Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default

By Triantis, George | Suffolk University Law Review, Summer 2012 | Go to article overview

Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default


Triantis, George, Suffolk University Law Review


INTRODUCTION

To a generation of law students, lawyers, and legal scholars, Contract as Promise (1) has provided a liberal theory of contract that explains fundamental features of contract law and provides a normative foundation for evaluating the legal doctrine. as is well known by now, the promissory theory of contracts justifies the legal enforcement of contracts in terms of respect for individual freedom and autonomy to make binding commitments. The touchstone of contractual analysis from this perspective is the intent of the promisor. Together with other moral theories of promising, this perspective on contract law has generated voluminous scholarship. Thirty years after the book's publication, I am unlikely to shed new light on the merits of the perspective. rather, I take the occasion of this symposium as an opportunity to explore how economic analysis since the book's publication might elaborate its thesis.

Significant insights have been made in the theory of incomplete contracts, particularly with respect to the existence and consequences of imperfect information. one might speculate as to how a hypothetical new edition of Contract as Promise, published today, might address the effect of imperfect information on the making and enforcement of promises. Working within or at least consistently with Professor Fried's perspective, this essay revisits the justification for expectation (compensatory) damages in light of two observations: (a) judicial determinations are costly and prone to error, and (b) parties have various motivations for promising beyond promoting reliance and collaboration (notably, credit and insurance). In light of this heterogeneity, I suggest that fully compensatory expectation damages may be preferred by no more than a plurality of contracting parties. in addition, the legitimacy given to expectation damages under various moral theories, such as the promissory principle, as well as the instrumental doctrine of efficient breach, in fact increases the cost of opting out and undermines the promissory autonomy they are thought to vindicate. In passing, I also take issue with the categorical distinction that Professor Fried and other moral theorists draw between contractual conditions and contract remedies, particularly damages. Damages, whether judicially measured or liquidated by contract, should be viewed as substitutes for conditions. Thus, if the parties are morally free to condition their promises, they should also be free to set their own level of damages or to let the court impose them by default.

I. INTERPRETATION AND INTERPOLATION

To create a contract, the promisor invites a court to enforce her promise (or some part of it). In the event of a subsequent dispute between promisor and promisee, the court must determine (a) whether a legally binding promise has been made, and (b) the content of the promise. The promissory language of the promisor is the basis for both decisions, (2) but the language may be vague, ambiguous, or incomplete. Professor Fried distinguishes between two tasks facing the court: interpretation (determining what the promisor had in mind) and interpolation (filling the gap left by the absence of intention). (3)

in interpreting the promise, the court may imply elements from the circumstances. Professor Fried provides the example of a sale of a bolt for use in a machine, after which the bolt fails and damages the machine. He writes that

   it is a fair implication of the simple-seeming original transaction
   that manufacturer not only delivered and promised to transfer good
   title to the bolt, but promised at the same time that the bolt
   would do the job it was meant to do.

      ... [B]uyer justifiably relied on manufacturer ... because of
   the (implied) promise or warranty, and of course it is a primary
   function of promises to induce reliance. (4)

Although there may be other grounds for liability, Professor Fried brings the implied warranty of fitness in this case under the promissory theory. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Promissory Autonomy, Imperfect Courts, and the Immorality of the Expectation Damages Default
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.