Quasi-contract

Quasi-contract is one of the four categories of obligation in Justinian's classifica­tion. The artificiality of the classification is again evident when we consider the content of the quasi-contractual category—a group of obligations which have little in common apart from some characteristics analogous to those of contract.

9.9.1 Negotiorum gestio

(D.3.5., C.2.18.)

Negotiorum gestio was the 'conducting of another person's affairs' without their authorization. Clearly, there is no contract in such a case as there is no actual agree­ment between the parties. But the law treats the situation as if (quasi) there were a contract between them. Suppose, for example, that you are serving abroad in the legions and that fences around your property are destroyed by storms in your absence. Your neighbour repairs the fences, thereby incurring expense. Had you known the facts, would you not have approved what was done for your benefit, and would you not be willing to reimburse your altruistic neighbour for his expenses? Of course you would—at least that is what was assumed in law: 'It is a prime exam­ple of the sober sense of realism with which the Roman lawyers were able to attune law and social ethics to each other and, more specifically, to balance the individual­istic interest in not having one's own affairs interfered with and the interests of soci­ety in encouraging ethically desirable activities on behalf of others' (Zimmermann, Obligations, 436).

If negotiorum gestio had been confined to absentee landlords, its scope would have been narrow; but in practice it could apply to a multitude of situations—whenever someone performed an unrequested service for another.

9.9.1.1 Position of the parties

The duties of the person performing the service, the gestor, were to complete what he had started, and to account for any proceeds or loss. He was liable for negli­gence in the performance of the service, the bonus paterfamilias standard applying. However, if the gestor had acted in an emergency, he was liable only for dolus. But if loss had resulted from doing something that the principal would not have done, thegestorwas strictly liable, although he could set off losses against the benefits that accrued from the unauthorized acts:

Pomponius, Quintus Mucins, book 21: If you act as the agent of a person who is absent and in ignorance, you have to answer for both negligence and fraud. But Proculus says that some­times you have to answer for accident as well, for example, if in the name of your absentee principal you transact business he did not usually do.... For if any loss comes from this, it will come to you, but a profit to the absent principal. However, if there has been a profit in some transactions and a loss in others, the absent principal has to set off the profit against the loss. (D,3.5.10.)

The duties of the principal were to accept the performance and to reimburse the gestor for expenses that had been properly incurred.

9.9.1.2 Conditions for reimbursement

In order to be reimbursed, the gestor had to satisfy a number of conditions:

(a) The gestor must have acted reasonably Thus, not only must the service have been a reasonable act in itself, but also it must have been reasonable in the cir­cumstances for the gestor to act rather than leave the matter to the principal or to someone else. If the principal had expressly forbidden the act to be done, the gestor could not be said to have acted reasonably.

(b) The act must have been beneficial when done Thus, it was irrelevant that the act did not prove useful, provided that it was useful when done. As Ulpian puts it: Ulpian, lidict, book 10: A person who brings an action for unauthorized administration will have the use of that action not only if he was successful in the business he transacted, but it is enough that he acted beneficially, even if what he did was unsuccessful.

However, it was insufficient for the gestor to show that he thought he was acting beneficially if in fact his acts were not useful. But he was entitled to reimbursement, despite the act not being beneficial when done, if the principal accepted or ratified the act.

(c) The act must have been done in the principal's interest The gestor had to show that he had acted in the affairs of another, not in his own affairs. But it did not matter if the gestor made a mistake as to the identity of the principal, providing that he was acting in the latter's interest. Where the act was in the interest of both the princi­pal and the gestor, the latter had no remedy unless he could demonstrate that he could have protected his own interests without protecting those of the principal: only in such circumstances could the gestor be said to be truly acting in the prin­cipal's interest.

(d) Intentions It seems that the act must have been done with the expectation of reimbursement in mind; if the act was done simply by way of gift, or as the result of duty or feelings of friendship, the gestor could not recover expenses (cf. C.2.18.11., 15.). The remedy was the actio negotiorum gestorum. The direct action, available to the principal, was aimed at recovering the object and its fruits as well as compensa­tion for any damages caused by the carelessness of the gestor. The amtraria action, available to the gestor, was primarily aimed at the reimbursement of expenses incurred in looking after the object in the principal's absence.

The common law does not have a doctrine generally comparable to negotiorum gestio: the predominant attitude has been one of 'mind your own business' rather, than recompensing the 'Good Samaritan'. But in some situations compensation is recoverable for unrequested services, e.g.

