The Promise Principle and Contract Interpretation

By Kostritsky, Juliet P. | Suffolk University Law Review, Summer 2012 | Go to article overview

The Promise Principle and Contract Interpretation


Kostritsky, Juliet P., Suffolk University Law Review


The promise principle and its roots in a certain type of morality of individual obligation, which play the central role in Charles Fried's vision of contract law, have importantly contributed to rescuing contract law from absorption into tort law and from the imposition of externally imposed standards that are collective in origin. The principle makes a mammoth contribution to alerting us to the tyranny of interference with individual self-determination. However, this Essay questions whether a promise-centered system, derived from a moral philosophy of promising (without an observable and testable foundation in reality) and geared to internal individual obligation and duty, can provide the basis on which the public law can decide the hard cases in contract law. First, the promise-sufficient principle will not help when the promises are incomplete. Second, this Essay hypothesizes that there is an evolutionary trend toward efficient social contracts (or institutions of any kind). Therefore, if different communities at different times, using the latitude that our cultural genetic makeup allows, choose to veer away from that trend, they will suffer by comparison with communities that do not. It is as if they are competing. In understanding what contract law should look like normatively, we must move beyond the purported internally reflective, a priori processes of individual will and understand, through casual and formal empirics and comparisons among economies, the background of how parties' externally expressed natural impulses act to coordinate on social problems in the games of life. The law should look to how parties act to coordinate through exchange and produce improving welfare when they construct contracts and the rules of contractual enforcement. In that way, contract law will develop around, and not in a manner at odds with, naturalistic sources for normative principles; ones that are consonant with the parties' own expressions.

I. INTRODUCTION

For Charles Fried, the promise principle unifies the law of contract and provides its moral foundation. (1) According to Fried, the promise principle promotes freedom and autonomy because it ties contractual obligation to "self-imposed" commitments. (2) By enforcing promises, contract law advances individual freedom. (3) I will explore why Fried is drawn to the promise and self-imposed obligation as the central organizing elements of contract law, what Fried means by morality, and the connection between individual freedom, morality, and contract law. I will explore these connections by tracing the origins of freedom, autonomy, and morality back to Kant and other philosophical antecedents.

Fried wants to theorize contract as involving a purely individual morality of promise-making and promise-keeping, which are values in themselves because they promote autonomy. They are self-binding through exercises of will.4 Fried does not want this master autonomy purpose cluttered with considerations of mere utility or efficiency, on the one hand, or distributive justice or fairness, on the other.

I will then argue that because morality and the promise principle are oriented toward individual, "self-created" obligation, they should not guide positive laws. (5) A focus on individually assumed obligations by itself would not explain why contractual institutions that enforce these promises are valuable by "foster[ing] trust," nor provide solutions to difficult contracts issues. (6)

This Essay argues: (1) that it is not clear why the legal system should care about enforcing exercises of individual will if doing so doesn't serve the important social purpose of welfare improvement; and (2) the reason a good deal of contract law exists is to solve problems that do not involve figuring out what parties actually promised, but implying terms or interpreting unclear terms in ways that will promote efficient results. (7)

This Essay suggests that the source for using a goal to maximize surplus (welfare) and to promote efficiency should not be based on normative principles that float freely and are formulated on an a priori basis, nor should the source be an ultimacy that is externally mandated. …

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