Part II of this Article positions the discussion in a theoretical context and describes the significance of party sophistication as a compromise between formalist and realist concerns. Part III collects examples of settings in which courts have used party sophistication as a tool to organize the world of contracting parties and, with that, the applicable legal principles. For sophisticated parties, in answering a wide array of contract questions, courts employ a formalist approach. Part IV begins descriptively and addresses the general lack of meaningful assessment of party sophistication. Drawing upon the review of hundreds of cases, Part IV identifies what appears to be germane to courts as they apply the label of sophistication and details the attributes common among parties that courts have deemed sophisticated. Finally, Part V presents the central normative claim of this Article: courts should undertake a more exacting, fact-driven approach in addressing party sophistication. Drawing upon the extensive review of case law, Part V provides a definition of sophistication that assesses information and resource asymmetries among the contracting parties. The proposed standard assesses whether a party, relative to the other parties to the contract, has sufficient experience and access to information and resources that the person or entity understands or should understand the intricacies, risks and consequences of the transaction. This standard takes into account the theoretical underpinnings of applying the sophistication label: for knowledgeable and experienced parties dealing in familiar industries, private autonomy should prevail over normative concerns. However, where a party lacks relative knowledge and experience, normative concerns may outbalance the literalism and private autonomy championed by formalism. In the absence of a meaningful definition of sophistication, however, courts are not actually addressing the context of the deal. Rather, they are simply reciting well-worn clich6s about "sophisticated parties dealing at arms' length."

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