Mr. Ricardo L.G. filed an ordinary declarative claim for breach of contract against Mrs. Lucia U.U. and the Real Estate Agency J.M.I. The Trial Court of Amurrio issued its opinion on April 10, 1990 in favor of the plaintiff. On appeal, the Court of Appeals partially reversed the Trial Court’s decision in favor of the co-defendant, the Real Estate Agency. The Supreme Court hereby dismisses the appeal.
Opinion by Honorable Mr. D. Pedro Gonzalez Poveda
Findings of Law:
First:
In the lawsuit filed before the Trial Court, the now appellee sought judgment for specific performance for the signature of public deeds for the sale of real 932estateproperty, and for the buyer to grant full title over the acquired property by delivering the keys to it [the property] and by providing notice that upon non-performance within the given peremptory term, the Judicial Authority would perform it, and also to pay the legal fees of the complainant, or to reimburse the down payment to the buyer for the amount of two million pesetas [2.000.000] plus legal interest and legal fees. The basis for such claim is that the plaintiff bought a property from Mrs. Lucia U.U., who had given a power of attorney to the Real Estate Agency J.M.I. to sell the real estate property, and having entered into the sale agreement with Mr. José María C., son-in-law of the owner, on behalf of whom he was acting, and having fixed the price on seven million pesetas, the buyer gave the aforesaid Agency the amount of one million pesetas as down payment.
The Second Division of the Provincial Court of Appeals of Bilbao rendered judgment in appeal partially reversing the Trial Court’s judgment, affirming the judgment against Mrs. Lucia U.U. to perform her obligation to grant full title over the property located in Ugarte (Llodio), and to perform her obligation to sign the public deeds of sale within the term of ten days after full payment was effected; or upon non-performance, then judicial performance would follow.
Second:
The first issue on appeal is based on Article 1692 numeral 5 of the Law of Civil Procedure, alleging a violation of Article 1280.1 of the Civil Code because the power of attorney under which Mr. José María C. acted is not evidenced in the files of the proceedings. There is no public deed containing a power of attorney authorizing the sale of real estate property. In a February 3, 1987 decision (RJ 1987, 674), it is stated that case law has established that according to Articles 1278 and 1279 of the Civil Code, the provisions of Article 1280 do not require formalities “ad solemnitatem” but only “ad probationem,” meaning that a trial court judge can decide on the existence of a contract that complies with the requirements of Article 1261 of said Code without necessarily having to rely on a written document; the Court “a quo” may grant its existence through the evaluation of evidentiary instruments provided therein; the decisions of February 21, 1987 (RJ 1987, 727), September 30, 1988 (RJ 1988, 6939) and November 23, 1989 (RJ 1989, 7905) follow the same reasoning. A doctrine long applied by this Court with respect to powers of attorney is found in the holding of the October 30, 1906 decision which states that express powers of attorney granted by the principal to his brothers exclude the principal’s need to personally deal with the buyer; it presupposes the principal’s agreement to sell and may be granted verbally, as provided in Article 1710 of the Code. Thus, what Article 1280 requires in its last paragraph is that all contracts that exceed the amount of 1.500 pesetas have to be executed in writing; but it does not say that this is a requirement for their perfection. Case law without the need of further arguments renders the issues on appeal inadmissible….
In this case, the Supreme Court distinguished between the formality of written documents as requirements ad solemnitatem and requirements ad probationem. It is a requirement ad solemnitatem when, without the written formality, the contract is not perfected. On the other hand, it is a requirement ad probationem when it is required to prove the existence of the contract, or to allow its registration. The Court concluded that a power of attorney is not a solemn contract. It held that Article 1280 of the Civil Code “requires in its last paragraph … that all contracts that exceed the amount of 9331.500 pesetas have to be executed in writing; but it does not say that this is a requirement for their perfection.” What is the source of law used by the Supreme Court to make such a distinction between granting and perfecting contracts? Is it a legislative, judicial, or doctrinal source of law? What would justify making such a distinction? Finally, if the distinction is not based on a legislative source of law, would the aphorism “where the law makes no distinction, the interpreter must not distinguish” be applicable?
Mito, S.A. filed a small claim against Aleaciones de Metal, S.A. to recover damages for breach of a requirements contract. The Trial Court number 12 of Barcelona decided on January 7, 1991 partially in favor of the plaintiff, ordering the defendant to pay for damages to be determined in the execution of the judgment; this decision was affirmed by the First Division of the Provincial Court of Appeals of Barcelona on April 22, 1991. The defendant filed an appeal to the Supreme Court. The Supreme Court dismissed the appeal.
Opinion by the Honorable Mr. D. Jesús Marina Martínez-Pardo
…
Third:
The allegation on appeal claims the erroneous application of Article 1280, based on Article 1692 numeral 5, specifically in the paragraph dealing with the violation of laws of the legal system, both Articles of the Civil Code. The appellant argues that the Court infringed said Articles by accepting the existence of a contract based on the freedom of forms and on assumptions, and by concluding that the contract was a requirements contract. The appellant leaves the issue of assumptions for the next allegation, and concludes by citing Articles 1278, 1279 and 1280 of the Civil Code, where the last paragraph of Article 1280 of the Civil Code states that: “It is also required to grant in writing, at least in a private document, any other contract where the value of the obligations, of at least one of the parties, exceeds 1,500 pesetas.” In the case at issue, there was no public deed granted.
According to the continuous and consistent interpretation of these Articles, the argument of the appellant is completely at odds with the content of the cited legal provisions—in such a way that it should be enough to remind the appellant that in our Law there is absolute freedom of forms (Articles 1255 and 1278); that where the law establishes a written formality, it can either be ad probationem or ad solemnitatem; that in the case at issue, a solemnity cannot be required by Law because the Law does not regulate this type of contract; that where the Code refers to a non-solemn public deed or private document, the correct interpretation of Article 1280 in relation to 1279 is that the parties can compel each other to grant the contract in such way.
Fourth:
For all the aforesaid, the appeal to the Supreme Court is hereby dismissed and legal fees and loss of the deposit are on the appellant in accordance with Article 1715 of the Law of Civil Procedure.
In the previous case, the Spanish Court distinguished the requirements of Article 1280 of the Civil Code from those of Article 1279. Article 1279 states that:
If the law requires that for a contractual obligation to be effective it needs to be granted in a public deed or by means of other special forms, the parties may compel each other to comply with said formality from the time of their consent and from the moment they comply with other elements required for its validity.300
What is the connection between the “spiritualistic” principle, the natural law of European pre-codification,301 and the parties’ freedom of contract? How do these principles contribute to the certainty of contracts? Which of the principles used by the courts in the previous decisions are more compatible with the needs of a globalized market?
Heraclites or Parmenides?
The Bill of Lading303 as a Formal Requirement for All Transportation Contracts: Decision of the Supreme Court of El Salvador
CIVIL COURTROOM OF THE SUPREME COURT OF JUSTICE: San Salvador, at the Tenth hour of the 22nd of December 2002.
