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Yale Law School Faculty Scholarship
1-1-1926
Non-Binding Promises as Consideration
Arthur Corbin
Yale Law School
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Corbin, Arthur, "Non-Binding Promises as Consideration" (1926). Faculty Scholarship Series. Paper 2896.
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NON-BINDING PROMISES AS CONSIDERATION
CONSIDERATION
NON-BINDING
In thousands
thousands of
of cases
cases it
it has
has been dogmatically stated that
that both
In
parties to
to aa contract
contract must
must be
be bound
bound or
or neither is bound. So convincing
parties
was this
this dictum
dictum that
it has
has been aa painfully slow process
process to re-introduce
was
that it
to the
the legal
legal profession the unilateral
unilateral contract-the
contract-the only kind of contract
to
that our
our ancestors
ancestors knew
knew a few centuries ago. It is still generally bethat
lieved,
even
by
those
who well understand the unilateral contract, that
lieved, even by
the
dictum
is
quiie
correct
with respect to bilateral contracts;
contracts; and the
the dictum quite
suggestion
of
Professor
Oliphant
that
this
may
never
be so came as a
suggestion of Professor
surprise.
Everyone
had
known,
indeed,
that
the
dictum
surprise. Everyone
dictum did not fully
apply
to
contracts
between
an
infant
and
an
adult,
contracts within the
apply to contracts
Statute
of
Frauds
signed
by
one
party
only,
and
contracts
induced by the
Statute of
fraud
of
one
party;
but
it
was
loosely
supposed
that
these
cases could
fraud of one party; but it was loosely
be
harmonized
with
the
dictum
by
use
of
"voidable"
be harmonized
the magic words "voidable"
and "unenforceable."
"unenforceable." Both
Both parties
were "bound";
power
and
parties were
"bound" ; but one had the power
of avoidance
of the whole, upon the exercise of which neither was
of
avoidance of
bound. It
It can easily be shown that this analysis is unsound in very
many
must admit that the dictum is subject to many
many cases;'
cases;1 and
and we
we must
clear exceptions.
exceptions. Have the exceptions, in this case as in sa
so many others,
clear
come to occupy the whole field?
field?
-The present
present writer
writer is
is not
not yet ready to abandon
'The
abandon the dictum altogether; but
but he
convinced that its correctness as a rule
gether;
he is
is thoroughly convinced
of law cannot be established by any mere deductive
deductive process based upon
some more ancient and general rule of law. It can be established
established only
by a collection of decisions
decisions in
in point; or, if we are willing to trust them,
by
collection of the dicta of judges and legal writers. No attempt
by aa collection
attempt
will be made here to present the collected decisions
decisions or dicta. 22 The problem will merely
merely be discussed
discussed briefly
briefly from the writer's personal point of
of
view.
In neither of the two great systems
systems of law with which we are
are familiar
miliar are all informal
informal promises enforceable.
enforceable. Courts and lawyers,
lawyers,
1 In the case of a wholly executory bilateral contract whereby an infant
x In the case of a wholly e.'Cecutory bilateral contract whereby an infant
promises to render service
service and the adult promises payment
payment after full performperformance, it
it is
breach of legal duty for the infant
ance,
is no
no breach
infant to fail to perform. Even in
the absence
of
any
disaffirmance,
a
complaint
alleging
all
the
facts
absence
disaffirmance,
complaint
would be
demurrable.
demurrable. The same
same is true of
of a wholly executory
executory bilateral contract
contract induced
induced
the
by
fraud
of
one
of
the
parties.
In
an
action
for
breach
the defendant call
by the
the
an action
can
successfully
plead
the
plaintiff's
fraud,
without
act
successfully
without showing
showing any
any notice
notice or other act
of disaffirmance
or
recission
by
himself.
The
existing
disaffirmance
recission
existing facts created
created no duty in
him.
Roberts
v.
James
(1912)
83
N.
J.
L.
492.
Yet
in
such
cases,
the defendant
him. Roberts v. James (1912) 83 N·.
492. Yet
such
defendant
could have
the contract
contract against
could
have enforced
enforced the
against the plaintiff.
'Professor
Oliphant
cites
numerous
legal
writers
in
Mutuality
of
Obligation
2 Professor Oliphant cites numerous legal writers
Mutuality
Obligatioll
in
ill Bilateral
Bilateral Contracts
COlltracts (1925)
(1925) 25
25 Columbia Law
Law Rev. 705.
705.
