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- Obligations- Contracts Institutes- An obligation is a legal tie which binds us to the necessary of making some performance in accordance with the laws of our state. This is a classical definition showing a legal bind between debtor and creditor. Paul goes on to state- The essence of obligations does not consist in that it makes property or a servitude ours, but that it binds another person to give, do, or perform something for us. This shows that it deals with rights and duties in personam and not in rem. Obligations are incurred by contracts made by parties or by delicts committed by one against another. An obligation comprises of a duty on the part of the person incurring the obligation; and there was thus a corresponding right in the other person to enforce that duty by legal action. (actio in personam), which would normally result in the award of damages. They were further considered as creating personal relationships between parties, thus could not generally affect third parties. Classification of obligations General classification involves obligations arising from ius civile and those from ius honorarium. Natural obligations was a 3rd^ class created in the late classical period. Further more, unilateral contracts were stricti iuris and bilateral contracts were bonae fidei. Natural obligations- agreements that were not legally enforceable but could have legal consequences. If a slave made an agreement with his master or some other party, it could not be enforced on manumission- the obligation of the other party was a natural one. But if the other party initially kept to the promise, but later tried to resile, he could be prevnted from using the argument that the initial agreement was void. Trphonius says- Suppose an owner has a debt to his slave and pays it after manumission. He cannot recover, not even if he believed the other could sue him by some action, for his payment acknowldges his natural indebtedness. Another natural obligation was those that arose between a paterfamilias and members of his family. Although the agreement had no effect while the family member was in potestas, it could have thereafter. Source of the obligation- important classification of obligation was according to the causa of the obligation i.e. its source. Gaius states- obligations arise either from contract or from wrongdoing or by some special right from various types of causes. Wrongdoing refers to delict. Justinian states in his institutes that the sources were fourfold: contract, delict, quasi- contract, delict and quasi- delict. The quasi ones can be inferred as arising from some special right. Justinian's classification- The fourfold mentioned above: Contract- broadly defined as an agreement that is enforceable at law. There are 4 categories of these adopted by Justinian: consensual contracts (obligation arose simply by the agreement between the parties), verbal contracts (pronouncement of particular set of words creating the obligation), contracts re (the deliver of a res created the obligation e.g. loans), and contract litteris (by written record- obligation arose form an entry written in a ledger). Quasi Contracts- not strictly contractual, but in which a liability in personam arose e.g. negotiorum gestio i.e. performing services for another person without their knowledge.
Delict- Gaius states- obligations arise from delict, for e.g., theft, damage, robbery, insult... they are all of one nature, for they consist in what is done, that is, the wrongdoing itself. Commission of civil wrongs. They had penal consequences. Quasi Delict- lacked a unifying principle. General features of Roman contracts All contracts in Roman law were either bonae fidei or stricti iuris, depending on whether the formula of the action empowered the iudex to apply his equitable discretion to the facts of the case. Stricti iuris contracts arose from ius civile, while bona fidei were introduced through ius honorarium. Consens Agreement between the parties was essential. There had to be genuine meeting of minds, consensus ad idem- agreements about the same thing- at the moment the contract was made. If there was unsolved ambiguity in the language used by the parties, the contract would be void; but a judge would strive to resolve the ambiguity by considering the conduct of the parties and the custom of the region. Ambiguities were interpreted so as to make the transaction as efficacious as possible. As a last resort the judge would fall back on the rule that the ambiguities were construed against the party who could be regarded as having the principal role in the formulation of the particular term in question. Paul says- where a term of the contract is obscure, it should be construed against the vendor who stated it rather than against the purchaser. Mistake- the following were regarded has fatal mistakes: Mistaken transaction-where one or both parties were mistaken about the type of transaction intended e.g. where A intended a sale, but B though it was a loan. Mistaken subject matter- where one or both parties were mistaken over the identity of the thing that was the central object of the contract. Ulpian suggests- If I thought I was buying the Cornellian farm and you that you were selling the Semronian, the sale is void because we were not agred upon the thing sold. If