Abstract
The tension between freedom of contract and non-promissory principles such as reliance and unjust enrichment, which legitimize judicial intervention in agreements, preoccupies many contract analysts.1 Among the subjects of this book are several distinct theories emphasizing one approach or the other. This chapter, for example, compares Charles Fried’s promise theory and Grant Gilmore’s hypothesis of the “death-of-contract.”2 Professor Fried posits that freely made promises of contracting parties constitute contract law’s core, whereas Professor Gilmore insisted that non-promissory principles “swallowed up” private contract law. The debate is not merely descriptive. Promise theorists champion individual choice and urge government not to intercede in private relations. Death-of-contract analysts, on the other hand, support the use of non-promissory principles to assure fairness in the contracting process.
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References
See, e.g., Robert A. Hillman, The Crisis in Modern Contract Theory, 67 Tex. L. Rev. 103 (1988).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation(1981)
Grant Gilmore, The Death of Contract (1974).
See, e.g., Ian R. Macneil, Relational Contract: What We Do and Do Not Know, 1985 Wis. L. Rev. 483, 508 (“[Promise-centered] theories tend to decrease … knowledge of relation … by blinding us to our errors and omissions.”).
Hillman, supra note 1, at 133. See also Robert C. Clark, Contracts, Elites and Traditions in the Making of Corporate Law, 89 Colum. L. Rev. 1703, 1726 (1989) (“A good society depends on both autonomy and heteronomy, each present in large measure. Theorists ought to face up to this point….”).
Ian R. Macneil, Values in Contract: Internal and External, 78 Nw. U. L. Rev. 340, 370 (1983).
See Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 19.
Bernard Schwartz, The Law in America 85, 116–18 (1974).
See also P. S. Atiyah, Freedom of Contract and the New Right, in Essays On Contract 355 (1990) (describing the situation in England)
Morton J. Horwitz, The Transformation of American Law, 1870–1960: The Crisis of Legal Orthodoxy 33 (1992);
James W. Hurst, Law and the Conditions of Freedom in the Nineteenth-Century United States 14 (1956).
Morton J. Horwitz, The Transformation of American Law, 1870–1960: The Crisis of Legal Orthodoxy 33 (1992), at 4.
P. S. Atiyah, The Rise and Fall of Freedom of Contract 716–18 (1979) [hereinafter Atiyah, Rise and Fall].
The rise of the welfare state in America began with “factory laws and workmen’s compensation laws” designed to “safeguard the individual against the uncertain nature” of industrialized society. Bernard Schwartz, The Law in America 85, 116–18 (1974), at 163–64.
See also Karlv Polanyi, The Great Transformation 149-50 (1944) (“countermove against economic liberalism and laissez-faire” was a “spontaneous reaction” to protect against destruction of the social order).
Thomas W. Merrill, Public Contracts, Private Contracts, and the Transformation of the Constitutional Order, 37 Case W. Res. L. Rev. 597, 627 (1987).
See, e.g., Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 20 (enforcing the moral obligation that arises out of promise-making enables people to “determine their own values”).
John Dalzell, Duress by Economic Pressure I, 20 N.C. L. Rev. 237, 237 (1942).
Wolfgang G. Friedmann, Some Reflections on Status and Freedom, in Essays In Jurisprudence in Honor of Roscoe Pound 236 (Ralph A. Newman ed., 1962).
Henry S. Maine, Ancient Law 141 (New Universal Library ed. 1905) (1864) (“[T]he movement of the progressive societies has hitherto been a movement from Status to Contract.”) (emphasis in original).
See also Hugh Collins, The Law of Contract 138 (1986) (“Far from refusing to develop a theory of distributive justice and fairness in contracts, classical law, through its rules about consideration and strict liability, states a clear preference for the distributive outcome of a largely uninhibited market.”).
