Imágenes de páginas
PDF
EPUB

to his rule of consideration, since they lack mutuality of obligation. But if all these cases may be satisfactorily reconciled and explained on a simple and reasonable theory of consideration, it seems better to seek an underlying principle which is an almost universal solvent, rather than to ascribe these results to common error, or deal with them as exceptions unjustifiable on principle, merely to lay down a rule to fit the language of the courts and some married woman cases.

A theory of consideration is after all only a generalization of the cases and of the policy of the law, and if a given hypothesis won't work, and won't explain close cases, and if it goes lame when the shoe begins to pinch, then we should modify our theory and even our habitual terminology to fit the facts.

The lack of mutuality referred to so frequently by the courts which results in lack of consideration would not seem to be truly based on the alleged rule that both promises must be binding in law or neither is binding. It is not mutuality of obligation or remedy, but mutuality of engagement, which is actually required. The promises must be obligatory only in the sense of being obligatory according to their terms. A distinction must therefore be made between cases where by the terms of the bargain the plaintiff does not make any reciprocal undertaking and promises nothing definite or certain in return, and cases where lack of mutuality and obligation is due to some fact outside of the content of the bargain, such as incapacity, Statute of Frauds, illegality, duress, fraud, or other negative element. These two classes of cases seem to be entirely distinguishable in principle. In the first, we have an entirely one-sided proposition, - what is sometimes unfortunately referred to by the courts as a "unilateral contract.” In the second, we have all of the affirmative elements of a valid contract, but the obligation of one of the parties is affected or taken away owing to the presence of some defense or negative element which does not affect the obligation of the other.25 These cases of voidable promises can therefore be satisfactorily explained only on the theory here advanced, viz., that there is ample consideration at present in the reciprocity or mutuality of the respective undertakings, although one of the parties to the contract may have an absolute personal defense. A promise by a minor, therefore, furnishes consideration, not because there is any value in a voidable promise, but because there is reciprocity in the terms of the bargain. Here the law gives the infant the personal privilege of receding from it at his pleasure. If, however, a would-be seller should make a proposition to deliver such quantity of any commodity as an infant buyer might choose to order, and the infant accepted it but did not agree to order any definite quantity, or reserved expressly a right to cancel his order, such a contract would doubtless be held lacking in mutuality and void in toto. There is therefore no exception to the ordinary requirements of mutuality in the case of an infant's contract. The disability of the infant, whereby he is exempted from the obligation of his contracts, is not created by the law for the benefit of those who contract with him, but for his own protection.

25 Compare Page on Contracts, $ 303.

It would seem to be a sound principle of law which demands some mutuality or reciprocity of engagement as the basis of a contract and which refuses recognition to an entirely one-sided proposition in which one of the parties promises nothing definite in return.26 From this it will usually follow that one party will not be able to go into court to enforce a contract unless the other can. But this is not what the requirement really means, although the loose language of the courts usually puts the symptom for the cause. The distinction between an option to perform given by the terms of the contract and an absolute defense given by the law is a substantial one, as in the former case the elements of a contract were never present, while they are in the latter, and the law gives a defense to one party only on grounds of justice or policy toward him.

I would accordingly venture to propose a modified version of Professor Williston's definition to read as follows: Consideration is something of possible value given or undertaken to be given in return for something promised.27 A bilateral contract is based on sufficient consideration which by its terms is a bargain involving any appreciable degree of mutuality or reciprocity in the things promised on each side. The test of this is whether the performance promised will be or apparently may be legally detrimental to the promisor or legally beneficial to the promisee. There is consideration even though the promises on one side may be unenforceable by reason of some negative element in the contract which excuses one of the parties from liability thereon. The test of the consideration is the possible value of the thing promised and not the effect of the promise itself.

26 Williston, Sales, pp. 203, 798, 800.

27 See Currie o. Misa, supra.

Under the lead of Langdell there has been a tendency to take detriment as the universal test of the sufficiency of consideration, and to say that the detriment alternative had swallowed up the benefit alternative of the usual definitions.28 It would seem, however, that the essence of the idea of consideration is reciprocity in the possible benefit or value to the promisor of the thing promised in return, rather than the detriment or burden to the promisee. The incurring of detriment on the faith of the promise is indeed the true basis of the subscription paper and other quasi-estoppel cases, but not of wholly executory contracts. Consideration need not move from the promisee directly to the promisor, or be in fact beneficial to him, in order to furnish a sufficient basis to make the promise binding.29 For one cannot say that what he has bargained for is not of value to him unless it conclusively appears so on its face or from its own intrinsic nature, as where it is something to which he is already entitled.

