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1.1.1.1 A. Background copy

Original Creator: Kessler, Gilmore & Kronman Current Version: Kessler, Gilmore & Kronman
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A. Background

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The early development of what we now call contracts (or torts, for that matter) took place not in the King's courts at Westminster, but (leaving aside the Courts Christian)[11] in local courts: county, borough, and manor courts, courts of the fair and of staple.[12] The law developed by these courts provided for the protection of such transactions as sales, loans, bailments, and suretyship. Much of this law was "unsophisticated" customary law; however, some courts, particularly those of the great cities of London, Bristol, and York, developed a highly flexible commercial law (law merchant), a matter of no small consequence since England all through the Middle Ages was an important commercial country. The law developed by the courts of London, in particular, may have significantly influenced the law of the royal courts in medieval and Tudor times.[13]

3

The story of the growth of the common law in contract and elsewhere is the story of the expansion of the common law jurisdiction at the expense of other jurisdictions and the consequent development - whether by invention or reception - of a common law with which to regulate the newly acquired business.[14]

4

In the twelfth century the royal courts had already acquired jurisdiction over criminal and property law but had hardly begun to handle contracts. Glanvil, to whom tradition has attributed a treatise, "On the Law and Customs of the Kingdom of England" (c. 1188), informs us that the royal courts could not be troubled with a breach of "private conventions" (ch. X-8). Yet, in building up a system of feudal law, the royal courts inevitably had to protect many rights that would now arise out of contract but that then arose out of more permanent relationships, which we might call proprietary.[15] To quote Maitland, "the feeble law of contract [was] supplemented by a generous liberality in the creation of incorporeal things."[16] 

5

In the interest of a smooth administration, the techniques of dispensing royal justice became standardized in a formulary system. Royal justice was set in motion by "writs,"[17] obtained for a fee from the Chancellor's office, that received the plaintiff's complaint and authorized the courts to take his case. Gradually, common forms were established and the writs themselves became, according to Fitzherbert, the " 'fundamentals' on which the whole law depends.”[18] The process of standardization of writs resulted in a rigid and formal system of justice, which could only develop through judicial fictions and evasions and what Baker calls "jurisdictional shifts," the spread of one form of action to remedy the deficiencies of others.[19] Small wonder that the evolution of the law of contract was not an unbroken line of principle, for if the logic of the writs had been meticulously followed, the "development," in the words of Milsom, "would have been impossible."[20]

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In choosing the form of action with which to proceed in the royal courts, a plaintiff had to consider, with respect to each writ, the nature of the judicial process available, the remedy that could be obtained, the mode of proof called for, and the factual and formal requirements of the particular writ. Some forms of action were clearly more advantageous than others to a plaintiff in any or all of these respects. The evolution of the substantive law of contracts therefore has to be explored in terms of adjective law: the slow but steady extension of the forms of action most procedurally advantageous to the enforcement of private agreements.[21]

7

Covenant. Of the two older writs, debt and covenant, debt is the more ancient.[22] Covenant, however, as Milsom has said, represents "an elementary legal idea ... familiar to the modem mind." To the medieval lawyer the word covenant (Latin, conventio) meant agreement.[23] The writ of covenant, which became available in the royal courts "as a matter of course" in the thirteenth century,[24] held out the promise of a form of action applicable to all contracts. But the destiny of covenant lay in a different direction. By the late thirteenth or early fourteenth century the common law courts had imposed on the writ of covenant the requirement of a sealed instrument (a specialty) as evidence of the agreement.[25] "Simple" (informal) contracts were thus eliminated from the scope of the writ, the enforcement of such contracts being left to the local courts.[26] This shift in jurisdiction reduced the influx of cases from the local to the royal courts.[27]

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The writ of covenant was rarely used except in apprenticeship litigation.[28] Its unpopularity, however, cannot be attributed entirely to the requirement of a seal. Drawing up a specialty and affixing a seal was no "great chore,"[29] and, as we shall see, sealed instruments were very common, especially among the commercial classes. More probably, the demise of the writ of covenant was due to the fact that it had certain disadvantages when compared with debt, the next writ to be discussed: after 1352 the rigorous process of arrest or outlawry was available in debt but not in covenant.[30] Another explanation is that the remedy given by covenant was inadequate. Originally, the remedy may have been specific performance.[31] Eventually, however, a plaintiff suing in covenant could only recover damages for the wrong or tort of nonperformance. But damages for nonperformance were insufficient in many cases, since the plaintiff might not recover for consequential losses caused by the nonperformance. Thus, the losses occasioned by poor or tardy performance might not be compensated.[32] For example, a defendant whose failure to fulfill his promise to strengthen a river wall caused the plaintiff's land to be flooded and his crop to be lost had only to strengthen the wall to avoid liability in covenant.[33] The sealed instruments used by the commercial classes avoided this problem of inadequate damages by providing for substantial liquidated damages in case of nonperformance.[34] These instruments, known as bonds, were actionable in debt; they will be discussed in more detail in the next section.

9

Debt. The royal courts did not leave the enforcement of all informal contracts to the local courts for very long. As early as the twelfth century, the common law courts recognized the writ of debt, which could be used to enforce "real" contracts, in the terminology of the civilians. The writ of debt was originally used, for example, by a lender to recover money lent, by a buyer to recover specific goods or fungible goods from stock, by a seller to recover the purchase price of goods sold, etc. Later the writ of detinue came to be distinguished from the writ of debt, the latter being restricted to recovery of specific goods (or their value[35]), the former being used to recover a fixed sum in the remaining instances mentioned above and others. Tradition has it that detinue was based on property, on an owning, debt on a duty or an owing.[36] In the language of the controversial theory of Barbour, debt and detinue illustrate the distinction between obligation and property.[37]

10

The action of debt was not limited to informal contracts. "As anything that we should call contract was not of its essence. . . it could be used whenever a fixed sum, a sum certain, was due from one man to another.[38] There was, to use the traditional classification, debt on the record, debt on an obligation (when the creditor produced a deed or bond), and debt sur contract (when a creditor sued for a fixed sum owed under an informal agreement).[39]