P. S. Atiyah, The Rise and Fall of Freedom of Contract 716–18 (1979) [hereinafter Atiyah, Rise and Fall]., at 292–330.
Hillman, supra note 1, at 133. See also Robert C. Clark, Contracts, Elites and Traditions in the Making of Corporate Law, 89 Colum. L. Rev. 1703, 1726 (1989) (“A good society depends on both autonomy and heteronomy, each present in large measure. Theorists ought to face up to this point….”).
Richard A. Posner, Economic Analysis of Law 79 (3d ed. 1986).
Friedrich Kessler, Introduction: Contract As A Principle of Order, in Friedrich Kessler et al., Contracts (3d ed. 1986)
Friedrich Kessler, Introduction: Contract As A Principle of Order, reprinted in Peter Linzerv, A Contracts Anthology 5 (1989).
See also Robert S. Summers and Robert A. Hillman, Contract and Related Obligation 7–8 (2d ed. 1992).
Hillman, supra note 1, at 133. See also Robert C. Clark, Contracts, Elites and Traditions in the Making of Corporate Law, 89 Colum. L. Rev. 1703, 1726 (1989) (“A good society depends on both autonomy and heteronomy, each present in large measure. Theorists ought to face up to this point….”), at 1714–15.
Friedrich Kessler, Contracts of Adhesion—Some Thoughts about Freedom of Contract, 43 Colum. L. Rev. 629, 629 (1943).
Friedrich Kessler, Contracts of Adhesion—Some Thoughts about Freedom of Contract, 43 Colum. L. Rev. 629, 629 (1943).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 17 (“But since a contract is first of all a promise, the contract must be kept because a promise must be kept.”).
See also Patrick Atiyah, Promises, Morals, and Law (1981). For a general discussion of theories about promising, see Richard Craswell, Contract Law, Default Rules, and the Philosophy of Promising, 88 Mich. L. Rev. 489, 491-503 (1989)
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 7, 12–13
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 16.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 20.
See also Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 20–21 (“If we decline to take seriously the assumption of an obligation… to that extent we do not take [the promisor] seriously as a person.”).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 41.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 42.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 43.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 98-99.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 69. For a discussion of Fried’s treatment of unconscionability, see Chapter 7. See also Macneil, supra note 3, at 496 (arguing that the nonpromissory aspects of promise-focused scholarship must be “fitted around promise”).
Stanley D. Henderson, Promissory Estoppel and Traditional Contract Doctrine, 78 Yale L.J. 343,347(1969).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 37–38.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981)
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 10–11.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981) , at 25 n*. For a discussion of promissory estoppel, the theory plugging the gap, see Chapter 2.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), , at 87. See, e.g., Hotchkiss v. Nat’l City Bank, 200 F. 287, 293 (S.D.N.Y. 1911) (Learned Hand, J.). “We ask judges or juries to discover that ‘objective viewpoint’—through their own subjective processes.” Zell v. American Seating Co. 138 F.2d 641, 647 (2d Cir. 1943) (Frank, J.); rev’d, 322 U.S. 709 (1944) (per curiam).
Ian R. Macneil, Contracts: Adjustment of Long-Term Economic Relations Under Classical Neoclassical, and Relational Contract Law, 72 Nw. U.L. REV. 854, 884 (1978).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 88.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981). See also Randy E. Barnett, Conflicting Visions: A Critique of Ian MacneiVs Relational Theory of Contract, 78 Va. L. REV. 1175, 1176 (1992) (“default rules based on the common-sense or conventional understanding of persons belonging to the parties’ community of discourse”).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981)
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 88 (“the congruence of background between two persons is never more than partial”).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 69–73.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 73.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 88-89. For an analysis maintaining that Fried’s theory fails to develop a coherent approach to default rules, see Craswell, supra note 30, at 517–523.
See, e.g., two reviews of Fried’s Contract as Promise: P. S. Atiyah, Book Review, 95 Harv. L. Rev. 509, 516–524 (1981) (asserting the limited role of contract under Fried’s view); Daniel A. Färber, Book Review, 66 Minn. L. Rev. 561, 564 (1982) (“[T]he validity of the promise principle does not alone establish its primacy.”). See also John P. Dawson, Gifts and Promises 3–4 (1980).
