Contracts

Wealth, in a commercial age, is made up largely of promises. An important part of everyone’s

substance consists of advantages which other have promised to provide for or to render to him;
of demands to have the advantages promised, which he may assert not against the world at
large but against particular individuals. Thus, the individual claims have to have performance of
advantageous promises secured to him. He claims the satisfaction of expectations created by
promises and agreements.

In such a society men must be able to assume that those will act in good faith, and as a
corollary must be able to assume that those with whom they so deal will carry out their
undertakings according to the expectations which the moral sentiment of the community
attaches thereto.

A social interest in the stability of promises as a social and economic institution, becomes of the
first importance.

In civil-law countries the interest of the promise, and thus the social interest in the security of
transactions, is secured to cover promises generally.

In the eighteenth century, the traditional requirement of a causa civilis, a civil, i.e., legal, reason
for enforcing a pact gave way before the teaching of the church that promises ought to be kept
and the enforcement of promises as such in the canon law reinforced by natural-law ideas.

In the nineteenth century, came the rise of the will theory of legal transactions.

In civil-law countries the enforcing machinery is modern and adequate. The oldest method of
enforcement in Roman law was seizure of the person, to coerce satisfaction or hold the
promisor in bondage until his kinsmen performed the judgment.

Pecuniary condemnation, a money judgment in all cases, enforced in the classical law by
universal execution or as we should say, by involuntary bankruptcy.

An actio and implendum or action to require performance, with natural execution, that is, a
doing by the court or its officers at the expense of the defendant, of that to which he is bound
as ascertained by the judgment.

The civil law prevails as the basis of our legal system there is full legal efficacy of promises and
agreements intended to create obligation, the means of enforcement fall short of full securing
of the interest because of lack of means of direct coercion applied to the person of a
recalcitrant promisor.
Law did not concern itself at first with agreements or breaches of agreements. Its function was
to keep the peace by regulating or preventing private war and this only required it to deal with
personal violence and with disputes over the possession of property.
Hippodamus in the fifth century B.C. that there were three subjects of lawsuits, namely, insult,
injury and homicide. If a dispute over breach of an agreement led to an assault and a breach of
the peace, tribunals might be called on to act.

Religion, the internal discipline of the organized kindred, and the law of the state were three
coordinate agencies of social control in ancient society. If the gods had been called to witness
or good faith had a religious sanction, the duty to keep a promise was a matter for religion.

Hindu law, shows the idea of religious duty to keep faith in full vigor. In the Hindu system the
relation between the parties to a debt is not legal but religious and after law had grown up
under English influence it was said that there is a legal obligation because there is a religious
obligation.
Hindus carry the idea of religious obligation so far that a descendant is bound to pay the debts
of his ancestor in many cases whether he receives any assets of the ancestor or not.

Brihaspati says, He who, having received a sum lent or the like does not return it to the owner,
will be born hereafter in the creditor’s house as a slave, a servant, a woman or a quadruped.

Narada says, when one dies without having paid his debt, the whole merit of his devotions or of
his perpetual fire belongs to his creditors.

Roman law. Agreements were matters for religion or for kin or guild discipline. As law replaced
religion as the controlling regulative agency, the old religiously sanctioned promise becomes a
formal legal contract.

When contact with Greek philosophers set the Roman jurists to thinking about the basis of
obligation there were two sorts of promises, such as the formal and informal promises.