A contract law for firms would differ in three major respects from current contract law. First, such a law would have far fewer default rules and standards than current contract law contains. The high level of generality on which much contract law is written (e.g., a party must behave "reasonably") creates unacceptable moral hazard for parties subject to it. Thus, firms in theory should, and in practice commonly do, contract out of much of the law most of the time. The primary effect of today's law, therefore, is to raise transaction costs without altering substantive behavior--an effect that a law with fewer default rules and standards would avoid. Second, a contract law for firms would contain a default theory of interpretation that would require courts to base interpretations primarily on the written texts of agreements. The costs of incorrect interpretations that such a theory creates, we argue, would be more acceptable to firms than the costs that the courts' current interpretive practices create. Third, the law would contain almost no mandatory rules. To summarize, a modern law merchant would be much smaller than current contract law; would truncate broad judicial searches for parties' true intentions when interpreting their agreements; and would accord parties much more freedom to write efficient contracts than now exists.