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Some Aspects of the Concept of Contract

Published online by Cambridge University Press:  12 February 2016

G. Tedeschi
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Extract

Until a few decades ago the opinion prevailed in England and in the United States, as also in continental Europe, that a contract is an agreement, although certain additional requirements were necessary to distinguish contract from other classes of agreement (see infra, para. 6). More recently, however, many leading American and English scholars have tended to substitute “promise” (or “aggregate of promises”) for “agreement”.

What characterizes the new view is not the mere use of the term “promise”: such use was widespread before and still continues among opponents of this view, and it is hard to deny that an obligatory contract is a promise or an aggregate of promises. The followers of the new view are distinguished by the fact that they prefer to define contract solely in terms of promise and sometimes even go so far as to reject agreement as an element of contract.

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Articles
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Israel Law Review , Volume 1 , Issue 2 , May 1966 , pp. 223 - 249
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Copyright © Cambridge University Press and The Faculty of Law, The Hebrew University of Jerusalem 1966

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References

1 Cf. Williston, , A Treatise on the Law of Contract, rev. ed., New York, 1936Google Scholar, I, para. 1; Id., “A Contract, a Promise or an Agreement” (1929) 5 Wisc. L.R. 233; Id., “Fashions in Law with Illustrations from the Law of Contracts” (1942) 21 Texas L.R. 119 (cf. p. 126); Corbin on Contracts, St. Paul, Minn., 1963, I, para. 3; Jackson, R. M., “The Scope of the Term ‘Contract’” (1937) 53 L.Q.R. 525Google Scholar; Atiyah, P. S., An Introduction to the Law of Contract, Oxford, 1961, p. 20 ff.Google Scholar See also, in Israel, , Zeltner, , Law of Contracts (Hebrew) 1962, pp. 28–29.Google ScholarCf. etiam R. Pound in Encyclopedia of Social Sciences, also defining contract as a promise (or aggregate of promises); Salmond, and Williams, J., Contracts, London, 1945, p. 6 ff.Google Scholar, who also define contract as a promise, but add that such a definition does not obviate the need for further analysis; Llewellyn, K. N., “Contract Institutional Aspects” in Encycl. of Social Sciences.Google Scholar

2 See the passage in Pollock, , Principles of Contracts, 10th ed., p. 1Google Scholar, to which Williston, op. cit., 535, refers. See also Page on Contrac, sec. 42, also quoted by Williston, ibid.

3 Cf. Paton, , Jurisprudence, 2nd. ed., Oxford, 1951, para. 92, p. 348.Google Scholar

4 Cf. Paton, loc. cit.

5 Cf. Hannen J. in Smith v. Hughes (1871) L.R. 6 Q.B. 597: “The rule of law… is corollary from the rule of morality which Mr. Pollock cited from Paley [Moral and Political Philosophy, Book III, ch. 5], that a promise is to be performed ‘in that sense in which the promiser apprehended at the time the promisee received it’, and may be thus expressed: ‘The promiser is not bound to fulfil a promise in a sense in which the promisee knew at the time the promiser did not intend it.’”

6 See, e.g., Corbin in discussing barter and gift: “These new relations [brought about by these transactions] arise by the voluntary action and consent of the two parties…” (our italics): op. cit., para. 4, p. 8.

