Do promises distinguish contract from tort?

AuthorBridgeman, Curtis
Position'Contract as Promise' at 30: The Future of Contract Theory

Contract as Promise, Charles Fried's modern classic, argues that contract law has a "moral basis" in the "promise principle." (1) It was written, of course, in response to scholars who foresaw the "Death of Contract." (2) According to them, it is a mistake to think of contract as a distinct domain of law, with a distinct foundation. Properly understood, contract is just an instantiation of the more basic category of tort, with the latter understood as law that requires persons who wrongfully cause losses to compensate their victims.

Contract-as-tort scholars made their point in different ways. Patrick Atiyah took a historical route, arguing that promising was only center stage in contract law for a brief period in the late-nineteenth and early-twentieth centuries, and has little to do with modern transactions. (3) "Relationalists" downplayed the importance of specific agreements and formal legal rules, instead highlighting the enforcement of extra-legal interpersonal norms. (4) Grant Gilmore combined these and other themes with a healthy dose of sarcasm, decrying the rules of classical contract law as barriers to justice. (5) Despite these differences, all subscribed to the idea that contract collapses into tort. As Fried put it so memorably, to these scholars, a breach of contract "is like a pit i have dug in the road, into which you fall. I have harmed you and should make you whole." (6) The fact that D harms P by breaking their deal rather than by breaking P's nose is of no consequence.

Against the contract-as-tort movement, Fried insisted that contract stands apart from tort because, unlike tort, it is built on promise. (7) He acknowledged that some courts had blurred the line between the two fields by, for example, mistakenly treating claims based on foreseeable detrimental reliance as contract claims. (8) But these decisions, he insisted, were mistakes at the margin that do not undermine the basic interpretive point that contractual obligations presuppose a promise in a way that tort duties do not. (9)

To emphasize the centrality of promise to contract was not enough, however, to fend off the contract-as-tort scholars. After all, they could concede that "contract" claims are claims for broken promises yet still insist that such claims fall within the larger category of tort. To deem harms caused by the failure to fulfill a promise as "breaches of contract" is no different--the argument would go--than assigning the name "battery" to intentional physical attacks or "slander" to spoken reputational attacks. A contract breach might be a distinctive kind of wrongful harming, but it is still a wrongful harming.

So Fried pushed further. Breaking a promise, he argued, is not merely one way of harming another. The utterance of a promise is not just an act akin to the deliberate movement of one's arm. it is a voluntary assumption of an obligation}10 To promise, under the right conditions, is to obligate oneself voluntarily to another. For Fried, it is the voluntary nature of promissory obligations that distinguishes contract from tort and other branches of private law. That promises stand at the root of contract also explains why contractual obligations are enforceable: "[S]ince a contract is first of all a promise, the contract must be kept because a promise must be kept." (11) The centrality of promise to contract in addition provides the key to understanding why contract law is, and should be, a pillar of our legal system. A liberal form of government does right by its citizens when it promotes individual choice. By enabling individuals credibly to commit themselves, contract law enables individuals to exercise their capacities as self-determining agents. (12)

We share Fried's judgment that contract is importantly distinct from tort. In what follows, however, we will begin with criticism. Specifically, we argue that the contract-as-promise thesis admits of two interpretations, that only one of these interpretations can generate a sharp distinction between tort and contract, and that Fried can only accept this interpretation at a significant cost to certain ambitions he has for his theory. After offering this critique, we turn to reconstruction, suggesting an interpretation of Fried's argument that, in our view, renders it both illuminating and highly plausible.

Our criticism will turn on a distinction between an individual's undertaking a moral obligation and her undertaking a legal obligation. (13) The question is this: Supposing that promises are the essence of contract, how should contract law deal with an agreement based on a promise that is meant to be morally binding but not legally binding? This question, we suggest, places Fried in a bind. if contract law is to be understood as a means of holding people to their promises, then it would seem that these promises should be legally enforceable, even though the parties to the contract agreed at the time of contracting that the promise is not to be legally enforced. if, by contrast, contract law is concerned first and foremost with enabling individuals to make the arrangements they wish to make, then presumably the law should not enforce such a promise.

