Saturday, April 25, 2009
When a contracting party makes a promise, does it intend to keep that promise, "no matter what"? Gregory Klass of Georgetown says no. Every promise, he says, is conditional -- that is, the promisor intends to perform under what it expects will be the future circumstances.
Sometimes, though, those future circumstances are so narrowly defined that the promise may actually amount to promissory fraud. He explores the topic in a new paper, A Conditional Intent to Perform. Here's the abstract:
No promisor intends to perform come what may. Yet some undisclosed conditions on a promisor's intent are so material that they can support a claim of fraud. A theory of promissory fraud should be able distinguish such foreground conditions on a promisor's intent to perform from the background conditions that attach to all intentions. Michael Bratman's planning theory of intention provides resources to explain the difference. A background condition is one that the agent accepts as satisfied or not satisfied in her practical reasoning; a foreground condition is one whose satisfaction she treats as an open question. Foreground conditions permit an agent to plan for futures in which she does not perform the act in question and reduce the rational pressure to adopt necessary means of performing it. Background conditions do neither.
This planning theory of conditional intentions provides a more complete account of why a promisee should care about foreground conditions on the promisor's intent to perform. An undisclosed foreground condition is likely material not only because it reduces probability of performance (background conditions do that too), but also because it is likely to affect the promisor's preperformance deliberations and behavior. The promisor is more likely to continue planning for possible futures in which she does not perform and less likely to invest in necessary means of performance. A foreground condition on the promisor's intent to perform also reduces the rational pressure to fill contract gaps in ways that accord or mesh with the promisee's plans and preferences, as described by the theory of shared intentions. These conclusions suggest revisions to the analysis of what a promise says about the promisor's intent to perform and any conditions on it. They also supply the beginning of a philosophical account of the relationship-based, extralegal expectations and obligations that attend agreements for consideration, and of the law's proper response to them.