Analysis of the Appeal:
The appellant has two allegations on appeal: the first is for erroneous interpretation of the law in violation of Articles 1330 and 1331 of the Commercial Code; and the second, for erroneous application of the law pertaining to testimonial evidence in violation of Article 321 of the Code of Civil Procedure. On the first allegation, the appellant argues that the Court ad quem gave a special legal connotation to transportation contracts because it considered the bill of lading as the only means of evidence to prove the parties’ agreements, providing it with a legal nature that it does not have, i.e., a solemnity per se and not a solemnity ad probationem as is the spirit and sense of the law. Furthermore, even if the reasoning of the Court of Appeals that the bill of lading is a means to prove a transportation contract is true, it is not so given the way that the Court reasoned in its decision because Article 1331 of the Salvadoran Commercial Code does not exclude other means of evidence, and it does not require that for the use of these other means it is necessary to prove that the bill of lading pre-existed and was subsequently misplaced or destroyed.
The Court of Appeals’ reasoning was that the cause of the debt that the defendant claims results from a transportation contract entered into by an individual whose course of business is transportation and a corporation and therefore, the contract is governed by the provisions of the Commercial Code. This Code regulates said contract 935under Article 1313 and defines it as the contract where the carrier is bound to transport people or goods from one place to another in exchange for a price. In the instant case, we are dealing with the transportation of goods and not people; thus, Article 1319 of the Commercial Code is applicable, and it establishes that the carrier bears all obligations and liabilities regarding the transportation of goods. Generally, this contract is granted and formalized by the mere consent of the parties, which can be verbal, as it is a consensual contract; it is a bilateral contract because there are two parties involved, with reciprocal stipulations or obligations; it is an onerous contract as all other commercial contracts are, because the person who provides the service is entitled to receive a price.
Notwithstanding the fact that it is a consensual contract, Article 1330 of the Commercial Code requires the bill of lading as a formality of the contract, a document with no constitutive effects but only required for evidentiary purposes. The carrier has the obligation to issue a bill of lading which, as was previously stated, is a way to prove the existence and content of the contract. This view is shared by Professors Joaquin Rodríguez Rodríguez and Emilio Langle Rubio, among others. The content of the bill of lading will decide any issues on the enforcement and performance of the contract, only allowing claims or defenses for forgery of the document or material error in its wording. In accordance with Article 1338 of the Commercial Code, the bill of lading should be returned by the shipper to the carrier upon performance of the contract and at that moment, all rights and obligations are deemed to be extinguished. All of the above reaffirms that the bill of lading is used as a means of evidence; and furthermore, Article 1338 of the Commercial Code states that if the shipper cannot return the bill of lading because he lost it, the shipper will then issue and provide the carrier with a receipt of delivery of the goods, and this receipt will have the same effects as returning the bill of lading.
The legal provisions of the Salvadoran Commercial Code which were supposedly infringed are the following:
Art. 1330. The bill of lading is the document that proves the contract between the shipper and the carrier, upon which issues on the enforcement and performance of the contract will be decided, only allowing claims or defenses for forgery of the document or material error in its wording.
Art. 1331. When the original and copy of the bill of lading are lost, any issues pertaining to it will be decided according to the evidence provided by the parties. Any condition omitted from the document can also be proven.
From the analysis of these provisions it is clear that the contract for the transportation of goods is proven with the bill of lading; that matters regarding its enforcement and performance will be decided in light of what was agreed in said document; that the bill of lading only allows for claims or defenses for forgery of the document or material error in its wording; and that when the bill of lading is lost, the issues arising from it shall be decided according to the evidence that the parties may provide.
After analyzing the Court of Appeals’ reasoning, this Court finds that the alleged violation by the Court ad quem has no grounds, because, contrary to what the appellant argues, the Court has given the correct legal interpretation to the law. In fact, in applying the law to the case at issue, the Court of Appeals has established that the transportation contract is a consensual contract, that it is generally granted 936verbally, and that for evidentiary purposes the contract shall be stated in the bill of lading; but in lack thereof, its content may be proven through other means of evidence….
Notwithstanding the consensual nature of the contract, for evidentiary purposes, the agreement between the one who provides the service and the beneficiary of that service is materialized in a bill of lading. This is stated under Article 1330 which is previously cited, but in its absence, the contract may be proven through other means of evidence as provided by law, such as testimony, which is evidence permitted by law for this type of contract. This is why testimony is indeed relevant to the case at issue. However, as previously stated, in this type of contract, the law establishes that only in the absence of a written contract can other means of evidence be used.
In the present case, it can be deduced from the statements in page one of the claim that the transportation contract between the defendant Central American Shippers, S.A. and the appellant Mr. Humberto Hernán Fuentes Valle was verbal; hence there was no bill of lading, and, therefore, he filed a commercial declarative summary complaint to establish the existence of the defendant’s obligation to pay the price agreed in the contract and default of payment…. In addition to the fact that there was no written contract, there is a letter sent to the appellant by Mr. Lincoln J. Martín Jr. on behalf of the defendant, where he accepts the existence of a contractual relationship and the existence of payment due….
The witnesses … established that Mr. Humberto Hernán Fuentes Valle … provided transportation services to the company Central American Shippers, S.A. from Santo Tomás de Castilla, Republic of Guatemala, to the Ground Customs Administration in our country, El Salvador … [and] that resulting from such services, the aforesaid company originally owed Mr. Fuentes Valle the amount of 374,516.04 Colones…. The Court ad quem erred as a matter of law in the evaluation of the evidence presented, violating the provisions of Article 321 of the Code of Civil Procedure which establishes the legal value of testimonial evidence. The Court failed to give the testimonial evidence the correct evidentiary value established by law, as they are the correct and pertinent evidence to this case. And for these reasons it is appropriate to reverse the appealed decision, it is so declared.
Apparently, in the Court’s opinion, the transportation contract is consensual and obligatory from the moment it is agreed on. Therefore, the Court considers that the document that embodies the bill of lading is a requirement ad probationem—that when it is missing, it can be proven through other means. Where does the consensual nature of the Salvadoran transportation contract come from? All that Article 1313 of the Salvadoran Commercial Code, cited by the Court, states is:
In the contract of transportation, the carrier is bound to transport people or goods from one place to another in exchange for a price. This contract will be commercial when it is provided by companies that provide this service to the public in the ordinary course of their business.
Notice that there are different types of transportation contracts and different documents related to them. In maritime transportation, the bill of lading, especially the negotiable one, represents title to the transported goods. If the consignee or its beneficiary does not have these bills of lading, then they are simply missing the required documents to claim the goods from the carrier. This does not apply to 937transportation via train, air, or ground. In such transportation, the document issued by the carrier is a mere receipt and not a required document or a document of title. Based on the law as well as on customs and practices of international and local transportation pertaining to the classification of this contract as consensual, what is the importance of this distinction?
If the legislator does not classify the transportation contract as consensual, is it possible that the parties in their own contract can agree that it is their intention that the contract be consensual? What is the importance of the parties’ ability to classify a contract as consensual? Or is a “higher authority” required for this? Would the opinion of a doctrinal commentator be considered this higher authority?
