November 19, 2005
Ayres & Klass on Promissory Fraud
Oliver Wendell Holmes famously noted that there is no moral component to contract law; that a contract was a mere option either to perform what was promised or to pay damages for failing to do so. Some of the recent work of Ian Ayres (Yale) has focused on an idea that Holmes presumably would have scorned: that taking such an option with knowledge that it won't be exercised ought to lead to penalties for fraud.
Now Yale University Press is releasing Insincere Promises: The Law of Misrepresented Intent, by Ayres and New York attorney Gregory Klass. Click on "continue reading" for the description.
(As an aside, it's ironic (if "ironic" is the word I want) that, given Ayres's views, published on the Yale web site, about the insensitivity of professors to the price their students pay for books, Yale University Press will nevertheless give you a free copy if you make ten of your students buy one. Looks like they've decided not to follow his suggestions in New Haven.)
From Yale University Press:
How can a promise be a lie? Answer: when the promisor never intended to perform the promise. Such incidences of promissory fraud are frequently litigated because they can result in punitive damages awards. And an insincere promisor can even be held criminally liable. Yet courts have provided little guidance about what the scope of liability should be or what proof should be required. T his book -- the first ever devoted to the analysis of promissory fraud -- answers these questions. Filled with examples of insincere promising from the case law as well as from literature and popular culture, the book is an indispensable guide for those who practice or teach contract law.
The authors explore what promises say from the perspectives of philosophy, economics, and the law. They identify four chief mistakes that courts make in promissory fraud cases. And they offer a theory for how courts and practitioners should handle promissory fraud cases.
Ian Ayres is William K. Townsend Professor of Law, Yale University Law School; coauthor of the Why Not? column in Forbes magazine; and a frequent commentator on National Public Radio’s Marketplace. Gregory Klass is an assistant solicitor general in the Office of the New York Attorney General.
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