11

According to Ames, "[a] simple contract debt, as well as a debt by specialty, was originally conceived of, not as a contract, in the modern sense, that is, as a promise, but as a grant.[40] Although the medieval lawyers did not emphasize the consensual nature of the debts actionable by the writ of debt, they were aware that in many cases a debt arising out of an informal. contract or a debt by specialty was the result of a voluntary agreement. The relationship between "contract," which gave rise to a writ of debt, and "covenant," which was the medieval word for agreement, was not lost on the legal profession of this period.[41]

12

The most striking example of the consensual nature of debt comes in the field of sales. A seller could sue in debt not only if he delivered the goods, but also if he was willing to deliver. For the seller, the contract had the effect of passing property in the goods sold to the buyer.[42] The buyer was in a different position. Unless there was an express agreement for credit, the buyer could not bring an action of debt (in the case of fungible goods) or detinue (in the case of specific goods) until he paid or tendered payment. The seller could withdraw from the contract until such time. The interesting aspect of this rule respecting buyers is that it was rationalized on the basis of the intent of the parties.[43]

13

Whatever the consensual aspects of the writ of debt may have been, promise was not of its essence. If, for example, a debtor defaulted in an installment, and therefore broke his promise to pay in a timely manner, the creditor generally had no recourse by the action of debt to recover the installment.  He had to wait in most cases until the last installment fell due and then sue for the entire debt. The breach of promise to pay on time was later redressed by the action of assumpsit.[44] The contractual debt itself was not considered to be based on promise. Debt lay to enforce an obligation or duty of payment arising out of a transaction re.[45] Thus, the remedy afforded by an action of debt was recuperative in nature. A successful plaintiff received the amount owed, plus damages for wrongful detention.[46] 

14

The recuperative nature of the remedy in debt may help to explain the statement frequently found in the old case law that debt sur contract presupposed a quid pro quo.[47] The requirement of a quid pro quo is the basis for the theory advanced by Ames and others that debt presupposed a half-performed bargain, and that medieval law recognized only two types of contracts: sealed and real (unilateral, half-performed) contracts.[48] Simpson has pointed out, however, that quid pro quo did not mean that one party had to perform his side of the agreement for the contract to be binding. As we have seen in the case of sales, wholly executory contracts were binding and actionable. In those cases, the quid pro quo meant simply that a reciprocity of exchange was required, a reciprocity that could be satisfied where a debtor-buyer had a reciprocal remedy against a creditor-seller for the goods sold but not yet delivered.[49]

15

In most cases, a defendant in an action of debt sur contract could elect com purgation , or wager of law, as the mode of trial The defendant, along with eleven others (or however many the court might designate), would swear that he owed or detained nothing.[50] This mode of trial, viewed today as having distinct advantages over jury trial for the debtor, may have enjoyed more popularity with creditors than one might expect.[51] Be that as it may, a prudent creditor rarely had to take the risk of a debtor successfully waging his law. Wager of law was unavailable if the plaintiff was able to introduce a sealed instrument or if the obligation had become a debt of recognizance. To be on the safe side, a creditor either insisted on a bond under seal containing a defeasance clause making the bond null and void when the debtor performed (in which case the creditor sued in debt, but, to use the traditional classification, on the "obligation"); or he refused to make an advance until a judgment (by default) against the prospective debtor had been obtained or a recognizance had been recorded on the plea rolls, often with the covenant that the sheriff could levy execution in case of default. A mercantile creditor could also have his claim recorded on a roll kept by the mayor of each important town, and could obtain speedy execution.[52]

16

In transactions of financial importance, the business community and its lawyers hit upon a most ingenious device to cope with the slow development of contract law, and to avoid wager of law and the arbitrariness of damage awards by juries. If the parties wanted to enter into what we now call a bilateral contract, they set up their agreement indirectly by the exchange of bonds: two independent unilateral contracts were used. A seller of land that had been sold at one hundred pounds, for instance, deliverd to the buyer a bond promising two hundred pounds in case of default. The buyer in turn delivered a bond for double the purchase price. These bonds contained defeasance clauses, typically written on the back; the bond became void on performance of the terms of the contract laid down in the sealed indenture.[53]

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Any kind of agreement (for example, large family settlements) could be cast in this mold. Penal bonds were quite popular even though the argument that the penal sum was excessive was unavailable, as was the defense of usury.[54] Contests about the performance of the conditions in the indenture, by contrast, went to the jury.[55]

18

These conditional bonds, which were the means of doing large scale business, were in use for a long time in both England and this country, and they involved some of the most important transactions coming before the central courts.[56] Their importance began to wane in the seventeenth century, however, when equity and common law courts began to show an increasing willingness to give relief against excessive bonds, a movement that culminated in the distinction between penalties and liquidated damages.[57]

19

Like covenant, debt never succeeded in becoming the principal means of enforcing contracts. It could not, because of its shortcomings with respect to informal contracts. Quid pro quo was rather narrowly defined, pleading rules were most complex, recoverable damages were apparently inadequate, debt did not lie against a debtor's executor, and the defendant in most cases was entitled to wage his law. Prudence dictated the use of formalities, but promisees were not always prescient or educated enough to avail themselves of the necessary forms, nor were formalities always convenient.