Definition of Constitutive and Declarative Documents
Séptima Época, Third Chamber, October 15, 1956
Mexican Law also distinguishes between requirements ad probationem and ad solemnitatem. The following is an excerpt of a court’s decision that adheres to the Spanish and Salvadoran perspective:
Next to constitutive or ad solemnitatem documents are those declarative or ad probationem documents. The former are those without which the legal act that they incorporate cannot be brought to life, and it is said that they are constitutive of the act itself, as is the case with marriage contracts, promissory notes, checks, etc. The latter are used to prove the act or contract incorporated within them, but do not exclude the possibility of the parties proving the act or contract through other means, as is the case with sale agreements where form is not a constitutive element, although it may be for its effects against third parties; and form is so far from being a constitutive element of sale agreements that even when the law requires that the contract be granted in a public deed, its ineffectiveness may be eliminated, regardless of its lack of form, if the parties willingly perform it.304
According to this decision, lacking the formality of a public deed will render the contract relatively null, but not absolutely null and void or nonexistent. However, other Mexican decisions do require formalities ad solemnitatem. For example, according to a court of appeals:
A contract for the assignment of rights as a gift, granted in the State of Quintana Roo, is found to be absolutely null and void because it was not recorded at the Public Registry of Property. Based upon a harmonious interpretation of Articles 2228, 2397, 2610, 2616, 2617, 3159 and 3160 of the Civil Code of the State, this legal act constitutes a contract of donation, which is a solemn contract that requires registration for its legal existence. Such registration is an essential element for the existence of this type of contract; if 938this requirement is not complied with, the contract cannot produce any legal effects.305
What might be the reasoning for requiring a solemnity for the assignment of rights as gifts and not for the sale agreement of personal property or real estate property?
Maria Trinidad Gómez Jiménez—Direct Amparo306
(Supreme Court dismisses the amparo.)
PROMISE TO SELL (LAW OF JALISCO): A promise only creates obligations to do, which are included in the corresponding contract and are in accordance with what has been offered. For its effectiveness, it is required that it be granted in writing, that it has the essential elements and characteristics of the final contract, and that it be limited to a specific term.
Articles 2163 to 2167 of the Civil Code clearly state that a promise to sell must include the elements particular to a sale agreement, i.e., its determination and price. A promise does not transfer ownership of the offered good; it only creates an obligation to do—that of the granting of the final contract by the obligated party provided that the other party requests it within the term stipulated in the promise. In this case, the parties consent that their agreement is not regarding an actual transaction but rather a future contract; thus the buyer’s payment on consignment does not grant him the right to receive the contractual good.
OPINION:
…
Second: The appellant alleged that the lower court reached its decision based on the opinions of foreign authors instead of basing it on the Civil Code of the State of Jalisco. This statement is incorrect; the court based its opinion in the first place on the provisions of the Civil Code of said State in effect at the time of the execution of the document and only secondarily did it refer to the opinions of foreign commentators.
Third: In summary, the appellant then refers to the violation of [various articles of the Civil Code of the State of Jalisco] and others of the Code of Civil Procedures. According to the appellant, the court disregarded the law which, for the existence of a sale agreement and transfer of property rights, only requires that the parties agree on an identifiable thing and its price, even when the former has not been delivered or the latter has not been paid, in the absence of an agreement otherwise.
This allegation has no grounds because Articles 2163 to 2167 of the Civil Code of the State of Jalisco regulate preparatory contracts, specifically that of a promise. In those provisions it is established that one can undertake the obligation to execute a 939future contract, allowing for this contract to be a preliminary contract or a promise, whether unilateral or bilateral. The promise only creates an obligation to do, consisting of granting the contract in accordance with what was offered. To be valid, the promise must be set out in writing, contain the characteristic elements of the definitive contract and be limited to a certain period of time.
From these provisions it is clear that a promise to sell must have the elements and characteristics of a sale, i.e., determination of the good and the price. Thus Article 2819 of the 1934 Civil Code of Jalisco provided:
For a simple promise to sell to have legal effects, when dealing with real estate property or non-fungible movable property, it is necessary to determine the type of asset. With fungible movable property, it is only necessary to determine its genre and quantity. In every case price must be determined.
Determination of the good and price are essential requirements, as is also the term for which the promise will remain in force, i.e., which time period the interested party must compel performance for the granting of the final contract.
Therefore, a promise does not transfer ownership of the offered good, but only creates an obligation to do, i.e., granting the final contract, provided that the other party so requests it within the term of the promise. In this case, the parties’ agreement and will pertains to a future contract and not to a present transaction. Consequently, the contract granted in a public deed which supports this claim is not a sale agreement under which property rights have been transferred even though the good and price have not yet been delivered or paid, respectively. It is a simple contract promising to sell under which property rights were not transferred and where payment on consignment of the aforementioned amounts in favor of the defendants did not grant the appellant the right to receive the assets at issue. The appellant indicates that the term of one year as agreed in the contract was not for her to accept the contract because she had already accepted it, but rather was agreed on for payment of the price. This argument is incorrect, because the period agreed on in the promise to sell was for the effective term of the promise and within which Mrs. Gómez Jiménez could compel performance of the final sale agreement.
Fourth: The appellant, based on the legal provisions mentioned in the preceding allegation which she believed had been infringed, argues that the corresponding authority found that the sale transaction was not completed because the price was not paid in due time. This statement is incorrect. The court did not hold that the sale agreement ceased to have effects because its price was not paid in due time, but rather the court merely held that in the instant case there was no sale agreement and that the appellant had allowed for the term of the promise to elapse, because the term expired on the last day of August 1935. The appellant also alleges the court’s failure to apply several theses published in the Appendix to Volume XCVII of the Semanario Judicial de la Federación. This allegation is dismissed because the theses referred to by the appellant (240 to 243) refer to sale agreements and not to contracts of promises to sell. Thesis 848, published in said Appendix, clearly states that “a promise to sell does not transfer property rights to goods because it only creates an obligation to do consisting on the granting of the final contract.”
Fifth: The appellant makes reference to [the course of dealing that preceded] the contract in dispute. For instance, she refers to a mortgage claim filed against her father in which, according to her, it was decided that the defendants had, in one single 940act, entered into a first contract as buyers and entered into a second contract selling and transferring property rights to the appellant. This allegation has no grounds since, as previously said, the clear wording of the contract is that of a promise to sell.
Additionally, the appellant cites a decision of the Auxiliary Chamber of the Supreme Court of Justice, amparo number 7326–50, arguing that in said decision it was held that the contract at issue was a true sale agreement and not a promise to sell. This is incorrect. The facts argued in the aforementioned amparo resulted from a claim filed by Mrs. María Trinidad Gómez Jiménez and her brothers against the Mestas and requesting a declaration of ineffectiveness, inexistence or nullity of the contracts granted in the public deed of August 31, 1934. That constitutional claim was decided against Mrs. Gómez Jiménez and her brothers in a holding that makes no reference, of any kind, to the contract being a sale agreement rather than a promise to sell. It is worth noting that in the claim on which the previously-mentioned amparo was based, the appellant herself established that there was a promise by the Mestas to sell to her, as well as a sale agreement granted by her parents to the Mestas, and that both transactions were simulations, and that in fact it was a loan agreement secured with a mortgage. Consequently, the present arguments made by the appellant and those argued in the original lawsuit where the facts of this amparo are being discussed are contradictory.
…
Seventh: Since the infringements alleged by Mrs. María Trinidad Gómez Jiménez have no grounds, it is appropriate to deny Constitutional protection because there was no violation of her guarantees as stated in Articles 14 and 16 of the Constitution.
Given the aforementioned … we hold that:
[This Court] does protect Mrs. María Trinidad Gómez Jiménez against the [decisions] of the First Chamber of the Supreme Court of Justice of the State of Jalisco and the Fourth Civil and Treasury Judge of Guadalajara….
Although the terms and conditions of the contract are not included in the findings of facts, from the facts summarized by the Court, it is possible to infer that the appellant had an option to purchase real estate property at a given price within a one-year term from the date of the option, and that when she tried to pay the agreed price, before the term elapsed, the defendant refused to transfer the real estate property. Apparently, the reason for the refusal was that the appellant omitted to take the middle step of obtaining a public deed from the seller that would convey title to the real estate. The Supreme Court concluded that the buyer could not have exercised his option unless he compelled the seller to grant the final contract. Because the appellant filed her complaint to force the granting of the public deed after the term of the promise had elapsed, her claim was dismissed.
