Abstract
Despite contract law’s modern-day theoretical pluralism, discussed in Chapter 1, the bargain theory of consideration constituted the principal basis for enforcement of promises in the United’States from the late-nineteenth to the mid-twentieth century.1 The bargain theory was underinclusive, however, in part because an assortment of gratuitous promises called out for enforcement.2 Suppose, for example, a promisee improved land in reliance on a landowner’s broken gift promise to convey. Suppose a promisee failed to insure her property in reliance on an insurance agent’s gratuitous broken promise to insure the property. Suppose a donor broke a promise to donate money to a charity.3 Responding to the promisee’s hardship or, occasionally, another strong policy such as aiding charitable institutions, courts began to enforce these and other gratuitous promises.4 Corbin amassed these cases to persuade the drafters of the first Restatement of Contracts to recognize justifiable reliance on gift promises as a distinct basis of enforcement.5
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Reference
See Chapter 1.
See Stanley D. Henderson, Promissory Estoppel and Traditional Contract Doctrine, 78 Yale L.J. 343, 350 (1969) (“[T]he tradition which produced Section 90 necessitated the extraction of a broad generalization from an assortment of cases which are not reducible to a systematic pattern.”); see also Robert S. Summers & Robert A. Hillman, Contract and Related Obligation 79–90 (2d ed. 1992) (discussing judicial recognition of the need to enforce relied-upon gratuitous promises).
See Restatement (First) of Contracts app. (explanatory notes) at 245–50 (Official Draft 1928).
See, e.g., Seavey v. Drake, 62 N.H. 393 (1882); Siegel v. Spear & Co., 138 N.E. 414 (N.Y. 1923); Ryerrs v. Trustees of Presbyterian Church, 33 Pa. 114 (1859); see also Jay M. Feinman, Promissory Estoppel and Judicial Method, 97 Harv, L. Rev. 678, 680 (1984).
See Feinman, supra note 4, at 683.
Restatement of Contracts § 90 (1932).
See Feinman, supra note 4, at 680, 683. For a more complete history of the section, see also E. Allan Farnsworth, Contracts Scholarship in the Age of the Anthology, 85 Mich. L. Rev. 1406, 1454–1462 (1987).
See Charles L. Knapp, Reliance in the Revised Restatement: The Proliferation of Promissory Estoppel, 81 Colum. L. Rev. 52, 53 (1981) (“[T]he principle of section 90… has become perhaps the most radical and expansive development of the century in the law of promissory liability.”).
See also Henderson, supra note 2, at 345–50 (discussing assimilation of promissory estoppel theory with bargain principles).
Henderson, supra note 2, at 364.
Edward Yorio & Steve Thel, The Promissory Basis of Section 90, 101 Yale L.J. 111, 167(1991).
See, e.g., Daniel A. Färber & John H. Matheson, Beyond Promissory: Contract Law and the “Invisible Handshake, ”52 U. Chi. L. Rev. 903 (1985); Yorio & Thel, supra note 11.
E. Allan Farnsworth, Contracts § 2.19, at 96 (1982) (discussing theorists).
Restatement of Contracts § 90 (1932).
Proceedings at Fourth Annual Meeting, 4 A.L.I. Proc. 98–99 (1926) [Hereinafter Proceedings], reprinted in Yorio & Thel, supra note 11, at 116–17.
Proceedings, supra note 15, at 103.
Restatement (Second) OF Contracts § 90(1) (1981).
See Yorio & Thel, supra note 11, at 130–32.
See, e.g., Färber & Matheson, supra note 12, at 907 (“[P]romissory estoppel is regularly applied to the gamut of commercial contexts.”).
See, e.g., Färber & Matheson, supra note 12, at 907 (“[P]romissory estoppel is regularly applied to the gamut of commercial contexts.”) at 908; Henderson, supra note 2, at 369.
See supra notes 14–16, and accompanying text.
See, e.g., P.S. Atiyah, The Rise AND Fall of Freedom of Contract 777 (1979) (promissory estoppel “indicates a resurgence of reliance-based liability at the expense of consensual liability”).
