Law of obligations Flashcards
What is the division of the law of things?
Property, succession and obligations
What are obligations?
Refers to things that a person is owed. This is the realm of rights in personam. An obligation is a right. To every correlative right in personam there must be a duty. e.g. if a has the right that B shall give him the book then B has a duty to deliver that book
‘It binds someone to give, do or perform something’
How is obligation classified by Gaius?
Arising from ex contractu
ex delicto
Justinian adds quasi ex delicto and quasi ex contractu
How do obligations arise ex contractu and ex delicto?
Ex contractu- if A agrees to buy B’s book then B’s obligation arises ex contractu. A under the duty to pay while B under the duty to give the book
If A steals B’s book then an obligation arises ex delicto. A is required to pay B a penalty and B is entitled to that penalty
What was the earliest form of contract/ obligation?
The earliest forms of obligation were most likely the simple debt (one man owed another a thing or sum). The presence or absence of an agreement was not a matter.
What is an example of the simple debt and the lack of need for an agreement?
For example, if A mistakenly pays B money that he though he owed in the early law this was merely seen as a loan. However, in late classical law it was identified that A can reclaim the money from B because there is no contract because there is no agreement.
Similarly, if a loan has not been repaid in the early law it was simply seen that a debt was owed. In the later classical law it was seen that there was a breach of the agreement that the borrower had agreed to repay the money.
What is the lack of importance of agreement exemplified by?
In the XII tables there were provisions for a formal act which embodied the essentials of an agreement. This was the stipulation. It was a formal exchange of questions and answers. It was not the agreement that gave the stipulation authority but the form. Thus, a debtor could not plead that there had been no agreement and he was mistaken. Conversely, if the form had been incorrect and the debtor said promittio instead of spondeo then the creditor could not plead that there had been an agreement in substance
What were the two types of debt? Why were they important?
Promissory debt
Real debt
The origins of contract lie in these two types of debt
How was a promissory debt created?
The formal act of stipulation
What was a promissory debt?
It changed the status quo and was necessary for the development of commerce as the conveyance or payment of the thing needed to occur at a later date. There needed to be a way to bind the buyer or seller to the performance.
How did promissory debt account for the performance of services?
In the case of building a house a modified stipulation needed to be used. The promisor promised to pay a penalty if he failed to perform the service. What was in substance a promise of service was formulated as a promise of payment.
How was a real debt created?
Informal payment or transfer
What was a real debt?
It restored the status quo- it was the return of something already received
What were consensual contracts?
In certain type of transactions (sale and hire) a mere formless agreement was sufficient to bind the parties. Here, no form of words or writing were required and an agreement sufficed.
What was the difference between the stipulation and real debt contracts and the consensual contracts?
Stipulation and real contracts were unilateral contracts
Consensual contracts were bilateral contracts
What are unilateral contracts?
A unilateral contracts only creates rights in one party and a duty in another
What is a bilateral contract?
Creates reciprocal rights and duties on both parties. For example, in a loan the borrower has a duty to repay the loan while the lender has a right to the repayment of the loan
Example is a consensual contract
What are unilateral contracts enforced by?
Stricti iuris actions where there are no considerations of good faith. All of the earliest contracts are unilateral and see a subjection of the debtor to the creditor
Why are unilateral contracts problematic?
Because one free man cannot be indebted to another and unilateral contracts cause the subjection of the debtor to the creditor
Why is it dangerous for consensual contracts to be stated in two unilateral contracts?
The buyer could claim the thing even though he has not paid the price and the seller would have to bring a separate action to claim the price, with the risk that the buyer would prove to be insolvent
What was the difference between stricti iuris and bona fide contracts?
Stricti iuris- issue was simply whether the defendant was liable in law- no consideration of fraud
In a bona fide action three words were added- ex bona fide- the judge was forced to look at the case in the requirements of good faith. Thus, any plea involving good faith could be raised before the judge
How did the stricti iuris action develop?
Middle of the 1st century when bad faith was allowed to be relevant in a stricti iuris action. The defence of fraud (exceptio doli) was admitted into the edict
Once the exceptio doli had been admitted the difference became less substantial. Either way, the idea of good faith entered far more fully into the bona fide contracts
What was the problem with contracting a sale with two stipulations?
