The Roman Law of Contracts

Now, the next question that you have to face in the law of contract is the question of classification. It turns out that what happens is, as a matter of course, is that people when they enter into contract usually think about some fraction of the relevant issues, but they don't necessarily think about all the particular details in question. These kinds of vitiating conditions are something that run through the entire body of contract law, and are not necessarily tied up to this, that or the other form of contract. And a lot of what the court law of contract does is to try to set up a series of terms, which you may be free to vary, but typically won't even think about when you're worried about a particular transaction. So let me just give an extremely simple example. What happens is I go into the store, I say “I'd like to get a pound of potatoes.” And so what we do is, we imply a series of concurrent conditions in these transactions and what the conditions say is, I do not have to pay you for the potatoes until you tender them to me, and you don't have to tender the potatoes until the cash is ready on the table. The theory is, each party can treat its promise as security for the others so that they go forward simultaneously or not at all. And this then becomes part of the implied law of conditions, and there's a kind of deep rationale as applicable in Roman times as today, as to how these conditions are inferred. Now, how is the rubric under Roman law for doing this? And at this particular point, the phrase that often comes into use is, is it “good faith”? Now what we're saying about good faith is the use of the kinds of things that you have to do in various kinds of arrangements in order to make them robust. So that if you in effect acted in bad faith, then it turns out that I don't have to do this at all. And so, what Roman law does is it develops bona fide contracts, and those are typically sale, they're contracts of hire, contracts of partnership, and contracts of agency, which we'll talk about. And then there are other promises, like loans and so forth, which tend to be strictly juris and there are a third class of contracts known as real contracts, in which it turns out that what you do is that you have various kinds of gratuitous arrangements, and you have to sort these things out. So, what the Romans do, is they develop a very elaborate system, and the genius of what they've done, is they seem to get the right categories for the various kinds of arrangement, and they're seen as the first approximation to get the right substance of rules as default terms for each of these kinds of arrangement. And for the most part, what they do is they allow but only occasionally, you to vary these candid terms to do something else.