38 the enforceabilit y of promises

Assuming that there was an obligation (for example, because the promise was in writing), if Gaston died before changing his mind, the obligation would not be extinguished by his death.56

portugal

Gaston would not be bound by these promises. He would be bound only if he made them in a written document, and even then, only if they were accepted by the promisee in a written document. Nevertheless, the promisees may be compensated if they incurred expenses in the expectation that the promise would be kept.

Portuguese law distinguishes between unilateral promises, which are not accepted by the beneficiary, and unilateral contracts, which are made by two parties but impose an obligation only on one of them. The general rule is that promises must be accepted. Unilateral promises are valid only in a few cases mentioned in the Portuguese Civil Code (art. 457). Therefore, if the beneficiaries of Gaston’s promises have not accepted, Gaston can revoke his promise at any time.

Even if they have accepted, Gaston can still withdraw his proposal unless it was made in a written document (art. 969 of the Civil Code). If he did, and the beneficiaries accepted in a written document, they will have entered into a contract of donation (contrato de doaçao), and Gaston would be legally bound. A donation contract is one in which a person who intends a liberality gratuitously and at his own expense gives another a thing or a right or assumes an obligation for his benefit (art. 940).57 Such a contract is termed an obligatory donation, meaning that the donor assumes an obligation to give.58 It is void if it is not made in a written

Footnote 55 (cont.)

are irrevocable. Some authors maintain that a foundation must be created in writing even if only personal property is to be given to it. See Castán Tobeñas, Derecho civil, vol. I-2, 450. Others disagree. See Díez Picazo and Gullón, Sistema de derecho civil. If they are endowed with real property, then, according to the Civil Code, they must be created by a notarial document (art. 633). So although Gaston could create a trust to give the money to the United Nations Children’s Emergency Fund, it is not clear whether he would have to do so in writing. In the other cases, his purpose is not charitable, and he would have to satisfy the requirements for a donation.

56Article 1156 of the Spanish Civil Code applies. It identifies six instances in which ‘obligations are extinguished’ and death is not among them: ‘(1) by payment or performance, (2) by loss of the thing owned, (3) by remission of the debt, (4) by confusion of the rights of the obligor and obligee, (5) by compensation, (6) by novation’.

57See Lima and Varela, Código Civil Anotado, vol. II, 236 ff.

58See J. A. Varela, ‘Anotação’, Revista de Legislação e Jurisprudência, 116 (1984), 30 and 57, at 60–2. The case law agrees that a promise to donate is binding. See A. Relação de Lisboa, 14 Oct. 1993, in CJ 189 (1993), IV, 151.

document (art. 947), even an informal one such as a personal letter, or a public deed if the gift is of immovable property. A public deed is a document subscribed to by the promisor in the presence of a notary. Otherwise, a donation of movable property would be valid only if the property was delivered immediately, which was not the case here.

If a promise of a donation is made and accepted by a written document, the donor can revoke it only if the donee shows ingratitude. Ingratitude means a criminal offence against the donor or his family, a refusal to give them ‘due alimony’, or coercion of the donor to make a different testamentary disposition of his property (art. 974 of the Civil Code). ‘Due alimony’ (the phrase used in the statute) has been interpreted to mean an obligation to pay alimony established by a court or in a contract.59 Only a donation between spouses can be freely revoked (art. 1765).

As obligations are transmitted by death (art. 2024), Gaston’s estate would be liable if he dies without performing a valid promise of a donation. However, according to Portuguese law, if the donor dies leaving wife or children as heirs, they are entitled to a mandatory share of his estate (two-thirds), and they are not obligated to perform promises of donations made by the deceased which exceed one-third of the assets he leaves. They can therefore demand that donations in excess of this amount be reduced (art. 2168).60

Nevertheless, even if such a promise is void, it could matter whether the promisee has incurred expenses in the expectation that the promise would be kept. In this case, although the promise is not binding, breach of the promise is deemed to violate the rules of good faith. The violation may give rise to pre-contractual liability. If so, the promisor must compensate the promisee for the expenses he has incurred.61 Pre-contractual liability is governed by art. 227 of the Civil Code which provides: ‘A party who enters negotiations to conclude a contract with another one, has a duty, either in its preliminaries or in its formation, to act in accordance with good faith, or he would be liable for losses and damages.’ There are no reported cases applying this provision to a gratuitous promise.

