Week 4- contracts one Flashcards
What are the 4 types of contract mentioned by G and J and how does the first differ from the other 3?
- Consensual contracts
- Written contracts
- verbal contracts
- Contracts Re (delivery of things)
Consensual contracts require nothing more than the agreement whereas the others require something further, and therefore is informal relative to the requirements of the other contracts.
What are obligations and how are contracts part of obligations?
The nature of obligations: an obligation is defined as a ‘legal tie’ between creditor and debtor. These situations encompass a situation where a person has incurred personal liability for which he is answerable at law. Obligations are rights in personam, and not rights in rem, but it must be emphasised that this area of law is concerned with obligations arising from the acts of parties themselves, and not from their status.
-Obligations incurred from contracts made by parties between the two parties, or by delicts which are committed by a party against another party. A contract is a mutual act whereas a delict is unilateral act. A delict involves one party compensating a victim for a damaging act against another party; it has two fold consequences. 1)a duty arose on the part of the person incurring the obligation 2) and there was a corresponding right in the other person to enforce that duty by legal action (actio in personam) which would normally result in an award of damages. From the plaintiffs point of view, an obligation was an asset.
What is contracts Re and what are the 4 types?
4 Different types of contract in Re Exist: Mutuum, Commodatum, Depositum, Pignus. The common denominator is that these contracts arise from the delivery of a CORPOREAL thing.
Must be remembered that unilateral contracts incur remedies for only one of the two parties.
What was Mutuum, what were the duties of borrower and lender?
- A unilateral and strict iuris contract, consisting of an essentially gratuitous ‘loan’ for consumption of things that could be measured and that were consumable through use ie fungibles (often an amount of money). It Is wrong to suggest this is ‘lending’ as there was strictly no lending because ownership was transferred via traditio to the borrower.
- The borrower had to restore NOT the thing itself, as this was consumed following the loan, but the equivalent. The equivalent had to be the same in size, number and quality of the borrowed thing. The borrower’s failure to care for the borrowed thing ie it gets lost or stolen, does not relieve him of his duty.
- The duties of the borrower were enforceable by the corresponding right to the lender by the action of condictio. The lender in Mutuum did not have contractual duties (since the contract was unilateral). If he lent something for consumption which was defective, he might be liable for a delict if he was at fault and damage resulted, but there was no contractual liability, as he simply expected the thing to be paid back/ returned something identical in shape, size, quality and value
- Condictio used because 1) usually Money is given, and condictio is an action for restitution for a specific sum and 2) there was no corresponding right for the borrower and therefore was unilateral.
What was commodatum what were the duties of the borrower and seller, and remedies available?
Consisted of a gratuitous loan of a corporeal things (usually moveables) for use, the thing to be returned at the end of the loan, rather than the equivalent as in mutuum.
- Unlike Mutuum, ownership WAS NOT TRANSFERRED. This was a Bi-lateral and Bonae fidei contract. The loan had to be gratuitous, and was made for a specific purpose and duration, but if the duration was not fixed, the borrower could keep the thing for a reasonable time (taking into account the purpose of the loan).
- Land was eventually regarded to operate under commodatum but not perishables.
- Neither possession nor ownership was transferred in commodatum, simply physical control, and therefore there could be a valid commodatum even if there was not ownership by the lender; he could be a thief and could sue over the contract.
– Duties of the borrower: he had to use the property for the agreed purpose otherwise he was liable for theft unless he honestly believed that the lender would’ve consented. He would normally be liable for any damage to the property, even if he was late in returning the property. Anything which he could’ve prevented eg non-forceful theft, he was liable for damages, but the borrower had an actio furti against the thief
-Duties of the lender: had to allow the borrower to use the property for the intended purpose and for the prescribed period, but was entitled to recover the property if there was mis-use. The lender had to reimburse the borrower for any abnormal expenses incurred in using the thing and the borrower could keep the property until the expenses were paid.
- Remedies: Lender= actio commodati to enforce the borrowers duties. Borrow could retain the borrowed thing as a set-off against whatever might be owed to him by the lender. Borrower= actio commodati contraria eg if the borrowers expenses exceeped the value of
the property which had been loaned.
What was depositum (contract re), what duties were there and what remedies?
: Deposit was a Bonae fidei, imperfectly bilateral contract whereby a movable was handed over to another person for safekeeping. There could not be a deposit of land and it had to be gratuitous otherwise it would be construed as hire.
- Again, as with commodatum, the depositee did not receive ownership or possession and therefore the depositor need not be owner either. However in this case the contract was beneficial for the depositor; if the borrower was benefited it would simply be commodatum.
- Duties of the depositee: He had to keep things safe was liable only for dolus(fraud). He was liable for culpa lata (gross fraud only). The depositee could not use the deposited thing, otherwise this would be in bad faith (theft leading to actio furti). He had to return the thing on demand and in the same condition as when it was received.
- Duties of the depositor= He was liable if negligent for damage caused by the deposited thing, the bonus paterfamilias standard applying. He had to reimburse the other party for expenses incurred in looking after the property and in returning it at the venue chosen by the depositor. He who deposits to an untrustworthy recipient only has himself to blame.
