eighteenth century, when the age of Enlightenment ideas were giving way to the Age of Commerce, Scots contractual theory seems to have gone into abeyance. It appears that Stair’s view was so soundly entrenched and universally accepted that no need was perceived for continued theoretical debate. While Stair’s natural law views were no longer required, their paring off from the basis he posited for contract and promise, as lying in the voluntary undertaking of liability, proved perfectly suited for the needs of commercial practice. Where courts felt the need to pronounce on matters of contract theory, they asserted just such a will-based approach, though one which emphasised, for commercial reasons, the need for objective interpretation of the will. Thus, it could be confidently asserted by the great, late Victorian judge, Lord Dunedin, that ‘commercial contracts cannot be arranged by what people think in their inmost minds. Commercial contracts are made according to what people say.’209

(c)  Civilian systems

(i)  German law

Discussion in Chapter 2 disclosed how, in the canon law, the pacta sunt servanda principle of general contractual enforcement came to replace the restrictive Roman rule of ex nudo pacto non oritor actio. It seems that the maxim pacta sunt servanda was coined in those precise terms by Pufendorf, building perhaps on the work of Matthew Wesenbeck, a Dutchman who taught at Jena and Wittenberg in Germany and who disseminated the canonical idea to civil lawyers. A similar approach was adopted by the FrenchjuristCharlesDumoulin,whoalsotaughtforsometimeinGermany. The teaching of this canonist rule combined with mercantile law and natural law principles, resulting in a general acceptance of the pacta sunt servanda rule in Germany by the end of the eighteenth century.210 While such an approach was stated frequently to have been in accordance with existing Germanic customary laws, the evidence for this is scant.211

By the nineteenth century, German jurists had ceased to utilise the concept of causa when describing the fundamental nature of contract, the question of whether parties had seriously intended to contract being now considered matters of procedure and evidence.212 Jurists were now describing contract instead as a declaration of will of the parties to the

209  Muirhead & Turnbull v. Dickson (1905) 7 F 686, 694.

210Zimmermann, Law of Obligations, pp. 539–40.

211Ibid., p. 541.    212  Ibid., pp. 541–2.

contract, and as a type of juristic act. Though some juristic acts were unilateral­ (such as a testamentary provision), contract was bilateral, requiring the presence and concurrence of the will of both parties to constitute the act.213 Such a will-based approach, criticised by some jurists,214 gave little room to the unilateral promise, save for exceptional occurrences such as the promise of reward. German law might have gone in another direction, however. The editor responsible for the codification of contract law in the German Code, Franz Philipp von Kübel, initially developed a radical model, quite at odds with the then existing law and the Pandectist approach, providing that the promise to render a performance to another would not necessarily require an acceptance on the part of the party to whom performance was to be rendered.215 This radical approach was justified by von Kübel on the basis of modern German legal development, the needs of commercial communication and legal life,216 as well as the free will of the promisor. As to free will, von Kübel argued that, if the promisor wished to exercise his will by binding himself, he should not require to justify such an exercise of the will by the need to have the concurrence of a second will.217 Von Kübel’s model was the subject of much discussion at the meeting of the First Commission of the drafters of the BGB, but did not receive support. Following the discussion, von Kübel decided to withdraw his general proposal on promises, to concentrate instead on the application of the promissory principle to certain specific cases. The specific uses for the promises which were agreed at the Second Commission (such as promises of a reward) are discussed in later chapters of this work. Notably, one important case that von Kübel saw as an example of a unilateral promise – a right given under a contract to a third party – was not so classified in the final text. Von Kübel’s defeat was to set modern German law’s face largely against the idea of the binding unilateral promise.

(ii)  Robert Pothier

Pothier218 stands as a figure of towering influence on European legal thought, both because of the direct and immense influence which his views had on the content of the French Civil Code (and through it, the

213Savigny, System des heutigen Römischen Rechts, iii, §104, pp. 5–7; Puchta, Pandekten, §§49–54; Windscheid, Lehrbuch, i, §69.

214One critic of German will theory was Jhering, who argued that will theory ignored the underlying purposes for which contracts were entered into: Jhering, Zweck im Recht.

215See on this history, Zimmermann, ‘Vertrag und Versprechen’.

French law. Citing Grotius, he affirms the need for an acceptance before a promise creates any obligation.

Pothier continues225 with a discussion of the difference between essential, natural and accidental contract terms, though there is no discussion of the Aristotelian underpinning of this distinction. What Pothier states of these types of term gives a very non-Aristotelian flavour to the concepts of substance and accident: substantial elements of a contract are those ‘without which such contract cannot subsist’;226 natural elements are those which, although not being of the essence, ‘form a part of it, though not expressly mentioned’,227 and can therefore be implied into it; accidental elements being part of a contract only by virtue of a special agreement of the parties. So, price is essential to a sale, and gratuitousness to a contract of mandate; warranties are implied in to sale; and the time allowed for performance in a contract is an accidental matter. This treatment is far removed from the philosophical and ontological debates of Aristotle and Aquinas on the nature of things.

