Westbrook's article explains a basic law of contracts in times past that remain, in many ways, bedrock legal standing even in today's world of contracts and negotiation. One aspect he references is the “shepherding agreements” that impact so many Biblical and other ancient and modern stories. These agreements are found throughout history, including in common Middle Eastern practices that many Americans find confusing and puzzling as we try to comprehend what is happening in that region. In a shepherding agreement, one party makes a promise to another party, and is honor-bound to keep the promise, even if it ultimately leads to something that might otherwise seem illegal or dishonest.

Writing for what is basically a publication tailored to Biblical historians and archaeologists, Westbrook cites the stories in Genesis about Jacob, whose name was better known as Israel. He was the patriarch of the 12 tribes to which modern Israel traces its roots. The article also cites the 500 B.C.E Code of Hammurabi, King of Babylon (modern Iraq), which states, “If anyone hire a herdsman for cattle or sheep, [then] he shall pay him eight gur of corn per annum.” However, “if he kill[s] the cattle or sheep that were given to him, [then] he shall compensate the owner with cattle for cattle and sheep for sheep.”

The shepherding contracts, however, had a caveat that if the cattle or sheep were killed by a lion or bear, then the hired shepherd would not be liable. Further, the shepherd was liable only for the number of sheep or cattle entrusted to him — meaning that if the herd grew by new births during the term of the contract, then the new sheep or cattle belonged to the hired shepherd.

To some degree, this explains various verses in Psalm 23, where the sheep are led to green pastures, avoiding rushing water that would frighten the sheep. Further, the sheep were to be kept on the authorized pathways. If they strayed onto someone else's land, then those sheep could be captured and kept by the other owner. The shepherd had to ensure that the pasture or meadow where the sheep would graze was free of poisonous plants or serpents that could harm or kill the sheep. This person's duty was to protect the sheep from wolves, who often would attack when sheep were passing through a narrow valley.

Jacob and His Brother

Many are familiar with the phrase, “he sold his soul for a mess of potage.” Although Jacob and his brother, Esau, were twins, Esau had been born first and was therefore the rightful heir under the law. Tired and hungry, Esau came in from the fields one day, and Jacob tricked him into giving up his birthright in exchange for a stew. Esau, like so many moderns, placed current needs and pleasures ahead of any long-term benefits, which, at the time, he may have seen as having little value.

Jacob needed to have the deal consummated. Otherwise, it might not be deemed valid. His father, Isaac, was blind, and when he called his son Esau to give him his blessing and birthright, Jacob took Esau's place, fooling his father and even wearing a sheepskin to mislead the old man. Was the deal legal? It had been planned by Jacob's mother, Rebecca, who assisted in the deception. The contract was not in writing, as it was a verbal agreement. With Isaac's blessing, however, the deal was made legal, though perhaps not ethical. Jacob, not his brother, inherited the birthright.

Jacob was himself trapped in another “bait and switch” scheme dreamt up by his future father-in-law, his Uncle Laban. Jacob tended Laban's sheep, and Laban agreed with Jacob that if he would do so for seven years, then Jacob could marry Laban's beautiful daughter, Rachel. On the wedding night when Jacob was already inside his darkened tent awaiting his bride, Laban instead sent in his older daughter, Leah. Jacob did not discover until the morning that he had consummated the wedding with the wrong sister. But honor made Leah his wife, so Jacob agreed to work for Laban another seven years so he could also marry Rachel.

“Bait and switch” is a similar modern version of selling one's soul for something of little value. It's done all the time. Unless someone complains, merchants get away with it. My grocery chain sends me great coupons for products that are either unavailable or cost far more than the store brand. I once bought a willow tree at a nursery. The tree was tagged with a price that was far below that of other willow trees in the row of trees where it sat in its pot. True, it was a bit scrawnier than the others, but the value was probably far more than what the tag indicated. When I took it to the check-out in the nursery's cart, the salesman said the price couldn't be right. He called the manager, who agreed that the tag was obviously wrong. The tree should have cost at least twice as much. But the tag listed a certain price, and it was the kind of tag that I could not have “exchanged” from something else. Thus, I insisted to purchase the tree for the price printed on the tag and went home with the tree for that price.

Was this justified? The tree was obviously worth more than I paid, even though I paid the price listed on the tree. Although my purchase was certainly legal, was it ethical? Was it moral? Had I cheated the nursery for what was obviously its mistake? We who become the embodiment of the insurance policy contract are often placed in similar situations. Thousands of times we have called upon the courts to define policy wording. If the court finds the wording clear, then it means what the policy says. However, if the court finds that the meaning is ambiguous or misleading, then the court will rule against the insurer and for the policyholder.

Changing the Wording

Court decisions have often led insurers to change their policy wording or add exclusions. For example, the issues surrounding whether computer data was “tangible” led to the addition in a CGL property damage definition of the phrase, “for the purposes of this insurance, electronic data is not tangible property.” The definition then continues with a definition of what is considered “electronic data.” It is like two medieval monks arguing about how many angels can dance on the head of a pin.

The ambiguity issue is not new. This column has spoken of this before, and the story is repeated in the sidebar, The Flipside of Ambiguity, for any new readers who may be unaware of Gybbons v. Martin.

Deals and laws are rarely verbal in the 21st century. Legislatures make the rules as complex as possible, and often courts must interpret them. For example, within one Georgia County, speeding fines may range from $60 to $200, depending on the jurisdiction. It may seem unfair that if the speeder happened to be caught on one side of the city line then he would pay only $60, but if caught on the other, he would have to pay $200. Is this just? Is it ethical? Perhaps a court ruling will dictate the answer to those questions.

Adjusters are faced with similar situations. The laws of the various states — and often even within various circuits of the same state — differ greatly in how laws, policies, and claims are interpreted. Adjusters are supposed to know all those differences and apply them to each and every case. That is a tough requirement. How simple it must have been in times past when one person would agree with another, shake hands on it, and uphold the bargain regardless of circumstances.

Ken Brownlee, CPCU, is a former adjuster and risk manager based in Atlanta, Ga. He now authors and edits claim-adjusting textbooks.