- •1 The concept of promise
- •1. What is a promise?
- •(a) A definition of promise
- •(b) Promise: objectively existing phenomenon or human construction?
- •(c) Testing component elements of the definition of promise
- •(i) A promise is more than merely an internal mental process: promises as speech acts demonstrating commitment
- •(ii) A promise is a commitment to a performance of the promisor
- •(iv) A promise must relate to the future
- •(v) A promise must state a commitment in favour of another party
- •(vi) Things which are not components of the definition
- •2. Three crucial qualities of relevance to promises: gratuitousness, conditionality, unilaterality
- •(a) Gratuitousness
- •(b) Conditionality
- •(c) Unilaterality
- •3. Acts having some similarity to, but which are distinct from, promises
- •(a) Vows
- •(b) Oaths
- •(c) Threats
- •(d) Donation (gift)
- •(e) Warranties (guarantees)
- •(f) Agreement
- •4. Promise as a culturally universal and significant idea
- •5. Preliminary conclusions
- •2 Promises as obligations: morality and law
- •1. Introduction: promise as a type of obligation
- •2. Taxonomies of obligations in morality and law
- •3. Promises as moral obligations: the practice of promising
- •(a) Promising as moral, immoral, or amoral?
- •(b) Source of the morality of the practice of promising
- •(i) Promising as a virtuous act; the natural law tradition
- •Scripture
- •The canon law
- •Objections to the morality of promising as having a natural law/virtue basis
- •(ii) Promising as an act of the will: respect for personal autonomy
- •(iii) The ‘contract theory’ of promising
- •(iv) Consequentialism (utilitarianism)
- •(v) Reliance theory
- •A more limited role for reliance
- •(vi) Conclusion on the competing theories of the moral value of promises
- •4. Powers and sanctions relevant to breach of morally binding promises
- •3 The historical development of promissory ideas in the law
- •1. Roman law
- •(a) Formal contracts: the stipulatio
- •(b) Informal contracts
- •(c) Conclusion on Roman law
- •2. Medieval contract law
- •(a) Continental legal thought
- •(b) English law
- •(i) Debt
- •(ii) Covenant
- •(iii) Unilaterality and bilaterality in early English contract law
- •(iv) Assumpsit
- •(v) The doctrine of consideration
- •3. The Northern natural law school
- •(a) Hugo Grotius
- •(b) Samuel von Pufendorf
- •(c) James Dalrymple (Viscount Stair)
- •4. Eighteenth and nineteenth centuries
- •(a) English law
- •(b) Scots law
- •(c) Civilian systems
- •(i) German law
- •(ii) Robert Pothier
- •5. Contract theory and practice in the twentieth century
- •6. A revitalised will theory
- •4 Formation of contract
- •1. Wasted pre-contractual expenditure following termination of contract negotiations
- •(a) A Common law solution to the problem of pre-contractual expenditure: promissory and proprietary estoppel
- •(i) Promissory estoppel: promissory or reliance-based principle?
- •(ii) Promissory estoppel and failed contractual negotiations
- •(iii) Proprietary estoppel and failed contractual negotiations
- •(iv) Conclusion on estoppel and pre-contractual expenditure
- •(b) A civilian solution to wasted pre-contractual expenditure: culpa in contrahendo and bad faith termination of contractual negotiations
- •(c) A mixed legal system solution to wasted pre-contractual expenditure: liability from an implied assurance that a valid contract exists
- •(d) Other solutions to the problem of pre-contractual liability
- •(e) Conclusion on pre-contractual liability
- •2. Pre-contractual duties of disclosure
- •3. Offer and acceptance
- •(a) Offer and acceptance as conditional promise
- •(b) The traditional offer and acceptance model as a unilateral dictation of terms
- •(c) Distinguishing offer from conditional promise
- •(d) Problem cases for a promissory analysis of offer and acceptance
- •(e) Conceiving of offers as binding
- •4. Enforcement of auction/tender conditions
- •5. The firm or irrevocable offer
- •(a) Characterising the firm offer
- •(b) Promises of reward
- •6. Options
- •7. Letters of intent and preliminary contracts
- •(a) An intent to contract
- •(b) A preliminary contract, envisaging a further contract
- •(c) An expectation of a formal contract
- •(d) An expression of intention to do something other than contract
- •(e) A genuine unilateral promissory intention
- •8. Error in formation of contract
- •(a) Choosing the policies which inform the rules on error
- •(b) Constructing workable classifications which implement the policies chosen
- •(i) Roman Law
- •(ii) The Common law
- •(iii) The mixed legal systems
- •(iv) German law
- •(v) An ideal approach to promissory error?