See Boyer, supra note 17, at 491 “[RJeliance… is the essence of promissory estopppel.”).
Lon L. Fuller, Consideration and Form, 41 Colum. L. Rev. 799 (1941).
Lon L. Fuller & William R. Perdue, Jr., The Reliance Interest in Contract Damages, 46 Yale L.J. 52 (1936).
Fuller, supra note 26, at 800–803.
See Fuller, supra note 26, at 800–803 at 814–15.
See Fuller, supra note 26, at 800–803 at 814–15 at 806.
See Fuller, supra note 26, at 800–803 at 814–15 at 806.
See Fuller, supra note 26, at 800–803 at 814–15 at 806. at 812–13.
See Fuller, supra note 26, at 800–803 at 814–15 at 806. at 812–13. at 810–12.
See Fuller, supra note 26, at 800–803 at 814–15 at 806. at 812–13. at 810–12 at 815.
Eisenberg, supra note 17, at 3.
Eisenberg, supra note 17, at 3. at 4. But see Andrew Kull, Reconsidering Gratuitous Promises, 21 J. Legal Stud. 39, 49–50 (1992) (“The argument that gratuitous promises do not merit enforcement cannot depend… on the proposition that the gratuitous transfer is itself unmeritorious.”).
See, e.g., Stewart Macalulay, The Reliance Interest and the World Outside the Law Schools’Doors, 1991 Wis. L. Rev. 247; Todd D. Rakoff, Fuller andPerdue’s The Reliance Interest as a Work of Legal Scholarship, 1991 Wis. L. Rev. 203.
See, e.g., Eisenberg, supra note 17, at 3. But see Kull, supra note 36 (little evidence for the proposition that gratuitous promises are less important economically).
P.S. Atiyah, Contracts, Promises and the Law of Obligations, 94 L.Q. Rev. 193, 202 (1978).
Eisenberg, supra note 17, at 18.
Eisenberg, supra note 17, at 18.
Henderson, supra note 2, at 3 83.
Feinman, supra note 4, at 685.
Boyer, supra note 17, at 492.
James Baird Co. v. Gimbel Bros., 64 F.2d 344, 346 (2d Cir. 1933).
333 P.2d 757 (Cal. 1958).
See Henderson, supra note 2, at 352.
133 N.W.2d 267, 267 (Wis. 1965).
133 N.W.2d 267, 267 (Wis. 1965). at 274–75.
See, e.g., Wheeler v. White, 398 S.W.2d 93 (Tex. 1965).
See Henderson, supra note 2, at 362–364.
See Henderson, supra note 2, at 362–364. at 364.
See, e.g., Arthur Corbin, Corbin ON Contracts § 1A at 205 (1963); Boyer, supra note 17, at 490–91; Eisenberg, supra note 17, at 26–27.
Seavey, supra note 17, at 926.
Eisenberg, supra note 17, at 24–25.
See, e.g., Wheeler v. White, 398 S.W.2d 93 (Tex. 1965) (indefinite contract); Mcintosh v. Murphy, 469 P.2d 177 (Haw. 1970) (statute of frauds).
See Mary Becker, Promissory Estoppel Damages, 16 Hofstra L. Rev. 131,148–149(1987).
133 N.W.2d 267 (Wis. 1965).
Yorio & Thel, supra note 11, at 143.
133 N.W.2d 267, 275 (Wis. 1965).
133 N.W.2d 267, 275 (Wis. 1965).
398 S.W.2d 93 (Tex. 1965).
398 S.W.2d 93 (Tex. 1965) at 97.
See, e.g., Esquire Radio & Elec, Inc. v. Montgomery Ward & Co., 804 F.2d 787 (2d Cir. 1986) (excluding “benefit of the bargain profit” when retailer breaks promise to buy electronic products from importer); Zimmerman v. Zimmerman, 447 N.Y.S.2d 675 (App. Div. 1982) (denying award of expectancy damages for father’s promise to pay his daughter’s college tuition).