20

Assumpsit. Debt and detinue covered a very considerable area of informal contract law, the sale of goods, bailments and loans of money. Covenant was appropriate for the residue of promises. However, the development of these "personal actions" was stunted by formal requirements, technical rules, inadequate remedies, and antiquated modes of trial.[58]

21

Covenant, as we have seen, could not be used in suits at common law on informal agreements or on formal promises to do something; e.g ., promises to build a house or to convey land were unprotected.[59] As a result, it became increasingly frequent for there to be "just -claims" for which no remedy was available.[60]

22

So long as local courts adequately handled most contractual obligations, the need for an expanded royal jurisdiction was hardly felt. But the local courts were reluctant or unable to change their archaic procedures to accommodate the changing needs of society.[61] Furthermore, the drop in the value of currency due to inflation meant that more and more informal contracts fell within the jurisdiction of the royal courts,[62] all the more since the extensive role played by ecclesiastical tribunals in disputes over breach of faith had begun to decline, and by 1550 had disappeared completely.[63]

23

In the fifteenth century. the Chancellor began to intervene to fin the gaps left by debt and covenant. Equity granted specific performance on parol contracts and even entertained actions on the ground that at common law the defendant could wage his law.[64] During the reign of Henry VIII it came to be said that "a man shall have remedy in the Chancery for covenants made without specialty if the party have sufficient witnesses to prove the covenants."[65] This liberal attitude of the Chancellor toward contracts could not remain unnoticed; it doubtless gave encouragement to the common law courts to "remedy the defects of their own system."[66] This was all the more necessary since there was a phenomenal increase in the amount of litigation in the course of the sixteenth century due to the rise in population, the growth of industry and, according to the controversial theory of Coke, the increase of wealth by lay persons resulting from the dissolution of monasteries.[67]

24

One of the many problems facing the legal system was how to reform the writ system, i.e., how to construct another writ to do the work of the writs of debt and covenant (without being too conspicuous about it, for by the reign of Henry VIII the rule against double remedies had become a settled rule of law).[68] The form of action chosen to accomplish this task was trespass on the case,[69] and (to anticipate the future) by the sixteenth century a species of case, assumpsit, had acquired "its own identity" and was well on its way to supporting a law of consensual contract.[70] 

25

Assumpsit and Covenant. In the fourteenth century a plaintiff bringing an action of trespass on the case against a defendant for doing badly what he had undertaken to do, i.e., for misfeasance, would face the argument that he was using the wrong writ. "This sounds in covenant." But the plaintiff could not sue in covenant if he lacked a sealed instrument. Nor would a person in his position be likely to have formalized his agreement with the defendant. He might be a patient suing his surgeon for maiming his hand, a customer suing his smith for incompetently shoeing his horse, thereby causing its death, or a bailor suing a ferryman for overloading the ferry, causing it to sink and the plaintiff's goods to be lost.[71] Even if the plaintiff could have brought an action of covenant, "[i]t would have been useless to order [the defendant] to keep his covenant.”[72] The damage was done, and the plaintiff had been wronged.

26

In the course of the fourteenth century, the royal courts began to reject the defendant's argument that actions for negligent misfeasance of this sort should be brought in covenant and not case. At the time it was not asked whether the basis of the defendant's liability was negligence or breach of contract; it would be several centuries before the law would draw the distinction between tort and contract. It can be said, however, that the undertaking, the assumpsit, played an important (if not decisive) role in actions on the case for misfeasance.[73] If a carpenter undertook to build a house and did nothing, no action would lie without a sealed instrument. This was decided in 1400,[74] the courts drawing a distinction between misfeasance and nonfeasance. "A mere failure to perform cannot be anything but a matter of covenant."[75] The distinction was often difficult to make, and lawyers attempted to devise artful ways of getting around it; at times, courts would simply characterize a nonfeasance as a misfeasance.

27

Early on, plaintiffs successfully brought actions of assumpsit for nonfeasance against innkeepers and others who by virtue of their calling were required by the common law or custom to contract with the publicJ6 In other cases a plaintiff might allege that he had been deceived by the' defendant's promise. The allegation of deceit, borrowed from the law of warranty developed in the mercantile courts, was first successfully used in cases against attorneys who had taken fees from both .sides, or revealed counsel to adversaries. These were also public offenses. An action of assumpsit in which deceit was alleged was also held proper in a case against a counsellor who had agreed to try to procure a piece of land for his client, but who instead bought it himself and sold it to a third party.[76] A vendor was then held liable in assumpsit for conveying land to a third party, land which had been promised to the plaintiff and for which he had prepaid.[78] The allegation of deceit, which apparently meant that the promisee was deceived and not necessarily that the promisor was deceitful, became increasingly popular in the sixteenth century.

28

The distinction between misfeasance and nonfeasance was finally abandoned in the sixteenth century with the case of Pickering v. Thoroughgood (1533).[79] This "momentous development" posed problems, however. Pickering itself was a case of a buyer suing a seller in case for failure to deliver malt that had already partially been paid for. The problem posed by this and other cases was that, in theory at least, the plaintiff already had an action against the defendant in debt sur contract. As we have mentioned, there was a rule against double remedies. A second problem, posed by all nonfeasance cases, was in drawing a line between enforceable and unenforceable promises. Without the "doctrine of nonfeasance," the potential existed for the enforcement of any promise or undertaking. The first problem was eventually resolved in Slade's Case.[80] The second problem was answered with the development of the doctrine of consideration.[81]

29

Assumpsit and Debt. The story of assumpsit's encroachment on the domain of debt is long, complex, and controversial. Its details need not detain us here; a few observations must suffice.[82]

30

If a debtor promised to payoff an existing debt, a creditor might argue that assumpsit should lie on the basis of the promise. The creditor's case would be enhanced if, relying on the promise, he delayed in suing for the debt, or was otherwise injured. Of the two great royal courts, King's Bench and Common Pleas, King's Bench for various reasons permitted a creditor to bring assumpsit to collect a debt, and was not particularly concerned about the promise made by the debtor, so long as the debt was proved. Common Pleas, a more conservative court with a larger interest in the preservation of the writ of debt,[83] insisted on proof of the promise, and insisted as well that the promise be supported by some consideration other than the debt itself. This conflict between the two courts came to a head in Slade's Case,[84] where it was decided that the King's Bench view should prevail.

