HISTORY OF LAW OF CONTRACT IN ANGLO-SAXON LAW
Anglo-Saxon Law required many external acts to create the basis of a contract. Some of these were in force for a lengthy duration. "Wed" was the first, following the time of the Norman Conquest, was known as "gage". It was a valuable object offered by the promisee's promisor to secure meeting the terms of the contract. Then there was the 'Borh', also known as a pledge following the Norman Conquest. It was a personal guarantee. However, during the Middle Ages, the word 'pledge became a reference to the person, not an object. The word "gage" symbolised valuable security, and it was later said that contracts should be formal. There were three kinds of circumstances when it was necessary to sign a contract:
- The solemn ceremony by which the betrothal was performed betrothal was, in essence, the term used to describe a contract of sale. Anglo-Saxon marriages, on their civil aspect, were based on the transfer by the woman's relatives of the right to guard her to her husband. The marriage was made by issuing a "wed", which later evolved into the wedding.
- Selling and buying were possible; however, the sale was always the execution of a contract. Sale law was just the police regulations designed to stop the sale of stolen items. A few regulations regarding the vendor's warranty of title or the quality of the merchandise sold were in place;
- The third possible occasion was the process to guarantee a defendant's appearance in the courts. The procedure was used in Anglo-Saxon Law; it was performed through contractual methods.
THE THREE-PARTY CONTRACT
As time passed, the 'borh' in other areas, other things also began to be dealt with in the same way, i.e., valuable security of 'wed' as well as the guarantee of "borh". The 'borh' is effectively a third party in the proceedings, and in many instances, the Anglo-Saxon contract is one of three parties.
LAW OF CONTRACT
Classifying our English Law of Contract into the following categories is possible. The first exists the legal system of "Simple Contracts". This is the standard type of agreement that is legally binding. It is also possible to have an official contract under seal, also known as a covenant. These two types of contracts are fundamentally based on the idea of an agreement between parties which is the concept that lies behind the term 'contracts'. The Mercantile contract is a little different from the other types of contracts. Quasi-contracts remain an unproven and untested area that is part of English Law.
(1) SIMPLE CONTRACT
It is based on an agreement between the parties, backed by consideration. Two essential elements are 'agreement' and "consideration'. To reach an agreement, there has to be an offer from one party in exchange for acceptance on the part of the second. Each case is not like the one mentioned, i.e., that in Carlill in v. Carbolic Smoke Ball Co. In this instance, the judge ruled that an advertisement was an offer made to anyone who could take the offer if they complied with the terms. The fact that a miscalculation of fact can completely invalidate the contract's validity highlights the significance of the agreement.
ROLE OF CONSIDERATION
Every contract does not constitute a legal obligation. With great hesitation in the 17th century, the judges set the foundation of the test of "consideration". This doctrine has not been satisfactory, and The Law Revision Committee, 1937, recommended its elimination. A fair amount of consideration for his promise should be given from the person who made the promise to the one making the offer. It is a requirement that the plaintiff has to be at risk of being a victim when he marries the daughter of the defendant or gives a benefit to the defendant, for instance, painting the defendant's house.
At Common Law, the remedy for breach of contract was to recover damages. No matter if the contract was intended to sell an apartment or marry a woman, the only remedy for the breach was to seek the amount. Equity subsequently intervened and brought in remedies for specific performance. In the future, equity enforced a contract in particular through an injunction. The court also provided relief, like the right to cancel the contract because of an innocent mistake.
(2) FORMAL CONTRACT
Formal contracts were originally cured through the act of Covenant, and this was done under the Doctrine of Consideration at Common Law and was, therefore, not applied. The seal was the primary element in these contracts. The rules regarding offer and acceptance did not have much legal significance since the contract was written in the document rather than in the contract between the parties.