Notice that in concluding this, the Court classified the contract as a preparatory contract as opposed to a final contract. Hence, a contract that created an obligation to do (grant the sale contract) instead of an obligation to give (transfer property rights to the real estate property). If one needed a clear illustration of the importance of classifications of obligations and contracts in Mexican law, this one should suffice. Yet, how far is this precedential decision or “individual norm” from the usages of the real estate trade in Mexico? Is the method described by the Court on the execution of promises to purchase real estate property the way in which they are actually executed 941in the Mexican real estate market? Is it the common practice of sellers or their brokers or agents to wait until a buyer files a lawsuit compelling the granting of the public deed, and then drafting the document before receiving payment of the price or assurance of payment?
Such a transactional method does not seem reasonable, especially given the possibility of the buyer deciding not to purchase once the seller has sustained the costs of preparing the public deed. If one were to ask Mexican real estate brokers or investors about the common procedure used in acquiring real estate property through promises to sell, what would be the traditional modus operandi before the term of the promise elapses? Would it be: 1) File a formal lawsuit requesting that the seller grant the sale document, specifying a date for compliance; 2) After this additional term has elapsed, file a claim before the courts for specific performance; or 3) Go to the courthouse and deposit the sale price and receive a court’s decision on the performance of the promise? Or would it be more efficient, reasonable, and thus a better practice to do what the buyer did in this case: Notify the seller that the buyer is willing to purchase the real estate property under the conditions stipulated in the contract of promise to sell, and inquire where to pay or deposit payment of the price, whether directly to the seller, before a notary, or through a bank account deposit especially designated for payment of the promise? Unfortunately, it was not common usage that had a greater influence on the determination of a transactional formula in this decision, but rather the classification of the contract, regardless of the unnecessary costs and uncertainty resulting from the transactional formula applied in this decision.
Two Mexican real estate brokers from the AMPI (the prestigious Asociación Profesional de Intermediarios o Corredores Inmobiliarios (Professional Association of Real Estate Intermediaries and Brokers)) who preferred to remain anonymous described their practice with options to purchase or promises to sell in July of 2009 as follows:
As real estate brokers, we could not engage in transactions to purchase real estate property through the use of these options or promises if we had to judicially (or extrajudicially) claim the granting of the public deed of sale from the seller after he had in fact agreed to sell that property based upon the terms and conditions specified in the agreement. How could we justify the time and expense of entering into such an agreement? More specifically to your question, we do not think that the procedure established by the Supreme Court in the Amparo of Maria Trinidad Gómez is in touch with market reality.
__________________________
1 A saying by an anonymous, yet contextual, lawyer.
2 P. S. Atiyah, The Rise and Fall of Freedom of Contract 419 (1979).
3 See supra § 4:4(D)(1).
4 See supra § 6:3.
5 See supra § 8:7(M).
6 See C. Civ. (Fr.) art. 1341. Unless otherwise indicated, all the English translations of the Code Civil provisions belong to Legifrance (see Frequently Cited).
7 See generally supra ch. 7.
8 C.C. (Spain) (1889) art. 1279.
9 Kevin M. Teeven, A History of the Anglo-American Common Law of Contract 177 (1990).
10 See W. Sheppard, Actions Upon the Case 33 (1663), cited in Teeven, supra note 9, at 203 n.7.
11 See C. Com. (Fr.) 109 (1807).
12 U.C.C. § 2–201.
13 Id. § 2–201(1).
14 For a detailed discussion on the statute of frauds in civil and common law countries, see infra § 22:10(C)(1)(a).
15 Restatement (First) of Contracts (1932) [hereinafter Restatement (First)]; see also Richard Speidel, Restatement Second: Omitted Terms and Contract Method, 67 Cornell L. Rev. 785, 786–87 (1981–82) (commenting on the “classic” theory of contract espoused in the Restatement First) [hereinafter Speidel, Omitted Terms]; Richard Speidel, The New Spirit of Contract, 2 J. L. Comm. 193 (1982).
16 Speidel, Omitted Terms, supra note 15, at 787.
17 Id.
18 Id. (citations omitted).
19 Id. at 787–88.
20 Teevin, supra note 9, at 177; supra note 9 and accompanying text.
21 Speidel, Omitted Terms, supra note 15, at 788.
22 Id. at 789.
23 Id.
24 Id. at 790.
25 U.C.C. § 2–204(1), (3).
26 Id. § 2–305(1).
27 Speidel, Omitted Terms, supra note 15, at 791.
28 But cf. infra § 22:4(D)(2) (discussing Slade’s Case, decided in 1602, which allows the enforcement of an executory promise, albeit issued in connection with promisee’s agreement to deliver a quantity of grain).
29 John Palmer, Parmenides, Stanford Encyclopedia of Philosophy (Edward N. Zalta ed., Summer 2012), http://plato.stanford.edu/entries/parmenides.
30 Id. at § 2.3 (Parmenides’ views on the being of things).
31 Legifrance C. Civ. (Fr.) art. 1108.
32 C. Civ. (Fr.) art. 1341 (Barrister 1804). Although somewhat awkward, I have used this translation because this appears to be the closest English version of the original French version.
33 Mexican C.C.F. art. 2224 (1932) states:
A nonexistent juristic act by the lack of consent of its parties or the absence of an object shall not produce any legal effect whatsoever. It is not susceptible of being confirmed by the parties, nor by a statute of limitation, and its non existence may be invoked by any interested party.
34 The class took place during the fall of 1988 at the National University of Mexico UNAM Law School. The professor and students mentioned preferred to remain anonymous.
35 C. Civ. (Fr.) art. 1319.
36 C. Civ. (Fr.) art. 1341 (Barrister 1804).
37 See Boris Kozolchyk & Cristina Castaneda, Invigorating Micor and Small Businesses Through Secured Commercial Credit in Latin America: The Need for Legal and Institutional Reform, 28 Ariz. J. Int’l & Comp. L. 43, 79–95 (2011).
38 See Boris Kozolchyk, Enhancement of Mexican Commercial Adjudication by Improved Transactional Fact-Finding, Application of Equitable Principles, and Drafting of Standard Contracts and Best Contractual Practices, 27 Ariz. J. Int’l & Comp. L. 349, 361–63 (2010). The legal conundrum faced by those who are governed by static opinion and promise to sell agreements is that even though the option to buy or promise to sell is supposed to be binding on their issuer, it is characterized by a Robert Pothier inspired classification of obligations as an obligation “to do”, i.e., to issue the necessary public deed (as contrasted to one “to give” something). As an obligation to do, it must await the court decision directing the promisor to issue the appropriate deed or issue it on his behalf. Thus, even if at the end of a lengthy proceeding the option or promise is deemed enforceable the cost and delay of doing so are serious disincentives. On the other hand, as wrily remarked by the dean of a Colombian law school: “Many of my former students, now civil litigators, have been able to send their children to good schools by litigating options to purchase and promises to sell lawsuits.”
39 Karl Llewellyn, Cases and Materials on The Law of Sales xvi (1930).
40 Short Sale, Investor Words, http://www.investorwords.com/4556/short_sale.html (describing short sales and their use in the financial marketplace).
