Case

Otto sold his house and all his furniture except for a valuable antique table and chairs. Charles promised to store them for three months without charge while Otto found a new house to buy. Is the promise binding? Does it matter (a) if Charles refused to store the table and chairs before they are delivered or a month afterwards? (b) if Charles was a friend of Otto, or the antiques dealer from whom he recently purchased the table and chairs, or a professional storer of furniture? (c) if Charles refused to store them merely because he had changed his mind or because he had unexpectedly inherited furniture which he had no place else to store? (d) if Otto could instead have stored his furniture with Jean, who had also offered to store it without charge, and has now withdrawn that offer? or (e) if Otto had previously contracted with a warehouse to store his furniture, had cancelled the contract because of Charles' offer, and now can only store his furniture at a higher price?

Discussions

FRANCE

The agreement between Otto and Charles would constitute a deposit (contrat de dépôt) under French law. A deposit is governed by arts. 1915 and following of the French Civil Code. The three main obligations of the depositee are to receive the object, to look after it, and to restore it to its rightful owner. Under French law, a deposit is regarded as an in rem unilateral contract, that is to say, as a contract which exists only when the thing is delivered by one party to the other (art. 1919 of the Civil Code).

Case

Richard promised to mail some documents to Maria's insurance company so that the company would (a) insure, or (b) cancel an insurance policy on Maria's small private plane. He failed to do so. Is he liable (a) if Maria's plane crashes and she cannot recover its value because it was not insured, or (b) if Maria has to pay an extra monthly premium because her insurance was not cancelled? Does it matter if Richard promised to help because he was a friend whose profession was completely unrelated to aircraft, insurance, or the mailing of documents? Does it matter if he promised to help because he had just sold and delivered the plane to Maria?

Discussions

FRANCE

Once again (see Case 4), the central problem here is the thorny one of distinguishing between promises which are legally enforceable as contracts, and moral promises or gentlemen's agreements which are not. The line between these two is particularly hard to draw in French law, and is left to the judges of the lower courts as a question of fact (see Case 4).

If Richard is a friend whose profession is totally unrelated to the services he carries out, it is very doubtful that the agreement would be regarded as legal and consequently as binding. It is more likely that a French court would characterize the transaction as a favour (acte de complaisance) that friends may do for one another. Maria would not recover.

Case

Barbara promised Albert that he could use her car without charge for three months while she was on vacation. She now needs the car because she cancelled her vacation plans after injuring her left foot. Can she have it back? Does it matter if she told Albert he could not have the car a week before she was supposed to deliver it or a week after she actually did? Does it matter if Albert has taken a job that requires him to have a car but does not pay enough for him to rent one?

Discussions

FRANCE

Under French law the arrangement made between Barbara and Albert would constitute a contract of loan for use (prêt à l'usage or commodat). In such a contract, the lender gives a thing to the borrower for his use which the borrower must later return. Accordingly, it is governed by arts. 1875 and following of the Civil Code.

Such a contract is defined as a contract in rem which means that it is formed upon delivery of the thing. It is therefore an exception to the general principle by which contracts are enforceable upon a mere exchange of promises. It does not follow, however, that no contract has been made if the lender has not made the delivery by which a contract of loan for use is formed. Barbara and Albert's arrangement can be classified instead as an offer to lend (promesse de prêt), which is an enforceable contract. Which kind of contract has been formed, however, depends on whether delivery has been made. We will discuss each alternative.

We can now examine the similarities and differences in the results that European legal systems reach and the doctrines by which they arrive at them. We will first consider promises which are meant to confer a benefit gratis on the promisee, and then those that are not. We will ask to what extent these results can be explained as responses to common underlying problems. In the end, we will discuss how the problems we identify might be solved most straightforwardly.

Gifts and favours

We will consider promises to confer a benefit on the promisee that necessarily entail a significant cost to the promisor because he has promised money or property. We will then turn to those that could be performed costlessly.

Promises of money or property

Obstacles to giving gifts

None of the legal systems under examination will ordinarily enforce an informal promise to give away money or property. One reason is generally acknowledged: to prevent the promisor from making ill-advised gifts. Nevertheless, no legal systems prevent the promisor from making any gifts at all. Nor, with some exceptions to be noted, are any legal systems willing to consider on the merits whether a particular gift is well or illadvised. Instead, they interpose obstacles to gift-giving so that the wouldbe donor will deliberate.

