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THE TRANSMISSION OF RIGHTS, AND
THEIR CONSEQUENT MODIFICATIONS

Chapter 1

The two ways of transmitting ownership: abandonment of what is owned and its occupancy by someone else, and contract

1045. There are two ways of transmitting ownership:
1. When I free something of my own and someone else occupies it, making it his own.
2. When I free something of my own free in favour of someone else who, under certain conditions or without conditions, accepts and takes it immediately as his own; this is called `contract'.(250)

1046. The first way is accomplished by two entirely distinct acts, one of which precedes the other: the act of the owner and the act of the new occupier. The owner abandons what he owns either with or without the intention that it be occupied by someone else; it is in fact occupied. Thus, ownership has passed from one person to another, although we cannot say that the first has transmitted it to the second. The first simply abandoned it and the other appropriated it.

1047. This first way of transmitting ownership takes place in three general cases, each of which can be subdivided into many others:
1. The owner renounces his ownership which, being free, is honestly occupied by someone else (dissolution of the moral-intellectual bond).
2. The passage of time and forgotten historical records allow the possessor to consider himself the owner even though, if the past were known, he might discover that his ownership began with usurpation (natural-positive prescription).
3. The disuse of the thing, with its ownership forgotten and further dimmed by the passage of time, dissolves the physical bond, that is, it destroys the ownership, which is the matter of right. At the same time another person appropriates the thing in good faith or obtains it in good faith from the one who had appropriated it. Thus, a new physical bond has been effected which supplies the matter for the right of ownership of a new owner (usucaption).(251)

1048. In the first case the owner expressly renounces what he owns. Generally speaking, this renouncement cannot be presupposed, because renouncing what is good is contrary to human nature - the renouncement has to be proved (cf. 881-893).
Proof is the words, facts, and non-facts of the owner, which must clearly indicate his intention, and circumstances, when these are such that human beings must reasonably give up their intention to keep the thing as their own or their persuasion that it is theirs. This last proof produces a particular persuasion.

We do in fact, under certain circumstances and despite ourselves, sometimes reasonably abandon our intention to possess something. This happens when it is not so much the owner who abandons the thing as the thing which abandons the owner: for example, when something goes astray, a bird escapes, or firewood is washed out to sea when a dam bursts. These things are now free and occupiable by anybody, because the owner can never have them back for himself, or no longer thinks about recovering them, or is unknown to their finder.

1049. In the case of positive prescription, three conditions are required for the transmission of ownership: 1. the thing is prescribable, 2. its possession has continued peacefully from time immemorial, 3. the present owner is in good faith. These three conditions must be present in such a way that a critical examination results in the probability that the just transfer of ownership from the former to the present owner has indeed taken place, although it is now lost to memory. On the other hand, if the history of the ownership was clearly preserved and it could be proved that the original transmission was unjust and no other title had ever been applied, the prescription, according to rational right, could not have taken place the passage of time alone does not constitute any just title.
Hence it is more difficult to confirm the case of natural prescription relative to empires than relative to private ownership, because the memory of the latter is preserved much longer than that of the former.

1050. Finally, usucaption, as I have described it, has its root in the intimate nature of the physical bond, that is, in the matter of Right. This matter consists in a FEELING, as I have explained many times, by which human beings appropriate things to themselves and, as it were, assimilate them. But with disuse and oblivion time can obliterate the feeling of ownership in the human spirit, and without this feeling, right is not possible. Thus, the feeling of ownership which binds a person to an object can be extinguished in the person, while a similar feeling is formed in someone else by the factual use of the forgotten or disused object. This second feeling takes on the quality of right as soon as the first ceases.
If the first owner should awake, as it were, and claim the object, his claim would be invalid. If the feeling of ownership has finally perished in him but awoken in another, he can no longer claim the thing, because it now belongs to another. He can no longer establish a physical bond with the object that now belongs to another.
But we must move on to our principal argument, contracts.(252)

1051. Contracts are part of rational Right in so far as they are subject to the laws of reason, and part of positive Right as subject to positive, freely-chosen dispositions and conventions.

1052. In fact, in the state of nature in which we are now considering human beings, we must distinguish several stages. Contracts take place only in some of them.(253)
The first stage is present when we are born. At this stage we have not only made no contracts, but have done nothing and therefore have not acquired rights. We are endowed with innate and strictly natural rights (cf. 283).

1053. The second stage is when, by our action, we acquire rights without dealings or contracts with our fellows. These primitive rights were discussed in the preceding book.
At this stage we have only a negative relationship with our fellows, which consists in their duty not to encroach on the sphere of our acquired rights, and in our duty not to encroach on the sphere of their acquired rights.

1054. In the third stage people are considered as coming together and entering into a mutual relationship by the use of language. The moral need to understand each other's rights manifests itself as soon as some obscurity or conflict arises about rights. The moral-jural law, written on the hearts of us all, requires a peaceful solution to disputes (cf. 501).(254) This is the origin of contracts.

1055. These contracts are morally and jurally necessary; others, which are free and not morally necessary, are made between human beings sometimes for the purpose of obtaining some good or avoiding an evil in the eudaimonological order, and sometimes for the sake of exercising an act of moral virtue.

1056. Among both obligatory and non-obligatory contracts we can often find freely-chosen agreements, that is, agreements which are not determined by principles of justice and equity or by the moral law. These principles sometimes require a dispute to be settled, but leave the parties free to bring this about in one way or another. Or, in the case of non-obligatory contracts, the same principles prescribe some conditions but leave many others to the free choice of the contracting parties. Agreements become obligatory laws for the contracting parties. Hence, freely-chosen agreements, that is, everything determined by free choice and not imposed necessarily by rational law constitutes a positive right, which is not part of rational Right. In a treatise on rational Right therefore only those prescriptions should be dealt with that are subject to rational law, not those which depend merely on the will of the contracting parties.

1057. There is also a fourth stage in the state of nature. At this stage contracts forming societies are made between human beings which give rise to collective bodies.

1058. Contracts forming societies are themselves divided into obligatory and freely-chosen, and what has been said in general about both kinds of contracts can be said about these: the contracting parties must observe certain conditions required by jural, moral reason. These conditions therefore belong to rational Right. In addition, the parties can form agreements and make freely-chosen regulations. These are the positive part of the constitutions of such societies.

1059. In general, human beings begin by contracts to submit to positive Right in addition to rational Right, in so far as the contracts contain something freely chosen. As a result of particular contracts forming societies, men and women begin to move out of the state of nature into the social state. But the acts (social contracts) which make them pass from one state to the other belong to the state of nature.

1060. Furthermore, because legislative power is normally present in a society, anything this power subsequently lays down as law for a society contains something springing from moral-jural reason and something springing from the legislator's free choice. Here again rational Right mingles with positive Right.

1061. The state of nature, therefore, in my opinion, divides into four stages. In the last two, contracts appear, and positive Right mixed with rational Right begins to show itself.

1062. It seems that one of the sources of error which bring downfall to many writers on rational Right is their inability to accurately distinguish these four stages of the state of nature, which are four different conditions in which human beings are found prior to the state of society. The expression `state of nature' has many meanings. By restricting rational Right to Right presiding in the state of nature, different concepts depending on the narrowness or breadth of the concept of nature are necessarily produced.

1063. Some writers excluded the fourth stage from their state of nature. Others excluded the third as well, and finally some acknowledged as the natural human state only that in which the human being is born, a state anterior to all jural action.

1064. This gave rise to disagreement about the definition of natural Right, which they confused with rational Right. As a result, they could not agree about the solution to problems on natural and rational Right.
The best way to bring these writers closer in their opinions and to establish agreement on many points is, it seems to me, to call their attention to the different concept they have of the natural state, in other words, of the different hypothetical condition from which they start in order to find the right for which they are searching.

1065. It may be asked how I can include freely-chosen contracts in natural Right. I do not include them in natural Right; I only ask that natural Right be distinguished from rational Right, and that the former be made a part of the latter (cf. 283). Thus, the exclusion of freely-chosen contracts from natural Right does not exclude them completely from rational Right which must consider them as follows.

1066. The fact that contracts are freely-chosen in so far as there is no obligation to make them is not the same as their being freely-chosen in so far as they include freely-chosen agreements and dispositions. Agreements and dispositions not dictated by reason but added by the will of the contracting parties are extraneous to rational Right. It is also clear that if the dispositions determining contracts are dictated by reason, they must be considered in the science of rational Right, even though those who draw them up are not forced to do so by any natural law.

1067. Rational Right is, after all, the opposite of positive Law. But in the contracts we are discussing, which are drawn up by human beings who are under no jural or moral obligation to do so, the only positive, freely-chosen element in them is the fact, that is, the decision to enter into the agreement. On the other hand, the right, that is, the law which governs the agreements, granted they are made, is by no means freely-chosen. Hence writers on rational Right are necessitated by their argument to speak about all that Right which proceeds from reason, even if this Right presupposes a freely-chosen fact, from which the Right draws its possible existence.

1068. If therefore all freely-chosen facts had to be removed from rational Right and only natural facts retained, the sphere of rational Right would be too limited. Everything would be reduced to the Right of that short period of time we have called `the first stage of the state of nature' (cf. 1052) where the baby exists without having posited any act capable of acquiring rights for itself. We could certainly call this natural Right but not rational Right.(255)

1069. I define a contract as: `The concourse and jural effect of corresponding acts of two persons, of whom one, an owner of a simple or complex right willingly dissolves the jural bond of the right with or without certain conditions, so that the other may become the owner, if he wishes. The second owner brings into effect the act of acceptance and, after satisfying any attached conditions, appropriates the right.' (256)

1070. We have seen what the jural bond is and how, granted the necessary conditions, it is formed by a moral-jural act with which a person wills to reserve to himself something to which he is joined by a physical bond (cf. 383-401). An act of will contrary to that by which the jural bond is formed dissolves the bond according to the relationship between contraries.

1071. Here we see why two `acts of ownership' must be present in every transmission of ownership from one person to another: the act by which the owner abandons his right (act of disappropriation) and the act by which the other joins the same right to himself (act of appropriation) (cf. 1045).

