The Many Faces of the ‘Reasonable Businessman’: Has Commercial Common Sense Become a Judicial Vehicle for Normative Idealism in Scots Law?

Abstract

This essay presents a novel contribution to the discourse on contractual interpretation by disentangling the historical, principled application of ‘Commercial Common Sense’ (‘CCS’) from its expanded, value-laden use in contemporary Scots contract law. While numerous commentators have scrutinised CCS for its conceptual convolution and the tangible threat it poses to the sanctity of contract, this paper contends that such critiques unduly conflate two doctrinally distinct manifestations. By tracing CCS’s evolution from a modest interpretative tool, aimed at resolving genuine ambiguity in a manner faithful to the parties’ objective intention, to a jurisprudentially detached vehicle for judicial correction, it demonstrates that the issue lies not with the concept itself, but with the trajectory it has taken. Part I charts the historical underpinnings of the doctrine, revealing how it originated as a safeguard against literalist readings that risked distorting the agreement’s commercial purpose. As such, it operated with procedural restraint: it respected party autonomy, reaffirmed legal certainty, and was inextricably tethered to the language and context of the contract. However, as Scottish case law has illustrated, the doctrine has since absorbed a moral dimension, with courts invoking CCS not as an interpretative aid, but as a corrective tool, seeking instead to infuse contracts with normative ideals such as fairness, cooperation, and proportionality. Contrary to its initial function, it no longer interprets commercial bargains; it reconfigures them. Subsequently, Part II considers the jurisprudential, legal, and policy implications arising from this shift. Drawing on Scots law’s longstanding reluctance to adopt an overarching duty of good faith, this paper identifies a jurisprudential tension between the legal system’s formal aversion to moralised intervention and the judiciary’s concurrent readiness to engage in precisely such reasoning through CCS. The modern approach, it is argued, erodes legal certainty by empowering judges to override consensual bargains in pursuit of abstract commercial rationality, while heightening ‘transaction costs’ by exacerbating interpretative unpredictability. Ultimately, this paper defends a narrow but principled position: CCS should not be discarded, but restored to its historical function. Only by reaffirming its authentic boundaries can the doctrine serve the aspirations of contractual autonomy, legal certainty, and doctrinal coherence.