- •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
Historical Development of Promissory Ideas |
127 |
than that determined by the idea of consideration, thus permitting the enforcement of unilateral promises.
The doctrine of consideration was subtly different to the older common law idea of quid pro quo. Consideration was conceived of as the thing which motivated the giving of a promise,72 whereas such motivational criterion was not present in the idea of quid pro quo. Consideration, moreover, might be constituted not merely by a benefit to the other party, but could include a benefit conferred upon a third party, or the incurrence by the other party of a detriment.73 An undertaking to marry was good consideration, having formerly been, only by the turning of a conceptual blind eye, an act of reciprocity.
3. The Northern natural law school
By contrast with English law, the contract law of Continental Europe and Scotland of the early modern period was the subject of a number of important theoretical treatments. The principal writers of the law in this period belong to what has been styled the Northern natural law school. It is their works which form the vast majority of the following discussion of this period, with an occasional reference to decisions of the courts.
The Northern natural law school were the last group of jurists to espouse unashamedly the natural law tradition of Aristotle and Aquinas, though as Reformed, early Enlightenment scholars, they did so from a Protestant perspective, and placed a greater emphasis upon reason than those natural lawyers who had gone before them. The greatest members of this school were the Dutchman Hugo de Groot (Grotius), the German Baron Samuel von Pufendorf, and the Scottish judge James Dalrymple, Viscount Stair.74 The writing of each of these men was characterised by a blend of natural law thinking and an early modern view of the importance of man as a rational being. The natural law and reason were seen as going hand in hand, the latter informing the former. Each of the three gave a prominent place to promise in his writings, though with Pufendorf we see the abandonment of promise as the central concept of the law of
72Ibbetson, An Historical Introduction, p. 144; Simpson, A History of the Common Law of Contract, p. 424.
73Ibbetson, ibid., p. 142.
74Other members of the School included: Petrus Gudelinus (1550–1619) of Leuven University; the French Huguenot translator of Grotius, Jean Barbeyrac (1674–1744); and the Scottish judge, Henry Home (Lord Kames, 1696–1782), Kames being one the last writers to merit the description of a natural lawyer in the ancient tradition.
128 |
Promises and Contract Law |
obligations and its replacement with that of agreement. The writings of the Northern natural lawyers were to be influential in the development not only of modern civilian systems but also of the modern law of the mixed legal systems of Scotland and South Africa.
(a) Hugo Grotius75
Hugo Grotius devotes a chapter of Book II of his work De jure belli ac pacis to promises.76 This title follows an opening chapter on the causes of war (identified as self defence and property) and a succession of chapters on matters concerning rights relating to property and persons.
It is notable that Grotius deals separately with promises,77 moving on to contracts,78 then oaths,79 before looking at all three as they relate to sovereign powers80 and treaties.81 Why does Grotius treat promises separately, and why does he place his treatment of promises before that of contract? He gives us little idea of the reasons for this in the chapter on promises itself, as he opens his chapter on promises by saying simply that the ‘order of our work has brought us to the obligation which arises from promises’.82 However, promise’s appearance before contract, and the fact that (unlike Pufendorf) he gives it a separate treatment, does give the impression of its holding a primacy in Grotius’s scheme of obligations. This may well be because Grotius saw himself as a scholar within the scholastic tradition, with all that that meant for the traditional scholastic emphasis of promises and vows.83
Grotius was not however a slave to scholastic opinion.84 He begins his discussion with a strong refutation of Connanus’s views that only reciprocated promises should be enforced and that it is not unjust not to fulfil a promise but only dishonest. Grotius cites in support of the contrary view, that promises ought to be honoured even when unreciprocated or not yet performed, the opinion of Hebrew jurists, passages of Paul from
751583–1645.
76The citations of the English translation of De jure belli ac pacis used are from the 1925 translation by Kelsey of the 1646 edition.
77 |
Ibid., II.xi. |
78 |
Ibid., II.xii. |
79 |
Ibid., II.xiii. |
80 |
Ibid., II.xiv. |
81 |
Ibid.,II.xv. |
82 |
Ibid., II.xi.1.1. |
83See Zimmermann, Law of Obligations, pp. 567–8.
