- •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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positive law might require an outward declaration of a promise, under the natural law and as a matter of principle even a silent promise could bind the promisor. It was not this impractical view that won out, but rather the contrary view of Lessius that an outward declaration of the promisor’s will was required,36 a view supported in the fundamental requirements for a promise suggested in Chapter 1. There was an equally lively debate as to the question of whether an acceptance of a promise was necessary: Covarruvias, Soto, and Molina said that, as all promises were binding, an acceptance of a promise was not required in principle; Lessius disagreed, holding that an acceptance was necessary because it was the promisor’s condition for being bound, an argument which clearly conceived of the nature of an offer as a conditional promise. This debate is noteworthy in being conducted in promissory terms; had the focus of contract been rather on agreement, no debate could have been seriously entertained as to whether an acceptance (or some other sign of agreement) was needed. The shift to thinking of contract primarily in agreement terms had not yet come.
The Spanish scholastics represented the penultimate flowering of the ancient natural law tradition, its final proponents being the Northern natural law school discussed below, whose members stood on the cusp between late medieval and early modern legal thought.
(b) English law
Though it is a standard observation to contrast the Common law with the Romano-civilian heritage of Continental Europe, one remarkable shared feature of both English law and Roman law is the extent to which legal development in each came about as a result of changes in forms of pleading rather than as a result of legal theory. While their content might be different, English law and Roman law were both essentially legal systems based upon actions. As will thus be seen, the eventual rise of will theory in the Common law should not really be seen as the triumph of any overarching theoretical or moral perspective, but rather the result of gradual development in legal and commercial practice.
The history of the development of English law narrated below will highlight the importance of promise to contractual thought in England.37
36Lessius, De iustitia et iure, 2,18,5.
37A short, though now somewhat dated, summary of the place of promise in the law, largely from a Common law perspective, is found in Farnsworth, ‘The Past of Promise: An Historical Introduction to Contract’.
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This is clearly observable in the rise of the promissory action of assumpsit, which was to became one of the cornerstones of the unified law of contract of the nineteenth century. To that observation must, however, be added the crucial further remark that the promissory nature of assumpsit was to become, in time, a reciprocal rather than a unilateral promissory one, given the development of the doctrine of consideration. English contractual development, like that of the Continent, was to be one of a shift from promise to mutual agreement.
A noteworthy feature of English law between Glanvill in the late twelfth century and Blackstone in the mid-eighteenth century is the dearth of theoretical treatments of contract law. Such an absence means that the focus of the discussion below will be on court practice and decision in relation to the three medieval actions of debt, covenant and assumpsit, out of which modern English contract law largely grew. There is also some discussion of the form of contracts and the doctrine of consideration.
(i) Debt
The early form of the English writ of debt38 is narrated in Ranulf de Glanvill’s late twelfth century Treatise on the Laws and Customs of England.39 The writ could be raised for a debt deriving from any cause, which need not be narrated in the writ itself. The form of the writ asked the court to order the debtor to pay a specified sum of money (or to hand over specific goods due) to the creditor. Though the debt might conceivably derive from an underlying agreement, it could be due as a result of some other cause. Glanvill lists two forms of proof of debt, witness or sealed charter.40 Thus, an underlying verbal agreement which gave rise to a debt might be proved by the bringing of witnesses; otherwise, a sealed instrument embodying the debtor’s obligation might be produced. Agreements unsupported by anything except the allegation that the other party had pledged the faith of the agreement (that is, given his word to perform) did not fall within the jurisdiction of the King’s court, such mere breaches of the faith of the parties falling instead within the jurisdiction of the ecclesiastical courts.41 The connotations of the writ
38See further Simpson, A History of the Common Law of Contract, pp. 53–135.
39Glanvill, Tractatus de legibus et consuetudinibus regni Angliae.
40Glanvill, x,12.
41Glanvill, x,12: ‘When the debtor appears in court on the appointed day, if the creditor has neither gage [a pledge] nor sureties nor any other proof except a mere pledge of faith, this is not sufficient proof in the court of the lord king. Of course, any breach of faith may be sued upon in an ecclesiastical court.’
