The Expectation Remedy and the Promissory Basis of Contract

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I. CONTRACT AS PROMISE

Charles Fried's Contract as Promise stands as a model of principled legal argument. It took a single, integrating thought--that a promise lies at the heart of every contract--and then reconstructed broad swaths of doctrine as elaborations of that thought.

the book's argument is all the more impressive because the promissory ideal in whose name it seeks to unify contract law is not straightforward. on the contrary, grounding contract in promise highlights two of contract law's most distinctive yet least understood features: that the law establishes liability strictly, rather than based on fault; and that it creates forward-looking rather than the usual backward-looking entitlements, entitlements to be made better off rather than to secure the status quo ante. These features of promissory obligation have long been considered mysterious by a chain of thinkers whose pedigree goes back at least to David Hume and, in the law, to Lon Fuller and William Perdue. (1)

Fried understood the unusualness of promissory obligation and hence the shaky foundation that emphasizing promise places beneath contract law. He thus began Contract as Promise by addressing the problem of establishing the ground of promise head on, in two separate ways.

One line of Fried's argument emphasized the connection between forward-looking, strict liability in contract and the dignity of the promisor. "[H]olding people to their obligations," Fried wrote, "is a way of taking them seriously and thus of giving the concept of sincerity itself serious content." (2) He further argued, on "a more abstract level," that "respect for others as free and rational requires taking seriously their capacity to determine their own values." (3) To respect someone is to allow her to fix her obligations, according to the content that she gives them--her "will binding itself--and not according to the costs that establishing those obligations may impose on others. (4) Promise and contract are commensurate to the dignity of persons--to their reasoned freedom--precisely in respect of reaching beyond the ordinary, fault-based morality of harm.

This line of argument carries an echo of Nietzsche's remark that "[t]o breed an animal that is permitted to promise--isn't this precisely the paradoxical task nature has set for itself with regard to man? isn't this the true problem of man?" (5) It also bears all the burdens associated with succeeding at this "paradoxical task." To observe that it would be useful to a person to possess the capacity to promise, or indeed that it would imbue her with a dignity that creatures without this power lack, is not yet to establish that persons actually possess such promissory capacity. The normative power associated with promissory capacity--the will's power to bind itself directly and unmediatedly, without invoking the ordinary morality of fault and harm--is odd indeed. A promissory obligation is a kind of reason, and reasons (one might think) track values. Thus, the normative power of promising involves a capacity to generate value simply by intending it into existence. Perhaps it is not a capacity that ordinary, mortal persons generally possess. Indeed, it has been suggested, for example by Hume, that such a generative capacity is the distinctive marker of divinity, which is why Hume thought promissory obligation quite as mysterious as transubstantiation. (6) Nietzsche, aware of all this, remarked that a person who possesses promissory capacity holds "his kick in readiness for the frail dogs who promise although they are not permitted to do so." (7) one worries that we are all, in this respect, frail dogs.

Contract as Promise never seriously took up the questions that a dignity-based contract law raises. Although Fried seemed to believe that persons possess the dignity associated with the normative power to promise, and may have been right to think so, the best reading of the text pursues a quite different account of the foundations of promise and thus also of contract. …