- •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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alternative be called a mutual contract, onerous and mutual thus being held to be synonymous. However, some jurisdictions choose to distinguish onerous contracts from mutual contracts, on the basis that a mutual contract, while certainly onerous, must have the additional feature that at least some of the duties of each party under the contract are reciprocal, or synallagmatic. This distinction is made because it is conceivable that a contract might be onerous, imposing duties on both parties, but the duties of each may not find a counterpart in the duties of the other. An example of an onerous but non-mutual contract is mandate, where the duty of the mandatory to concern himself with the task allotted to him is not the synallagma of the mandant’s duty to pay any expenses of the mandatory, each duty being independent of the other. By contrast, a mutual contract is one where there are at least some reciprocal undertakings, even if others are independent. In jurisdictions with a doctrine of mutual consideration, all contracts51 should in theory be seen as being mutual to at least some extent, as the consideration paid by each party is viewed as having been given in exchange for the other’s undertaking.
The distinction between mutual and onerous contracts is recognised in South African52 and Louisiana53 law, and in theory in Scots law too, though it is hard to find any theoretical discussion of the distinction in the latter. This distinction between onerous/non-gratuitous contracts and mutual/reciprocal contracts is a useful one, the latter being a subset of the former.
(b) Conditionality54
Obligations like promise may be conditional or unconditional (otherwise ‘absolute’), the two being opposites.55 This is a crucial flexibility of
51Save those undertaken by way of deed or under seal.
52See Van der Merwe et al., Contract, p. 10, who state that in South African law the mutual or synallagmatic contract is a ‘particular type of multilateral contract. It differs from other multilateral contracts in that – according to the intention of the parties – the one party is bound to perform in exchange for performance by the other party.’
53The Louisiana Civil Code defines synallagmatic contracts at Art. 1908, and onerous contracts at Art. 1909.
54The discussion here seeks to be as inter-jurisdictional as possible. To that end, jurisdiction specific meanings of the term ‘condition’ or ideas of conditionality are avoided. Thus, there is no discussion of certain peculiarly Common law meanings of the word condition, such as a contract term in general, or a contract term performance of which goes to the root of the contract and which therefore gives a right to terminate the contract if the term is not fulfilled.
55See DCFR, Art. III.-1:106.
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promise, as it enables the idea of promise to be employed to describe the nature of contract as an accepted conditional promise (or an exchange of promises, if mutual consideration is held to be a requirement for a contract). But what does conditionality mean? It is important to distinguish a number of meanings.
In a promissory setting, the idea of conditionality can be used to denote whether or not a binding obligation has been assumed by the speaker of the potentially promissory words. With that possible meaning in mind, the following four types of statement can be tested for their conditionality:
(1) Type 1 examples:
‘I promise to pay you £100 next Monday.’ ‘I promise to marry you.’
(2) Type 2 examples:
‘I promise to pay you £100 if you pass your driving test.’
‘I promise to employ you if your current employer dismisses you.’
‘I promise to buy you dinner if my football team wins its game today.’
‘I promise to pay to have you flown home for medical treatment if you contract malaria.’
(3) Type 3 examples:
‘I promise to buy the painting if my wife likes it.’
‘I promise to pay you £100 if you give me your clock.’
‘I promise to go to the cinema with you tonight if you pay for the tickets.’
(4) Type 4 example:
‘I promise to pay you £100 every Sunday unless and until you cease going to Church.’
Note, that in each of these types of case, the condition must not be certain to happen, or else the promisor will be bound to fulfil the promise on the occurrence of the certain event, and the promise cannot be said to be conditional.56 For instance, if the promise is ‘I promise to pay you £100 the next time it rains’, although the time for performance of the promise is as yet uncertain, we know that it is going to rain (precipitation being a universally recurring phenomenon), and thus the performance of the promisor is not conditional even if the time for performance remains uncertain until it rains. By contrast, a promise to buy an umbrella on condition that it rain tomorrow is a valid conditional promise, as whether it will rain tomorrow is an uncertain future event.
56As the first sentence of Art. 1767 of the Louisiana Civil Code states: ‘A conditional obligation is one dependent upon an uncertain event.’ The same requirement of uncertainty is stated in respect of conditional obligations in the DCFR, Art. III.-1:106.
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In the first type of case, there is nothing in what is said to suggest that the promisor is not immediately bound by an obligation (whether it be of a moral or legal kind), so the promise is unconditional.
In the second type of case, however, the promise is, in some sense, conditional, but in what sense? Here, it could be argued, the person making the statement intends to be bound to the promise immediately it is uttered, but that performance is not intended unless and until the stipulated event (for instance, the promisee’s passing his driving test) occurs. This is, of course, a matter of interpretation, and it might be argued that a different state of affairs was intended by the promisor (namely, that no binding obligation was intended until the contingency was met), but it is certainly one reasonable interpretation of the examples given under type 2 that the statements give rise to an immediately binding obligation, albeit one where performance is contingent upon the occurrence of the stipulated future event. The importance of that analysis would be that, once the statement had been made, the speaker would not be free to withdraw from the obligation. However, in those examples of this type where the contingency relates to some stipulated conduct of the hearer, the hearer is under no obligation to perform the conduct indicated (for instance to pass his driving test), though he is at liberty to attempt so to perform; if he does so perform, then he has fulfilled the condition of the promise and may seek the promised benefit from the promisor. Thus, with this sense of conditionality, the promise is conditional because, though immediately binding on the promisor once uttered, its performance is contingent on the occurrence of an uncertain future event. So, the idea of conditionality can relate to the performance of the promise, without there being any doubt that there is an immediately binding obligation.