1072. In contracts these two ways are co-relatives, the first being the condition of the second, that is: one person abandons his right on condition that the other accepts it for himself. Hence the latter's act of appropriation is called `acceptance' and is essential to the nature of contract.(257)

1073. If a person abandons his right without the condition that another appropriate it, and if the other appropriates it simply because the first leaves it vacant, without any understanding between them, the right would pass from the first to the second by means of two separate and independent acts, which consequently would not constitute a contract. This would be the first of the two ways we described for the transmission of rights (cf. 1046).

1074. The act by which an owner dissolves the bond binding a right to him can be considered either before the act is accepted or in the act of acceptance itself by the person in whose favour the act is posited. Before acceptance the act is complete relative to the person positing it, but conditioned, that is, its efficacy is dependent upon its acceptance. As soon as this is given, the act becomes efficacious because the essential condition attached to it has been fulfilled.

1075. To understand clearly how the act can justly be called complete, although dependent on a future condition, we need to consider the particular way human intelligence and will act.
Our intelligence can know a particular object, and our will desire it, even if it is a future and conditioned object. The condition becomes a quality of the desired object so that the object without the condition would be something else, not that which is desired. The desire for a conditioned object therefore can be absolute and certain, not simply provisional or doubtful.

1076. When acceptance is added, the bond of ownership is dissolved not by a new act but by virtue of the act itself by which the relative dissolution was revealed to the other person and proposed for his acceptance.

1077. We see therefore that a contract is not always a promise which simply concerns the future. It is a moral-jural action of a fully present will. This is so true that until there is acceptance, there is no contract; as soon as acceptance is obtained, the contract is completed, mutual obligation begins and the right has passed from one to the other.

1078. The reason why all contracts were considered promises(258) - later we shall see how promises are contracts of a determined kind - was, I believe, the confusion between the right of ownership of a thing and its possession.

1079. The right of ownership is formed and lost by a simple act of the intelligent will (moral bond), granted the necessary conditions. For example, I say it is my will that a certain object is no longer mine and is to belong immediately to John. As soon as John has made an act of will corresponding to mine and says he wishes the object to be his, he has become the full owner of it, although its consignment has not been carried out.

1080. Possession is an element of the physical bond. It consists in placing a thing or right under my physical power or under an equivalent symbol, protected by force. This force declares that the thing is mine and that I can physically do with it as I wish without my being impeded by greater force.
I have already noted that the symbol belongs to the moral bond in so far as it serves as an indication of ownership to all and causes in them the moral obligation to respect it. This obligation is not present as long as others are ignorant of the ownership (cf. 508-509). The indication is already present, however, in our case where we are dealing with something which has an owner (cf. 450-451). It is simply a question of indicating that what is owned must now be to someone else's advantage. The sign no longer indicates that ownership pertains to the first person. Nothing else is needed because the transmission of rights is known to the two contracting persons.

Real or symbolic possession therefore is not necessary in rational Right for the transmission of ownership from one person to another.(259) The only thing necessary is that, as a consequence of the transmission, the one who cedes ownership understands he is leaving its recipient free to take possession of it.

1081. Not all contracts are simple promises, although all accepted promises are contracts.

1082. The difference between promises and contracts is that in the case of accepted promises only a right to the thing promised, but not given, passes to the other person, while in the majority of contracts, that is, in all those which are not simple promises, the ownership itself of a thing, the right to it, is transmitted, even though it is not yet possessed.

1083. Promising and ceding something to another are, therefore, different acts. Although both are internal, manifested by external signs, and both are contracts when acceptance is added, they have different objects. The object of the first, as we said, is merely a right of appropriation; of the second, ownership itself.(260)

1084. One of the reasons why people believed that all contracts were promises is this: in the majority of contracts the possession of a thing is not, in reality, immediately transmitted. The ownership however is transmitted in the act by which the contract is completed. Hence, the promise to transmit the material possession itself of the thing is always carried out in either a tacit or expressed way together with the act of contract, in virtue of which ownership of something is transmitted.

1085. But we can easily see that a promise which is always joined to contracts de faciendo and de dando does not form the essence of a contract; it is purely an element and consequence of a contract. Thus, whenever this kind of promise is not expressed, and particularly when someone who sells or gives me something has no intention of giving me possession, I would still have acquired ownership of the thing according to rational Right, and I could even take it with force despite the opposition of the vendor and donor.(261)

1086. Similarly a contract would be complete if the vendor added no promise of giving me possession of something, or even if he expressly excluded a promise and, for example, ceded to me something he owned on the understanding that I took it of myself.

1087. A promise to give me possession of a thing (a promise of consignment) does not, therefore, constitute transmission of ownership; it gives me only the right of action, to which the owner is obligated when he promised to give me the possession and, more generally, the right to take possession.

1088. An accepted promise is a contract in virtue of which I oblige myself to an action in favour of another (that is, to be the recipient or doer of an action, to lend or to give).

1089. By the contract the right over my action (cf. 1087) passes to the accepter. The right can be exercised by the use of force in order to constrain anyone who reneges on his promised action, but not for any other purpose.

1090. I am obliged to keep the accepted promise because my promise has given the other person a right, which he has accepted, to my action. Hence, if I do not perform the promised act, I harm the other's right, refusing to give him what is his.

1091. Similarly, not honouring other contracts is reduced to not keeping the promise attached to a contract which grants or allows possession of a thing whose ownership I have transmitted to another by the act of contract.

1092. Thus, every violation of an agreed contract consists in the failure to keep the promise attached to the contract.

1093. However, if no promise has been attached - for example, when an object has been alienated provided that the accepter himself obtains possession of it - violation of contract is impossible. Damage to the other's ownership independently of the contract would be possible only when I impeded with force his taking possession of an alienated thing, or if, after the receiver has obtained possession, I steal what is legitimately possessed, or in any way disturb the owner in his possession or legitimate use of the thing.

1094. In any case, the reason for the obligation is the same as the reason we gave when speaking about damage to others' right in general; it is the moral precept: do not harm another by attempting to deprive him of his ownership (cf. 368-449). Promises must not be left unfulfilled, therefore, precisely because failing to keep them really deprives a person of what has already been joined to him by the bond of ownership.(262)

1095. The obligation resulting from a simply accepted promise, however, differs from the obligation arising from a contract which transmits the ownership of a thing, even relative to the time during which the promise or contract must be honoured.

1096. Let us suppose that in one case we are dealing with a promise to donate a book, and in another with the actual donation of a book; the promise and the donation have been accepted and both contracts concluded. In the first case, when must the promise be fulfilled? In the second case, when must the donor present the book if he had included this obligation in the donation?

In this second case, because no time is fixed, the consignment must be made immediately or as soon as possible, if the new owner so requires. In fact, if there is delay, the donor can take the donated book for himself as something he owns.
On the contrary, in the first case, where the promiser has not fixed a time for fulfilling his promise, he can execute it whenever he wants; he has the responsibility of determining the time. The promisee has no right to force him to fulfil what he has promised, because the promisee has in no way acquired any real right - `the act of ownership' transmitting the dominion has not yet been carried out.

1097. All we have said so far concerns an accepted promise and any contract to which this kind of promise is attached. But what about a promise that has been made but not accepted or rejected?
First, a promise, at this stage, is not a contract. Nevertheless it is a promise and therefore a new reason for distinguishing the notion of promise from that of contract.

1098. Does this kind of promise entail obligation, even though it does not have the nature of contract?
It is certain that whenever a person promises something to another, he intends to obligate himself by his own words, granted the other's acceptance. In fact, the acceptance is usually presupposed; our acceptance is taken for granted because a promise concerns something we desire. For example, if someone says to his employee, `I promise you 1,000', he has no doubt at all that the employee will accept. But the meaning of the promise is: `I obligate myself to cede to you this right, provided you accept it.' The obligation resulting from the promise is indeed conditioned, but it is of its nature irrevocable. After its communication to the promisee, moral and jural reasons require that it be maintained at least for the time necessary and suitable for its acceptance or rejection, or within the fixed terms of the promise.

1099. A promiser always presumes in his promise a tacit condition that the promisee will express his acceptance as soon as possible, or at least without too long a delay. In fact when we make a promise, we do not intend to bind ourselves to fulfil it if we have to wait indefinitely on the response of the promisee; we want the contract concluded quickly and not left indefinitely open and suspended.

1100. At the same time, however, the promiser, by the very fact of his promise, obligates himself to allow some reasonable time for its acceptance. Civil laws generally define this time.(263)

1101. This shows that in the opinion of civil legislators even a person's simple act transfers the right,that is, the right to acceptance of the promise, to another person.(264)

1102. We cannot object that acceptance is simply a lawful action, not the exercise of a right. If this were the case, anyone who withdrew a promise before the promisee could reply would not offend the promisee, which is contrary to the supposition of all civil laws.

1103. The irrefutable proof that offence has really been given is in human nature. If human nature has been seriously promised something it desires (a good), it naturally feels upset when the promise is suddenly withdrawn before its acceptance could be expressed. A disturbed feeling like this is the indubitable characteristic of harm; it shows that the moral law, the foundation of right, has been transgressed: `Do not upset human nature by taking from it the good it had naturally appropriated to itself.'

1104. We must note that certain contracts remain simple promises until they are executed, that is, until one or both of the parties carries out the actual consignment of the thing. This happens when the object of a contract is not sufficiently determined; the contract concerns only the obligation to determine the object. The contract is made solely by a promise, not by a transmission of ownership, because ownership of an undetermined object cannot be transmitted.

1105. The three contracts of exchange, sale and loan will serve as examples. In exchange the objects to be exchanged are determined. Thus, once the contract is made the ownership of the two objects is reciprocally transmitted and exchanged.