Pothier rejects out of hand the old Roman contractual scheme of named and unnamed contracts, and contracts bonae fidei and stricti juris; instead, he posits a division between synallagmatic (or bilateral) and unilateral contracts, which he defines as a distinction between those where both parties bind or engage themselves to each other, and those where only one so binds or engages himself to the other.228 Further classification is possible, and Pothier suggests additional divisions such as that between consensual and real contracts (that is, between those formed by simple consent and those requiring delivery of a thing),229 and (as Grotius did) that between contracts of beneficence and those of interest to both sides.230

Following some discussion of defects of consent, including error and extortion, Pothier comes to a section of his treatise that was to prove very influential in English law. In the original French, it is entitled ‘Du défaut de cause dans le Contrat’, that is, ‘Of want of cause in Contract’.231 This clearly identified the subject matter as that of cause, as it is understood in the civilian tradition. Yet, in the text of the 1806 translation, the leading English edition of Pothier’s work of the time, the heading is rendered ‘Of the want of a good consideration’. In translation the doctrine of cause is thus equated with the Common law concept of consideration. The translation of Pothier’s statement that ‘Toute engagement doit avoir une cause honnête’ thus becomes ‘[e]very contract ought to have a just cause (or

225  §5 f.    226  §5.    227  §7.    228  §9.    229  §10.    230  §12.    231  §42.

consideration)’, making the suggested equation very clear. It is hardly surprising that, presented with this equation, contemporary Common lawyers were quick to suggest that the English rules on consideration could be fitted into a logical scheme of contract, such as Pothier offered, and that in the enterprise of constructing such a logical scheme Pothier was cited in support, both in later English treatises and judgments. In the leading 1802 translation of Pothier published in the United States, the transformation of cause to consideration is even greater, in that the word cause does not even appear in the translation at all, but merely the term consideration. In the American edition, Pothier’s opening statement on cause simply becomes ‘[e]very engagement ought to have a lawful consideration’. Though the transformation of cause to consideration is thus more complete in the American translation, the equation of cause with consideration in the later English edition was sufficiently clear. The great influence which Pothier’s translated text had upon the development of English law in the nineteenth century was discussed earlier in this chapter.232

Pothier continues with an explanation of the rule against the stipulatio alteri, that is the rule against an enforceable promise made in the interests of a third party, a rule of Roman law which Pothier explains as applicable in the modern French law also.233 Pothier explains the basis of the rule as being that someone who stipulates for performance in favour of a third party has himself no pecuniary interest in seeing the duty performed. This would mean that the party under the duty of performance could breach it with impunity, something which Pothier says could not be ‘more repugnant’ to the nature of a civil (as opposed to a natural) obligation. This explanation of course ignores the possibility of seeing the third party as itself entitled to seek performance, but Pothier clearly does not conceive of a possible third party right in those terms. Had such a conception been raised in Pothier’s understanding of the relationship of the parties, then the objection he posited to obligations in favour of third parties might have been refuted.

Despite the rule against third party rights in contract, Pothier lists a number of common situations where it is not seen as applicable, among them: cases where the third party is in fact a principal to the agreement, the apparent stipulator having been merely an agent for the third party;234 cases where a contracting party promises to engage a third party

232  See earlier discussion at pp. 144–5.    233  Pothier, Treatise, §54. 234 §55. He discusses agency more fully at §§74 ff.

and vouch for his work;235 cases where a contracting party merely designates a third party agent to whom the price is to be paid;236 cases of stipulations in favour of heirs (because ‘they are as it were the continuation of ourselves’);237 and stipulations in favour of successors in title to property.238 Importantly, Pothier also recognises as exceptions to the rule against stipulationes alteri cases where, unless performance to a third party occurs, payment of a sum of money is to be made to the stipulator, and cases where the stipulator transfers some money to the other party on condition that a performance in favour of the third party is to occur.239 In both of these cases of conditional performance, the stipulator has a pecuniary interest in the performance of the condition, and so the performance in favour of the third party may indirectly be enforced through enforcement by the stipulator of the condition. These last two types of case are important, for they in fact encompass many of the traditionally conceived cases of third party rights, such as the life insurance contract where a stipulator makes payments to an insurance company on condition of payment to a named third party after his death. Pothier concludes his discussion of exceptions to the rule with the rules on agency (contracts ‘through the ministry of another’).240 The totality of the exceptions mentioned by Pothier constitutes a large inroad into the rule against the stipulatio alteri, and demonstrates the extent to which continental jurists of the time were seeking to avoid its application without yet dispensing with the principle and conceding direct enforcement by the third party, as happened in contemporary Scots law.

In his Treatise, Pothier offers a clarity of thought and expression, and a highly organised scheme for the classification of obligations, which was to prove immensely popular with contemporary and later lawyers. His treatment of obligations was far removed from the involved discussion of the minutiae of the law which had so characterised the treatments of the schoolmen and which had come to be so despised by the rationalists of the eighteenth century. By contrast, Pothier offered a rational, systematised and modern view of the law of obligations which appealed to those seeking to make sense of the law. Though rejecting liability for unilateral promises in favour of mutual undertakings, Pothier continued to employ promissory language to describe such undertakings.

Pothier’s approach not only provided the model for both the French and LouisianaCivilCodes, butsetthetone for later,nineteenth-centuryFrench jurists. These jurists took a similar line to Pothier in holding that contract

235  §§56, 58.    236  §57.    237  §61.    238  §67.    239  §§70,71.    240  §§74 ff.