Why does the law enforce some promises and not others?

In the autumn of eighteen forty, a widow in Alabama received a letter from her husband's brother. She had several children. She was living on public land under a lease, and she was, in the words of the court that later heard her case, comfortably settled. Her brother in law lived sixty or seventy miles away. He wrote that he had heard of her husband's death, that he knew her situation was one of grief and difficulty, and then he wrote this. If you will come down and see me, I will let you have a place to raise your family. He added that he had more open land than he could tend.
Within a month or two she gave up her place without selling it, packed up her children, and moved to his farm. He put her in comfortable houses and gave her land to farm. For two years. Then he told her to leave those houses, moved her into a house in the woods that the court described as not comfortable, and after that required her to leave altogether. She sued him. A jury gave her two hundred dollars.
So here is the question. He promised. She relied on the promise. She was harmed when he broke it. Is there a contract? Think about that before I tell you what the court said, because the answer is the reason this course exists.
Before we get to the answer, I want to ask a different question, and it is the question I will keep asking for the whole of this course. What exactly did these people promise each other? Not what did they hope, not what did they expect, not what would have been decent. What did they promise, and what, if anything, did each of them give for the other's promise?
Here is the first thing to put on the board. A contract is a promise, or a set of promises, that the law will enforce. That sentence has a trap in it. It does not say that every promise is a contract. It says the law will enforce some promises. The whole of the first year of contracts is the study of which ones, and why.
The second line. The promises the law enforces are, in the main, bargains. A bargain is an exchange. I promise you something, and in return you promise me something, or you do something. The thing given in exchange for a promise has a name in the law. It is called consideration. We will spend a whole module on it later. For today, hold onto the plain idea. The law enforces promises that were paid for, in money, in goods, in work, or in another promise. A promise given for nothing is a gift, and the law, with narrow exceptions we will meet, does not enforce a promise to make a gift.
Third line, and this one is about which law we are even talking about. Contracts in the United States come from two sources. The first is the common law, which is the body of rules built by judges, case by case, over centuries. The common law governs contracts for services, for land, for employment, and for almost everything that is not a sale of goods. The second source is Article Two of the Uniform Commercial Code, a statute that every state except Louisiana has enacted, which governs transactions in goods. Goods, under the Code, are things that are movable at the time they are identified to the contract. A truck is goods. A hundred cases of glass jars are goods. A house is not. A haircut is not. Legal advice is not.
Why does it matter which one applies? Because the Code changes some of the rules. It is often more forgiving about how a contract is formed, and it has its own rules about terms, about warranties, and about what happens when forms are exchanged. So the first question a lawyer asks about any contract problem, before anything else, is this. Goods, or not goods?
That question has a hard version. Suppose a contract is for both. A company agrees to install bowling equipment, which means selling the machines and doing the installation. Is that goods, or services? In nineteen seventy four a federal court of appeals answered that question in a case called Bonebrake against Cox, and its answer is the test most American courts use today. Here is the court's sentence. The test for inclusion or exclusion is not whether they are mixed, but, granting that they are mixed, whether their predominant factor, their thrust, their purpose, reasonably stated, is the rendition of service, with goods incidentally involved. The predominant purpose test. You ask what the deal was mostly about. If it was mostly a sale of goods with some service thrown in, the Code applies. If it was mostly a service with some goods along the way, the common law applies.
One more line for the board, and then the case. A contract can be formed in two shapes. In a bilateral contract, each side gives a promise. I promise to sell you my truck, and you promise to pay me forty five thousand dollars. Two promises, exchanged. In a unilateral contract, one side gives a promise and the other side gives an act. I promise a hundred dollars to whoever finds my dog, and you find the dog. One promise, one performance. Most contracts in commerce are bilateral. Keep both shapes in mind, because the difference will matter when we reach offers and acceptance.
Now, back to Alabama. The case is called Kirksey against Kirksey, decided by the Supreme Court of Alabama in eighteen forty five, and it is short. The facts were agreed. The question for the court was whether those facts would sustain the action. In plain terms, whether the brother in law's promise was one the law would enforce.