In a consensual contract if A knew the thing he was selling was defective B had a cause of action on the basis of a lack of good faith.
Conversely, if a sale had been contracted using two stipulations then the buyer had no remedy as the seller had fulfilled the stipulation by delivering the thing.
How does Gauis classify obligations arising ex contractu?
Re (transfer of the thing- includes the primitive real obligations)
Verbis (Stipulation)
Litteris (document)
Consensu (consensual contracts)
In order to have a valid contract they had to fit into one of these categories. For example, with the consensual contract there had to be an agreement on the specific thing and the fixed price price to be- could be no sale for a reasonable price
Which were the formal and informal contracts?
Verbis and litters were formal contracts
real and consensual are informal contracts
What were the advantages of forcing contracts into these categories?
Easy for Roman lawyers to work out the consequences of particular contracts by assigning it to a group
Fitted well into the system of actions- can identify the relevant actions
However, not all contracts fit into these categories- inominate contracts- a contract might not fall into these heading- no legal protection- gaps in the law
Was a stipulation a contract?
Stipulation was a method of contracting rather than a contract. Any agreement could be made legally binding by using the stipulation form.
What are the characteristics of real contracts?
They are stricti iuris and unilateral. They arise from the delivery of a res corporales. Actions for it are the condictio and stricti iuris actions
What are the four real contracts?
Mutuum
Commodatum
Depositum
Pignus
What is mutuum?
Loan for consumption and not merely use (e.g. loan of fungibles). It involved a transfer of ownership and required the borrower not to return the thing but to return its equivalent in quantity and quality
Was there interest in mutuum?
Simply return of the thing. If you wanted to add interest it must be done in a separate stipulation
How did dominium pass to the recipient?
Traditio of the thing
What action could be brought to recover an amount transferred?
The condictio
Was there any standard of care or risk?
There was no standard of care but there was risk. No standard of care as he was only required to return the equivalent in quantity and quality. However, there was risk as the risk of loss or damage was on the owner
What is commodatum?
A loan only for use- the specific thing had to be returned in the same condition
It was simply bare detention as opposed to possession or ownership- borrower could not bring a vindicatio
What were the requirements of commodatum?
Could only use the thing within the terms of the contract
Standard of care of a bonus paterfamilias because he benefited from it. If an unavoidable incident occurred he would not be liable provided he had acted as a bonus paterfamilias
What if the thing was stolen while in the possession of the borrower?
Justinian’s law- the lender can either sue the borrower on the contract or proceed against the thief
The lender was obliged to upkeep the borrower on expensive upkeep of the thing
What is the difference between mutuum and commodatum?
The type of thing transferred- fungibles in mutuum. However, non-fungibles could also be transferred uning mutuum.
What is depositum?
Handing over a thing for safe-keeping and not for use. This was bare detention (not ownership or possession)
Bilateral contract
What would happen if the thing was used in depositum?
It was seen as theft
What were the requirements depositum?
Return of the original thing. There was no required time period it was simply whenever the transferor wanted it back. It was exclusively for the benefit of the transferor.
What was the duty of care required?
Only liable for dolus and there was no greater duty of care. Although standard of care could be increased by a special pact in the contract
What are the three variants of depositum?
Sequestratio- often when there was a dispute over a thing the sequester took care of it until it was settled and then restored the thing to one of them
What was pignus?
Giving of real security through the transfer of possession
Protected by possessory interdict
The creditor could neither benefit or profit from it
How did Gaius classify obligations contracted re?
Only considered mutuum- perhaps because they involve no transfer of ownership
Why were real contracts relatively unimportant?
They had no commercial significance. For instance, depositum and commodatum were gratuitous
What were the standards of care that the parties were liable for?
Always liable for dolus (fraud)
Culpa (fault or negligence)
Custodia (Idea of strict liability)
What was culpa?
A failure to show the standard of care that was expected by a bonus paterfamilias. The conduct could be unintentional and there does not have to be a positive fault. Negligence is sufficient
What are Justinian’s requirements for culpa?