Obligations: Common Principlesand Obligations Arising from Contracts 317 to the latter's actual or presumptive wishes (s. 677). Issues such as whether the gestor is entitled to damages—and not just expenses—have proved controversial in German law. For example, the courts have allowed 'reasonable compensation', but not full damages, to a motorist who steered into a tree in order to avoid colliding with a child who had run into the street. See Zimmermann, Obligations, 433 ff. For an interesting recent comparative perspective, see Kortmann, J., Altruism in Private. Law (2005).

9.9.1,3 Actio funeraria

This was a special action, analogous to the action for unauthorized administra­tion, available to anyone who had incurred funeral expenses with the intention of being reimbursed for them. It lay against the person who was legally responsible for burying the deceased (normally the heir) for failure to do so. The person who actually buried the deceased could recover such expenses as were reasonable in the circumstances:

Ulpian, Edict, book 25: Funeral expenses are assessed according to the wealth or rank of the deceased. (D.l 1.7.12.5.)

However, the actio funeraria would not lie if the expenses that had been incurred were so low as to be insulting. The priority was to bury the corpse; hence, expenses could be recovered even where the heir had expressly prohibited the burial:

Ulpian, Edict, book 25: Labeo also says that if you bury a testator even though the heir forbids it, an action for funeral expenses is available to you if good reason is shown....

9.9.2 Condictio indebiti

(D.l2.6., C.4.5.)

Ulpian, Edict, book 26: If someone mistakenly pays what is not due he can recover by this condictio.... (D.12.6.1.1.)

We are concerned here with unjustified enrichment—a familiar concept in modern systems, thanks to our Roman forebears. This was the work particularly of Labeo, who appears to have been the first jurist to establish the doctrine. If a person mis­takenly paid money or transferred a thing to another, both wrongly believing that the debt or transfer was owed, the transferor had the condictio indebiti ('the recovery of a thing not owed') for its recovery. The rationale behind the remedy was readily understandable—the concept of fairness: in D. 12.6.66., we are told that the condic­tio was 'grounded in the idea of what is good and fair'. The Institutes of Justinian (3.27.6) lists the condictio indebiti as one of the quasi-contracts. It should be borne in mind, however, that this was not the only enrichment action known to Roman law (see 9.9.2.2). Various other enrichment actions existed which were classified according to the cause of the enrichment.

9.9.2.1 Position of the parties

The plaintiff had to show that he had made a payment or a transfer, and that the debt or obligation was not owed. But the action was not available if the transferee had acted in bad faith, because such behaviour would have amounted to theft (for which there were discrete remedies). Nor was the action available if both parties had acted illegally or immorally: the rule applied that if the conduct of both was

reprehensible, the position of the possessor was stronger (D. 12.5.8.). B^ut exceptions were allowed—e.g. where the conduct of the plaintiff was clearly less blameworthy than that of the recipient.

What was it that the plaintiff could recover under the condictio? Was it the thing transferred, or the extent of the defendant's enrichment? The texts are inconclu­sive, but the most plausible view is that the action was concerned with enrichment.

Paul, Plautius, hook 17: The plaintiff in the case of a supposed debt ought also to obtain resti­tution in respect of fruits and offspring, a deduction being made for expenses. (D.12.6.65.5.)

9.9.2.2 Analogous cases

Other forms of condictio were allowed in analogous cases of unjust (or unjustified) enrichment, e.g. where property was given as dowry in expectation of a marriage which did not take place, or as an inducement not to commit a crime or to do some­thing which the recipient was already bound to do. Of special significance was the condictio sine causa ('recovery on no specific ground'), a residuary action intended for any case of unjust enrichment that did not fall within the standard forms of condictio. An illustration from Ulpian:

Ulpian, Edict, book 32: A cleaner takes a laundry contract, and then when the clothes have gone missing, he is sued by the owner in an action on hire and pays up their price. Then the owner finds the clothes. By what action should the cleaner recover the price he paid? And Cassius holds that he can not only sue by action on hire but can also maintain a condictio against the owner. I think he can definitely bring the action on hire. It has, however, been doubted whether he can also have the condictio, in that what he gave was not something not owed. Yet maybe we can hold him able to have the condictio as for something given without any basis. For once the clothes are found, it does seem as though the giving had no basis. (D.12.7.2.)

The very existence of the condictio sine causa, and the other forms of condictio, points to the emergence of an important general principle—that persons who are unjustly enriched may not be able to benefit from their enrichment, even though they acted entirely in good faith. The development of this principle, one of the most impres­sive achievements of Roman law, was further aided by the availability of the action for unauthorized administration to the gestor against an 'enriched' principal {ante), and the actio depeculio against a master or paterfamilias enriched by contracts made by those in their power. Nevertheless, Roman law never did achieve an all-embracing principle of unjust enrichment—more a case of providing specific remedies which in toto approximated to such a principle.

