Unequal Promises

University of Pittsburgh Law Review

Volumn 72, Issue 3, 2011, Pages 467-493

  Bagchi, Aditi ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

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[No Author keywords available]

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EID: 80155197472     PISSN: 00419915     EISSN: None     Source Type: Journal    
DOI: 10.5195/LAWREVIEW.2011.163     Document Type: Review

References (52)

1. See, e.g., DORI KLMEL, FROM PROMISE TO CONTRACT: TOWARDS A LIBERAL THEORY OF CONTRACT (2003);
2. Daniel Markovits, Contract and Collaboration, 113 YALE L. J. 1417 (2004);
3. Joseph Raz, Promises in Morality and Law, 95 HARV. L. REV. 916 (1982).
4. KIMEL, supra note 1, at 28-31; Daniel Markovits, Solidarity at Arm's Length, available at http://www.law.uperm.edu/academics/institutes/ilp/ 2008papers/MarkovitsSolidarityatArmsLength.pdf.
5. Cf. TIM SCANLON, WHAT WEOWETO EACH OTHER 304 (1998) (locating the value of promising in the value of assurance).
6. In a widely acclaimed article, Seana Shiffrin has made the provocative but intuitive claim that contract law diverges from the moral practice of promise. Seana Shiffrin, The Divergence of Contract and Promise, 120 HARV. L. REV. 708, 709 (2007). Perhaps the most fundamental way in which the two diverge, in her view, is that contract law traditionally limits damages for breach of contract to plaintiff's expectation.
7. See Avery Weiner Katz, The Option Element in Contracting, 90 VA. L. REV. 2187, 2188 (2004) ("[I]t has long been recognized that a contract that is enforceable only through monetary liability operates in practice as an option, because as a legal matter the promisor retains the power either to perform or to breach and pay damages.");
8. Paul G. Mahoney, Contract Remedies and Options Pricing, 24 J. LEGAL STUD. 139, 139 (1995) ("The ability to breach and pay money damages is analogous to granting the breaching party an option to buy back his performance for a strike price equal to the damages award.");
9. Anthony T. Kronman, Specific Performance, 45 U. CM. L. REV. 351 (1978) (characterizing damages for breach of contract as "liability rule" protection for contractual entitlements);
10. Alan Schwartz, The Case for Specific Performance, 89 YALE L. J. 271 (1979) (same).
11. See also Robert E. Scott & George G. Triantis, Embedded Options and the Case Against Compensation in Contract Law, 104 COLUM. L. REV. 1428 (2004);
12. IAN AYRES, OPTIONAL LAW: THE STRUCTURE OF LEGAL ENTITLEMENTS (2005).
13. Seana Shiffrin, Could Breach of Contract be Immoral?, 107 MICH. L. REV. 1551, 1561 (2009).
14. David Chamy, Nonlegal Sanctions in Commercial Relationships, 104 HARV. L. REV. 373, 404 (1990) (detailing reasons sellers may have for not making quality commitments legally enforceable).
15. OLIVER WENDELL HOLMES, JR., THE COMMON LAW 235-36 (Transaction Publishers 2005) (1881) ("The only universal consequence of a legally binding promise is, that the law makes the promisor pay damages if the promised event does not come to pass.");
16. LOUIS KAPLOW & STEVEN SHAVELL, FAIRNESS VERSUS WELFARE 191-92 (2002);
17. Oliver Wendell Holmes, The Path of the Law, 10 HARV. L. REV. 457, 462 (1897) ("The duty to keep a contract at common law means a prediction that you must pay damages if you do not keep it-and nothing else.");
18. Richard A. Posner, Let Us Never Blame a Contract Breaker, 107 MICH. L. REV. 1349, 1351 (2009) ("The promise is to perform or to pay damages, and so if you choose not to perform-even if you are prevented from performing by circumstances beyond your control-you must pay damages.").
19. Steven Shavell, Is Breach of Contract Immoral?, 56 EMORY L. J. 439, 440 (2006) ("Performance is morally required in a contingency if and only if the parties did specify, or would have specified, performance in that particular contingency.").
20. Daniel Friedmann, The Efficient Breach Fallacy, 18 J. LEGAL STUD. 1, 1 (1989) ("[T]he weakness of Holmes's approach lies in its conclusion that the remedy provides a perfect substitute for the right, when in truth the purpose of the remedy is to vindicate that right, not to replace it.").
21. See, e.g., Glanville L. Williams, Language and the Law-IV, 61 L. Q. REV. 384, 402-03 (1945) ("It is common form among judges to deny that they ever read into a contract or other document anything other than what, in their view, the parties actually intended; and occasionally they have even gone so far as to say that the implication must be collected from the words of the document itself. These statements cannot be taken seriously.").
22. Roy Kreitner, Fear of Contract, 2004 WIS. L. REV. 429, 430 (2004).
23. See Richard Craswell, Contract Law, Default Rules, and the Philosophy of Promising, 88 MLCH. L. REV. 489, 490 (1989).
24. See 17 A AM. JUR. 2D CONTRACTS § 3 (1994) ("A promise demonstrates a party's intent to act or not act in a specific way; this demonstration of intent, in turn, justifies the promisee in understanding that a commitment exists and binds the promisor to the happening of the future promised event.");
