Real contracts

The common characteristic of so-called real contracts was that the binding element arose upon the transfer of a thing (res). The delivery, therefore, was an essential part of the creation of the contract: delivery was neither a con­sequence of the contract nor a constitutive element of its performance.

The law of obligations: contracts 189 only upon delivery of the thing; without agreement and delivery (datio), there was no binding obligation (Paul, D. 2.14.17pr.). The obligation arising from these contracts was the restoration of the items given. Sometimes, however, the party was also liable for damages, e.g., when a depositary lost the deposited object.

The prototype of real contracts and one of the cornerstones of daily life was the loan for consumption (mutuum). This is the only specific real contract Gaius deals with in his Institutes (3.90). Justinian (Inst. 3.14), however, refers to four real contracts: the just-mentioned loan for consumption but also the loan for use (commodatum), the deposit (depositum), and the pledge (pignus). It is commonly thought that the four real contracts Justinian mentioned were already recognized as contracts in the classical period and that Gaius’s approach was only transitional. The loan for consumption and loan for use were contracted for the benefit of the recipient; the deposit was basically in the interest of the depositor; the pledge provided advantages to two parties, but specifically it was in the interest of the creditor.

Mutuum

Probably derived from mutare (to change), the mutuum was the loan of con­sumption of money or other things normally used by being consumed (oil and corn, among others). The mutuum was a real, unilateral, and gratuitous contract. It was real because the loan could not be concluded until the lender (or creditor) had handed the money or the fungible thing over to the borrower (or debtor).

The mutuum was unilateral because the only obligation was on the side of the debtor, who had to restore not the thing itself but an equivalent in quantity and quality. Therefore, the mutuum gave rise to only one action from the lender against the recipient of the loan, not vice versa. The mutuum was gratuitous because it was done free of charge, and no claim for interest could be enforced. This suggests that the simple mutuum was largely used between friends, relatives, and acquaintances.

If the lender wanted to receive any interest on capital loaned, which was standard, the parties had to enter into an additional stipulation. This stipu­lation could also include incidental provisions concerning the time and place of performance. The stipulation was usually made before the delivery of money; it therefore did not produce a novatory effect because novation, as mentioned above, required that the existing obligation precede the stipulation. This transaction, therefore, was actually not only real (re) but also formal (verbis). As a matter of fact, however, the stipulation seemed to absorb the mutuum (Pomponius, D. 46.2.7). Maximum interest rates were legally fixed

and varied from period to period. During the late Republic and the Empire, the maximum rate was 12 percent per year.

The condictio was the personal action that the creditor could bring against the debtor when the latter did not fulfill his obligation of restoring the equivalent thing. The action was called actio certae creditae pecunia where the object of the loan was money, and condictio triticaria where other fungible things were involved. Because of the very nature of money or other fungible things, performance would not be rendered impossible if such goods were acciden­tally lost.

The Roman idea of mutuum as a verbal contract distinct from both the agreement of lending money and the stipulation of interest became precarious and problematic and was not generally accepted by modern law.

Commodatum

Commodatum involved lending for use an object that was nonconsumable. The scope of consumable things was narrower than that of fungible things. Nonfungible things are usually also consumable, but there are exceptions. For instance, cash on a table or a key to open an apartment are not consumables (they can be used many times), but they are fungibles, since they can be replaced by equivalent things. Originally, the loan for use was restricted to movables but later was expanded to include immovable things.

Like the mutuum, the commodatum was a real and gratuitous contract. Unlike the mutuum, the lender expected that the very same thing would be restored to him in the same condition and not just its equivalent in quantity and quality. In contrast to the hire (locatio conductio rei), the loan for use was strictly gratuitous. In contrast to precarium, a commodatum could not be revoked at will. A commodatum did not involve any transfer of ownership, and therefore the lender did not have to be the owner (e.g., a usufructuary). The borrower was not protected by the possessory interdicts, since he was not a praetorian possessor but a mere holder.

Usually, a commodatum was for the exclusive benefit of the borrower, and it therefore normally occurred between friends, relatives, or acquaintances without involving any commercial or economic interest. It was a matter of friendship, outside the province of the law. At the end of the Republic, however, the praetor granted an action in factum to the lender to sue the borrower for recovery (Ulpian, D. 13.6.11pr.). By the time of the codification of the Edict, the lender could choose between the old action in factum and a new one in ius (Gaius, 4.47), probably based in good faith.