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with shame and dishonour have been remarked upon, this being a point of contact between the action of debt and the early idea of an obligation in Roman law.42
Glanvill was familiar with Roman law, so it is not surprising that at least four of the five causae which he lists as supporting the writ of debt are highly reminiscent of Roman actions: consumption, sale, loan for use and lease, as well as ‘any other just cause of indebtedness’.43 The influence of Roman law, at least in terminology if not in substance,44 was evidently too great to be extinguished by its study being banned by King Stephen around 1150.45
The action of debt was evidently useful as a means of enforcing an underlying agreement if a claim for a specific sum could be proved before the court; it was not available where such a specific sum could not be stated, for instance because the parties had left the price of an agreement to be fixed at a later date. Another difficulty with using the writ of debt was that the debtor might repel the action by swearing that the debt was not due and by producing eleven ‘oath helpers’ who would testify to the same effect.46
(ii) Covenant
The second action out of which the modern law of contract grew was that of covenant.47 Like debt, the form of the writ simply narrated that the party bringing the writ was entitled to some performance and begged the court to order the other party to perform it or to pay damages (as assessed by a jury). The action developed in the course of the thirteenth century out of the action of trespass: again, like the Roman concept of an obligatio, it thus grew out of the redress due for wrongful behaviour. The idea of covenant meant no more than agreement, such agreement being narrated in the writ, but the origins of covenant in trespass gave the writ
42 Ibbetson, An Historical Introduction, p.19. |
43 Glanvill, x,3. |
44Unlike the Roman law, Glanvill’s discussion of the various types of consensual contract which he lists places great stress upon pledges of performance, such as delivery in a contract of sale. Scrutton, The Influence of the Roman Law, argues that the Continental influence on English law was mainly terminological (see p. 74f). A similar point in relation to the Roman legal influence on the action of debt is made by Ibbetson, An historical Introduction, p. 19.
45Hall, in the introduction to his translation of Glanvill (p. xviii), surmised that Roman law continued to exert some influence on England because it had proved indispensable to the canon lawyers.
46Ibbetson, An Historical Introduction, p. 32.
47See further, Simpson, A History of the Common Law of Contract, pp. 9–52.
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a certain ambiguous nature, part contractual, part tortious, which was to prove enduring.
Given that the idea of covenant was explicitly agreement based, one might have expected it to develop in time into a general contractual action. That it did not seems to be due to two procedural developments. First, in the late thirteenth and early fourteenth century the rule developed that an action of covenant could only be brought if the covenant was embodied in a sealed document.48 Thus covenant, unlike debt, suffered the same restriction upon its development as had the stipulatio in later Roman law. Had this development not occurred, English law might have developed a general idea of contract much earlier than it did. Second, lawyers began to embody many agreements in the form of a conditional bond.49 A bond to pay a sum of money would be written out, and endorsed with the condition that it would not have to be paid if the debtor had performed a certain duty by a specified day; non-performance would thus give rise to the action of debt. The attractiveness of an action for debt was that it was for a clear sum, rather than for an uncertain amount of damages, and that it could be brought for any deviation from the clear terms of the condition attached to the bond. The conditional bond was used to encourage performance of an underlying agreement in a similar way to the stipulatio poenae in Roman law. These two developments are prime examples of how wider, theoretical development of English law was constrained by practice and pleading.
In addition, another limiting aspect of covenant was that, because the form of the action of covenant was geared towards performance or damages, it was not ideal as a means of complaining about defective performance. As time passed, pressure was exerted by litigants to allow pleas of defective performance to be remedied, but where this occurred it was under the guise of the writ of trespass, alleging ‘disturbance of the king’s peace’ by the defective performance, a not theoretically convincing, though increasingly successful, plea.50 The difficulty of pleading defective contractual performance in covenant (contract), and the increasing hiving off of defective performance claims (including breach of warranty claims) into trespass (tort), drove a wedge between two common types of claim which were only reunited much later in the history of English contract law. Such developments inevitably hampered the conceptualisation of contract as a single obligation.
48 Ibbetson, An Historical Introduction, pp. 26–7.
49 Ibid., pp. 28ff. 50 Ibid., p. 44.