3.13.1.1 The Gratuitous Noncommerical Promise Introduction | Kessler, Gilmore & Kronman | September 12, 2012

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3.13.1.1 The Gratuitous Noncommerical Promise Introduction

by Kessler, Gilmore & Kronman
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Common and civil law are agreed that gifts, i.e., transactions with the intention of gratuitously enriching another, present special problems. "We live in a world in which self interest is the measure of our actions."[145] "It is not from the benevolence of the butcher, the brewer or the baker," to quote Adam Smith, "that we expect our dinner, but from their regard to their own interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our necessities but of their advantages." Wealth of Nations 24 (Modem Library ed. 1937).

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In such a system a high value is assigned to exchange transactions. Society must protect these transactions to safeguard the existing division of labor. Ballantine, Mutuality and Consideration, 28 Harv. L. Rev. 121, 134 (1914). Gifts fall into another human sphere, the realm of altruistic activities, and have sometimes been called "sterile" transactions on the grounds that they do not tend to promote an increase in public wealth.[146] But it has been pointed out in reply that a gift must make the donor happier (or else he would refrain from making it) and therefore necessarily increase the total happiness or utility of the parties, just as an exchange transaction does.[147] In addition, "gifts have a wealth-redistribution effect, and taken as a class probably redistribute wealth to persons who have more utility for money than the donors. . . ."[148]

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An exhaustive list of reasons for the traditional reluctance to enforce gift promises is not possible. A few examples may suffice. Such promises are often made impulsively and with little reflection. The ingratitude of the donee may later cause the donor to regret his promise, as may a change in the donor's circumstances. There is also a risk that the donor was the victim of fraud or undue influence. The administrative cost of determining the existence of an informal gift promise may be great, and the possibilities of error substantial. It has also been pointed out that extrajudicial sanctions, as well as the solicitude of the donor for the donee's interests, diminish the likelihood that the gift promise will be broken for no reason, thus making judicial intervention less necessary.[149] Finally, it has been argued that legal enforcement either would decrease the quantity of donative promises, or would have little effect on the accuracy and reliability of such promises. In the former instance, the donee would, it is argued, prefer to bear the risk that the donor might break his promise. In the latter instance, legal intervention would be unlikely to discourage rash promises that induce injurious reliance since social factors frequently work against the promisor's placing too many restrictions on his promise in the first place.[150]

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It is not surprising that everywhere gifts have been singled out for special treatment. Freedom of contract has often been restricted. Some legal systems limit the amount of property that can be given away; others have introduced formalities to safeguard deliberation and to avoid evidentiary problems. In this connection a distinction is often made between executed and executory transactions. Frequently, the duties owed by the donor to the donee are limited when compared to the duties imposed on parties to an exchange. The adage "you must not look a gift horse in the mouth" has in varying degrees appealed to many legal systems. In a sale, for instance, the buyer is protected under our law if the goods sold turn out to be defective, irrespective of his fault. The liability to a donee by contrast is more limited. He has to resort to tort (negligence) law for protection. Marsh, The Liability of the Gratuitous Transferor: A Comparative Study, 66 L.Q. Rev. 39 (1950). In the civil law, the donor is generally permitted to reclaim the donation or to defeat a gift promise if he has become impoverished without his fault, and he can revoke the donation for reasons of gross ingratitude on the part of the donee.

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By distinguishing between executed gifts and gift promises, the common law has attempted to protect the interests of the maker of a gift promise with the help of the consideration doctrine. One of the doctrine's functions is to make gift promises unenforceable or, more accurately, to safeguard deliberation by channeling such promises into formalities that are meant to impress the maker with the seriousness of the transaction.

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One final point is worth noting. Because of the consideration doctrine, the common law historically has had a wider conception of gift promises than that of the civil law: in the common law view, all promises not supported by consideration are treated as gift promises.[151] A firm offer made without consideration, for instance, is a gratuitous promise. This section deals only with gift promises in the narrow sense, i.e., promises made with the intention of conferring a gift. Promises made in a commercial context, but unsupported by consideration, have already been treated in Section 7.

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On §90 of the Restatements, see Shattuck, Gratuitous Promises — A New Writ?, 35 Mich. L. Rev. 903 (1937); Boyer, Promissory Estoppel: Requirements and Limitations of the Doctrine, 98 U. Pa. L. Rev. 459 (1950); Boyer, Promissory Estoppel: Principle from Precedents, 50 Mich. L. Rev. 639, 678 (1952); Henderson, Promissory Estoppel and Traditional Contract Doctrine, 78 Yale L.J. 343 (1969); Eisenberg, Donative Promises, 47 U. Chi. L. Rev. 1 (1979); Goetz & Scott, Enforcing Promises: An Examination of the Basis of Contract, 89 Yale L.J. 1261, 1305 et seq. (1980).

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[145] 3 G. Ripert & J. Boulanger, Traite Elementaire de Droit Civil de Planiol 1021-I022 (3d ed. 1951), translated in A. T. Von Mehren & J. Gordley, The Civil Law System 791-792 (1977).

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[146] C. Bufnoir. Propriete et Contrat 487 (2d cd. 1924), translated in Eisenberg, Donative Promises, 47 U. Chi. L. Rev. I, 4 (1979).

[147]
Posner, Gratuitous Promises in Economics and Law, 6 J. Legal Stud. 411 (1977).

[148] Eisenberg, supra note 146, at 4.

[149]
Eisenberg, supra note 146, at 2-7.

[150]
Goetz & Scott, Enforcing Promises: An Examination of the Basis of Contract, 89 Yale L.J. 1261, 1304-1305 (1980).

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[151] This approach is discussed and criticized in connection with promises for benefits received in Henderson, Promises Grounded in the Past: The Idea of Unjust Enrichment and the Law of Contracts, 57 Va. L. Rev. 1115, 1156 et seq. (1971).

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June 05, 2014

3.13.1.1 The Gratuitous Noncommercial Promise Introduction

3.13.1.1 The Gratuitous Noncommerical Promise Introduction

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