Summaries

102 the enforceabilit y of promises

According to some scholars, the promise to pay the debt barred by time (Case 3(b)) is enforceable because it is a promise to pay a natural obligation. The promise to pay a debt incurred as a minor (Case 3(c)) is enforceable because it is a ratification of the debt.

Portugal: Case 3(a) cannot arise since debts are not discharged in bankruptcy. The promise to pay the time-barred debt (Case 3(b)) is enforceable because there is a moral obligation, and, in contrast to other moral obligations, the mere promise to pay this one is binding. The promise to pay the debt incurred as a minor (Case 3(c)) is enforceable because it was confirmed after reaching majority.

Italy: The promise to pay the debt discharged in bankruptcy (Case 3(a)) is not enforceable because courts and most scholars agree that the usual formalities are required even when a promise is made to perform a moral obligation. The other promises are enforceable if the promisor was aware that the debt was barred by the passage of time (Case 3(b)) or voidable due to lack of legal capacity (Case 3(c)) because the promise ratifies these debts. Austria: The promise to pay a debt discharged in bankruptcy (Case 3(a)) is enforceable because a natural obligation remains, and the promise waives the defence that the debt was discharged. The promise to pay the timebarred debt (Case 3(b)) is enforceable because it also waives the defence. The promise to pay a debt incurred as a minor (Case 3(c)) is enforceable because it ratifies the debt.

Germany: Case 3(a) could not have arisen before 1999 because debts were not discharged in bankruptcy. It can arise under the new bankruptcy statute that took effect on 1 January 1999. The promise will probably not be enforceable but there has been too little discussion to be sure. The promise to pay a time-barred debt (Case 3(b)) is enforceable because the promisor is deemed to have renounced his defence. The promise to pay a debt incurred as a minor (Case 3(c)) is enforceable as an approval of the original contract provided the debt was incurred when the promisor was at least seven years old.

Greece: Case 3(a) could not arise under Greek bankruptcy law. Under special provisions of the Greek Civil Code, the promises in Cases 3(b) and 3(c) are binding only if made in writing, and the promise in 3(b) only if, in addition, the promisor knows that the debt is time-barred.

Scotland: None of the promises is enforceable without the usual formality: a written document.

England: Under current law, the promises to pay the debts discharged in bankruptcy (Case 3(a)) or barred by time (Case 3(b)) are unenforceable because they lack consideration and are not made by deed (‘under seal’).

At one time they were enforceable on the grounds that they had so-called ‘moral consideration’. The promise to pay a debt incurred as a minor (Case 3(c)) is enforceable because English law recognizes an exception in this case to the normal requirement of consideration, although there is no general agreement as to why this exception is made.

Ireland: The doctrine of ‘moral consideration’ once applied in English courts (see England, above) was never acknowledged by the Irish case law. The promise to pay the debt discharged in bankruptcy (Case 3(a)) is unenforceable because it lacks consideration and was not made by deed (‘under seal’). The promise to pay the time-barred debt (Case 3(b)) is unenforceable because a statute provides that such a promise is enforceable even without new consideration but only if it is made in writing. The promise to pay the debt incurred as a minor (Case 3(c)) is unenforceable because a statute declares such a promise unenforceable even if it is made for new consideration.

Preliminary comparisons

Most civil law systems would enforce all of these promises on the grounds that a promise to pay a natural obligation is legally enforceable (at least in the case of a time-barred debt), or that the promise ratifies an obligation or waives a defence to enforcing it. (Exceptions: the promise in Case 3(a) is not enforceable in Italy; the one in Case 3(b) is not enforceable in the Netherlands; none are enforceable in Greece and Scotland; and in Spain, Portugal, Austria, Greece, and, until recently, Germany, Case 3(a) could not arise because debts are not discharged in bankruptcy.)

In Austria, and perhaps elsewhere, there is no sharp distinction drawn between these two rationales for enforcing the promise (the natural obligation becomes a civil obligation; the prior debt is ratified). They are distinguished in Italy: the promise in Case 3(a) is not binding because a promise does not make a natural obligation enforceable, but the promises in Cases 3(b) and 3(c) are because they ratify the debts.

In Greece, according to special provisions of the Civil Code, the promises in Cases 3(b) and 3(c) are enforceable if made in writing. All three would be enforceable in Scotland if made in writing where that is the formality required in gratuitous transactions.

In England, all three promises were once enforceable because they were said to have ‘moral consideration’. Today, only the third is enforceable and that is an anomaly since consideration is supposed to require that the promisee gives up a legal right.

104 the enforceabilit y of promises

In Ireland, all three are unenforceable, the first because it lacks consideration, the second because a statute provides that such a promise is binding even without consideration but only if it is in writing, and the third because a statute provides it is not binding even if it is given for new consideration.