Anaya Nolan
Promises are a fundamental part of contract law, and while not all promises are legally binding, some are enforceable. A contract is a promise or a set of promises that the law recognises as a duty or provides a remedy for its breach. In contract law, the person making the promise is known as the promisor, and they are bound to fulfil their promise unless prevented by factors such as an act of God or the promise being contrary to law. The obligation to keep promises is widely recognised as a moral duty, and legal doctrines like promissory estoppel exist to enforce promises that do not constitute a contract when relied upon by the promisee. Quasi-contracts, based on the doctrine of unjust enrichment, are another means of enforcing promises where the act or acts giving rise to the contract are voluntary.
| Characteristics | Values |
|---|---|
| Definition | A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. |
| Promisor | One who makes a promise. The promisor is bound to fulfill their promise unless it is contrary to law, prevented by an act of God, or prevented by the promisee. |
| Promisee | The promisee can maintain an action on a promise made to them, but when the consideration moves from another person, that person has a cause of action. |
| Enforceability | Promissory estoppel is a legal doctrine used to enforce promises that do not constitute a contract when someone has reasonably and foreseeably relied on the promise. |
| Quasi-Contract | A quasi-contract is imposed despite the intentions of the parties and is based on the law of natural immutable justice and equity. It does not require a promise or privity. |
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What You'll Learn
Promises vs. contracts
A contract is a legally enforceable promise or set of promises. For a contract to be valid, it must include two elements: 'consideration' and 'mutual assent'.
Consideration is what each party gives up and gets out of the deal. For example, in a bilateral contract, both parties exchange promises. In a unilateral contract, one party gives a promise, and the other performs an act. Mutual assent, or the meeting of the minds, refers to the intention and agreement of both parties to create a contract.
Promises that are not part of a contract may also be legally enforceable in certain cases. For example, under the doctrine of promissory estoppel, a promise can be enforced if the promisee has reasonably and foreseeably relied on the promise to their detriment. This may apply even if the promise was made orally and not in writing. However, gratuitous promises of gifts or unilateral pledges to confer benefits remain legally unenforceable.
Quasi-contracts are another situation where obligations may arise outside of a contract. In a quasi-contract, the obligation is imposed despite the intentions of the parties. The obligation arises from the law of natural immutable justice and equity, rather than the consent of the parties. For example, if it is the duty of the defendant to pay, the law may impute to them a promise to fulfil that obligation, even if there was no explicit promise made.
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Promissory estoppel
For a promise to be legally enforceable, there are typically requirements for legal consideration, such as the exchange of money or a promise to refrain from an action. However, promissory estoppel is an exception to this rule, allowing the enforcement of a promise without consideration if the other party has acted on the promise and suffered damage as a result.
To seek damages based on promissory estoppel, a plaintiff must typically demonstrate four key elements:
- The promisor made a promise with the intention that a reasonable person would act on it.
- The promisee believed the promisor and acted on the promise in good faith.
- The promisor later reneged on the promise, causing financial harm to the promisee.
- The only way to avoid injustice is by enforcing the promise.
It is important to note that the precise legal requirements for promissory estoppel can vary between different jurisdictions and states.
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Quasi-contracts
The obligation in a quasi-contract arises from the law of natural immutable justice and equity, rather than the consent of the parties. The act, or acts, from which the law implies the contract must be voluntary. The duty that forms the foundation of a quasi-contractual obligation is often based on the doctrine of unjust enrichment, where one party gains something at the expense of another. The plaintiff must demonstrate, through the burden of proof, why the defendant received an unjust enrichment.
The types of quasi-contract are outlined in sections 68 to 72 of the Contract Act of 1872. For example, Section 68 states that a third party can recover the price of supplies provided to a person incapable of making contracts. Section 70 outlines that when a person does something lawfully for another or delivers something without intending to do so gratuitously, the receiving party is obliged to compensate the former party.
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Enforceable promises
While it is commonly acknowledged that there is a moral duty to keep promises, not all promises are legally enforceable. Orthodox doctrinal categories provide only modest assistance in answering which promises are legally binding and which are not.
A promise made in exchange for a return promise or performance is typically enforceable, whereas non-reciprocal promises are not. This is the basis of the common law "bargain theory". However, contract law has evolved to embrace reliance and unjust enrichment as additional principles of promissory obligation. Thus, a promise may be enforceable to the extent that the promisee has incurred substantial costs or conferred benefits in reasonable reliance on the promise.
Promissory estoppel is a legal principle that defines a promise as enforceable by law when a party who relies on that promise suffers a related detriment. Promissory estoppel is the primary enforcement mechanism when action in reliance follows the promise. Under the doctrine of promissory estoppel, even the existence of a promise may be sufficient to enforce an agreement if the other party has suffered damage as a result of acting on that promise. Promissory estoppel is state-specific in the United States and varies between countries and jurisdictions.
In the United States, the Restatement allows, under some circumstances, the enforcement of past-consideration contracts. A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. For example, if the promisee conferred the benefit as a gift or for other reasons, the promisor has not been unjustly enriched.
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Common law bargain theory
A contract is a promise or a set of promises that the law will enforce. A breach of contract gives rise to a remedy provided by the law. Contract law is generally governed by state common law, and while general overall contract law is common throughout the country, some specific court interpretations of a particular element of the contract may vary between the states.
The common law "bargain theory" is simple: bargained-for promises are presumptively enforceable, and non-reciprocal promises are presumptively unenforceable. However, this simple theory does not always reflect reality. Contract law has expanded beyond such limitations, embracing reliance and unjust enrichment as additional principles of promissory obligation. Thus, a promise may be enforceable to the extent that the promisee has incurred substantial costs or conferred benefits in reasonable reliance on the promise.
The bargain theory is one of the two main theories of consideration. The other is the benefit-detriment theory. The bargain theory involves the subjective mutual assent of the two parties, while the benefit-detriment theory involves the objective legal detriment or benefit to the parties. In other words, the bargain theory focuses on the parties' motives for making the promises, while the benefit-detriment theory focuses on the legal detriment or benefit to the parties.
The bargain theory requires a reciprocal exchange where both parties negotiate and agree on the terms. This is in contrast to non-reciprocal promises, which are not legally enforceable. For example, a unilateral pledge to confer benefits is not legally enforceable. However, in limited circumstances, courts may be willing to impose liability on someone who receives a benefit for which they have not bargained.
The bargain theory is also different from the quasi-contract, which has no reference to the intentions or expressions of the parties. Instead, the obligation arises from the law of natural immutable justice and equity. The act or acts from which the law implies the contract must be voluntary.
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Frequently asked questions
A contract is a promise or a set of promises that are legally binding and for the breach of which the law provides a remedy.
A contract is formed from the consent of the parties, whereas a quasi-contract is formed from the law of natural immutable justice and equity. A quasi-contract is imposed despite the intentions of the parties.
Promissory estoppel is a legal doctrine that allows the courts to enforce a promise that does not qualify as a contract. It is typically used when someone has reasonably and foreseeably relied on a promise to their detriment.
A promise is generally made by one party, whereas an agreement is a mutual understanding between two or more parties.
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