the mistaken thing was an accessory, not central to the contract, the mistake was not operative- the contract being valid. Mistaken identity- where one or both parties were mistaken about the identity of the other party, but the mistake was only operative in such a case if the identity of the other party was relevant. Mistake about the subject matter of the contract- less drastic. Suck mistakes were irrelevant as reagrds stricti iuris contracts, but could invalidate bonae fidei contrcats if the mistake was fundamental. Ulpian says- I think I am buying a virgin when she is in fact a woman, the sale is valid, there being no mistake over her sex. But if I sell a woman and you think you are buying a male slave, the sale is void. The effect of an operative mistake was to render the contract void. A buyer would have an action for the recovery of the price paid, while the seller could recover the thing delivered. Duress- A contract is made under duress if a party has been threatened with serious evil unless he consented to the contract. Ulpian states- Nothing is so contrary to consent, which sustains the cases of good faith, as force and duress; it is contrary to good
Consensual Contracts These were bilateral and bona fidei. Institutes- Obligations contracted by mere consent are exemplified by sale, hire, partnership and agency, which are called consensual contracts because no writing, nor the presence of the parties, nor any delivery is required to make the obligation actionable, but the consent of the parties is enough. Sale (emptio venditio) Essential requirements were that there should be an agreement about the thing sold and the price. Agreement- an agreement of wills (consensus) orally, in writing or even by messenger. The conduct of the parties constituted proof e.g. shaking of hands. No need to prove the agreement was made in each others presence. This is affirmed by Paul. The practice of giving arra (earnest money) made proof of agreement relatively straightforward. Arra was a token of good faith and seriousness of purpose, given by the buyer to the seller to cement the bargain. Arra could consist of money or an item of value. If the buyer defaulted, the buyer forfeited the arra. If he performed his obligations, he could redeem his arra unless it was a deposit. The thing sold- Paul- there can be a valid sale of anything which one may have, possess, or sue for; but there can be no sale of anything which is excluded from commercium by natural law, the law of antions, or statutes. Anything could be sold unless excluded from the commercium. Prohibited things- a number of statutes forbade the sale of things in certain circumstance... sale of dotal immovables and the sale of property belonging to the wards. Things excluded from private ownership. Institutes- A buyer who knows he is buying a sacred or religious place, or a public one... achieves nothing at all. If the purchaser did not know that he was buyng such things, it seems a sale in such circumstances could have legal effect: Pomponius- The purchase of freeman or of sacred or religious land who or which cannot be held as property is considered valid, so long as the purchaser does not know. The contract is valid only to the extent of allowing the purcahser to recover the value of his bargainbut not for other purposes. Things belonging to the purchaser- a sale of property to someone who already owned it was a nullity. If the seller acted dishonestly, he would probably be liable for theft. If the buyer bough property he had a proprietary interest the sale was valid to an extent to which the buyers title had been incomplete e.g. where he was co owner. Non- existent things- Pomponius- There can be no sale without the thing to be sold. Perished things- a sale of property that had perished or lost it's identity before the contract was made was void. Paul- even though there is agreement on the thing, if the thing ceases to exist before the sale,there is no purchase of the other.... the issue is largely dependant on how much of the house remians; if a greater part of it has been destroyed, the purchaser will not be obliged to perform the contract and can recover anything which he may have paid. If parties knew the
thing has perished the contract was void. If the buyer knew and if the seller did not the contract was valid. It seems there is a duty on the seller for full disclosure. Future things- A contract to sell a thing with a potential existence was normally valid, but there could not e a sale for no thing to be sold. Distinction between saleo of an expected thing and a sale by chance: in the former if the buyer was buying an expected thing, the operation of the contract was conditional on the thing materializing in the future- if nothing materialized, there was no obligation. If the buyer bought by chance, he took the risks that the thing might never materialize and had to pay the agreed price. To bring out the distinction, we must look at what the buyer intended- if he intended to pay for something materialized, he bought an expected thin. Res aliena (another's property)- things belonging to a 3rd^ party could validly be sold if the buyre and seller were unaware of the 3rd^ party rights. The price- Ulpian- There was no sale without a price. Agreement on price were essential. The price had to consist of money or money plus the performance of