HeinOnline -- 26 Colum. L. Rev. 550 1926
NON-BINDING PROMISES
NON-BINDING
PROivIISES AS
AS CONSIDERATION
551
enforceable
therefore, must search for the test or tests by which the enforceable
distinguished from the unenforceable.
unenforceable. In the civil law one of
of
can be distinguished
common
these tests parades
parades under the pseudonym
pseudonym of "causa";
"causa"; in the common
law under that of "consideration."
"consideration." All too readily do we suppose
suppose that
law" on these and other subjects is certain and knowable. All too
"the law"
"correct" definition of
of
blithely do we assume that there is only one "correct"
sufficiency by which decisions can be tested.
terms and one rule of legal sufficiency
In fact the "causa"
"causa" that in the long history of the civil law made prompromises binding is an indeterminate
indeterminate and variable quantity.
quantity.33 The same is
equally true of "consideration."
"consideration." Anglo-American
Anglo-American law did not start
start
with a definition or a rule of legal sufficiency.
sufficiency. Instead, we have several
centuries full of decisions
decisions in specific
specific cases, furnishing at every stage
in their progress a new inductive basis for definition
definition and stated
stated rule,
an ever changing basis
on
which
all
alike
are
free
to
build,
yesterday,
basis
now, and forever. Some rules
rules. are more persistent than others. It
may be that one such rule is that a promise
considerapromise is not a sufficient
sufficient consideraaffirmatively shown that it is not
tion for a return promise if it can be affirmatively
binding on the one who made it.
promise."'4 Suppose
Suppose that S
Let us consider
consider the so-called "illusory promise."4
guarantees
guarantees P's note in return for C's written promise to forbear from
wishes so to forbear. C's promise is said to be
suing P as long as C wishes,
"illusory," and it is said that S's guaranty is not binding
"illusory,"
binding for lack of a
"illusion" consist;
sufficient consideration.
consideration. In what does the "illusion"
consist; and why is
"sufficient" (one
the consideration not "sufficient"
(one that along with other facts will
operative to create a legal duty in S)
be operative
S) ?
?
If S asked C for that written form of expression
expression he got exactly
exactly
what he asked for.5U If S had asked for a different form of expression,
he would not have received
received what he asked for. The case would then be
determined
determined by the rules of mutual assent and of mistake, not by the
definition
"sufficient" consideration.
definition of a "sufficient"
Causa and
and Consideration
33Lorenzen, Causa
Consideratioll in
ill the Law of Contracts
Contracts (1919)
(1919) 28
621.
Yale Law Journ. 62l.
'• See my
my discussion
discussion in
in The Effect of Options
Options 011
on Consideration
Consideration (1925)
(1925) 34
34
Yale Law Journ. 571, 573 et seq.
Yale
• Professors Williston and Oliphant (1925)
(1925) 25 Columbia Law Rev. 719, 860
expression" but an
both
say that the contractor requests in return "not simply an expression"
"assurance
in
fact."
What
is
an
"assurance
fact" other
expression
"assurance in fact." What is an "assurance in
in fact"
other than
than an expression
that expresses something?
something? Surely it is not meant to abandon the objective test
test
of contract and make it depend upon the subjective state of mind of either the
promisor or the promisee. When a contractor requests
requests a certain "expression,"
"expression,"
he does not request
request a word with
with the
the tongue
tongue obviously
he
obviously in the cheek; in such case
expression. But when two parties sign a written
he does not get the requested expression.
document with numerous
language, each gets exactly the exnumerous terms in specific langnage,
pression and
and the "assurance"
despite the fact that there may be
pression
"assurance" that he requests, despite
be
contained only
an illusory
illusory semblance
semblance of
the other
other party.
party. When
contained
only an
of aa promise
promise by the
he requests this
this particular written "assurance" he is not asking for a state of
of
mind; he cannot escape contractual duty on the ground
ground that the words mean
mean
less than he supposed.
less
HeinOnline -- 26 Colum. L. Rev. 551 1926
552
COLUMBIA LAW
LAW REVIEW
Even if S got exactly what he asked for and was under no mistake
or illusion as to what he got, still the promise
promise of C has been described
described
as "illusory." The reason
reaSOn for this is that by the ordinary concept of
of
"promise" the "illusory
"illusory promise"
"promise"
promise" is not a promise at all. The fundamental element of promise seems to be an expression of intention by
by
the promisor
that
his
future
conduct
shall
be
in
accordance
with
his
promisor
present expression,
irrespective of what his will may be when the time
expression, irrespective
for performance
performance arrives."
expresarrives. 6 This element is wholly lacking if the e."{pression is like that of C above where he said that he would forbear as long
long
as he wished so to do. The clear meaning of this expression
expression is that C's
C}s
future conduct is to be in accordance
accordance with his own future will, just as
it would have been had he said nothing at all. In the absence of mistake
as to what was said by C there is nothing illusory about
about this. An
"illusory promise"
"illusory
promise" is merely a group of words that lack the principal
definitional element of a promise.