Grant Gilmore, The Death of Contract (1974), at 87, 94.
Grant Gilmore, The Death of Contract (1974), at 6–8, 98. But see Richard E. Speidel, An Essay on the Reported Death and Continued Vitality of Contract, 27 Stan. L. Rev. 1161, 1162
Grant Gilmore, The Death of Contract (1974), at 13–14.
Grant Gilmore, The Death of Contract (1974), at 13.
The casebook is C. Langdell, Cases on the Law of Contracts (1st. ed. 1871).
Grant Gilmore, The Death of Contract (1974), at 18.
Grant Gilmore, The Death of Contract (1974), at 21–22, 33.
Grant Gilmorev, The Death of Contract (1974), at 95–96.
Grant Gilmore, The Death of Contract (1974), at 14.
Grant Gilmore, The Death of Contract (1974), at 47–48.
Grant Gilmore, The Death of Contract (1974)
Grant Gilmore, The Death of Contract (1974), at 42.
Grant Gilmore, The Death of Contract (1974), at 44.
See also Grant Gilmore, The Death of Contract (1974), at 48: “To the extent that a theory of excuse from a contractual obligation is admitted, it becomes necessary to take particular factual situations into account.”
Grant Gilmore, The Death of Contract (1974), at 14, 22.
Grant Gilmore, The Death of Contract (1974), at 94–96. See, e.g., Kurt A. Strasser, Contract’s “Many Futures” After Death; Unanswered Questions of Scope and Purpose, 32 S. C. L. Rev. 501,509(1981).
For example, the Uniform Commercial Code enforced promises modifying existing contracts. Grant Gilmore, The Death of Contract (1974), at 69, 77.
Grant Gilmore, The Death of Contract (1974), at 58, 64. For example, analysts found liability in cases lacking “mutual conventional reciprocal inducement.” Id. at 63.
Grant Gilmore, The Death of Contract (1974), at 57, 62,65. For example, Gilmore pointed to the increase in products liability cases under the Restatement (Second) of Torts. Id. at 94. See Speidel, supra note 65, at 1165.
Grant Gilmore, The Death of Contract (1974), at 70–73, 77–84. For example, according to Gilmore, promissory estoppel in section 90 dominates the second Restatement. Id. at 70–72. See also Speidel, supra note 65, at 1166. Restatement (Second) of Contracts §90(1) (1981) provides
Grant Gilmore, The Death of Contract (1974), at 70–71.
Grant Gilmore, The Death of Contract (1974), at 71 (quoting Restatement (Second) of Contracts § 90 cmt. at 165-66 (Tentative Draft No. 2, 1965).
Grant Gilmore, The Death of Contract (1974), at 72.
Grant Gilmore, The Death of Contract (1974), at 73–74.
E. Allan Farnsworth, 1 Farnsworth on Contracts § 2.20 (1990).
Grant Gilmore, The Death of Contract (1974), at 75–76.
Grant Gilmore, The Death of Contract (1974), at 6–8, 98. But see Richard E. Speidel, An Essay on the Reported Death and Continued Vitality of Contract, 27 Stan. L. Rev. 1161, 1162.
See, e.g., Sullivan v. O’Connor, 363 Mass. 579, 296 N.E.2d 183 (1973). See also Chapter 2.
See Chapter 70. See also Ian R. Macneil, The New Social Contract (1980)
Robert A. Hillman, The Crisis in Modern Contract Theory, 67 Tex. L. Rev. 103 (1988), at 124; Jay M. Feinman, The Significance of Contract Theory, 58 U. Cin. L. Rev. 1283, 1301–02 (1990).
Robert A. Hillman, The Crisis in Modern Contract Theory, 67 Tex. L. Rev. 103 (1988), at 124.
