James Hart (James Stephens), a farmboy from Minnesota, starts his first year of law school. Being unprepared for his first day of ""Contracts"" he is 'shrouded' by Professor Charles W. Kingsfield, Jr. (John Houseman), pronouncing the hapless Hart as ""dead"" in his class. This means that he will never call on Hart and his part of the class's ""Socratic dialogue will be at an end. Hart finds out that Kingsfield shrouds one student each year and that student remains deceased all year long. Kingsfield is the reason Hart has chosen to come to this school; we are shown a couple of his nightmares now that he is the ""former Mr. Hart"".

Another student, Franklin Ford III (Tom FitzSimmons), is organizing a study group and invites Hart to join. The members of the study group decide to have each member do an outline of one of the classes that they can then copy for each member of the group. Hart wants to do the Contracts outline but the others worry that Hart cannot be effective if he is shrouded. In