It may be that many of the cases holding a seemingly bilateral
It
agreement invalid when one of the expressions is not in fact a promise
assentcan be explained on the ground of mistake or lack of
of mutual assentfor.7
the "illusory
"illusory promise"
promise" made was not the promise that was asked for.?
doctrine of
In some of them the decision is expressly based upon the doctrine
of
8
It is to be observed
observed that in such cases the court is dealdealconsideration. s It
ing with a unilateral, not a bilateral contract. There
There is only one promise
made;
made; and strictly the case is not within
within our 'present subject. But such
such
agreements
agreements are usually spoken of as bilateral;
bilateral; and the reasons why the
"illusory
"illusory promise"
promise" is not a sufficient consideration
consideration are probably identical
with
those
given
for
holding
that
a
real promise is not sufficient if it
with
can
be
shown
to
be
not
binding.
can
Professors Williston and Oliphant
(1925) 25
Columbia Law
Law Rev.
Rev. 719,
719, 860
• Professors Williston and Oliphant (1925)
25 Columbia
860
a volition to set some objective limits to one's freedom of action."
action."
Great Northern
Withain (1873)
defendant
•'In
In Great
N orthem R. R. v. Witham
(1873) L. R. 99 C. P. 16, the defendant
offered
goods that the Railroad
Railroad might order
offered to supply all goods
order of him. The Railroad
replied
promising
to
buy
replied
all that it might so order. This reply contains an "il"illusory promise";
promise"; but it
it was not
not responsive to the offer. The true response
response was·
was an
lusory
order for
for goods, with its implied promise to pay a specific sum; when such a
order
response came
came there
there was
an acceptance
making aa good bilateral contract.
response
was an
acceptance making
Chicago
& G,
G. E. R.
Dane (1870)
Chicago &
R, R. v. Dane
(1870) 43 N. Y. 240 was decided rather on the
ground' of
of lack
proper acceptance
for lack of sufficient
sufficient consideration.
consideration.
lack of
of proper
acceptance than for
ground'
In Hopkins v.
v. Racine Iron
(1909) 137 Wis. 583, 119 N. W. 301.
In
Iron Co. (1909)
301, the defenddefendant
promised to
furnish castings
castings as
as ordered.
ordered. Both
parties seem
seem to
to have
have thought
thought
ant promised
to furnish
Both parties
that this
this promise
was aa contract;
contract; but the
the plaintiff
plaintiff made not even an "illusory
that
promise was
promise"
to acceptance
acceptance by
by ordering
ordering some
some castings
defendPrior to
castings the
the defendpromise" in
in return.
return. Prior
ant promised
furnish castings
parties seem
seem to
to have
have thou~ht
thought
ant
promised to
to furnish
castings as
as ordered.
ordered. Both
Both parties
Sheffeld (1895)
Y. 392,
392, 39 N.
N. E. 330. Probably
saying
Sheffield
(1895) 144
144 N.
N. Y.
Probably most of the cases saymg
that both parties must be bound
bound are cases where one party gave nothing whatever,
not even an "illusory promise".
'
'8 Oscar
Oscar Schlegel Mfg. Co.
Co. v. Peter
Glue Factory
(1921) 231 N. Y.
Peter Cooper's
Cooper's Gl1le
Factory (1921)
459,
132 N. E.
E. 148.
148. The court interpreted the buyer's written words as being a
459, 132
promise to buy such glue as it might thereafter
thereafter order of the defendant. The
promise
"contract for your requirements of glue for the year 1916,"
words were :'contract
1916," the
HeinOnline -- 26 Colum. L. Rev. 552 1926
NON-BINDING PROMISES AS
AS CONSIDERATION
553
"illusory" or the
Why does not the community
community regard the "illusory"
the' nonbinding promise as a good reason for using compulsion against the,
law" it has no "value"?
other party? Is it because "in the eye of the law"
"value"?
