228 the enforceabilit y of promises

electric company threatened to cut off power unless the recipient paid the unpaid debt of the previous owner of a building.22

italy

In Cases 9(a) and 9(b), Paul is not obliged to pay more than the amount originally agreed.

Robert’s demand for extra payment under threat of non-performance which will cause a significant harm to Paul would be considered both a crime23 – extortion – according to art. 62924 of the Criminal Code, and a tort according to art. 2043 of the Civil Code.25 In any event, in contract law, the promise would be voidable under arts. 1434 and 1435 of the Civil Code.26 In real life, Robert would have no incentive even to request it.

austria

Paul can refuse to pay more than the amount originally agreed upon. According to § 870 of the Civil Code, a contract is voidable if it is caused by an unlawful threat. There is a debate among Austrian jurists whether the threat not to perform a contractual obligation is unlawful or not; although Gschnitzer27 claims that such a threat is unlawful, Rummel28 argues that not every such threat is unlawful in the sense envisioned by § 870. He fails to make clear, however, where he draws the line between lawful and unlawful threats not to perform one’s contractual obligation. Moreover, there are no judicial decisions concerning this question.

22STJ, 11 March 1997, BMJ 465 at 552.

23See, most recently, Cass. pen., sez. III, no. 206858 1996; Cass. pen., sez. II, 17 Oct. 1995, in Cass. pen. (1997), 406; Cass. pen., sez. II, 2 June 1994; Cass. pen., 10 March 1989.

24Article 629 of the Criminal Code: ‘Whoever, by means of violence or threat that forces someone to do or omit something, obtains an unjust profit for himself or for others by causing someone else harm, is subject to imprisonment for five (5) to ten (10) years and to a fine from one (1) million to four (4) million lire. The sanction is imprisonment for six (6) to twenty (20) years and a fine from two (2) to six (6) million lire if any of the circumstances are present that are enumerated in the last paragraph of the preceding article.’

25Article 2043 of the Civil Code: ‘Any fraudulent, malicious or negligent act that causes an unjustified injury to another obliges the person who has committed the act to pay damages.’

26Article 1434 of the Civil Code: ‘Duress: Duress is cause for annulment of a contract even if exerted by a third person.’ Article 1435 of the Civil Code: ‘Characteristics of duress: Duress must be of such a nature as to impress a reasonable person and to cause him to fear that he or his property will be exposed to an unjust and considerable injury. In this

respect, the age, sex and condition of the persons shall be considered.’

Not every unlawful threat gives the other party the right to avoid the contract. The threat must be a serious one (gegründete Furcht). This means that the threatened harm must not be insignificant and that there must be some probability that the harm will be realized if the contract is not concluded.

Given these rules it is clear that § 870 will apply to both Cases 9(a) and 9(b). In both cases, we have not only the threat not to perform a contractual obligation but also the threat of a serious harm to Paul, namely the considerable delay of the opening of the restaurant. Therefore, under § 870 of the Civil Code, Paul would have the right to avoid the contract.

germany

In Cases 9(a) and 9(b), the new contract is valid but voidable. Robert’s threat not to do what he has promised in a binding contract was unlawful and an undue influence. This threat was the cause of Paul’s promise. Section 123(1) of the Civil Code allows the promise to be invalidated if it was caused by an unlawful threat. Here, the threat is unlawful if the means threatened are unlawful, even if the person making the threat is not aware of their illegality.29 A threat is also unlawful if the purpose is illegal,30 or if both means and purpose are legal but connecting the two of them seems to be wrongful.31

Our case fits within the first of these three rules because it is illegal not to perform one’s contractual duty without any reason. Therefore, Paul was entitled to invalidate the new contract by so notifying Robert (§§ 123(1), and 14332 of the Civil Code), and he has already done that.

According to § 142(1) of the Civil Code, the result of invalidating the contract is that it will be regarded as void from the beginning. The termination is retroactive and takes effect not only between the persons involved in the contract but erga omnes.33 Therefore Paul can refuse to pay more than the amount originally agreed because the second contract is deemed never to have existed and so it could not change the original contract between Paul and Robert.

greece

Paul can ask for the annulment of his agreement to pay one and a half times more than the amount originally agreed because his declaration of

In particular, an act shall be void as contrary to morality whereby the freedom of a person is hampered excessively or whereby through an exploitation of the need, the levity of character or the lack of experience of the other party, pecuniary advantages are promised or received for one’s own benefit or that of a third party and in consideration of something furnished which in the circumstances are obviously out of proportion to the consideration furnished.

The requirements that have to be met for this provision to apply are:39

(1) there must be an obvious disproportion between the performance and counter-performance; (2) this disproportion must have arisen because of the need, the levity of character, or the lack of experience of the party – a person is in need if he is in a situation (permanent or temporary) of direct danger (financial or otherwise), and he has to face it immediately; (3) the other contracting party must have taken advantage of the need of the other person, which means that he must have been aware of that need and that he used it to obtain more from him.

If art. 179(2) applies, then the contract may be void completely or only in part (art. 181 of the Civil Code).40 Tort liability is also possible according to arts. 914 and 919 of the Civil Code.41 Article 179 is construed narrowly and applies only when very strict conditions are met.42 Nevertheless, Paul should not be required to pay the extra money if his need was great and Robert took advantage of it to obtain a disproportionate amount in return for his own performance.

scotland

As there are obligations on both sides, the Scottish courts are likely to analyse a problem such as this one as a bilateral contract rather than as two sets of unilateral obligations, as they generally prefer to adopt a contractual analysis. When Robert refuses to perform the contract under the terms originally agreed, he is in material breach of contract, and Paul is entitled to rescind the contract and sue Robert for damages. However, Paul agrees to vary the terms of the contract, and he is therefore bound to fulfil the terms as agreed, as Robert has completed his side of the bargain. Robert will be entitled to sue Paul for specific implement if he does not pay the agreed amount. It is unlikely that any plea Paul makes to the effect that the revision of the contract was invalid will be successful, as the

39For a thorough discussion of profiteering contracts, see P. Papanikolaou, The Profiteer Contracts (1983).

40Karasis in Georgiadis and Stathopoulos, Civil Code, art. 179, no. 4; Georgiadis, General

42 Stathopoulos, Contract Law, 113.