Enforcing Promises: An Examination of the Basis of Contract

The obligation to keep promises is a commonly acknowledged moral duty. Yet not all promises – however solemnly vowed – are enforceable at law. Why are some promises legally binding and others not? Orthodox doctrinal categories provide only modest assistance in answering this persistent question. Conventional analysis, for example, has distinguished promises made in exchange for a return promise or performance from nonreciprocal promises. Indeed, common law bargain theory is classically simple: bargained-for promises are presumptively enforceable; nonreciprocal promises are presumptively unenforceable. But this disarmingly simple theory has never mirrored reality. Contract law has ventured far beyond such narrow limitations, embracing reliance and unjust enrichment as additional principles of promissory obligation. Thus, a promise may be enforceable to the extent that the promisee has incurred substantial costs, or conferred benefits, in reasonable reliance on the promise. Promissory estoppel under Section 90 of the Restatement of Contracts is the primary enforcement mechanism when action in reliance follows the promise. If the change of position by the promisee precedes the promise, its nexus with the promise is more subtle. For example, a promise is enforceable when it follows a non-donative material benefit conferred by the promisee. Unjust enrichment principles are typically invoked to enforce such past consideration promises. Despite this expansion of liability, gratuitous promises of gifts or unilateral pledges to confer benefits remain legally unenforceable

Liquidated Damages, Penalties and the Just Compensation Principle: Some Notes on an Enforcement Model and a Theory of Efficient Breach

Part I of this Article examines the role of liquidated damage provisions and penalties in the context of a general theory of efficient breach of contract. The proof problems inherent in fully recovering idiosyncratic values within the context of operationally practical damage sanctions may prevent the non-breaching party from recovering his subjective expectations if recovery is limited to legally determined remedies. The expected cost of establishing true losses under conventional damage measures will thus induce parties who face uncertain or nonprovable anticipated losses to negotiate stipulated damage agreements. The current penalty rule subjects these agreements to costly review, based not on the fairness of the process, but on whether the initial estimate sufficiently mirrors the anticipated provable loss. Part II examines the hypothesis that, absent evidence of process unfairness in bargaining, efficiency will be enhanced by the enforcement of an agreed allocation of risks embodied in a liquidated damage clause. We argue that agreed damage measures and in terrorem provisions represent, under many circumstances, the most efficient means by which parties can insure against the otherwise non-compensable consequences of breach. Our hypothesis is then also tested against a series of conditions in order to identify alternative legal principles that may provide less costly means of avoiding the harmful effects whose perception apparently prompted the current penalty rule

Measuring Sellers\u27 Damages: The Lost-Profits Puzzle

A buyer repudiates a fixed-price contract to purchase goods, and the seller sues for damages. How should a court measure the seller\u27s loss? The answer seems simple: The seller should be awarded damages sufficient to place it in the same economic position it would have enjoyed had the buyer performed the contract. But the seductive conceptual simplicity of the compensation principle disguises substantial practical problems in measuring seller\u27s damages. Contract law has traditionally minimized measurement difficulties by basing damages in most cases on the difference between the contract price and market value of the repudiated goods. The common law courts generally limited the seller to such market damages whenever the seller had a resale market for the contract goods. These courts assumed that combining this damage award with proceeds from a resale would give the seller the profits that performance would have earned it

The Mitigation Principle: Toward a General Theory of Contractual Obligation

The duty to mitigate is a universally accepted principle of contract law requiring that each party exert reasonable efforts to minimize losses whenever intervening events impede contractual objectives. Although applications of the mitigation principle pervade the specific rules of contract, it is startling how many questions remain unanswered as to precisely what efforts the mitigation duty requires and what point in time the obligation arises. For example, under what circumstances does mitigation require an injured party to deal with the contract breacher? Why does the duty to minimize losses mature only after the breach, even if the injured party became aware much earlier of a significant danger of breach and had a cost-effective opportunity to mitigate the prospective loss? Is the duty to communicate special or unforeseeable circumstances confined to the time of contracting, even where the communication of post-contract but pre-performance information might reduce costs? These and many similar questions remain unresolved because the relationship among the diverse rules of mitigation has not been systematically articulated. Recognizing that each party\u27s mitigation responsibility is inextricably linked to the performance obligation of his contracting partner is the key step in fitting the mitigation principle into a general theory of contractual obligation. In recent years, a maturing theoretical scholarship has furthered understanding of the performance and remedial obligations of contracting parties. By focusing on particular performance problems, this scholarship has not only uncovered further questions but also heightened interest in a theoretical formulation that weaves the performance and remedial rules of contract into a single fabric

