Summaries

Belgium: There is no liability if the parties did not intend the arrangement to be legally binding.

If they did, the arrangement is an agency, and Richard is liable for breach, but he will be held to a lower standard of care if he acts gratuitously. He would be held to a higher standard if he had just sold Maria the plane, since then the contract is a commercial agency which is not gratuitous.

The Netherlands: There is no liability if the parties did not intend the arrangement to be legally binding, as is likely, particularly if Richard was a friend.

If they did, the arrangement is an agency, and Richard is liable for breach. If it is a gratuitous agency, however, Richard will be held to a lower standard of care, the damages recoverable will be less extensive, and the judge may reduce the damages awarded still further if necessary to avoid ‘unacceptable results’. If Richard has just sold Maria the plane, the promise might be regarded as part of that contract, although this interpretation is problematic since Richard had already sold the plane.

Although it is not likely, Richard may be liable in tort for violating a ‘rule of unwritten law pertaining to proper social conduct’. There is no difficulty about recovering for pure economic loss. Some scholars and the lower courts believe that the standard of care should be lower if Richard was acting gratuitously.

Spain: The contract is not one of agency because Richard did not agree to act legally as Maria’s representative. Neither is it a contract for the hiring of services since Richard was not paid. It is a contract for ‘friendly service’. If the causa is liberality, then it is enforceable only if it meets the requirements for a valid donation: the promise must be in writing.

The promise would be enforceable if it could be interpreted to be part of the sales contract for the plane.

Portugal: The contract is one for performing services. As such, it is binding without a formality whether or not the services are to be rendered gratuitously. Nevertheless, it is not binding if the parties were friends who intended a mere social obligation or gentlemen’s agreement.

Italy: The contract is one of agency, and Richard is liable for breach. It is a gratuitous agency since Richard is not paid. For the formation of the contract, Maria must actually hand over the documents, but she has done so here. Since the agency is gratuitous, Richard is held to a lower standard of care.

Austria: There is no liability if the parties did not intend the arrangement to be legally binding, as may well be the case if Richard was a friend. They

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had that intention if Richard has just sold Maria the plane. If Richard was a friend, a court might conclude that the promise is binding but subject to an implied clause that Richard is not liable for slight negligence.

Germany: There is no liability if the parties did not intend the arrangement to be legally binding. They had that intention if Richard has just sold Maria the plane. If Maria was a friend, they probably did because Richard knew the task was very important to Maria.

If they did, the contract is one of agency, and Richard is liable for its breach.

Greece: There is no liability if the parties did not intend the arrangement to be legally binding. It is likely that they did if Richard knew the task was very important to Maria.

If they did, the contract is one of agency, and Richard will be liable for breach. He will be presumed to be at fault, and he can only overcome this presumption by proving a chance event or force majeure.

Scotland: There is no liability if the parties did not intend the arrangement to be legally binding, as is likely if Richard was a friend.

If they did, since the promise is gratuitous it may be enforceable even though it was not made in writing if Richard sold the plane and made the promise in the ordinary course of his business. Or it may be enforceable if he knew and acquiesced in Maria’s omission to mail the documents herself, and (as is the case) she relied materially and was materially harmed as a result.

England: The promise is not enforceable in contract because it lacks consideration unless Richard sold Maria the plane and the promise is held to be part of the sales contract. Courts have held a subsequent promise to be part of a prior sale, but they are unlikely to do so here because mailing insurance documents is not normally a part of a sale.

As in Case 5, even though Maria’s loss was purely economic, Richard might be liable in tort for negligent provision of services if the parties had a ‘special relationship’. As before, for there to be one, the situation must be ‘close to contract’ or the defendant must have ‘assumed responsibility’ for the plaintiff’s economic welfare, and typically the defendant has acted in a professional role, for example, as a solicitor or banker. While a court would not find there to be such a ‘special relationship’ if Richard were a friend, it might if he had sold Maria the aircraft. Indeed, in one eighteenthcentury case, the defendant was held liable for negligently failing to keep a gratuitous promise to insure the plaintiff’s property. As before, a court might not hold Richard liable because he did not act negligently but failed to act at all, although this distinction is of dubious value. As before, Maria

would be more likely to succeed if the documents had actually been given to Richard since the relationship then seems closer and the case less like mere enforcement of a promise.

Ireland: There is no liability if the parties did not intend the arrangement to place Richard under a legal duty. It is less likely that they did if Richard was a friend.

Even if they did, Richard is not liable in contract if there was no consideration for his promise. There is consideration only if Richard sold Maria the plane, and his promise is considered to be part of that contract. It will not be so considered if it was given after the sale.

Richard might still be liable in tort. In Irish law, it is possible to recover in tort for pure economic loss, for nonfeasance as well as for misfeasance, and for breach of a duty arising out of a relationship voluntarily entered into.

Preliminary comparisons

Intention to be legally bound: Nearly all the reporters observed that Richard is not liable unless the parties intended to be legally bound, and most added that they probably did not if Richard was a friend.

Contract of ‘agency’ – descendants of the Roman mandatum: In some jurisdictions it mattered whether the contract belonged to a class of contracts descended from the Roman mandatum (translated here as ‘agency’). It did not matter in Portugal, Germany, and Austria because no special rules applied to such a contract in a case like this one. (In any event, the Portuguese reporter said that this contract was not an agency, the German reporter said that it was, and the Austrian reporter did not discuss the question.) In France, Belgium, the Netherlands, and Italy, the arrangement would be an agency, and the classification does matter because, if the agency is gratuitous, the agent is held to a lower standard of care (and, in the Netherlands, is liable for less extensive damages). (The Austrian reporter arrived at a similar result by another route, suggesting that the contract might be subject to an implied clause excluding liability for slight negligence.) In Greece, on the contrary, the arrangement would be an agency, and the classification matters because the agent’s fault is presumed and he can only escape liability by proving a fortuitous event or force majeure. In contrast, in Spain, the arrangement would not be an agency because Richard is not authorized to enter into legal transactions on Maria’s behalf. The classification matters because, if the transaction is gratuitous but not an agency, it requires the formality necessary for a

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donation (a writing), and so Richard’s promise would not be enforceable. The prior sale: Several reporters noted that the promise would not be gratuitous if it could be considered part of the prior sale (Spain, Belgium, England, and Ireland), but most of them thought this possibility unlikely because the promise was made after the sale (the Netherlands and Ireland) or because such a promise is not normally part of a sale (England). Promising in the course of business: In Scotland, a gratuitous promise made in the ordinary course of business is enforceable without a formality. The Belgian reporter believes that such a promise does not count as a gratuitous one even if nothing extra is paid to the promisor.

Reliance: In Scotland, reliance matters because a gratuitous promise is enforceable when the promisee relied with the knowledge and acquiescence of the promisor, and the reliance and harm to the promisee are material.

Tort: Richard may be liable in tort in the Netherlands and Ireland, where pure economic loss is ordinarily recoverable. He may be liable in England where ordinarily it is not, if, as in Case 5, the parties had a ‘special relationship’. As before, for there to be one, the situation must be ‘close to contract’ and, typically, the defendant must act in a professional role: here, as seller of the airplane. Even then, the court might not impose liability since Richard did not act negligently but failed to act at all, although this distinction is of dubious value.