obtained (that advantage being the certainty that the other party would now be able to perform). In 1989, contracts under seal were abolished and replaced with a much watered down procedure for declaring a document a deed, thus making the undertaking of a unilateral and gratuitous promise much easier in English law.287 There was greater regulation of the substantive fairness of contracts, through the development at common law of economic duress and undue influence,288 and under statute through the Unfair Contract Terms Act 1977 and later regulations.289 The device of unilateral contract was used to deal with some perceived problems of precontractual fairness,290 and there were signs of the courts becoming more receptive to the idea of good faith playing a role in contract law.

Many of these specific developments in English law are considered in later chapters of the work. In total, they represent a greater willingness of the Common law both to enforce bare promises but also to regulate the content and effect of such promises. Ultimately, however, the continued unwillingness of the Common law to recognise and enforce unilateral promises as such, but rather to treat them as imagined bilateral contracts, distorts the nature of many transactions having a genuinely unilateral nature, as will be argued later in this work.

6.  A revitalised will theory

It has been remarked at a number of points that the primary intention of this work is not to champion any particular theory of contract law, but rather to attempt to explain the role that promise has played, continues to play, and might play again, in the law. However, in the final section of this chapter, an attempt will be made to see whether a modern, revitalised will theory can continue to provide an overarching structure for the force of voluntary obligations. The reason for attempting such an exercise can be simply put. Will theory remains the dominant explanation for the force of contracts in western legal systems. Indeed, as has been seen, it is entrenched in some civil codes. However, that dominant theory has been attacked by a number of prominent contract scholars over the past century or so. If such attacks were to be accepted as valid, then this would be a

287Law of Property (Miscellaneous Provisions) Act 1989, s. 1(2).

288See, on undue influence, National Westminster Bank v. Morgan [1985] AC 686, Barclays Bank v. O’Brien [1994] 1 AC 180, CIBC Mortgages v. Pitt [1994] 1 AC 200.

289Unfair Terms in Consumer Contracts Regulations 1994, subsequently 1999.

290See further discussion of this in the next chapter.

matter of profound disquiet: any system of law which purported to enforce contracts on the basis of a theory of their normative force which could not be justified would be discredited. Moreover, if such attacks were accepted as having substance, then the suggestions to be made in later chapters of this book that promise ought to play a greater role in modern contract law than is currently the case in many jurisdictions would be liable to be undermined: if the will, of which promising is one manifestation, were no longer to be seen as a valid source of obligations, then any argument promoting a greater role for promise would seem to be fatally flawed. In order then to provide a theoretical defence for the later argument in this work for a greater role for promise, it seems prudent to undertake some consideration of the theoretical question of whether a continued defence of the dominant will theory is possible.

Whilst some have argued that the twentieth-century developments represent an attack on the continued sustainability of will theory,291 not only does this view fail to take proper account of the distinction which should be made between the very existence of contracts on the one hand, and their content on the other (the latter, but not the former, certainly being less easily explicable by reference to the will of the parties), but no alternative theory has yet been advanced which more successfully explains the moral and legal force of contracts and promises in the modern age.

It is obviously absurd to ignore definitive statements by legal systems as to the basis of their contract law. Louisiana and Germany, for instance, both clearly posit the exercise of the human will as the means by which contracts are formed. Contract theory should not take place in a vacuum, but must reflect the law as it is, and to ignore such statements as to the force of contracts would be foolish in the extreme. Even where the will theory has no codal basis (as in Scotland and England), it remains the dominant theory for explaining contract law. The reliance-based attacks of the 1970s and 1980s proved ephemeral distractions which withered along with the collectivist, centralist political ideologies which were their political counterparts. That will theory still dominates is to be applauded because, whether or not historically it owed its popularity to political liberalism,292 it can properly be seen as a juristic manifestation of respect for personal autonomy and responsibility, and, as such, a safeguard against the intrusive and overweening power of the state.

291Ibbetson, An Historical Introduction, p. 261.

292Gordley devotes an entire chapter (Ch. 8) of Philosophical Origins to arguing that it does not.

