The problem of risk allocation

(a) Perkulum conductoris

At the moment the contract is concluded, the promised work is not yet in existence; locatio conductio operis involves a process of production which usually takes some time.

Thus, it may happen that the work is destroyed or damaged, or that it becomes incapable of performance before it has been completed. If this is due to some fortuitous event, the question of risk distribution arises. Does the contractor receive no remuneration for the time and effort that he has invested in the (unsuccessful) attempt to produce the work (periculum conductoris)? Or will the customer have to pay even though he does not receive the promised work (periculum locatoris)? It will be noted that we are dealing here again with price risk: what happens to the claim for the counterperformance agreed upon if the performance becomes impossible due to circumstances outside the control of either of the parties?^[2010] According to Labeo, the risk was on the contractor (conductor). "Si rivum, quern faciendum conduxeras et feceras, antequam eum probares, labes corrumpit, tuum periculum est."^[2011] Tu (the conductor) has undertaken to build a canal. The embankment collapses. Since the locator does not receive the work, the conductor will not receive his wages. Of course, there had to be a time when the risk would pass to the locator. One might have thought of the moment when the conductor had carried out his obligation to execute the work free from defects, or of the moment when the work was delivered to the locator. In Roman law, the crucial event was adprobatio. "Antequam eum adprobares": it is a matter of course, and therefore not even mentioned, that after adprobatio the risk of accidental damage or destruction falls on the customer (locator). But before adprobatio: (omne) periculum est conductoris." A very similar approach, incidentally, was adopted in the famous English case of Appleby v.

Myers; the conductor's action to recover payment for work done and materials supplied failed, because he was deemed to have entered into a contract "to complete the whole, and be paid when the whole is complete, and not till then".^[2012] ^{^[2013] And the BGB restates the Roman rule in § 644 11: "The contractor bears the risk up until acceptance of the work." But it is a harsh rule. To be sure: the workman, under a contract of locatio conductio operis, does not receive the merces for his services as such, but for the production of a certain specified work or result. This is a strong argument in favour of periculum conductoris. However, one should not lose sight of the fact that a contract of work does not only entail a straightforward exchange of a piece of work for money, but a whole production process too. The conductor has to put in time and effort, usually by working on a physical object provided by (and belonging to)^[2014] the other party. It is at least as much in the locator's interest as it is in his own that he undertakes to produce the work and one may therefore well ask why, under these circumstances, the whole of the production process should be at his risk.^[2015] Thus, a splitting of the risk suggests itself as an equitable alternative. (b; Equitable distribution of the risks
This is exactly what we find being proposed in the later classical literature. Paulus, taking up Labeo's canal example, draws the following distinction: "Immo si soli vitio id accidit, locatoris erit periculum, si operis vitio accidit, tuum erit detrimentum. "¹⁰³ Vitium soli and vitium operis do not imply culpa but are to be taken as accidents, typically emanating from (and therefore attributable to) the risk sphere of the two parties concerned.¹⁰⁴ It is the locator who provides the place where the excavation work is to be done. If the soil turns out to be unsuitable for the building of a canal and makes the walls collapse, he has to carry the risk.
On the other hand, it is the conductor who performs the work. Every accident related to the way in which the work is carried out is therefore attributable to him: if the walls collapse because the conductor falls ill and is therefore unable to get the work done according to schedule, he will not receive any remuneration for what he has done. What D. 19, 2, 62 does not settle is the question of who, in post- Labeonic times, had to carry the risk for vis maior. lav. D. 19, 2, 51, dealing with "vis naturalis veluti terrae motus", provides the answer: periculum locatoris.¹⁰⁵ This is in accordance with the allocation of risk under a contract of locatio conductio rei.¹⁰⁶
The development¹⁰⁷ in Roman law from a very strict and dogmatic distribution of risks towards a more flexible one finds its parallels in other legal systems. In England the rule established in Appleby v. Myers seems to be widely regarded as unsatisfactory today.¹⁰⁸ In Germany the fathers of the BGB laid down a number of exceptions to the principle expressed in § 644 I 1 BGB: If the work, before its acceptance by the customer, is destroyed, or damaged, or becomes incapable of performance in consequence of a defect in the material provided by the customer, or in consequence of instructions given by him for its execution, the contractor may demand a part of the remuneration proportionate to the labour performed, and compensation for any outlay not included in the remuneration (§ 645 I 1). This rule is purportedly based on equitable considerations,¹⁰⁹ but finds its justification in the fact that the customer appears to be "closer" to the source of the risk. Another exception, eventually laid down in § 644 I 2 BGB, can be traced back to lav. D. 19, 2, 37: the risk passes to the locator (customer) even before approval has taken place, if he ought to have approved the work. It has consistently been claimed that these
“ D. 19, 2, 62.
** Cf. particularly Kaser, (1957) 74 ZSS 189 sq.
Cf. further Afr. D. 19, 2, 33 ("quemadmodum..."); lav. D. 19, 2, 37; Flor. D. 19, 2, 36. The arguments in favour of periculum locatoris are analysed succinctly by Wubbe, Festgabe Schweizerischer Juristentag, pp. 142 sqq. Cf. supra, pp. 369 sqq.
According to Cannata and Wubbe (supra, note 97) there was no such development; the rules pertaining to risk of the time of Labeo were essentially the same as those in classical law.
Lorenz, op. cit., note 58, n. 149. ^№ "Motive", in: Mugdan, vol. II, p. 280. exceptions do not go far enough. Thus, the requirements of § 645 I 1 have been applied in a most liberal manner and the norm has been used, repeatedly, as the basis for an argumentum per analogiam.^{^[2016]} Apart from that, a theory has attracted considerable support which favours the allocation of risk on the basis of typical spheres of risk:^{^[2017]} a nice example of how ideas from the "Treasure House"^{^[2018]} of the ius commune can prevail even against the odds of codificatory intervention.^{^[2019]}
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Source: Zimmermann R.. The Law of Obligations. Roman Foundations of the Civilian Tradition. Juta & Co, Ltd,1992. — 1241 p.. 1992

The problem of risk allocation

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