him a gift upon O’s death. PE is sometimes denigrated as a doctrine which allows the claimant to circumvent the formalities requirements just because he happened to rely on the promise. But this need not be the case. In Section 4.2 we will see that in fact the courts do not really enforce the promise as if it were properly formalized. Crucially, in PE cases the court looks to see whether the reliance was proportionate to the promised benefit. I suggest that if we want to bring out the difference between formal and informal promises, we can analyse the remedy for the latter as falling short of enforcing on O the full force of her moral duty to R. Instead of tracking the moral obligation(s) of O, namely to keep her promise, the remedy offered by PE should be seen as the legal enforcement of a different, narrower, kind of obligation: LPA.

If you are happy with Scanlon’s account of the duty to keep promises you can interpret the function of PE in the gift category as enforcing on O (the promisor) only the core obligation that lies at the heart of her promise. For, according to Scanlon, the obligation to keep a promise is an extension of the moral duty laid down by principle L (which requires you to compensate other people for reasonable reliance on your representation unless you warned them not to do so). By enforcing on O only the more basic duty that is implied by her promise, we give the requirements of formality their due respect. Thus, while we prevent at least an important part of the harm which broken promises cause the promisee, we acknowledge the utmost importance of formality as attesting to the true intentions of the donor. This way of balancing R’s interests against policy considerations can work well, albeit with less conceptual elegance, even for those who do not accept Scanlon’s account of promises (e.g. because they believe that the duty to keep a promise is sui generis, or is based on an independent social norm). On these accounts PE will be seen as forcing O to fulfil, not her promise, but a different, yet closely linked, kind of obligation towards people she induced to trust her.67

4.2 The remedy

If the interpretation of PE I suggest is accepted by the courts, this should change the point of departure, if not the end result, of their decisions in regards to the remedy. In a nutshell, when a successful PE claim is made against O, she should be enforced to compensate R for his reliance loss, not to make her representation good.68 PE as

benefits (see Lord Walker’s discussion of Dillwyn v Llewelyn 1862 in Cobbe v Yeoman’s Row Management Ltd 2008, [50]). Similarly, in some cases that are firmly set in commercial relationship, O has arguably made a promise to R that does not seem to have any potential to benefit O, see for example the life tenancy promised to the Earl in Parker v Parker 2003.

67And see Raz 1982 where he says that in principle the liberal state can enforce only reliance-based duties for any promise/contract (Raz 1982, 937).

68Richard Craswell has made a powerful argument according to which Fuller and Purdue’s classification of the remedial interests to expectation, reliance, and restitution is not a useful starting point for normative or instrumental analysis of contract remedies. This is because remedies can be defended only with reference to the purpose or policy which they are meant to serve (Craswell 1996, 11). His suggestion, however, is not to eschew the idea of a baseline for measuring contract damages (Craswell 1996, 80). Rather, when we come to analyse the different remedies in this field, we should

we know it today is a fairly recent phenomenon. But over this short period, an interesting shift has already registered in the case law from an almost automatic award of the expectation value to a great emphasis on the proportionality between the remedy and the claimant’s reliance loss.69 The result is a gap between the way the courts respond to a legally enforceable promise (i.e. contract), and the way they treat successful PE claims. This gap is readily understood if the function of PE is to enforce a different kind of obligation, the discharge of which does not require O to make her representation good (unless this is the only way to compensate R for his reliance loss).

In Jennings v Rice for example, the claimant, Mr Jennings, worked many years for free for Ms Royle, a wealthy widow. The lady encouraged J to believe that he would receive property worth at least £435,000 under her will, but eventually passed away intestate. At first instance, J was awarded £200,000 calculated by reference to the market price of the care he had given her. J appealed on the basis that the promises made to him reasonably led him to expect a more generous share of her estate. The CA dismissed the appeal, rejected the view that the equity of PE is principally satisfied by awarding the expectation value, and stated that ‘the most essential requirement is that there must be proportionality between the expectation and the detriment’.70 This and other recent CA cases which highlight the requirement of proportionality between the claimant’s reliance and the remedy support the view, detailed below, that the essential remedy of PE is tailored to cover R’s reliance loss, not to fulfil his expectations.