31

In Slade's Case, plaintiff brought an action on the case in King's Bench for the purchase price of wheat and rye that he had sold the defendant at the defendant's special instance and request. According to the pleadings, the defendant then and there promised to pay sixteen pounds. The defendant disputed not the money owed but the availability of assumpsit. The jury found that the sale had taken place, but "there was no [other][85] promise or undertaking other than the said bargain." The purpose of the special verdict was probably to determine whether case could lie on a contract (debt) in the absence of an express promise to pay. This issue was argued for over five years by the best lawyers of the day, among them Francis Bacon for the defendant and Edward Coke for the plaintiff. According to Coke, the problem was considered by "all the judges of England" in the Exchequer Chamber and eventually the King's Bench view triumphed.[86] 

32

After Slade's Case, the term "contract" lost its intimate connection with debt.[87]  The availability of assumpsit in place of debt marked the end of wager of law for all practical purposes,[88] the action of assumpsit being tried before a jury. Although the demise of wager of law might seem to be a step forward from the modern point of view, it should be kept in mind that jury trial in the sixteenth century was a much cruder means of determining truth than it is today. The problem of perjured oath helper-s was now replaced by the problem of perjured jurors, or of jurors who had a far greater freedom in deciding cases than they have today.[89] Slade's Case has therefore been cited as a contributing factor in the passage of the Statute of Frauds in 1677, which required a writing for transactions having large consequences for the parties.[90]

33

Another possible advantage of assumpsit was that, in contrast to debt, special damages caused by nonpayment were recoverable, e.g., losses' caused by a rise in the market and other losses suffered by plaintiff in his business.[91] Whatever the availability might have been, before or even during the sixteenth century, of damages in debt for losses due to non- payment, a frequent argument in favor of the action of assumpsit was that it allowed recovery of such damages.[92] Indeed, in theory at least, a plaintiff suing in assumpsit could only obtain damages;[93] the action was not for the recovery of debt, though Slade's Case decided that the "whole debt" should also be awarded in addition to damages, so that an action in assumpsit would bar a later action in debt.[94] Slade himself recovered sixteen pounds damages, which iust happened to be equal to the debt owed.[95]

34

Whatever the mysteries surrounding the genesis, historical soundness, and meaning of Slade's Case,[96] one thing is certain: after it, debt sur contract became obsolete and assumpsit (case) became almost the sole remedy for contracts by parol that did not involve a bailment.[97] In this sense Slade's Case marks a break with the past and, according to some authors, the beginning of the modem law of contracts.[98] 

35

Elaboration of Assumpsit: The Common Counts. However important a step Slade's Case was towards the unification of contract law, the process was not complete. Assumpsit had come to be divided into two classes: special and indebitatus assumpsit. The distinction between the two was in the manner in which they were pleaded; in indebtitatus assumpsit the plaintiff merely alleged a debt in a certain sum and a promise to pay, while in special assumpsit all the detail of the underlying transaction had to be set out specifically.[99] Both types of assumpsit could be used in place of the action of debt after Slade's Case, though special assumpsit harbored many teclmical traps for the careless pleader and indebitatus assumpsit was frequently attacked as invalid.[10] However, because of the opposition to general indebitatus assumpsit, and in order to avoid the pitfalls of faulty pleading in special assumpsit, the legal profession after Slade's Case revived the indebitatus count, but with a new twist.[101] Since after Slade's Case there were still a few transactions that could only be enforced by the action of debt,[102] the cautious pleader would not simply plead that the defendant was indebted to the plaintiff; he had to impress upon the court that the debt arose out of a simple contract and not out of a transaction within the exclusive jurisdiction of debt.[103] So, to be on the safe side, lawyers adopted the practice of pleading that the defendant was indebted for the price of goods sold and delivered, for money lent, for work and services performed, etc.[104] These became the so-called common counts, embodying and standardizing everyday transactions that could be enforced by assumpsit The use of the common counts had its disadvantages for the defendant, however, particularly since the various counts could be and were combined in the pleadings so that the defendant could not know until trial what evidence was needed to contest the plaintiff's allegations.[105] Still, the common counts survived until the pleading reforms of the nineteenth century.[106]

36

Implied Contracts. Indebitatus assumpsit proved to be a highly flexible device for enforcing obligations. A central feature of that form of action, and one that accounts for its flexibility, was the implied promise. When indebitatus assumpsit was brought in lieu of debt, the promise, though alleged, did not have to be proved. The idea of an implied promise permitted. the expansion of indebitatus assumpsit into areas where the implied promise could only be a fiction. In the eighteenth century, the areas covered by indebitatus assumpsit had expanded so far that Lord Mansfield in Moses v. Macferlan, 2 Burr. 1005 (1760), could make the assertion that an action of indebitatus assumpsit would lie "whenever natural justice and equity required a defendant to return money."[107]

37

Debt could only be brought to recover a sum certain. There were, however, situations in which parties had failed to fix the amount due. A victualer may have supplied food or a servant services without coming to an agreement beforehand about payment. Since debt was unavailable to recover a reasonable payment,[108] indebitatus assumpsit, it was thought, was also unavailable.[109] The plaintiff did, however, have an action in assumpsit on a quantum meruit or quantum valebat. Thus began the evolution of the implied (in fact) contract, as contrasted with the express contract.[110] It may be that quantum meruit and quantum valebat grew up in connection with claims by those who were bound by law to provide services, e.g., the common carrier or innkeeper.[111] Be that as it may, sometime after the seventeenth century it came to be held that indebitatus assumpsit lay on a quantum meruit or quantum valebat.[112]

38

Indebitatus assumpsit eventually came to be used to enforce other obligations that were not strictly contractual at all. This category of civil liability in modern terminology is called quasi contract, an anglicization of the Roman category of obligation quasi ex contractu. Quasi contracts are contracts implied in law, and unlike contracts implied in fact, which are genuine contracts that differ from express contracts only in that the promise is circumstantially proved, quasi contracts are not contracts at all.