"value" in an economic sense
It is doubtful whether
whether the idea
idea of "value"
played any large conscious
conscious part in the development
development of the doctrine of
consideration.
consideration. The courts have uniformly
uniformly refused
refused to go into the
question of relative
relative values, except to establish fraud or the absence of
of
a bargain in fact.
fact.99 "Value"
"Value" is determined by the existence
existence of a market;
market;
and a bargain in fact proves that one market exists. The value depends
upon the appetite
appetite of him who buys. The law of consideration is not
made
made to assist the poor buyer in his struggle for life. To some slight
slight
degree, however, the validity of a bargainbargain· may
may be determined
determined by extrinsic markets. Possibly
consideration is not sufficient unless there
Possibly a con;ideration
are
are such extrinsic markets to give it some value. The markets for "illu"illusory"
sory" and non-binding
non-binding promises are no doubt few and weak. Yet itit
seems
seems never
never to have been stated that a consideration
consideration is insufficient
insufficient in
case no market other than the present buyer can be shown to exist.
Professor
considerations having
Professor Williston agrees
agrees that there are considerations
economic value that are nevertheless
not
legally
sufficient to make a
nevertheless
0
1O
return promise binding.'
Further,
he
does
not
assert
that considerabinding.
.does
considerations having no economic value are never sufficient. Value
Value in the economic or factual sense not being the test, he falls back upon "legal
"legal
value," or ."value
*"value in a technical sense,"
sense," or "value in the eye of the
value,"
law.""" How are we to define "legal"
"technical" value or
or
law."ll
"legal" value, or "technical"
"legal eye"
eye" value?
It is believed that the only way is to observe the
"legal
value? It
"accepted" by the buyer. "The defect ...
... is that itit
document being marked
marked "accepted"
contains no express
express consideration,
consideration, nor are there any mutual promises from which
which,
such consideration
consideration can be
....
The only obligation assumed by .
such
be fairly inferred
inferred ....
it might order .
..... . . Unless
it was to pay nine cents a pound for such glue as it
both parties to a contract
either can sue the other for a breach,
contract are bound, so that either
neither
We might
might differ with the court in its interpretation of the
neither is
is bound."
bound." We
buyer's
words and arrive at
at aa different
different result; but the court rested the decision
decision
buyer's words
on
of sufficient
and not
not on
on want of mutual agreement. See
sufficient consideration
consideration and
on lack
lack of
also
Wickham &
& B. Coal
Coal Co. v.
v. Farmer's
Farmers LWllber
Lumber Co. (1920)
(1920) 189 Iowa 1183,
also Wickham
179 N. W. 417: "Appellant does not deny that
179
that a promise may be a conconsideration
enforceable
sideration for a promise. Its position is that this is so only of an enforceable
promise. That is the law."
for example,
example, in
in Keller
Keller v. Holderman
Holderman (1863)
(1863) 11 Mich. 248.
•'As,
As, for
Of course, the question whether
whether corisideration
consideration has some "value" is not identical
that of
The law might require that extrinsic markets
of relative
relative values.
values. The
tical with
with that
shall
show that
that aa consideration
consideration has
has some
some value without
without requiring
requiring that they shall
shall show
show
that the
the exchanged
considerations have the same value.
exchanged considerations
show that
Op. cit., footnote 5,
5, p. 865.
10 Gp.
'When
(1842) 2 Q. B. 851, Patteson, J., said that
11
When in Thomas v. Thomas (1842)
consideration means something of some value in the eye of the law,"
law," he
he said
"consideration
nothing
about "value
"value in
in the
of the
as aa test
test of
of sufficiency.
sufficiency. His
His
further about
the eye
eye of
the law"
law" as
nothing further
main
main point
point was
was that it had to be something "moving
"moving from the plaintiff."
plaintiff." This
proceeded to illustrate and apply. Even as to this, his statement is
point he proceeded
not now
the United
States. Moreover,
Moreover, the
of the law"
law"
not
now prevailing
prevailing law
law in
in the
United States.
the "eye
"eye of
is notoriously
notoriously of impaired
impaired vision. '
is
HeinOnline -- 26 Colum. L. Rev. 553 1926
554
COLUMBIA LAW
LAW REVIEW
REVIEW
COLUMBIA
working of
of the
the technical
technical legal
legal eye,
eye, to
to list the
the decisions
decisions and
and thus
thus discover
discover
working
.what
.what considerations
considerations (some
(some with
with economic
economic value
value and
and some
some without)
without)
put before
hefore the
the horse;
horse j
held to
to be sufficient.
sufficient. Thus
Thus the cart
cart isis put
have been held
instead of
of "value"
"value" determining
determining the
the decisions,
decisions, the
the decisions
decisions deand instead
termine
in any event
event be
be made;
made j
termine "value."