Failure to show exacta diligentia which would be expected of a bonus paterfamilias
Failure to show the care one normally shows in his own affairs
What was culpa Levis (slight fault) in abstracto?
Failure to show the exacta diligentia of a bonus paterfamilias
What was culpa Levis in concreto?
failure to show the care that the individual typically shows when conducting his own affairs
What is culpa lata?
gross negligence of fault. Similar to dolus except for the lack of a positive intention. Carelessness so great as to suggest bad faith
What is custodia?
Similar to strict liability- liable for custodia for not returning the thing for whatever reason. It does not matter whether he had taken reasonable care to prevent it. However, he was not liable for theft with violence
What is mora?
Mora means delay. Failure to honour a duty at the proper time or place was considered wrongful
Was custodia important under Justinian?
It was confined to a few cases and had been replaced by liability for culpa
What did Ulpian suggest about liability for culpa lata and Levis?
Suggested that it depended on whether or not the party in question benefitted from the contract. Thus, the depositee was liable for culpa lata while the commodatarius and pledgee in pignus only liable for culpa Levis
What were the two formal contracts?
Verbal
Literal (written)
What was the verbal contract?
Stipulatio
The earliest verb form was spondere
Dari spondes? Spondeo- ‘do you bind yourself to give?” I do bind myself’
Other verbs eventually came to be used during classical law provided that
- the answer immediately followed the question
- corresponding verb forms
- both parties present throughout
- the question and answer were spoken
Why did the difference between an agreement and the stipulation degenerate?
The use of writing
Principle that a document incorporating the stipulatory phrase was a contract. After the constitutio antoniana the stipulatory phrase was added to the bottom of legal documents- growth of vulgar law
What were written contracts like?
For example, the diary entries (Ledger) of the paterfamilias
Important to note that it was forgotten by Justinian’s time in favour of literal contracts
What were the literal contracts under Justinian?
Written acknowledgement of perhaps a non-existent debt
If the creditor brought an action the debtor would have the difficult task of proving that the money had never been paid
Limitation period of two years for literal contracts
What were consensual contracts?
Formless agreements where there did not need to be any forms of writing or words. Mere agreement was sufficient
What were the types of consensual contracts?
Sale
Hire (locutio conductio)
Societas (partnership)
Mandatum (mandate)
What was sale (emptio venditio)?
Generally concerned a res corporales but could also concern rights which the seller was capable of transferring to the buyer. ‘Transfer the ownership of the thing’
Important to note that services were not sale
What were the requirements of sale (thing)?
Thing
- typically the thing sold was a res corporales, but it could also be a res incorporates such as a praedial servitude
- the thing must exist at the time of the agreement- problematic in the case of a goldsmith
- However the sale of an expected thing was possible such as next year’s crop. However, if the crop fails then the seller cannot claim the price because there can be no sale of a non-existent thing- making the contract void. Difference between sale of an expected thing and the sale of an expectation. If the parties decided that the seller should take the risk then it was the sale of an expected thing. If the buyer took the risk then it was the sale of an expectation
- The specific thing must be identified e.g. cannot be ‘a cask of wine’ it has to be ‘that cask of wine’
Price
The price has to be fixed. There could be no sale for a reasonable price that is fixed upon subsequent dealings.
Price needs to be known at the time of agreement unless being fixed by a third party
There must be a money price. Therefore exchange and barter was not sale. The Sabinian’s disagreed with this. Proculians supported this stating that if there was no money price it would be difficult to distinguish buyer from seller
The price must be seriously intended and not mask a gift. In the later law there was a development that suggested that the seller was allowed to rescind the sale of a land if the price agreed was less than half of the agreed value of the land.
Consent
Problems arise when real intent differs from the manifestation of that intent.
Subjective interpretation- there is no consent when the two differ. e.g. buyer has in mind horse A and the seller horse B
Objective interpretation- is that of the bystander which suggests that the parties were apparently agreed.
Defects of consent arising from error or dolus and metus (duress)- consent has been obtained in such a way that the law cannot enforce it.