The judge who wrote the opinion, Judge Ormond, began by telling us what he himself thought. Listen to his words. The loss and inconvenience, which the plaintiff sustained in breaking up, and moving to the defendant's, a distance of sixty miles, is a sufficient consideration to support the promise. In his view, she had paid for the promise. She paid with the move.
And then he told us that he lost. Here is the sentence. My brothers, however think, that the promise on the part of the defendant, was a mere gratuity, and that an action will not lie for its breach. The judgment for the widow was reversed. She recovered nothing.
A mere gratuity. The majority of the court saw the letter as a kind offer of a gift, a place to live, and they saw the move not as the price she paid for that gift but as the thing she had to do in order to receive it. If I say, come to my house and I will give you dinner, your drive to my house is not the price of the dinner. It is how you collect a gift. That, the court thought, was this letter. Judge Ormond disagreed, and he told us so, and he was outvoted. Both views are in the opinion, one paragraph long, and law students have argued about which is right for nearly two hundred years.
Notice what the court did not say. It did not say he behaved well. It did not say she was not harmed. It did not say his promise was not sincere. It said only that a promise given as a gift is not enforced as a contract. That is the rule, and it is a hard one, and it is the beginning of everything we do here. So, back to the question. What exactly did these people promise each other? He promised her a place. She promised him nothing. And the court held that the law would not make him keep a promise she had not paid for.
Now let's change one fact. Suppose the letter had said this instead. If you will come down and work my land for me, I will let you have a place to raise your family. Same widow, same move, same two years, same eviction. Is there a contract? Choose an answer before I go on. Yes, no, or not enough to say.
Most people say yes, and this time most people are right. The letter now asks for something in exchange. Her work is the price of his promise. That is a bargain, and a bargain is what the law enforces. The move is no longer a way of collecting a gift. It is the beginning of her side of a deal. Judge Ormond thought the original letter was already this. His colleagues did not. Add the words work my land, and there is no longer anything to argue about.
Change one fact again. Leave Alabama. A homeowner hires a heating company to supply and install a furnace for twelve thousand dollars. The furnace itself is nine thousand of that. The company delivers it and installs it badly. Which law governs the dispute, the common law or Article Two? Choose.
Most people say services, because someone came to the house and did work. Here is why that is tempting, and why it is probably wrong. The predominant purpose test does not ask whether there was labour. It asks what the deal was mostly about. Nine of the twelve thousand dollars bought a machine. The installation was how the machine got into the house. Most courts would call this a sale of goods with installation incidental, and apply the Code. But notice that I said most, and probably. The test is a judgment about the thrust of the transaction, and a well argued case can pull a close one either way.
Change one fact a third time. A business pays sixty thousand dollars to a software firm to write a custom program to its specification. The program is delivered on a disk. The business says the program does not work. Goods, or services? Choose.
This one is argued, and I want you to hear me say that plainly, because a good lawyer knows the difference between a question with an answer and a question with two sides. Some courts say the disk is a movable thing and the customer bought a product, so the Code applies. Others say the customer bought months of skilled labour and the disk is just the container, so the common law applies. The honest answer is that the characterisation is contested and that you should be able to make both arguments. The predominant purpose test tells you what to argue about. It does not always tell you who wins.
Here is what most people get wrong in this first week, and why it is tempting. The first mistake is treating he promised as the end of the analysis. It is the beginning. The widow's brother in law promised, and lost nothing. Ask always what was given for the promise. The second mistake is assuming the Code applies whenever money changes hands. Money changes hands for haircuts and for houses. The Code applies to goods, and to mixed deals that are mostly goods. The third mistake is smaller but it will cost you marks. Bilateral and unilateral describe how a contract is formed, by two promises or by a promise and an act. They do not describe how many people have obligations afterward.
Here is the rule, in one breath. The law enforces bargains, promises given in exchange for something, and it does not enforce a promise to make a gift, however kind, however relied upon, however badly broken. Now, five questions.