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344 the enforceabilit y of promises

with sufficient deliberation. If the promisee himself suspected that the promisor had acted on impulse and might later regret his promise, then he is not a sympathetic figure. If he is protected if he changes his position in reliance, he may do so just because he is afraid the promisor will change his mind. Of course, the promisee may know the promisor better than the court does, and may have good reason to believe that the promisor will not regret his promise. But how is the promisee to convince a court that he had that belief, especially in a case in which the promisor has actually changed his mind? If it were thought that a court could accurately determine whether an informal promise was sufficiently deliberate by looking at evidence presented by the promisee, then very likely, the law would not have required a formality in the first place.

B. Favours that need not entail expense

Promises to benefit the promisee by giving him money or property necessarily entail a corresponding cost to the promisor. Other promises to benefit him gratis need entail no significant cost at all: for example, promises to loan the promisor’s property (Case 7), or to store the promisee’s property (Case 5), or to do a service (Case 6). One question is whether such promises, if made informally, are binding. Another is what to do if the promise can no longer be, as intended, both costless to the promisor and beneficial rather than harmful to the promisee. That can happen in two ways. First, the performance of a promise might entail an unexpected cost, for example, because the promisor now needs the object he has loaned for his own use (Case 7) or the space for storing his own goods (Case 5). The promisee, however, may have changed his position so that he will now be harmed if the promise is not kept. The other possibility is that, although the promise could have been kept costlessly, it was not kept, and as a result, the promisee has been harmed. To make up for the harm, the promisor would have to compensate the promisee at significant cost to himself. While such a problem could arise when goods are loaned or stored, we will examine it in the context of a broken promise to do a service (Case 6).

1. Favours that can no longer be performed costlessly

As we have seen, in Roman law, gratuitous contracts to loan or store goods (commodatum and depositum) were contracts re. They became binding at the moment when the goods were delivered. As we saw earlier, in Roman law,

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so far as one can tell, if the parties agreed that goods were to be loaned for a fixed term, the lender could not take them back earlier. As we have seen, the late scholastics and natural lawyers disagreed. Even if a term had been fixed, they thought the lender should be able to reclaim them if he had an unexpected need.

Those were two ways of dealing with the problem that the promise can no longer be, as it was intended, both costless to the promisor and helpful rather than harmful to the promisee. The Roman jurist Paulus said that the promise should be kept because ‘favours should help, not lead to trouble’.13 Nevertheless, the lender received a certain measure of protection because the contract was formed only upon delivery. Here, as with gifts, the delivery would be more likely to be accompanied by reflection and a realization that there could be legal consequences. Moreover, the requirement of delivery limited the length of time during which the lender had to foresee his needs accurately and the buyer’s reliance was protected. In contrast, the late scholastic solution protected the lender even though the borrower was harmed. Molina argued that the borrower should have been aware that the lender did not expect to part with the goods to his own cost.14 The approaches of modern legal systems reflect the same concerns although sometimes they protect the parties differently.

a. Promises to loan goods

In Spain and Germany, probably in Portugal, and possibly in the Netherlands and Greece, the lender is protected in the manner endorsed by the late scholastics and natural lawyers: the promise is binding in advance of delivery but the lender can reclaim his property in case of need. The promise is binding in advance of delivery in Spain and Germany and probably Greece, because a contract of loan for use is formed when the promise is made even before delivery. In any event, in Greece and probably in Portugal, a promise to enter into such an agreement is binding. In the Netherlands, where a loan for use is formed only on delivery, such an agreement may or may not be binding. In all of these countries, a loan for use is subject to a specific provision of the civil code which allows the lender to reclaim his property before the time agreed upon if he has an urgent and unforeseen need for it (Germany, the Netherlands, and Greece) or an urgent need (Spain, where the text of the Code does not mention foreseeability) or a ‘fair reason’ (Portugal). The Greek and Dutch reporters believe that this provision would apply by analogy to a promise to enter

13 Dig. 13.6.17.3.

14 L. Molina, De iustitia et iure tractatus (Venice, 1614), disp. 279 no. 10.

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into a contract of loan for use. The German and Greek reporters note that a court would take some account of the harm the borrower suffers through reliance, although it would attach more importance to the lender’s need.

No civil law system protects the parties in precisely the same way as Roman law. Austria comes close. A contract of loan for use is formed by delivery, and after that the lender cannot reclaim the object before the time agreed even in case of urgent need. In contrast to Roman law, however, a promise to enter into a loan for use is binding before delivery although it is subject to the general principle that relief will be given for changed circumstances.

Interestingly enough, English and Irish law may afford the same kind of protection as Roman law though the doctrinal justification is quite different. In Case 7, the promise to lend the car is not binding in advance of delivery because there is no consideration. Upon delivery, the contract formed is called a ‘gratuitous bailment’. A party is liable for breaching it, according to some, in contract, according to others, in tort, and according to still others his liability is sui generis. At any rate, the normal rules of contract law do not apply. Absent an agreement to the contrary, the lender can take back the object at any time. It is possible, however, that the lender’s promise to let the borrower keep an object for a fixed term is enforceable as a promise ancillary to a gratuitous bailment. If so, then the result (though not the doctrinal justification) is the same as in Roman law. The Irish reporter believes that the result might be the same, although the matter is far from clear, but that the lender would be liable in tort.