"value." This
This list
list of
of decisions
decisions must
must in
them we
we shall
shall determine
determine what
what considerations
considerations are
are sufficient,
sufficient, and also
also
by them
(if
(if the
the matter
matter seems
seems to
to be
be of
of any
any importance)
importance) what
what considerations
considerations
in the
the eye of the law."
law." If
If they show
sbow that non-binding
non-binding
"value in
have "value
they
may
consideration,
to
be
insufficient
been
held
have
promises
promises have been held to be insufficient consideration,
may also
value";
no
"legal
have
promises
non-binding
be
but
be said to show that
that non-binding promises have
"legal value" j but
insufficient
cannot be
be said to show
show that they
they are
are insufficient consideration
consideration
they cannot
have no
no "legal
"legal value".
value". ,
because they have
In exactly
exactly the same way, "detriment"
"detriment" and
and "benefit"
"benefit" became
became ininconsideration. Since
effective in
in determining
determining the sufficiency
sufficiency of
of consideration.
Since many
effective
considerations that were
were not detrimental
detrimental or beneficial
beneficial in any economic
economic
considerations
or factual sense
sense were
were held to be sufficient, and others that were ador
be not sufficient, itit became
became
detrimental or beneficial
beneficial were
were held
held to be
mittedly detrimental
customary to say that the test of sufficiency
sufficiency was "legal
"legal detriment"
detriment" or
or
customary
law."
detriment "in
"in the eye
eye of the law."
detriment "in a technical
technical sense" or detriment
considerations "the
"the eye
eye of
of
The very thing we wish to know was what considerations
determined only by
by
law" looked
looked upon as sufficient, and this can be determined
the law"
an inductive collection
collection of decisions-the very
very collection
collection necessary
necessary to
"in
detriments" or12detriments
determine what considerations
considerations are "legal detriments"
detriments "in
law.'
of the
a technical sense"
sense" or detriments
detriments "in the eye of
the law."12
It appears, therefore, that if an "illusory"
It
"illusory" or other non-binding
non-binding
consideration, the rule is not reached
reached by a
promise is not a sufficient consideration,
mere process"
process' of deduction from a supposedly
supposedly more general rule that
consideration must have "legal
"legal detriment." Such
"legal value" or be a "legal
be
a particular rule may be a correct one; but its correctness must be
shown by an inductive collection
collection of decisions in point. If such deciA similar
similar error
error could
could be made in using the term "sufficient
"sufficient consideration."
".-2. A
"value," or
If
"consideration" is defined in a purely factual sense (as we define "value,"
If "consideration"
requested
or promise requested
forbearance, or
"detriment"
"benefit"), to wit: "an act, forbearance,
"detriment" or "benefit"),
or
with exactness one or
ceases to denote with
for a promise," it ceases
given in exchange for
and given
considerations
facts that make a contract. Some considerations
more of those operative facts
of cases
within
contract; and in many sorts of
the definition
definition will not help to make a contract;
within the
consideration at all. We theremade without
without any consideration
an informal contract can be made
consideration that
of consideration
fore add aa qualifying adjective and say that the only kind of
Observe, now, that
"sufficient" consideration. Observe,
will
will help to make aa contract is aa "sufficient"
of aa
enforceability of
determining the enforceability
slightest possibility of determining
there
there is not the slightest
promise by the use of this concept deductively. To say that aa void promise
"sufficient"
the law
law requires
requires aa "sufficient"
because the
not make
make aa return promise binding beeause
will
vill not
Its defects are no
the question. Its
consideration is aa glaring example of begging the
promise
that aa void promise
from those involved in saying that
kind, however, from
different in kind,
the
in the
sufficient consideration
consideration because it has no "legal value" or "value in
is not a sufficient
court to
"sufficiency" that causes a court
eye of the
the law." It is not the quality of "sufficiency"
eye
be "sufficient."
consideration to be
hold a certain consideration
HeinOnline -- 26 Colum. L. Rev. 554 1926
NON-BINDING PROMISES
PROMISES AS
AS CONSIDERATION
CONSIDERATION
NON-BINDING
555
555
sions exist,
exist, itit is
is possible
possible that
that they may
may be
be explained
explained on
on tfie
tle ground
ground that
sions
the courts
courts regard
regard such
such aa consideration
consideration as having
having too slight
slight an economic
, the
value; the
the general
general markets
markets for
for such
such a commodity
commodity are too
too few
few and
and too
value;
weak. They
They may
may perhaps
perhaps be explained on the ground that the courts
courts
weak.
too slight an economic detriment
detriment or
or benefit.
thought the consideration too
Or, they
they might
might be
be explained
explained on
on some other ground
ground of
of social policy.
policy.
