The Comment On Fuller's Reliance Interest Theory

The issue of"The Reliance Interest in Contract Damages"is a milestone of the contract theory development. It signifies the new era's reaching, and exerts its far-reaching influences over contract law and the research of reliance interest in the future. Its author, L.L.Fuller, is a reputable American jurist. By studying and researching Fuller's reliance interest theory, we'd like to clear its main contents, appraise its influences, find out its flaws, and finally offer some reasonable suggestions to our contract law legislation, in the long run, promote our own development.The first part: the main point is about the background of reliance interest theory's formation. The foundation of Fuller's theory is its native contract theories'development. In early days, American jurists did not pay great attention to contract. This situation changed in 1950s. Since then, contract law has been recognized as an independent subject of law. Consideration, the core concept of contract law, comes into being since the publication of"The Common Law", whose author is Holmes—a judge of the Supreme Court in America, and it plays the role as the standard of determining contracts'validity. Williston further researched it and perfected consideration's concept in"The Restatement (First) of Contracts"§75.From then on, this concept has been esteemed as a core terminology. The main contents were criticized by many scholars, one of the most important ones is Corbin who is quite famous at that time. He advocates the modification of consideration's concept intensely. As a compromise,"The Restatement (First) of Contracts"§90 gives Holmes and Williston's theory of consideration, meanwhile embodies consideration to Corbin's theory of promise. These two apparently conflicting theories coexist in The Restatement and keynote the contract theory's development. Fuller's theory not only absorbs the essence of its native contract theories, but also been enlightened by The Fault Liability theory in the Civil Law System. As the leader of jurists in Germany, Jhering issued his"Damages of Fault, Invalid or Non-perfect Contract"and put forward his Fault Liability theory in 1861. The greatest contribution of his theory rests with the affirmation of the reliance relationship between parties, freeing the research from damage theory in contract, paving a new way to the rescue of damage of contract reliance interest. As a former theory refers to reliance protection, Jhering's Fault Liability theory enlightens Fuller's, thus they have great similarities.The second part is about the main contents of Fuller's theory. The writer tries to reveal the core components of reliance interest fully and accurately. Based on the analysis of reliance interest's concept, Fuller classifies contract interest into three respective parts in a descriptive way. They are restitution interest, reliance interest and exception interest. He defines them separately and gives them specific examples. In Fuller's opinion, the essence of reliance interest lies on the reasonable cost which bases on reliance of a contract's formation and performance. All the cost can be reimbursed by the other party's compensation. Reliance interest is not the benefit originates from a contract's formation, performance or cancel, but a part of performance interest that the contract brings about. The interest that ascribes to reliance interest is not newborn, but a compensation for the contract reasonable cost that has paid. Fuller used a whole section in his article to distinguish the reliance interest from others. Although there are some parts overlapped between reliance interest and restitution interest, still there are parts in the former that can't ascribed to the latter. Although reliance interest and expectation interest share many similarities on protection, they are quite different in the extent of claims to judicial intervention and the base on which they begin their protection. As a result, originated from those former contract theories, reliance interest comes into being successfully. And maybe this is the very premise why we protect it. Then Fuller enumerated many reasons why we should protect reliance interest, gave each specific reason profound analysis, and achieved his conclusion that reliance protection is the best way. Further more, he divided reliance interest into essential reliance and incidental reliance. Fuller also asserted that both of them would exert their influence over reliance interest's protection. At last, Fuller gave his own comment on consideration's contents in"The Restatement (First) of Contracts". He pointed out that the conflicts of its system and the repelling of reliance interest protection. Especially, he held that the latter is The Restatement's fatal defect.The third part is about the writer's opinions and comments on reliance interest theory after the above study. Many scholars consider Fuller as the theory's father, and believe that the new theory in itself has shocked the classical consideration theory. The writer refutes these opinions, and point out that Fuller is just an interpreter of reliance interest in this field. Meanwhile, Fuller's theory has not changed the basic contract theory at all. His theory adopts the essence of its former native contract theories, melts Jhering's Fault Liability theory together, attain its agreement with the latter on the protection's aim, foundation and so on. However, Fuller's theory did not put forward the jurisprudence base of reliance interest protection. He just announced the need of protection in a realistic way. On his research, Fuller also apply benefit-analysis approach, which has become a very popular teaching method in America. With this weapon in hand, Fuller put forward his own theory, destroyed the former all-but-not contract interest protection mode,and effected on"The Restatement (Second) of Contracts"and UCC. Just like a coin has its another side, Fuller's theory has its own flaws. It ignores the significance of the incidental reliance interest, restricts the damage mistakenly, and endangers the contract law's stability probably.In the last part, I hope that my research on Fuller's theory can benefit the progress of our own contract law. Although provides protection, those reliance interest protection rules are scattered and un-systematic. Our contract law mainly transmitted from the Civil Law System, that is to say, our reliance interest protection mode adopts Jhering's Fault Liability theory mainly. Based on these analysis above, I think Fuller's theory may benefit our contract legislation in the affirmation of contractual relationship, the duties, and the acknowledgement of the parties'true meaning in their inner sense. And I also wish that our contract law can define the concept of reliance interest and these related definitions. Meanwhile, we'd better draw lessons from reliance interest's objective criteria in judging cases, and reinforce the protection of the party's benefits that have been impaired.