See, e.g., Becker, supra note 63, at 134–35; Färber & Matheson, supra note 12, at 909; Yorio & Thel, supra note 11, at 130–31.
See, e.g., Eisenberg, supra note 17, at 26–28; Henderson, supra note 2, at 378–79.
Henderson, supra note 2, at 378–79.
Becker, supra note 63, at 137–139 (discussing In re Estate of Bucci, 488 P.2d 216 (Colo. Ct. App. 1971)).
Eisenberg, supra note 17, at 26–28.
See Becker, supra note 63, at 139.
Boyer, supra note 17, at 486.
Eisenberg, supra note 17, at 28.
See, e.g., Vastoler v. American Can Co., 700 F.2d 916 (3d Cir. 1983).
Becker, supra note 63, at 139; Boyer, supra note 17, at 486; Eisenberg, supra note 17, at 26–28.
Eisenberg, supra note 17, at 26–28; see also Metzger & Phillips, supra note 17, at 545 (expectancy measure allows “promisee to recover lost profits from foregone opportunities”)
Richard E. Speidel, The Borderland of Contract, 10 N. Ky. L. Rev. 163, 171 (1983).
642 F.2d 1098 (7th Cir. 1981).
Becker, supra note 63, at 144–145.
Restatement (Second) OF Contracts § 90(2).
Becker, supra note 63, at 137.
Becker, supra note 63, at 137 at 146.
Becker, supra note 63, at 137 at 146 at 138.
Becker, supra note 63, at 137 at 146 at 138. at 155. Recall Coudert’s remark about punishing the Uncle with a $1000 judgment. See supra note 15 and accompanying text.
See, e.g., United Laboratories Inc. v. Kuyke-dall, 335 N.C. 183, 437 S.E.2d 374 (1993); Reynolds v. Pegler, 123 F. Supp. 36 (S.D.N.Y. 1954).
See, e.g., Wheeler v. White, 398 S.W.2d 93 (Tex. 1965).
Yorio & Thel, supra note 11, at 113.
Yorio & Thel, supra note 11, at 113 at 163.
Slawson, supra note 17, at 208.
Slawson, supra note 17, at 208
Charles Fried, Contract As Promise (1981); see Chapter 1.
Yorio & Thel refer to these grounds. See Yorio & Thel, supra note 11, at 166 n.363.
Fried, supra note 99, at 16; see Chapter 1.
Fried, supra note 99, at 16; see Chapter 1 at 20.
Yorio & Thel, supra note 11, at 166 n.363.
See, Fried, supra note 99, at 10–11.
Färber & Matheson, supra note 12, at 914.
Färber & Matheson, supra note 12, at 914 at 905.
Färber & Matheson, supra note 12, at 914 at 905 at 942.
Färber & Matheson, supra note 12, at 914 at 905 at 942. at 929.
Färber & Matheson, supra note 12, at 914 at 905 at 942. at 929 at 904.
Färber & Matheson, supra note 12, at 914 at 905 at 942. at 929 at 904. at 914.
Yorio & Thel, supra note 11, at 167.
Yorio & Thel, supra note 11, at 167 at 161.
Mat 151.
Mat 151
See, e.g., Hoover Community Hotel Corp. v. Thomson, 213 Cal. Rptr. 750 (Ct. App. 1985); Clinton v. Int’l Business Machs. Corp., 570 N.Y.S.2d 405 (App.Div. 1991).
Becker, supra note 63, at 153 (discussing promises of employers in the context of “at-will” employment).
Yorio & Thel, supra note 11, at 159 (acknowledging “[t]he many cases that adduce reliance as a reason for enforcing the promise”).
Färber & Matheson, supra note 12, at 913–14 n.43.
700F.2d916(3dCir. 1983).
Färber & Matheson, supra note 12, at 910.
700F.2dat919.
Färber & Matheson, supra note 12, at 912.
See Färber & Matheson, supra note 12, at 912 at 911 n.31.
14 A. 464 (Md. 1888).
Yorio & Thel, supra note 11, at 155.
