Monday, February 28, 2005
All of Judge Cardozo's contracts opinions are interesting, but few have aroused as much interest over the years as Allegheny College v. National Chautauqua County Bank, the decision that held that consideration is unnecessary to support charitable pledges. Or maybe in didn't hold that, exactly. Actually, does anyone know exactly what it held? Anyone?
As Curtis Bridgeman (Florida State) argues in an interesting new paper, Allegheny College Revisited: Cardozo, Consideration, and Formalism in Context, few of old Ben's opinions have been so widely criticized, even by people who applaud the outcome. Bridgeman sets out to rectify this, mounting a sustained defense of the opinion and replying to much of the criticism. Click on the link for the abstract.
Allegheny College is a bit of an oddity. It deals with a narrow issue (the enforceability of promises to make donations to charities), and Cardozo's majority opinion is almost universally derided as at best confusing and at worst outright devious. Yet it is still included in most contracts casebooks and taught by most contracts professors, usually as an introduction to the doctrine of promissory estoppel. In this paper, I defend the opinion - something almost no one has done without severe qualification - and argue that most of the criticisms are the result of a misguided emphasis on promissory estoppel.
Although most scholars now agree that the case is decided on consideration grounds, the invocation of promissory estoppel is usually explained away as some sort of rhetorical flourish or deceit, probably designed ultimately to undermine the doctrine of consideration. I take on some of this scholarship, and then argue by contrast that the reference to promissory estoppel is not meant even to suggest that promissory estoppel controls in this case, but rather to show that whether bargaining has taken place (and therefore whether a promise is supported by consideration) depends very much on context. The key move in Cardozo's opinion is not only finding the return implied promise by the college, but also claiming that Ms. Johnston made her promise in order to induce Allegheny College to obligate itself, a point that has gone almost unnoticed in the scholarship.
Perhaps more importantly, I argue that there is a larger lesson for us here about contracts jurisprudence. Finding bargaining in such an instance would likely be an unwarranted stretch in a normal business setting, but it makes perfect sense in the context of charitable subscriptions. I argue that this sensitivity to context is of a piece with two of Cardozo's other famous opinions, Wood v. Lucy and DeCicco v. Schweizer. There is room between the caricature of formalism as completely blind to particular facts and the caricature of realism as completely unbound by legal rules. Cardozo displays a jurisprudence that shows respect for the formalities of contract law, but insists on applying those rules in a way that understands transactions the way the parties themselves did.