a service. Pomponius says- if you sold a building in exchange for a fixed sum of money plus your promise to repair another building of mine, I may sue on the purchase to force this repair. Price had to be genuine and not a sham- must be intended by the parties to be paid. Laesio enormis (huge loss) rule of the late republic, where if the price paid for land was less than half its market value at the time of sale, the seller could rescind the contract unless the buyer made up the difference. (made to protect small landowners). The price paid had to be certain or ascertainable- the parties had to agree to price otherwise the contract was void. If the price though not fixed was ascertainable by reference to various facts, the contract was valid. Parties could not allow 3rd^ parties to set price in the future. Legal consequences Transfer of risk- Paul- when a sale is perfect we know who bears the risk of the thing... i.e. on the purchaser even if the thing is not delivered (i.e. not the owner- as a contract of sale did not infer transfer of ownership). Before the contract was made perfect the risk lay with the seller. The seller had to assign to the buyer any actions that were available against 3rd^ parties in respect of damage to the property. If the seller was in more due to late delivery, he bore the risk between the period of making the agreement and the date of actual delivery. Duties of the seller- Care for the property before delivery- i.e. until delivery. Under Justinian, the standard of care was that similar to a bonus paterfamilias; hence being liable for even the slight acts of negligence. It seems thus the buyer only bore risk if the seller was blameless. The seller would not be liable for damages caused by 'an act of god'. Delivery with vacant possession- deliver the property with vacant possession i.e. legally protected possession- the seller had to put the property under the exclusive and effective control. There had to agreement as to the place and time of delivery- in the absence of this, the seller had a duty to deliver at once and for place, the place was assumed to be that where the thing was
Sellers withdrawal rights- calling of the sale if price was not paid in full by a certain date. He could sue under actio venditi, but he had the choice to sue for the price or to withdraw from the sale. Sellers rights to accept a better offer- calling off the sale if he received a better offer within a certain date. The original buyer had the right to be informed of this, so he could attempt to match it. It could include easier or faster payment. Sellers right of first refusal- seller could buy property back if the buyer should decide to sell it in the future. Buyers right to reject- reject the good if they were found to be unsatisfactory after a period of trial Letting and hiring Hire was a bilateral bona fidei contract where a person (locator) let out a thing/ services/ completion of piece of work to another. Gaius states- lease and hire is close to sale and purchase, and it is formed by the same rules of law. Sale and purchase is contracted if the price is agreed … lease and hire is considered to be contract once there is rent agreed upon. Hiring of a thing- conductor was allowed to use and enjoy a thing by the locator in return for rent. Contract is made when the parties agreed on the subject matter and amount payable (consisting of money. I could be a corporeal thing and something not consumable through use. Usual to agree on a period of duration for hire and could end upon the destruction of the subject matter or through misconduct of either party. Thus if the locator had substantially prevented the locator from using and enjoying the thing, the latter could sue for damages and terminate the contract. Selling the thing to a 3rd^ party did not terminate the contract of hire, but could amount to a substantial interference of the conductor and thus he could sue the locator for damages but could not insist on the continuation of hire Duties of the parties- Locator- deliver the property + accessories to the conductor, who received custody but not possession. The locator had to maintain the thing in good repair throughout the period of the hire, thus if the conductor incurred reasonable expenses in maintaining the property, h could recover. He was also liable for damages of undisclosed defects of which he was aware or should have been aware. Standard of care required of the locator was that of a bonus paterfamilias. Duties of the parties- the conductor- accept delivery of the thing and pay for the hire either in lump sums or instalments. Security for the rent could be agreed. Essential character of the property had to be preserved and could not be used in an unauthorised way. He ahd to exercise the care of a bonus paterfamilias. At the end of hire, he was to return the property to a substantial original state. Hire of services- the locator placed his services at the disposal of the conductor in return for payment. Rules on this were similar to the above ones. The locator had to perform his services with due dilligence. The conductor could incur liability through failure, for e.g., provide safe work environment. Death of the locator terminated the contract. If the