84He remarks of the scholastics that, because they lived in an age deprived of knowledge of the liberal arts, ‘it is less to be wondered at if among many things worthy of praise there are also some things which we should receive with indulgence’ (De jure belli ac pacis, Prologue, 52).
Historical Development of Promissory Ideas |
129 |
the Digest, the natural law, good faith, and ‘the nature of immutable justice’.85
He says that those promises which are binding in law are those where an intention to promise is ‘manifested by an outward sign of the intent to confer the due right on the other party.’86 He compares the effect of such a promise to an ‘alienation of ownership’ because in making the promise we are intending either to alienate a thing or some portion of our freedom of action. Notably, he requires an acceptance before a promise can bind, though he admits that ‘[t]his effect does not follow from the law of nature but merely from the civil law’.87
Grotius admitted that promises might be made the subject of ‘burdensome conditions’, stating that this was so obvious from ‘natural equity’ that ‘it does not need many proofs’ (he does not offer any).88 Grotius might have used this idea of the conditional promise as a means of connecting promise with contract by describing contract as founded upon conditional promises, but he does not do so. On the contrary, the language of promising is almost entirely absent from Grotius’s treatment of contract in his succeeding chapter, which distinguishes him clearly from Pufendorf, as we shall see.
In fact, the definition of contract offered by Grotius, that it encompasses ‘all acts of benefit to others, except mere acts of kindness’,89 is hardly a serviceable definition of the obligation, as clearly not all acts beneficial to others are in fact contracts. Contracts are described as ‘reciprocal acts’, of either beneficence or exchange (his own conceptualisation of the Aristotelian ideas of liberality and commutative justice), and being either such as ‘separate the parties’ (in that each party undertakes it to further his own interests) or such as ‘produce a community of interests’ (contracts for a common purpose).90 The latter distinction seems a somewhat minor one to posit as of primary importance in understanding the field of contract, though, given that the latter class is held to include associations for the purposes of war, the reader is perhaps expected to grasp a certain relevance in this classification to a work on war and peace. Regardless of any such relevance, it hardly provides the most useful primary taxonomy for contracts in general. Grotius then spends some time discussing what it means to say that the law of nature enjoins that contracts are characterised by equality,91 though, like Stair after him, Grotius is willing to leave it to the parties themselves to estimate what seems fair to them
85 Ibid., II.xi.1; II.xi.4. 86 Ibid., II.xi.4.1. 87 Ibid., II.xi.14.
88 Ibid., II.xi.19. 89 Ibid., II.xii.7. 90 Ibid., II.xii.3. 91 Ibid., II.xii.8–13.
130 |
Promises and Contract Law |
by way of exchange,92 an approach which does no more than pay lip service to Aristotle’s idea of commutative justice. Grotius is, however, well acquainted with Aristotle: he characterises human acts as either ‘kind’ or ‘reciprocal’, citing Aristotle, and the first chapter of his first book contains a lengthy discussion of Aristotelian classifications of justice and law.93 It is also more than abundantly clear that his text shows a clear support for natural law philosophy, though like Stair natural law and reason are inherently linked in Grotius’s view.94
The remainder of Grotius’s discussion of contract seems somewhat jumbled and disjointed, for he deals, in no apparent order, with a number of seemingly unrelated issues, such as the estimation of the price in a sale, monopolies contrary to nature, money as the medium of exchange, interest, partnership, joint undertakings for maritime operations, and a number of other topics. The result, for those looking for a logical treatment of the field, is unsatisfactory, far less elegant and structured than that of his treatment of promise, and certainly less satisfactory than the structured treatment offered by his near contemporaries Stair and Pufendorf.
A comparison of Grotius’s treatment of promise and contract is instructive. He stands as perhaps the last writer in the natural law tradition who gave promise a central role in obligations theory. With his passing, contract and mutuality were to replace promise and unilaterality as the central themes in the first treatments of obligations which ushered in the modern era of obligations theory. However, as will be seen, though mutuality was to become the dominant model, the idea of promise had become so entrenched that the conceptualisation of mutual agreement was still discussed in promissory terms.