ROLE OF FIDES FICTA
In the beginning, a formal contract was an obligation that had a sacramental or moral character, not one that required the intervention of the secular court. Following the war, the religious courts acted for the benefit of a Church that claimed to be in control of the moral obligations of its congregation through methods that were not secular. Thus, the Church courts often enforced under the guise of "fides ficta" contracts which were not legally binding under the Common Law. This was the "lessio fidei" breach of faith that prompted the remedy. It was seen as a single obligation rather than a pledge made by a party. It is believed by some as the source of the Doctrine of Consideration which forms the foundation of the modern concept of simple contracts, is found in the old "fides" of Church courts. The Church courts attracted attention to the most important aspect of the contract law, not breaching obligation but the obligation itself.
EARLY FORMS OF ACTION USED IN CONTRACTUAL MATTERS
The following "Forms of Act' could be employed in contract matters from the time of Bracton up to the widespread usage of the action of assumpsit:
THE ACTION OF DEBT
This type of action was in development during the time of Glanvill to meet the ever-growing demands of the people involved in the trade. The type of obligation applied was the obligation to pay money owed to the person who filed the claim. The legal action was in the pursuit of recovering an item rather than simply enforcing an obligation that can be reduced to damages. These are the instances where Action of Debt is applied: To collect:
- money loaned;
- the cost of selling goods;
- rent arrears due under a lease of years;
- the amount payable from a Surety
- an amount that is fixed and promised in an unsigned document;
- The penalty for a violation of the law and the amount sentenced by a judge as due.
There were also other cases like money being promised to a potential husband by the bride's father. However, in all cases, an amount was fixed and due. This focus on the exact recovery of a certain item or amount caused the law to evolve later that debt was only due for a specified or liquidated sum, which is now referred to as liquidated damages. To justify a claim under the event of debt, one must show the defendant's benefit, which can be reduced to the amount of liquidated sum money. Other rules limited the scope of the debt:
- Since the obligation on which it rests is not indefinite, the court cannot allow it to be used for anything other than to collect a specific and fixed amount. The plaintiff has to recover the exact amount claimed or be in breach of the law;
- If the plaintiff has not produced an unsigned document or another formality, either as evidence of a contract or in connection with the obligation on which he filed suit could be likely to be able to satisfy the court through a wager of law and
- If the plaintiff relied upon an unsigned document, the case was strict Juris'. A defendant is bound to the terms of the document, all of the deed, and not just the deed.
The debt-related action was just for a liquidated amount of money, but chattels were redeemed through the act of Detinue. It is thought that the Writ of Detinue is the next generation of the Writ of Debt, which is definitely of recent date. The detention of chattels is a property violation, and the Writ of Detinue to recover it is by nature private, i.e., for the return of property. The detinue action will occur when the property of one man has made its way into the possession of someone else who is not entitled to keep it in comparison to the original instance, such as the instance of a loan for the domestic item for a week with no return at the end of the time. The conclusion drawn from the source of Detinue is that there is no or no evidence that lawyers believed that they were applying an agreement between parties. The essence was to protect the rights of the plaintiff to claim his property returned.
Glanvill, the author of his work, noted that there was no writ issued to authorise covenants during the first period of England. However, beginning in 1201 (if not 1194), the covenant action is recorded in the Plea Rolls, and the first Register of Writings (1227) includes the reference to the Writ of Covenant. By the time of the reign of Henry III (1216-1272), this act was most likely to be widely used. In the early years, the Writ of Covenant, in its beginning days, was used to protect the rights of land and, in particular, the lease for the duration. The majority of the early cases involved agreements (Conventions) regarding land or objects that the courts of mediaeval times considered comparable to property and able to be taken. They generally fall into three categories:
- Acts to ensure the conditions of a lease for some time. Pollock and Maitland believe that covenants were created principally to accomplish this. Before the introduction of this procedure, it was believed that the lessee had no interest in the land. However, it was only through this method that he could secure compliance with the terms of the agreement.
- The actions are brought only in the hope to end with a compromise, usually referred to as a final concord or a fine-in-fact that was an exchange of property by one of the parties to the third party with the approval of the court.
- Enforcement actions to enforce covenants made as part of family settlements by re-feoffment or feoffment. One of the most frequent and peculiar uses for Writ of Covenant was in the imposition of the fine.