41 Invoice, Wikipedia, http://en.wikipedia.org/wiki/Invoice.
42 See Daniel W. Graham, Heraclitus, Stanford Encyclopedia of Philosophy (Edward N. Zalta ed., Summer 2011), http://Plato.stanford.edu/entries/Heraclitus (describing Heraclitus’ teachings, contrary as they were to those of Parmenides).
43 See infra § 22:10 for Spanish and Mexican, Salvadorean and Uruguayan Supreme and appellate court decisions on ad solemnitatem and ad probationem requirements of civil and commercial contracts.
44 See Glossary, “Positive Law.”
45 See, e.g., Consejo Superior de Camaras de Comercio, Industria y Navegacion, Recopilacion de Usos y Costumbres y Practicas Comerciales Comerciales Seguidas en Espana 444–56 (1964) (discussing the usages and practices on pricing, place of conclusión of the agreement (“by the side of the cattle”), measurement of weight, and role of intermediaries and ritual phrases).
46 The traditional saying is “luck and blessing” (mazel und brocha). Tom Zoellner, The Heartless Stone: A Journey Through the World of Diamonds, Deceit, and Desire 188 (2007).
47 See, e.g., Hank King, Take a Tour of the Futures Trading Pit, Investopedia (May 26, 2011), http://www.investopedia.com/articles/optioninvestor/07/thepit.asp#axzz1evgSOPG7 (illustrating such a United States market).
48 See, e.g., Watson, Digest, 13.7.1 (“The contract of pignus is made not only by delivery but also by mere agreement even in the absence of any delivery.”)
49 Gorla I, at 45.
50 Pillans and Rose v. Van Mierop and Hopkins (1765) 3 Burr 1663, 97 Eng. Rep. 1035.
51 Rann v. Hughes (1778) 101 Eng. Rep. 1014.
52 See CISG.
53 See UNIDROIT Principles.
54 See EPCL.
55 See infra § 22:2.
56 U.C.C. § 9–202.
57 See supra ch. 2 & infra §§ 23:4(D) & 23:5(A)(2).
58 See supra § 4:4(D)(1).
59 See supra § 4:4(D)(3)(1).
60 Id.
61 Gorla I, at 30.
62 Id. at 31 (summarizing the effect of typification in classical Roman law).
63 See supra § 4:4(D)(3)(f).
64 Gorla I, at 32.
65 See Watson, Digest, 12.4.6 (“For one who gives on account of marriage can, if no marriage happens, use the condictio as for nonmaterialization of an expected state of affairs….”)
66 Gorla I, at 42–43.
67 Andrea Falcon, Aristotle on Causality, Stanford Encyclopedia of Philosophy (Edward N. Zalta ed., Winter 2012), http://plato.stanford.edu/entries/aristotle-causality/.
68 Alejandro Guzmán Brito, Causa del Contrato y Causa de la Obligación en la Dogmática de los Juristas Romanos, Medievales y Modernos y en la Codificación Europea y Americana, 23 Revista de Estudios Historicos-Juridicos 209, 279 (2001).
69 Id.
70 Id.
71 Legifrance C. Civ. (Fr.) art. 1108.
72 Id. art. 1131.
73 Guzmán Brito, supra note 68, at 230–31:
Quand je vous vends (sic) ma ferme, la cause du contrat, ou de mon obligation, si l’on veut, le motif qui m’a déterminé à m’engager, ce sera tantôt la nécessité oğ je me trouve de payer des sommes considérables, tantôt le projet d’acquérir des rentes ou des maisons en remplacement de mes terres, afin de augmenter mon revenu, tantôt de doter ma fille. Mais en droit, ces motifs premiers ne sont pas à considerer; et c’est seulement le motif dernier et immédiat de l’obligation qui constitue sa cause juridique: quand je me oblige à vous livrer ma ferme, mon motif immediate, la cause juridique de mon obligation, c’est l’obligation que vous-même contractez de me payer une somme d’argent, quel que soit l’emploi auquel je destine cette somme.
74 See supra § 8:7.
75 ódigo Civil [Cód. Civ.] [Civil Code] art. 499 (Arg.), available at http://www.archive.org/stream/argentinecivilc00whelgoog/argentinecivilc00whelgoog_djvu.txt (providing the translation of Article 499 (appears now as Article 533)) (emphasis added). See also Guzmán Brito, supra note 68, at 228–29. According to Professor Guzmán Brito, Andres Bello, the drafter of the Chilean Civil Code, experienced similar difficulties with Article 1108’s amalgamation of convention, engagement and obligation. However, he opted to stay as close as possible to the use of these terms in the Code Civil. Id. at 222–25.
76 See, e.g., §§ 11:2(D)(2) & 11:4(D).
77 Guzmán Brito, supra note 68, at 228.
78 John P. Dawson, Gifts and Promises 114 (1980).
79 C. Civ. (Fr.) art. 1133.
80 Cour de cassation [Cass.] [supreme court for judicial matters] 1e civ., Oct. 8, 1957, JCP 1957 II 10234 (Fr.). See Alex Weill & François Terré, Les Obligations 280–81 (2d ed. 1975) (a brief review of the French Law of the morality of cause in gratuitous promises up until 1975). See supra § 8:7(F) (this sub-section summarizes my discussion in Kozolchyk, Commercialization, at 7–9), see also its text in supra § 8:10.
81 Cour de cassation [Cass.] [supreme court for judicial matters] 1e civ., Oct. 8, 1957, JCP 1957 II 10234, note Esmein (Fr.) (author’s translation).
82 Henri Capitant, De la Cause Des Obligations 226–27 (3d ed. 1927).
83 Judgment of 13 June 1889, Bourges, D.P. 1889. 5.329, cited in Capitant, supra note 81, at 243.
84 2 René Demogue, Traite des obligations en géneral n.773 (1912), cited in Georges Ripert, La Regle Morale des Obligations Civiles, at n.2 (3d ed. 1935).
85 Ripert, supra note 84, at ¶ 39, n.40.
86 Alex Weill, François Terré & Henri Capitant, Les Grands arrÊts de la jurisprudence civile 10–12 (5th ed. 1970).
87 C.C. (Spain) arts. 1274–1277 (1889).
88 See supra § 22:1(A).
89 See supra § 12:3(D).
90 BGB §§ 780, 781 (Goren, 1994). See also Arther Taylor Von Mehren & James Russell Gordley, The Civil Law System 805–11 (1977) (a good commentary on these provisions and the lack of a French counterpart).
91 See supra § 12:4(C).
92 See supra § 11:4.
93 Secondary Market, Investopedia, http://www.investopedia.com/terms/s/secondarymarket.asp#ixzz1gfnTKDkS.
94 European Union, The Principles of European Contract Law 2002, available at http://www.jus.uio. no/lm//eu.contract.principles.parts.1.to.3.2002/portrait.letter.pdf.
95 International Institute for the Unification of Private Law, Unidroit Principles of International Commercial Contracts 94 (2010), http://www.unidroit.org/english/principles/contracts/principles 2010/integralversionprinciples2010–e.pdf.
96 Id. at 95.
97 Id.
98 Mark Twain, I Autobiography of Mark Twain 115–16 (Harriet Elinor Smith ed., 2010).
99 Letter from Rafael Fernandez to Boris Kozolchyk (date unknown).
100 Wildy & Sons Ltd, http://www.wildy.com/.
101 See supra § 3:3.
102 Id.
103 See supra § 3:3(C).
104 Barbara Sebek, Good Turns and the Art of Merchandizing: Conceptualizing Exchange in Early Modern England (unpublished draft), available at http://emc.eserver.org/1–2/sebek.html.