39

Instances of what we now call quasi-contractual liability were known to the common law (and to equity) long before the advent of indebitatus assumpsit. Where, for instance, a bailiff had failed to account for rents collected, or a person had neglected to remit the proceeds of goods sold for the account of another or had failed to pay over money received from a third person for another's use, the injured party was accorded protection by the "cumbersome" action of account.[113] Gradually the action of account was replaced by the action of debt in cases where the plaintiff could allege and prove a sum certain due him. After Slade's Case, indebitatus assumpsit naturally expanded to cover these areas of arguably non- consensual liability. Under the name of the action for money had and received, indebitatus assumpsit became available for the recovery of money paid or received by mistake or because of improper conduct or on a consideration that had failed.[114] By an expansion of the action of quantum meruit (valebat), indebitatus assumpsit could be used for the recovery of the value of goods or services rendered to a party guilty of breach of contract or under the mistaken assumption that there was a contract.[115]

40

In the nineteenth century, treatise writers on the common law came to realize, under the influence of civilian writers, that indebitatus assumpsit included more than contractual obligations[116] and that a court, when allowing recovery under an implied-in-Iaw contract, was merely pretending "that there was a contract because it thought there ought to be recovery."[117] The English courts, however, failed to pick up on this suggestion to acknowledge the difference between implied-in-fact and implied-in- law contracts.[118] It was not until 1937 that Lord Wright in Brooks Wharf and Bull Wharf Ltd. v. Goodman Bros., 1 K.B. 54, introduced to the case law the textbook learning of the nineteenth century, although there is evidence that the textbook learning was tacitly recognized in many nineteenth-century cases.[119]

41

Consideration. When at common law assumpsit came to be used to enforce informal parol promises problems arose. No legal system can afford to enforce "any old promise," as Corbin put it. Different legal systems have developed different techniques for separating the sheep from the goats; yet however different the techniques used by various legal systems to accomplish this end, they can all be traced back to a "common stock of ideas prevailing in medieval Western Europe," and in particular to the idea of reciprocity,[120] a concept that has influenced the development of the law not only in central Europe, but also in England.

42

In England, the consideration doctrine was gradually developed to set limits to the enforcement of promises. Its early history is still controversial and so is its genealogy. The question has often been asked whether it is an "indigenous product" or the adaptation of notions coming from civil, canon and natural law fitted into the framework of the writ system. Simpson, for example, relates the early beginnings of consideration to the law of uses of land and through it to the canon and civil law. Simpson, chs. IV-VII; Simpson, Historical Introduction at 89; Milsom at 356-360. This controversy, however, need not detain us.

43

Roughly speaking, it is sufficient to point out that English law took the course of protecting the promisor against the consequences of unguarded utterances made without consideration, i.e. deliberation. Strangeborough v. Warner, 4 Leon. 3 (1589). If, on the other hand, the promisor had begun to perform his promise, for instance to repair a roof but had abandoned the job in midstream, the courts did not find the problem of recovery insuperable. Tort (trespass) and later contract (assumpsit) were expanded to protect the promisee who had lost his cattle due to defendant's misfeasance. But the problem became really serious if the defendant  had done nothing at all. "Not doing is no trespass." Milsom, [1954] Cambridge L.J. 105. But this solution became intolerable, and violated the sense of common decency and fairness, particularly if the promisor had received full or partial payment or other recompense. The changing attitude of the case law in favor of liability can be traced back as far as a remark of Fineaux, C.J., referred to by Frowicke, C.J.C.P., in Orwell v. Mortoft, supra note 46.

44

When the common law inherited a large part of the business of the iocal used by courts, the local it was courts only natural in deciding for it contract to take over cases.[121] Furthermore, of reciprocity the common law courts could not remain unaware of the existence of a link between the notion of consideration and the idea of a quid pro quo used in explaining and justifying the liability of the borrower to his lender in debt. The borderline between these ideas was, for a while at least, rather fluid, as some of the misfeasance cases which use quid pro quo indicate.[122]

45

Gradually the various strands of liability came together and found an untidy alliance in the technical meaning of consideration, defined as a detriment to the promisee or a benefit to the promisor. Stone v. Wythipol, Cro. Eliz. 126, 1 Leon. 113, Owen 94 (1588): "Every consideration that doth charge the defendant in an assumpsit must be to the benefit of the defendant or charge to the plaintiff and no case can be put out of this rule." This was all the more natural since there is hardly a situation where a benefit to the promisor is not at the same time a detriment to the promisee (though the reverse is not necessarily true). (Manwood v. Burston, 2 Leon. 203 (1587). Simpson suggests a "more helpful way of looking at the decisions" and urges us "to distinguish between detriment consideration, benefit consideration and meritorious consideration as three different categories." Simpson at 489.

46

Consideration aided the emergence and recognition of "pure" executory bilateral contracts. Strangeborough v. Warner (1589) - a promise against a promise will maintain an action on the case - reflects existing case law.[123] It was the task of succeeding generations to amplify and refine the consideration doctrine.

47

 

48

Notes:

49

[11] The role of the ecclesiastical courts in the enforcement of private agreements should not be underestimated. Helmholz, Assumpsit and Fideii Laesio, 91 L.Q. Rev. 106 (1975); 2 Pollock & Maitland at 200-203.

50

[12] Fifoot, ch. 13 (1949). R. Henry, Contracts in the Local Courts of Medieval England (1926)' J. J. Dawson The History of Lay Judges, 178-186 (1960). On law merchant and the merchant's court , see F. R. Sanborn, Origins of the Early English Maritime and Commercial Law (1930); R. Speidel, R. Summers & J. White, Commercial and Consumer Law 647-648 (2d ed. 1974); Baker, The Law Merchant and the Common Law Before 1700, 38 Cambridge L.J. 295 (1979).

51

[13] Milsom at 343 and passim.

52

[14] Simpson, Historical Introduction, at 2. The essay by Francis, The Structure of Judicial Administration and the Development of Contract Law in Seventeenth Century England, 83 Colum. L. Rev. 35 (1983), is an attempt to go beyond “doctrinal legal history” traditionally used and "to link law to the dynamics of common law administration. (See p. 29 infra.) Simpson at 1-16 and L. Fuller & M. Eisenberg, Basic Contract Law, at 40-17 (4th ed. 1981) contain admirable overviews of the evolution of contract law.

