, Windex now; Johnson’s wax back in the 1930s).  I told him about Lon Fuller’s “expectation interest” and Jack said that if you have to assert contract rights, you will never be where you would have been had the contract been performed.   He told me stories and arranged for me to talk with his friends who ran big companies.  Lots more about the roles played by Willard and Robert Merton in the accounts above.

It was a preliminary study, but I found other things to do.  I turned to a place where a special kind of contract law  — franchise protection legislation – was very important.  See Macaulay, Law and the Balance of Power: The Automobile Manufacturers and Their Dealers (Russell Sage 1966).  Here is where my father played a part.  During the 1930s, he was an executive with Chevrolet and was very involved with dealer relations.  As part of this study, I interviewed many heads of auto dealer trade associations, read legislative history and what cases applying the statutes that there were, and followed the many reports in Auto News.  Dad had lots to say about my interpretation of this history.

Many others have done studies of relationships between manufacturers and suppliers that largely support my 1963 article.  I cite many of them in my “A New Legal Realism: Elegant Models and the Messy Law in Action” in Mertz, Macaulay & Mitchell, 1 The New Legal Realism: Translating Law and Society for Today’s Legal Practice 29-50 (Cambridge 2016).  I do this in fn. 13 on pp. 38-39.  There I am responding to Matthew Braham, “Non-Contractual Relations in Business Reexamined: A Critical Assessment of Macaulay’s Legal Realism,” 16 Homo Oecomicous 436 (2000).  I believe that he misunderstood the argument and points to the lack of a sample and statistics.  I cite many who have found something similar in very different places.  See also Josh Whitford, The New Old Economy (Oxford 2005).   Josh is a sociologist who is Bill Whitord’s son.

I did go on to do a lot of empirical things that mattered to me more than doing a social science study following up the noncontractual relations article.  See, e.g., Lawyers and Consumer Protection Laws, 14 Law & Society Rev. 115 (1979); Kenworthy, Macaulay & Rogers, The More Things Change . . . Business Litigation and Governance in the American Automobile Industry, 21 Law & Soc. Inquiry 631 (1996).   There are also four editions of Contracts: Law in Action, a two-volume casebook that relies on ideas of relational contract and draws on standard contract clauses and reports of business practices to put legal problems in context.

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