Contract Notes

OBLIGATIONS

• Create a right/duty situation – D.44.7.3.pr

• Fall into one of two categories for Gaius or one of four for Justinian (he added the quasi situations).

• They can be:

  • Unilateral – obligation is on one side

  • Bilateral – on both sides

  • Stricti iuris – bound to what has been promise and nothing more

• Natural obligations were not enforceable due to a failure in legal technicality e.g. action against a slave, or a son in power. Could not be recovered on manumission or emancipation.

• They needed causa i.e. contract, delict, special right (as Gaius puts it), or the quasi forms.

  CONTRACTS IN GENERAL

• Four types of contract. Ten contracts in total. Rome had a law of contracts not contract – sometimes things would fall through the gaps (see quasi-contract).

• All contracts require agreement. In consensual contracts that is what makes them binding, but others have extra ingredients.

• Consensus – ad idem (about the same thing). Any ambiguity would render the contract void.

• Causa – No obligation without causa - D.2.14.7.4. Legal basis for transaction, or motive for transaction – sale, gift etc.

• Capacity – had to be capable of making contracts.

• Legality and morality – could not contract to do illegal or immoral things.

• Possibility – No obligation to do anything which is impossible – D.50.17.185. Where something became impossible after the contract was made but before fulfilled, it was valid but was not enforced

• Privity – only enforceable between two parties. No third party involvement.

• Other situations:

  • Mistake – not necessarily fatal, but usually made a contract void.

    • Error in negotio – mistaken iusta causa.

    • Error in corpore – mistake as to the identity of the item being sold. Mistake as to acceassory items would not be fatal.

    • Error in persona – where one or both parties were mistaken as to the other’s identity. This only mattered where identity was relevant e.g. in partnership.

    • Error in substantia – mistake as to the subject matter

• Cases of dishonesty:

  • Duress – the contract was, in early law, technically valid. But the exceptio and actio metus were introduced, which granted a remedy for recourse.

  • Fraud – as above, but the exception and actio doli.

• VERBAL CONTRACTS

  The Stipulatio:

  • Unilateral and stricti iuris consisting of a formal promise made in answer to a formal question.

  • Its use was probably quite limited at first but then it grew massively and was used for almost anything.

  • Alan Watson says that the stipulatio is the basis for the Roman theory of contract (which many claim they didn’t have) and that ‘almost every other contract is a derogation from stipulatio’

  • Pugsey says it didn’t become all purpose until the Classical period. At first was just for res mancipi.

  • Although verbal, a cautio (written record) and witnesses were often used in important stipulations. Note that this was never required and the verbal stipulatio was always valid, but eventually became a symbol of the stipulatio – legal fiction assumed presence of both parties.

    Requirements:

  • Formal question: do you promise (spondesne)? Formal response: I promise (spondee). The stipulation would follow the question and the promise.

  • Response had to be more or less immediate – passage of time could render the contract invalid.

  • The response had to take the same form as the question and could not add fresh clauses.

  Developments:

  • Other verbs could be used. 6 others are mentioned in G.3.92. Riccobono says that these 6 were not exhaustive, but Nicholas thinks they were.

  • The Constitution of Leo in 472 said that a stipulation was valid whatever words were used. Riccobono takes this to mean that there was no need for the question/answer, while Nicholas says it just allowed for any verb.

  • Justinian said that you didn’t need to have both parties present because the use of a cautio would be a record of the stipulation. Riccobono says such a document was conclusive evidence of the stipulatio, whereas Nicholas says it was merely compelling evidence.

  • Languages other than Latin could be used, including different languages in the same stipulatio – so long as responses accorded.

  Classifications:

  • Judicial and praetorian – not really legal contracts but obligations to do or not doing something, imposed by a judge.

  • Conventional. By virtue of agreement

    • Simple: arose immediately and unconditionally

    • Ex die: arose at once but could not be enforced a certain day/event

    • Conditional: based on a condition. Differs from ex die because it might never arise.

  Remedies:

  • For a specific thing it was the condictio triticaria

  • For a sum of money it was the condictio certae pecuniae

  • Otherwise it was the actio ex stipulati (less convenient because you had to state a basis of liability).

  • Unilateral: only one party had a remedy. But note that many stipulations may have been made in order to form one large transaction, and so there may be many actionable remedies.

  • Penalty clauses could be built in and sometimes these were hefty, but the Romans thought this proper because contracts were important.

  Stipulatio and finance:

  • Novation of debt – renewed declaration of indebtedness made it easier to prove and action in the instance of default. Note that a new stipulatio being made would have to be slightly different from the old contract.

  • Creation of surety

    • Adstipulatio – debt already owed to one creditor was promised to another creditor. One insured the other against loss.

    • Adpromissio – guarantor. They were unattractive to creditors due to a number of restrictions like not binding heirs etc.

    • Fideiussio – emerged in late Republic and superseded the other two. Did bind heirs. Joint and several liability. Suing one released others under Justinian.

      CONTRACTS LITTERIS

  • A creditor would enter the existence of a debt into a ledger. The debtor had to consent to this entry.

  • Reason for existence is because, under Justinian, the burden of proof of the existence of a debt was on the creditor.

  • A records that B owes him X in his ledger. A money obligation is...

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