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Insincere Promises advances an economic theory of promissory fraud. Ayres and Klass argue that the doctrine of promissory fraud helps to induce efficient reliance from promisees by penalizing promisors who misrepresent the objective probability of their performance. The authors propose a revised doctrine aimed at inducing optimal reliance with minimal transaction costs. I show that Ayres and Klass have all but abandoned the role of intent in the common law of misrepresented intent. Ayres and Klass are concerned only with making available to promisees accurate information about the probability of performance by promisors. I suggest that whatever the merits of their approach, it is inconsonant with the everyday practice of promising, which as a moral practice attaches great significance to subjective intent. Contrasting the common law of promissory fraud with securities regulation of expressions of corporate intent, I argue 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 subject 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 theory of the tort of promissory fraud in intentional terms. I conclude that, though their proposed reforms are consistent with economic theories of contract law, if given effect they would result in a radical overhaul of existing doctrine.


2008 U. Ill. L. Rev. 985 (2008)