9.9.2.3 Unjustified enrichment today

Modern systems espouse unjust enrichment in various degrees. See generally Zimmermann, Obligations, 834 ff. Although the Code Civil does not provide a general enrichment action, the courts have succeeded in doing so, at least for enrichment sans cause. On the other hand, the BGB does allow a general action; the principle is that if a person acquires—through transfer or in any other manner—something at the expense of another without any legal ground, he must return it to him; s. 812. The very generality of the principle has caused difficult problems of interpretation, and a distinction has had to be drawn between enrichment through transfer and otherwise. Roman-Dutch law has not applied the enrichment principle generally

Obligations: Common Principles and Obligations Arising from Contracts 319 despite its advocacy by Grotius (who saw it as emanating from natural justice). However, enrichment claims are allowed in specific cases. Recent developments in South Africa suggest an increasingly extensive application of enrichment remedies.

English law too has eschewed the general application of the enrichment principle. However, the underlying basis of the law of restitution is clearly the principle of unjust enrichment. That law has long been an untidy mixture of elements of com­mon law and equity, seemingly not fitted into any unitary scheme. But recently the trend has been—certainly in legal writing—towards the recognition of unjust enrichment as a principle of general application, or at least as an organizing concept for rationalization of the law. The analytical scheme proposed attempts to give the law of restitution some much-needed structure: the proposed basis of a restitution claim depends, first, on whether the defendant was enriched; second, on whether the enrichment was at the plaintiff's expense; third, on whether it would be unjust for the benefit to be retained by the defendant; and, fourth, on whether there is an appropriate defence. Moreover, cases such as Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548, HL—where the Playboy Club was held to have been unjustly enriched by a partner of a solicitor's firm who used the firm's money to gamble there—have helped to fuel the current dynamic state of the law of restitution.

9.9.3 Common ownership

(D10.3., C.3.37.)

Common ownership often resulted from agreement, in which case the contract of partnership applied. But it could also arise in the absence of agreement, e.g. as the result of a gift or inheritance, in which case the owners were in a quasi-contractual position, the law implying certain rights and duties between them. Their position could be regulated by the actio communi dividundo, the action for dividing common property—the same remedy that was allowed to the members of a partnership. There was a special action for the division of an inheritance between co-heirs, but for other cases of common ownership the actio communi dividundo was the appropri­ate action.

As a general rule, the position of common owners was similar whether they were partners in a societas or co-owners in the quasi-contractual sense. The latter were liable, e.g., for losses caused through their negligence, the standard of care required being that expected of them in their own affairs. They had to account for profits but were entitled to expenses that had been reasonably incurred. However, unlike the case in most partnerships, the death of a co-owner did not end the common ownership.

9.9.4 A common link?

Despite the earlier assertion that the chief instances of quasi-contract appear to lack a unifying principle, it can be argued that they all amount to attempts to prevent unjust enrichment. This is clearly the case in condictio indebiti; but is it so in the other cases? In negotiant™ gestio the gestor is allowed to recover expenses otherwise the principal would be unjustly enriched by the beneficial service that was rendered to him. Similarly, the heir would be unjustly enriched by another's payment for the deceased's funeral if the actio funeraria was not available against the heir. And with regard to common ownership, the actio communi dividundo can be regarded as

preventing the unjust enrichment of any of the co-owners. The argument can also be applied to other instances of quasi-contractual liability—e.g. that of the heir in respect of his duty to pay legacies. It could be objected to this line of reason­ing that the quasi-contractual remedies are essentially concerned with preventing unjust loss to one party rather than the unjust enrichment of the other, but these are arguably two sides of the same corn. There may be some justification, then, in regarding the prevention of unjust enrichment (or loss) as the link between the quasi-contractual remedies. On the other hand, is this alleged link a specific enough explanation for the individual cases of quasi-contract? Is it not the fundamental object of the civil law to prevent the unjust enrichment (in a broad sense) of one party at the expense of another?

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FURTHER READING

On the classification of obligations, see Biscardi, A., 'Some Critical Remarks on the Roman Law of Obligations' (1978) 4 Scripts Classica Israelica, 106-21.

On the standards of contractual liability in Roman law, see MacCormack, G., 'Juristic Use of the Term Dolus: Contract' (1983) 100 ZSS (rA), 520-32 and by the same author, 'Dolus, Culpa, Custodia and Diligentia—Criteria of Liability or Content of Obligation', in Omaggio Peter Stein, 189-209.