1106. This is not true for a sale's contract. On the one hand, the object to be sold and bought is determined in this contract; on the other, only the price is determined. The fixed price is not a materially determined object; it is simply an ideal being which determines in a particular way the measure of another real being (money), but not the real being still to be determined by the buyer. As long as the money is not present, the contract is a promise which means (for the seller): `I bind myself to transfer to you the ownership of this object on the condition that you determine the quantity of money (whatever it is) to be given me in exchange'. For the buyer it means: `I bind myself to determine the quantity of money and to give it to you in exchange for the object you are selling me.' The object of the contract is therefore, clearly determined for one of the parties; for the other there is no determined object, because the object is replaced by a promise to determine it. Hence, while this situation obtains, the ownership of both objects is not exchanged; only the promise of their exchange is given, and without the determination of the object its ownership cannot be given to another.

1107. It is the same for a contract for a loan. In buying and selling, as we have seen, the object is determinate only for the seller and remains undetermined for the buyer, as long as the latter does not present the money for the desired purchase. Similarly, in a loan the borrower merely promises to restore an equal value. He is simply making a promise to transmit to the lender the ownership of an object at the moment of repaying the loan.

In contracts of this kind, therefore, rational Right requires that ownership be transmitted by the material consignment of the thing, or at least by its determination. Consequently, in contracts of exchange, ownership is transmitted at the moment the exchange is made.

1108. I call these contracts promissory to distinguish them both from contracts in which ownership is transmitted and from simple or gratuitous promises.

1109. We have seen that a simple promise, even though accepted, gives only the right to the promised action, not to ownership. But if the promiser has determined no time, he cannot be forced to determine it. His promise is gratuitous and unilateral, and therefore must be considered as a free gift which does not give the other the right to ask for its execution at a stated time, unless the time of execution is contained in and forms part of the promise itself.

1110. But this is not the case with promissory contracts, in which both parties bind themselves and undertake to lend something with a view to some advantage. Here, each contracting party has acquired a right to the benefit which necessarily comes to him from the execution of the contract; each can therefore claim it as his own. Hence, if the time for the execution was not agreed in the contract itself, one party can require from the other that the execution take place as soon as possible.

1111. Furthermore, some codes consider the promise of this kind of contract as the contract itself. Because the contract is a promise, and a promise which requires immediate execution, the difference is more of words than of things in the following two ways: `I promise to sell' and `I sell.(265)

1112. In order to be jurally effective, the consent by which contracts are formed must:
1. concern a thing capable of being the matter of a contract;
2. be given by persons jurally able to give it;
3. not be produced by an injustice of one contracting party to the other;
4. be expressed in such a way that it must and can be considered a true, certain consent.

1113. In order to be the matter of a contract, a thing must be alienable, and if it is by nature alienable, alienation must be possible.

1114. The following are inalienable:
a) divine things (any attempt to make them otherwise is the sin of simony)
b) rights which are simultaneously duties and concern truth, virtue and happiness (cf. 52, 89-93).(266)

1115. Hence, no action that is substantially and without exception evil can be the object of a contract.(267)

1116. However, if the thing or action alienated by someone is of its nature alienable and honest, the contract would be valid even if the circumstances of the alienation were forbidden by the moral law. The contract is rendered invalid not by the wickedness of the action of the contract (provided the contract is just) but by the wickedness of the object or matter of the contract. Thus, anyone who has sold some books must consign them to the purchaser who has paid, even though by the sale he has failed in his duty to his children who need the books for their education. Although the sale was morally unlawful, the object (the books) is alienable, honest matter. Hence, after the sale it is still lawful and obligatory to consign them to the purchaser. To give another what is his is both lawful and obligatory.

1117. Furthermore, according to Right the purchaser cannot be obliged to give up the books after the completion of the contract, just as he cannot be jurally obliged to give an alms. Even if he knew for certain that the seller was failing in his moral duty by selling the books, it could not be said that in buying them he sins against moral-jural duty in such a way that he is obliged to restitution. When a contract is made by the two different acts of alienation and appropriation, appropriation is always just (although not always lawful) when it follows alienation; the acquirer appropriates things left free by their owner. The moral law is therefore violated, but not the jural law which imposes respect for another's ownership.

1118. Alienation of the thing that forms the object of the contract must be possible in addition to its being alienable by nature (cf. 1113). According to Zeiller, alienation or loan of the object of a contract

1119. No one can give valid consent unless he is able to use his understanding and free will. Those incapable of perceiving the thing to which they must assent either through lack of intellective development, or through mental alienation, drunkenness or any other accidental mental state, are incapable of consent.

1120. According to rational Right, those who do not see the proximate consequences of their consent are incapable of consent, although they need not see the remote consequences nor understand everything virtually contained in the obligation they assume.(270)

1121. Consequently, some are capable of giving their consent in simple matters but not in more complex matters, where it is more difficult to conceive the nature of the contract and even its proximate consequences. Generally speaking, civil legislation requires a lower age for giving valid assent when accepting benefices than when contracting obligations.

1122. Those who cannot express their consent clearly are also incapable.

1123. If, in order to conclude a contract, one person's will depends on another's, the jural freedom necessary for the contract is lacking in the first, when consent is not given by the second on whom the first depends.

1124. If the action of the contract is unjust towards the person with whom it is made, it is clear that it cannot produce a right against that person.

1125. Hpfner, together with Zeiller,(271) Grotius(272) and Bodin,(273) restricts the injustice which renders contracts invalid to these limits.

1126. But many distinctions are necessary:

1. If the contract itself is an injustice, it obviously cannot be binding.
2. Similarly, if injustice was the cause of a harmful, unwanted contract to the party who has suffered the injustice, this party must at least be compensated and satisfaction made, although the contract is just in itself.
3. Injustice which was neither in the contract nor in its efficient cause, but was the cause of its execution, is an evil which does not render the contract invalid.
4. Injustices which are only accidental and inessential to the contract require restitution and satisfaction for damages, but do not nullify the contract.
5. If there was some accidental injustice in the contract against a third party but not against the contracting parties, no. 4 applies.
6. If the act of contract was just but immoral, a similar distinction would have to be made:

Immorality affecting the acts of alienation and appropriation which are present in every contract annuls the contract. Accidental immorality does not nullify a contract which is substantially upright, but, like all immorality, produces an obligation to expiate the fault.(274)

1127. Violence and fear can be great enough to remove the use of intelligence and free will, and thus render the person incapable of giving valid consent to a contract for lack of the second condition I have given (cf. 1119).

1128. Violence and fear, when insufficient to remove intelligence and free will, are nevertheless unjust and require reparation. If the injustice becomes the cause of a contract by extorting consent, it can certainly make the contract invalid. This happens whenever someone is induced to make a contract in order to avoid the greater evil unjustly threatened by the person wanting the contract, even though the contract is in itself upright.

1129. We must note in the above case that the contract is not invalid because the person making it is induced to do so through fear of an evil, but because 1. the evil is unjust and 2. it is threatened by the contracting party to force the conclusion of the contract. On the other hand, the consent is valid if a person is induced to make a contract in order to escape an evil evidently caused by accidents independent of human beings, or justly dependent on human beings, or unjustly dependent on a third party not involved in the contract.

1130. He has only the right to restitution by the third party who caused the fear and thus forced him to make the harmful contract.

1131. The fear in each case however must not be panic nor be such that the person could have easily escaped it.

1132. Fear, even though not strong enough to prevent reflection, can render a contract invalid. Nevertheless, in this case it must be such that the person must have reasonably let himself be moved by it to make the contract.

1133. Fear is always of this kind whenever it arises from the threat of a definite future evil if the contract is not concluded, and of harm greater than that inherent in the contract, whether this harm is real or a sacrificed affection, which also has value.

1134. If the feared evil, however, is not certain, it must be calculated according to its degree of probability, and the resultant evil must be such that the conclusion of the contract is rendered less obnoxious than its omission.

1135. Anyone who abuses the weakness of a credulous person or of a person subject to fear acts unjustly.(275)

1136. If however this kind of contract can no longer be cancelled, the restitution must be equal to the total of the real harm, the value of the sacrificed affection and the evil caused by the fear.

1137. It may be objected: `Surely the promise to give a murderer a sum of money, or any contract imposed under threat of death, removes the duty of truthfulness which your words must have? A person who has not lost the use of reason is always free; he can refuse to promise, and be ready to die instead.' (276)
If veracity is the point at issue, I refer to my earlier opinion that an unjust person who seriously misuses words for the sake of harming others has lost the right to their use because words no longer mean anything to him (cf. 106-112). Properly speaking, however, it is not a question of truthfulness: the validity of a promise is not founded in the moral law requiring us to speak the truth, but in the internal act manifested externally of the transmission of what is possessed. In our case the internal act can be missing. Thus the murderer, a human being endowed with reason (without reason he would not be capable of rights), knows or should know that the promise or external contract is not the expression of an internal will, but simply a means of avoiding a greater evil.

1138. Even if we suppose that the internal act of transmission of ownership has taken place, the right to restitution of the equivalent value of what has been lost always remains along with the value of the affection for it, the usefulness and enjoyment corresponding to the time of its absence, the cost of the evil of the fear inflicted. All this is due, over and above the satisfaction required for the harm done.

1139. If this kind of just restitution is denied me, I can, according to rational Right, obtain it myself with the use of force, as I can every other right.

1140. What has been said about unjust fear applies equally if a false hope of gain is used to make me accept a contract.

1141. But if the hope enkindled in my spirit originated solely from my irresponsibility or waywardness for example, the hope was unjust or an unjust gain was promised me I no longer have any right to claim that the contract is invalid.

1142. Nor has the person who deceived me acquired a right to any utility resulting from such a contract. Each of us must expiate his own fault.

1143. However, relative to me the hope may be unavoidable, that is, invincible; in particular a falsely promised good may be honest and such that it renders the contract a good and even reasonably necessary undertaking for the person making it. In this case the deception concerns either the object of the contract or its consequences.

1144. If a mistake was made about the object of the contract because the object appeared substantially different, the contract is null for lack of consent - the consent referred to another object.

1145. If the deception concerns only some accessory quality of the object of the contract, it does not render the contract invalid but simply gives a right to restitution for the damage done.

1146. If however the hoped-for gain, engendered by false, deceptive information, concerns the promised consequences, it is my belief, contrary to the opinion of other authors,(277) that the contract is invalid. It is clearly reasonable for me to make a contract which will bring me great gain and save me great loss. Hence, the person who offers this kind of motive to a reasoning being is the efficient cause of that being's action and, if the motive is deceptively false, of any harm to him.

