Article by Timothy Hoff
A. The Louisiana Civil Code
In 1970 Grant Gilmore, Sterling Professor of Law at Yale, gave a series of lectures published in 1974 under the title The Death of Contract. He concluded:
We have witnessed the dismantling of the formal system of the classical theorists. We have gone through our romantic agony—an experience peculiarly unsettling to people intellectually trained and conditioned as lawyers are. It may be that, in this centennial year, some new Langdell is already waiting in the wings to summon us back to the paths of righteousness, discipline, order, and well-articulated theory. Contract is dead—but who knows what unlikely resurrection the Eastertide may bring?
Since 1970 there has been both a storm of protest over Gilmore's funeral pronouncement and a resurgence in doctrinal writing in English on contract law. Whether the result of his lectures or not, the phenomenal new interest in contract law caused Gilmore to proclaim in his 1974 Storrs Lectures on Jurisprudence, later published under the title The Ages of American Law, the dawn of the resurrection:
In 1970 I thought of the passage [quoted above] as merely a rhetorical flourish which, I hoped, might induce the audience to leave quietly without actually throwing things at me. I seem to have been a better prophet than I had dreamed of being. Our new Langdell may not yet have made his appearance on front-and-center stage but it is already apparent that the cause of well-articulated theory has been better served in the 1970s than, arguably, it has been in any decade since the 1870s. Forsaking the pluralism of such scholars as Corbin, Llewellyn, and Kessler, the New Conceptualists, as they have been dubbed in some quarters, have returned to the elaboration of unitary theories, to the reduction of all principles of liability to Holmes's "philosophically continuous series." Their work is being taken seriously, as of course it should be. In the world of legal scholarship the New Conceptualism will be a force to be reckoned with for at least the next generation. It is, however, unlikely that its future includes a triumph as complete as that of Langdellianism a century ago. In the polarized society which we seem to have arrived at, consensus is an unlikely issue.
While the writer makes no claim to be in the mainstream of the New Conceptualism, there is a need for rethinking, particularly in Anglo-American law, the nature and role of contractual error. As Professor Arthur I. Rosett of the University of California wrote in the festschrift for Addision Mueller, the preeminently practical of twentieth century professors of contract law:
The treatment of mistake is certainly one of the weakest aspects of classical contract law. The cases and "rules" are contradictory and impossible to reconcile. Moreover, mistake and other failure situations have been a fertile source of doctrine in other areas of contract law as judges fumble around looking for doctrinal pegs on which to hang their hats in cases that really turn on issues of mistake. The Uniform Commercial Code and the Restatement II provide an imperfect but helpful way out of this morass by treating many of these situations as a "failure of presupposed conditions," providing an excuse for non-performance. Uniform Commercial Code § 2-615. The Restatement II recognizes both excuse for supervening impracticability or frustration (sections 281, 285) and the discovery of preexisting impracticability or frustration (section 286), which resembles mistake more closely.
In this comparative treatment of the law of contractual error, it seems appropriate to turn to the civil law, to the work of the great eighteenth century French doctrinal writer Robert Joseph Pothier (1699-1772), and to the code that most thoroughly reflects Pothier's writing on the problems of contractual error, the Louisiana Civil Code. This code provides a unique vantage point from which to survey the problem of error in the formation of contracts. Largely indebted to the Code civil and therefore in turn to Pothier and Toullier, the current Louisiana Civil Code contains thirty articles on the subject of contractual error. It is, consequently, much more specific in its treatment of this subject than the Code civil, with only two or three articles concerned with contractual error. In this respect the Louisiana Civil Code creates an exception to what has otherwise been termed "the abstractness and coldness of the style of the code articles." Louisiana is of particular interest in comparative law because it shows "the influence of English law on a body of doctrine already profoundly romanized, and stand[s] between the common law and the civil law systems."
B. The Nature of Contractual Error
The Louisiana Civil Code provides that the consent of the parties legally given is essential to the validity of a contract. Consent consists of the communicated concurrence of intention of the parties resulting from the free and deliberate exercise of their wills. If the intention of a party results from error, fraud, violence, or threats, then there is no consent and, accordingly, no contract. There are limitations on the extent to which error will be recognized in Louisiana, as will be noted. For the moment, it is sufficient to note that the Louisiana Civil Code, like the Code civil, starts with the proposition that consent resulting from error is ineffective.
Error results from ignorance of fact or erroneous conclusions of law. Insofar as error is regarded as the result of ignorance, its definition in Louisiana law is essentially the same as that of mistake at common law, usually defined as "a state of mind that is not in accord with the facts." It follows, then, that errors are to be taken account of, and that it will be the exceptional case where they are ignored.
At common law, on the contrary, relief is exceptional, for as a general rule the common law is concerned with the manifestation of consent and not with inquiries into the mental states that give rise to it. Thus it has been said, "A contract has, strictly speaking, nothing to do with the personal, or individual, intent of the parties." Holmes has written:
In my opinion no one will understand the true theory of contract or be able even to discuss some fundamental questions intelligently until he has understood that all contracts are formal, that the making of a contract depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs—not on the parties' having meant the same thing but on their having said the same thing.
C.The Subjective and Objective Theories
The difference in the ways that error is approached in the civil law and in the common law is often expressed as a function of the distinction between the objective and the subjective theories of contract. As one common law court has expressed it: "It is not the subjective thing known as meeting of the minds, but the objective thing, manifestation of mutual assent, which is essential to the making of a contract." But to identify the common law with the objective theory, without qualification, is misleading. Despite the objective theory, the common law courts do take contractual error into account in a variety of circumstances. Despite the subjective theory, the civil law does qualify and limit the extent to which it takes account of and gives relief for contractual error. Louisiana is, of course, closer to the French subjective theory than the objective theory. Yet the Civil Code states enough qualification and limitations on the granting of relief for contractual error that it may be said that Louisiana is not wholly committed to the subjective theory.
D. Some Fundamental Similarities Between the Civil Law and the Common Law in Their Approaches to Contractual Error
In spite of their different theories of contractual consent, there are a number of points in which the common law and the civil law are remarkably similar in their approaches to the problem of contractual error. Historically, both systems have witnessed an expansion of the idea of voidability or relative nullity and a corresponding contraction of the scope of the notion of absolute nullity. It has been noted: "Courts and juridical writers [in America] have unified, in one theory, the scope of both absolute nullity and voidability, in a way which reminds some of civil law systems." In their substantive aspects on this problem there are many points of agreement shared by both legal systems. This is in no small part a result of the influence of civilians such as Pufendorf, Gundling, and perhaps Pothier. Thus, for example, to support a claim for relief, the mistake must relate to an essential matter both at common law and under the Louisiana Civil Code.
Perhaps more significant is the fact that both systems evidence a policy of protecting the reliance interest of the unerring party and the interests of third parties who may have depended on the apparent validity of the transaction. It is this policy of protection, sometimes expressed as a need to preserve the security of transactions, that seems to be evident when in either system relief from error is either denied or qualified in some way.
About the Author
Timothy Hoff. Professor of Law, University of Alabama. A.B. 1963, J.D. 1966, Tulane University; LL.M. 1970, Harvard University.
Citation
53 Tul. L. Rev. 329 (1979)