Consent Agreement

Consent Agreement in the United States

Consent Agreement in Environmental Law

Settlements are common in environmental practice. The type of consent agreement reached in a settlement depends on whether the case is in court or the agency is handling the alleged violation itself. A consent agreement will be either a consent decree or a consent order.

Consent Decree

Note: there is an entry on consent decree in this legal encyclopedia.

These agreements are worked out between the defendant to a lawsuit and the plaintiff (usually the government in environmental cases) and then filed with a court. When the government notifies a business that it will be sued, it may at the same time open the door to settlement. The parties meet to discuss the claims and proposed penalties, actions, or other relief, and negotiate. In this manner, many of the EPA lawsuits are settled at the same time the complaint is filed.

Because a lawsuit is the triggering mechanism, a consent decree involving the EPA must be approved by three offices: the regional EPA, the EPA Headquarters, and the Department of Justice. Also, a consent decree cannot be entered as final until it goes through a period of notice and comment to allow interested parties to object. This process is called the lodging of the consent decree. After the notice and comment period, the EPA and other parties make a motion for entry of the decree, which then becomes an order of the court.

Consent decrees usually have much lower penalties than those initially sought in the complaint, because the EPA normally asks for the maximum amount allowed under the law but has much discretion to reduce the penalty when negotiating. Some of the matters considered by the EPA in settlement discussions are duration of the noncompliance, severity of the violation, history of violations, economic benefit resulting from noncompliance, good faith efforts to comply, and similar matters.

The EPA obtains several benefits from settling a case, most obviously time and manpower savings. Often it also obtains stipulated penalties, written in a way that requires the defendant to pay without being asked if it violates the consent decree.

The defendant also stands to gain from settlement, particularly when the complaint has not yet been filed. Publicity for environmental violations is not welcomed by many companies. But if the consent decree and complaint are filed simultaneously, public exposure is lessened.

Normally defendants will also profit by reducing financial exposure as well as legal fees.

Consent decrees rarely contain an admission of liability, since that would expose the defendant to other lawsuits. If noncompliance was based on technical problems, defendants can negotiate a schedule for remedying the problem. The decree normally reserves the government’s right to sue for a violation of the statute but the government seldom takes that step unless the defendant ignores the consent decree.

Consent Order

This agreement may be negotiated with an administrative agency when the agency issues or plans to issue an administrative complaint, administrative order, or administrative penalty order. Consent orders have many of the same features as a consent decree, but neither the Department of Justice nor a court is involved. If a penalty is proposed, it is limited by the amount allowed for an administrative penalty proceeding, which generally is less than is available in a court.
Based on “Environment and the Law. A Dictionary”.

Defining Consent in Contract Law

Consent and the Objective Theory of Contract

At first blush, a consent theory of contract may appear to some to be a version of a will theory. Understanding the fundamental differences between the two approaches, therefore, will assist an appreciation of the comparative virtues of the consent theory.

A will theory bases contractual obligation on the fact that an obligation was freely assumed. As was shown in Part I, a theory that bases *301 contractual obligation on the existence of a “will to be bound” is hard pressed to justify contractual obligation in the absence of an actual exercise of the will. It is difficult to see why one is legally or morally committed to perform an agreement that one did not actually intend to commit oneself to and still hew to a theory that based the commitment on its willful quality. This subjective component creates a tension between a will theory and the inescapable need of individuals in society and those trying to administer a coherent legal system to rely on appearances–to rely on an individual’s behavior that apparently manifests their assent to a transfer of entitlements.

In contrast to a will theory, a consent theory’s recognition of the dependence of contractual obligation on a rights analysis is able to account for the normal objective-subjective relationship in contract law. The concept of rights or entitlements is a social one whose principal function is to specify boundaries within which individuals may operate freely to pursue their respective individual ends and thereby provide the basis for cooperative interpersonal activity. Lawyers tend to concentrate on the function entitlements notions play in specifying the proper remedies for wrongful conduct, but given the uncertain justice of any legal remedy, a vital function of a system of well-defined entitlements is the avoidance of disputes. And, while it is not unusual to discuss avoiding disputes by raising the cost of misconduct and thereby deterring “bad” persons, [FN131] it is frequently overlooked that an entitlements view must take a “good man” view of law at least as seriously as it does a “bad man” view.

The boundaries of individual discretion that are defined by a system of clear entitlements serve to allocate decision-making authority among individuals. Vital information is thereby conveyed to all those who might wish to avoid disputes and respect the rights of others, provided they know what those rights are. [FN133] Potential conflicts between persons who might otherwise vie for control of a given resource are thus avoided. Therefore, an entitlements theory demands that the boundaries of protected domains be ascertainable, not only by judges who must resolve disputes that have arisen, but, perhaps more importantly, by the affected persons themselves before any dispute occurs.

