ABSTRACT
In this chapter, the position often taken to be opposed to contextualism in contract interpretation – formalism – is considered. If contextualism requires looking outside the text of the legal documents in interpretation – perhaps even outside the law and legal framework – then formalism describes the tendency ‘to decide cases on narrow grounds of the inner logic of the law’1 or to adopt ‘overly rule-bound decision making’.2 Literalism in contract interpretation is often associated with formalism, since literalism regards the words of the text as the best means to access the parties’ intentions, and to give the words their plain meaning as the best way of effectuating those intentions.