The interpretation of the basic remedy for PE as a compensation for reliance losses has some clear advantages. From a conceptual point of view, it marks a significant improvement in the internal coherence of the doctrine. Many commentators accept that the defendant’s responsibility is anchored in the claimant’s detrimental reliance.71 Hence, it is only natural to expect that ‘hand in hand with reliance-based enforcement [there would come] reliance-based relief ’.72 Moreover, even in breach of contract cases it is far from clear why we should take the expectation value (rather than the reliance loss) as the standard measure for remedy. The strongest conceptual (to distinguish from practical) arguments in favour of that rule are based on the unique structure of contracts as bilateral

ask not which of the three interests they serve, but to what extent they strive to fulfil the claimant’s expectations and hence the promise he was given (Craswell 1996, 83). My analysis of the remedies for PE goes along very similar lines: since the commitment which is enforced by the doctrine is to cover reliance losses, the reliance interest serves as the baseline, where the value of the remedy is highly flexible and can climb up to the expectation measure when this is necessary for achieving the aim of the remedy (i.e. to encourage optimal reliance).

69As Matthews shows, the proportionality requirement does not sit well with the historical origins of PE (Matthews 2010, 53).

70Jennings v Rice 2002, 36; Sledmore v Dalby 1996, 208–9; Ottey v Grundy 2003; in Australia see Commonwealth of Australia v Verwayen 1990, per Mason CJ 208–9; Giumelli v Giumelli 1999, 123.

71See Cooke 2000, 7–13 and sources cited there.

72Cooke 2000, 167. Cooke herself does not accept this view of the estoppel remedy even in proprietary estoppel cases, but her view on this point is based on conservative instinct rather than specific arguments (Cooke 2000, 168, and see criticism in Neyers 2003, 35).

agreements which involve consideration.73 This is of course not the place to examine this issue, but it is obvious that the relationship between R and O in estoppel cases cannot support a principled award of the expectation value. From this point of view then, O should only be made to compensate R for his reliance loss, not for his frustrated expectations.74

Taking the reliance value as the base point of the PE remedy would also serve another major concern of property law, namely, ‘to contain the situations in which property rights arise’.75 A happy side-benefit of reducing the basic measure of the remedy from expectation to reliance would be the inevitable reduction in the economic value of property rights that are passed via PE, as the reliance value is very often lower than the expectations one. But the containment goes deeper than that: if we take the reliance value as a base point for remedy, it would be reasonable to limit the recourse to proprietary, to distinguish from monetary, remedies to a minimum. We could, in other words, expect that as a rule property rights would be transferred (or otherwise changed) only where a personal remedy cannot achieve the goal of compensating the claimant’s reliance loss (see more on this point later in this section).

The problem is of course that in many, if not most, of the recent cases in which PE was successfully argued, the claimant ended up getting the value of his or her expectation. O, in other words, was often forced to make her representation good. One way to proceed when a fissure opens between a suggested interpretation of a doctrine and the current practice is to urge the legislator, or the Supreme Court, to introduce a sea-change in the way the cases are decided. That, however, will not be necessary here. For, as Bright, McFarlane, and Robertson show, the results of PE cases do not reflect the view that the expectation value is the standard measure of the remedy. On the contrary: the courts emphasize again and again that the remedy must be in tune with the claimant’s reliance. The reason why it appears that the remedy is tailored to cover the claimant’s expectation is that in the knotty circumstances typical of PE this is the only way to ensure that the reliance loss is adequately compensated for.

The contrast between the relative ease with which the value of expectation can be determined and the complex task of calculating reliance losses is well known.76 If

73See Benson 2001, 175; Penner 1996b, 352. The classical challenge to the expectation measure of damages for breach of contract has been laid down in Fuller and Perdue 1936, and has been taken seriously by contract theorists ever since (see n. 35).