Or,
It
is
conceivable
that
the
sufficiency
of
consideration
might
be
-deterIt is conceivable that the sufficiency of
might
'determined
by
some
particular
standard
of
economic
value
or
by
some
specimined by some particular standard
value
fied
degree
of
factual
detriment;
but
the
writer
believes
that
the
defied degree
cisions
do
not
justify
the
construction
of
a
rule
on
any
such
basis.
cisions do not justify
rule
basis.
The only
only possible
possible generalization,
generalization, the
the deductive use of which does
The
not involve
involve aa begging of the question,
question, is one that is
is constructed
constructed out of
of
not
factual
elements
that
in
the
past
have
induced
factual elements
courts to act or that
lawgiver declares
declares must
must induce courts to act. In a new case
case possessaa lawgiver
ing
those
factual
elements
the court's action may be predicted with a
ing those factual
moderate degree of confidence but not with certainty.
moderate
Professor Williston
Williston writes:
writes: "The
"The test of 'value in the eye of the
Professor
law'
remained
and
is
in
law' remained and is in substance the same for both classes of casescases'legal' detriment to the promisee or 'legal'
'legal' benefit to the promisora 'legal'
promisorsomething which
which changes
changes the legal
something
legal position that the party giving or receiving the
the consideration
consideration occupied prior to the bargain."13
bargain."1 3 This senceiving
tence suggests
suggests aa definition,
definition, not only of "legal value" and "legal
"legal detritence
ment," but
but also
consideration." It
It is "something
"something which
ment,"
also of
of "sufficient
"sufficient consideration."
changes the
legal position
position ..."
. .. " A
A definition
changes
the legal
definition so worded cannot be relied
on..
on..
The consideration
The
consideration in
in aa unilateral
unilateral contract
contract may be such as to opoperate
per
se
to
change
the
"legal
position"
of
the
promisee.
When
"legal position"
erate per se to change
such
may be
an added
such is
is the
the case,
ease, this
this may
be an
added reason
reason for holding the considconsideration
to
be
sufficient.
Thus,
if
the
promisee
eration to be sufficient. Thus,
promisee releases
releases a mortgage
mortgage he
extinguishes
extinguishes his
his property
property interest;
interest; if he surrenders
surrenders or cancels
cancels a promissory
note,
he
extinguishes
his
right
to
payment;
if
he
rejects an offer,
offer,
issory note, he extinguishes his right payment; if
he
destroys
his
power
of
acceptance;
if
he
hands
over
a gold piece or
or
he destroys
power
acceptance;
aa book, he extinguishes
extinguishes his property
property interest
interest in the chattel.
chattel. All these
these
performances,
performances, changing
changing legal
legal position, are sufficient
sufficient as a consideration.
consideration.
A consideration
consideration may be sufficient,
sufficient, however, even though
though it changes
changes
not
single legal
not aa single
legal relation
relation of either
either the promisee
promisee or the promisor.
promisor. A
change
change one's physical position is quite
change or
or forbearance
forbearance to change
quite sufsufficient;
ficient; so
so also,
also, aa forbearance
forbearance to change one's legal position (for(for" Op. cit., footnote
1'lOp.
footnote 5, p. 866.
866. The
The present
present writer's
writer's objections
objections to "legal
"legal
detriment"
detriment" as
as aa definitional
definitional term have been
been stated
stated above.
above. "Legal
"Legal detriment"
detriment" has
been
defined
as
any
act
or
forbearance
not
already
required
by
existing
or forbearance not already required
existing legal
legal
been defined as
duty.
it does not
not accurately
accurately define
define "sufficient
"sufficient
duty. This
This does
does not
not beg
beg the
the question;
question; but
but it
consideration."
HeinOnline -- 26 Colum. L. Rev. 555 1926
556'
COLUMBIA LAW
LAW REVIEW
REVIEW
bearance to iise
power) is just as sufficient
bearance
use a power)
sufficient as is a change therein.
If at request, a promisee (having made no promise,
If
promise, tacit or express)
express)
14 or
plows a field or swims the Hudson or forbears to smoke for a year14
or
15G
forbears to accept an offer that has been made him/
him, he is not changing a single one of his legal relations;
relations; and yet all of these are sufficient
sufficient
considerations.
after
considerations. From beginning to end of these performances,
performances, after
the bargain is made and during
during its making, the performer
performer and the promisor had every right, power, privilege, and immunity that he had prior
prior
thereto. If there are any other legal relations not included under. the
foregoing terms, they too are unchanged.