The law of obligations: contracts 191 against him (Gaius, D. 13.6.18.3). This contra claim was only secondary, but it made the commodatum no longer a necessary unilateral contract, like the stipulation and the mutuum, but a bilateral one. Because of the accidental character of this bilateralism, modern lawyers consider the commodatum an imperfect bilateral contract.

Since the commodatum was in the interest of the borrower, his liability for the use of the thing was extensive, including not only fraud (dolus) and negligence (culpa) but also the so-called custody liability. Custody liability consisted of a guarantee to keep the object safe because it belonged to another person. Specifically, it referred to the liability of the borrower in case of theft. Custody did not presuppose fault and excluded damages that were beyond human capacities (vis maior). If the borrower used the thing improperly, however, or fell into default (mora), he was liable for all the risk, including damages caused by superior force (vis maior) or accident (casus fortuitus).

Depositum

The deposit was a contract by means of which a depositor handed over a movable thing to the depositary for safekeeping. The deposit is one of the more primitive legal institutions, reflecting the basic human need of entrusting valuable things to the care of another person when one cannot watch over them.

Like the commodatum, the deposit was a real, gratuitous, and imperfectly bilateral contract in which there was no transfer of ownership. Like the com- modatary, the depositary was not protected by possessory interdicts but was just a holder. Unlike the commodatum, however, the depositum was concluded for the benefit and in the interest of the depositor.

Three kinds of deposits had special rules. (1) The so-called depositum mis­erabile was a deposit made in time of fire, riots, and other calamities. Since the depositor was not able to choose the depositary, the liability of the latter increased to double the value of the thing in case of damages or fraud. (2) Sequestration was a provision in cases of dispute concerning a particular thing. The parties could hand over the thing to an impartial person until the issue had been settled (Florentinus, D. 50.16.110). The depositary (sequester) had to restore the thing to the person in whose favor the controversy was decided. The praetor granted the sequester interdictal protection so that the sequester could protect the thing with some degree of autonomy in relation to

the parties. (3) Irregular deposit (depositum irregulare) was the deposit of money or other fungibles; consequently, the depositary had to return not the very same thing but an equivalent. This kind of deposit was like a mutuum in that it involved the transfer of ownership, but it had the advantages of bilateral con­tracts based on good faith, including the possibility of awarding interest in some cases. The institution had a Hellenistic origin and seems to be postclassical.

Pignus

An archetype of real security, the pignus (pledge) was a real contract that consisted of handing over a movable or immovable thing to secure a debt.

The pledgee could not use the pledged thing and had no rights over its fruits, unless it was agreed as an interest (antichresis). He was liable for fraud (dolus), negligence (culpa), and safekeeping (custodia). Once the underlying obligation had been extinguished, the pledgee had to restore the thing to the pledgor. If the pledgee did not give back the pledged thing, the pledgor could sue the pledgee for restoration of the thing with a personal action (actio pigneraticia in personam). Of course, if the pledgor was the civil owner of the pledged thing, he could also bring a rei vindicatio against the pledgee. But for the pledgor, it was easier to bring the actio pigneraticia because it required only proof of the pignus, not proof of civil ownership. On the other hand, the pledgee could bring a contra claim against the pledgor (actio pigneraticia contraria) for damages caused in the pledged thing and for reimbursement of necessary expenses. The pledgee had a right of retention (ius retentionis) until the pledgor compensated for damages and expenses.

It was usual in classical law to agree that the creditor should be entitled to sell the pledged thing if the debtor did not pay the debt by the agreed-upon date. In later classical law, the right to sell (ius distrahendi) was conceived as a right of the creditor, unless it was expressly excluded. After the sale, if the price of the pledged thing exceeded the debt for which the pledge was given, the pledgor had the right to the excess (superfluum). The parties might also agree to the transfer of ownership from the pledgor to the pledgee if the debtor did not pay his debt by a certain day (the so-called lex commissoria). Because this agreement could produce excessive interest to the creditor when the plegded thing was more valuable than the amount of the debt, Emperor Constantine prohibited the lex commissoria (C.J. 8.34.3).