prior probability

Law professor Charles Fried published a little book called “Contract as Promise” in 1981. (It’s now in its second edition and is required reading in many contracts law courses.) His thesis, simply stated, is that promises are self-imposed moral obligations. He calls his thesis the “promise principle” and explains its relation to two other fundamental legal principles, such as the tort principle (A must compensate B for harms A causes to B) and the principle of restitution (if A receives an undeserving benefit at B’s expense, A must return that benefit to B unless a gift was intented). There are many problems with Fried’s thesis, however. First of all, Fried does not devote a single word to the doctrine of “illegal agreements” (contracts lacking a lawful purpose). We find this omission very troubling: if promises are based on some deep ethical principle of morality, then we want to know what Fried has to say about illegal promises, i.e. about promises to do something illegal or even promises to do something immoral!

Secondly, Fried concedes that many areas of contract law, such as the mailbox rule, are based on mere “rules of convenience,” not on the promise principle. But hold on: if certain background rules are based on rules of convenience (as they surely are), then why can’t we argue that promissory obligations themselves are also based on rules of convenience, as opposed to rules of morality? In addition, Fried also concedes that the promise principle plays absolutely no role in cases of mutual mistake (p. 60) as well as in cases of unilateral mistake (p. 62) … (By the way, all page references are to the original paperback edition of “Contract as Promise.”)

Thirdly, we’re not impressed with Fried’s analysis of blackmail in Chapter 7 of “Contract as Promise.” We understand Fried’s common sense position: why Fried would argue that a promise made under the threat of blackmail is not a legally or morally binding promise, but we must confess that we don’t understand why this has to be the case from a moral perspective. In fact, we see a potential link between Fried’s analysis of blackmail and his expert analysis (in Chapter 6) of the duty to disclose in certain contracting situations. The link is this: what about the blackmail victim’s duty to disclose? Shouldn’t the blackmail “victim” have a legal duty to disclose the information that he wants to keep secret? (Take Fried’s own example of the moral philosopher who was convicted of embezzlement “many years ago” (p. 96). We would argue that it’s the moral philosopher who is acting immorally by trying to hide this embarassing information about his past. Yes, the philosopher’s blackmailer is now trying to profit off his victim’s misfortune, but why do legal scholars tend to focus exclusively on the blackmailer’s wrongdoing?)

But most importantly, we found Fried’s point about the reciprocal nature of promises on page 117 to be very revealing. In our view, what makes a promise “morally” binding is not the fact that it is “self-imposed” (to borrow Fried’s own formulation on p. 112). After all, if a promise is self-imposed, so what? The fact that I have self-imposed an obligation on myself tells me nothing about whether I am justified in breaking my promise in the future, especially if the conditions under which I made my promise have changed. To us, what makes a promise a “moral” event is its reciprocal nature: I make promises to other people (and I keep my promises) because I want other people to make and keep their promises to me. In short, we take a pragmatic view of promising.

The promise principle …