The Limits of Expanded Choice: An Analysis of the Interactions between Express and Implied Contract Terms

Although trade and its defining terms lie at the very core of contract law, perceptions of the state\u27s involvement in the exchange process remain peculiarly incomplete. Everyone understands that the state supplies the fundamental property-defining rules for pre-trade endowments. For instance, governmentally provided rules of tort, nuisance, and civil rights establish basic boundaries of what initially belongs to an individual and, hence, what he has to offer in exchange. When an exchange subsequently takes place, however, the parties themselves assume an important part of the burden of communicating what rights are being given and received. Although the state\u27s general rules of contract provide a set of standard gap-filling assumptions or implied terms, almost every agreement requires the parties to provide some additional individualized content. At one level, the private and state-supplied terms of an executory contract represent an attempted interparty communication of the substantive entitlements intended to be exchanged. Since, however; the terms communicate evidence of the exchange\u27s content to the state as well, they also constitute the principal legal definition of the rights reallocation. Unfortunately, this definitional process requires parties to employ inherently error-prone signals – the formulations of their agreement. If the chosen combination of privately and publicly supplied terms results in an inappropriate formulation, a party may suffer a costly surprise when the contract is legally enforced. The disappointed party will frequently contend that the content of the contract, as ultimately interpreted, does not accurately describe the original intent or expectation. Many such complaints about the misformulation or misinterpretation of an agreement are rooted in tensions between implied and express terms and between standard and unconventional forms of expression. To the extent that these tensions have been understood at all, the major attempt to harmonize them relies on what we term the Expanded Choice postulate. The postulate maintains that implied terms expand contractors\u27 choices by providing standardized and widely suitable preformulations, thus eliminating the cost of negotiating every detail of the proposed arrangement. This Expanded Choice thesis implicitly presumes a neutral policy toward individualized agreements: atypical parties lose nothing, since they remain unrestrained from designing customized provisions to replace the state-supplied terms

Enforcing Promises: An Examination of the Basis of Contract

The obligation to keep promises is a commonly acknowledged moral duty. Yet not all promises – however solemnly vowed – are enforceable at law. Why are some promises legally binding and others not? Orthodox doctrinal categories provide only modest assistance in answering this persistent question. Conventional analysis, for example, has distinguished promises made in exchange for a return promise or performance from nonreciprocal promises. Indeed, common law bargain theory is classically simple: bargained-for promises are presumptively enforceable; nonreciprocal promises are presumptively unenforceable. But this disarmingly simple theory has never mirrored reality. Contract law has ventured far beyond such narrow limitations, embracing reliance and unjust enrichment as additional principles of promissory obligation. Thus, a promise may be enforceable to the extent that the promisee has incurred substantial costs, or conferred benefits, in reasonable reliance on the promise. Promissory estoppel under Section 90 of the Restatement of Contracts is the primary enforcement mechanism when action in reliance follows the promise. If the change of position by the promisee precedes the promise, its nexus with the promise is more subtle. For example, a promise is enforceable when it follows a non-donative material benefit conferred by the promisee. Unjust enrichment principles are typically invoked to enforce such past consideration promises. Despite this expansion of liability, gratuitous promises of gifts or unilateral pledges to confer benefits remain legally unenforceable

Ten year change in forest succession and composition measured by remote sensing

Vegetation dynamics and changes in ecological patterns were measured by remote sensing over a 10 year period (1973 to 1983) for 148,406 landscape elements, covering more than 500 sq km in a protected forested wilderness. Quantitative measurements were made possible by methods to detect ecologically meaningful landscape units; these allowed measurement of ecological transition frequencies and calculation of expected recurrence times. Measured ecological transition frequencies reveal boreal forest wilderness as spatially heterogeneous and highly dynamic, with one-sixth of the area in clearings and early successional stages, consistent with recent postulates about the spatial and temporal patterns of natural ecosystems. Differences between managed forest areas and a protected wilderness allow assessment of different management regimes