- •9. Extortion in the formation of contract
- •(a) English law
- •(b) The mixed legal systems
- •(c) German law
- •(d) Conclusion on extortion
- •10. Implied terms
- •11. Consideration
- •(a) The Common law
- •(b) The mixed legal systems
- •(c) German law
- •(d) Model law
- •12. Requirements of form: unwarranted restrictions on promising?
- •5 Third party rights
- •1. The challenge to third party rights in contract
- •2. The historical legal background
- •3. Third party rights in modern contract law
- •(a) The Common law
- •(b) The mixed legal systems
- •(c) German law
- •(d) Model law
- •(e) Conclusion on third party rights under contract
- •4. Assignment
- •(a) English law
- •(b) The mixed legal systems
- •(c) German law
- •(d) Model law
- •5. The problem of transferred loss
- •(a) English law
- •(b) The mixed legal systems
- •(c) German law
- •6. Conclusion on third parties
- •6 Contractual remedies
- •1. The ‘interests’ protected by remedies
- •2. Mutuality of promises and withholding of performance
- •(a) The Common law
- •(b) Mixed legal systems
- •(c) German law
- •(d) Model law
- •3. Specific performance
- •(a) English law
- •(b) Mixed legal systems
- •(c) German law
- •(d) Model law
- •4. Perfect or substantial performance of contractual promises
- •(a) Contracts for services
- •(b) Sales of goods
- •5. Injunction (interdict)
- •6. Damages
- •(a) Contractual damages and interests other than the performance interest
- •(b) Damages for mere breach of contract, or for fault?
- •(c) English law
- •(d) Mixed legal systems
- •(e) German law
- •(f) Model law
- •7. Liquidated damages: penalty clauses
- •(a) English law
- •(b) Mixed legal systems
- •(c) German law
- •(d) Model law
- •8. Termination of contract for non-performance
- •(a) Historical origins of the right to terminate
- •(b) English law
- •(c) Mixed legal systems
- •(d) German law
- •(e) Model law
- •9. Restitution following termination for non-performance
- •(a) English law
- •(b) Mixed legal systems
- •(c) German law
- •(d) Model law
- •10. Good faith and contractual remedies
- •7 The renunciation of contractual rights
- •1. Terminology
- •2. Bilateral or unilateral renunciations
- •3. Characterising undertakings not to enforce contractual rights
- •4. Express contractual or promissory renunciation of rights
- •(a) The Common law
- •(b) Mixed legal systems
- •(c) German law
- •5. Forbearance, promissory estoppel and personal bar
- •(a) The Common law
- •(i) Forbearance at common law
- •(ii) Forbearance in equity: promissory estoppel in English law
- •(iii) Promissory estoppel in American Common law
- •(iv) Conclusion on promissory estoppel in the Common law
- •(b) Mixed legal systems
- •(i) South Africa
- •(ii) Louisiana
- •(iii) Scotland
- •(c) German law
- •6. Model Law and renunciations of rights
- •8 The future of promise in contract law
- •1. The restricted role of promise in the modern law
- •2. Future possible development of the law
- •(a) General remarks
- •(b) The Common law
- •(c) The mixed legal systems
- •(d) German law
- •(e) The development of supranational model law
- •3. Conclusion on the future of promise
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a greater number of exceptional circumstances where such unilateral promises will be enforceable.
In the final part of this book, some suggestions will be offered as to how the idea of promise might serve the future development of the law, partly from the internal perspective of individual legal systems, but also with harmonised legal development (particularly within the European con text) in mind.
2. Future possible development of the law
If, as suggested above, it would be to the benefit of the law to recover the earlier significance accorded to promise, what would be necessary for this to happen? That question can be posed inter-jurisdictionally by reference to certain general considerations, but also in relation to the specific legal systems studied in this work.
(a) General remarks
There are a number of matters listed below which affect the general pro spect of promise being accorded a greater role in contract law in all of the jurisdictions studied. However, a fundamental question is whether legal development is managed one jurisdiction at a time, or whether supranational, harmonised development becomes the preferred route. While factors such as globalisation, cost reduction, the ease of doing busi ness, and the committal of many transactions to electronic form favour harmonisation, on the other hand legal nationalism, systemic differ ences between Common law and civilian systems, and lack of political will for harmonisation, all seem to pull in favour of single jurisdictional legal development. Which will win in the long term is uncertain, though a more prominent role for promise in contract law is most likely to be derived from supranational development and harmonisation, given the recognition accorded to promise in already published model law.
