The relationship between treaty and contract remains undecided in international investment law. It is an open question which instrument takes priority when their terms diverge. While it is clear that investment treaties apply to contracts in some way, they are silent as to how these instruments ultimately interact. Moreover, arbitral jurisprudence has varied wildly on this point, creating significant problems of certainty, efficiency, and fairness – for states and foreign investors alike. I suggest that the problem arises out of a tendency to confuse the logics of property and contract in a context where the contracting parties have themselves chosen how to allocate risk and price.

This Article reappraises the treaty/contract issue from the perspective of contract theory, adopting the ex ante perspective of contracting states and foreign investors. From this point of view, I argue that investment treaties must be understood as having generated a rudimentary law of contracts, governing agreements between states and foreign investors on issues ranging from substantive rights and duties, to damages and forum selection. But, critically, it remains unclear whether parties are free to contract around these treaty rules, or whether treaty provisions should be understood as mandatory terms that constrain party choice – whether, in other words, treaty norms should be understood as defaults, sticky defaults, or mandatory terms vis-à-vis subsequent investment contracts. Though states and foreign investors may have different interests and values at stake, the treaty/contract problem is not zero-sum. I argue that the best approach for both states and foreign investors is usually to privilege their contractual arrangements over background treaty rules. And I explore when and how adjudicators (or treaty-makers) might justifiably insist that certain treaty norms exert a greater pull.