Case

A burglar stole Simone's valuable diamond necklace. She offered a large sum of money payable if it was discovered and returned (a) to Raymond, a private detective, or (b) in a newspaper advertisement, to whomever succeeded in finding the necklace. Three months later, after (a) Raymond or (b) others incurred expenses looking for the necklace, she wishes to withdraw her promise because she has changed her mind about how much she is willing to pay for the return of the necklace. Can she do so?

Discussions

FRANCE

When Simone promises Raymond a sum of money to find her necklace, she makes an offer to a specified person which is clear, precise, and unequivocal. By undertaking the investigation, Raymond has tacitly accepted this offer and a contract to find the jewellery has accordingly been made. It can be analysed either as a contract to undertake an investigation (contrat d'entreprise) or as a promise of reward.

If it is a contract to undertake an investigation (contrat d'entreprise), it may be that no payment is due until Raymond achieves the desired result, and Raymond is under an obligation to use his best endeavours to achieve it. Such an obligation is termed an obligation de moyens. Under this analysis, because the contract resembles one for a lump sum, it might seem that Raymond cannot be reimbursed for his costs if Simone revokes her offer as no express provisions have been made to that effect. However, art. 1794 of the Civil Code contains a provision which enables the employer to terminate in mid-performance and compensate the other contracting party for his expenses.

Case

Ian, now solvent and an adult, had once owed money to Anna that she could not claim legally because (a) Ian's debt had been discharged in bankruptcy, (b) the debt was barred by the passage of time (by prescription or by a statute of limitations), or (c) the debt was incurred when Ian was too young to be bound by his contracts. Ian now promises to pay the debt. Can Anna enforce the promise if he changes his mind?

Discussions

FRANCE

In Case 3(a), Ian's debt to Anna was discharged in bankruptcy. Under French law, although he is no longer legally bound and cannot be successfully sued, he remains ‘naturally’ bound. His obligation is not purely moral. If he promises to pay, the debt will become legally due again.

As noted in discussing Case 2, this theory of natural obligations has been developed by case law, and is considered to be an implication of art. 1235 of the French Civil Code. As a consequence, there is no closed list of natural obligations, but French academics agree that a debt discharged in bankruptcy is among them.

In Case 3(b), in which the debt was barred by the passage of time, it is not possible to give a quick answer. French case law has distinguished two types of prescriptions that take place under the French Civil Code: presumed and normal prescriptions.

Case

Carlo, a famous musician, agreed to come to a dinner to be held in his honour by a private music conservatory. Two days before the dinner, he was offered a large sum of money if he would give a performance in another city the night of the dinner, taking the place of another musician who had become ill. He notified the conservatory that he could not come because he had accepted a conflicting invitation. The conservatory cancelled the dinner after it had already spent a large amount of money on publicity and food. Can the conservatory recover against Carlo?

Discussions

FRANCE

Under French law, the central issue of this case is whether Carlo's promise was legally or morally binding. French courts enforce only legal promises, and never gentlemen's agreements. In order to succeed with its claim the conservatory has to characterize Carlo's promise as a legal one. However, there are no rules whatsoever in French law to help. It is all a question of fact and is left to the lower courts' assessment. In this respect their power is absolute (appréciation souveraine), and not subject to the control of the appellate courts or the highest court, the Cour de cassation. This means that case law on the subject may be contradictory. It is therefore open to conjecture how a French court would exercise the wide discretion it has in the matter. The fact that Carlo was not given any money to come to the dinner would probably be a factor in favour of describing the promise as a purely moral one.

Case

Alloy, a steel manufacturer, promised to sell Motor Works, a car manufacturer, as much steel as it ordered during the coming year for a set price per ton. Is the promise binding (a) if the market price rises to 20 per cent more than the contract price, and Motor Works orders the amount of steel it usually needs? (b) if the market price rises to 20 per cent more than the contract price, and Motor Works orders twice the steel it usually needs? (c) if the market price falls to 20 per cent below the contract price, and Motor Works buys no steel from Alloy, buying its requirements of steel on the market instead?

Discussions

FRANCE

The arrangement between Alloy and Motor Works seems to be aimed at fixing the general conditions of sale, which will be the subject of later orders. Under French law, such a contract would be considered a framework contract (contrat cadre) as opposed to the sales contracts (contrats d'application) which implement the initial contract. It is probably more accurate to view the contrat cadre as a convenient and practical category which scholarly opinion (doctrine) has constructed so that it will not be necessary to analyse each sale as a new contract with its own conditions. This construction is more elegant.

The only other possible analysis, in our view, would be to consider the arrangement to be a unilateral promise to sell (promesse unilatérale de vente) since Alloy is already bound to sell at a fixed price while Motor Works may or may not decide to purchase.