It is possible, however, that an English or Irish court would not enforce the promise to keep the object for a fixed term. If not, then, in England, and in Ireland as well unless he is liable in tort, the lender will receive the most extreme form of protection possible. His promise to the borrower is never binding. He can go back on it at any time, for any reason, regardless of whether the borrower has relied.

In Italian law, the lender receives protection which is extensive but not so extreme: his promise is not binding before delivery because a loan for use is not yet formed, and he can reclaim the goods after delivery if he has an urgent and unforeseeable need because of a code provision like those described earlier. He has both the protection that Roman law gave the lender and that which the late scholastics and natural lawyers endorsed.

In Scots law, in contrast, as long as the borrower relied, he is protected whatever the lender’s need. Delivery does not matter. The promise is gratuitous, and therefore enforceable only if the promisee relies with the

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knowledge and acquiescence of the promisor provided both his reliance and the harm he suffers are material. It is also enforceable if it is made in the ordinary course of business.

In Ireland, the promisee who relies may receive similar protection although the doctrinal justification is different: he may be able to recover in tort. In Irish law, unlike English law, the plaintiff can do so for pure economic losses, for the defendant’s nonfeasance as well as misfeasance, and for breach of a duty that arises out of a relationship the defendant entered into voluntarily.

So far, then, the rules we have examined can be understood as responses to the two concerns one might have when a transaction that was supposed to be costless to the promisor and beneficial to the promisee can no longer be both: that of the late scholastics, that it remain costless, and that of the Romans, that favours not cause troubles. The rules differ in the degree to which they respond to one of these concerns at the expense of the other.

We should note, however, that only some of the rules we have examined were laid down specifically to address this problem. For example, in Scotland the protection given to the borrower is a consequence of a general rule that if a gratuitous promise is not in writing, the promisee must have relied and been harmed to a significant extent, or the promise must have been given in the course of business. Those who adopted this rule may or may not have thought of the case in which the lender or depositee or promisor of a service will incur an unexpected cost. Even if they had, one could not conclude that they adopted the general rule because they wished to protect the borrower this extensively in such a case. They might simply have wanted a general rule rather than a clutter of specific ones.

Similarly, the results in England and Ireland may be shaped by the generality of the rules that come into play. Liability depends on whether a court will enforce a promise ancillary to a gratuitous bailment. If it will, the result is much the same as in Roman law. If it will not, the lender is protected more extensively than in any other legal system since he can break his promise for any reason at any time. If an English court enforces the ancillary promise, it may be because, like Paulus, it believes that favours should not cause trouble. But it may be because the court’s only alternative is the extreme one just described. The court does not have the option of allowing the lender or depositee to break his promise only in case of urgent and unexpected need because it has only general rules to work with. To frame a specific one would require a degree of judicial creativity that would be condemned in England and could even raise an

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eyebrow in California. Conversely, if the court refuses to enforce the promise, the reason for the extreme consequences may not be a desire to protect the promisor, but that there is no middle alternative. Indeed, the court might refuse to enforce the promise, not to protect the promisor, but simply because of the general rule that promises must have consideration.

These considerations suggest why, in this case, the solutions in Scots, English, and Irish law seem more extreme than the others. Their rules are general ones which extend beyond gratuitous loans. They are not decisions about precisely how the parties should be treated in a more specific situation. Perhaps if they had been, the solutions would have been more moderate.

Finally, we must note that the law of France and Belgium cannot be explained as a response to these underlying concerns. The French and Belgian Civil Codes contain a provision like those we have seen elsewhere: in a loan for use, the lender can reclaim his property if he has an urgent and unexpected need. Nevertheless, according to the French and Belgian reporters, a contract of loan for use is formed only upon delivery, and this provision applies only to such a contract. A promise to enter into a loan for use made before delivery is binding, but the provision just described will not apply to it even after delivery has been made. Moreover, in such a case, the promisor cannot seek relief on the grounds of changed circumstances (imprévision) because neither French nor Belgian law accepts that doctrine. In Belgium, he might obtain relief for force majeure because Belgian courts have sometimes applied that doctrine when performance has become more difficult than expected rather than impossible. Thus the lender who has an unexpected need is protected only if he did not commit himself before delivery. That result cannot be explained by a concern for the position of the borrower. Whether the lender committed himself before delivery has little to do with whether the borrower will be harmed if the promise is broken. Nor can this result be explained by a concern for the position of the lender. If he commits himself in advance, he is less likely to have been able to anticipate his own need.

The French and Belgians seem to have arrived at their rules, not by considering how the parties should be protected, but by applying the maxim of statutory construction that exceptions to a general principle should be construed narrowly. To them, the special provisions in their codes allowing the lender to reclaim his property if he has an urgent and unforeseeable need seem to be deviations from general principle because French and Belgian law does not accept the doctrine of changed circumstances