We have no trusts in Portuguese law. The institution most similar is the ‘foundation’ (fundação), governed by arts. 185 ff. of the Civil Code. The foundation is a legal person to whom goods are given in order to further a certain altruistic aim. As foundations are legally obliged to pursue social interests, there are no foundations to pursue private interests. The

59RC, 1 June 1993, in BMJ no. 428, 690.

60See M. B. Lopes, Das doações (1970), 231 ff.; C. P. Corte-Real, A imputação de liberalidades na sucessão legitimária (1989), 1041 ff.

61On pre-contractual liability, see Cordeiro, Da Boa Fé no Direito Civil, 527 ff.

40 the enforceabilit y of promises

foundation has to be authorized by a public authority, which would not give permission if no public interest is seen to be involved. Therefore, only in Case 1(c) would it be possible to establish a foundation, but there is absolutely no need for it, because, as stated, if the contract of donation is made in a written document, the promisor is bound.

Perhaps it should be mentioned that there is a special rule governing situations like Case 1(b). The donation could be considered a pre-nuptial gift (donatio propter nuptias). Such donations are subject to a special rule (arts. 1753 ff. of the Civil Code): if they are included in the pre-nuptial agreement (which is a public deed) they are automatically rescinded if the marriage is not performed or if it is dissolved due to the recipient’s fault. However, if they are not included in the pre-nuptial agreement, they are subject to the general rules that have already been described.

italy

Gaston is not bound by the informal promise to give a large sum of money in any of these cases. However, he could bind himself by making the promise formally by subscribing to a notarial document in the presence of two witnesses (art. 782 of the Civil Code62 and the notarial law, art. 48 l. 29/1913). Scholars maintain that the formality of notarization is required by the Civil Code in order to protect the promisor and his family from acting without due deliberation (cautionary function) as well as to save transaction costs when proving the obligation in court (evidentiary function) and to distinguish enforceable from non-enforceable promises so as to encourage reasonable reliance (channelling function).63

In Cases 1(a), 1(c), and 1(d), in order to be binding, the formal promise

62Article 782 of the Civil Code: ‘Form of gift: A gift shall be made by public act, under penalty of nullity. If it has movable things as its object, it is only valid for those specified with an indication of their value in the same instrument as the gift, or in a separate note subscribed by the donor, the donee and the notary. The acceptance can be made in the same instrument or by a later public act. In the latter case the gift is not perfected until the donor is notified of the act of acceptance. Until the gift is perfected, both the donor and the donee can revoke their declarations. If the gift is made to a legal person the donor cannot revoke his declaration after he has been notified of the submission of the request to obtain governmental authority to accept. On the passage of a year from the notification without the authority having been granted, the declaration can be revoked.’

For an English version of the Italian Civil Code, see The Italian Civil Code and Complementary Legislation, translated by M. Beltramo, G. E. Longo and J. H. Merryman (1991).

63See Marini, Promessa ed affidamento, 257 ff.; L. Fuller, ‘Consideration and form’, Columbia Law Review 41 (1941), 799; M. Eisenberg, ‘Donative Promises’, University of Chicago Law Review 47 (1979), 1.

requires an equally formal acceptance64 by the promisee. Hence, Gaston could withdraw his formal promise until it has been formally accepted by the promisee.65 In contrast, in Case 1(b), the formal promise itself is enforceable without such an acceptance pursuant to art. 785 of the Civil Code.66

If Gaston dies before changing his mind, his estate is liable for the amount of money formally promised subject to recall and reduction – as in the case of any gift – in accordance with the rules of succession contained in arts. 555 and 559 of the Civil Code.67

The fact that the promisee incurred expenses in the reasonable expectation that the promise would be kept might possibly be considered to support a claim for damages in tort. The outcome of such a claim, however, is presently quite doubtful.

austria

In Cases 1(a), 1(c), and 1(d), Gaston is not bound by his promise. All three promises constitute gifts (Schenkung, Schenkungsvertrag).68 Such contracts are valid only if the gift is actually delivered to the donee69 or if the

64On the admissibility of peculiar forms of implicit acceptance, see Cass. civ., sez. II, 16 Nov. 1992, no. 12280 (Calì v. Tomasi); Cass. civ., sez. II, 16 Nov. 1981, no. 6057 (Giannò v.

