Freedom of contract and its limitation

(a) The allocation of shares in profits and losses

The fact that societas was based on bona fides did, of course, not mean that the contents of the contract between the socii had to conform to any kind of objective standard of fairness or reasonableness.

More particularly, the validity of a societas did not depend on an equivalence of contribution and reward. "Quidquid ob earn rem N^m N^m A° A° dare facere oportet ex bona fide": that was determined, in the first place, according to what the parties had specifically agreed upon. For what can be more in accordance with good faith than to give effect to the arrangements of the parties concerned? A Roman paterfamilias may be relied upon to be the best guardian of his own interests. Naturally, if no specific agreement regarding profits and losses had been made, the presumption was that the parties would bear both in equal shares.⁴¹ But if shares had been specified, the agreement had to be observed. Thus, for instance, the parties could arrange that one partner should receive two-thirds of the profits and bear one-third of any loss, while the other would bear two-thirds of any loss and get one-third of the profits.⁴² It was even possible to allocate a share in the profits to a sodus without making him share in the losses at all.⁴³

True: in the days of the Republic, this matter had been very controversial. Quintus Mucius, for instance, had disapproved of these kinds of terms.⁴⁴ But his disapproval had not been based on the lack of equivalence between contribution and reward. Fairness was not an issue. Such arrangements had rather been regarded as "contra naturam societatis": as incompatible with the nature of partnership as such.⁴⁵ In this argument, we see again the old erctum non citum lurking behind the scenes of consensual societas.^[2355] This ancient type of consortium was formed by co-heirs.

An heir, as Alan Watson has stressed,^[2356] is liable for the debts of the deceased, even if they exceed the assets. Co-heirs were liable in the same proportion as they inherited. They might have been instituted ex partes inaequales; but profit and loss, as far as each of the co-heirs was concerned, corresponded. Servius Sulpicius broke away from this traditional position.^[2357] He obviously did not regard such correspondence as essential for the modern, consensual type of partnership, and left the determination of shares, in both profits and losses, to the parties. If they gave one of them a better deal they might have good reason for doing so:.. saepe quorundam ita pretiosa est opera in societate, ut eos iustum sit meliore condicione in societatem admitti."^[2358] The services of one of the parties may be so valuable, in comparison with the contributions of the others,^[2359] that such favourable treatment appears to be fully justified. Whether or not that is so must, however, be left to the discretion of the parties,^[2360] and it is not up to any third party to interfere with their evaluation of the matter.^[2361]

(b) The societas leonina

There was, however, one exception to this rule. A societas in which one partner shared only in the loss and not at all in the profit, was inadmissible.^[2362] It is in the fables of Phaedrus that we find the prototype of this so-called "societas leonina":

"Vacca et capelk et patiens ovis iniuria

socii fuere cum leone in saltibus.

Hi cum cepissunt cervum vasti corporis,

sic est locutus partibus factis leo;

'Ego primam tollo; nominor quia rex meast; secundam, quia sum socius, tribuetis mihi; turn, quia plus valeo, me sequetur tertia; malo adficietur siquis quartam tetigerit.' Sic totam praedam sola improbitas abstulit."^[2363]

These are certainly powerful arguments on the part of the lion, but one must admit that from a more impartial point of view the distribution of the spoils is indeed "iniquissimum".^[2364] In fact, there is no distribution at all. Just as for a valid emptio venditio, there had to be at least some counterperformance in money (even though not necessarily a iustum pretium),^[2365] so in the case of a partnership contract each socius had to get at least some material benefit out of it (albeit not necessarily a fair share). For the Roman lawyers, this seems to have been inherent in the concept or nature of partnership.^[2366]

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Source: Zimmermann R.. The Law of Obligations. Roman Foundations of the Civilian Tradition. Juta & Co, Ltd,1992. — 1241 p.. 1992

Freedom of contract and its limitation

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