ABSTRACT
Cooke and Oughton comment as follows: There are both moral and economic reasons for the protection of expectations. Morally, it is right that promises should be kept, but it is not the case that all promises are legally enforceable. Moreover it has been argued that promises will usually be made in order to get something and that they tend to encourage acts of reliance. If the promisor gets what he seeks or if there is an act of reliance by the promisee, this enhances the case for enforcing the promise. Moreover, if the promisee’s expectation interest is protected, this serves as an encouragement to the promisor to fulfil his promise, thereby upholding the operation of the market economy. In this way, the protection of the expectation interest encourages the efficient movement of resources to the person who values them most. If only the status quo or reliance interest were to be protected, there would be no incentive to contracting parties to perform. But if the expectation interest is protected, such an incentive does then arise. A further economic justification for protecting the expectation interest is that an exchange of promises may act as a deliberate risk allocation device which allows a business to shift the risk of a particular loss to someone who is better able to take the risk or avoid it in some way. However, such risks may not always be capable of being absorbed by the person to whom they are transferred. In such a case, judicial or parliamentary intervention in favour of the weaker party may be justified. Sometimes a promise may be kept for reasons other than legal compulsion. For example, it has been shown by empirical research that promises may be kept by businessmen because they deal frequently with a particular business and do not wish to lose that business relationship for the future.1