105 Id. at ¶ 5.
106 Marcel Mauss, The Gift: The Form and Reason for Exchange in Archaic Societies 3 (W. D. Halls, trans., W. W. Norton & Company 1990) (1950).
107 Id. at 24, 26, 38, 43, 45 (among others).
108 Id. at 43.
109 Richard H. Britnell, The Commercialisation of English Society 1000–1500 7 (2d ed. 1996) (citation omitted).
110 Sebek, supra note 104, at ¶¶ 10.
111 Id. at ¶ 11:
Thou art deceived if thou think that any judge can help thee; no Law is able to set thee clear again. Only have thou an eye to the faithfulness of the receiver. So shall benefits keep their estimation, and continue honorable. Thou stainest them, if thou make them a matter of Law. In debts it is a most upright speech and agreeable to the Law of all Realms, to say, Pay that thou owest. But it is the foulest word than can be in benefiting, to say, Pay…. The estimation of so noble a thing should perish, if we make a merchandise of benefits…. Would God that no surety might be taken of the purchaser by the seller, nor bargains and covenants be made under hand & seal: but rather, that the performance of them were referred to the faithfulness and upright meaning of mens’ consciences.
112 Britnell, supra note 109, at 7.
113 Id. at 228–37.
114 Sebek, supra note 104, at ¶ 2.
115 Adam Smith, The Wealth of Nations 20 (Prometheus Books 1991) (1776).
116 Adam Smith, The Theory of Moral Sentiments pt. I, § I, ch. I, ¶ 1(David Daiches Raphael & Alec Lawrence Macfie eds., Liberty Fund 1982) (1759), available at http://oll.libertyfund.org/192/39008/908774.
117 Id. at pt. VII, § II, ch. III, ¶ 12.
118 See supra § 9:2(E)(4)(b)(1) (discussing the Fable of the Evil Impulse).
119 See, e.g., Craig Muldrew, Interpreting the Market: The Ethics of Credit and Community Relations in Early Modern England, 18 Soc. History 163 (1993).
120 Id. at 169.
121 Id. at 171.
122 Id.
123 Id. at 180.
124 Id.
125 Id.
126 Id. at 172.
127 Id.
128 Id.
129 Id. at 174–75.
130 See supra § 17:3(E).
131 Muldrew, supra note 119, at 178.
132 Id.
133 P. S. Atiyah, The Rise and Fall of Freedom of Contract 419 (1979).
134 Id. at 140.
135 A bill obligatory, also known as a “single bill” or “bill of debt” and occasionally also referred to as a promissory note, is a writing by which a merchant acknowledges that owes a certain sum of money to be paid on a certain day and subscribes it at a day and place certain. Some dictionaries state that it is distinguishable from other bills or promissory notes by the fact that it must be under seal. See Black’s Law Dictionary 211 (4th ed. 1951). But see The Free Dictionary, http://legal-dictionary.thefreedictionary.com/Bill+obligatory (stating that it could have been under seal or not).
136 Muldrew, supra note 119, at 173.
137 Id. at 177.
138 See Teeven, supra note 9, at 37–43.
139 Id. at 43.
140 Id. at 43. See also Strangborough v. Warner, 4 Leo. 3, 74 Eng. Rep. 686 (1589).
141 Cecil Herbert Stuart Fifoot, History and Sources of the Common Law: Tort and Contract 361–63 (1949).
142 Leone Levi, I International Commercial Law (1863).
143 Id. at 281 (emphasis added).
144 Muldrew, supra note 119, at 173.
145 Id.
146 Id.
147 J. H. Baker, Origins of the ‘Doctrine of Consideration, 1535–85, in On the Laws and Customs of England: Essays in Honor of Samuel E. Thorne 336–58 (Morris S. Arnold ed., 1981) cited in Rhetoric and Law in Early Modern Europe 23 n.24 (Victoria Kahn & Lorna Hutson eds., 2001).
148 David Harris Sacks, The Promise and the Contract in Early Modern England: Slade’s Case in Perspective, in Rhetoric and Law in Early Modern Europe 28 (Victoria Kahn & Lorna Hutson eds., 2001).
149 Id. at 29.
150 Id.
151 Id. (I have replaced the old English used by Professor Sacks with modern English words).
152 Id.
153 Id.
154 Id. at 30.
155 For a biographical note of William Rastell, a nephew of Thomas More, see 8 Encyclopedia Britannica Micropedia 427 (1973).
156 Sacks, supra note 148, at 30.
157 Id.
158 Id.
159 J. H. Baker, Book Review, 21 Am. J. Legal Hist. 335, 336 (1977) (reviewing A.W.B. Simpson, A History of the Common Law of Contract. Volume 1: The Rise of the Action of Assumpsit (1975) and S. J. Stoljar, A History of Contract at Common Law (1975)) (citation omitted).
160 Id. at 337.
161 Id.
162 E. Allan Farnsworth, The Past of Promise: An Historical Introduction to Contract, 69 Col. L. Rev. 576, 587 (1969).
163 Frederick Pollock, Contract, in 7 Encyclopedia Britannica 35, 36 (11th ed. 1910) (cited by Farnsworth, supra note 162, at 13). See also Frederic W. Maitland, Equity, Also The Forms of Action at Common Law (Alfred H. Chaytor & William J. Whittaker eds., 1909), available at http://www.fordham.edu/halsall/basis/maitland-formsofaction.asp. Maitland describes the action on debt starting with its initial writ: “A writ of debt was addressed to the sheriff; the sheriff is to command the defendant to pay to the plaintiff the alleged debt, or, if he will not do so, appear in court and answer why he has not done so.” Id. at 299. The court procedure required that the defendant:
… prove his assertion that he owes nothing by his own oath and the oaths of a certain number of compurgators, or oath-helpers. The defendant must then solemnly swear that he owes nothing, and his oath-helpers must swear that his oath is clean and unperjured. If they safely get through this ceremony, punctually repeating the right formula, there is an end of the case; the plaintiff, if he is hardy enough to go on, can only do so by bringing a new charge, a criminal charge of perjury against them.
Id. at 309. A sub-species of debt eventually acquired its own features:
Meanwhile the actions which came to be known as personal make their appearance. The oldest seems to be Debt-Detinue,’ which appears already in Glanvill. I say ‘Debt-Detinue’—originally men see little distinction between the demand for a specific chattel and the demand for a certain sum of money. Gradually this action divides itself into two, Detinue for a specific chattel, Debt for a sum of money—this differentiation takes place early in the thirteenth century. As in Detinue the judgment given for the plaintiff awards him either the chattel itself, or its value; and, as the defendant thus has the option of giving back the chattel or paying its value, Bracton is led to make the important remark that there is no real action for chattels….
Id. at 342.
164 A dispute exists among commentators on whether wager of the law was allowed against attempts to enforce oral or informal covenants. According to Simpson, “there seems never to have been a time when the royal courts regularly allowed actions to be taken on parole covenants,” a viewpoint with which Stoljar apparently agrees. Baker, supra note 159, at 337. Yet, Baker refers to “recently published rolls of 1248 in which wager of law seems to be regularly allowed against parol covenants.” Id. As I read Professor Baker’s quoted opinion, the implication would be those parol covenants that either were not subjected to a wager of law or somehow survived it, could be enforced. Since I had troubles visualizing a “parol covenant” to begin with, I did a search for such a term and found it used in a decision (circa 1869) by the Supreme Court of Pennsylvania in the sense that a covenant that is attempted to be altered by parol ceases to be a covenant, and can only be enforced if at all as a promise. A fortiori, a covenant attempted to be executed orally would meet the same fate.