The will theory which can be confidently advocated in the present age is, however, inevitably a modified version from that which has been asserted at various points in the past. For one, a realistic will theory must view the will not as an independent source of obligations, but, as it is already conceived of in some systems, as a faculty through which parties are permitted to assume obligations which ultimately derive their binding force from the sovereign power of the state. This, in fact, is not a new idea: the natural lawyers of the past, including the late natural lawyers of the Northern school, saw human beings as free to undertake obligations in so far as God had left them so free. The will, as manifested in ­promises and agreements, was clearly seen as the means by which obligations might be assumed, but their force was derived from God (or, as less theistic proponents of modern law might prefer, from a temporal sovereign lawgiver). Modern will theory, if it is to continue to be a useful explanation of the source of obligations, must again recognise the derivative normative power of the will, rather than seek to locate in the will some wholly independent normative power. In such a scheme the will is merely one element of a larger set of conditions which in total explain promissory and contractual liability: the will is the faculty (or means) by which parties are permitted to assume voluntary obligations, and promising is a manifestation of such will.

Second, a revitalised will theory will have to be one that is slimmed down from the more expansive versions popular in past centuries. It should not seek to explain all of the content of contract law, as in former days, but merely the act of concluding a contract, as well as the content of the contract in so far as agreed by the parties and in so far as not objectionable under statutory or other legal policy. It should not seek to explain, for instance, the rules relating to illegal contracts, or to frustration, or to other external controls. Such controls, whether operating via legislation or common law policy, evidently operate to modify or strike down agreed content, or to impose further content. Though it is true that such interference is a restraint on the pure will of the parties, so what? That does not negate any respect for free choice, it merely limits such choice within socially acceptable boundaries, as ideas of liberality and commutative justice once did. The question, however, is whether the various common law and statutory restrictions on the will can be grouped together in any coherent way which would help to complete an overall general theory of contract which was based upon the will as the means by which contractual obligations are assumed.

What then would a revitalised will theory amount to? Doubtless there might be a number of ways in which such a theory might be defined, but

one attempt is as follows. A new will theory would posit that a contract is formed through an expression of the human will (the promise)293 by which the contracting parties demonstrate their willingness to be bound in law and thus to assume obligations. Such a contract would be seen as being concluded either through an exchange of promises (in cases of mutual contract) or through the acceptance by one party of another’s promise (in a gratuitous contract). The obligations assumed by the parties through such a promissory manifestation of the will would be such as they expressly determine for themselves, as well as those which were imposed upon them by the law through legal rules (otherwise styled ‘implied terms’). Both express and imposed contractual content would apply within the context of an overarching relationship characterised in terms of equity, fairness and good faith.

Such a definition of a revitalised will theory could be argued to offer a viable new general theory of contract. In the paradigm prevailing under such a new theory, the pure exercise of the will could, if that were desired, be restrained in ways analogous to those which applied by virtue of the older, Aristotelian constraints of liberality and commutative justice. That might be achieved by virtue of the fact that the law would be able to:

(1)take account of the concern about illiberal and unconsidered giving by imposing stricter requirements of form for transactions undertaken out of liberality or (to classify such transactions in slightly different terms) which were gratuitous ones; and

(2)regulate the justice of exchanges in ways which, to some extent, gave effect to the concerns which underlay the old value of commutative justice (‘equality of exchange’), doing so through the application of ideas of equity, fairness, and above all the doctrine of good faith.294

On such an approach, the reason underlying a transaction would still be of relevance, even if the former doctrine of causa had largely disappeared. It

293Though it was suggested earlier that all contracts can be characterised in promissory terms, the alternative possible view was mooted that some contracts might be said to demonstrate a present consent to bound to an obligation in law even in the absence of a promise. On such an alternative view, the promise is merely one type of manifestation of the human will demonstrating contractual intent, other conduct being equally capable of so doing. Such an alternative theory is clearly also will-based, and so is suited to the revitalised will theory suggested in the main text. See, as an example of a non-promis- sory but will-based view of contract, Pratt, ‘Contract: Not Promise’.

294Gordley does not discuss the concept of good faith in Philosophical Origins, though that work was published in 1991, before the modern resurgence of the idea of good faith had begun to occur.

would not have to be the case that the law would consider that ‘the choices people make are the best or only guide to their welfare’, as has been suggested to be the necessary position of will theorists,295 because under a revitalised will theory promises could be constrained if their fulfilment conflicted with societal values and protective policies, such constraint applying both through requirements of form and via the moderating effect of the value of good faith.