In contract law, this informational or “boundary defining” requirement means that an assent to alienate rights must be manifested in some manner by one party to the other to serve as a criterion of enforcement. Without a manifestation of assent that is accessible to all affected parties, that aspect of a system of entitlements that governs transfers of rights will fail to achieve its main function. At the time of the transaction, it will have failed to identify clearly and communicate to both parties (and to third parties) the rightful boundaries that must be respected. Without such communication, parties to a transaction (and third parties) cannot accurately ascertain what constitutes rightful conduct and what constitutes a commitment on which they can rely. Disputes that might otherwise have been avoided will occur, and the attendant uncertainties of the transfer process will discourage reliance.

While this imperative of a system of entitlements may initially strike some as ad hoc, we react this way only because we are not used to thinking of contractual obligation as arising from the transfer of rights. The relationship between legal rules and entitlements theory is better understood in the realm of property law, where the boundary defining function of rights also necessitates an objective approach. No serious theory would suggest that persons initially acquire rights to (unowned) resources simply because they subjectively believe they have done so. Rather, rights to unowned objects are acquired by performing some demonstrable and meaningful act with respect to those objects. Depending on the theory of acquisition that is held and the conventions that are adopted, the act required might be possessing or staking out the resource, transforming it, or filing a claim to it with a claims office. [FN134] Each of these conventions objectively manifests ownership over a previously unowned or abandoned resource by conveying to others an unmistakeable claim to possess, control, and utilize the resource.

The analysis for contract law is similar. Requiring the consent of the rights holder as a condition of a valid transfer of rights is absolutely vital to a regime of entitlements for the reasons discussed above. [FN136] But, whether one has consented to a transfer of rights under such a regime generally depends not on one’s subjective opinion about the meaning of one’s freely chosen words or conduct, but on the ordinary meaning that is attached to them. Language itself–the way that assent to a transfer is manifested–is as much a convention as those conventions governing rights acquisitions. If the word “yes” ordinarily means yes, then a subjective and unrevealed belief that “yes” means no is generally immaterial to a regime of entitlements allocation. Only a general reliance on objectively ascertainable assertive conduct will enable a system of entitlements to perform its allotted boundary-defining function.

Further, a legal theory that attempted to rest the rightful acquisition, use, or transfer of resources solely on subjective intentions could not provide a coherent set of rights or entitlements. There is nothing to prevent subjective intentions from conflicting with one another. Therefore, to the extent a theory attempts to derive rights from such intentions, it would produce “rights” that were necessarily in irreconcilable conflict with each other. Such a theory would then need to appeal to still other principles to resolve these conflicting claims of “rights,” but any such appeal would mean that this type of legal theory was not a theory of rights at all.

The function of a rights theory is to define the boundaries of permitted human action [FN138] and resolve competing claims. [FN139] A coherent rights theory will, therefore, allocate rights largely on the basis of factors *304 that minimize the likelihood of generating conflicting claims. In this regard, objectively manifested conduct, which usually reflects subjective intent, provides a far sounder basis for contractual obligation than do subjectively held intentions. Evidence of subjective intent that is extrinsic to the transaction and was unavailable to the other party is relevant, if at all, only insofar as it helps a court to ascertain the “objective” meaning of certain terms.

What exact meaning must a court conclude was conveyed by a promisor to a promisee to find that a contractual commitment was incurred? If consent is properly thought of as “objective” or “manifested” assent, what is it that must be assented to for a contractual obligation to arise? It is not enough that one manifests a commitment or promises to perform or refrain from doing some act. Such a manifestation would be nothing more than a promise. [FN141] Contract theory searches for the “extra” factor that, if present, justifies the legal enforcement of a commitment or promise.

An entitlements theory specifies that consent to a transfer of rights is this factor. [FN142] The consent that is required is a manifestation of an intention to alienate rights. [FN143] In a system of entitlements where manifested rights transfers are what justify the legal enforcement of agreements, any such manifestation necessarily implies that one intends to be “legally bound,” to adhere to one’s commitment. Therefore, the phrase “a manifestation of an intention to be legally bound” [FN144] neatly captures what a court should seek to find before holding that a contractual obligation has been created. [FN145]

Charles Fried maintains that a promisor incurs a moral obligationbecause *305 she intentionally invokes a social convention whose purpose is to cause others to expect the promised performance. [FN146] By contrast, a consent theory specifies that a promisor incurs a contractual obligation the legal enforcement of which is morally justifiable by manifesting assent to legal enforcement and thereby invoking the institution of contract. In the circumstances described by Fried, a promisor may have a moral obligation to do what she promised. Without more she would not have a legal obligation and a promisee would not have a legal right to performance. [FN147] She incurs a contractual obligation to perform only when she manifests to a promisee her intention to be legally bound. The basis of contractual obligation is not promising per se. The basis of contract is consent.

It is not paradoxical to adhere to an “objective” notion of consent that is based on just those ordinary words and deeds of persons that are commonly understood to reflect their subjective assent to be legally bound, notwithstanding that they may not have in fact meant to convey the commonly understood meaning. [FN148] A consent analysis is genuinely interested in the actual intentions of the parties, but we never have direct access to another individual’s subjective mental state. We thus must always learn the meaning of terms by comparing (1) the conduct of persons with their words, or (2) their conduct and words in one context with those in another, or (3) one person’s conduct and words with another person’s conduct and words. [FN149] Even in a subjective theory, evidence of subjective assent must be manifested at some point–if only from the witness stand or in self-serving documents.