1147. False hope is a cause similar to that of an unjust threat of harm. Such causes, although not mechanical, have a near infallible effect on reasoning beings and are therefore equal causes of harm. Thus, stock-jobbers who disseminate false news, or dealers who falsely put it about that a certain food product or merchandise is in abundant supply so that the price will drop when they want to buy, or is very scarce when they want to sell, must be considered as real robbers of the possessions of others and are bound by the obligation of restitution.

1148. Some codes require that a contract, to be valid, must be seen to have a just, upright cause precisely because knowledge of the contract's cause can indicate whether deception is present or not.(278)

1149. Reciprocal consent which renders a contract valid must be seen as true and certain. It must therefore appear as internal, serious, determined, free from error and intelligible.

1150. I say it must be seen to have these qualities because the cause of the right acquired by the parties through the contract must be something externally visible, not internal in the spirit; what happens in the spirit is hidden and cannot constitute any title to right.

1151. Anyone who pretends to give consent without doing so is certainly aware of not giving it. For this reason some philosophers believed that although the person sinned by lying, the lie did not impose a jural obligation to execute the contract.

1152. In my opinion they are mistaken, as the following argument demonstrates. No one can acquire a right through a contract without the aid of an external sign manifesting the mind of the other contracting party. An external sign, therefore, whose meaning cannot be doubted, is the sole possible title to the acquisition of rights by transmission. Thus, if one party undoubtedly acquires a right by such a sign, the other party contracts the jural obligation corresponding to this right. This proof seems clear to me. The only exception is when through our own fault we lose the right to the truth of language.(279) This happens, as we have said, when one person forces another to use words in such a way that the latter can be despoiled of his possessions (cf. 1137, 1142). The unjust assailant must know, as a reasoning human being, that the words he forces from the other are not words, because by his wrongful action he has lost the right that they s hould be such for him.(280)

1153. The requirements for the validity of a contract, therefore, must be external, and when external indications give no reason for doubt, internal consent must be supposed. The contracting parties are obliged to give this internal consent when they express it externally. If they do not give it at the moment of agreement, they have a jural duty to add it later, or at least a duty such that the withholder of consent loses any right given by the law of ownership. He may still have ownership, but he has lost the right of ownership (cf. 922-923).

1154. Hence it is clear that the consent must be expressed seriously:

1155. The consent must also be precise. Thus, if it was not known which object was meant, or if each party gave consent for a different object, the execution of the contract would be impossible.

1156. The same applies in the case of substantial error about the object where I think I am contracting for one thing but am actually contracting for another.

1157. If my mistake concerns only the motive for making the contract but not its object, the contract is valid, provided the harm done to me is not the result of the other party's deception, and provided the motive for the contract is not an essential condition of the contract itself.(283)

1158. Finally, the consent must be clear.

1159. This clarity relates either to the parties or to the judge who must adjudicate their disputes.

1160. It could happen that the parties clearly understand each other, although the contract itself is unclear, equivocal and false. In this case, they are morally and jurally obliged to the contract.

1161. If one party has understood one thing, and the other, something else, the party who has understood the spirit and letter of the contract has the advantage, and can presume that the other is not acting sincerely. But if the circumstances and the known honesty of one party persuade the other that the first is in inculpable doubt, the other must retract and the contract be considered as null.

1162. Whenever one party reasonably doubts the other's sincerity in understanding the contract, the former can have recourse to a judge.

1163. The same applies when both parties are uncertain about the other's rectitude, or if neither wants the contract annulled, although both are aware that in its expression and thought it lacks clarity and precision. In these cases they can either agree among themselves or seek the opinion of the competent judge or tribunal.(284)

1164. If the judge or competent tribunal finds the contract unintelligible and vitiated, they can declare it void and assume the office of mediator in drawing up a new contract, provided the parties agree. Alternatively, they could find that the contract needs to be submitted to interpretation, in which case they could interpret it, using the rules of hermeneutics.

1165. This interpretation or clarification is made when the contract can be understood in its substantial part. As regards the other parts, it will be sufficient for the judge to give the most probable interpretation, which is often reduced to an equitable transaction.

1166. The rules for the interpretation of contracts according to rational Right will certainly be the same as those determined by Roman wisdom and fully accepted by modern legislators.(285) They are in fact precisely logical rules, and pertain therefore to the logic of Right and of morality.(286)

1167. The aim of the interpretation is to know the intention of the contracting parties.(287)

1168. The following rules are helpful for this purpose:
1. The sense given by the whole act must guide the understanding of both parties to the contract.(288)

1169. A contract therefore must be interpreted in such a way that
a) the parts and clauses of the act contain no contradiction;
b) the contract has effect.(289)

1170. 2. If this is insufficient, recourse must be had to the region and time when the contract was stipulated.(290)

1171. According to this usage therefore:
a) ambiguous clauses or those with double meaning must be interpreted;
b) unexpressed clauses must be understood.(291)

1172. 3. If doubt still remains, we must require the obligation to be proved; as long as the obligation remains doubtful, it does not exist.(292)

1173. Hence, in unilateral contracts, the person supposedly has the desire to accept the lighter rather than the heavier burden.

1174. 4. In bilateral contracts, where the burden cannot be reduced for one party without increasing it for the other, reason requires that ambiguous expressions be interpreted against the one who used them.(293)

1175. Finally, an obligation can also be tacitly contracted by positing a fact which reasonably indicates consent. For example, the person who uses a hired vehicle must pay for it without any previous agreement; the fact proves that he has the intention either to pay or to abuse the other's possession.

1176. On the other hand, a jural obligation is not contracted by silence without external facts, unless the person remaining silent has the jural obligation to speak and his silence is the cause of harm.(294)

1177. Obligations arising from contracts cease with:
1. the execution of what is agreed in the contract;
2. the acquisition of the creditor's right;
3. the impossibility of executing the contract;
4. the non-verification of the condition applied to the contract;
5. a new contract or reciprocal agreement;
6. the fault of one of the parties, so that the other party is freed from the obligation undertaken.

1178. The execution of what is agreed is carried out by;
a) consigning to the creditor what is owed him at the time and in the place and manner agreed;
b) consigning to him an equivalent with which he must be reasonably content, as if he were being paid an equal debt (compensation);

1179. The acquisition of the creditor's right by the debtor takes place by:
a) the tacit or expressed remission of the obligation by the creditor;
b) any other means of acquiring ownership; for example, by buying the useful dominion of a field owned by direct dominion, by inheritance and so forth (the intermingling of credit and debt in the same person).

1180. The impossibility of the execution of the contract arises from
a) the loss and destruction of what is agreed;
b) a greater force preventing the execution of what has been undertaken;
c) oblivion of the agreements, doubts arising about the existence of the contract, or long-lasting mutual negligence to execute it (prescription, antiquation).

1181. We must note however that if one of the parties is the culpable cause of the impossibility of the contract, they are held to make good the harm to the other party.

1182. The same applies if one party has used unlawful influence to obstruct the verification of a condition present in the contract, intending to annul the contract, with consequent harm to the other party.

1183. The new agreement between the parties which terminates the obligation of the previous contract is made by:
a) altering the intrinsic, essential agreements of the contracts, which is the same as nullifying the previous contract, and forming a new one (novation);
b) rescinding the contract by agreement without substituting another (restitution);
c) substituting another debtor for the first, who is freed from his debt (substitution).

1184. Moreover, the creditor can alienate his right without consulting the debtor. In this case, the debtor's obligation to the creditor ceases, but continues towards the person to whom the right was conceded.(295)

1185. Equity must sometimes be applied in the fulfilment of obligations arising from contracts. We must therefore say something about this difficult and controversial matter.

1186. Authors are uncertain whether to place equity among acts of strict justice or among the virtues of beneficence.(296)

1187. `Equality', the original meaning of `equity', is a cause of this uncertainty of opinion. Because `equality' can be and is applied to both physical and moral matters,(297) we are left uncertain about which it applies to.

1188. Thus, when it refers to moral things, it sometimes expresses evenness of spirit,(298) and sometimes the balance between giving and receiving as practised by human beings.(299)

1189. In this last sense `equity' is a part of strict justice, which usually consists in equality between giving and having.(300)

1190. But even in this last sense it sometimes means a softening of strict justice, that is, when strict justice is no totally in harmony with equality in giving and having, but rather falls away somewhat from equality.(301)

1191. There is therefore a way of acting called strict justice, which brings about equality, and another way, also called strict justice, which does not bring about equality. Hence, equity is needed to restore the balance.(302)

1192. Properly speaking, this is the meaning we give to the word `equity', understood as a virtue completing justice.

1193. However, before discussing this concept further, we must identify all those other functions of moral reason which resemble equity and can be easily confused with it.

1194. The first is the interpretation of positive laws. This interpretation has its own rules for enabling us to know the legislator's mind in obscure cases.

1195. The second function is called in Greek epikeia.(303) This is the faculty enabling us to know those natural exceptions in which the law loses its obligating force. The legislator could not have foreseen these cases, and their scrupulous observance would harm their purpose - keeping the law would be entirely unjust or immoral or harmful to public good. Alternatively, its observance would certainly be a greater burden than that intended by the legislator for his subjects, so that if the legislator were present, he himself would dispense from it.

1196. A third function of moral reason is related to the art of applying positive laws to particular actions. It becomes effective when the obscurity of the law cannot be clarified in any way by the rules of interpretation. In this case the obligating force of the law has to be determined in another way, that is, by the so-called rules of conscience (formation of conscience).

1197. The equity we are discussing is not involved in these three functions (interpretation, epikeia, conscience). On the other hand, because they concern the art of applying positive laws, they pertain, properly speaking, only in part to the rational Right under discussion.

1198. Equity, taken in the sense we give it, manifests its exigency in contracts.

1199. Agreements and pacts, by which contracts are formed, are a kind of private positive law mutually imposed on the contracting parties,(304) and accepted by them.