It has been urged by a few that the time has come to abandon the
It
requirement
but the existing decisions
requirement of a consideration;
consideration; ,but
decisions show
show that
rule.'166 It might be urged that
that
the courts would not now follow such a rule.
forbearance, or promise
a promise
promise should be made binding by any act, forbearance,
promise; again, existing
e..xisting
bargained for in fact as the equivalent of a promise;
decisions do not permit of such a rule. It may be urged
urged that a nonbinding promise is sufficient
sufficient to make
make a return promise binding, even
even
though the second does not and cannot make the first binding. In determining whether
whether the courts will in fact follow this rule (whether
(whether it
is "the
"the law"),
we
cannot
rely
upon
any
"deduction"
from
some more
law"),
any "deduction"
general rule that a consideration
consideration is not sufficient
sufficient unless it has value
(either factual or "legal"),
consideration is not sufficient
"legal"), or that a consideration
sufficient un(either
less it is a detriment (either
(either factual or "legal")
"legal") to the promisee
promisee or a
benefit
(either factual or "legal")
"legal") to the promisor. Even though these
benefit (either
(especially factual "detriment"
"detriment" and "benefit")
"benefit") may have playconcepts (especially
play'See Hamer
Hamer v.
v. Sidway
Sidway (1891)
124 N.
N. Y.
N. E.
E. 256.
If in
in this
this case
case
"See
(1891) 124
Y. 538,
538, 27
27 N.
256. If
the nephew promised
that
he
would
forbear
to smoke, and if under the law
promised
this promise
promise is binding, he changed his legal position, in that he extinguished
extinguished
his privilege
(undertook a duty to the uncle not to smoke).
smoke). Even
privilege of smoking
smoking (undertook
Even
in the case of such a bilateral contract
contract the change in legal position is the result
of the contract; the contract is not the result of a change
in
legal
position.
But
change
But
even if the nephew
nephew made no promise at all, his actual forbearance as requested
requested
would be sufficient consideration; and yet at every moment of such performance,
and afterwards
afterwards too, he remained legally
legally privileged
privileged to smoke.
See the excellent statements
supra, footnote 6, and
Strollg v. Sheffield, supra,
statements in Strong
Miles v. Alford
(1886) L. R. 32 Ch. D. 266 (per Lord Bowen).
Bowen).
Alford Estate
Estate Co. (1886)
(1913) 127 Tenn. 713, 156 S. W. 470. Likewise,
:Ill See White v. McMath (1913)
forbearance to make an offer is not prevented from being a sufficient consideraconsideraHopkins v. Ensign
Ensign (1890)
position. Hopkins
(1890)
tion because it does not change one's legal position.
122 N. Y. 144, 25 N. E. 306.
'"
It is true that in certain
10 It
certain classes of cases
cases the requirement
requirement has already
already long
consideration one favored by
been abandoned, if we accept as the definition of consideration
many writers: "an act, forbearance, or promise
promise requested
requested and given in return
considerations" are by this definition,
for a promise."
promise." The many sufficient "past considerations"
as Sir William
William Anson truly says, no consideration at all; and the same is true
in those cases holding that subsequent
subsequent action in reliance on a promise makes it
binding even though such action was "no more than a condition
condition or a natural
Martin v. Meles (1901)
(1901) 179
consequence of the promise." Holmes, C. J., in Martin
Mass. 114, 60 N. E. 397.
HeinOnline -- 26 Colum. L. Rev. 556 1926
NON-BINDING PROMISES
PROMISES AS
AS CONSIDERATION
CONSIDERATION
NON-BINDING
557
557
ed aa considerable part
part in
in the
the development
development of
of the
the law, they
they have
have not
not so
so
ed
restrained
its
development
that
a
consideration
is
not
now
sufficient
unrestrained its development
a
now
less the
the requirement
requirement indicated
indicated by
by these terms exists. This
This is shown
shown by
less
modern
decisions
dispensing
with
such
a
requirement.
We
must
modem decisions dispensing with such
We must start
anew, therefore,
therefore, and
and construct inductively
inductively from the
the collected
collected decisions
decisions
down
to
date
a
new
definition
of
"consideration,"
a
new
definition
down to date a new definition of "consideration," a
definition of
"sufficient consideration," and a new rule determining the enforceability
"sufficient consideration," and a new rule determining the
of promises.
promises. Such
Such aa rule
rule may
may be safe for a decade as aa basis for the
of
decision
of
new
cases
that
appear
to fall within
within its
its terms. It is
is certain
decision of new
that
new
notions
will
gradually
make
it
more
or
less
unsafe
thereafter
that new notions will gradually
thereafter
and that new definitions and rules will be constructed by our successors.