EVOLUTION OF ASSUMPSIT
To extend the current contractual remedies, judges used the trespassing rule, and the case brought into force was called an "Assumpsit". In the event breaching a contract was to be considered an 'evil' promise, which is also known as it was a tort. This means that an expansion of the lawful Law of a Contract was achieved through a tortuous act. In the years before Yearbooks were published, the term "contract" was used to define the obligation behind the debt action. In the beginning stages of assumpsit, the word contract is used to indicate an obligation, distinct from the assumpsit or undertaking that was the basis of modern remedies. In 1348, a case was brought in which the petitioner complained to the King's Bench regarding losing his horse by overloading a ferry (Humber Ferry's case). Justice Bankwell argued that it is possible that he committed wrong by overloading the vessel, and his horse died. Even though the counsel for the defendant was not guilty, the judge ruled against him. The case is called the most significant in developing the law of contract. Similar to Waldon v. Marshal, in 1370, the plaintiff claimed that the defendant had sworn to treat his horse. However, he had completed his task so that the animal ended up dying. The defendant's counsel argued that the claim was based on the existence of a promise, and the correct remedy should there have been a deed was a covenant. Nevertheless, the writ was upheld as the defendant caused the plaintiff harm through his reckless conduct.
MEANING OF ASSUMPSIT
Ames claimed that from the medieval idea of liability comes the requirement for an explicit assumpsit. "So, if a Horse Doctor undertakes to cure my horse and I, on the faith of that undertaking, allow him to treat the horse, then the risk falls upon him, and I have suffered a wrong if my horse is the worse for his treatment." Assumpsit has become quite commonplace during the 15th century. But the theory behind it remains the same. A statement made by Newton in 1436 clarifies that even though the strict doctrine is maintained, it is extremely difficult to keep the contract from being a part of it. The assumpsit cannot be described using any other name, except the word is 'covenant'. One of the first cases (1388) exhibits a trend to this end that the assumpsit occurred in the payment of money.
C. DOCTRINE OF CONSIDERATION
The word 'consideration' initially comprised all motives that would make the agreement legally binding legally. "To enforce any agreement would only result in absurdity' was the ruling in the case of Doige. We will explore the theories about the basis of this principle.
ORIGIN OF 'CONSIDERATION'
There are three main theories on the origins of the Doctrine of Consideration, i.e., of Holmes Ames, Professor. Ames and Sir John Salmond. The following research will allow us to better understand the subject more clearly:
(1) Justice Holmes, in his Common Law (Chapter VII), states that the source of the doctrine can be found in the older obligation of 'Quid pro quo, a requirement within the Action of Debt. Holmes proposes an altered generalisation of what witnesses were required to be able to prove. The author offers the following criticisms of his theories. Barbour:
- "Quid pro quo" must be extended beyond a benefit to the defendant to include loss to the plaintiff
- This extension of 'quid Pro quid pro quo cannot be seen even in the act of "indebitatus assumpsit".
- The court was not convinced to allow Action of Debt to allow any harm to the plaintiff to be considered 'Quid pro Quo'.
(2) Prof. Ames suggests that it originates from "detriment" to the plaintiff, as the damage is necessary to justify action in the case. Without it, there is any 'trespass' in such a reduced form that it could be used as a foundation for a case. This seems to be the foundation judges used to introduce the concept of assumpsit in its most basic version. However, the flaw of Professor. Ames' theory appears to the author in his complete disregard of the impact on the action of assumpsit, which was made by indebitatus.
(3) The third argument that Sir John Salmond proposed claims that it was never a logical advancement' from within the act (of assumpsit) at all and was instead a pre-made principle imported as an extra.
