Reversing the Reliance Revolution in Contract

During the past century, leading American academics have attempted to rewrite in radically altered form the theoretical foundation of liability in contract. In derogation of the historical bases for contractual liability in Anglo-American law, namely voluntary mutual exchange and “formal” contract, these intellectual revolutionaries desire to impose strict liability in contract on the basis of unilateral, unbargained-for reliance. The centerpiece of this revisionist effort has been the novel and artificial doctrine of “promissory estoppel,” first advanced by Williston and Corbin in the Restatement of the Law of Contracts published in 1932. The invention of this doctrine has been accompanied by related conceptual developments across the spectrum of academic scholarship and other articulations of contract law.

On the basis of the relevant history, this Article argues that the historical and proper foundations of liability in contract are mutual exchange and formal contract rather than naked, unilateral reliance on informal promise in the absence of exchange. A return to the historical foundations of contract would repudiate the century-long effort from within academia artificially to alter this field of law.