doctrine, he thought, produced incoherence. Modern scholars commonly share Gilmores rejection of williston but have yet to disprove his incoherence thesis. 4+ We, too, lack a theory of everything. Rather, the theory we develop here is Willistonian in spirit, but applies in a limited domain - to contracts between firms that do not create externalities This limited scope permits our normative thesis to develop according to a particular logic The markets social function is to maximize welfare, subject to distributional and fairness constraints. Firms, we show below, have incentives to choose the contracts and contracting trategies that will maximize the surplus their deals can create. Further, firms are more able than courts or statutory drafters at choosing efficient terms and strategies. It follows that, when externalities are absent. a contract law that regulates firms should be the contract law that firms prefer. The state, that is, should let the preferences of firms control because firms can pursue the objective that both the state and firms share. The central organizing question this Article asks thus is: What contract law would commercial parties want the state to provide? We proceed as follows. Part ii defends the welfare maximization norm as applied to the contracts of sophisticated actors. In Part Ill, we describe commercial parties' first order preference: To have the state enforce contracts in order to protect relation-specific investments or to guard against especially disruptive market movements. Part IV argues that firms want the state to supply a theory of interpretation, but not the theory currently advanced by the UCc and the Restatement of Contracts. Rather, we defend a textualist theory of interpretation as the optimal default approach for business contracts. In Part V, we develop the restrictive conditions under which the state can create defaults terms that satisfy typical party preferences. Part Vi analyzes a set of unjustifiable mandatory rules--rules that rest on a misplaced view of the parties'interests We conclude, in Part VIl, that today s contract law is a series of category mistakes. Rules that are Consider the Restatements definition of consideration [in $75] taken in connection with its most celebrated section, $ 90(promissory estoppel). One thing that is clear is that these two contradictory proposition cannot live comfortably together: in the end one must swallow the other up. Id at 60-61 Eric A. Posner, Economic Analysis of contract Law after Three Decades: Success or Failure? Yale LJ(2002)13“Consider the Restatement’s definition of consideration [in §75] taken in connection with its most celebrated section, § 90 (promissory estoppel)...One thing that is clear is that these two contradictory propositions cannot live comfortably together: in the end one must swallow the other up.” Id. at 60-61. 14Eric A. Posner, Economic Analysis of Contract Law after Three Decades: Success or Failure? Yale L.J.(2002). 10 doctrine, he thought, produced incoherence.13 Modern scholars commonly share Gilmore’s rejection of Williston but have yet to disprove his incoherence thesis.14 We, too, lack a theory of everything. Rather, the theory we develop here is Willistonian in spirit, but applies in a limited domain -- to contracts between firms that do not create externalities. This limited scope permits our normative thesis to develop according to a particular logic. The market’s social function is to maximize welfare, subject to distributional and fairness constraints. Firms, we show below, have incentives to choose the contracts and contracting strategies that will maximize the surplus their deals can create. Further, firms are more able than courts or statutory drafters at choosing efficient terms and strategies. It follows that, when externalities are absent, a contract law that regulates firms should be the contract law that firms prefer. The state, that is, should let the preferences of firms control because firms can better pursue the objective that both the state and firms share. The central organizing question this Article asks thus is: What contract law would commercial parties want the state to provide? We proceed as follows. Part II defends the welfare maximization norm as applied to the contracts of sophisticated actors. In Part III, we describe commercial parties’ first order preference: To have the state enforce contracts in order to protect relation-specific investments or to guard against especially disruptive market movements. Part IV argues that firms want the state to supply a theory of interpretation, but not the theory currently advanced by the UCC and the Restatement of Contracts. Rather, we defend a textualist theory of interpretation as the optimal default approach for business contracts. In Part V, we develop the restrictive conditions under which the state can create defaults terms that satisfy typical party preferences. Part VI analyzes a set of unjustifiable mandatory rules -- rules that rest on a misplaced view of the parties’ interests. We conclude, in Part VII, that today’s contract law is a series of category mistakes. Rules that are