1200. Hence, moral reason also exercises the three functions in the matter of contracts: interpretation (cf. 1166-1176), for discerning the intention of the contracting parties; epikeia, for rectifying badly expressed clauses which, understood to the letter, would destroy the effect of the contract;(305) finally, conscience, for determining the obligating force of these clauses when the clear, certain meaning cannot be completely determined. I repeat (cf. 1194), however, this is not the equity we seek in contracts.

1201. Such equity is precisely what the Roman legislators acknowledged as necessary when they divided contracts into two classes: those called `in strict right', and those called `in good faith'.(306)

1202. Because this division truly pertains to rational Right, we must demonstrate its basis and nature.

1203. As we have said, agreements and pacts are positive laws which the contracting parties impose on themselves (cf. 1199). But rational laws, to which all legislators and their laws are subject, exist prior to all positive laws. Private legislators, that is, parties to a contract, must therefore draw up pacts and contracts which, if they are to be binding, must not offend rational laws. Thus, obligations resulting from contracts must be judged according to two codes, as it were: a code of rational laws which pre-exist contracts and to which contracts must conform, and a code of positive laws, that is, of agreements made by external signs between the contracting parties.(307)

A contract can conflict in two ways with the laws of the first code of jural reason to which agreements must conform: the contract is vitiated either in its very formation or because of new circumstances arising at the time of its execution in accordance with its terms.

A contract may be vitiated in its very formation because its cause is immoral, or because the agreed pacts are damaged by deceit and bad faith, or finally because its effects are harmful to the right of third parties. In these cases the contract is null, according to rational Right, and a referee or judge must declare its rescission.

Although a contract may be formed on a sound basis, unforeseen accidents can be such that its execution would be impossible without harm to the rational laws which govern just contracts. In these circumstances two cases could occur: 1. the execution does not allow emendation; for example, if the object of the contract had become immoral without the parties' fault. In this case the contract is dissolved and the parties' obligation ceases, apart from restitution if one party had already fulfilled its obligation and the other had not. 2. The execution of the contract is emendable and, by means of non-substantial modification, can be reclassed within the laws of justice. It is these modifications, made to contracts of this kind, that are precisely the object of the EQUITY we are discussing and are the task of a tribunal called to judge de bono et aequo [what is good and fair], as the law says.

1204. This is indeed what the Romans, the wisest legislators of pagan antiquity, understood when they expressed the first rule for judges in the fine words: `In all things the ruling principle of justice and equity is more desirable than that of strict right.' (308)

1205. In my opinion, therefore, equity, strictly understood, has its seat in the execution of contracts. It is that `function of the moral-jural reason which modifies their execution in such a way that, while this may depart noticeably from what has been agreed, it draws nearer to the law of rational justice to which all contracts must be subject.'

1206. The distinction I have made (cf. 921 ss.) between ownership and the right of ownership should make this definition clearer.

1207. In fact some authors would totally exclude equity from right; they see equity as releasing human beings from the word they have given in agreements. They say that we are all masters of our rights and that from the moment we transmit them to another by contract, the rights are alienated and our word can no longer be revoked.

1208. Their mistake lies in beginning from the concept of ownership rather than from the concept of the right of ownership. As we have already observed, ownership is something absolute and entirely restricted to the owner; it is totally unrelated to any other form of life, even any other intelligent life, outside the owner. If all this perishes, the owner is not disturbed, nor need he know of the destruction. Ownership is indeed natural but it is not right of ownership; moral reason has not yet spoken in all this, and right is a statement of moral reason. Moral reason limits bare ownership and even compels an owner to renounce part of it so that what he has left may be raised to the sublime dignity of right, and be as it were consecrated. The truth of this will become clearer as we continue to clarify the proposed concept of equity.

1209. We have said that `equity modifies the execution of contracts when, because of some accident, their strict execution would deviate from natural justice and, more properly speaking, from commutative justice, as I should have said.'

We need therefore to investigate when this takes place, to indicate what this commutative justice requires and the law it imposes on contracts, and finally to give a definite rule telling us in which contracts and cases equity can and must intervene.

1210. In speaking of commutative justice I have already indicated the contracts in which equity is seen to be necessary. Donations and, in general, gratuitous contracts do not properly speaking pertain to commutative justice(309) which presupposes a kind of equality (cf. 1189) between giving and possessing. Donations are not measured or equated against any debt but solely against benevolence and liberality, which are freely-chosen and therefore not susceptible of any assignable measure, except that of the donor's large-heartedness represented in the gift itself.
There is no law of natural justice therefore that can modify the execution of a contract of donation which, if unconditioned, is also irrevocable by nature.

1211. Hence, although according to the spirit of Roman legislation gratuitous contracts were considered `of strict right', nevertheless Justinian placed among actions `of good faith', which they certainly are, all actions `dealing with something of value' and any action which `comes about through exchange'.(310)
We see therefore how the law of equality between giving and possessing in commutative contracts is that which forms the natural justice of these contracts. Agreements cannot alter such contracts without changing their nature from being onerous to partly gratuitous. We see how equity must be applied to restore and strengthen the lost balance whenever equality is upset by some accident independent of the acts of the contracting parties.

1212. Sales contracts are the commonest of commutative contracts. Our discussion therefore will proceed more clearly if we consider the nature of this kind of contract rather than the nature of a commutative contract.
A sales contract presupposes and requires equality between what is given and what is received, between the thing sold and its price. When this equality is present, the price of the thing is said to be just.

1213. The intention of the two contracting parties is as follows: the purchasing party does not wish to pay more than the thing is worth; the party who is selling does not intend to consign it for a price less than its value. Neither of them has the intention of donating what he has; they intend to give the least they can. But if one tries to give the other the lowest price he can, he is not asking the vendor to give him a part of the thing as a gift; he is simply trying to persuade the vendor that the thing is not worth more than he is offering. Similarly, the other party tries to persuade the buyer that the thing on sale is worth more than the buyer estimates but he is not in any way asking him to pay more than the thing is worth, which would be futile and irrelevant.
All discussion between the parties is therefore an attempt to establish a just price, and their differences consist solely in this: one is trying to show the other that the just price is more than the other is offering; the other is persuaded that the just price is lower than that asked by the first.

1214. Finally both parties agree on the just price, having attained it gradually or `worked round it' (if we prefer the Roman law expression). The party with the greater advantage is the one who has succeeded in persuading the other to accept his estimation of the just price. Because no norm exists for establishing the just price for the thing, both parties are able to range between two extreme, just prices. Within this range they finally find a price they agree to, a price which can vary between the lowest and highest. The decent, limited gain obtained by one of the parties depends on the degree of advantage obtained in the sale.

1215. It is true that some deny the existence of a just price, because, in their opinion, a just price cannot be rigorously determined.

1216. But the inability to determine rigorously a just price simply shows that the just price oscillates between two extremes, outside of which we can certainly declare the price is unjust.

1217. A just price results necessarily from various elements, some of which however can be eliminated by particular circumstances.

1218. These elements are:
1. the quantity of goods being traded in a particular city, province or region where commerce is pursued;
2. the quantity of money in circulation;
3. the desire for goods, which in varying degrees will be stronger than the affection for money. This desire for goods is principally produced in our spirit by natural needs and by needs which the goods themselves generate.

1219. It may be objected: `How can we deduce a price from such complex elements?'
But every day we see in the press the average price of certain foods. This demonstrates the common belief that such a price can be known.

1220. It is in fact buying and selling that reveals this price. The would-be buyer tries to acquire merchandise for the least possible price, as we said; the vendor, on the other hand, tries to push the price as high as possible. It is this bargaining which produces the just, that is, the current price of the merchandise. A vendor acts carefully to draw buyers to himself and away from others, and is thus induced to lower the price of his goods so that other vendors cannot undercut him.

Vendors therefore by reducing their prices compete for customers. The reduction however finally reaches a limit (we ignore for the moment another limit determined by the price which the trader himself paid for the goods) determined by a relationship of equality between the saleable quantity of goods and the quantity of desire purchasers have for it.

1221. Let me explain. The quantity of goods is balanced against the quantity of the purchasers desire in the measure that the price is determined. Obviously, great desire is not compatible with buying at a low price. Generally speaking therefore the price is reduced to the level where the desire of the buyers embraces all the merchandise on sale or at least all that can fully satisfy their desire; anything over and above, if there is any, has no value whatsoever. The vendors have no reason for reducing the price below this limit because, once this price is arrived at, they are able to sell all their saleable merchandise. But they must all arrive at this amount; if one of them wanted to keep a higher price, he would alienate the buyers and be left with his goods unsold.(311) Thus a uniform price emerges, called the current price, which is the just price.
All purchases and sales below and above this price are exceptions which, like the smallest parts of a whole, are swallowed up in the multiplicity of transactions.

1222. It is true that, granted equality between the quantity of saleable goods and the quantity of the purchasers' desires, the current price can fluctuate at different times and places. This would depend on the quantity of money in circulation. But this simply means that the current price varies at different times and places. The current price at a particular time and place is always the just price.

1223. Such is the theory of price relative to our discussion. Let us now look at two special cases of the theory where the price is exceptionally high.
In the case of necessary goods, an exceptionally high price can be caused 1. by the shortage of goods, and 2. by the shortage of vendors.

1224. Purchasers' desires are not in fact all freely chosen; some are founded on needs of varying intensity. The most intense and unavoidable needs of all are those connected with existence. We will therefore consider these alone: the arguments advanced concerning the extreme need of existence can be equally applied, with due proportion, to the alterations in price produced by other needs.

1225. If basic goods are scarce, their price must obviously increase and be fixed by buyers who have more money. People who have more money draw necessary goods to themselves and thus deny them to others with less money; the rich give as much as is necessary for securing the goods.

1226. In these cases the price of necessary goods can increase until the total quantity of saleable goods is equal to the total quantity of existing money or anything else making up the price. In difficult times the price is fixed by the relationship between the quantity of necessary goods and the quantity of things exchangeable for the goods. Thus, if the head of a donkey was sold in the famine of Samaria for about 80 shekals per head, we could deduce solely from this amount the total quantity of remaining food, granted we knew the total quantity of wealth in the city.

