and work for the competitor unless he received more money. If he did, then the case would, in principle, be analysed in the same way as the previous one. The question is whether there was an abuse of circumstances or a threat. As before, a great deal depends on whether Company had an alternative.8 However, the question whether the party who threatens not to perform abuses the circumstances may be answered differently because here the issue of personal freedom may play a role.

The promise in Case 10(b) is a ‘remuneratory’ gift.9 Therefore, the formal requirements for gifts have to be met: the promise was binding only if it was made in a notarial document (art. 7A:1719 of the Civil Code).

It does not matter in either Case 10(a) or Case 10(b) whether Vito bought a vacation house he could not otherwise afford.

spain

For the agreement to be enforced, there must be a causa. According to art. 1277 of the Civil Code, there is presumed to be a causa, and the party who wishes to escape from the contract has the burden of proving that one does not exist. If Company cannot prove that there is no causa, the court may consider that the promise was made causa donandi as a gift. If it does, then the promise is enforceable only if it meets the requirements for a donation (see Case 1).

A court might decide, however, that the promise was made causa credendi because Company made it to keep Vito from leaving the firm. There is causa credendi when the promisor hopes to get an advantage by making the promise.10 The difficulty might seem to be that Vito had already agreed to work for Company for ten years. Nevertheless, Spanish law is very flexible, and it allows the employee to terminate such a contract at will (article 49(d) of the Law on Workers (Estatuto de los Trabajadores)). The reasons for this are that (1) the relationship is similar to slavery, and (2) unwilling employees are likely to be unproductive.11 When an employee wants to terminate a ten-year contract before the time period ends, he is obliged to give notice to the employer. Despite the fact that art. 81 of the Law on the Contract for Labour (Ley del Contrato de Trabajo) and art. 1101 of the Civil Code allow the employer to sue for damages, in practice this right is seldom exercised and almost never granted by the courts. Since Vito does have a right to terminate the contract unilaterally, Company’s promise to give him extra money if he stays does have a causa

8 See also Tjittes, De hoedanigheid van contractspartijen, 84.

11 J. Lluis and Navas, Manual de derecho laboral (1975), 257.

244 the enforceabilit y of promises

credendi.12 Consequently, if Vito stays, the promise is enforceable without meeting the requirements for a donation. Vito can claim damages under art. 1107 of the Civil Code.

In Case 10(b), however, where Vito is about to retire, if Company has promised him money merely to thank him for past services, the promise would be made causa donandi.

portugal

Company is not obliged to keep this promise unless it was made in a written document. Nevertheless, it may have incurred pre-contractual liability. If so, the fact that Vito bought a vacation house may be relevant to the losses he suffered for which Company must compensate him.

According to Portuguese law, this kind of promise would be considered a doação remuneratória which is defined by art. 941 of the Civil Code as a donation to compensate the recipient for services provided to the donor for which the donor was not legally obligated to pay. Article 88 of the Labour Contract Statute (Lei do Contrato de Trabalho) makes it clear that this kind of donation is not deemed to be part of the wages paid for labour unless it is made regularly.

Therefore, such promises are subject to the normal rules of donation: the sum of money must be actually delivered or the promise must be made in a written document (art. 941 of the Civil Code).

However, as in Case 1, if the contract is void, there may be pre-contractual liability (art. 271 of the Civil Code). Pre-contractual liability is based on the indefinite concept of the breach of a duty of good faith which gives the judge a free hand in deciding cases. In my view and that of other scholars,13 it is sufficient for liability that a party makes a promise knowing that the other party will rely on it. It is sufficient that the party relying on the promise believes that it will be kept even if he knows it is not legally valid.

italy

Company is obligated by its promise in Case 10(a) and probably in Case 10(b) as well. It does not matter if Vito, relying on the promise, has already bought a vacation house he could otherwise not afford.

12G. Igelmo and A. Jose, Curso de derecho del trabajo (1991), 501. TS, 30 Sept. 1975 emphasizes that if the promisee wants to enforce a promise on the grounds of the existence of a causa credendi, the promisor must have received the expected advantage.

13See Cordeiro, Da Boa Fé no Direito Civil, 1243 ff.