- Remedies: Depositor= actio depositi for depositors breach of duty. If the depositee was found liable, infamia resulted (loss of legal standing/position), justified by the fact that it showed a breach of trust. He would also have to pay damages, which were doubled if the property was deposited in an emergency. Depositee= actio depositi contraria against the depositor for the recovery of expenses.
What was pignus (a pledge for contract re) and what duties and remedies existed
- Bonae Fidei and bilateral contract, consisting of transfer of property as security by a borrower to a lender by way of mortgage. The lender received legal possession (could be land or moveables) and created a strong, limited, real right over the property.
- The (money) borrower in Pignus was liable for damage by defects in the property transferred as security, the standard of care being that of bonus paterfamilias.
- The (money) lender received possession of the thing, although in practice often the borrower was allowed to keep control; if he did so, he had to safeguard the property, and if the lender mistreated the property the contract was terminated. The lender was entitled to recover expenses that were properly incurred in looking after the property. Any profit made from the property was regarded as a set off against the debt.
- Remedies: The lenders duties could be enforced only if the borrower paid the debt (with the actio pigneraticia) or was ready to give payment of it.
- If the borrower failed to pay the debt, the lender kept possession of the security until the debt was paid off, but he could not become owner nor sell or otherwise dispose of it. Therefore it was customary to give the lender a right of sale if the debt was not paid (through a stipulatio perhaps?). If the lender sold the property for more than the debt owed, he had to account for any excess after deducting debt, interest, and expenses incurred from sale.
- The Hypothec- a modified version of Pignus in which the lender was promised rights in the borrowers property if he failed to pay the debt, whilst the borrower retained ownership and possession.
What was the stipulatio and what formal requirements were required in its earlier stages?
- Stipulatio consisted of a formal promise made in answer to a formal question. Its said to predate the XII tables and through its development virtually any agreement could effect by it. Eg a sale made by the appropriate stipulations by each party. The drawbacks of stipulatio included the requirement of parties being present alongside its highly formal procedure, which led to the development of more informal consensual contracts.
- Formal requirements: A formal question required from the promise, requiring a formal answer by the promisor. The Q contained the subject matter of the stipulation eg do you promise to give me … A verbal answer was required, no nod or gesture would suffice. The Q and A had to form one continuous transaction, or it could be invalidated.
- The terms of stipulatio had to be clear, and any ambiguity was construed against the promisee, as he was providing the questions and thereby forming the basis of the contract. The Q and A had to have congruence and involve unconditional answers to unconditional questions.
- Can be that the promise is regarded as good for the lesser sum of money common to both the question and answer, but not without some concurrent intention (might be interpolation as inconsistent with Gaius).
How did J deteriorate the formal requirements of stipulatio?
- Over time a written document sufficed as evidence for the Q and A (cautio) and in the late classical period, it was presumed that a question preceded an answer if a cautio alleged that a promise had been made.
- Justinian was responsible for further deterioration in formal requirements, because a cautio also became evidence of the transaction and presumed that both parties were present even if one of them wasn’t. This was only rebuttable if it could be proved that both parties weren’t in fact present. However a perfectly oral stipulatio remained valid despite the development of caution
What remedies were available for the parties in a stipulatio?
Remedies: If the stipulatio was made for the payment of a specific sum of money or some specific thing, the condictio was the appropriate remedy; otherwise, the promisee has the actio ex stipulate against he whom agrees to pay for the thing (the promisor). The latter remedy was less convenient to the plaintiff than a condictio, which did not have to state the basis of liability in the formula of the action.
-As the contract was unilateral, only one party had the remedy (the promisee), but in practice contracts often consisted of several stipulations by both parties- essentially a bilateral transaction.
What was the point of written contracts under G and under J?
EARLY DEVELOPMENT
-Custom for head of family to record financial transactions; first noted in a daybook and then transferred to a ledger. Two sorts of ENTRIES- those that were evidence of debt and those which created debt. The formed didn’t create contractual obligation but was simply confirmation of it eg a record that he lent B £1000 that day.
Both parties did not need to be present for the agreement, an advantage over stipulatio.
-Sabinians argued that foreigners could only be debtors, whereas proculians argued that no foreign citizens could be involved at all.
-The contract was unilateral and stricti Iuris which made it beneficial to the creditor eg if A owes B money under the contract of sale, B can novate the obligation by entering it into a ledger; this will replace the original obligation and create a new one, giving the debtor fewer opportunities to dispute the contract and make it more easily provable.
LATER DEVELOPMENT:
- This practice of private ledgers decline, with the rise of banking, so it became obsolete by the late empire.
- Justinian still included it in his 4-fold classification of contracts, and its purpose was as a written acknowledgment of a fictitious loan. This bound the debtor, who had two years to deny the debt.
What were consensual contracts and what were the 4 types of these contracts?
- Bilateral and Bonae Fidei contracts, and the development attributable to economic and commercial expansion in the middle republic.