Our guess is that, as between these two options, Fried would choose the latter and allow parties to avoid legal liability even as they assume promissory moral obligations. If that proves to be the case, however, then there is reason to doubt the fitness of the promise principle for serving as the moral basis of contract law, especially in a liberal society. At its core, the promise principle seems to stand for the idea that contract law is ready to enforce the solemn moral obligation that attends the serious business of a promise. Why, then, allow promisors to avoid being held to their moral obligations simply by specifying that their promises are not to be legally enforced? The moral obligation incurred by the making of a promise no longer seems important enough to provide the moral basis of contract law.

Even if the foregoing arguments have some force, there remains in Fried's deservedly influential book a deep insight into the relationship of contract to promise. The key, we believe, is to read the book as primarily offering a theory of contract interpretation. To emphasize the similarities between contract and promise is to observe that parties to contracts ordinarily understand themselves to be taking on the sort of commitments one takes on when making an ordinary promise outside of the contractual setting. Given this understanding, courts should read contracts to incorporate the everyday morality of promising unless there is good reason to conclude that a particular contract does not. in most cases, then, courts should enforce promissory morality at least in broad outline not because morality demands it, but because the agreement demands it. in this sense, promise really is central to contract law.

  1. CONTRACT LAW: POWER-CONFERRING OR DUTY-IMPOSING?

    H.L.A. Hart famously distinguished between two broad categories of legal rules: duty-imposing rules and power-conferring rules. (14) Duty-imposing rules are rules that apply to citizens whether the citizens wish them to or not. (15) The rules that define crimes such as murder and theft are perhaps the canonical examples of duty-imposing rules. By contrast, some rules confer a power on actors to effect legal change if and when they choose to invoke them. (16) Legislators have the power to enact laws so long as they do so in accordance with the rules of enactment; individuals can form corporations so long as they do so in accordance with formation rules; and individuals may marry or execute wills if they so desire if they follow the proper formalities. The law does not require individuals to form corporations, marry, or make wills, and indeed the law may be largely indifferent to whether anyone wishes to do so or not. But if individuals do wish to make these sorts of arrangements, the law provides a mechanism that empowers people to make them.

    Although Hart did not discuss the point in detail, he seems to have regarded contract law as mainly a set of power-conferring rules. (17) On this view, contract law empowers individuals jointly to create "legislation" that is specially tailored to their own circumstances. Randy Barnett likewise has described contract law as conferring on individuals a power to enact private legislation. (18) The position taken by Hart (if it is, in fact, the position he took) and Barnett is by no means uncontroversial. Contract-as-tort scholars obviously take the view that contract law imposes tort-like duties not to injure and to repair. Moreover, as Greg Klass has noted in a recent paper, it is not always easy to distinguish duty-imposing rules from power-conferring rules in controversial cases. (19)

    One way to explore the central claims of Contract as Promise is to ask what stance, if any, it takes on these issues. Because Fried focuses on the importance of freedom of choice in the liberal state, (20) and because he argues that contract law is different from tort law precisely because contract obligations are freely undertaken, (21) it is tempting to suppose that he regards contract law as containing primarily power-conferring rules. On the other hand, Klass plausibly attributes to Fried the view that contract law consists of duty-imposing rules. (22) In contrast to inheritance law--which allows people a nearly unconstrained choice as to how their property will be distributed upon death (23)--contract law, according to Fried, enforces moral obligations, and moral obligations do not "depend on fashion or favor." (24) Arguably, then, Fried's view is that contract is a mechanism for enforcing the moral duty to keep one's promises. If this view is correctly attributable to Fried, his theory of contract may best be understood as a theory that treats contract law as generating duty-imposing rules. (25)

    In assessing Fried's...

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