Requirements for a Contract in Roman Law

Roman Law: “Examine the three elements required for a valid contract and illustrate how the law relating to them developed.”

To be valid, a contract in Roman Law requires: (1) a “Thing”; (2) a Price; and (3) Agreement/Consent. Borowski and du Plessis^[1] succinctly state the principle:

“Once the parties had agreed on the subject-matter and the price [emphasis supplied], the contract was ‘perfect’, i.e., fully made. Important legal consequences followed from the making of the contract: both parties acquired certain duties, and the risk of damage to the property sold was transferred to the buyer.”

1) A “Thing”

This is a term which is frowned upon in ordinary English usage (let alone in legal terminology) as being too vague and non-descriptive. However, in Roman Law, it is the very lack of specificity which renders it valuable in describing this contractual element. The Latin equivalent, res, is similarly vague and Roman lawyers allowed the meaning of the word to emerge from the circumstances in which it was used. In refers to an economic asset. This might be a simple piece of physical property such as a chariot or an intangible asset such as a debt or a right of way. Gaius and Justinian both refer to ‘the law of things’ by which is meant that part of the law which regulates transfer and ownership of economic assets which are capable of having a specific monetary value. Nicholas^[2] makes the point that certain rights are therefore excluded from the definition such as the right of freedom or the rights of a father over his children since these are incapable of monetary valuation. Rights are either in rem (property) or in personam (obligations).

The category of “things” which are capable of forming the subject-matter of a contract is therefore wide:

“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 commercial by natural law, the law of nations or the observances of the state.”^[3]

The “observances of the state” from time to time specifically excluded certain types of contract such as the sale of houses with a view to demolition for profit or the property of a ward.^[4] Certain “things” were excluded from private ownership such as a freeman or religious land. However, if the purchaser acted without notice of the nature of the subject matter, the sale was held to be valid.^[5] A sale of property could not take place to a man who already owned it.^[6] The sale of non-existent “things” was possible only in certain circumstances. For example, a sale for one price of two slaves one of whom was dead was wholly invalid^[7] whereas, as a matter of economic reality, the sale of assets which had yet to come into existence such as a crop or a catch of fish was commonplace.^[8]

Justinian recognised four types of obligation: mutuum, commodatum, depositum and pignus. Mutuum started life as a loan for consumption involving such subject-matter as money or food. This gave rise to no obligation to return the item itself but rather to account for its value either in money or in kind. It therefore gave rise to an irrevocable transfer of ownership. Commodatum was the loan of an item for use only whereas depositum was the handing-over of an item for safe-keeping. Both, therefore were a species of hire. Pignus was the giving of security by the transfer of possession. By contrast, Gaius recognised a common category of obligation akin to Justinian’s mutuum whereby the handing-over of an asset gave rise to an obligation. This has been described^[9] as a “primitive” or early type of “real” debt.

2) A Price

It has been baldly stated^[10]:

“There is no sale without a price.”

However, the suggestion that the price had to consist of money was a source of dispute between the Proculians and the Sabinians. In Paul, Edict, book 31, (D.18.1.1pr) it is argued that all buying and selling had its origin in exchange or barter:

“For there was once a time when no such thing as money existed and no such terms as “money” or “price” were known…[eventually] a material was selected which, being given a stable value by the state, avoided the problems of barter by providing a constant medium of exchange. That material, struck in due form by the mint, demonstrates its utility and title not by its substance as such but by its quantity, so that no longer are things exchanged both called wares but one of them is termed the price.”

The Sabinians argued that the price in a contract need not consist of money but that exchanging items deemed by the parties to be of equivalent value also represented a sale whereas the Proculians disapproved of the concept of barter as a sale arguing that a true sale was the exchange of a “thing” for money (as opposed to the exchange of two “things”). However, as Borowski and du Plessis (perhaps somewhat “tongue in cheek”) observe^[11], “is money not a thing?”. The Proculian view was eventually triumphant on the basis that different duties were imposed upon the seller and the buyer. The identity of the buyer is easy to establish if he is the party tendering money in return for goods whereas if no money is changing hands and each party is parting with an asset, it is impossible to make the distinction. The situation is easier to analyse where there is a combination of money and something else of value such as a service (Pomponius, Sabinus, book 9, (D.16.1.6.1)) or even a “thing”.

The price had to be genuine. If there was a derisory price agreed or if there was no intention that the price be paid, the exchange would be regarded as a gift rather than a sale. As with the English contract law concept of consideration, there was no enquiry into whether the price agreed represented a bad bargain so long as it was not so low as to be obviously a sham. However, this principle was mitigated in the later Empire by the introduction of the concept of laesio enormis (huge loss). This came about as a result of the need to protect small landowners against the economic power of strong neighbours and speculators. It is unclear whether this law was enacted by Justinian or Diocletian but its effect was that if the price paid for land was less than half its market value at the time of sale, the seller was entitled to rescind the sale unless the buyer made up its value.