- 4 types of sale, hire, partnership and mandate, with the influx of foreigners stimulating peregrine praetor development of these contracts
What must be agreed about the thing and price in a sale?
- A) The thing
- The parties must agree on a price and on the thing to be sold; such sales tended to be of corporeal things (moveable or immovable), but it could also be a praedial servitude. The underlying principle is that the typical sale is an agreement to transfer the ownership of a thing, and it is only when the maker supplies the material that there can such a transfer.
- The thing must exist at the time of sale (no contract to do the impossible).
- The thing must be identified specifically (ie my slave) or semi-specifically (ie 10 gallons of that wine) or one of a number of specific things. There could be no sale of generic goods ie a cask of wine). However a sale of some future thing was still possible, eg next years crops from a specific thing, or 10 litres of this cows next batch of milk
- B) The Price:
- There must be a money price, despite the contention between the different schools of thought, it was the proculians who prevailed, in that there was no sale if two goods of equal value were exchanged, it would be wrong to say that one was bought and sold, when in fact neither were bought or sold, just exchanged.
- The price must be a fixed price and was only done so if it were either known or immediately ascertainable at the time of the agreement eg today’s market price. Only exception is where a third party would fix the price
What was the significance of consent (objective and subjective) in a sale and what grounds might nullify a sale?
What were error in negotio and error in pretio?
- ‘a concurrence of two intents’ but here there had to be objective consent, in that there is mutual consent of the sale of a thing, but subjectively the consent is not specific enough ie A is agreed to sell horse A but B agrees thinking about horse B.
- Once there is some objective intent/agreement, it must be determined to what extent these intents are concurrent. Either there is no consent as to the whole or part of the transaction, Defects can arise from error(mistake) or from fraud (Dolus) or duress (metus). It was bad faith if one party actively deceived the other but also if he did nothing more than passively acquiesce in the others self-deception, both of which would void the contract of sale.
- Error is a more complicated issue because there are a number of avenues it can arise from. Either both parties make the same mistake (both believe the cup to be brass rather than gold) or the two parties have two different intentions (A wants horse A but Bs offering horse B). IN this latter example, it could be that one party knows of the divergence or neither party knows, the former being bad faith. Not all mistakes will vitiate consent, it must be a ‘fundamental matter’
- Error in Negotio exists where the two parties think they are entering into two different contracts respectively eg sale as opposed to hire. This leads to no contract.
- Error in Pretio exists where the two parties intend different prices, but it can be rectified if one party agrees to the other parties price.
What were the two effects of the contract ie what was/could be passed?
- I) the passing of title: An effect of the consequent conveyance of the property rather than of the contract. An essential point being that ownership did not pass on creation of the contract but upon delivery or conveyance. In addition the price had to be paid too in the time of Justinian for ownership to be passed, in order to protect the seller from the buyers insolvency, since he could assert title until it was paid.
- ii) the passing of risk: Outside the contract of sale the rule is that the owner takes the risk of accidental loss or damage. For example, we have seen that the borrower in a contract of commodatum was, at least in the law of J, liable for loss or damage only if it were caused by his own negligence. However, in sale it was different; The risk passed to the buyer as soon as the contract was complete even though he was not yet owner. Provided the seller looked after the thing with due care between contract and conveyance, he could claim the price from the buyer no matter what happened to the thing, and the buyer had no claim if, without his fault, the thing was destroyed or damaged before conveyance.
What were the duties of the seller in a sale?
- i) Care and delivery; bound to delivery and care of bonus paterfamilias
- ii) Warranty against eviction; the fact that the seller is not the owner does not vitiate the sale. He is required only to abstain from bad faith, and to maintain the buyer in undisturbed possession until, if ever, he becomes owner by usucapio. If the seller knows he is not owner but buyer does not, buyer only had a remedy on the ground of sellers bad faith but not his lack of title. If seller is in good faith the buyer has no remedy unless and until he is evicted by the owner; practically this was of little importance as either way the buyer had an action on account of the sellers lack of title, he will remain in possession until he is evicted, providing him with either ownership via usucapio or the actio emptio when he is evicted.
- Iii) warranty against latent defects: the seller was originally was not liable for any defects in the thing unless he had stipulatio expressly undertaken such liability. The development of good faith imposed a considerable qualification on the rule by making him liable for any defects of which he knew but had not revealed. Moreover, since the requirement of good faith was inherent in the contract itself, the seller could not contract out of this liability.
What were the duties of the buyer in a sale?
-Pay the price (concurrent with the sellers duty to deliver the good) and to compensate the seller for any expenses incurred in looking after the thing between contract and delivery.
What were the 3 types of hire which existed?
: l.c rei= a locator places a thing, whether moveable or immovable, at the disposal of another (conductor) for his use or enjoyment.
- L.c Operarum= locator places his services at the disposal of the conductor eg a doctor placing his medical services out for a check-up
- L.c Operis= the locator places out a piece of work to be done by the conductor, the work having always, it seems, a physical object- a slave to be taught, a house to be repaired.