53

[15] Milsow's Introduction to Pollock & Maitland at Iii. See also I W. H. Page, The Law of Contracts II (1920):

54

In place of contracts for work and labor of the modern law, we find land held by tenure of rendering services for the overlord. At a time at which interest could not be recovered, the favorite means by which a landowner borrowed money was by granting a lease for years at a nominal rent in consideration of present payment of money…Contracts for support in money or in kind were treated as grants or realty and this theory was extended even to cases in which no charge was made upon any corporeal realty to secure payment.

55

[16] The quotation is taken from Milsom's introduction to Pollock & Maitland at liii.

56

[17] For a description of the writs, see F. Maitland, Forms of Action at Common Law (1909, repr. 1962).

57

[18] Baker at 52, citing the Preface to De Natura Brevium (c.1530); see also id. at 49.

58

[19] Baker at 263.

59

[20] Milsom at 249.

60

[21] 2 Pollock & Maitland at 568. "The subsequent development of forms will consist almost entirely of modifications of a single action, namely, Trespass, until at length it and its progeny - Ejectment, Case, Assumpsit, Trover - will have ousted neary all the older actions." Id. at 564.

61

[22] Simpson at 9.

62

[23] Milsom at 246.

63

[24] Simpson at 9.

64

[25] Simpson at 10·11. This made all the more sense since the parties could not testify. As a result the word "covenant" eventually lost its meaning as "agreement"; indeed the very idea that an agreement could be the basis of an action got lost. Covenant came to mean a formal executory contract under seal. Milsom at 248-249.

65

[26] Provided the claim was for less than 40 shillings, a sizable sum before the decline in the purchasing power of money resulting from the influx of silver from the New World. Milsom at 60, 240, 241; Beckerman, The Forty Shilling Jurisdictional Limit in Medieval English Personal Actions, Legal History Studies 110 (D. Jenkins ed. 1972). See further p. 29 infra.

66

[27] Milsom at 65; sce also id. at 244-246; Baker at 265, 266; Simpson at 10-13.

67

[28] Milsom at 251-252.

68

[29] Simpson at 90.

69

[30] Milsom at 252.

70

[31] Simpson at 13-14.

71

[32] Milsom at 252, 326-328; Baker, Introduction at 264 et. seq.

72

[33] The example is taken from Milsom at 252.

73

[34] See also Simpson at 117 for the procedural advantages of debt sur obligation over covenant.

74

[35] For a discussion of the splitting of the composite writ of debt-detinue, see Fifoot at 217.

75

[36] Baker at 267, 2 Pollock & Maitland at 206.

76

[37] W. T. Barbour, The History of Contract in Early English Equity 26-28 (1914). See Simpson at 75 for a criticism.

77

[38] 2 Pollock & Maitland at 210.

78

[39] See Jackson, The Scope of the Term "Contract," 53 L.Q. Rev. 525 (1937). The word "contract" was intimately connected with the action of debt until after Slade's Case (discussed infra p. 32), while the scope of the action of debt was wider than what we now call contract. A penalty imposed by statute, for instance, could be recovered in debt. Lawyers in describing this phenomenon frequently spoke of contracts-in-law. ld. at 529. See also 2 Pollock & Maitland at 204.

79

[40] J. B. Ames, Lectures on Legal History and Miscellaneous Legal Essays 150 (1913); Simpson at 79-80.

80

[41] Simpson at 188.

81

[42] Milsom, Sale of Goods in the Fifteenth Century, 77 L.Q. Rev. 257, 282-284 (1961); Simpson at 161-J64; Stoljar, A History of Contract at Common Law 27 (1975) (maintains that bargain and sale remained a real eon tract until the advent of assumpsit); Francis, supra note 14, at 79-80.

82

[43] Simpson at 164-169; see also Barton, Review of Simpson, 27 Toronto L. Rev. 373, 375 (1977), referring to the "eccentric" view of Brian, C.J. in Y.B. Pasch. 17 Edw. IV, f. 1, pl. 2 (1478), and Y.B. Hil. 18 Edw. IV, f. 21, pl. 1 (1479), that property passed to the buyer immediately on sale even when credit was not given, a view that passed into the law of sales in the nineteenth century. See Blackburn, Contract on Sale 196 (1845).

83

[44] Simpson at 66-68.

84

[45] Baker at 267.

85

[46] The measure of damages in debt is a matter of controversy. Frowicke, C.J.C.P., in Orwell v. Mortoft, Y.B. Mich. 20 Henry VII, f. 8, pI. 18, Keilway 69, 72 (1505), argued that a plaintiff buyer could only receive back his down payment in an action of debt against a defaulting seller. See Stoljar, supra note 42, at 40-41(1975). Cases do exist,  however, where the plaintiff suing in debt obtained substantial damages for wrongful detentlon. See Wolf v. Meggs, Cm; Eliz. 545, 78 Eng. Rep. 70 (Q.B. 1597); McGovern, The Enforcement of Informal Contracts in the Later Middle Ages, 59 Calif. L. Rev. 1145, 1161 (1971); 2 Pollock & Maitland at 215.

86

[47] Mervyn v. Lyds, Dyer 9OA, 73 Eng. Rep. 195 (1553); "quid pro quo is necessary to every contract." See Simpson at 193-194.

87

[48] See generally Ames, supra note 40, Lecture Vlll (1913), and Fifoot, ch. 10.

88

[49] Simpson at 194-195; Baker, Review of Atiyah, 43 Cambridge L.J. 467, 468 (1980). On the development of "pure" executory contracts in assumpsit, see Baker, id., al 467, 468; note 123 infra; Simpson at 459 et seq.

89

[50] Simpson at 137 et seq.

90

[51] T. F. T. PJucknett, A Concise History of the Common Law 116, 647 (5th cd. 1956); Simpson at 139-140.

91

[52]] Plucknett, supra note 51, at 391; Thorne, Tudor Social Transformation and Social Change, 26 N.Y. U. L. Rev. 10, 19-20 (1951); Simpson at 140-144.

92

[53] Milsom at 250-251; 2 Pollock & Maitland 213 et seq.; Simpson at 90-112.