As to concern (1), that relating to the question of liberality and illiberality, the law clearly has regard in the present age both to liberal intentions, through permitting transactions motivated by generosity to be given effect, but also to the concern about the potential for unconsidered liberality, by often imposing more onerous formal requirements in respect of gratuitous transactions. The willingness of the modern law to recognise that someone may wish to confer a benefit unilaterally and gratuitously, and to give legal effect to such an act of the will (at least in some transactions in all systems), embodies a recognition that people may quite properly wish to confer things on others out of generosity. Giving effect to such transactions may not be quite the same as an explicit acceptance of the Thomist understanding of liberality, but giving effect to an intention to confer a benefit gratuitously on another, while usually requiring a special form for it to ensure that such giving has been properly considered, surely comes at least close to recognising such a liberal motivation. This is particularly true of a system like Scotland, which has a separate obligation of unilateral promise: what clearer evidence could there be of the legal value placed upon the generous, unreciprocated promise?296 It is also clear, however, that the revitalised will theory, which best explains why the law respects and gives legal effect to the desire to enter such transactions, is thought able to coexist with legal constraints that propose stricter requirements for achieving such effect, albeit that it will be argued in the final section of Chapter 4 that caution should be demonstrated in ­stipulating unduly burdensome constraints on such gratuitous

295Gordley, Philosophical Origins, p. 235.

296It would, however, be stretching the argument beyond reasonable bounds to argue that Scots law, with its separate obligations of unilateral promise and contract, chose to entrench the values of liberality and commutative justice structurally and taxonomically, by recognising an obligation which embodies each value. This argument would be unsound for a number of reasons: (i) there is no evidence that this was the chosen rationale for the creation of two separate obligations, (ii) given that Scots law allows gratuitous contracts, contract can equally be the medium for an arrangement embodying liberality, and (iii) unilateral promises are often given in a business context, where liberality is thus not the reason for the promissory undertaking.

undertakings: a preference ought to be shown for party autonomy over paternalism, the parties themselves often being the best judges of when gratuitous acts of the will should be enforced.

As to concern (2), the regulation of the justice of exchanges, while it is true that the rationale underlying the restraints that are imposed externally on the free will of parties to an onerous contract appear muddled, it is suggested that a coherent rationale can be offered. The mechanisms presently operating to enforce justice in exchanges seem to be a mixture of ideas of general equity, fairness, reasonableness and, above all, good faith. These values, especially good faith, embodied both in statutory regimes297 as well as the common law, might be said to contain, as one major strand within them, the idea of commutative justice. If that is so, then the recent re-emergence of the importance of good faith in European legal philosophy might be seen as a re-emergence of the idea of commutative justice under another name. Good faith could be seen as a secularised, commercialised and non-philosophical yearning for good behaviour and decency, a value capable of application without a necessary reference to the morality of virtue and Christian theology in explaining why people should behave fairly and non-exploitatively towards others.

Whilst a recognition of the validity of type (1) and (2) restraints on free will, taken together with the modified will theory argued for above, may not amount to as grand and organised a general theory of contract law as existed in the days of the natural law schoolmen, it nonetheless presents a workable framework to explain what lawyers observe legislators and courts doing when they enforce some promises but not others. Though many would argue that the revitalised doctrine of good faith is vague and unhelpful, that is surely no more so than with the ideas of liberality and commutative or distributive justice; if it interferes in contractual freedom, then again this is no more so than would be the case by reference to commutative and distributive justice. Any concepts of general application which restrain contractual freedom are necessarily going to be somewhat imprecise and sweeping, whether they stem from philosophical or religious understandings, or from a more humanist and mercantile concern for fairness. So although, without a shared philosophy, it may be true that ‘discovering general principles or doctrines that can explain the rules of positive law or the results that most people regard as fair’298 will be harder,

297Consider, for instance, the law of marine salvage, which provides a regime for recovery by the salvor which displaces any promise which the owner may have made in extremis.

298Gordley, Philosophical Origins, pp. 230–1.

given that we live in a modern world where we no longer share common assumptions about the nature of humanity or its purpose, it can be argued that it is still possible to explain how courts continue to insist on caution in the exercise of liberality through formal means, and to regulate equality in exchange by reference to the concept of good faith. The language may have changed, and there may not be as solid and complete a general theory of contract law as prevailed until the eighteenth century, but the view suggested here still represents more by way of a theory of contract than had Roman law or the Common law before the nineteenth century. It is suggested therefore that we need not abandon the idea of seeking to set out some general contractual theory as it is currently articulated and applied by modern courts.