1227. The exceptional increase in price which results from the scarcity of goods also takes place whenever dealers have no opportunity to compete in reducing the price.

1228. This happens whenever dealers are few in number and form a cartel themselves, or when a single dealer controls all the goods; he can do this either because he is in fact the sole owner of all the goods of a region, or has created a monopoly by cornering the market. In these cases, the buyers who need the goods have to pay the dealers' price which is determined solely by necessity (which cannot be satisfied in any other way) and by the wealth of the purchasers. It bears no relationship to the quantity of goods, because circumstances exclude this relationship.

1229. It would be impossible to demonstrate, in the light of rational Right, that this last case (in which all necessary goods are held by one dealer) is contrary to justice, unless the monopoly or some other action depended upon fraud or violence.

1230. The owner of these goods would, of course, be free to impose whatever price he wished, and could do so entirely free from control by the laws of commutative justice, which could not be applied.

1231. However, if the owner's capricious refusal to sell necessary goods meant that people would die of hunger, he would certainly be exceeding the limits of his right of ownership (cf. 921-957).

1232. Again, if he raised the price of the goods so high that it exceeded the balance between all the goods and all the existing wealth, he would exceed the limits of his right, because a quantity of useless, unsold merchandise would be left.

1233. In the third place, if the price increase did not reach this balance but was high enough to leave some goods unsold because few people had sufficient resources to buy them, he would again exceed the limit of his right of ownership.

1234. But if the imposed price, although very high, were such that sufficient buyers were available to purchase the entire quantity of goods at that price, he would not exceed the limits of his right of ownership, because all the goods would serve the advantage of his fellow human beings.

1235. Poor people and those with limited resources would only have the same right of sharing in the goods as a person in danger of death through starvation.

1236. Moreover, the law of humanity and of charity would oblige a dealer not to sell the rich more than they needed. In this way, goods necessary for the existence of other human beings would not be uselessly removed either by excessive consumption on the part of the rich or by an excessive fear of future needs which could persuade the rich to lay up a superfluous quantity of goods. The injury to right resulting from this failure to care for humanity would depend more on the rich who had removed goods necessary for others but superfluous to their own needs.

1237. We may now consider the case of someone like Joseph in Egypt who owned all food supplies, and used his position to acquire the wealth of his compatriots, and seigniory over them after they had handed over all they possessed. In our hypothesis however no one has died; food has been provided in exchange for what the people possessed, or given freely to those who had no means of payment. According to the laws of simple rational rights, no injustice would be done in such a case.(312) However, there would soon be almost no occasion for the application of the rules of commutative justice. As I said, relationships between such an owner and his fellows would shortly have to be regulated by humanity and benevolence on his part, and submission and gratitude on theirs. All this must equally be applied in the case of extreme famine when the price of food exceeds all limits of normal trading.

1238. We must therefore acknowledge a just, ordinary price for goods and an exceptional price which also is just, because both result from the same laws which control how the price is determined.

1239. Moreover, it sometimes happens that a common price cannot be determined because of the extreme mobility of the elements causing it, for example, objects of fashion. Here, the desires of purchasers are an unstable element to which laws cannot be applied in practice.

1240. For this reason legislators do not acknowledge any claim arising from injury in the case of buying and selling of chattels,(313) but do acknowledge as just the price current at the time of the sale, or rather, any price whatsoever agreed by the contracting parties in the sale.

1241. If we encounter difficulty in determining the approximate just price of something, we will certainly have greater difficulty in determining the price for a limited period of time, for example, for a particular month, day and hour.

1242. The reason is that the number of sellers and buyers is reduced in proportion to the limitation of time: there are obviously more buyers and sellers in a year than in a month or a day or an hour. As we have seen, reduction in the number of contracting parties leaves the price more undetermined and open to fluctuation (cf. 1223). Hence, anyone forced to sell at a particular time is the most disadvantaged, because he generally has to accept the level determined by the few buyers available within that short time. Similarly anyone who has to buy at a particular time is disadvantaged; he has to submit to the level established by the few sellers with whom he has to deal.

1243. However, according to commutative justice, we cannot say that a person does wrong either by buying at a low price from someone who has to sell, or by selling at a high price to the person who at that moment must buy. In these circumstances, a price either much higher or lower than the normal price is determined by the same general elements and causes which determine the price of things in all other circumstances. Cases of this kind therefore must be regulated more by the laws of human kindness than by those of justice.

1244. Hence, civil laws exclude the right of injury in the case of sales by public auction, but allow it in the case of private sales arising from the great needs of sellers and buyers.(314)

1245. Sales by auction and (in case of urgent need) private sales take place at a determined time. The only difference between them is that in a public auction, the desires of all the buyers are publicly expressed at the place of auction at a stated time; this is not so in the case of private purchases and sales at a time of urgency. Thus, the price determined by competing buyers at the time of an auction is considered just, even if the goods could be sold at more than double the price at another time. On the other hand, if a price in a private sale is excessively low, an obvious injury is done because it is not known whether it was determined by all the buyers available at the time, or rather by the greed of one of them, who by his purchase profited from the simplicity or shame of the needy, or sold and profited from the buyer's simplicity or desire or urgent need.(315)

1246. If we take all these circumstance into consideration, we can form according to commutative justice the concept of just price. These circumstances can greatly change this price but its determination always depends on the same principles and elements.

1247. The concept of a sales contract and of all commutative contracts in general can be based on this price once it is determined.

1248. We said earlier that neither contracting party intends to give anything of his own to the other. Their intention, will and understanding is to exchange money for goods according to equality of values, or to exchange goods for the just price. Thus, when one of them eludes the will of the other and sells at a higher price or else buys at a lower price than the just price, commutative justice is injured.

1249. Nor can it be objected that the agreement is entered into willingly. On the contrary, the will of the one who suffers the injury is truly deceived; if he knew he could have sold at a higher price, he would have done so because there was no wish to donate anything. From what we have said, we see how the excess above the just price comes about: one of the parties has the chance of a better bargain because of the competition possible at the time, but he is made to accept (or does so, because he is foolish or deceived) a worst bargain. He does this either by selling to someone who offers too little or by buying from someone who demands too much compared with the price which the wills of the other buyers would have determined.

1250. Hence, legalists correctly apply to cases of injury the dictum: `Consent given to someone mistaken or deceived is null and void', and Roman laws call the injury `fraud in the act itself'. Even if no pretence has been used to conclude such a contract, its very acceptance is a kind of deception and fraud.(316) Thus, the same Roman laws very aptly say: `By a law of nature no one can justly become richer to the detriment and harm of another.' (317)

1251. We had to deal with these teachings about a just price and injury in contracts so that we could clarify the nature of equity considered as part of commutative justice. Equity is not avoidance of injury but of what positive law calls injustice.

1252. From what has been said therefore we see that equity consists in the just execution of just agreements.

1253. A commutative agreement or contract is just if the agreed price is just. But an unforeseen accident which puts the price beyond just limits can occur between the formation of the contract and its complete execution by both parties.
In the case of an absolute contract, where ownership is transmitted at the moment agreement is made (contracts of exchange are an example), equity is no longer present. Because the contract is finished and what happens afterwards no longer pertains to the contract itself, equity can only suggest the human, moral duty to give some compensation.(318)
In the case of a promissory contract (for example, a sales contract, or any other contract involving money) rational Right teaches that ownership is transmitted solely upon the actual payment of the agreed price. Hence, equity can be involved, in the following way.

1254. The thing sold must be paid for at the just price current when the contract was made. If in the meantime the just price has altered, there would be no occasion for exercising equity, but at most humanity. But equity could be exercised 1. if the means used for calculating the price at the moment of the contract were still valid, but the present value of the article were now known to be different from its earlier value; 2. if the article were to suffer some unforeseen and uncalculated modification which, if foreseen, would have been calculated by both parties as part of the agreement and would have influenced the price; 3. if anything else occurred which would be recognised as having seriously influenced, relative to the value justly put upon the article when the contract was made, the price fixed for the act of execution of the contract. Equity is therefore reduced to acting in such a way that `the article sold really attains the just price that would have been assigned to it at the moment of the sale, if at that moment the article had been known for what it was, or if it had been known that when consigned it would have undergone the modifications that had in fact affected it.'

1255. In this way, the defective and obscure expression of the contract, that is, its form drawn up with insufficient foresight, is emended, and the true, formal and virtual will of the two parties is carried out.

1256. A few examples of what I am saying will clarify the matter. Suppose a house has been sold with all its chattels for an inclusive price. When the moment arrives for the execution of the contract, the seller discovers that some chattels have not been calculated in the price of the house. These articles are so precious that the just price for the house should have been notably higher than the stated price. Equity requires that the buyer renounces the valuable articles or pays for them separately at exactly the just price current when the contract was made, whether the price has increased or decreased in the meantime.

1257. A worker's wages are agreed according to a determined currency. Before payment however this type of currency is no longer valid. Equity requires that his work be paid for in another currency equivalent to the just price at the time of the agreement; otherwise, the thing sold (his work) would remain without its just price because of the unforeseen event.

1258. Excavation work is to be done at a fixed price per cubic metre. The extraordinary hardness of the earth makes the work so slow and difficult that the workmen are unable to earn their living, no matter how hard they apply themselves. The equity of the hirer must supply for this morally difficult situation by paying what an unbiased judge would estimate for the work in the absence of agreed compensation. Otherwise, the quantity of effort and work of one party would not be met by a just price paid by the other.

1259. We are reminded at this point of the contract of chance, and the question is asked: `Is it true, as some maintain, that injury is not possible in a contract of chance?' (319) To answer the question we need only know that the cost of the expectation of an event can on many occasions be calculated much more accurately than the cost of goods sold on the market. This can be verified by knowing exactly the number of events which favour one or other of the parties with equal probability, and the total cost of a favourable chance - the problem is well known in mathematics. In my opinion, therefore, injury can be done even in contracts of chance just as in any other sales contract, and equity can always be present. But I must add a note of warning: the injury can never be judged from the event, and the compensation required by equity does not depend on the event. In both cases restitution has to be obtained by investigating whether the value of the expectation of both parties was accurately calculated at the time of the contract and whether this value was equal for both.