But see Jay M. Feinman, Promissory Estoppel and Judicial Method, 97 Harv. L. Rev. 678, 688–89 (1984) (suggesting that courts sometimes limit recoveries in contract cases to reliance damages and sometimes give expectancy recoveries in promissory estoppel cases). See also Edward Yorio & Steve Thel, The Promissory Basis of Section 90, 101 Yale L J. 1ll (1991).
Grant Gilmore, The Death of Contract (1974), at 77–84.
Grant Gilmore, The Death of Contract (1974), at 77–84.
Robert A. Hillman, Contract Excuse and Bankruptcy Discharge, 43 Stan. L. Rev. 99, 106-07 (1990); Hillman, supra note 127, at 624–25; Transatlantic Fin. Corp. v. United States, 363 F.2d 312, 318 (D.C. Cir. 1966) (“Foreseeability or even recognition of a risk does not necessarily prove its allocation.”). See also Jean Braucher, Contract Versus Contractarianism: The Regulatory Role of Contract Law, 47 Wash. & Lee L. Rev. 697, 724 (1990) (“[T]he objective approach requires potential promisors to be concerned about how their actions and communications appear to potential promisees and heightens their concern with what meaning a court will consider ‘reasonable’.”).
James J. White & Robert S. Summers, Handbook on the Uniform Commercial Code § 3–5 at 129-30 (3d ed. 1988) (“What is reasonable will vary with the case depending on such factors as the nature of goods to be delivered, the purpose for which they are to be used, the extent of seller’s knowledge of buyer’s intentions… and so on.”).
See generally Robert S. Summers & Robert A. Hillman, Contract and Related Obligation 342–60 (2d ed. 1992). Litigation costs and the potential loss of good-will also contribute, of course.
Grant Gilmore, The Death of Contract (1974), at 95-96. See also Speidel, supra note 65, at 1166. For a theory that modern contract supports “the communitarian values comprising assistance to the weak and handicapped, fairness in the distribution of wealth, and altruistic concern for the interests of others,” see Hugh Collins, The Law of Contract 1 (1986).
But see John P. Dawson, Gifts and Promises 3–4 (1980), at 220–21 (describing “bargained for exchange” as an “essential instrument” of contract law and as “subject to [a] few exceptions… the only recognized reason” for enforcing contracts).
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981), at 73.
Grant Gilmore, The Death of Contract (1974), at 95–96.
Grant Gilmore, The Death of Contract (1974), at 95.
Jay M. Feinman, Promissory Estoppel and Judicial Method, 97 Harv. L. Rev. 678, 688–89 (1984) (suggesting that courts sometimes limit recoveries in contract cases to reliance damages and sometimes give expectancy recoveries in promissory estoppel cases), at 686.
See Robert A. Hillman, The Crisis in Modern Contract Theory, 67 Tex. L. Rev. 103 (1988), at 128–132 (discussing theories).
See Robert A. Hillman, The Crisis in Modern Contract Theory, 67 Tex. L. Rev. 103 (1988), at 128–132 (discussing theories).
See also Russell J. Weintraub, A Survey of Contract Practice and Policy, 1992 Wis. L. REV. 1,4; W. David Slawson, Standard Form Contracts and Democratic Control of Lawmaking Power, 84 Harv. L. Rev. 529, 529, 538–39 (1971).
See Stewart Macaulay, Non-Contractual Relations In Business: A Preliminary Study, 28 Am. Soc. Rev 55, 62, 65 (1963). See also Stewart Macaulay, An Empirical View of Contract, 1985 Wis. L. Rev. 465,471; Robert A. Hillman, Court Adjustment of Long Term Contracts: An Analysis Under Modern Contract Law, 1987 Duke L.J. 1,4–6.
Charles Fried, Contract as Promise: A Theory of Contractual Obligation (1981)
Grant Gilmore, The Death of Contract (1974).
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Hillman, R.A. (1997). Theories of Contract: Promise and Non-Promissory Principles. In: The Richness of Contract Law. Law and Philosophy Library, vol 28. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-5680-6_2
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