GRADUAL DEVELOPMENT OF THE DOCTRINE
From a birds-eye look at the development of the consideration process from the beginning of the fifteenth century, we can conclude that at the time, English courts recognised the act of non-feasance under torts, the basis of the action being damage or injury that plaintiff suffers as a result of the defendant's promise. Within the Law of Contracts, the Action of Debt was recognised where the liability was derived due to the benefit that the defendant was known as "quid pro quo". It was then only a matter of combining the concepts of detriment and benefit in a single conception to define the basis for the action of assumpsit in the Modern Law of Contracts. A term to indicate this idea, i.e., consideration, is also within the Law of Real Property. According to the Law of Property, where the transfer of an estate legally owned by a stranger, the courts assumed that it had been being transferred to benefit or use of the person to whom the transfer was made unless the recipient could demonstrate the value of reason for the transfer. So, before the middle of the 16th century, the word 'consideration' was not the only term used to identify the cause of action based on a breach of a commitment. Only in the latter portion of the sixteenth decade did it become common to employ the term "consideration" in this context. There are three manners of consideration based on which action of assumpsit can be grounded:
- a debt precedent;
- in which case the person to whom the promise is made carries out his time at the request of the promisor even though no profit accrues to the promisor
- There is a momentary consideration."
The primary head in the Manwood case was a result of the concept of Quid pro quo debt and was incorporated through the action of indebitatus assumpsit. It was claimed that until the debt was paid off, it was still in existence and was a basis to consider. This was confirmed by the Slade case (1602) and confused the distinction between past and final considerations during the eighteenth and nineteenth centuries. The second issue in Manwood's case concerns the application of the principle of detriment to the plaintiff, which is the basis for an Action of Trespass, which is the reason for assumpsit. There were two questions to be resolved. If the promise was made before the consideration was formulated in the past, would the consideration, even though it is past, be enough to warrant the commitment? Furthermore, is any loss or gain, however minor, sufficient, or should the consideration be considered sufficient? For the first question, it was answered in general terms that "past consideration" did not constitute a 'consideration'; to the second, the answer is that any act or forbearance that has some significance in the eyes of the law must be adequate.
CONSIDERATION IN THE 18TH & 19TH CENTURIES
Lord Mansfield played a crucial part in the evolution of Common Law during the eighteenth century. Lord Mansfield was keen on creating equity in the practice of Common Law. The Court of Chancery developed the idea that "natural love and affection are sufficient to warrant the contract'. However, it was denied in Common Law. The insanity of the concept allowed for appealing to natural and moral law was appropriate to the times. The precedent debt was considered a valid basis for an indebitatus assumpsit. When incorporating the Mercantile Law into the Common Law, Lord Mansfield believed that in the commercial context, there was no concept of “nudum pactum", i.e., an agreement that is not legally binding. In 1765, Lord Mansfield made use of the opportunity to do so in Pillions V. Van Mecrop. He claimed that the Law of Merchants and the Law of the Land were the same, and the term 'nudum Pactum is not in the law and usage of merchants. Mansfield declares: "I admit that the ancient notion about the want of consideration was for the sake of evidence only, because when it was reduced to writing...there was no objection to the want of consideration." In Rann v. Hughes (1778), the contract was written as stipulated by the Statute of Frauds. The case was debated in line with Mansfield's belief that consideration was unnecessary to justify the case. The House heard the case of Lords. Skynner, Lord Chief Baron, said: "There cannot be 'nudum agreement' written. There is no such law within English law." He declared no law in the Law of England afforded no remedy to force the execution of an agreement that was not given adequate consideration. House of Lords adopted that decision. But the concept and the concept of moral consideration were upheld when it came to Lee Muggeridge v. Muggeridge, decided in 1813. Mansfield C.J. at the Common Pleas stated: "It has been repeatedly decided that a moral consideration was a good consideration for a promise to pay." However, those who advocated for consideration as a technical concept were wary. Eastwood v. Kenyon had been decided in 1840, and the court had since changed to a stricter view of consideration. Lord Denman, C.J., in the case, stated in support of the idea that any promises that are made deliberately ought to be considered binding, that "the doctrine would annihilate the necessity for any consideration at all in as much as the mere fact of giving a promise creates a moral obligation to perform it". Lord Denman was rational and clear in his assertion that accepting a moral basis, in a sense, is referred to as abrogating consideration completely. This decision was a devastating hit to this notion. In the end, it was left to the courts to decide what they would recognise as an acceptable consideration and define its relationship to legally binding contracts. In 1875 the most accurate definition of consideration can be found by the court in Currie and Misa: "A valuable consideration in the sense of law may consist either in some right, interest, profit or benefit according to one party or some forbearance, detriment or responsibility given, suffered or undertaken by the other."
