Academic journal article William and Mary Law Review

Promises and Paternalism

Academic journal article William and Mary Law Review

Promises and Paternalism

Article excerpt

Consider the case of Jack Tallas, an immigrant from Greece who had achieved considerable success as an insurance agent and landlord during the nearly seventy years he spent working in Salt Lake City.(1) Jack, who lived in a hotel during the last years of his life, wanted to give $50,000 to Peter Dementas, a close friend of fourteen years, who had helped him during that time.(2) Jack dictated a memorandum to Peter in Greek.(3) It stated that Jack owed Peter, who "treats me like a father and I think of ... as my own son," $50,000 for his kindness in having Jack at weekly dinners with Peter's family, his help in driving Jack to the doctor, and his assistance in the management of Jack's rental property.(4) The memorandum promised that Jack would change his will to make Peter an "heir" and leave him $50,000.(5) Jack kept the Greek document, retyped it in English, notarized the English version with his own notary seal, and delivered the documents to Peter three days later.(6) Jack died six weeks later, leaving behind a substantial estate, but bequeathing nothing to Peter.(7)

Too bad for Peter, decided an appellate court in Utah.(8) Jack's promise was unenforceable because there was no consideration for it.(9) Jack's intention to be bound legally could not have been clearer, but this was not enough. Not only was such an intention insufficient, but no formality would have been enough. Utah law afforded Jack no means of making an enforceable promise to make a gift to Peter.(10) Jack could, of course, have gone to the trouble of changing his will and having it witnessed, but even then he would have been free to change his will again.

I want to convince you that for centuries the common law's treatment of promises such as Jack's--promises to make gifts--has been profoundly paternalistic. So let me at the outset explain what I mean by paternalism. It is commonly said that a legal rule is paternalistic if, for a person's "own good," it prohibits the person from doing something, such as using drugs, or requires the person to do something, such as wearing a helmet while cycling. I will use paternalism more broadly to include legal rules that for a person's "own good" disable that person from making a binding commitment, such as making an enforceable promise to give up relief under the bankruptcy laws.(11) I will then apply this notion of paternalism to a broad category of promises: promises to make gifts. As suggested by the examples of drug use, helmets, and bankruptcy, paternalism can sometimes be justified, but in a legal system that prizes freedom of contract, we ought to eschew paternalistic restraints on that freedom. I intend to show that it is mainly for a promisor's "own good" that our rules of contract law trump the preferences of a promisor who, like Jack, seeks to make a binding promise to make a gift and that there is no justification for this paternalistic intervention.

Because my argument assumes that a promisor, such as Jack, might have a preference for making a binding promise to make a gift, I turn to the reasons why that might be so. In most cases, a promisor wants to be able to make a binding promise because of self-interest. In order to get something that the promisor wants, such as a new Ferrari or a promise of one, the promisor has to make a promise to pay the price of the Ferrari. Furthermore, it is in the promisor's self-interest that the promise be binding, for otherwise the seller will balk at delivering or at promising to deliver the car. In such transactions we exchange our promises for things, including other promises, that we want; however, that is not always so. Jack did not exchange his promise for something he wanted. Rather, Jack promised to make a gift. Jack's situation thus raises a question as to why someone would promise to make a gift.

Before asking why one makes such a promise, it may be well to ask why one makes a gift. Is it pure altruism--an unselfish regard for the interests of others? …

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