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c ase 11: doing more than was agreed

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itself or by an expert acting on its account. The waiver of that right is not permitted, so an agreement in which the parties agree that they will not inspect is illegal. A promise such as this one which is against the law is void (art. 294 of the Civil Code).10

The fact that Contractor had already covered over portions of the building the architect would have needed to inspect does not make the promise binding. It can, however, be a reason why the right of inspection has been frustrated and is therefore lost. The only way Realty could exercise this right would be to insist that part of the work already done by Contractor be destroyed. That would be regarded as an abuse of right because Realty, by making the promise, caused the work to be completed before it was inspected. Therefore, according to the doctrine of the abuse of right expressed in art. 334 of the Civil Code, the right of inspection would be lost as to the portions of the work already covered over.11

italy

Both promises are binding. It does not matter if Realty had already advertised the glareproof windows, or Contractor had already covered over portions of the building the architect would have needed to inspect, before the other party threatened not to keep its promise. In such a situation, modifications of the original contract such as Contractor’s promise and waivers of right such as Realty’s promise are not examined by the courts in isolation. They are evaluated as part of the whole contractual agreement so that the question whether there is a causa is asked of the transaction as a whole.12 In the Italian legal system, viewing the transaction in this way is a matter of established doctrine.13

The enforceability of both modifications and waivers is governed by art.

10See Lima and Varela, Código Civil Anotado, vol. II, 759.

11According to legal scholars, in a situation like this venire contra factum proprium, or going back on your word, can constitute an abuse of right. See Cordeiro, Da Boa Fé no Direito Civil, 742 ff.

12See L. Moscarini, ‘Rinunzia (diritto civile)’, Enc. giur. Treccani, 27 (1991), 5; M. Giorgianni, ‘Causa (diritto privato)’, Enc. dir. (1960), 565

13See e.g., L. Vacca, ‘Causa e contratto nella prospettiva storico-comparatistica’, Atti del IIIo convegno internazionale ARISTEC (1997); G. Venezian, ‘La causa dei contratti’, in Opere giuridiche, vol. I (1919); G. Astuti, ‘Contratto’, Enc. dir. 9 (1961), 780; G. Astuti, I contratti obbligatori nella storia del diritto italiano, vol. I (1952); M. Bessone, Adempimento e rischio contrattuale (1969); C. Massimo Bianca, Diritto civile, vol. III, Il contratto (1984), 419; L. Bigliazzi Geri, U. Breccia, F. D. Busnelli, and U. Natoli, Diritto civile, vol. III, Obbligazioni e contratti (1989); I. Birocchi, Causa e categoria generale del contratto (1997); E. Roppo, Il Contratto (1977); E. Roppo, ‘Contratto’, in Digesto (1989), 90; R. Sacco, ‘Il Contratto’, in Vassalli, Tratt. di dir. civ. 6:2 (1975), 595.

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1333 of the Civil Code.14 Provided that they burden only the promisor, both types of promises are irrevocable as soon as they come to the knowledge of the promisee. They are legally binding with no need for an express or implied acceptance by the promisee unless they are rejected within the time limit that is customary or appropriate given the nature of the transaction.

austria

Both promises are binding. They will not be considered to be gifts. As they are made within the context of a contractual relationship they are not made with the intention to make a gift. They will rather be considered as modifications to the original contract. As they are not gifts, the form requirement does not apply. It does not matter whether Realty has already advertised the glareproof windows or whether Contractor has covered over portions of the building.

germany

If the promises were accepted by the other party, they are both binding because a contract which modifies an already existing contract is not a gift even if only one party makes a promise in the new contract. Additional compensation is not required. A contract that modifies another contract is regarded as a revaluation of the original contractual duties. Its connection with these duties is deemed to be ongoing. The courts do not look at the promise modifying the contract in isolation.15 Therefore, the formalities that § 518 of the Civil Code requires for gifts are not necessary (see Case 1).

It does not matter whether the other party has changed his position in reliance on the promise.

greece

Contractor and Realty entered into what is termed a contract for work. Such a contract is governed by arts. 681–702 of the Civil Code. It is a

14Article 1333 of the Civil Code: ‘Contract binding on offeror only: An offer for the purpose of forming a contract that creates obligations only for the offeror is irrevocable as soon as it comes to the knowledge of the party to whom it is directed. The offeree can reject the offer within the time requested by the nature of the transaction or by usage. In the absence of such rejection the contract is concluded.’

15BGH NJW-RR 1986, 1135.

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reciprocal contract by which the contractor undertakes the obligation to complete a work and the other contracting party, the commissioner of the work, is obliged to pay the agreed remuneration (art. 681 of the Civil Code).16

The remuneration is payable on completion of the work unless the parties agree otherwise: for example, on pre-payment or payment by instalments. The parties may, however, agree that the fee will be paid under the condition that the commissioner of the work approves it (art. 201 of the Civil Code).17

Provided that they have both consented, the parties are bound by the changes in the terms of their original agreement: that Contractor would do some additional work without further remuneration or that the fee is payable regardless of the architect’s approval (art. 361 of the Civil Code). Moreover, here it would be contrary to good faith to threaten not to keep such a promise after the advertisement of the windows or the covering of portions of the building so that the architect cannot inspect them.18

scotland

If they are regarded as gratuitous unilateral obligations, s. 1(2) of the Requirements of Writing (Scotland) Act 199519 provides that both promises will be binding and enforceable if constituted in writing. However, as has been noted above, s. 1(2)(a)(ii) dispenses with this requirement where the promise is made in the course of the promisor’s business, and therefore it is likely that either side will be able to establish the promise in question by any available evidence.