Whether in relation to national or supranational legal development, there are a number of obstacles to promise regaining the ground it once lost in legal thought and practice. Among such obstacles are the following:
(1)Any greater role for promise would first require an agreed understand ing of basic obligational concepts essential to describing promises and other obligations. These concepts were considered in Chapter 1, and include qualities such as unilaterality and bilaterality, gratuitousness
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and onerousness, and conditionality. Typically, codified systems already have a clear understanding and definition of such basic con cepts, as Germany and Louisiana demonstrate. On the other hand, uncodified systems tend to lack such an agreed understanding and definitions: England and Scotland are both beset with this problem (consider the divergent views on what ‘unilateral contract’ means),2 as is South Africa to a lesser though still not insignificant degree. There is a clear divergence in juridical and academic use of these funda mental terms in uncodified systems, a phenomenon which is natur ally productive of confusion. Without clarification of such confusion and the adoption of uniform definitions of basic obligational ideas, the development of a greater role for promise will be hampered, as the analysis of fact situations and the characterisation of possible solu tions to such situations will inevitably remain muddled.
(2)Even if terminology is agreed, there would remain a large antag onism in certain quarters to allowing promise a greater normative and explanatory role in the law. The relentless attacks of utilitar ians since Bentham onwards have created a fundamental mistrust in the minds of many thinkers as to the value of promise, certainly in a normative but even in a descriptive role. Despite the appear ance in recent years of different varieties of neo-promissory ana lysis (such as that of Fried and Smith) as well as of neo-virtue ethics, there remain many adherents of reliance theories and of other non- promissory theories of contract law. Critics of promise are bolstered in their views by modernist and post-modernist attacks on the idea of the importance of the human will. The resultant confusion means that some have despaired of adducing in the present age any coher ent theory of contract law. Any attempt entirely to vanquish prom issory sceptics in the academic field may well be fruitless, though an attempt was made in Part 1 of this work to enunciate a revived will theory capable of meeting many of the criticisms of anti-will theo rists. It was also suggested how promise need not claim all of the ground which promissory theorists once attempted to, but rather how it can quite happily function as a description of the means by which human beings are permitted by the legislative sovereign to
2A ‘unilateral’ contract strictly refers in English law only to a contract in deed form, yet the courts have utilised the term in other conflicting senses, as earlier discussion in Chapter 4 indicated; in Scotland, there is no such thing as a unilateral contract (save as a misnomer for a gratuitous contract), though one encounters academic and judicial use of the term.
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assume voluntary obligations, even if it does not explain the whole content of such obligations.
(3)Even if antagonism to promissory ideas in any form can be overcome, there would remain a deeply ingrained preference in many systems for the accepted promise, and a consequent rejection of the unaccepted promise as a basis for anything other than very exceptional types of liability. Overcoming such a general rejection of the unilateral prom ise would, again, not be easy. Antagonism to unilateral promises has a long tradition. Yet, the history of the law of the ius commune prior to around 1700, a law which did give to promise a primary role, is surely not itself an insignificant tradition: what would require to happen is not so much a complete abandonment of tradition, but the redis covery and redevelopment of an older tradition. That older tradition of enforcing unilateral promises served many useful purposes, and might (as suggested at various points in this work) do so again. The more recent tradition would be hard, but not impossible, to change.
(4)Were a greater role to be given to promise by particular national legal systems or in a supranational code, a decision would require to be taken as to whether this should be by way of the development of a separate obligation of promise (as in Scots law), by way of treating the unilateral promise as generally enforceable without conceiving of it as a new nominate obligation, or by way of continuing to deny general recognition to such promises while increasing the exceptional cases in which they were enforceable. Though the first option is entirely pos sible, it would have the appearance of a radical alteration of the law and thus be unlikely to command widespread support. The second option has already found favour with the drafters of PECL, in which a unilateral promise is treated as a sort of unaccepted contract, and thus subject to the rules on contract with ‘appropriate modifications’ (whatever they may be).3 The framers of the DCFR chose to follow a somewhat different approach. As their project had a wider canvas than merely contract, they were not obliged to try and squeeze promise in to provisions drafted with contract almost entirely in mind. They were instead able to give promise a place in the Book on ‘Contracts and other juridical acts’, the point being that the DCFR treats promise
3PECL Art. 1:107 states that the Principles ‘apply with appropriate modifications to agree ments to modify or end a contract, to unilateral promises and other statements and con duct indicating intention.’ Art. II.-1:103(2) of the DCFR states that ‘A valid unilateral undertaking is binding on the person giving it if it is intended to be legally binding with out acceptance.’