165 Maitland, supra note 163, at 311 (referring to these “old formal modes of proof” as known to the king’s court, the same court which “made use of the ordeal until that ancient process was abolished by the Lateran Council of 1215. Trial by battle … was not abolished until 1819 and wager of law was not abolished until 1833.”)
166 Sacks, supra note 148, at 34 (emphasis added).
167 The action of trespass upon the case to recover debts, in contrast to the action of debt, was based on the wrong done by a broken oral agreement. For the most recent work on the subject, see Sir John Spelman, The Reports of Sir John Spelman 255–98 (J. H. Baker ed., 1977); J. H. Baker, The Legal Profession and the Common Law 213–36 (1986); A. W. Brian Simpson, A History of the Common Law of Contract (1987).
168 Baker, supra note 159, at 338.
169 Dawson, supra note 78, at 199.
170 Id.
171 Id. at 200–01.
172 Id. at 200–01 (citing Pykeryng v. Thurgoode (no date given)).
173 Id. at 201.
174 I The Selected Writings and Speeches of Sir Edward Coke (Steve Shepherd ed., 2003) (including a full version of Slade’s Case), available at http://oll.libertyfund.org/index.php?option=com_staticxt&staticfile =show.phpštitle=911&layout=html#chapter_106321. The summary of the fact in the principal text, which was provided by the Liberty Fund, precedes its transcription of the original text.
175 Maitland, supra note 163, at 364.
176 J. B. Ames, The History of Assumpsit, 2 Harv. L. Rev. 53, 53–54 (1888).
177 Id. at 53.
178 See infra § 22:8(B).
179 See supra § 20:2(G)(1).
180 Restatement (Second) of Contracts § 1 (1981) (emphasis added) [hereinafter Restatement (Second)].
181 C. Civ. (Fr.) art. 1101.
182 Restatement (Second) § 1 cmt b.
183 Id. at § 2 (1) (emphasis added).
184 Id. at § 2 cmt. d.
185 See E. Allan Farnsworth, Contracts 47 (4th ed. 2004).
186 Id. at 47.
187 See Grant Gilmore, The Death of Contract 19–21 (1974) (cited in Dawson, supra note 78, at 198 n.5, 203 n.12).
188 Dawson, supra note 78, at 203.
189 Id.
190 Id.
191 Id. at 204.
192 Farnsworth, supra note 185, at 55. Could “his” have meant “this”? After all, the party issuing the promise is normally the promisor, at least per Restatement (Second) § 2 (3).
193 Restatement (Second) § 17(1).
194 Id. cmt. a.
195 Id. § 6.
196 Id. § 71 (emphasis added).
197 Id. § 81 cmt b.
198 Id.
199 Farnsworth, supra note 185, at 70.
200 Id. at 48.
201 See Robert Pothier, I A Treatise Obligations 5 (1802).
202 Farnsworth, supra note 185, at 108.
203 Id.
204 Id. at 70.
205 Id. at 70.
206 Id. at 71.
207 Apfel v. Prudential-Bache Sec. Inc., 616 N.E.2d 1095, 1097 (N.Y. 1993).
208 Spaulding v. Benenati, 57 N.Y.2d 418, 423 (1982).
209 Dawson, supra note 78, at 204.
210 Farnsworth, supra note 185, at 48.
211 On the growth of mini and small business associations and their ability to participate in marketplace transactions once they are given access to secured credit, see Kozolchyk & Castaneda, supra note 37, at 98–115.
212 See supra § 22:1(D).
213 Swift, http://www.swift.com/.
214 Farnsworth, supra note 185, at 55. As noted earlier, I am confused by this formulation because I would have assumed that the promisee is not the party issuing the promise but the one either accepting it and or performing acts supposedly in exchange for such a promise. See supra note 192.
215 Farnsworth, supra note 185, at 49.
216 See, for example, the following decisions, which hold that because of a lack of privity between the confirming bank and the customer, the confirming bank has no right of reimbursement against the original customer and owes that customer no duty: Dulien Steel Prods., Inc. v. Bankers Trust Co., 298 F.2d 836, 841–42 (2d Cir. 1962); Petra Int’l Banking Corp. v. First Am. Bank of Virginia, 758 F. Supp. 1120, 1130 (E.D. Va. 1991), aff’d sub nom. Petra Int’l Banking Corp. v. Dameron Int’l Inc., 953 F.2d 1383 (4th Cir. 1992).
217 (1765) 3 Burr. 1663, 97 Eng. Rep. 1035. The discussion of facts and especially of Lord Mansfield’s questions during trial, findings and reasoning owes much to C. H. S. Fifoot. C.H.S. Fifoot, Lord Mansfield 129–35 (1936).
218 Drafts or bills of exchange are “orders” of payment drawn by a creditor or debtor on a third party acceptor, usually a party of known solvency such as a bank or well-known merchant. These drafts could be “time” drafts (if the draft was payable at a future time) or sight drafts (if the draft was payable upon presentation or “at sight”). For a discussion of the legal meaning and economic significance of bills of exchange or drafts, see supra §§ 11:2(D)(2) & 11:4.
219 Fifoot, supra note 217, at 129–30.
220 Id. at 130.
221 Id.
222 Id.
223 Id.
224 Id.
225 Id. at 131–32.
226 Rann v. Hughes, 4 Brown 27, 2 Eng. Rep. 18 (H. L. 1778).
227 Fifoot, supra note 217, at 131.
228 See Boris Kozolchyk, Commercial Letters of Credit in the Americas 593 (1966) (quoting Dean Rousseau regarding a similar albeit twentieth century explanation of the legal nature of a documentary letter of credit: An acceptance issued in advance of the presentation of the beneficiary’s draft and documents).
229 Farnsworth, supra note 185, at 56.
230 Lynn M. LoPucki & Elizabeth Warren, Secured Credit: A Systems Approach 143 (7th ed. 2011). Lopucki & Warren state that “The definition of ‘value’ used in Article 9 [of the U.C.C.] not only encompasses all forms of consideration that would support an ordinary contract, it even includes one form of consideration that does not pass muster in common law contracts: past consideration.” Id.
231 John Swift v. George W. Tyson, 41 U.S. 1 (U.S. 1842).
232 Erie Railroad Co. v. Tompkins, 304 U.S. 64 (U.S. 1938).
233 See supra § 21:11(C)(1).
234 Restatement (Second) § 58.
235 Offer, Online Etymology Dictionary, http://www.etymonline.com/index.php?term=offer [hereinafter Offer Etymology] (“Old English ofrian … from Latin offerre ‘to present, bestow, bring before’ (in Late Latin ‘to present in worship’), from ob ‘to’ … + ferre ‘to bring, to carry’…. Non-religious sense reinforced by Old French offrir ‘to offer,’ from Latin offerre.”) The noun is first recorded in the early 15th century “from Old French ofre … (12c.), verbal noun from offrir…. The native noun formation is offering.” Id. Offering is the verbal noun that comes from offrian. Offering, Online Etymology Dictionary, http://www.etymonline.com/index.php?term=offering&allowed_in_frame=0. The word offer comes “[f]rom Middle English offer, from Old French offre (‘offer’), from offrir (‘to offer’), from Latin offerō (‘to present, bring before’). Compare North Frisian offer (‘sacrifice, donation, fee’), Dutch offer (‘offering, sacrifice’), German Opfer (‘victim, sacrifice’), Danish offer (‘victim, sacrifice’), Icelandic offr (‘offering’).” Offer, Wiktionary, http://en. wiktionary.org/wiki/offer. Thus, the common roots of “to offer” are: to present, bestow or bring before, to bring or carry as part of a sacrifice or donation.