1260. If one of the parties has bought an equal expectation at a higher price than the other party and this fact is known by the party who has the advantage, there is injury. But if both parties are acting in good faith and ignorance, or if the equality of the cost of the expectation was altered by some unforeseen accident taking place after the contract, equity must be applied.

1261. From all this we must conclude that equity, understood in this strict sense, is a part and function of commutative justice. This is precisely how the Romans considered it.(320)

1262. The reason why people doubt this and have a strong inclination to accompany equity with beneficence is the common mistake of thinking that agreements are the only laws governing commutative justice. But the opposite is true: if agreements are laws of justice, and if these laws are to have any value, they must, as we said, be drawn up according to the norm of preceding laws. Thus, equity emends agreements when they were made in good faith and without deceit and in such a way that they could be executed without departing from the primitive laws according to which they had to be made.

Notes

(250) Roman laws show traces of these two ways in many places, for example: `The dominion of things is transferred by CONSIGNMENT and USUCAPTION, not by mere agreements' (Cod., bk. 2, t. 3, 20). Consignment presupposes a contract; usucaption is a kind of abandonment of something owned, and its possession and dominion by another.

(251) To make myself clear, I distinguish natural prescription from usucaption. The title for possession in prescription is presumed; it is considered forgotten in the passage of time. The title for possession in usucaption is not presumed; it is supra-occupancy, that is, the gradual occupancy of a thing by others as little by little the physical bond uniting the thing to the first owner ceases.

(252) Further reading about this first way of transmitting ownership can be found in chapter 4, bk. 2 of Grotius' De T. B. et P. Grotius was a great man, treated very unjustly by the sceptics of the last century.

(253) Cf. SP, bk. 1, c. 4.

(254) Agreements of this kind, invented to settle disputes in the state of nature, were excluded by Hobbes and Spinoza, who consequently posited war as the state of nature. It is clear that if we begin with the definition, `The state of nature is the opposite of every accord and agreement; it is the state in which human beings think only of themselves and of preserving their goods', we have a state of war. That is true, but it is only a question of words: the state of nature is such because that is the sense given to the phrase `state of nature'. But this does not give us the right to propound practical, pernicious teachings as consequences of that arbitrary definition. We need only reply: the consequences are as true as the definition. But the definition is arbitrary. Therefore the consequences are arbitrary and hypothetical. - For the moral-jural obligation human beings have in the state of nature to settle their differences peacefully, se e SP, bk. 1, c. 9.

(255) There are therefore five jural states of human beings. The first four, I have said, are those of the natural state (the opposite of social state); the fifth is the social state. Rational Right (the opposite of positive right) deals successively with all these five stages, expounding the Right of each. The Right of the first stage is natural Right in the strictest sense (the opposite of acquired right (cf. 283)). The Right of the first and second stages is natural Right in a less strict sense (the opposite of agreed right). The Right of the first three stages is natural Right in a wider sense (the opposite of social right). The Right of the fourth stage is the introduction to social Right, that is, the Right of actions which form the passage of human beings from the state of nature to the state of society - I make this part of soc ial Right. Finally, the Right of the fifth jural stage of human beings is rational social Right itself.

(256) Many define contract as: `A pact or agreement made between two or more'. Saying that a contract is a pact or agreement does not seem to define anything but substitutes one word for another; we still need to know what a pact or agreement is. Furthermore, the phrase `between two or more' seems to complicate and confuse the definition unnecessarily. Two persons means jural persons, who can be either individuals or collective. And if we understand that the jural persons making the contract are more than two, it would not be one contract but several contemporaneous contracts. Again, in the definition of a contract in general we should exclude the complicated case of several contracts, which we will discuss later.

(257) Zeiller says: `Consequently, mediate acquisition' (acquisition by contract) `substantially accords with immediate acquisition' (acquisition by occupancy) `and both are grounded in the same principles of Right. - Immediate acquisition is directed to obtaining something which, relative to all, is vacant (free); a declaration or indication is necessary which can be recognised by all. On the other hand, mediate acquisition refers to something declared free solely in respect of the person to whom it was promised and on condition that he is willing to accept it. No one else can appropriate it to himself, and it is sufficient for that person to have revealed his will to the promiser to whom the exclusive right over the thing belongs' (§94).

(258) Zeiller also considers them promises in his Diritto naturale privato, §93. - Cf. Austrian Civil Code, §861.

(259) Positive laws often require the consignment of a thing, before they acknowledge transmission of ownership. Thus, the Austrian civil code, after saying that `the title of mediate acquisition is founded in a contract, etc.' (§424), adds in the following paragraph: `Ownership is not acquired by title alone. With the exception of the cases determined by law, ownership and all real rights in general can be acquired solely by legitimate consignment and acceptance.' This regulation is a necessary consequence of considering all contracts as `accepted promises' (§861). The promise of giving is certainly not actual giving; if the ownership is to be really handed over we need to add `the consignment of a thing'. I do not consider a contract as a promise to give, but as a true jural consignment (a consignment of the right), although the recipient may not enter into possession, and the physical consignment may be lacking. According to me, th e promise present in every contract refers only to this physical consignment.

Furthermore, if we consider the matter carefully, we will see that even in Austrian legislation `the consignment of a thing' is required more as a sign to reveal clearly the intention of the contracting parties (indeed, without a sign of the transmission of ownership, civil law could not acknowledge and sanction it) than as an element intrinsic to the completion of a contract. As proof of this, the laws themselves are satisfied with a declaration of the parties or a symbolic consignment of some thing, in place of a real consignment (§§427-428, 431-440). This is because a declaration or a symbolic consignment clearly reveals the internal act of the contracting parties' will, in which the transmission of the right properly consists. If this were not the case and it were not acknowledged by Austrian civil laws, these laws would not be satisfied with certain signs testifying to the act but unaccompanied by a real consignment of a material thing - a symbolic consign ment or a declaration is not in fact a material consignment. The relevant paragraph in which the declaration of the parties is considered sufficient states: `The consignment of a thing is done by declaration when the alienator manifests in a demonstrable way his will that for the future he will retain the thing in the name of the accepter, or that the accepter can for the future possess by real right the thing which he previously retained without such right' (§428).

(260) In order to explain how a contract is obligatory, Tittel has recourse to `a tacit agreement of the human race, which laid down that a contract must be a symbol of a real translation' (cf. Feder's Schiarimenti al Diritto naturale). This way of explaining the obligation produced by a contract shows that the author did not know the nature of the act of appropriation by which a human being establishes and dissolves the bond between a thing and himself. The nature of this act, in my opinion, has been generally missed by authors. In the second place, ownership does not pass from one person to another by a real consignment of things but by a moral consignment, by which a person dissolves the bond of ownership uniting the thing to himself so that another may establish it. A mere external symbol of the real consignment is, therefore, much less capable of transmitting rights. Finally, recourse to an agreement of the h uman race to explain the obligating force of contracts is a vicious circle because one has recourse to the obligating force of a contract to explain the obligating force of contracts!

(261) The moral act of cession of ownership was called `consent' by Roman laws (Institut., bk. 3, tit. 23). They distinguished between obligations arising from mere consent and obligations coming from a verbal promise, written consent or from the consignment of a thing. Relative to obligations we read: `Obligations in buying, selling, letting, hiring, partnerships and mandates are effected by consent. In these ways the obligation is said to be contracted by consent. In order to substantiate the obligation there is no need of anything written or physically present, nor need anything be GIVEN; it is enough that those negotiating consent' (bk. 3, tit. 23). - There was certainly a rule that `dominion over things is not transferred by pacts but by traditions' (bk. 20, c. De pactis). However, as I have observed, exceptions to this rule are found in Roman law itself, e.g in the last section of S. De off. jud., and in the last book of D. De serv. leg. - This rule certainly applied to undetermined contracts and perhaps also to all bilateral-promissory contracts, where the transmission of ownership is taken as contemporaneous. - Höpfner (Diritto naturale, §80) refers to the principal authors who discussed the question whether the consignment of a thing is a necessary condition for the transmission of ownership.

(262) Authors like Fries (Dottrina filosofica del Diritto, Jena 1830) are mistaken when they try to extract the duty of keeping promises and honouring contracts from the law of truthfulness. A promise is not an affirmation but `an act of ownership' or, in other words, an act by which a right is made to pass to another and a duty is accepted. If the promiser had no intention of keeping his promise, it would be a kind of lie, because to promise something is a way of making another believe that the promiser will keep his promise. Nevertheless the promise would be just as valid, provided the promiser were persuaded that he was obligating himself. However, if he intended not to obligate himself, it would be a lie but not a valid promise. The lie does not consist in failing to keep a valid promise but in depriving a material promise of its validity, which comes from internal consent, and thus from the truthfulness of the words expressing th e consent. The person who accepts a false promise acquires the right to have it upheld, if the falsity, that is, the lack of internal consent, remains uncertain for him. If he is certain about the lack of consent, he nevertheless retains the right to restitution if, while acting in good faith, he was harmed by the false promise.

(263) `If the acceptance of a promise is verbal and no time has been agreed for its acceptance, it must be accepted immediately. In the case of a written promise we must distinguish whether both parties are in the same place or not. If they are in the same place, the acceptance must be acknowledged and notified to the promiser within 24 hours; if in different places, within the time necessary to despatch the reply twice. Otherwise, the promise is no longer obligatory. Before expiry of the fixed period, the promise cannot be revoked' (Austrian civil code, §662).

(264) Donation is another example. Before a donation is accepted, it gives the person to whom it is made the right not to be prevented from knowing the proffered donation (cf. 32).

(265) Art. 1589 of the Napoleonic code says: `The promise to sell is the same as a sale when there is a reciprocal consent of both parties regarding the thing and the price.' - M. Portalis, speaking about the motives of this law, says,: `There is in fact present in this case everything concerning the substance of a contract of sale'; he quotes Cochin, t. 6, p. 160 Séance du 7 ventôse an. 12 .- The Albertine code enacts the same in art. 1595.