93

[54] Simpson at 113-117. On usury see generally J. T. Noonan, The Scholastic Analysis of Usury (l957); R. Tawney, Religion and the Rise of Capitalism (l926); R. Tawney's Introduction to T. Wilson, A Discourse upon Usury (1925); B. Nelson, The Idea of Usury (1949).

94

[55] Simpson at 101. The law of conditions was developed in connection with conditional bonds. See Kingston v. Preston, infra p. 979.

95

[56] Simpson at 88; Baker at 270.

96

[57] Simpson at 118-125; Baker at 271. For the American experience, see Horwitz at 167-170.

97

[58] Simpson, Introduction at 3.

98

[59] Baker, 2 Spelman’s Reports, 94 Selden Society 51-53 (1978).

99

[60] Milsom at 342-343.

100

[61] Simpson, Introduction at 3, 4.

101

[62] Baker, supra. note 59.

102

[63] Id.

103

[64] Helmholz, supra. note 11, at 426-428.

104

[65] Baker at 272-273. Simpson, Historical Introduction, at 4. For details of the theory of contracts developed by Chancery, see Barbour, supra. note 37, ch. 4. The competition of Chancery is alluded to in Y.B. Mich. 21 Hen. VII, f. 41, pl. 66 (1506).

105

[66] According to the thesis developed by Francis (supra. note 14), the judiciary and the legal profession had a substantial interest, pecuniary and otherwise, in preserving the existing structure of adjudication. To do this, the caselaw capacity of the court system had to be maximized. An administrative structure emerged that conserved judicial energy by permitting delegation of function and at the same time facilitated tight judicial control over the delegated task. This "controlled delegation system" strongly influenced the development of procedural and substantive contract law, e.g., the form of pleading, the law of evidence, the roles of judge and jury, the law of conditions and of substantial performance, and the law of damages.

106

[67] Francis, supra note 14, at 41 et seq. See further Milsom at 60·81.

107

[68] Baker, Introduction at 76-77.

108

[69] Trespass (Latin, transgressio) meant wrong, and trespass on the case gave a plaintiff damages as compensation for the wrong done to him. The development of trespass on the case in the fourteenth century, which represented a relaxation of a jurisdictional boundary that barred royal courts from entertaining suit for wrongs other than those alleging force and arms (vi et armis) or a breach of the king's peace (contra pacem regis), need not detain us here. For details of the controversial origins of the action on the case, see Milsom at 244 et seq.; P1ucknett, Case and the Statute of Westminster II, 31 Calif. L. Rev. 778 (1931); Holdsworth, Note, 47 L.Q. Rev. 334 (1931);Landon, The Action on the Case and the Statute of Westminster II, 52 L.Q. Rev. 68 (1936); Dix, The Origins of the Action of Trespass on the Case, 46 Yale L.J. 1142 (1937); A. K. Kiralfy, The Action on the Case (1951); Baker at 58-59.

109

[70] Simpson at 199, 273, 274.

110

[71] See Simpson at 203-204.

111

[72] Baker at 274. On the limitations to the remedy in covenant, see p. 24 supra.

112

[73] Simpson at 207.

113

[74] Walton v. Brinth, Y.B. Mich. 2 Hen. IV, f. 3, pl. 9; Fifoot at 91.

114

[75] Milsom, Reason in the Development of the Common Law, 81 L.Q. Rev. 496, 507 et seq. (1965).

115

[76] In Y.B. 21 Hen.VI, f. 55, pl. 12 (1443), a judge observes:

116

If I'm riding on the highway and I come to a village in which a smith lives, who has sufficient stuff to shoe my horse, if my horse has lost a shoe and I request him to shoe him at proper time, and I offer him sufficient for his labor, and he refuses, and if my horse is lost for want of shoes, and by his default, I say that in that event, I will have trespass on the case.

117

See also Baker, supra note 59, at 262 et seq.

118

[77] Somerton's Case, Y.B. Hil. 11 Hen. VI, f. 18, pl. JO (1433). See Simpson at 253, Baker at 278-279.

119

[78] Doige's Case, Y.B. Trin. 20 Hen. VI, f. 34, pI. 4 (1442), 51 Selden Society 97 (Hemmant); Simpson at 255 et seq.

120

[79] Spelman's Reports, 93 Selden Society 4,5 (1977); 94 Selden Society 247; also given in Simpson at 608.

121

[80] 76 Eng. Rep. 1072,4 Co. Rep. 91a, Yelv. 20; Moo. K.B. 433 (K.B. 1602).

122

[81] On consideration and nonfeasance, see BaKer at 279 et seq.; Simpson at 271-272. On consideration in general, see p. 37 infra and the introduction to Ch. 3, §7.

123

[82] For more details, consult Baker, Slade's Case; Simpson at 289 et seq.; Baker at 282 et seq.; Baker, Introduction at 275 et seq.; Baker, Dark Age at L

124

[83] The popular explanation for the reluctance of Common Pleas was jealousy of its monopoly over debt cases. Although Common Pleas in theory had a monopoly over cases in debt in practice King's Bench could entertain such suits by means of a fiction involving the Bill of Middlesex. Moreover, Common Pleas itself had a general jurisdiction permitting it to entertain assumpsit actions. Thus, Common Pleas would benefit by an expansion of assumpsit. The modern explanation for the position taken by Common Pleas is that judges of that court were simply more conservative in outlook See Simpson at 294.

125

[84] 4 Co. Rep. 91b, 76 Eng. Rep. 1074; Yelv. 21,80. Eng. Rep. 439, Moo. K.B. 433,29 Eng. Rep. 677. For a discussion of Slade's Case and its background, see Baker, Slade's Case; Baker, Introduction at 275; Baker, Dark Age at 4; Simpson at 292 et seq.; Milsom at 339-353.

126

[85] We have borrowed the insertion from Milsom at 303.

127

[86]The Exchequer Chamber referred to here was not the newly created statutory court, but the older, informal Exchequer Chamber consisting of common law judges. Baker. Slade's Case at 225.

128

[87] See note 39 supra.