236 Offer Etymology, supra note 235.
237 Reinhard Zimmermann, The Law of Obligations 571 (1996).
238 Hugo Grotius, The Rights of War and Peace 280 (The Lawbook Exchange, LTD. 2004) (1738).
239 Id. at 280 n.10.
240 Id. at 281; see also Glossary, “Pollicitation.”
241 Grotius, supra note 238, at 281.
242 Id. at 701 n.11; but cf. Berger, Encyclopedic Dictionary at 634 (discussing that the Pollicitatio was binding when the offeror promised to give a gift to a city or municipality in exchange for a post and failed to fulfill his promise).
243 (1817) 36 Eng. Rep. 170 (K.B.).
244 (1818) 106 Eng. Rep. 250 (K.B.).
245 Teeven, supra note 9, at 178.
246 Id.
247 Id.
248 Id.
249 Id.
250 Restatement (Second) § 24.
251 Id. § 25. Contrast this rule with the interpretation of what was supposed to be a counterpart provision in the Mexican Federal Civil Code and its interpretation by the Supreme Court of Mexico in the Maria Trinidad Gomez case, infra 22:10(K).
252 Restatement (Second) §§ 18, 19.
253 Id. § 29.
254 Id. § 30.
255 Id. § 33.
256 Id. § 33(2).
257 Id. § 35(1).
258 Id. § 41.
259 Maria del Pilar Perales Viscasillas, The Formation of Contracts & the Principles of European Contract Law, 13 Pace Int’l L. Rev. 371, 384 (2001); BGB art. 145; United Nations Convention on Contracts for the International Sale of Goods art. 16(2), Apr. 11, 1980, 19 I.L.M. 668, 1489 U.N.T.S. 3.
260 Restatement (Second) § 25 cmt. b.
261 Id. (citation omitted).
262 See supra note 176 and accompanying text.
263 Restatement (Second) § 42.
264 Id. § 42 cmt. a.
265 UCP 600 art. 3 (2007).
266 U.C.C. § 2–205.
267 Id. § 2–205, cmt. 1.
268 For a discussion on the negative effects of this requirement in the contemporary marketplace, see infra 22:10(F).
269 I Corbin on Contracts 27 (Joseph Perillo ed., Rev. Ed. 1993).
270 Compare U.C.C. § 9–102 (1998) and U.C.C. § 9–102 (1962). The latest revision of U.C.C. Article 9 does not include a separate definition for “contract rights,” as it was absorbed by the definition of “accounts.”
271 Kozolchyk & Castaneda, supra note 37, at 62–63.
272 Id. at 63.
273 Restatement (Second) § 6; U.C.C. § 2–205.
274 Goode on Commercial Law 77–78 (Ewan McKendrick ed., 4th ed. 2009; see also Roy Goode, Abstract Payment Undertakings, in Essays for Patrick Atiyah (Peter Cane and Jane Stapleton eds., 1991). In addition to the above mentioned letters of credit and bank guarantees, Profesor Goode lists performance bonds. I would add to the list of abstract undertakings the promise to deliver the goods said to be stored or carried by a warehouseman or a carrier in his negotiable document of title if duly negotiated to a holder in due course. See, e.g., U.C.C. § 7–502; Boris Kozolchyk, Evolution and Present State of the Ocean Bill of Lading from a Banking Law Perspective, 23 J. of Mar. L. & Commerce 161, 173 (1992) (commenting on the abstraction of the U.S.-issued negotiability of ocean bills of lading).
275 Farnsworth, supra note 185, at 89.
276 Id. (citations omitted).
277 United Nations Convention on the Assignment of Receivables in International Trade art. 9, Dec. 12, 2001, available at http://www.uncitral.org/pdf/english/texts/payments/receivables/ctc-assignment-convention-e.pdf.
278 Volume 102—Year 1991, LJU CASE 11695, Supreme Court of Justice. Appeal to the Supreme Court, Montevideo, July 16, 1990.
279 Emphasis added.
280 See Phillip Heck, Grundriss des Schuldrechts 122 (1929) (cited in Von Mehren & Gordley, supra note 90, at 830–31).
281 See § 23:1(C) (discussing the exceptio doli’s role in shaping the Roman law doctrine of good faith).
282 418 So. 2d 878 (Ala. 1982).
283 Emphasis added.
284 Id. at 879–80. See also infra § 25:6 (discussing pre-trial discovery).
285 See infra § 25:6 (discussing pre-trial discovery & complaint).
286 Amended U.C.C. § 2–201(1) (2003).
287 Id.
288 Id. § 2–103(1)(m).
289 Id. § 2–201, cmt. 1.
290 761 F.2d 1117 (5th Cir. 1985).
291 Id. at 1120.
292 539 F.3d 1159, 1162–63 (9th Cir. 2008) (citations omitted).
293 274 N.W.2d 339 (Iowa 1979).
294 Id. at 340–41.
295 Fuero de Navarra, III, 19, 6.
296 C.C. (Spain) (1889) arts. 1254, 1258, 1278, 1279, 1280.
297 See infra § 23:5(D)(2)(b).
298 S.T.S., Mar. 12, 1994 (R.J., No. 1743) (Spain).
299 S.T.S., July 4, 1994 (R.J., No. 6424) (Spain).
300 C.C. (Spain) (1889) art. 1279 (emphasis added).
301 See supra § 8:2.
302 El Salvador: Case law, No. C 1003 (Dec. 21, 2002), available at http://natlaw.com/natlaw-world/.
303 The term “bill of lading” in this decision refers to a non-negotiable bill of lading.
304 La Forma No es Elemento Constitutivo de la Compraventa, Pleno de la Suprema Corte de Justicia [SCJN] [Supreme Court] Semanario Judicial de la Federación y su Gaceta, Séptima Época, tomo XC, Octubre de 1956, Tesis Tercera Sala, Cuarta Parte, Página 59 (Mex.), available at http://ius.scjn.gob.mx/paginas/externas/detalle.aspx?id=241259 (also on file with this author) (this author’s translation). I am thankful to Lic. Manuel Pliego from the LL.M. program in International Trade Law at the James E. Rogers College of Law, University of Arizona 2004–2005, for providing me with this source.
305 Cesion de Derechos. El Contrato no Inscrito en el Registro Público de la Propiedad está Afectado de Nulidad Absoluta, Segundo Tribunal Colegiado del Décimo Cuarto Circuito [TCC] [Collegiate Circuit Court], Semanario Judicial de la Federación y su Gaceta, Novena Época, tomo IV, Noviembre de 1996, Tesis XIV.2o.15C, Página 411, available at http://ius.scjn.gob.mx/paginas/externas/detalle.aspx?id=200886 (on file with this author).
306 Maria Trinidad Gómez Jiménez, 125 SJF5a 355 (1955), in Woodfin L. Butte, Selected Mexican Cases 305–08 (1967) (any changes made are to aid in clear understanding).