Larussa).

65If the acceptance is expressed in a separate deed, the promise can be withdrawn until notice of the acceptance is given.

66Article 785 of the Civil Code: ‘Gift in contemplation of marriage: A gift made in contemplation of a future marriage whether made between the spouses or by others in favour of one or both spouses or of children to be born of them, is perfected without need of acceptance, but produces no effect until the marriage. Annulment of the marriage imports annulment of the gift. However, the rights acquired by third persons in good faith between the date of the marriage and the date the judgment declaring the marriage annulled becomes final are preserved. The spouse in good faith is not bound to restore the fruits received prior to the application for annulment of the marriage. Gifts in favour of unborn children of a putative marriage remain effective.’

67Gifts whose value exceeds the share of which the deceased could dispose are subject to reduction to that share (art. 555 of the Civil Code). Gifts are reduced beginning with the last and proceeding with the next earlier in order (art. 559).

68According to § 938 of the Civil Code (ABGB) a contract of donation is a contract whereby the donor promises to transfer ownership in an object gratuitously to the donee. A gift is a contract as the donee has to accept the gift. Section 938 of the ABGB uses the expression Sache. This concept is defined in § 285: everything that is not a person and which can be used by human beings is a Sache. According to § 285a, animals are not Sachen unless otherwise provided. Those rules dealing with objects have to be applied to them.

69If the gift is delivered after the making of the promise, the contract becomes effective upon its delivery. The donor therefore cannot demand that the object be returned. The delivery of the object makes the contract effective.

42 the enforceabilit y of promises

contract is recorded in a notarial document.70 As Gaston did not deliver the money to the donee, the promises would be binding only if they were recorded in a notarial deed. As Gaston is not bound by the promise, Gaston’s estate will not be liable either.

Gaston could bind himself by using a different legal form, namely the contract of mandatum. He could instruct a third person, the mandatary, to deliver the money to the donee.71 Here two questions arise. The first is whether it is necessary that the donee accept the promise. Most jurists say that this is not necessary.72 The second question is whether the donor must deliver the sum of money in question to the mandatary for the contract of donation to be effective.73 According to one opinion this is not necessary,74 but this view has been criticized by other writers.75

In general it does not matter if the promisee incurred expenses in the expectation that the promise would be kept. As he should know that a promise of a gift which does not meet the legal requirements is not binding, he incurs such expenses at his own risk. Under exceptional circumstances76 Gaston could, however, become liable because of culpa in contrahendo. It is an accepted doctrine of Austrian law that under special circumstances a person who has signalled a willingness to enter into a contract can be liable even if the contract was never concluded.77 Liability can arise only if the parties have reached agreement on the content of the future contract and only if the party who refuses to conclude the contract has no reason for doing so. In such a situation that party can be liable for the expenses that the other party incurred in the expectation that the contract will be made. Whether this doctrine will apply to gifts under Austrian law has not yet been determined. If it applies, Gaston could be

70See § 943 ABGB and § 1 NZwG. Until 1871, it was sufficient that the contract was made in writing.

71Such an instruction would constitute a contract in favour of a third party (Vertrag zugunsten Dritter).

72P. Rummel in Rummel, ABGB § 881 no. 8; F. Gschnitzer in Klang, ABGB vol. IV/1, 228; K. Spielbüchler, Der Dritte im Schuldverhältnis (1973), 20.

73There is, of course, the possibility that the mandatary is a debtor of the donator who instructs him to pay the money owed to the donee. In this case the requirement of § 943

76Gaston will be liable, of course, if he acts in bad faith. This would be the case if he makes the promise in order to harm the donee; then § 1295(2) of the Civil Code would apply. According to this provision a person who intentionally inflicts harm on another person becomes liable if he acts contra bonos mores (sittenwidrige Schädigung).

77See P. Apathy in Schwimann, ABGB § 861 no. 13.