Contract Law’s “Too Good to Be True” Doctrine—Is It?

Authors

William A. Drennan, Southern Illinois University School of LawFollow

Abstract

In a wonderful variety of emotionally charged contract law opinions, including the cases of the boastful cheater, the opportunistic attorney, and the careless concrete contractor,3 courts unfortunately have used the phrase “too good to be true” as a single-step test to decide enforceability. These cases can generate emotional responses ranging from empathy4 to schadenfreude5 because they involve a mistake with potentially disastrous results for one party (and a windfall for the other side). It is understandable that courts would be drawn to a catchy, down-to-earth phrase to reach a just resolution in these entertaining and memorable cases.

Nevertheless, this Article argues that using too good to be true as a single-step test violates fundamental policies of contract law. Judicial too-good-to-be-true pronouncements appear arbitrary and unpredictable, likely undermining public confidence in the enforceability of contracts.6 As an alternative, sophisticated, time-tested, multi-factor doctrines are available to achieve just results in these cases.7 Accordingly, this Article argues that the phrase “too good to be true” should be expunged from the tool kits of decision-makers and advisors involved in contract disputes.

Recommended Citation

William A Drennan, Contract Law’s “Too Good to Be True” Doctrine—Is It?, 75 SMU L. Rev. 273 (2022)