Response to Charny's Rules : LUSENET : Lessig's Contracts : One Thread

I'm not sure I agree with Christian that Charny's rules support the court's decision in Zeman. The biggest sticking point is Charny's first requirement that the promisee "substantially and justifiably" misapprehend the probability of the breach. Zeman did not agree to build the complex at Lufthansa's request. Indeed, he explicitly conceded that "he would build the building in any case before April 1st because he could rent the aparments...very quickly and well to other air carriers if there should be no interest on the part of [Lufthansa]." It sounds to me like Zeman built the apartments independently of Lufthansa's promise, and then, when he found that he could not rent them to anyone (let alone Lufthansa), sought to minimize his losses by going after a likely target.

Along those same lines, it seems difficult to see how his reliance made "him worse off than he would have been had no promise been made." He still would have built the apartments even without Lufthansa's promise, and he still would have faced default for lack of interest. Unless Zeman can show that he passed up other offers in favor of Lufthansa (something I don't recall him doing), I don't think he can claim to be worse off as a result of the promise. The only amibiguity here is his consent to judgment against himself for delinquent payments--an act the court claims was done on the expectation that Lufthansa would sign a lease. I'm not sure I fully understand the details, and they may well mitigate the force of this second claim, but I suspect Zeman would have acted similarly in any event on the expectation that others would rent if Lufthansa did not.

Finally, I'm not sure we can say that "rational transactors would have contracted" to enforce the commitment (Charny's 2nd criterion). This may be a gross misapplication of our discussion in class, but I would think that rational parties would want to preserve the non-binding nature of negotiations. Then again, I'm not sure I fully understand the 2nd criterion (or any of them for that matter), so perhaps I'll leave it at that.



-- Anonymous, October 07, 1998


Response to Charny (Correction)

After re-reading my post, I realized that the first paragraph doesn't make a whole hell of a lot of sense(reminder to self: don't post or talk in class on Mondays or Tuesdays!). I think I was trying to argue that Zeman could not have misapprehended the probablity of Lufthansa's breach because he wasn't really relying on the airline's promise in the first place. Or perhaps I was saying that he understood Lufthansa's unwillingness to commit but decided to build anyway because he thought he could rent the rooms regardless--I'm not really sure. Upon further reflection, however, I see that that's less an argument about applicability of Charny's rules than it is a general claim that this case may not really be about reliance at all. Anyway, sorry for any unnecessay confusion.

cheers, andy

-- Anonymous, October 07, 1998

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