In the third type of case, one interpretation of what is objectively intended by the promisor is that the nature of the statement as a binding obligation is itself conditional, the condition being that the person to whom the statement is made is himself willing to undertake an obligation of the type indicated (for instance, the obligation to transfer ownership in some goods). Here, therefore, the conditionality relates primarily to the nature of the statement as an obligation. It is not intended to be treated as an immediately binding obligation, but is, pro tem, merely a proposed obligation, and is to retain such nature until the condition is fulfilled. This type of conditionality, where the condition denotes that the obligation is not binding unless and until a future contingent event occurs, is in many jurisdictions styled a condition ‘suspensive’ of the
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obligation.57 In this third type of case, the statement is also conditional in the sense applicable in the second type of case, namely that there is uncertain conduct of the other party upon which performance rests, but the primary sense of conditionality is as to the nature of the statement as an obligation at all. Neither offer nor acceptance has obligational force unless it is met with a reciprocal conditional commitment from the other party. It is the sense applicable to this type of case which allows contractual offers and acceptances to be characterised as conditional promises, and thus for the contract as a whole to be characterised in a promissory fashion.
In the fourth type of case, the type of conditionality concerned is likely (as with the third example) to be objectively interpreted as relating to the nature of the statement as an obligation. In this case, however, the promise gives rise immediately to a binding obligation, but such obligation may cease to be binding if and when a contingent future event occurs (in the example given, that the promisee ceases to go to Church). In many jurisdictions, this sort of conditional obligation is referred to as ‘resolutive’ (or ‘resolutory’).58
Are any types of condition impermissible? Some conditions may stipulate unlawful or immoral conduct, and so for those reasons may invalidate a promise. In addition, however, a condition which undermines
the very idea that a binding commitment was being undertaken in the first place would seem to be impermissible in the sense that it would prevent fulfilment of the requirement that a speaker must commit to a future act. Thus, if the condition stipulated related to whether or not the person making the commitment still wished to perform the commitment at a future date, this would bring in to question whether any commitment was seriously being undertaken to begin with. So, for instance, the statement ‘I promise to pay you £100 next Monday, if I have not changed my mind by
57The situation is in fact even more complex than suggested. In some jurisdictions, a so-called suspensive condition may either prevent an obligation from coming into being until the condition is fulfilled, or there may be an obligation in force immediately, from which neither party is permitted to withdraw, but the parties rights and duties under the obligation will not be enforceable unless and until the suspensive condition is purified. Which type of effect is intended by the relevant party or parties is a matter for the court to interpret. See, for instance, for Scots Law, the discussion at McBryde, Contract, paras. 5–35 to 5–40. In the DCFR, a suspensive obligation is one which, until fulfilment of the condition, does not have obligatory effect: see Art. III.-1:106(2).
58As the third sentence of Art. 1767 of the Louisiana Civil Code states: ‘If the obligation may be immediately enforced but will come to an end when the uncertain event occurs, the condition is resolutory.’ The DCFR also makes provision for resolutive conditions: see Art. III.-1:106(1),(3).
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then’ would not seem capable of being considered a promise because the condition attached undermines the very notion that any definite commitment has been undertaken to begin with.59 On the other hand, a condition which permits the promisor to revoke the promise at some future point, but is not so sweeping as to be suggestive of a lack of an original intention to be bound at all, might be argued to be a permissible condition. Thus, a promise of the type ‘I promise to pay you £1,000 on 1st January, but I retain the power to revoke this promise should I deem the changed nature of our relationship so to warrant’ might fall within the category of valid promises, albeit that a fairly wide power of revocation is retained by the promisor.60
Are any other senses of conditionality relevant to the debate about the nature of promises? What of the argument referred to earlier of some linguistic philosophers that it is essential to the idea of a promise that the words spoken produce in the hearer an understanding of the binding nature of what is being said: without such a ‘condition’ being fulfilled, there can be no promise. That might seem to give rise to a further sense of conditionality, one which holds that all promises are conditional because they depend upon a subjective understanding in the hearer being attained before the statement can be considered a promise. However, as the argument that the words spoken by a promisor require to induce such an understanding on the hearer’s part before a statement can count as a promise has been argued earlier to be controversial and probably misguided, it is proposed to discount this meaning of conditionality.
A further possible sense of conditionality has been said to lie in the fact that all promises are conditional because they relate to future acts, and all future acts are inherently uncertain because we cannot know whether circumstances prevailing in the future will permit performance of the
59Such reasoning would appear to underlie the first sentence of Art. 1770 of the Louisiana Civil Code: ‘A suspensive condition that depends solely on the whim of the obligor makes the obligation null.’ This point has long been acknowledged by jurists. For instance, Pufendorf states in his Elementorum that ‘[i]t must be observed, furthermore, that promises are unavailing and null, when the condition under which the promise is made has been put under my own pleasure, for example … “You will have ten pieces of gold from me, when it pleases me”’ (I.xii.11).
60Atiyah suggests that a promise of future performance is by nature irrevocable (Promises, Morals and Law, pp. 178–9) unless the promise is made for no consideration or is not relied upon (p. 181). This suggestion is made in the context of an argument that a promise is a type of consent to an obligation, and while present consents can normally be later withdrawn, a promisor is committing himself to a future performance which usually indicates that his consent will not be revocable.