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so necessary to the existence of consideration. It may be argued that the obligation imposed need not be perfect, and that a contract voidable under the catute of Frauds, or for infancy, insanity or fraud, is not entirely without value, and may be ratified without new consideration.” But as has been said, “What sort of obligation is that which binds the obligor at his option only?” It is generally held that if one party has the privilege at his election of withdrawing from the alleged contract, or of doing nothing at all thereunder, such a contract is void for want of mutuality.” It is accordingly very hard to reconcile the preceding cases with the accepted test of consideration, though there is no real mutuality or obligation, consideration for obligation. There may be sufficient consideration, though there is no real mutuality of obligation, and no binding promise on one side to support the counterpromise on the other. We come now to the second objection to this theory. If a “binding promise ’ is a consideration because it is a detriment, then promising to do something which one is already under obligation to perform would be sufficient consideration for a new promise, because it would be a legal detriment if binding; clearly so if made to a third party as creating a new liability to him; and even if made directly to the obligee, by starting the Statute of Limitations to run afresh, it would be a legal detriment to one party and a benefit to the other. Accordingly, an application of this “ obligation theory '' in the test cases does not square with the authorities. ** The third argument against this theory is that legal obligation cannot be the source of consideration and at the same time consideration be the source of legal obligation. This is a case of lifting yourself by the boot-straps. It is a complete circle to say that promises are binding because they are consideration for each other, and that they are consideration for each other because they are binding and so a legal detriment. This was pointed out some time ago by Professor Williston:” “Unless a promise imposes an
* Langdell, Summary, § 82.
* Ashley on Contracts, 124.
* Vogel v. Pekoc, 157 Ill. 339; Velic, etc. Co. v. Kopmeier, etc., Co., 104 Fed. 324.
* Wald's Pollock on Contracts, 3rd ed., 203, n. 15.
at S Harv. L. Rev. 27, 35.
obligation no promise whatever can be considered a detriment. It is therefore assuming the point in issue to say a promise is a detriment because it is binding.” Professor Langdell grappled with Williston's argument as to reasoning in a circle, but I do not find that he succeeds in meeting the point.* Langdell simply asserts it as a positive rule of law that if the promise can be binding, it is made so by the counter-promise, and it is for the objector to shew why it is not. He does not himself shew any reason why reëiprocal promises logically are a detriment under his definition of consideration. Professor Ashley states in his recent article,” “I must confess that the suggested difficulties have never impressed me. . . . There seems to be no logical difficulty in saying that the law operates simultaneously on each and thereby transforms each action into a promise, each mutually dependent on the other. In all cases there must be some instant at which the law takes effect.” Yes, but as Professor Ashley says, in the same paragraph, refuting his own contention, “the law refuses to annex the obligation of a contract to acts of the parties which lack this essential element * of consideration. The element of consideration must be found before the law can act on the promises. One promise cannot fertilize another with consideration until it is itself fertilized. To make them act simultaneOusly is simply to attempt, by a sort of parthenogenesis, to make each promise indirectly fertilize itself. Like the “loop the loop,” you go around the circle so fast that you don’t fall out or notice what has happened. According to the premise assumed by Professor Ashley, Professor Langdell, and the other learned theorists, the law cannot operate on either promise to annex an obligation until the element of consideration is actually furnished, and yet by their theory the element of consideration is not furnished until the law has operated. Why should the law operate on both promises simultaneously any more than on either one alone until the consideration is furnished? The elements on which Professor Ashley insists are not yet present to set the law in motion, and still he would get around this by making the promises become binding all in a flash and generate their own consideration in the instant of becoming binding.
* 14 Harv. L. Rev. 496, 502. 505; 2 Street's Foundations of Legal Liability, 108. * 26 Harv. L. Rev. 433.
The whole trouble with the theory of consideration in bilateral contracts results from the major premise unnecessarily assumed by these learned theorists from a supposed analogy to unilateral contracts, that we must find in bilateral contracts a present detriment incurred on each side at the moment the contract is made.” But this premise is entirely false.
In bilateral contracts, we do not have to figure out a detriment already incurred or a benefit received at the time of making the contract. To insist on this is in effect to deny the possibility of “executory consideration altogether. It is an artificial and medieval conception to think of each party's present grant of a right as forming the quid pro quo for the reciprocal grant of the other. In bilateral contracts the consideration is future. If there will be a real exchange or reciprocity of performance, the test of consideration is satisfied, when we say that mutual promises are consideration for each other we must be understood to speak elliptically, and by a figure of speech to use the word “ promise ’’ for “promised performance.”