Utilising a revitalised will theory, it would not be necessary to resuscitate the idea of cause, any more than it would to continue to use that of consideration. Cause has withered away in most jurisdictions, and, even where it continues formally to be insisted upon, as is the case in France,299 Louisiana,300 and perhaps South Africa,301 such formal insistence adds nothing of use to contractual analysis or enforcement. Indeed, in systems which continue to insist upon cause, the courts often ignore the actual intention of the parties and treat the cause as something else in order to allow the transaction to be validated.302 There is no longer any clear universal understanding of what cause means, unless it is the very general idea of the reason or motive for entering into a contract. If it does mean no more than the reason or motive for contracting, then it seems an irrelevancy: it is self-evident that any parties who in fact contract must have had a reason for so contracting, as human beings possessing ordinary contractual capacity and intelligence do not act randomly and without motive when entering contracts. If there is a need to exclude some causes from giving rise to valid contracts – for instance, the contract entered into as a result of unlawful extortion – then specific legal rules (such as a rule that extortion invalidates contracts) can do the job of cause in a much better and targeted way. If there is a perceived need that parties should

299 Code civil, Arts. 1131–33. 300 CC Art. 1966.

301In 1979, it was suggested that iusta causa was still a component aspect of contracts (see Jansen JA in Saambou-Nasionale Bouvereniging v. Friedman 1979 (3) SA 978, 990–2 (A)), but there has been no judicial pronouncement on the matter from the higher courts since that date.

302This is particularly seen in the case of donation, where some national courts are unwilling to see some types of transaction fall for failure to comply with the restrictive form required of donations.

demonstrate seriousness of intent to contract, again a simple rule stating that that be required, and that such can be demonstrated by any relevant means, will do the job. If there is a perceived need to subject some promises to greater formality, then this can be done by reference to the objective nature of the transaction, rather than the motives for it. Such an objective approach works perfectly well in some systems in the case of donation. True, the reason why such strict requirements were first thought necessary was because of the nature of the cause – they arose from benevolence, rather than exchange – but recognising why such benevolent transactions might require cautionary measures designed to protect one of the parties need not involve a full-blown doctrine of cause.

The suggested general modern theory of contractual liability can still be said to rest upon respect for the will, as manifested in objectively interpreted promises made in favour of others. Such respect for promises has been a universal feature of human society, despite occasional and rather trifling examples said to demonstrate the contrary. One might explain such respect as part of natural law if one wished (and, indeed, if one is seeking a moral basis of promises, rather than just a legal one, such a natural­ law basis may well be thought necessary303), though a non-­natural law view, resting upon general observations of human behaviour and societies, is also tenable. It is simply and actually the case that societies believe that promises should be upheld, for a variety of reasons, and therefore provide that this is so in their law. It helps if one believes that promising is a virtuous act, or that one is bound to keep promises because one has agreed expressly or tacitly to be bound by the rules of society, but lawyers do not need to share such beliefs to understand contract law. As for the restraints placed upon free promising, one can explain these as based largely upon formal requirements regulating gratuitous unilateral undertakings, and upon ideas of equity and good faith regulating equality in exchange.

Searching, however, for a single and universally correct theory of contract, one that will hold good at all times and in all places, seems a flawed exercise. It is an attempt to search for a Platonic form of ‘contract’ which simply does not exist. Contract is a tool for regulating human social interaction, and its nature is always changing, just as societies change. The

303The revitalised will theory suggested is certainly adequate to explain the legal force given to promises, but those seeking a moral basis for promises may quite reasonably search for something more than the normative power delegated to private persons by a legal sovereign, or else the moral worth of promises will rest upon a mere subjective and changeable basis, rather than one that is objective and unchanging.

best that lawyers can seek to do is observe why, in particular societies, legislatures and courts say they are enforcing contracts, how they determine the content of them, and then accurately describe what they have observed. If that means articulating a different theory of contract for, say, Soviet Russia, where one might argue there was no real private law of contracts but rather a state distribution of assets, from that prevailing in, say, sixteenth-century Spain or present day England, then so be it. Accepting that there is no universal general theory of contract which explains the law of contract in all societies is not to admit defeat, it is simply to realise that human societies are free to determine the basis of legal liability as they see fit.

Part 2

The modern law