services were poor his heirs would be bound. Only services typically performed by slaves could be hired out Hire of a piece of work- the locator placed a thing with the conductor in order for the latter to do some work in reltion to it e.g. X gives Y bronze to make a statue. The conductor could sub contract. Apporval of the locator was tested objectively- he could not disapprove of the work without reasonable grounds the standard of bonus vir (upright man) applied- Paul- if it is provided in a lease clause that the owner is to judge the work accpetable, this is construed to mean that what they had called for was the judgement of an upright man... The work had to be completed within the time range, if none agreed then a reasonable time sufficed. Both parties required to show the standard of care of a bonus paterfamilias. If the materials were damaged while the conductor was working with them, the risk initially lay with him- Ulpian- If a fuller takes clothes for cleaning and mice then agnaw at the, he is liable... if destruction was via an act of god, then the locator was liable. Contract was not terminated by death, but their heirs were bound. Mandate (mandatum) A bonae fidei contract made when a promisor gratuitously agreed to perform a service requested by another, the mandator. The essentials of a mandate- the promise had to be made gratuitously. Paul- There is no mandate unless it is gratuitous... derives from duty and friendship... if reward was agreed upon, it could be enforced under cognitio extraordinaria procedure. Only services that were moral, legal and possible could be enforced. The madator had to have some interest in the service i.e. had to concern him. Duties of the parties- the promisor- to perform the mandate subject to the right of renunciation. In carrying out the task he could do anything reasonably necessary to achieve it, but could not exceed his powers (ultra vires). He could not profit from the madate; had to transfer and proceed or rights acquired through his performance- Paul- Nothing obtained as a result of a mandate ought to be left in the hands of the person who undertook the mandate. Standard of care that applied- promisor was liable only for dolus, bonus paterfamilias came to effect later on. Duties of the parties- the mandator- accept performance of the promisor, including liabilities and expenses that had been properly incurred. Subject to the bonus paterfamilias standard of care. The remedies available tot he parties were the actio mandati directa for the mandator and the actio manadtoi contraria for the promisor. If the promisor was found liable infamia resulted. Termination of the mandate- Renunciation- contract could be renounced, without liability, by either party before the promisor had commenced performance. But if the promisor's renunciation prevented the mandator from obtaining a similar service from another person, the promisor would be liable to that extent. If renunciation happened after the commencement of performance, the renuncing party would be liable for damages or expenses caused to the other party.
must have been incurred strictly in pursuance of the common venture and not simply a consequence of it. Pomponius- a partner is wounded... he cannot get back expenses for having himself treated even though it is a consequence of the partnership... The expense was not made for partnership purposes... Remedies- actio pro socio (action of a partner). Could be brought as a friendly suit to make minor adjustments in the position of partners, or as hostile actions for breach of duties. In the latter case, condemnation resulted in infamia, and the partnership was terminated. Types of partnerships- partnership for a single transaction- e.g. to buy a particular property. Partnership in a particular business- agree to operate a particular business e.g. salve dealing. Partnership in general business- associated for the purposes of all business transactions. Partnership in all assets- all property of the parties formed a common fund of assets. Termination of partnerships- Renunciation- if any partner wished to withdraw, the partnership ended. A partner who renounced would have to compensate the others if his withdrawal unreasonably prejudiced their interests- Paul – e.g. we form a partnership and buy slaves, and then you renounce at a time which is disadvantageous for selling slaves, you are liable to an action in partnershi... Death- ended on death of a partner. Loss of civil status- generally it terminated the partnership, though remaining partners could form a new one. Poverty- a partnership ended when a partner became bankrupt or had his property confiscated by the state. Verbal contracts Obligations arose from uttering a set of words in a specified manner. They were unilateral and strict iuris. Dotis Dictio Pronouncing of a dowry- was a solemn declaration of the composition of a dowry, usually made before the marriage. The promisee (bridegroom) had to be present. It became obsolete in the late empire. Iusiurandum liberti oath of a freedman- made when a freedman took a solemn oath in his patron's presence, immediately after manumission, to render services fr the patron. Stipulatio It consisted of a formal promise made in answer to a formal question. Pomponius- A stipulatio is a verbal expression in which the man who is asked replies that he will give or do what he has been asked. It seems to have developed out of sponsio, a formal guarantee to pay the debt of another.