Unlike English law, the Romans refused to accept the principle of quantum meruit. The price had to be fixed. However, Justinian made an exception to this by decreeing that a price was sufficiently certum if it was left to be fixed by a third party. However, if that party failed to do so, the contract was void. Nicholas^[12] argues:

“The requirement that the price be fixed is more easily defended than the requirement that the thing be specifically identified. Many of the incidents of a contract must…be supplied by the law, but in its essentials it must be the work of the parties. The law should not make their bargain for them. And one of the essentials of sale is clearly the price.”

While it is possible to agree with the reasoning of Nicholas in respect of price, it is difficult to understand how a contract may become “perfect” without certainty of subject matter. If the price is to be certain, surely the corresponding consideration should be equally specifically ascertainable.

3) Agreement/Consent

Roman Law did not descend into an analysis of the component parts of a contract in terms of offer, acceptance and certainty, agreement between the parties in the form of a genuine meeting of minds (consensus ad idem) was essential. However, judges were prepared to construe contracts and resolve ambiguities. This is illustrated in Paul, Sabinus, book 5, (D.18.1.21):

“Labeo writes that where a term of a contract is obscure, it should be construed against the vendor who stated it rather than against the purchaser, because the vendor could have declared his will more explicitly before the contract was entered into.”

Nonetheless, Roman law recognised various categories of mistake which, as in our law, are capable of vitiating consent. These were:

• • Error in negotio – where there was a mistake as to the type of transaction intended;

• • Error in corpore – where there was a mistake as to the item which was the subject matter of the contract;

• • Error in persona – where there was an error as to the identity of one of the contracting parties (but only where this affected the particular nature of the contract such as in the case of a partnership.

Borkowski and du Plessis^[13] argue that a fourth type of mistake became recognised in the post-classical period: mistake about the quality of the subject-matter of the contract. They pray in aid Ulpian, Sabinus, book 28, (D.18.1.11.1):

“If, in fact, I think that 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 you a woman and you think you are buying a male slave, the error over sex makes the sale void.”

This principle is questionable. It might be argued that if the contract was not for a woman per se but specifically for a chaste woman, the fact that there had not been the requisite meeting of minds in respect of the latter requirement should render the contract void for uncertainty.

Similarly, Roman law recognised the principle that duress should vitiate a contract. However, this changed over time. In the early law, if a stricti iuris contract was made under duress it would nonetheless be recognised as valid and the aggrieved party would seek relief in the discretion of the Praetor. In the late Republic, the formal defence of duress (exceptio metus) operated against a party attempting to enforce a contract procured by the threat of “serious evil”. A comparable development occurred in respect of fraud with the introduction alongside the exceptio metus of the exceptio doli.

It is important in the context of agreement to examine the role of arra. This was something given as a token of good faith. It might be in the form of money in which case it was treated as a deposit or it might be an item of value which would be forfeited in the event of default. In the latter situation, if the buyer fulfilled his obligations, he could redeem the arra. However, it should be noted that the giving of arra, while valuable evidence of intention and agreement, was not conclusive:

“A contract of sale is concluded…even if no arra has been given. For what is given by way of arra is merely evidence of a contract of sale having been concluded.”^[14]

There is an interesting interrelationship between the above and the practice of reducing a contract to writing. In modern systems of jurisprudence, this practice is regarded as highly desirable and highly conclusive of the parties intentions. This was not so for the Romans and the practice only evolved gradually. Justinian firmed up the principle by decreeing that a contract was not valid until put in writing. Until that time either party could withdraw but the arra, if any, would be forfeited by the party refusing to complete the contract. This in fact raises the status of writing beyond that which is necessarily found in English law and has a parallel with the “exchange of contracts” stage in the English law of real property.

Conclusion

Thus it will be seen that although the Roman Law requirements for the formation of a binding contract differ from the English, there are significant similarities. The modern requirements of offer, acceptance, certainty, consideration and intention to create legal relations are all reflected in some form or other in the Roman contractual elements of “Thing”, Price and Agreement.

Bibliography

Borkowski, A. & du Plessis, P., Textbook on Roman Law (3^rd Ed., 2005)

Nicholas, B., An Introduction to Roman Law (1975)

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Footnotes

^[1] Borkowski, A. & du Plessis, P., Textbook on Roman Law (3^rd Ed., 2005), p.267

^[2] An Introduction to Roman Law (1975), p.98

^[3] Paul, Edict, book 33, (D.18.1.34.1

^[4] Borkowski & du Plessis, Op. Cit., p.263

^[5] Pomponius, Sabinus, book 9, (D.18.1.18pr)

^[6] Ibid.

^[7] Marcian, Rules, book 3, (D.18.1.44)

^[8] Borrows & du Plessis, Op. Cit., pp.264-5

^[9] Nicholas, Op. Cit., pp.167-8

^[10] Ulpian, Sabinus, book 1, (D.18.1.2.1)

^[11] Op. Cit., p.266

^[12] Op. Cit., p.174

^[13] Op. Cit., p.256

^[14] Inst. Gai. 3.139