Generative Gap Filling
Most contract litigation turns on contracts that imperfectly record parties’ bargains. When the parties’ dispute can’t be solved by interpreting the text, courts fill the gap. Scholars have long assumed that the remaining text runs out quickly, and provides thin evidence of the actual deal on the disputed point. On that view, a judge who supplies the missing term must be drawing on something else, from commercial defaults to her own policy preferences. Despite generations of work, courts have no real alternative to such unruly methods. We tested that assumption.
Taking real contracts, we masked a term the parties had negotiated and asked readers to predict what we removed. Lay respondents recovered the hidden term about half the time, twice what chance predicts. Law students and lawyers did marginally better. But large language models, given nothing but the rest of the contract, recovered it nearly nine times in ten.
The deal, in short, testifies to far more of the agreement than the literature assumes, including terms the parties never wrote. A contract, we argue, is like a radio signal from far away. Even when incomplete, enough of the message is carried elsewhere that the missing part can be reconstructed with the right receiver. True gaps are rarer than supposed. Courts can weigh model predictions as ordinary, contestable evidence, and parties can discipline the practice with “Choice of Model” clauses.
About the Law and Economics Workshop
Michigan’s Law and Economics Workshop provides an opportunity for faculty and students from across the University to engage with cutting-edge law and economics research by leading scholars on a wide range of legal and policy topics.
Professors J.J. Prescott ([email protected]) and Jeff Zhang ([email protected]) organize the workshop. If you would like to receive workshop announcements, please contact Alex Wroble ([email protected]) and ask to have your name added to the workshop’s email list.