Prentice, Robert A. --- "Gratuitous Promises" [2011] ELECD 122; in De Geest, Gerrit (ed), "Contract Law and Economics" (Edward Elgar Publishing, 2011)

Book Title: Contract Law and Economics

Editor(s): De Geest, Gerrit

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206008

Section: Chapter 5

Section Title: Gratuitous Promises

Author(s): Prentice, Robert A.

Number of pages: 16

Extract:

5 Gratuitous promises
Robert A. Prentice


1. Introduction
The `first great question of contract law' is why some agreements
are enforced and others are not (Eisenberg 1979: 1). Standard Anglo-
American common law contract doctrine requires consideration for legal
enforceability of promises. Consideration is premised upon the notion of
reciprocity: something of value in the eyes of the law must be exchanged
for the promise to be enforced (Beale 2008: 3­4). Thus, the presence of a
bargained-for exchange formally demarks the critical fault line between
enforceable and unenforceable promises. Promises that are the product
of a bargained-for exchange are presumptively enforceable. Presumptive
unenforceability attaches to mere gratuitous promises, even if it is indis-
putable that their makers well considered and seriously intended them. In
the US, putting such a promise in writing or even under seal will not make
it enforceable (Farnsworth 2000: 396), which contrasts with the result in
civil law systems. Civil law systems tend to enforce gratuitous promises,
at least if certain formalities are observed, absent changed circumstances
such as ingratitude by the promisee or impoverishment of the promisor
(Dawson 1980: 29­196).
Naturally the common law recognizes exceptions which authorize
enforcement of certain promises in the absence of consideration. One
major exception arises from a promisee's foreseeable reliance. The doc-
trine of promissory estoppel is very important, but outside the scope of this
discussion. Another significant exception involves charitable subscrip-
tions. A few other exceptions are occasionally allowed, such as firm offers
...