can function well with little more than honest courts and a set of enforcement rules The rest is of second-order importance A court cannot enforce contracts, however, without a theory of interpretation that"maps from the syntactic content of the parties' writing to the writings legal implications. An interpretive theory that is grounded in efficiency holds, in contrast to the UCC and much modern scholarship, that textualist interpretations best suit parties to Category 1 contracts. Business firms, that is, prefer courts to adhere as closely as is possible to the ordinary meanings of the words the parties used, apply a hard parol evidence rule, and honor merger clauses" reciting that the parties intended their writing to be interpreted as if it were complete. a textualist theory of interpretation, however, will not suit all parties all of the time. Therefore, our second implication actually holds that textualist interpretation should be the default theory for Category 1 contracts. Courts should use narrow evidentiary bases when interpreting agreements between firms, but also should comply with party requests to broaden the base that is applicable to them This implication is at variance with current law, which holds that interpretation is an issue for courts to decide and is conducted according to rules that parties cannot vary Contract law has more rules than are needed to perform the enforcement and interpretation functions. These rules, that regulate various aspects of the contracting relationship, commonly are defaults, controlling only when parties do not contract out. Creating good defaults is widely believed to be the principal function of a law of contracts. This belief is misguided because the state could create defaults that business firms would want only under quite stringent conditions a good default rule must apply in very few possible states of the world, be relatively simple in courts cannot conveniently recover. a default standard should be written when parties do ny E form, be efficient in a highly heterogenous set of circumstances, and not rely on information that See TA?A"hard" parol evidence rule treats writings that appear to be complete contracts as complete contracts SThe decisionmaker specifies the content of a rule in advance. Thus, drivers cannot exceed a 55 mile per hour speed limit. The decisionmaker specifies the content of a standard ex post. Thus, parties must drive reasonably"in the circumstances7 A “hard” parol evidence rule treats writings that appear to be complete contracts as complete contracts. See TAN 81-89, infra. 8 The decisionmaker specifies the content of a rule in advance. Thus, drivers cannot exceed a 55 mile per hour speed limit. The decisionmaker specifies the content of a standard ex post. Thus, parties must drive “reasonably” in the circumstances. 7 can function well with little more than honest courts and a set of enforcement rules. The rest is of second-order importance. A court cannot enforce contracts, however, without a theory of interpretation that “maps” from the syntactic content of the parties’ writing to the writing’s legal implications. An interpretive theory that is grounded in efficiency holds, in contrast to the UCC and much modern scholarship, that textualist interpretations best suit parties to Category 1 contracts. Business firms, that is, prefer courts to adhere as closely as is possible to the ordinary meanings of the words the parties used, apply a “hard” parol evidence rule,7 and honor “merger clauses” reciting that the parties intended their writing to be interpreted as if it were complete. A textualist theory of interpretation, however, will not suit all parties all of the time. Therefore, our second implication actually holds that textualist interpretation should be the default theory for Category 1 contracts. Courts should use narrow evidentiary bases when interpreting agreements between firms, but also should comply with party requests to broaden the base that is applicable to them. This implication is at variance with current law, which holds that interpretation is an issue for courts to decide and is conducted according to rules that parties cannot vary. Contract law has more rules than are needed to perform the enforcement and interpretation functions. These rules, that regulate various aspects of the contracting relationship, commonly are defaults, controlling only when parties do not contract out. Creating good defaults is widely believed to be the principal function of a law of contracts. This belief is misguided because the state could create defaults that business firms would want only under quite stringent conditions. A good default rule8 must apply in very few possible states of the world, be relatively simple in form, be efficient in a highly heterogenous set of circumstances, and not rely on information that courts cannot conveniently recover. A default standard should be written when parties do not