Yorio & Thel, supra note 11, at 155
“It might very well be, and probably was the case, that the plaintiff would not have taken a trip to Europe at his own expense.” 14 A. 464 (Md. 1888).
For a discussion of this term, see Chapter 1.
See Yorio & Thel, supra note 11, at 155–156.
See Yorio & Thel, supra note 11, at 155–156.
See, e.g., Spiegel v. Metropolitan Life Ins. Co., 160 N.E.2d 40 (N.Y. 1959); East Providence Credit Union v. Geremia, 239 A.2d 725 (R.L 1968).
Yorio & Thel, supra note 11, at 161.
Yorio & Thel, supra note 11, at 159.
Färber & Matheson, supra note 12, at 904.
Färber & Matheson, supra note 12, at 904. at 914.
Färber & Matheson, supra note 12, at 946.
Slawson, supra note 17, at 217.
Slawson, supra note 17, at 217.
Slawson, supra note 17, at 217.
Slawson, supra note 17, at 217 “[T]he only measure of damages that is designed to compensate” for breaking a promise “is the expectation measure.” Slawson, supra note 17, at 217. at 208.
Yorio & Thel, supra note 11, at 166 (emphasis added).
Yorio & Thel, supra note 11, at 133.
See supra notes 62–63, and accompanying text.
Yorio & Thel, supra note 11,134.
394 P.2d 571, 578 (Cal. 1964).
394 P.2d 571, 578 (Cal. 1964). at 573.
394 P.2d 571, 578 (Cal. 1964). at 573.
394 P.2d 571, 578 (Cal. 1964). at 573. at 578.
77 N.W. 365 (Neb. 1898).
Yorio & Thel, supra note 11, at 134.
Yorio & Thel, supra note 11, at 134. at 135. All but one cited case, however, were decided prior to 1932, when the first Restatement formalized promissory estoppel.
See, e.g., Wadsworth v. Hannah, 431 So. 2d 1186 (Ala. 1983).
See supra notes 76–79, and accompanying text.
Yorio & Thel, supra note 11, at 139–151.
169 F.2d 684 (D.C. Cir. 1948).
Yorio & Thel, supra note 11, at 140.
144 A.2d 123 (Del. 1958).
Yorio & Thel, supra note 11, at 141–142.
398 S.W.2d 93 (Tex. 1965).
398 S.W.2d 03 (Tex. 1965).
Yorio & Thel, supra note 11, at 148.
Yorio & Thel, supra note 11, at 148
The second Restatements call for remedial flexibility in Section 90 appropriately reflects this view. See supra notes 18–20, and accompanying text.
See Chapter 1.
See section A.
See Chapter 1.
Summers & Hillman, supra note 2, at 294–304.
Restatement (Second) OF Contracts § 90 cmt. d (1981).
See, e.g., Elvin Assocs. v. Franklin, 735 F. Supp. 1177 (S.D.N.Y. 1990), where the court dismissed a contract claim because the parties did not intend to be bound, but then ordered a trial to determine damages on the basis of promissory estoppel. If the plaintiff ultimately recovers expectancy damages, the court’s initial determination of the parties’ intentions is irrelevant.
See Farnsworth, supra note 13, § 3.26, at 191–92. Farnsworth concludes that the substantive basis for liability in a case such as Hoffman v. Red Owl Stores is Red Owl’s bad faith. Even if Red Owl had bargained in good faith, however, the parties may not have successfully reached an agreement. Therefore, the expectancy remedy would overcompensate.
See Farnsworth, supra note 13, § 3.26 at 189–190; see also Restatement (Second) OF Contracts § 90 illus. 9 (1981) (liability for deliberate misrepresentation).
Farnsworth, supra note 13, §3.26, at 100–101.
For example, see the discussion of plant closings in Chapter 5.
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Hillman, R.A. (1997). Theories of Promissory Estoppel: Reliance and Promise. In: The Richness of Contract Law. Law and Philosophy Library, vol 28. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-5680-6_3
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