Sale was a bona fide contract- judge should declare that the innocent party should not be held to his contract ex bona fide if there was dolus or metus- this includes both active and passive deception- e.g. the guilty party passively acquiesced in the other party’s self deception
What errors can vitiate a contract?
Error in negotio Error in pretio Error in substantia Error in corpore Error in persona Error in quantity
What is error in negotio?
Error in the type of transaction. One party thinks they are entering into a sale and the other hire. There can be no contract. Important to note that to acquiesce in another’s mistake is bad faith.
What is error in pretio?
The parties intend on different prices
What is error in quantity?
Only partially operative when they intend on different quantities- neither party can enforce the contract on his own figure
What is error in persona?
Mistake as to the identity of one party
What is error in corpore
Mistake as to the identity of the thing hired/ sold
What is error in substantia?
When the parties are agreed to the physical identity of the thing but not some essential characteristic e.g. bronze mistaken for gold. It must be shown that the other knew at the time of the sale that the quality was essential for the buyer.
What are examples of locatio condictio?
Lease of land
Contract of employment
What were the three types of locutio condictio?
Locatio rei
Locatio operarum
Locatio operis
What is locatio rei?
Locator places the thing at the disposal of the conductor for his use or enjoyment. Conductor only acquires a right in personam against the locator and has no possessory interdicts against third parties.
What is locatio operarum?
locator places his services at the disposal of the conductor
What is locatio operis?
Locatio- means placing out
Locator places out a piece of work to be done by the conductor. The work was always a physical object e.g. a horse to be repaired.
Were these distinctions made in the texts?
These distinctions are not made in the texts. It is likely that the jurists failed to arrive at a clear classification of the different types of hire
What is the difference between sale and hire?
In the case of the goldsmith who is making the ring. If I provide the materials then it is hire. However, if the goldsmith provides the materials then it is sale. Conversely, if a builder builds on my land using his materials it is still hire
What is societas (partnership)?
Societas was an agreement between two or more persons to cooperate for a common purpose. Every joint commercial venture took the form of societas.
Includes agreement to share expenses/ profits/ loss. However, it was also societas when one party was excluded from sharing any loss as their contribution was sufficient
Each party must make some contribution- skill, labour, money
The interests of both parties must be the same- in order to distinguish it from sale and hire. Although it was a bilateral contract.
The societas only created rights between the partners themselves
How was the societas terminated?
Actio pro socio- could only take societas to court once it had been terminated
The brining of an action by either party immediately terminated the contract
How was societas terminated?
One party could unilaterally terminate the contract at any time by unilateral renunciation. However, he could be called out by the actio pro socio if the purpose is to avoid loss
Also terminated by the death of a partner
What is mandatum?
Mandatum existed where one person (mandatarius) agreed to perform a service gratuitously for the other at his request (mandator).
It was most likely a social obligation that had acquired legal force.
It was bilateral in the sense that the mandatarius performed the service while the mandator would indemnify him for his expenses.
Moreover, the mandatarius might have an interest in the performance of the service. The mandatarius could claim no reward.
If the mandate was in the interest of the mandatarius alone then it was not binding. However, if A gave B a mandate to lend C money and C failed to repay the loan, B could claim to have his loss made good by A. A was in effect acting as surety for C.
The mandate was extinguished with the death of either party
What are innominate contracts?
These are contracts which cannot do not fit into any of the categories. They fill the gaps and solve uncertainties that are left by the regular contracts
What are examples of innominate contracts?
- Sale for a reasonable price
- Aestimatum was an agreement for sale or return. If a man sells a thing provided to him by another party, he will pay an agreed sum back or he will return the thing
- permutatio (exchange)
What happens when one side of the bargain had been completed e.g. the res has been conveyed?
If the res has been conveyed and the money had not been paid a condictio can be brought for the return of the thing on the ground that it had been given for a purpose.
What was condictio to Justinian?
A claim quasi ex contractu as it is a claim for restitution rather than damages for non-performance. For example, if the transaction is an exchange of a horse for a cow and the horse has been conveyed, the owner of the horse through a condictio will secure the value of the horse.
In contrast, in a contractual remedy they will only obtain the value of the cow
What is the definition of a condictio?