An answer
answer to
to the
the question
question under discussion-whether
discussion-whether a promise
An
(or at least in
in
that itself remains not binding on its maker is generally (or
cases) not sufficient to mal{e
make a return promise binding-is indi-.
indi-.
some cases)
cated by
the following:
by the
following:"17 (1)
(1) The dictum that both parties to a bilatcated
eral agreement
agreement must be bound or neither is bound is inveterate.1Iss
(2) Many
Many cases
cases have
have held
held that
that aa promise is made insufficient as aa con(2)
19
(3) There
sideration if the promisor reserves an "option to cancel."'
cancel."19
(3)
promise" is not sufficient conare decisions holding that an "illusory p'romise"
sideration for the reason that it is not binding (and not for the reason
that it was not the requested
requested equivalent or that no equivalent was, in
2
fact, requested)
.
0
If two promises,
requested) .20 (4) If
promises, one of which is void for illegality,
are
made
by
A
in
exchange
legality, are made by
in exchange for one lawful promise by B, iti1rJ
has
been
said
that
B's
promise
has been said that B's promise is void and not sufficient
sufficient consideration
consideration
2
for
the
one
lawful
promise
made
by
A.
1
An
exhaustive
study of the
:EOr
promise
A.2I
cases in these fields, along with those in which void and voidable promises are held to be sufficient
sufficient consideration,
consideration, is necessary
necessary in order to deter17The list here made is merely suggestive, not exhaustive.
17 The list here made. is merely suggestive, not exhaustive.
The writer is quite willing to abandon
18 The
abandon such a dictum if actual
actual decisions
have
unintentionally, through ignorance,
have undermined
undermined it,
it, whether
whether intentionally
intentionally or
or unintentionally,
forgetfulness,
forgetfulness, or fiction. Many
Many another equally glittering phrase
phrase and doctrine
doctrine
has
ages."
that has
has gone bouncing
bouncing down the ages."
has been
been shown
shown to
to be
be aa "wind
"wind ball
ball that
Phelps,
Professor Williston appears
Phelps/ Falstaff
Falstaff and
alld Equity
Equity (1901)
(1901) 45, 46. Professor
appears to be
be
right,
right, however,
nowever, when he indicates
indicates that
that there
there is no obvious social
social demand
demand for
for
the abolition
abolition of the rule..
rule. .
"1 Williston,
1111
WiIliston, Contracts
Contracts (1920)
(1920) § 105;
105; Page, Contracts
Contracts (2d
(2d ed.
ed. 1922)
1922) § 572.
The
The present writer
writer believes
believes that the rule
rule has been applied
applied in cases where itit
should
Consideration (1925)
should not
not have
have been.
been.."See
See The Effect
Effect of Options on Consideration
(1925) 34
34
Yale
Law Journ.
Yale Law
]ourn. 471,
471, passim.
passim. The
The cases show none the
the less
less the attitude
attitude of the
courts on the problem involved
involved in this article.
article.
'See
"" See supra,
supra, footnote 8.
8.
"13
Willistbn,
op.
cit.,
footnote
19,
§§
•13 Williston,
§§ 1780,
1780, 1782;
1782; Page, op.
op. cit.,
cit., footnote
footnote 19,
19,
§§ 1031.
1031. The
The cases
cases cited
cited as authority
authority for this appear
appear to
to be doubtful and
and confused.
confused.
They
involve
the
distinction
between
the
terms
They involve the distinction between
terms "void"
"void" and "illegal"
"illegal" and
and are
are
much
appears to be
much concerned
concerned with
with questions
questions of
of divisibility. The
The law
law appears
be stated
stated
contra
in
13
Corp.
contra in 13 Corp. jur.
]ur. 512,
512, citing
citing many
many cases
cases unconfirmed
unconfirmed by
by the
the present
present writer.
writer.
See
See also
also Erie
Erie Ry.
Ry. v.v. Union
Union Loco.
Loco. &
& Ex.
Ex. Co.
Co. (1871)
(1871) 35 N.
N. J.
]. L.
L. 240,
240, and
and Sarco
Sarco
Co.
Co. v.v. Gulliver (N. J.
]. Eq. 1925)
1925) 129
129 Atl.
Atl. 399,
399, apparently
apparently contra.
contra.
HeinOnline -- 26 Colum. L. Rev. 557 1926
558
COLUMBIA LAW
LAW REVIEW
mine the extent to which the rule requiring mutuality of obligation still
prevails.
prevails. A statement of where
where the rule ends and the exceptions begin
is not a simple
simple matter.
AhiTHUR
L. CORBIN
COR13IN
ARTHUR L.
YALE
YALE LAW SCHOOL
HeinOnline -- 26 Colum. L. Rev. 558 1926