- •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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intended act.61 This sense of conditionality is based upon the rarely held belief that no obligations requiring a future performance can meaningfully be entered into. It is a position which therefore denies the obligatory force of most contracts. As a highly sceptical position, the sense of conditionality to which it gives rise is discounted here.
Given the various meanings of conditionality outlined above which are accepted, do any of these describe circumstances which would render a statement not to be a promise under the definition suggested earlier? That definition suggested that a promise is a statement by which a speaker places himself under a commitment as to a future act. Commitment denotes a present obligation (whether of a moral or legal nature). Given this definition, conditionality of the type mentioned in example three – the condition suspensive of the existence of an obligation – would prevent a statement from being a promise. If the nature of the statement as a binding obligation is postponed until some future contingent event, then unless and until such a contingency creates an obligatory effect, there can be no promise as there is no commitment. On the other hand, a condition which relates only to the performance of a firm commitment (example 2), or which is a resolutive condition (and thus relates to the possible future termination of an existing firm commitment), are types of condition which do not prevent a statement from being a promise.
It seems therefore that promises may be unconditional, or may be conditional in any sense other than suspensive of the obligation undertaken by the promisor. A speaker who is not yet bound to any commitment, and who may therefore withdraw from making any commitment until a stated event occurs, has not made a promise.
(c) Unilaterality
Most people’s paradigm image of the promise is probably a unilateral act (though as will become clear in later chapters of this work, there is also a long tradition of conceiving of bilateral contract as an exchange of promises). It is useful then to begin by examining those promises which are unilateral. To do so, one must ask: what is meant by a promise being unilateral?
61A concern which is said to explain the absence of the phenomenon of promising from Tongan society, where the future is considered uncertain: see further discussion of this below, at p. 53.
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Promises and Contract Law |
As with gratuitousness and conditionality, the concept of unilaterality is one which can be utilised to analyse the whole spectrum of obligations, not simply the promise. To begin with, just as with the other two features we have been discussing, unilaterality has its opposite: bilaterality (or multilterality, in multi-party obligations). However, as with gratuitousness, there are conceivably a number of possible meanings of unilateral, which is where confusion may creep in. First, a unilateral obligation might mean one which is constituted by one party only, in other words, where it requires the actions or behaviour of only one party to give rise to the obligation. Alternatively, a unilateral obligation might be one where only one party assumes any duties or commitments under the obligation. In that sense, unilateral would be meant in a way synonymous to one of the meanings of gratuitous outlined earlier, that is an obligation undertaken without any ability to compel a counter-performance. These two distinct senses of the concept of unilaterality may be demonstrated by reference to the following examples:
I promise to pay £100 to my brother.
I promise to draft a will for my client for no consideration. My client accepts my promise.
In the first example, if we assume for the moment that a promise needs no acceptance on the part of the promisee before it can bind (an assumption which would not, in legal terms, hold good in every jurisdiction), then this promise might be unilateral either in the first sense outlined (because the promise may be constituted by the undertaking of the promisor alone, whether orally or in writing) or in the second sense (in that no duty or commitment is assumed by the promisee). On the other hand, in the second example, which essentially describes a contract lacking mutual consideration (again, this is not possible in all jurisdictions), the promise of the lawyer to draft a will for his client would be unilateral in the second sense (in that it imposes a duty on only one party, the lawyer) but not in the first: as a contract, it would require at least an indication of assent to the contract by the promisee, typically in the form of an acceptance, before the obligation could be constituted.62
In any legal system which requires mutual consideration before voluntaryobligationsmaybeconstituted,theideaofaunilateralobligation
62In the Louisiana Civil Code, a further possible sense of unilateral is stipulated, that being non-mutual: ‘[a] contract is unilateral when the party who accepts the obligation of the other does not assume a reciprocal obligation’ (CC Art. 1907). A synallagmatic, or mutual, contract arises ‘when the parties obligate themselves reciprocally, so that the obligation of each party is correlative to the obligation of the other’ (CC Art. 1908).
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in either of the two senses of the term discussed above would be anathema: there could be no voluntary obligations constituted by only one party or which impose duties on only one party. However, even the Common law, with its doctrine of mutual consideration, allows unilateral voluntary obligations to be undertaken by deed.63 In jurisdictions where obligations may be constituted by the actions of one party alone, or where there is no requirement of mutual consideration, obligations might be unilateral in either sense. Which sense of the word a jurisdiction chooses to use is, of course, entirely a matter for it, though if the second sense of the term unilateral were to be chosen (the sense of an obligation which imposes a duty on only one of the parties) there would then be a somewhat unnecessary and perhaps confusing overlap with the meaning of gratuitous defined as an obligation in which one party cannot compel a counter-performance. There might therefore be thought to be good sense in choosing the first definition of unilateral rather than the second, as for instance the drafters of the Draft Common Frame of Reference (DCFR) have done,64 though such a course has not invariably been adopted by national jurisdictions.
The complications with understanding the idea of unilaterality do not end there. Some jurisdictions use the term unilateral both to refer to obligations constituted by only one party as well as to refer to obligations where only one party comes under any duties. The first usage describes what is called the nature of the juridical act, which is to be distinguished from the second sense, which describes the number of parties having duties under such an act. In such systems, while contract is always defined as a bilateral juridical act, two parties being required to constitute a contract, if mutual consideration is not a requirement of the law then contracts can be described (in the second sense of the term) as unilateral or bilateral, depending on whether one or two parties come under contractual duties. This can result in the confusing situation where a contract can be described as both bilateral and unilateral at the same time: bilateral because it is a bilateral juridical act, but unilateral in that it imposes duties on only one party. Such an analysis is, for instance, adopted in South African law.65 The same position prevails
63See later discussion of contracts in deed form at p. 166. The separate and unusual phenomenon of English Law’s ‘unilateral contract’ is ignored for the moment (for discussion, see Ch. 4, at p. 220).
64See DCFR Art. II.-1:101, II.-1:103. The DCFR restricts use of the term unilateral to undertakings (including promise) which are constituted by one party alone; there can therefore be no such thing as a unilateral contract in DCFR terms.
65See Van der Merwe et al., Contract, p. 9; see also p. 32, where it is explained that multilateral juristic acts are those ‘in which at least two persons must participate, in contrast with