74A liability rule that awards R the value of his expectation will also exacerbate the ‘over-reliance’ problem—see Craswell 1996, 494.

75Bright and McFarlane 2005b, 449.

76For some writers this gap even explains why the standard remedy for a breach of contract is based on the expectation (and not reliance) value, as Fuller and Perdue explain: ‘granting the value of the expectancy . . . offers the measure of recovery most likely to reimburse the plaintiff for the (often very numerous and very difficult to prove) individual acts and forbearances which make up this total reliance on the contract (Fuller and Perdue 1936, 60). According to the authors, the prevailing practice of bargain contracts actually makes it the case that expectation interest is swallowed by the reliance interest as the expectation of profit becomes a legitimate reliance; this, however, is a highly implausible analysis, see Penner 1996b, 350; Raz, in contrast, keeps the expectation and reliance interests separate, and argues that the former should be satisfied for practical reasons similar to those put forward by Robertson et al., see Raz 1982, 938.

should be based on principles, especially so in property law where clarity and predictability are of particular importance. For parties to a dispute on a unique and (often) precious right can expect to know what they need to do in order to prove their claim and what are the chances of success. Some appellate judges have suggested that when deciding the remedy for PE the court ought to take into account a wide range of considerations, from the level of indecency that can be attributed to O, to the parties’ relative needs, or even any ‘alterations in the benefactor’s assets and circumstances’.85

Yet, if the justifying principle behind the doctrine is as suggested in this chapter the judge should not take such considerations into account. Future changes in O’s circumstances should matter only inasmuch as foreseeing them influenced her (perceivable) commitment to the state of affairs envisaged in her representation. Similarly, the general moral standard of O’s behaviour should not affect the measure of remedy, as the only issue on the table is whether her behaviour gave rise to an LPA obligation—other morally relevant aspects of her conduct are beside the point. The parties’ relative needs lie even further beyond the boundaries of the relationship that is relevant for a PE claim. Indeed, the influence which such factors seem to have exerted on the results of some cases can sometimes be explained as stemming from principles that are external to PE or, more often, on the basis of the conventional elements of the PE claim.86

A related problem is the allusive role of the ‘unconscionability’ element of PE. The fear is of course that the ‘unconscionability’ element will tempt the court to use equity as a ‘sort of moral U.S. fifth cavalry riding to the rescue every time a claimant is left worse off than he anticipated as a result of the defendant behaving badly’.87 Peter Birks for example, dismissed unconscionability as a ‘fifth wheel on the coach’ of estoppel.88 Lord Walker, in contrast, glorifies it as ‘unifying and confirming, as it were, the other elements’ of the PE claim.89 The interpretation of PE advanced here supports Lord Walker’s view. At the bottom of PE lies a moral wrong that taints the defendant’s conscience: inviting R to trust and rely on her, or carelessly making R believe so, and turning her back on him later.90 This, as we saw, is not to say that the point of PE is to make people obey their moral obligations (and it is highly doubtful anyway whether this is possible at all). But it does mean that we see O’s behaviour as morally wrong and that it is a legitimate interest of society to curb this kind of behaviour in order to foster a socially valuable

85See respectively Crabb v Arun District Council 1975; Sledmore v Dalby 1996; Jennings v Rice

2002, 52. For a critical exposition of the way in which O’s behaviour influenced the courts’ decision see Robertson 2010, s. B.

86Robertson 2010, 421.

87Neuberger 2009, 543. As an example one can perhaps point at Rotherham’s view of the function of PE in cases of unilateral mistake as tackling ‘unconscionable opportunism’ (Rotherham 2002, 294).

88Birks 1996, 63s.

89Cobbe v Yeoman’s Row Management Ltd 2008, 92. See also Spence (1999, 14) who sees ‘unconscionability’ as relating to the strength of the moral duty that lies at the heart of estoppel according to his interpretation, and the criteria for unconscionability he offers at pp. 59–66.

90I am here using ‘unconscionability’ to denote an action that is contrary to objective moral norms—on equity as employing the conscionability standard in that sense see Samet 2012.