Case

Realty, a company dealing in land, was looking for a site for a new building. It told Simon it might be interested in purchasing a lot that he owned, but that it would need time to conduct a study. Without charging anything, Simon promised that he would sell his land to Realty for a fixed price (a) if Realty chose to buy it at any time within the next month, (b) if Realty chose to buy it at any time within the next two years, or (c) when Realty completed its study of the land, unless, in its sole and absolute judgment, Realty thought the economic prospects were unsatisfactory, in which case Realty had the option to withdraw. Realty accepted. Is the promise binding? Does it matter if therewas an abrupt rise in the market price, and Realty wants to buy the land, not for a building, but for immediate resale?

Discussions

FRANCE

We note at the outset that it does not matter if, because of an abrupt rise in the market price, Realty wants to buy the land, not for building, but for resale unless the purpose for which the land is bought was an essential element of the contract. We will not examine that possibility in any detail. Suffice it to say that, had the purpose of the sale been one of the determining factors which induced Simon to contract, he would need to prove that such a condition belonged to the parties' agreement (dans le champ contractuel).

A basic difference between modern civil law and Roman law is supposed to be that in modern law, in principle, contracts are enforceable upon consent. In Roman law, when they were enforceable depended on the type of contract in question. A basic difference between the modern common law and civil law is supposed to be that the common law requires a contract to have ‘consideration’. The civil law does not. This study is concerned with the extent to which these characterizations are true, and how these and other differences affect the enforceability of promises.

The method is that of the Trento Common Core of European Private Law Project. Experts from different legal systems have been asked how their law would resolve a series of hypothetical cases. Because of the larger purposes of the Project, and because one has to draw the line somewhere, the legal systems are those of member states of the European Community. Sometimes, the expert's opinion about a case is conjectural, and the experts were asked to note when it is. In these instances, admittedly, another expert from the same legal system might decide the case differently. But the value of the expert opinions is not that they tell us how the case will come out. It is that they tell us which cases are clear, which are troublesome, the reasons why they are troublesome, and the doctrines that might be applied to resolve the difficulties.

Case

Claude, wishing to sell his house, listed it with Homes, an agency that assists sellers in finding buyers. Homes was to receive 5 per cent of the sales price of the house if it found a buyer. Three months later, after Homes had taken various steps to do so and incurred expenses, Claude decided not to sell his house. Is he liable to the agency for 5 per cent of the sales price or for its expenses? Does it matter if the agency has found a buyer who has expressed his willingness to buy the house although no contract has been signed? Does it matter if Claude had promised that he would list the house only with Homes or whether he remained free to list it with other agencies?

Discussions

FRANCE

Under French law, the contract between Claude and Homes would be classified as one of agency (mandat). Claude grants Homes the power to do something in his name (art. 1984 of the Civil Code): to find a buyer for his house. More precisely, this contract would probably be considered to be a real estate agency contract, although some would consider it a contract for services on the ground that, traditionally, a contract of agency is deemed to be gratuitous, unlike a contract with a real estate agent, who receives compensation.

The Civil Code provides some general rules to govern an agent's remuneration. According to art. 1999, ‘the principal must reimburse the agent for advance payments and costs that the latter has incurred while performing the agency, and pay the salary promised to him’.

Case

Kurt promised a large sum of money to Tony who had suffered a permanent back injury saving (a) Kurt or (b) Kurt's adult child from drowning after a boating accident. Can Tony enforce the promise if Kurt changes his mind? Does it matter if Tony was a professional lifeguard or if he had performed the rescue as part of his normal duties?

Discussions

FRANCE

Kurt promised Tony a large sum of money for saving him or his adult child because he felt under a moral duty to do so. Under French law, this duty could be considered to be a natural obligation (obligation naturelle). As already noted in discussing Case 1, a promisor who voluntarily undertakes to perform a natural obligation is bound by this promise and liable to the promisee if he fails to perform. The natural obligation has been converted into a civil one by a unilateral promise to perform. Nevertheless, his recognition of the natural obligation must be sufficiently unequivocal. Evidence concerning the promise is appreciated by the trial courts and is considered to be a matter of pure fact.

The rule that a promise to perform a natural obligation is binding is a result of judicial interpretation of art. 1235 of the Civil Code. promise is not specifically enforceable. Yet its breach gives rise to contractual liability. Through Kurt's voluntary undertaking, the natural obligation has been novated (in a non-technical sense) and can thus be considered to be a civil obligation.