7 Cf. Corbin, op. cit., para. 9.

8 Cf. Williston, in Texas L.R., cit.; Zeltner, loc. cit.

9 Published circa 1523. See Book II, ch. 24.

10 See his letter to Mr. Thompson quoted above in 5 (1929) Wisc. L.R.

11 Paton, op. cit., para. 92, p. 347, criticizes Salmond for limiting the denotation of the term “contract” to agreements creating rights, and adds: “There is no a priori reason why a contact, in addition to creating rights, should not also assign or release them.” To be more precise, Salmond, , (Jurisprudence, 11th ed., para. 126, p. 385 ff.)Google Scholar, following the accepted use of the term, reserves the term contracts for those creating rights in personam, and not rights in general. And rightly so. For it is only to these that the obligatory results will apply, and not, as a matter of principle, to any agreement assigning or releasing rights or creating non-obligatory rights. Paton himself remarks elsewhere (Ibid., p. 348): “In such a contract as barter… there is no need for any theory of enforceable agreement”, that is to say, the regulation of contract does not apply. This being the case, obligatory agreements (contracts) cannot by their nature be taken together with non-obligatory agreements, such as those which assign or discharge obligations. For the sake of clarity it is useful to reserve the term “contract” for obligatory agreements only.

12 The accepted definition according to which “contract is an agreement enforceable by law” is not sufficiently precise, in view of the fact that valid non-obligatory agreements can also be enforced by process of law. See Snyder, O.C., “Contract— Fact or Legal Hypothesis?” (1950) 21 Miss. L.J. 304, cf. p. 309.Google Scholar

13 Of course, a single transaction may be composite, including both contractual and other elements.

14 More exactly, under a given factual hypothesis the law requires certain action and prescribes a sanction for the event that that obligation is not met (thus imposing the duty and the sanction are separate factors).

15 The usual definitions refer to the first factor, saying that contract is an agreement or a promise. In other statements the other factor is stressed: see Sliosberg v. New York Life Insurance Co., 244 N.Y. 482, 155 N.E. 749 (cf. Williston on Contracts, 3rd ed., sec. 1, p. 3): “the obligation of contract is the law which binds the parties to perform their agreement.” Cf. Pollock, , Contracts, 3rd ed. by Wald, , pp. 1–2Google Scholar (cf. Corbin on Contracts, sec. 3): “The specific mark of a contract is the creation of a right, not to a thing, but to another man's conduct in the future.”

16 Cf. Anson, , Law of Contract, 16th ed. by Guyer, M. L., 1923, p. 2.Google Scholar This passage does not appear in the later editions, but it is quoted, with approval, by Paton, op. cit., para. 92, p. 346.

17 L. 1 Dig., 2, 14.

18 Grotius, De jure belli ac pacis, Lib. II, cap. XII, para. III–IV.

19 Cf. Osti, “Contratto”, in Novissimo Digesto Italiano.

20 The term Vereinbarung was rendered into French by Duguit as “union” (sec Duguit, L., Traité de droit constitutionnel, 3me ed., I, Paris, 1927, p. 380 ff.Google Scholar) and similarly into English (Duguit, L., “Collective Acts as distinguished from Contracts” (1918) 27 Yale L.R. 753).CrossRefGoogle Scholar This term was in fact used in the past to define contract as such: see Serjeant Pollard arguing in Reniger v. Fargossa, (1550) Plowd. at p. 17; 75 E.R. at p. 27: “agreement… is union, collection, copulation and conjunction of two or more minds in anything done or to be done…”. Holdsworth also refers to contract as a “union of wills”: A History of English Law VIII, 1926, p. 1.

21 Cf. Binding, “Die Gruendung des norddeutschen Bundes”, Festgabe fuer Windscheid, 1888; Id., Zum Werden und Leben der Staaten, 1920, pp. 95 ff., 191 ff.

22 Triepel, , Voelkerrecht und Landesrecht, 1899Google Scholar; Jellineck, G., System der subjekt. oeffentl. Rechte, 1892, p. 193 ff.Google Scholar; 2 ed., 1919, p. 273 ff.; Duguit, Traité (cit., para.40). Cf. Guggenheim, , Traité de droit internat, public, Genève, 1953, p. 56.Google Scholar

23 Besides the authors mentioned above see, e.g. Jacoby, , Grundlehren des Arbeitrechts, 1927, p. 2601 ff.Google Scholar See also Tuhr, V., Allg. Teil des deutschen Buerg. Rechts, II, 1, Muenchen und Leipzig, 1914, p. 237 ff.Google Scholar

24 Cf., e.g., Nawiasky, H., Allgemeine Rechtslehre, 2nd ed., Zuerich-Koeln, 1948, para. 16, p. 219 ff.Google Scholar: “…Vereinbarung, auch Gesamtakt genannt (wenn gleich manchmal unter diesem Ausdruck nicht die Vereinbarung selbst, sondern ihr Vollzug verstanden wird)…”.