(b) Samuel von Pufendorf
At the cusp of this era of modernity stands another member of the Northern natural law school, Samuel von Pufendorf.95 Although he treats of promise in his writings, he gives it much less emphasis than did Grotius
92Ibid., II.xii.11.1: ‘Whatever, in fact, the parties promise or give, they should be believed to promise or give as on an equality with the thing which is to be received, and due by reason of that equality.’
93Ibid., II.xii.2.
94‘The law of nature is a dictate of right reason … an act, according as it is or is not in conformity with rational nature, has in it a quality of moral baseness or moral necessity; and that, in consequence, such an act is either forbidden or enjoined by the author of nature, God’ (I.i.10.1).
951632–1694.
Historical Development of Promissory Ideas |
131 |
or other natural lawyers before him. For Pufendorf, promise is a way of analysing contract, but it is contract which takes on the dominant role in obligations. Pufendorf’s views on promise and contract are set out in his works Elementorum jurisprudentiae universalis (The Elements of Universal Jurisprudence) and in his most famous work, De iure naturae et gentium (The Laws of Nature and Nations).
In the Elementorum, he begins his treatment of obligations by laying out some conceptual ground. Obligations may be classified according to various criteria, including whether they are congenital or adventitious, equal or unequal, and mutual or non-mutual.96 Congenital obligations derive from our human nature, and include the duties we owe to God and each other under the natural law; adventitious obligations are those which do not follow from our birth, but either we assume voluntarily or are imposed upon us by law. Unequal obligations are due from inferior beings to their superiors, whether to God or some superior human power; equal obligations, as the name suggests, exist between those of the same state in life. Most relevant for the present discussion is the division between mutual and non-mutual obligations.97 A mutual obligation is one to which ‘another obligation corresponds’,98 a concept of mutuality still employed by the modern law; by contrast, a non-mutual obligation is one to which no other obligation corresponds (Pufendorf gives the example of the duty of obedience owed by men to God, which has no corresponding duty on God’s part).99 In Pufendorf’s view, no such non-mutual obligations exist between men under the natural law, because it is ‘repugnant to the natural equality of men among one another for one to be bound to another in such a way that the latter is in his turn bound to the former in no way at all’.100 This statement appears to suggest that it would be impossible for someone to undertake a gratuitous obligation in favour of another. That would fail to appreciate, however, that Pufendorf, like other natural lawyers before him, saw the recipient of a gratuitous promise as under a reciprocal natural obligation of gratitude, even if such an obligation of gratitude could not be legally enforced. Seen this way, gratuitous obligations have a place in Pufendorf’s thinking,101 the making of such a promise entailing that ‘we must now follow the directions of our promise’.102
Pufendorf’s general discussion of obligation is littered with promissory language. For instance, he illustrates a further obligational
96
97
98
101
Elementorum, I.xii.1–5.
The idea of mutuality was discussed in Ch. 1, at pp. 29–30. Elementorum, I.xii.6. 99 Ibid., I.xii.5. 100 Ibid., I.xii.5. Ibid., I.xii.7. 102 De iure naturae, III.v.7.