The requirement that the promise be constituted in writing will also be unnecessary if there has been a change of position in reliance on the promise which is known to the other party. This will give rise to a plea in terms of s. 1(3) and (4) of the 1995 Act (see Case 1). The unilateral gratuitous promise is valid even though it is not constituted in writing.

england

It is reasonably clear in English law that the promise by Contractor to install more expensive windows is unenforceable regardless of whether Realty relied in some way. The reason is that Realty did not do or promise to do anything in exchange for Contractor’s promise, hence the promise

16 A. Kardaras in Georgiadis and Stathopoulos, Civil Code, arts. 681–702; Stathopoulos,

Contract Law, 226.

17 AP 1274/1993 HellD 37 (1996), 147.

18 Ibid.

19 See Case 1.

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lacks consideration (see Case 1). Realty’s possible reliance on Contractor’s promise is in principle irrelevant since, while induced detrimental reliance on a promise can give rise to certain obligations under the doctrine of estoppel (see Case 1 and below), this is the case only where the promise is raised in defence to an attempt to enforce a pre-existing legal duty or right. Estoppel cannot be used to create a cause of action where none existed before, as would be required here. As discussed elsewhere, courts sometimes invent consideration where there has been reliance upon an apparently gratuitous promise. Thus, a court might find, for example, that Realty’s advertisement of the glareproof windows was of benefit to Contractor and, furthermore, was given in exchange for Contractor’s promise to install the windows. Such a conclusion seems unlikely on the facts, but it is possible.

The second promise, that Contractor would be paid without the architect’s certificate, is clearly enforceable if Contractor has relied on the promise and probably enforceable even if Contractor has not relied. As with the first promise, there is no consideration for Realty’s promise not to require an architect’s certificate, and thus, according to the ordinary understanding of the consideration requirement, the promise is unenforceable. And if Contractor has not relied on the promise, estoppel is not a possibility (see Case 1). Nevertheless, even in the no-reliance situation Contractor may be able to enforce the promise by using the concept of waiver. A ‘waiver’ is said to occur when one party agrees to forgo rights owed to him or her.20

There is little consensus on the meaning of waiver, its juristic foundation, or its legal consequences;21 and many commentators and courts now regard it as virtually indistinguishable from estoppel (see Case 1).22 Certainly, waiver and estoppel are closely related. Under the doctrine of waiver, a party who has agreed or promised to forgo his rights cannot reassert those rights without giving reasonable notice.23 Thus, like estoppel, waiver is used as a defence to an attempt to reassert pre-existing legal rights. The usual case of waiver is where a buyer has agreed that delivery may be made later than the date specified in the original contract. The buyer may not change his mind and demand delivery at the original date without giving reasonable notice, and then only if the seller has not relied on the new agreement. In the case now under consideration, the

20 Waiver also has other meanings in other contexts, but we can ignore these for our

purposes.

21 See, e.g., The Kanchenjunga [1990] 1 Lloyd’s Rep. 391.

22See, e.g., Prosper Homes v. Hambro’s Bank Executor & Trustee Co. [1979] 39 P & CR 395, 401.

23See Treitel, Contract, 98.

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promisee, Contractor, did not rely upon the promisor’s promise to forgo his rights. This suggests the promise is not binding. But against this conclusion is the fact that no notice was given prior to Contractor’s completion of its part of the contract. Thus, it is arguably too late for Realty to reinvoke the original agreement. As Treitel notes, where ‘the varied performance is actually made and accepted, neither party can claim damages on the ground that performance was not in accordance with the contract’.24 For example, a seller who delivers late at the buyer’s request is not liable if the buyer has accepted delivery. It is not entirely clear what is the equivalent to acceptance of goods in the case under consideration (the reported cases nearly all deal with variations regarding delivery of goods), but it is suggested that a court would likely hold that acceptance had occurred if everything under the contract was done save for obtaining the architect’s certificate. Thus it seems possible that, even where there is no reliance, Realty may not be able to go back on its promise not to seek this certificate.

Where Contractor has relied on Realty’s promise, Realty is liable if it breaks the promise. Realty is liable under the doctrine of either waiver or estoppel. As noted above, where a party agrees to forgo rights, as Realty has done, that party cannot go back on its word without giving reasonable notice and then only if the other party has not yet relied on the forbearance. Similarly, under the doctrine of estoppel (see Case 1), a party who has induced another party to alter its position detrimentally through a representation that she would not enforce her strict legal rights is estopped from going back on her word. The requirements of estoppel would appear to be met in this case, the reliance requirement being satisfied by Contractor covering up some of the work. Estoppel is being used as a shield, not a sword, because it is raised as a defence against Realty’s attempt to reassert its original rights – the pre-existing legal relations – in full.

Note that, as discussed in more detail in the next answer, it might be argued that Contractor should not be able to use estoppel to enforce the promise qua promise, but should be limited instead to a claim for damages incurred in reliance on the promise (which would be difficult to assess, though it might be less than the value of the promise). An English court, however, is unlikely to pursue this line of argument (see Case 12), and in practice will almost certainly simply bar Realty from demanding the certificate before payment.

24 Ibid., 99.