25. RESTATEMENT (SECOND) OF CONTRACTS § 2 (1981) ("A promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.").
26. See also Andrew Gold, A Property Theory of Contract, 103 NW. U. L. REV. 1, 33-34 (2009).
27. See 17 A AM. JUR. 2D CONTRACTS § 130 (1994);
28. RESTATEMENT (SECOND) OF CONTRACTS § 77 (1981).
29. See Tomcello v. United States, 681 F.2d 756, 769 (1982) ("[A] route of complete escape vitiates any other consideration furnished and is incompatible with the existence of a contract.");
30. WLLLISTON ON CONTRACTS § 7:7 (4th ed. 1999) (an illusory promise "would impose no obligation, since the promisor always has it within his power to keep his promise and yet escape performance of anything detrimental to himself or beneficial to the promisee").
31. See, e.g., E. I. Du Pont De Nemours & Co. v. Claiborne-Reno Co., 64 F.2d 224, 89 A. L. R. 238 (8th Cir. 1933).
32. Cf. Pacific Pines Const. Corp. v. Young, 477 P.2d 894 (1970) (stating that because there was no express provision reserving unrestricted right of cancellation, requirement to use best efforts would be imputed).
33. See Geary v. Wentworth Laboratories, Inc., 60 Conn. App. 622
34. A.2d 969, 972 (2000)
35. (quoting L & R Realty v. Connecticut Nat'l Bank, 53 Conn. App. 524
36. A.2d 181) ("To form a valid and binding contract in Connecticut, there must be a mutual understanding of the terms that are definite and certain between the parties To constitute an offer and acceptance sufficient to create an enforceable contract, each must be found to have been based on an identical understanding by the parties.... If the minds of the parties have not truly met, no enforceable contract exists.");
37. Blinn v. Beatrice Community Hosp. and Health Center, Inc., 270 Neb. 809, 824, 708 N. W.2d 235, 248 (2006) ("[A] contract requires that the promisor intend to make a binding promise-a binding mutual understanding or 'meeting of the minds'....").
38. See, e.g., Morris R. Cohen, The Basis of Contract, 46 HARV. L. REV. 553, 569, 576-77 (1933);
39. William P. Hackney & Tracey G. Benson, Shareholder Liability for Inadequate Capital, 43 U. PITT. L. REV. 837, 863 (1982);
40. Jerry Kang, Information Privacy in Cyberspace Transactions, 50 STAN. L. REV. 1193, 1265 (1998);
41. Christine Reilly, Achieving Knowing and Voluntary Consent in Pre-Dispute Mandatory Arbitration Agreements at the Contracting Stage of Employment, 90 CAL. L. REV. 1203 (2002);
42. Lea S. VanderVelde, The Gendered Origins of the Lumley Doctrine: Binding Men's Consciences and Women's Fidelity, 101 YALE L. J. 775, 778 n. 15 (1992);
43. Stephen J. Ware, Employment Arbitration and Voluntary Consent, 25 HOFSTRA L. REV. 83, 113 (1996) ("The requirement to form a contract is not that parties actually assent to its terms. The requirement is that they take actions....");
44. see also Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U. S. 395, 414 (1967) (Black, J., dissenting).
45. See, e.g., Michael J. Garrison & John T. Wendt, The Evolving Law of Employee Noncompete Agreements: Recent Trends and an Alternative Policy Approach, 45 AM. BUS. L. J. 107, 118-19 (2008) (discussing courts' reluctance to revise noncompete clauses in order to render them enforceable).
46. Cf. EMILIE DURKHEIM, THE DIVISION OF LABOR IN SOCIETY 161 (W. D. Halls trans., 1984) ("Most of our relationships with others are of a contractual nature. If therefore we had each time to launch ourselves afresh into these conflicts and negotiations necessary to establish clearly all the conditions of the agreement, for the present and the future, our actions would be paralysed.... We can only depart from [contract law] in part, and by chance.");
47. Cf. Eyal Zamir, The Inverted Hierarchy of Contract Interpretation and Supplementation, 97 COLUM. L. REV. 1710, 1752-53 (1997) ("[T]he meaning of the contract is determined by the law, except for matters in which the parties are allowed-under certain conditions and limitations-to deviate therefrom, and to the extent they usually do so."). (Pubitemid 127437470)
48. See, e.g., Michael H. Robins, The Primacy of Promising, 85 MIND 321 (1976).
49. Dolores Miller, Constitutive Rules and Essential Rules, 39 PHIL. STUD. 183, 188 (1981) ("Obligation is not an intra-institutional term-something defined or constituted by certain behavior regulated by certain rules. Obligation is a concept or value which exists above and beyond promising-it is logically independent of promising, although promising may not be logically independent of it.").
50. See David Owens, A Simple Theory of Promising, 115 PHIL. REV. 51, 51 n. 1 (2006) (labeling these views as "information-interest theories").
51. Aditi Bagchi, Separating Contract and Promise, 38 FLA. ST. L. REV. (forthcoming 2011).
52. See Joseph Raz, Promises and Obligations, in LAW, MORALITY, AND SOCIETY: ESSAYS IN HONOUR OF H. L. A. HART 210, 227-28 (P. M. S. Hacker & J. Raz eds., 1977).