Insincere Promises advances an economic theory of the law of mis-represented intent. Ian Ayres and Gregory Klass argue that penalizing promisors who misrepresent the objective probability of their performance helps to induce efficient reliance on promises by promisees. The authors develop a reformed version of the doctrine aimed at inducing optimal reliance with minimal transaction cost.In this Book Review Essay, the author shows that Ayres and Klass have all but abandoned the role of intent in the common law of misrepresented intent. Ayers and Klass are concerned only with making available to promisees accurate information about the probability of performance by promisors. She suggests that whatever the merits of their approach, it is inconsonant with the everyday practice of promising, which attaches great significance to subjective intent. Contrasting the common law of promissory fraud with securities regulation of expressions of corporate intent, she argues that the “errors” which Ayres and Klass identify in the case law reflect the origins of the common law doctrine in the moral practice of promising. The relevance of subjective intent to that practice explains why even Ayres and Klass would make subjective intent essential to the crime of false promise, and also explains why they couch their the-ory of the tort of promissory fraud in intentional terms. The author con-cludes that, though the proposed reforms are consistent with economic theories of contract law, if given effect they would result in a radical overhaul of existing doctrine.Insincere Promises: The Law of Misrepresented Intent, by Ian Ayres and Gregory Klass. Yale University Press, 2005.
The full text of this Book Review Essay is available to download as a PDF.