Professor Ashley finds himself unable to conceive how the contract can arise until the consideration is actually furnished. To him this means a contract without any consideration.” He does not seem to perceive that the rule of consideration is a mere test of the nature of the agreement, and the element of consideration may exist from the start in the nature of the agreement as a bargain before the exchange is actually carried out. He somewhat misinterprets the views of the present writer by confusing the test of consideration with that which is tested. The performance is not “the consideration * although we may often speak for convenience of the test of consideration as being the consideration. Performance on one side of a contract is intended to be in exchange for, or in consideration of, performance on the other; and the nature and relation of the performance called for are the test of the bargain.
* Langdell, 14 Harv. L. Rev. 506: Ashley, 26 Harv. L. Rev. 420; compare 2 Street's Foundations of Legal Liability, 57, 119. * 26 Harv. L. Rev. passim.
If the parties to a bilateral contract contemplate that performance on one side is the exchange or price for the performance on the other, and, if the discharge of one party's contractual duty by the other party's breach, actual or prospective, depends on the principle of failure of consideration, it would seem that the exchange of performances is the real bargain, and not the exchange of promises. To put the subject of consideration on this reasonable footing, therefore, goes far to clear up the doctrine of implied conditions in bilateral contracts as being based on failure of consideration.”
Professor Williston , approaches very closely to this view of the nature of consideration in bilateral contracts, “seeking the detriment necessary to support a counter-promise in the thing promised and not in the promise itself.” As he points out, however the Judges may define consideration, it is the sufficiency of the thing to be done which they consider, the performance, not the fact that there is or is not an obligation to perform. Dean Ashley, too, would determine whether a promise is an obligation by the nature of the contemplated performance.” The conception of consideration herein advocated is largely drawn from Professor Williston, under whom the writer first studied the law of contracts. At the same time Professor Williston does not entirely discard the artcient formula that promise is consideration for promise, although this is the conclusion to which his reasoning would seem to lead. If a promise is consideration only when that which is promised would be so regarded, does this not prove that it is not the promise which is the consideration? And although Professor Williston escapes from the absurdity of rating a promise higher than performance, does he entirely escape from the old question-begging fallacy which he himself exposed, when he speaks of the reciprocal promises covered by his test as furnishing the element of consideration for each Other?89
It remains to say a word as to the secondary aspect of the consideration test as applied to the sufficiency of completing or promising to complete a contract as consideration for a promise of additional compensation by the other party or by a third party. - There is an exchange in fact here, there is a bargain; and the question turns on the second branch of the consideration formula, whether what is offered in exchange is a “legal detriment * having any possibility of value in the eye of the law, sufficient to be the foundation of a bargain. Looking at the question broadly, the real issue in such cases would seem to be not the theoretical or metaphysical possibility of finding a microscopic “legal detriment” in some imaginary rescission or in a waiver of a supposed right to break the contract and pay damages,” but whether good faith and business policy permit a contractor to exact additional compensation for completion under the circumstances.
* See Wald's Pollock on Contracts, 323, n. 8:—Harv. L. Rov.
* S Harv. I. Rev. 35. 36.
* 26 Harv. I. Rev. 433, n. 11: Ashley on Contracts. 02, 93.
* Williston, Sales, 958; see also Wald's Pollock on Contracts (3rd ed.) 201, n. 14; 203, n. 15: 323, n. S.; Ames, 13 Harv. L. Rev. 31.
In some cases of untoward difficulties supervening, either unknown or unforeseen when the contract was made, (which, if our law were more liberal and just, would excuse performance), the contractor may be equitably or morally justified in a demand for more pay for the additional burden not contemplated by the parties, and a contract to that effect should be enforced.”
On the other hand the Court should refuse its aid to a contractor who takes unjustifiable advantage of the necessities of the other party to coerce a promise to pay increased compensation, where there is no honest or equitable reason for abandoning performance of the contract.” Such an abstention from breach of contract is no more a sufficient basis for an honest claim than abstention from a crime, tort or breach of official duty. This distinction, suggested by the Minnesota case, convinces the sense of justice of many Courts in the face of technical difficulties.”
Although one is already under contract with another to do a certain thing, if this contract was made in contemplation of the contracting party getting further compensation from others, it would not be a violation of his duty to earn more pay by making contracts with third parties for the