Revisiting Touch and Concern: The Perils of Degraded Contracts versus the Perils of Opportunism
The touch and concern doctrine addresses a very particular problem: Successors, at best, weakly assent to the land use promises that their predecessors made when they take the property with notice that their predecessors intended to bind them. Thus, there is little reason to presume that the deal we may bind them to would be one that they would strike. Of course, whenever deals persist over time, it is possible that one or the other contracting party would no longer feel that the gains from the deal outweighed its costs, but the problem is more pronounced when the identity of the potentially bound party has shifted, not just the tastes or circumstances of the contracting party. Moreover, initial contractors receive compensation for the risk that tastes or circumstances change, so although there are good paternalistic reasons to protect them against unduly binding long-term contracts, and reasons to give room for long-term flexibility to renegotiate, we need not worry that the initial bound contractor will receive little or no compensation for bearing a burden.
Those who advocate relying solely on initial contractors to figure out when it is sensible to make their promises run presume that successors will be compensated by paying less for property to account for the burdens of taking on unwanted obligations. This optimistic view is unwarranted: the predecessor’s promises are bundled together with large numbers of land use planning promises and with the purchase of the property. It is unlikely that purchasers will adequately depress bids to account for the disutility of taking on each of the burdens.
If we looked only at the successors, we would probably just adopt a blanket rule that promises are terminated upon conveyance. But we need to protect the promisees as well: If they have made site-specific, non-fungible investments relying on the promisor and successors meeting the contractual obligations, they are subject to opportunistic exploitation if the contracts simply die upon conveyance. We try to balance these concerns in the first instance by determining whether the deal the predecessor and promisee struck was one that the successor would likely undo rather than redo. Promises that touch and concern the land in this preliminary sense are ones that are location-specific (the benefits to the promisee are particularly high or the costs of compliance for the promisor are atypically low because the promisor occupies a particular parcel). If this is true, the fact that the predecessor and successor are different people, with presumably heterogeneous preferences, may be outweighed by the objective factors that would tend to make their preferences converge: each inhabits a parcel whose features make the contract atypically sensible.
This preliminary account of the best version of the doctrine is incomplete: It may bind too many successors. A promise may be somewhat location-specific, but distinctions in preferences may swamp the preference-homogenizing effects of locational specificity. It may also bind too few successors. If the promise is location-specific from the promisee’s vantage—benefits from fulfilling the promise are greater because of the promisor’s location—and the promisee made location-specific investments premised on the reasonable belief that successors would be bound, then the successor ought to be bound even though we are by no means confident she would have made the deal she is being asked to observe. But we ought to be alert to the possibility that the promisee indeed has reasonable substitute contracting partners and will not be held up by a uniquely situated parcel owner.
Each of the proposals I offer to affirm a functional version of touch and concern contradicts the positions taken in the Third Restatement, which, in my view, utterly misunderstands the role the doctrine plays.
Revisiting Touch and Concern: The Perils of Degraded Contracts versus the Perils of Opportunism,
Tex. A&M J. Prop. L.
Available at: https://doi.org/10.37419/JPL.V9.I2.2