Formal requirements- a formal question was required from the promisee, followed by a formal answer by the promisor. The question contained the subject matter of the stipulation. They had to use the words spondesne (Do you promise?) and spondeo (I do promise) – though later relaxed, any language sufficed. The question and answer had to form a continuous transaction- a substantial interval between them could invalidate the contract. Venuleius- the acts of stipulator and promisor must be continuous, though a moment or two may naturally intervene. The reply must be made when the stipulator is at hand. If, after the question, something else is begun, the proceeding is invalid, even if the reply is given on the same day. The term of a stipulation had to be clear- any ambiguity was construed against the promisee. There had to be harmony between the question and the promise: the answer could not introduce fresh terms or be made conditionally in response to an unconditional question. It seems the intention of the parties needs to be clear. Remedies- if a stipulatio was made for the payment of a specific sum of money or thing, the appropriate remedy was condictio otherwise the promisee had the actio ex stipulatu. Classifications of stipulatio- based on the source primarily- Pomponius- some stipulations are judicial (originate from a true office of a judge), some praetorian (true office of the praetor), some conventional (come about as a result of an agreements between parties)... the first 2 seem to be peomises made under legal compulsion to do or abstain from doing something. Simple, ex die or conditional stipulations- the simple one being one where the obligation arose at once and unconditionally. An ex die was one where the obligation arose at once, but could not be enforced until a specified day of the occurrence of some specified event that was certain to happen. A conditional one was one where the obligation to perform might never arise. Stipulatio and finance- Novation- process by which an obligation was terminated and replaced by a new one created by stipulatio. The new obligation had to arise from the extinguished one, but could not be identical, there had to be some change- Pomponius- If a man promises the same thing twice, he is not automatically more liable than if he promises it once. The promisse improved his position through novation- the new obligation was more recent, more easily provable and enforceable by effective remedies for breach of a stipulation. Surety- Adstipulatio- a debt that was already owed to one creditor was promised to another creditor e.g. A promise money to B, who then promises the same amount to C, the 2nd^ promise is an adstipulatio. This is because C will be acting on the understanding that if A cannot ensure the performance of B's obligation, C will enforce it and account for the proceeds. C is acting in a form of surety for A. Surety- Adpromissio- consisted of one stipulation to pay the debt of the principle debtor if he failed to pay. Fideiussio-not subject to a limitation period, but it did bind the heirs of the guarantors and could be used to guarantee any debt. If there were 2 or more guarantors the creditor could enforce payment against any one of themselves. Penalties (check page 296 )
Remedies- lender had the action on loan to enforce the borrowers uties. The latter could retain the borrowed thing as s set off against whatever might be owed to him by the lender. The borrower had the actio commodati contraria. Depositum Bonae fidei, whereby a moveable thing was handed over to another person for safekeeping. The deposit had to be gratuitous. Ulpian says- if clothes have been given to the keeper of a bath for safekeeping are lost and if the keeper has received a safe keepers fee, I think that he is liable in an action on deposit... The transferee did not receive ownership or possession. It was contract entirely for the benefit of the transferor. Duties of the depositee- he had to keep the thing safe but was liable only for dolus, but was sometimes equated with gross negligence and could consist of failure to do what a man would do in his own affairs. He could not use the deposited thing- if he did so in bad faith he would be laible for theft of use. He had to return the thing on demand, and in substantially the same condition as he received it in, subject to any wear and tear. Any accretions that arose during the deposit had to be handed over as well. Duties of the depositor- he was liable if negligent for damage caused to the deposited thing. He had to reimburse the depositee for any expenses insurred in looking after the property and in returning it at the venue chosen by the depositor. Remedies- depositor had the actio depostit for the depositee' s breach of duties. If he was found liable, infamia would occur and would have to pay damages. The depositee had the actio depositi contraria against the depositor for the recovery of expenses. And the right to retain the thing as a set off for unpaid expenses. Pignus A pledge- bonae fidei contract consisting of the transfer of property as security by a borrower to a lender by way of mortgage. The lender received