A contract obligating Vito to continue working for a period of ten years would definitely be void under Italian labour law. That being so, Company’s promise in Case 10(a) would be binding because Company clearly has an economic interest in making it: keeping its valuable employee, giving him a new incentive to work better, and not losing him to the competitors.14

Employees stand high in the courts’ favour, and so Company’s promise in Case 10(b) would probably be enforced as well. The case law does not consider such a bonus promised out of good will to be a gift.15

It is worth noting, however, that this situation is quite unusual. I cannot exclude the possibility that the courts would consider such an informal promise to give, based on the services rendered by Vito in the past (causa praeterita), to be a ‘remunerative gift’ (see Case 2). If so, the promise would be unenforceable due to the absence of the formalities required to make a donation binding. Even if it was considered a ‘liberality according to usage’ (liberalità d’uso) (art. 770(2)) (see Case 2), delivery would still be required;16 a mere informal promise would probably not be considered legally binding.

austria

The promise will be binding unless Company can avoid the contract under § 870 of the Civil Code on the grounds of threat in the manner described in discussing Case 9.17 There are, however, no indications that Vito threatened Company in any way.

The promise does not constitute a gift. As the promise is part of an existing contract, its main purpose is to compensate for services rendered and to motivate the promisee to render the services in the future to the full satisfaction of the promisor. In Austrian law, in such cases, the promisor is deemed not to intend to make a gift (he has no Schenkungsabsicht).18 If, for example, the employer voluntarily increases the salary of the employee, he does not make a gift19 since the increase is made as a compensation for the services rendered. This is the prevailing view even

14Close to the point are: Cass. civ., 3 Dec. 1988, no. 6567 (Tozzi c. Ist. federale credito agrario Italia centrale); Cass. civ., 25 June 1986, no. 4230 (Soc. Travertino toscano c. Inail).

15See Cass. civ., 23 Nov. 1984, no. 6053 (Inps c. Fossi); Cass. civ., 25 June 1986, no. 4230 (Soc. Travertino toscano c. Inail); Cass. civ., 19 July 1983, no. 4986 (Beccari c. Banca Naz. Agr.); Cass.

civ., sez. lav., 26 March 1994, no. 2968 (Inps c. Soc. Kodak), in Foro it. I (1995), 819.

18See G. Schubert in Rummel, ABGB § 938 no. 4; SZ 56/30; JBl 1984, 495; SZ 58/209; JBl 1986, 323. 19 GlU (NF) 4753.

246 the enforceabilit y of promises

though, according to § 940 of the Civil Code, a gift that has the purpose of rewarding another person for his merits is a genuine gift (belohnende Schenkung). According to the prevailing view, § 940 of the Civil Code should be interpreted to apply only if the promisor acts purely out of generosity and with the intention to make a gift. This intention, it is said, is missing when, for example, a salary is increased. Therefore, in Case 10(a), the promise is not a gift, and it will be valid regardless of the form in which it was made.

In Case 10(b), the connection with the services provided by Vito is weaker than in Case 10(a) because Vito is going to retire. There is no connection with future but only with past services. Austrian courts nevertheless consider such payments to be part of the salary rather than gifts even though there is no legal or contractual obligation to make them.20

germany

In Cases 10(a) and 10(b), whether the promise is enforceable depends on the question whether the contract to pay the money is a gift or not. If it were a gift, the promise would have to be made formally through a notarial document (§ 518 of the Civil Code) (see Case 1).

A promise made by an employer to pay money to his employee is not a gift even if the employer is not under a legal obligation to make the payment and even if the employee is to receive the payment after his retirement. The reason for this rule is that the payment is closely related to the employee’s normal compensation and to the employer’s loyalty to him.21 For example, in one case,22 the court enforced a promise made by an employer to give a certain amount of red wine per month to an employee after his retirement. It denied that the promise was in the nature of a gift. In another case,23 the highest German court for tax matters, the Bundesfinanzhof, regarded an annual payment on an employee’s birthday as part of his income for tax purposes and not as a gift. Therefore, Company’s promise was not a gift and it is valid even without the formality.

It does not matter if Vito relied on receiving the extra amount promised. It does matter if the promise was made because Vito threatened to break his employment contract. If so, the promise could be voidable because the

threat is unlawful (see Case 9).

20 ArbSlg 5836 and 7285; JBl 1935, 168; JBl 1959, 218 (the promise of payments to the