25 Cf., e.g., Gierke, Genossenschaftstheorie, 1887, p. 133 ff.; Lescot, , Essai sur la période constitutive des personnes morales, Paris, 1913, p. 134 ff.Google Scholar

26 Cf., e.g., Kuntze, , “Der Gesamtakt” (Festgabe f. Mueller), 1892, para. 6, 12Google Scholar; Duguit, , Traité, cit., I, §37 ff.Google Scholar; Messineo, in Riv. dir. civ., 1942, 65.Google Scholar

27 Cf., e.g., G. Jellineck, loc. cit.

28 Bonsor v. Musicians Union [1954] Ch. 479, cf. p. 485. Cf. etiam Lee v. Showmens Guild [1952] 2 Q.B. 329. But as against the view of Lord Denning that natural justice prevails against the regulations see Citrine, Trade Union Law, 2nd ed., pp.230–31.

29 A similar opinion regarding Jewish law was expressed by Mr. Justice Haim Cohn:“Marriage in Jewish law is a bond of a contractual nature” (see Rizenfeld v. Yakobson (1963) 17 P.D. 1009 at p. 1018).

30 Cf. Chitty on Contracts, 21st ed., ch. 10, sec. 3.

31 Salmond, & Williams, J., Law of Contracts, London, 1945, p. 4 ff.Google Scholar Compare, in French law, Demogue, , Obligations, I, 1923, n. 23.Google Scholar

32 Paton, , Jurisprudence, 2nd ed., 1951, p. 349.Google Scholar

33 Distinct from the will of a person ratifying an agreement concluded by someone else, as in the capacity of guardian (see sec. 7 above). The person ratifying is not considered a party to the agreement, as his will is not viewed as a cause of the legal results but rather as a condition for their ensuing.

34 It would be reasonable to require disclosure in agreements leading to a fiduciary relationship between the parties, such as partnership. However, English law, in determining whether non-disclosure is a defect in the agreement, mainly inquires as to whether a fiduciary relationship already exists between the parties at the time the contract is concluded.

35 “It is well known that the basis of every partnership is the mutual good faith of the partners. For this reason the relationship of the partners to one another is frequently described as a relationship of trust which requires complete sincerity.” (Hasas v. Laslo ve-“Adi” (1963) 17 P.D. 758.)

36 As distinct from the less usual case of laws dealing with a particular instance (“privilegia”, as the Romans called them) and applying once only.

37 Some writers object that these agreements do not belong to this category, on the grounds that they do not regulate the contracts to be concluded in the future by the individual with his clients—but rather enjoin him from concluding them altogether except under certain conditions. Thus the possible future contracts are only indirectly influenced by such agreements. The difference, however, between such restraints of trade and other agreements under discussion does not seem to be substantial, for the latter also, as indicated in the text, do not prohibit abstaining from the contracts they deal with.

38 In this connection it should be noted that the term “collective agreement of (or for) employment” is inexact if it is considered to be tantamount to a collective contract of employment. It is not a contract of employment, as only personal contracts of employment are properly so called. The full correct term for such collective agreement would be “a collective agreement regarding contracts of employment”.

39 For a tendency in the positive direction see Jewish Agency v. Ilani (1956) 26 P.E. 43, at p. 46. But the matter belongs to the category of obligatory normative agreement only if, before the Collective Agreements Law, 1957, collective agreements in Israel were of such a nature, no more and no less: neither void on the on hand (and against this there might be invoked certain hints to be found in the various labour laws, such as sec. 35 of the Hours of Work and Rest Law, 1951), nor immediate in nature, on the other.