The Promise Principle
The promise principle is a way for someone to create an obligation for themselves in a situation where they were not under such an obligation. Specifically, ‘The Promise Principle… is that principle by which persons may impose on themselves obligations where none existed before.’[1] A complete and uncontested elucidation of what contract law is remains elusive, despite these reaches into the field of jurisprudence with the aim of bringing forth such an explanation. Moreover, a normative account of what contract law ought to be has also proved elusive. [2] Due to this inability to develop a coherent ‘jurisprudence of contract law’, the field is by and large a pastiche of values, such as efficiency, fairness, liberty, reliance and the promise principle.
The Human Rights Perspective
The impact of Human Rights law has been felt in the field of contract law much like it has across most other areas of the law, although this is relatively recent; the usual province of Human Rights law is to manage the relationship between the state and its citizens. However, human rights norms have broken free of the vertical paradigm and established themselves in horizontal relationships between citizens as well. This has also been the case for contract law. Naturally, it is perfectly possible that the transfer of vertical human rights norms into the horizontal citizen-to-citizen space is largely impacted by every nation’s individual constitutional framework. However, since fundamental rights have a tendency to cross-fertilise between the vertical and horizontal dimensions and have done so over a considerable amount of time, it appears likely that the way in which human rights norms have influenced horizontal arrangements has achieved a degree of uniformity at least. It is more likely that any changes in the field of contract law are better viewed and explained chronologically rather than by recourse to the horizontal/vertical divide. [3]
A coherent account would be beneficial, which is why commentators have argued in favour of what is known as a ‘total constitution’[4] – a constitution that would bolster the integrity of the law and would achieve further uniformity across the disparate areas of the law as far as protection of fundamental rights are concerned. [5] However, a different viewpoint argues that private law is a creature of social regulation. This position opposes the view of private law as a tool of modern corrective justice, instead positing that it is a regulatory weapon for the state. [6]
How the Regulatory Doctrine applies to Contracts
When it comes to modern contracts and particularly those modern contracts which relate to consumers, the overriding policy thrust evident in the latest norms is to ensure the prevention of unfair practices, one-sided form contracts and protection from injuries; there is also a considerable emphasis on fostering competition. [7] As has been discussed above, this type of overlap with the field of social regulation is typically seen across other parts of the law; however, with every intrusion by the state into the horizontal relationships of its subjects comes a greater need to ensure that the fundamental rights of those same subjects are protected in the course of such intrusions. It should be noted that when pursuing the social regulatory aspect within horizontal relations to its logical conclusion, achieving the state’s policy objectives often requires that strict liability regimes will appear in certain situations. Strict liability regimes relate to situations in which a person will be found to infringe some rule (and perhaps required to compensate another party) even though it has not been possible to conclusively prove any fault (sometimes, fault is wholly irrelevant in such regimes). In such cases, it is vitally important that there is consideration for the paying/sanctioned party and their rights; if nothing else, some justification must be provided. [8]
It is situations such as these which provide ammunition for the argument that it is necessary to reframe private law to closely reflect human rights norms; this will arguably impact on the way lawyers and judges approach such cases and foster greater protection for the fundamental rights of parties in cases/instances where protection may otherwise be lacking. It is to be applauded that more and more, attention is being paid to whether proportionality (and similar protection mechanisms) has been observed, or whether the dignity and autonomy of each party is protected. [9]
If the convergence between private and public solidifies it will be prudent to consider the scale of the impact that human rights law might have on contract law. It is possible that the sheer degree of change will have a transformative effect on contract law by way of introducing human rights norms (until now alien to contract law) into contract law cases. It is equally possible that the opposite effect may take hold, namely that a laissez-faire approach develops in such a way as to offer insufficient protection for vital human rights norms. [10] What Collins is actually concerned with is if the fusion of two very different parts of the law may have the unfortunate and undesired effect of abrogating social coherence and replacing it with individualism.
[1] Charles Fried, Contract as Promise: A Theory of Contractual Obligation (HUP 1981) <http://www.law.harvard.edu/programs/about/privatelaw/contract.as.promise.1.56.fried.pdf>accessed on 20 May 2014, 1.
[2] Alan Schwartz and Robert E Scott, ‘Contract Theory and the Limits of Contract Law’ (2003) 133 Yale L J 541, 543.
[3] Hugh Collins, ‘The Impact of Human Rights Law on Contract Law in Europe’ (2011) <http://ssrn.com/abstract=1837429> accessed on 20 May 2014, 1-2.
[4] M Kumm, ‘Who is Afraid of the Total Constitution? Constitutional Rights as Principles and the Constitutionalization of Private Law’ (2006) 7(4) German Law Journal 341.
[5] Hugh Collins, ‘The Constitutionalization of Private Law as a Path to Social Justice?’ in H Micklitz (ed) Social Justice and Private Law (Edward Elgar, forthcoming)
[6] Hugh Collins, Regulating Contracts, (OUP 1999) ch. 3.
[7] Collins (n 1), 2.
[8] Hugh Collins, ‘Utility and Rights in Common Law Reasoning: rebalancing Private Law Through Constitutialization’ (2007) 30 Dalhousie Law Journal 1.
[9] Collins (n 8), 3-4.
[10] Collins (n 8), 4.