132 |
Promises and Contract Law |
classification – that between perfect and imperfect obligations – with examples of promises of both type. A perfect obligation is one which creates a legal entitlement to enforce the obligation; an imperfect obligation does not. Like Grotius before him, Pufendorf insists upon an acceptance on the part of a promisee before a promise may become perfect and thereby bind the promisor.103 This seemingly minor point is in fact of great significance. Because promises must be accepted, and because contracts evidently involve acceptance of the terms offered, contract can be characterised by Pufendorf as an accepted promise. Pufendorf’s train of thought in this respect may be seen from the following progression in the text of the Elementorum: first he stipulates the need for promises to be accepted,104 next discussing that promises may be conditional or unconditional,105 before finally characterising a contract as constituted by conditional promises.106 It is significant that an author who (as will be seen below) saw contract as the central obligation, nonetheless continued the existing tradition of analysing contract in promissory terms. Such a carrying over of promissory language into the analysis of contract by Pufendorf and others laid the foundations for a modern analysis of offer and acceptance which can still be classed in promissory terms and as having unilateral characteristics.107
Though in his Elementorum Pufendorf discusses promises before contract, when the chapter on Obligations is considered as a whole (and indeed when his later work is considered) it will be seen that he devotes far greater time to contract than to promise, and gives contract a much more extensive place in the scheme of obligations than did Grotius. Furthermore, having (as has been noted) characterised the duties of parties under a contract as conditional ‘promises’,108 he mixes this conceptualisation with the language of mutuality.109 A contract is a ‘perfectly mutual obligation’ arising from ‘the agreement of two or more persons … in such wise that on both sides there is an obligation of the same kind regarding one another mutually’.110 This is a strikingly modern agreement-based conception of contract. The concept of mutuality he has expounded enables him to
103 |
Elementorum, I.xii.10. 104 Ibid., I.xii.10. 105 Ibid., I.xii.11. |
106 |
Ibid., 1.xii.12. 107 See the discussion in Ch. 4, at pp. 210–13. |
108See for instance the discussion in the Elementorum at I.xii.12 of what good faith requires in the performance of each party’s obligations.
109For that reason, Ibbetson’s view that ‘[f]or Pufendorf, contractual obligation derived from the duty to keep one’s promise’ (An Historical Introduction, p. 218) perhaps somewhat overstates the significance of promise in Pufendorf’s conceptualisation of contract.
110Elementorum, I.xii.12.
Historical Development of Promissory Ideas |
133 |
explain why it is that the good faith engendered by such reciprocity means that a contracting party who has not received performance is no longer bound to perform on his side (an entitlement still operative in the modern law under the name of ‘retention’ or ‘justified withholding of performance’), and also why a breach of one of the various promises made by a contracting party enables the whole contract to be dissolved111 (a concept also maintained today in somewhat modified form in the concept of fundamental or material breach).
Even though Pufendorf does not state that he is specifically turning his attention to contract until much later in his chapter,112 a significant number of his illustrations in his general treatment of obligations are in fact contractual ones, as will be seen from his treatment of error, extortion, obligations undertaken with enemies, the right of others to bind persons, illegality, formalities, pledge and suretyship. The overall impression conveyed by such attention to contract in the Elementorum is that Pufendorf saw contract as the primary vehicle by which voluntary obligations might be assumed; by contrast, the genuinely unilateral promise is given little specific treatment.
The primacy given to contract in Pufendorf’s approach to obligations is continued in his later, great work, De iure naturae et gentium. In the general chapter on obligations in this work,113 the place of contract as the principal obligation comes out even more clearly than in the Elementorum. Pufendorf begins his analysis of obligations with the idea of the agreement: agreements, he tells us, are necessary to human societies.114 He continues by explaining in the next section of the chapter (for which, building on canonical ideas, he coins the maxim ‘pacta sunt servanda’) how it is a ‘sacred precept of natural law’ that everyone must keep his word, that is to say, carry out his promises and agreements.115 In this paragraph, Pufendorf recaps the development visible in the preceding centuries from enforcement only of contracts in specific form, through canonical enforcement of bare contracts and promises backed by oath, to a rule of general civil enforcement of what is promised or contracted.
There is also in Pufendorf’s later work a refutation of the position of Connanus, Pufendorf citing Cicero at length (as well as others, including Grotius, whose similar refutation of Connanus was mentioned earlier) to demonstrate why Connanus’s view would negate gratuitous promises and thereby ‘destroy all kindness and liberality’.116 Pufendorf also devotes
111 Ibid., I.xii.12. |
112 Ibid., beginning at I.xii.51. 113 De iure naturae, III.iv. |
114 Ibid., III.iv.1. |
115 Ibid., III.iv.2. 116 Ibid., III.v.9. |