I do not propose to attempt a discussion of the desirability of the legal benefit-detriment test of the sufficiency of consideration adopted by Professor Williston as compared with the Ames theory. Professor Ames contended that the attempt to formulate a technical test to measure the sufficiency in value of what is promised or given as consideration in bargains has not proved a success. He pointed out that this attempt has encumbered the law with unreasonable distinctions and subtleties which serve no useful purpose.30 Professor Ames argued that the detriment test functions properly only in cases which could better be put on other grounds, and that where the basis of a bargain was vicious, as abstaining from a crime, a tort, a breach of contract or legal duty, or the taking of unfair advantage of the necessities of the other party, there the contract should be held invalid as being illegal or

28 Langdell, Summary of Contracts, $ 64.
29 Drovers', etc. Bank o. Tichenor, 156 Wis. 251, 145 N. W. 777 (1914).

12 Harv. L. Rev. 530; 13 Harv. L. Rev. 29; see also Melroy o. Kemmerer, 218 Pa. 381, 67 Atl. 699 (1907); Ex parte Ziegler, 83 S. C. 78,64 S. E. 513, 916, 21 L. R. A. N. S. 1005, n. (1909).

30

contrary to public policy rather than as lacking in consideration, which he found in the exchange of all promises in fact.

Whether the attempt has proved wise or not to measure the sufficiency of consideration by a technical and mechanical formula, there can be no doubt, as Professor Williston shows, that this represents the settled policy of the law. If we recognize gain or benefit to the promisee, we can uphold the view of the English courts and of a minority of American courts that the completion of contracts with a third party (or the promise thereof) is valid consideration for a promise.31 This would meet some of the strongest instances put by Dean Ames where the test of legal detriment leads to unsatisfactory results.

What, then, in conclusion, is the basic reason why the law in general finds a ground for the enforcement of executory two-sided bargains and not of one-sided or gratuitous promises? I believe the answer is a broad but simple one. Without some positive sanction or legal guarantee that reciprocal bargains are binding, men would be unable to do business or make reliable arrangements for the future. Good faith and honesty demand that men be entitled to rely on their bargains, and that they stand by them if they are reciprocal. Mutuality or reciprocity characterizes all fair business transactions. It is not in the mutual expression of assent, nor in the legal effect of the promises however that reciprocity is sought, but in the content of the bargain, the possible value to be received on either side.

Is not the literal interpretation of promise for promise as quid pro quo (i. e., present value actually received on each side in the making of the contract), like the supposed incurring of a present detriment, merely a factitious attempt to assimilate executory consideration to executed consideration? There must, of course, be mutuality of assent. But is not the actual value bargained for a future value? If we formulate the real policy which dictates the consideration requirement, and on which the cases are decided, instead of taking too seriously the pseudo-scientific language of the courts, we may at last put the theory of executory consideration on a logical, consistent, and intelligible basis.

Henry Winthrop Ballantine. UNIVERSITY OF WISCONSIN.

31 Abbott v. Doane, 163 Mass. 433, 40 N. E. 197 (1895).

BUSINESS JURISPRUDENCE

THE

*HE law of railroads, shipping, banking, corporations, partnership,

brokerage, trade marks, “unfair competition," "restraint of trade," "monopoly," and related subjects has been much discussed, but little attention has been devoted in this country to a study of the thing of which all these particular subjects are commonly but phases, — the doing of business. The most perplexing legal problems of the present time are concerned with business, and a clear conception of how the doing of business differs, if at all, from the other activities of life, as well as of its legal characteristics, becomes important. The laws applicable to business properly form a distinct branch of jurisprudence, and are so recognized in practically all countries except those in which the common law prevails. Most of the nations of Europe 1 and of Latin America, as well as Japan, have formulated codes of commerce, not perfect by any means, and approaching the subject from different angles, but indicative at least, from their very existence, of a consciousness on the part of courts, lawyers, and business men that there is a difference, naturally and legally, between business on the one hand and the other activities and interests of life on the other; so much so as to require distinct treatment in the interest both of the public and of trade.3

In the nature of things, different rules are applicable to business than to the more formal, fixed, and personal relations of society, such as estates in land, succession, and domestic relations. "The affairs of commerce,” says Montesquieu," "are but little susceptible of formalities. They are the actions of a day, and are every

1 Lyon-Caen and Renault, Droit Commercial, vol. 1, p. 46.

2 The French code, for example, is said to have had its day," — "a fait son temps.” Introduction to French Commercial Code, Commercial Laws of the World, vol. XXI, p. 6.

3“... I have long entertained the belief” said Mr. Justice Story, deploring the indifference of English lawyers to the study of foreign jurisprudence, “that an enlarged acquaintance with the Continental Jurisprudence, and especially with that of France, would furnish the most solid means of improvement of Commercial Law, as it now is, or hereafter may be, administered in America.” Commentaries on the Law of Bailments (1856), - Preface.

• Esprit des Lois, bk. 20, ch. 18.

[ocr errors]
« AnteriorContinuar »