Spatial Predictive Modeling and Remote Sensing of Land Use Change in the Chesapeake Bay Watershed

This project was focused on modeling the processes by which increasing demand for developed land uses, brought about by changes in the regional economy and the socio-demographics of the region, are translated into a changing spatial pattern of land use. Our study focused on a portion of the Chesapeake Bay Watershed where the spatial patterns of sprawl represent a set of conditions generally prevalent in much of the U.S. Working in the region permitted us access to (i) a time-series of multi-scale and multi-temporal (including historical) satellite imagery and (ii) an established network of collaborating partners and agencies willing to share resources and to utilize developed techniques and model results. In addition, a unique parcel-level tax assessment database and linked parcel boundary maps exists for two counties in the Maryland portion of this region that made it possible to establish a historical cross-section time-series database of parcel level development decisions. Scenario analyses of future land use dynamics provided critical quantitative insight into the impact of alternative land management and policy decisions. These also have been specifically aimed at addressing growth control policies aimed at curbing exurban (sprawl) development. Our initial technical approach included three components: (i) spatial econometric modeling of the development decision, (ii) remote sensing of suburban change and residential land use density, including comparisons of past change from Landsat analyses and more traditional sources, and (iii) linkages between the two through variable initialization and supplementation of parcel level data. To these we added a fourth component, (iv) cellular automata modeling of urbanization, which proved to be a valuable addition to the project. This project has generated both remote sensing and spatially explicit socio-economic data to estimate and calibrate the parameters for two different types of land use change models and has undertaken analyses of these models. One (the CA model) is driven largely by observations on past patterns of land use change, while the other (the EC model) is driven by mechanisms of the land use change decision at the parcel level. Our project may be the first serious attempt at developing both types of models for the same area, using as much common data as possible. We have identified the strengths and weaknesses of the two approaches and plan to continue to revise each model in the light of new data and new lessons learned through continued collaboration. Questions, approaches, findings, publication and presentation lists concerning the research are also presented

Northern High-Latitude Ecosystems Respond to Climate Change

The northern high latitudes are an area of particular importance to global climate change. As a system dependent on freezing conditions, the top of the planet contains vast amounts of carbon in biomass, soils, and permafrost that have the potential to interact with the atmosphere through the biosphere, hydrosphere, lithosphere, and cryosphere. If released en masse, this carbon would greatly exacerbate the levels of greenhouse gases in the atmosphere. Over the past 2 years, a growing body of research has provided evidence of substantial but idiosyncratic environmental changes, with some surprising aspects, across the region. This article reviews some recent findings and presents a new analysis of northern vegetation photosynthetic and productivity trends tracked from Earth observing satellites

Lidar Remote Sensing Variables Predict Breeding Habitat of a Neotropical Migrant Bird

A topic of recurring interest in ecological research is the degree to which vegetation structure influences the distribution and abundance of species. Here we test the applicability of remote sensing, particularly novel use of waveform lidar measurements, for quantifying the habitat heterogeneity of a contiguous northern hardwoods forest in the northeastern United States. We apply these results to predict the breeding habitat quality, an indicator of reproductive output of a well-studied Neotropical migrant songbird, the Black-throated Blue Warbler (Dendroica caerulescens). We found that using canopy vertical structure metrics provided unique information for models of habitat quality and spatial patterns of prevalence. An ensemble decision tree modeling approach (random forests) consistently identified lidar metrics describing the vertical distribution and complexity of canopy elements as important predictors of habitat use over multiple years. Although other aspects of habitat were important, including the seasonality of vegetation cover, the canopy structure variables provided unique and complementary information that systematically improved model predictions. We conclude that canopy structure metrics derived from waveform lidar, which will be available on future satellite missions, can advance multiple aspects of biodiversity research, and additional studies should be extended to other organisms and regions