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not as a modified sort of contract but as one of the ‘other juridical acts’ (a unilateral juridical act). The approach of the DCFR, though it does not go so far as to recognise promise as a separate class of obli gation, nonetheless gives it an independent life of its own by treat ing it as a generally enforceable type of undertaking. This seems a preferable approach to that taken in PECL, as many rules of contract law stated in contract codes such as PECL are redundant in the case of unilateral promise (the rules on offer and acceptance being an obvi ous example), but it is not always clear which apply to promises and which do not.4 The last option, increasing the exceptional cases where unilateral promises are recognised (in some cases by applying prom issory analysis to facts currently treated as contractual), is clearly practicable but has the disadvantage of requiring identification of specific transactions which the law is to consider sufficiently import ant to merit legal recognition rather than the much simpler process of allowing parties themselves to determine what is important to them. The result of applying an exceptional recognition approach is likely to be both piecemeal and to appear overly paternalistic.
(5)Assuming that some sort of change were desirable (under one of the models discussed in the preceding paragraph), the question of how to achieve it arises. Evidently in codified systems an alteration to the existing Code would be required. If general recognition of unilateral promises were to be allowed, a broad enabling provision could be inserted into the Code in question, and other more specific, excep tional provisions could be removed as being in consequence obso lete. In codified systems, preference already tends to be given to performance remedies (and thus to the protection of the promissory interest in a wider sense, not just in the narrower sense of unilat eral promise), so that only minor codal changes might be needed to enhance the role of promise in that regard. In non-codified systems, the way forward for promise would be harder to plot. Short of whole sale change of private law to put it on a codified basis, development would have either to be led by the courts or through statutory change (a ‘Contract Act’, for instance, might, in modernising other aspects of contract law, give legal effect to unilateral promises). Any possible
4Take the rules on rescission for breach of contract, for instance: while a material or serious breach of contract will justify termination of a contract and restitution of a performance tendered, it is not evident that the detail of this principle applies mutatis mutandis to a case of a breach of a condition attaching to a unilateral promise such as might justify a unilateral promisor seeking restitution of his performance.
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judicial development would encounter the large theoretical obstacle of the abolition of a mutual consideration requirement (where it exists in a specific system) and the rule that only mutual promises are enforced (a component of the privity rule), matters considered further below in relation to Common law development. Such a step might be perceived by many as too radical for the judicial branch of government to undertake. If that were so, then legislative devel opment would be required to address the question, as, for instance the Contract (Rights of Third Parties) Act 1999 did for England and Wales in a restricted way by allowing enforcement of promises for the benefit of third parties.
(6)Assuming that promise were to be given a greater role in the law, care would have to be taken not to neuter the potential of gratuit ous promise by subjecting it automatically to the legal regime applic able to donations. Were that to happen, then if the particular national regime for donations required compliance with strict formal or notar ial rules, gratuitous promise would be prevented from fulfilling much of the potential which it has been suggested in this work it might have. However, the risk of that happening is not great, as many gratuitous promises do not relate to the transfer of ownership of a thing, and it is only such transfers which could be conceived of as donations. Gratuitous promise has a large field within which to operate which is not donative in nature.
(7)If supranational harmonisation of contract law or wider civil law is thought desirable, promissory reform might naturally find a place in any such harmonisation, as the examples of the PECL and DCFR indicate. Achieving such harmonisation would itself be problem atic, however. There are not insignificant political and juristic objec tions to harmonisation, though evaluation of the scope and force of these lies outside this work. Nonetheless, assuming such hurdles can be overcome, the very existence of the PECL and DCFR texts shows that harmonisation is feasible, albeit that it would mean a significant degree of change to the laws and legal culture of some jurisdictions (particularly Common law ones). Outside Europe, the harmonisation of the laws of South Africa and Louisiana with other systems raises considerations different to those applicable within the European con text. Though organisations such as the Pan African Lawyers’ Union and the African Union actively promote legal harmonisation across the African Continent as a goal, such an enterprise is at the present time little more than an aspiration, and there is no African equivalent