DIFFICULTIES IN ACCEPTING THE ABOVE DOCTRINE OF CONSIDERATION
Accepting the Doctrine of Consideration, as mentioned above, the problems arise in the commercial contract, e.g., in the case of bankers' credit. Professor. Gutteridge has dealt with the problems arising from the Consideration Doctrine through his study regarding Commercial Credit 'Law of Banker's Commercial Credit', published in 1932. According to Dean Roscoe Pound observes in his book: "The Doctrine of Consideration with its uncertain lines stood in the way of many things which the exigencies of business called for, and the businessmen found themselves doing in reliance on each other's business honour and the banker's jealously of his business credit, with or without help from the law." The other problem that is still not resolved is whether a promise to carry out independent of a contract or another contract constitutes an incentive to make an entirely new promise. It is assumed that the obligation given in the new contract is identical to the obligation previously imposed under the agreement. Problems arise most frequently when the two parties are the same.
Thirdly, the issue arises when the condition is waived when the condition, had it not been waived, would have prevented the breach. In America, this situation is classified as an informal contract with no consideration. The fourth issue that has created a problem is where a promise has been made with no consideration, but it is of such the kind that it causes action based on the trust in the guarantee or faith in it. Finally, consider the situation of charity subscriptions. There are usually no guarantees from the charities, e.g., to provide specific payment methods. With all of the issues mentioned above and discussions in mind, we believe that consideration isn't an element of a contract. It's just evidence. Another type of evidence might include what is in England has been called moral consideration' or, in some instances, "moral consideration," however in certain countries, it's been referred to as "causa," i.e., things such as love and natural sentimental affection, gratitude for past kindnesses and benevolence, charity, etc. Another type of evidence could be writing, whether by particularity. However, neither cause nor consideration or writing can be considered the essence of the contract. These are all irrelevant and preoperative matters that help prove and confirm the intention of the contract.
OUGHT THE DOCTRINE OF CONSIDERATION TO BE ABOLISHED FROM THE COMMON LAW?
In my opinion, the notion of consideration should not be found within the Law of Contract framework. I'm the only one to stand in this opinion. Lord Wright of Durley thinks that the real contract law is devoid of practical or theoretical issues and based upon the above principles. Professor. Lorenzen has also supported this position by writing in the essay (1919) "Causa and the Law of Contract'. Dean Roscoe Pound is also a proponent of this view. Sir William Holdsworth (H. E. L. 1925, Vol. VIII, 47. 47) declares: "In its present form, the Doctrine of Consideration is somewhat of an anachronism." He suggests as a practical solution that a contract is legally enforced if it is written or is subject to consideration. The written evidence or the circumstances could be proof of serious intent, i.e., what Lord Mansfield tried to establish a legal norm in Pillian V. Van Mecrop. However, the proposed reform was restricted to commercial contracts. There is no likelihood that English Law will be completely changed in this manner. Lord The Chancellor's Law Revision Committee' appointed in 1937, also criticised the doctrine of consideration within its Sixth Interim Report. Jurists such as Anson wrote that "consideration is not one of several tests, it is the only test of the intention of the promisor to bind himself by contract". The elimination of the deep-rooted Doctrine of Consideration will not impact the law that pertains to illegality, error and immorality. It would not affect the law relating to the inability to fulfil a condition. It's not a valid argument in the law in France, Italy, Spain, Germany, Switzerland and Japan. In conclusion, I can see no reason to oppose the abolishment of the doctrine to balance the arguments for which I've advocated for its elimination.