Therefore, the only difference in the treatment of evidence of subjective intent between subjective and objective approaches to contract concerns evidence of subjective intent that is extrinsic to the transaction. At the time of formation, such extrinsic evidence is unavailable to the other party who witnesses what did or did not appear to be an assent to a transfer of rights. Since, by definition, this information is unavailable to the other party at the time assent is manifested, its later use by a court (following a subjective approach) defeats the function that consent performs in clearly defining and communicating the boundaries of rightful conduct at the time of the transaction. [FN150] A truly subjective approach *306 to contractual intent would admit this evidence and an objective one would exclude it.

The fact that objective consent generally takes precedence over subjective assent does not jeopardize the liberty interest that rights have been formulated to protect. No one suggests that an objective approach to either rights acquisition or resource use is inconsistent with the liberty interest that the scheme of private rights was intended to serve. Rather, these approaches to rights acquisition and resource use are favored precisely because they respect and protect the rights and liberty interests of others, whose plans and expectations would be severely limited if they were not entitled to rely on things as they appear to be and to take the assertive conduct of others at face value. [FN151]

The same is true in contract law. Volitional acts–words or deeds–that manifest assent to transfer entitlements presumptively bind the actor regardless of subjective intent. This “strict liability” theory of contract is appealing precisely because it too recognizes the legitimate rights and liberty interests in others. [FN152] Lon Fuller noted over forty years ago that a law of contract which seeks to secure a realm of private autonomy has a “bipartisan” quality and that this quality gives rise to an objective theory of contract. [FN153]

In a consent theory, then, contracts are interpreted with an eye *307 towards honoring the actual intentions of the parties. But where the subjective intentions of one party have not been manifested to the other, only the “reasonable” or objective interpretation of the commitment will establish the clear boundaries required by an entitlements approach.

There is nothing novel or revolutionary about contract law’s concern for the protection of reliance by promisees. One of the most important functions of the institution of property rights is to legally protect certain expectations of the rights holder so that she may rely on the continued use of certain resources. For example, an owner of real property relies upon her title when she invests in building a house or a factory upon it, because she expects that her title will be honored by a legal system in the future. She also relies upon her title when she leaves town on vacation, expecting her property to still be hers when she returns.

In a consent theory, reliance on the words or deeds of another is “justified” only (1) when and to the extent that such words or deeds have a commonly understood meaning within the relevant context or when a special meaning can be shown to have been understood by both parties to this transaction, and (2) when this meaning indicates a consent to transfer legitimately acquired and alienable rights. The hard work facing any legal system based on entitlements includes determining what constitutes “valid” title and what acts constitute “consent.” Only when these concepts are properly defined can we “expect” the legal system to act in a predictable enough manner to make our reliance “reasonable” or “justified.”

The Proper Limits of the Objective Approach

A consent theory also explains the limits of the objective approach–why the objective interpretation of a party’s acts will yield, at times, to proof of a different subjective understanding of one or both parties. [FN154]

To find the presence of consent, what matters is the meaning that is generally attached to some given word or conduct indicating assent–a meaning to which both parties have access. In contract law, this generalized meaning therefore becomes the presumptive meaning. [FN155] The presumption can be rebutted, not by reference to the promisor’s subjective intent in performing the consenting acts, but either by proof of any special meaning that the parties’ behavior reveals they held in common, thereby negating the social function of accepting the generalized *308 meaning, [FN156] or by the promisor’s proof that the listener did not actually understand the “reasonable” meaning to be the intended meaning. [FN157] A promisee is not “justified” in relying on the ordinary meaning of a promisor’s words or deeds where a special meaning can be proved to have been actually understood by both parties. Similarly, the enforcement of the “reasonable” meaning serves no constructive purpose where it was not the promisee’s actual understanding. [FN158] The boundary-determining function [FN159] of a rights analysis simply does not require that such reliance be protected or such a meaning enforced. [FN160]

This also explains why the misuse of a particular term by party A who was unaware of its ordinary meaning would not bind A if it could be shown that B, the other party, was made aware of this mistake by the circumstances of the transaction. [FN161] Proof of this occurrence would show that the normal boundary-defining function of an objective approach designed to protect parties in B’s position had been satisfied by B’s actual knowledge of A’s meaning. A consent theory, therefore, explains both why parties are free to shift away from the ordinary meanings of words or deeds either intentionally or inadvertently, and why, if a shift by both cannot be shown, the ordinary or “objective” meaning will govern.

Persons generally use conventional words and actions to convey their intentions with a considerable degree of accuracy. Because of this, the outcomes of cases decided by an objective approach based *309 upon the ordinary and natural meaning of words and other assertive conduct will differ from those decided by a subjective approach only in unusual circumstances. Most cases would come out the same in either event. But unlike a will theory, a consent theory, because it is based on fundamental notions of entitlements, can explain both why we generally enforce the objective manifestation of consent when it differs from subjective intent and the exceptions where evidence of subjective intent will prevail.

Author: Randy E. Barnett
Copyright © 1986 by the Directors of The Columbia Law Review Association


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