The condictio provides a partial remedy. It was confined to agreements which had been performed on one side and in which performance consisted of conveyance. It was confined to restitution and not performance.
How did the nature of a lack of performance change under Justinian’s law?
In cases where there was non-performance on one side Justinian’s law stated that the actio prescriptis verbis could be brought- treated the agreement which was executed on one side as if it were a contract.
What are pacts?
The original meaning of a pact is a compromise such as an agreement not to sue
What was the purpose of these pacts?
It extinguished any obligation arising ex delicto
What is a bare pact?
An agreement which does not fall into the category of any of the recognised contracts.
A bare pact brings about a defence but not an action.
However, in later cases the praetor gave actions on agreements which did not fall within the list of contracts. most important is constitutum debiti- agreement to pay a debt at a fixed time (e.g. mutuum). By suing on the constitutum the creditor could obtain the debt plus a penalty of one-half in addition.
What are clothed pacts?
Later the praetor and the Emperor gave actions for agreements that did not fall into one of the list of contracts
What is an example of a clothed pact?
- One example is constitutum debiti- an agreement to pay an existing debt at a fixed time. If, for example, a debt owing under a mutuum were due on 1 January, but at the debtor’s request the creditor allowed an extension of 6 months, this agreement would be constitutum
- By suing on the constitutum the creditor could ontain payment of the debt and of a penalty of one-half in addition. In contrast, the condictio which lay to enforce the original mutuum was the penalty of only one-third
When did ownership pass in a contract?
Ownership only passed with the conveyance of the thing- not when the contract was made. In the law of Justinian it was also necessary that the price be paid or security given for its payment. This was to protect the seller from the buyer’s insolvency
What is risk?
The rule is that the owner takes the risk of accidental loss and damage. For instance, the borrower in commodatum was only liable for loss or damage caused by his negligence- other risk laid with the lender.
When did risk pass to the buyer?
Risk passed to the buyer as soon as the contract was complete even though the buyer did not become owner until the conveyance of the thing.
If the seller looked after the thing with due care in between the period of contract and conveyance he could claim the price in spite of what happened to the thing. Conversely, the buyer had no action against the seller if the thing was, without his fault, damaged or destroyed before conveyance.
If A buys a mare and she foals before conveyance the buyer has the right to the foal as well- right in personam so the seller must convey
Why is this regarded as a defect of Roman law?
The separation of title and risk is seen as a defect in Roman law
What are the duties of the seller?
Care and delivery
Warranty against eviction
Warranty against latent defects
Care and delivery requirement
The seller was required to look after the thing until delivery. Originally, he may have been liable for custodia but under Justinian he only had to display the care of a bonus paterfamilias.
Warranty against eviction
The fact that the seller is not owner does not vitiate the contract. Instead, he is required to abstain from bad faith and maintain the buyer in undisturbed possession until he acquires through usucapio. Thus, if the seller knows that he is not the owner and the buyer does not the buyer has a remedy on the seller’s bad faith rather than his lack of title.
If the seller is in good faith there is no remedy unless and until he is evicted by the owner- if the buyer knows the seller is not the owner and does not know who the owner is- complications as he can neither claim against the seller or resell
Warranty against latent defects
Important to note that the seller was not liable for any latent defects in the thing unless he had expressed to take such a liability through stipulation. However, the development of good faith meant that he was liable for any defects of which he was aware and had not expressed.
What was the Aedilician liability for latent defects?
Sellers were required to display on a board a statement of any physical defects. If a defect appeared which had not been disclosed the buyer can sue (within 6 months) using the actio redhibitoria- led to the recession of the sale.
If he sued within 12 months he could claim the difference between the price paid and the actual value of the defective slave or animal by the actio quanti minoris
What were the actions available for latent defects?
Actio redhibitoria
Actio quanti minoris
If the seller was aware of any defects it was dolus and the actio empti could be brought
What type of actions were these?
Liability was strict in both actions and the lack of knowledge of the seller was irrelevant
What were the duties of the buyer?
Principle duties were to pay the price and to compensate the seller for any expenses he incurred in looking after the thing between contract and delivery.
