A Promise Made is a Debt Unpaid

There is a Hebrew Proverb that “a promise made is a debt unpaid.” Well, if you made the promise in Louisiana, it may be very true!

Unlike the other 49 states, Louisiana practices the Civil Law system. The other states practice Common Law. There are several key differences. One of the most important is the way our state treats promises.

At common law, an enforceable contract generally requires consideration. This means that each party to the contract must give something to the other. For example, in car sale, the seller gives consideration to the buyer – the car. The buyer gives consideration to the seller – the money. But, what if the seller simply promised to give the car to the buyer for no money. In a common law state, the seller’s promise may not be enforceable.

NOT SO IN LOUISIANA. In our state, the seller’s promise may be enforceable under several theories. First, there is the concept of cause. It is a Louisiana term that can almost be considered the replacement for consideration. Essentially, as long as the seller has a reason – or cause – to enter into the agreement, his promise may be enforceable against him. His cause could be a gratuitous feeling.

Now don’t run out and sue everyone who broke a promise to you. Under the concept of cause, certain formalities must be met. In most cases, the promise must be written and notarized before two witnesses.

Negligent Misrepresentation

But, there are other theories that come into play. One theory comes in under tort law. (Tort law general deals with injuries people cause to each other through fault. For example, car accidents generally fall under tort law).

Under the theory of negligent misrepresentation, a promisor may be liable for damages another person incurs because of his promise. Now, this only comes into play if the promisor was negligent in making the promise. As you can imagine, whether a person was negligent is not a straightforward determination. Many court battles have been held to determine whether a person was negligent or not. But, if the promisor was negligent and the other person incurred damages because of the broken promise, the promisor may be required to compensate the other person for those damages.

Detrimental Reliance

One last theory that comes into play is the notion of detrimental reliance. This theory is related to contract law, but comes into play when no actual contract was formed. For example, if the formalities of a written and notarized promise don’t exist, this theory may still come into play.

Similar to the theory of negligent misrepresentation, the promisor may be liable for a broken promise if the other person incurred a loss because of the broken promise. Generally, to recover, the person must show he reasonably relied on the promise and he suffered damages. The battle here will be over whether reliance on the promise was reasonable.

So if our car seller promised to give you a brand new Lexus for no money if you take the bus downtown to pick it up, you probably can’t recover the bus fare if he breaks it. Reliance on the promise was not reasonable. But, if he promised you $2000 off if you took the bus in the next hour to pick it up, maybe you have a case.

In short, we 90’s kids used to jam to Christopher Williams’ song “Promises.” But, as grown folks, we need to know that breaking promises is not cool and we could be financially liable for breaking them.