129

[88] Wager of law was not abolished until 1832.

130

[89] Baker, Slade's Case at 230; Simpson at 298-299.

131

[90] Stoljar, supra note 42, at 85.

132

[91] On the controversy surrounding the measure of damages in debt, see note 46 supra.

133

[92] See the argument of Frowicke, C.J.C.P., in Orwell v. Mortoft, Y.B. Mich. 20 Hen. VII, f. 8, pl. 18, Keilway 69, 72 (1505).

134

[93] MiIsom at 353.

135

[94] 76 Eng. Rep. 1072, 1074,4 Co. Rep. 91a, 92b, YeJv. 15, Moo K.B. 433 (K.B. 1602).

136

[95] Baker, Slade's Case at 221 n. 45 (1971). Slade had asked for forty pounds. Kiralfy, supra note 69, at 228-229.

137

[96] Consult the sources cited in note 82 supra.

138

[97] On bailment, see Simpson at 299.

139

[98] Baker at 287.

140

[99] A plea in special assumpsit had to set out all the facts necessary to explain the intention of the parties and the nature of the transaction, plaintiff's performance of all he was bound to perform, defendant's nonperformance or breach of contract and plaintiff's damages. Even the Latin had to be impeccable (Gardner v. Fulford, 83 Eng. Rep. 369, 1 Lev. 204 (1688). See generally, Simpson at 301-307.

141

[100] Simpson at 308.

142

[101] Milsom at 354; Baker, Slade's Case at 214; Luecke, Slade's Case and the Origin of the Common Counts (pt. 3), 82 L.Q. Rev. 81, 91 (1965); Simpson at 309-313.

143

[102] For example, an action to recover rent, or by specialty, or by record. See Simpson at 299-300.

144

[103] Luecke, supra note 101.

145

[104] H. J. Stephen, A Treatise on the Principles of Pleading in Civil Actions 312 (1824). E. Bullen & M. Leake, Precedents of Pleadings 35 (3d ed. 1868), contains a specimen and a list. It is now assumed that Slade's Case did not deal with indebitatus assumpsit. See Simpson, The Place of Slade's Case in the History of Contract, 74 L.Q. Rev. 381, 384 (1958), and his change of mind in his book, Simpson at 305 n.2.

146

[105] The Baker's Case of Gray's Inn v. Occould, 78 Eng. Rep. 113, Godbolt 186 (C.P. 1612); Luecke, supra note 101, at 92.

147

[106] Fifoot at 370.

148

[107] Simpson, Historical Introduction at II.

149

[108] Young and Ashburnham's Case, 3 Leon. 161,74 Eng. Rep. 606 (1587); p. 146 infra.

150

[109] Simpson at 497.

151

[110] Simpson at 496-499.

152

[111] The Six Carpenters' Case, 8 Co. Rep. 146,77 Eng, Rep. 695 (1610).

153

[112] Simpson at 499.

154

[113] Fifoot at 365 et seq.; Simpson at 499 et seq.

155

[114] Simpson at 494-495; Fifoot at 364 et seq.

156

[115] In the last mentioned illustration, recovery was regarded as sufficiently similar to the action of quantum meruit (quantum vale bat), available for the enforcement of an implied-in-fact contract to merit the same label. As a result the tenn quantum meruit acquired a double meaning and covered both contractual and quasi-contractual recovery. P. Winfield, The Province of the Law of Tort 157 et seq. (1931); Martin v. Campanaro, p. 178 infra.

157

This triumph of indebitatus assumpsit did not mean, however, that special assumpsit had become superfluous; it was still indispensable for the enforcement of contracts executory on either side and for the recovery of damages. S. Warren, Introduction to Law Studies 486 et seq. (2d ed. 1845).

158

[116] Indebitatus assumpsit traditionally required the allegation of a promise to pay at plaintiff's request. The promise would be purely fictitious in the case of an implied-in-law contract. Nonetheless, liability in quasi-contract was rationalized as contract liability. 3 Blackstone, Commentaries 155 et seq. (1768).

159

[117] I. Stone, Legal Systems and Lawyers' Reasonings 260 (1964) contains an interesting discussion of the technique of "circuitous reference" involved here. The nature of quasicontractual liability was clearly understood by Lord Mansfield. who, in the celebrated case of Moses v. Macferlan, 2 Burr. 1005 (1760), attempted to develop its general theory within the framework of the action for money had and received "if the defendant be under an obligation, from the ties of natural justice to refund, the law implies a debt, and gives this action indebitatus assumpsit, founded in the equity of the plaintiff's case, as it were upon a contract ('quasi ex contractu’ as the Roman Law expresses it)." For the fate of this attempt, see Lord Wright, Sinclair v. Brougham, 6 Cambridge. L.J. 305 (1938); J. Dawson, Unjust Enrichment 10 (1951). According to Lord Justice Scrutton, "the whole history of this particular form of action has been what I may call a history of well-meaning sloppiness of thought." Holt v. Markham, [1923] 1 KB. 504, 513. In this country the Restatement of the Law of Restitution, prepared by the American Law Institute, has undertaken to replace the "vague jurisprudence" of unjustifiable enrichment by a detailed enumeration of the typical fact situations in which the remedy is available; its provisions should be consulted in addition to the pertinent sections of the Restatement of Contracts. A Restatement Second of Restitution is now in preparation.

160

[118] Atiyah at 482. In this country the courts were quicker to pick up on the distinction. See Hertzog v. Hertzog. infra p. 147, which is referred to in 2 Kent, Commentaries 450 n.1 (Holmes 12th ed. 1873) (no clear-cut distinction is drawn in earlier editions).

161

[119] Atiyah at 482 et seq.

162

[120] Barton, Early History of Consideration, 85 L.Q. Rev. 372. 390 (1969); Baker, Introduction at 257 et seq.

163

[121] Milsom, supra note 58, at 323.

164

[122] Barton, supra note 120, at 374.

165

[123] Barton, supra note 120, at 390; Baker, Introduction at 292 et seq.

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June 02, 2014

1.1.1.1 A. Background

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