legal possession of the property, in effect creating a strong limited real right over property. Position of the parties- borrower in pignus was liable for damage caused by defects in the property transferred as security, the standard of care being that of a bonus paterfamilias. The lender received possession of the thing, although in practice the borrower sometimes was allowed to keep physical control. If the lender had actual control, he had to safeguard the property, the standard of bonus paterfamilias applying. If the lemder mistreated the property the contract was terminated. Ulpian- It is something to be taken into account under the action on pignus if the creditor mistreats pledged property... lender is entitled to recover expenses that were properly incurred in looking after the property. Any profit that he made out of the property was regarded as a set off against the debt. If the debt was repaid the lender had o repay the thing + accretions. Remedies- lenders duties could be enforced only if the borrower paid the debt or was ready to tender payment or give satisfaction for it, as stated by Ulpian. If the borrower failed to pay the debt, the lender could retain possession of the security until the debt was paid, but could not become the owner., nor could he sell or dispose of the thing. There
were common practice for the lender to be allowed to sell off the property if the debt was unpaid or to make him owner of the property Hypothec- modified pignus, that promised the lender rights in the borrowers property in the event of a debt being unpaid, the borrower meanwhile retaining ownership and possession. Contract litteris The form of entry in ledger that created a monetary obligation. The debtor had to consent to the entry. The presence of the parties was not necessary when making the entry. By justinians;'s time the contract litteris consisted of a written acknowledgement of a fictitious loan of money i.e. the loan had not been made at all. This bound the debtor. The debtor had 2 years to deny the debt, after which he would be automatically bound by it. Innominate contracts Certain agreements for mutual services, enforceable because one party had performed his part of the bargain i.e. part performance. Transactio- compromise of a legal action i.e. the abandoning of a claim or a defence in legal proceedings in return for some benefit given or promised by the other party. Effected by a stipulatio, if breahced sue on the stipulatio. Compromise normally agreed before the judegemtn but Ulpian suggests a transactio after a judgement is alid if there has been an appeal or a possible appeal. There should an element of dounbt about the final outcome when the compromise is made. Ulpian- A person who makes a compromise does so on the basis that a matter is doubtful and the outcome of a lawsuit uncertain or not yet determined. Aestimatum- conditional sale in which the owner of a thing entrusted it to a transferee on a sale or return basis. The parties would specify a period within which the transferee was to return the property or an agreed price for it. Normally worked in the essence when you wanted to sell something you did not own a middle man concept. In the absence of an agreement the risk lay with the transferor, it was in respect of accidental loss i.e. loss caused through his own fault. Permutatio- contract for exchange or barter. Paul says- Aristo says that since barter is akin to purchase, there should be a warranty that a slave given for this reason is healthy etc. There was a duty to pass ownership. Obligations arose upon performance and risk as transferred to the B being a 'buyer' if it had not yet been transferred. If a party defaulted in barter and if one had performed, the aggrieved party could sue fro condictio. Precarium- Ulpian says- what is conceded to one who asks for it for his use for as long as the person who made the concession suffers it... gratuitous grant of enjoyment of land or movables. The grantor was able to terminate the agreement at any given time and the grantee had general enjoyment of the property and a right to its fruits. The grantee received possession and was liable for dolus. The grantors remedy for recovery was the interdict de precario. Pacts
fro any damages caused by the carelessness of the gestor. Contraria available to the gestor for reimbursement of expenses. Actio funeraria- reimbursement of funeral expenses. (check page 313). Condictio indebiti Ulpian- If someone mistakenly pays what is not due he can recover by this condictio... Unjustified enrichment. If a person mistakenly paid money or transferred a thing to another, both wrongly believed that the debt was owed, the transferor had the condictio indebiti (recovery of a thing not owed) for recovery. Position of the parties- P had to show he made a payment or a transfer, and that the debt was not owed. The action unavailable if the transferee acted in bad faith or if both acted illegaly or immorally. Position of the possessor was stronger. P could recover the thing transferred or its equivalent + any profits and or accretions, but allowing fro expenses- upheld by Paul. (read pages 314 and 315)