(266) Zeiller says: `A contract by which a human being subjects himself to another without condition and is obliged to perform, omit or suffer everything the other wishes would lower him to the level of a mere thing, a purely feeling being (an animal). No one can acquire this kind of authority as a right over a rational being. Anyone who really subjected himself to an unlimited authority, would be acting like an irrational creature which is unable to conclude a contract. Moreover, he would be obliged to serve the other as a mere thing and thus deprive himself of personal dignity. His renunciation of the right to act as a reasoning, moral being would mean that in future he would no longer be a subject of moral obligation and legal duty. What a contradiction!' (§103). And in the footnote to §104 he says: `The promise to obey indiscriminately all the commands of a superior, to become drunk by immoderate drinking, to become a victim of licentiou s behaviour and unnatural vices, to rob, assassinate and murder cannot produce a right or a duty. Papinian says all too accurately: ``It is unthinkable that we can perform actions which offend our piety, esteem, modesty and, generally speaking, decent mores'' (bk. 15, De condit. instit.).

(267) Anyone who causes a crime to be committed against another is not, in my opinion, obliged to pay for an act which is substantially and not accidentally criminal, even if the amount is agreed. But in conformity with the amount of influence he had over the criminal's action, he has the duty of restitution for any calculable harm sustained by the delinquent as a result of the crime. Similarly he has the duty of restitution or of renouncing the benefit he may have gained as a direct effect of the crime.

(268) Cf. Höpfner, Commentario sulle Istituzioni di Eineccio, §76.

(269) §104. - Concerning the last observation, I think that eventual difficulties do not reduce the right of the accepter if they are virtually understood although not foreseen in the promise; this is not the case if they result from an extraneous, accidental cause. If, for example, I have made a contract with a well-digger, he is obliged to complete the work even if he encounters ground much harder and more resistant than he had imagined; he must sustain any loss. But he is not obliged to pursue the work in the event of war when the battlefield is so close that the work could be dangerous; this circumstance is not included in the promise, even virtually. It would be the same in the case of a landslide which covered the site of the well; the expenses for clearing the obstruction could not be the responsibility of the person who had promised to dig the well and nothing more.

(270) If this were necessary, a contract could never be made to the advantage of one of the parties. The party with no advantage could always rescind the contract on the grounds of not having foreseen the consequences.

(271) §1004, footnote.

(272) De jure B. et P., pt. 2, §9.

(273) De conditione turp. implet., c. 2, §3 ss.

(274) All these cases can be reduced to the general principle that `there can be no injustice or immorality in the TITLE which posits a right in being, nor in the ACTIVITY constituting it.' Cf. ER, 256-261.

(275) `Deception is a cause of nullity of an agreement when the deceit employed by one of the contracting parties is such that without it the other party would clearly not have made the contract' (Albertine code, art. 1203).

(276) This objection is supported by Cr. G. Schwarz, Sylog, problem. jur. nat., Altorff 1738, 38, and by K. H. Heidenreich, Sistema del diritto naturale, Leipzig 1894, 1.

(277) For example, Zeiller, §101.

(278) The French code, followed by the codes of the Canton Ticino and the Kingdom of Sardegna, requires a cause for contracts: `An obligation without a cause, or founded on a false or unlawful cause, can have no effect' (art. 1131); the next article states that the cause need not be expressed in the contract, provided its existence can be proved. The Austrian code does not impose this condition for the validity of contracts; gratuitous contracts and testamentary dispositions would still be valid even in the case of a false cause, `unless there is proof that the testator's (or donor's) will was dependent solely on this erroneous motive' (§§572, 901). This comparison is itself sufficient to indicate the different spirit of the two original legislations, the French and the Austrian. The former is keen to discover and punish deception wherever present; the latter to see that the will of honest people produces its effect. It is easy to see that c ivil legislators have to avoid the two hazards of not punishing false dealing and of placing an obstacle to a just will; they can be happy if they avoid both. In fact all measures to uncover fraud bring with them the great evil of rendering many conditions or just desires useless through lack of formal requirements. However, although the omission of such measures may uphold the validity of many agreements and desires of honest people, it leaves the door open to deception of the unfortunate. The desire to defend ourselves excessively from deception impedes honest wills and hampers trade between upright citizens. In any case, it is all too clear that the spirit of the Austrian legislation, which leaves the will more free and protects acts more precisely, is more liberal than that of the French, which is totally directed to defence against deceivers. When we concern ourselves too much with defence, we are obviously restricted in our position and not free; on the other hand, many m easures against human wickedness not only protect the good, but make the wicked more cautious. While the law remains majestically stationary, the wicked progress.

(279) Some authors deny that a person has a real right to the truthfulness of others. I reply: there is no right to the words of others, but there is a right to the truthfulness of the words. This right is particularly evident when displeasure or harm is caused to others by deceptive words, because we all have a clear right not to be upset or harmed. Speaking only about harm, I affirm I may not in any way be a cause of harm to another; but every time I posit a fact (words are also a fact) which is a reasonable motive for others to inflict harm on themselves, I am the cause of that harm. If I make a promise to a business colleague and then retract it before he replies, I must indemnify the harm caused him. My promise gave him a reasonable motive for action (for example, to buy a quantity of silk if I have promised him a loan). After acting reasonably, he does not have to bear the resultant harm - that is my responsibility, because, by withdrawing the stimulus which made his action reasonable and useful, I have rendered the action harmful to him.

(280) These observations and those that follow indicate to what extent those authors are right who on the one hand deny the necessity of internal consent for the validity of an agreement - Vasquez, Turrianus, Pontius, Pallavicino, Dicastillo (who refers to the first four in De jur, et justit., bk. 2, tr. 3, Disp. 1, n. 461 ss., and others) and others are examples - or on the other hold that internal consent is necessary - Sanchez (Bk. 1, De matrim., Disp. 9, num. 3), Molina (t. 2, Disp. 352), Card. de Lugo (De jur. et just., t. 2, Disp. 22, Sect. 4, n. 45), Beuch ( De pactis et contract, Tract. c. 1, Sect. 2). - If internal consent is involuntarily and innocently absent, the contract is null and void; if it is deliberately and maliciously withheld, and all external evidence indicates that it should be and is present, the contract must be upheld.

(281) Ulpian says: `A contract is the consent and agreement of two persons, but pollicitation is the promise of someone merely making an offer' (bk. 3 ss., De Pollicit.).

(282) Zeiller, §96.

(283) The Austrian code says, `When the motive or purpose of a consent is expressly stated as a condition, it is considered to be like every other condition' (§901). Zeiller justly adds that the contract's purpose could have the nature of a condition even if it were not expressly stated but understood according to the circumstances `in a way that it is impossible not to be known' (§101, Diritto naturale).

(284) According to rational Right, the conscience of each contracting party must clarify their own obligations and interpret those of the other party. Generally speaking therefore it seems that Huffeland was close to the truth (Principii di Diritto naturale, §327), in maintaining that rules of interpretation are solely for the use of a third party, a judge or referee. However the parties themselves, especially in the case of an ancient contract, may have to resort to the same rules to interpret the contract.

(285) After the State Councillor, Bigot-Préameneu, had stated the rules of interpretation of contracts in Roman law, he added: `Axioms must be invariable, like the justice that has dictated them. They were simultaneously the embellishment and foundation of Roman legislation and had to be inserted in the civil code' (session of the 7 Pluviôse, year 12).

(286) Cf. Preface to the works of moral philosophy and the schema of the distribution of this science [PE, 1-14].

(287) `In agreements between contracting parties, desire is given more importance than words' (L. 219 ss., De Verb. signif.) - `Applying equity without concern for the words' (Cic. pro Caecin. 13).

(288) `It is irregular to judge or respond to any single proposition without considering the total law (the total agreement)' (L. 24, D., De legib.).

(289) `Whenever there is ambiguity in determining customs, it is most fitting to accept whatever guarantees the matter in question' (L. 8 ss., De verb. oblig.).

(290) `In stipulations and other contracts we must follow what has been enacted. If the enactment is not clear, we must follow what is normally done in the region in question' (L. 34 ss., De reg. jur.). - `Whatever is inserted in contracts to remove doubt does not harm common right' (L. 81 ss., De reg. jur.).

(291) `What pertains to custom and practice is tacitly understood in contracts'.

(292) `It is unjust to remove by agreement information which has not been passed to us' (L. 9 ss., De trans.).

(293) `The interpretation is to be made against the one who could have stated the law more clearly but did not do so' (L. 38, §18, De verb. obligat.).

(294) In the opinion of Zeiller (Diritto privato, §96, footnote), `Wolff goes too far when he maintains that the person who does not reply to a letter in which some business is entrusted to him must execute the task' (S. N., t. 4, §792). - Nevertheless, the writer can reasonably believe that the commission will be carried out, despite the lack of a reply if, for example, he had added that he would consider the commission as definitely fulfilled if he had no reply. Thus, if his friend culpably fails to reply, there is a moral cause of harm and perhaps also jural harm. Friendship in this particular case seems to become a jural title giving the right to a reply.

(295) `Heidenreich (Sistema del diritto di natura, 2, p. 238, Leipzig 1794) and Grotius may object that in contracts the parties unite their will in perfect accord so that a contracting party who alters the contract against or without the consent of the other commits an injustice against the other. I would reply: the person to whom the right pertains can, by custom, freely dispose of it. The acquisition by contract of only a personal, untransmissible right is not, therefore, a custom but an exception. If Grotius then maintains, for the reason just given, that the necessary compensation cannot be known by natural Right, we must reply that a contracting party must clearly permit any novation whatsoever of the contract, which relative to his right is truly indifferent. Or, as Bauer says (Diritto di natura, p. 174): in accepting an obligation in compensation there is a tacit remission for the one who now acquires the right of the o bligation existing up to the present' (Zeiller, Diritto naturale, pt. 1, §119, footnote).

(296) Cf. Grotius, De Aequitate. - Klein, Annali della legislazione, 3, Berlin, 1788.

(297) Seneca applies it to physical things in the following fine passage: `Nature deals with its parts, as it were, according to their weight. If the equity of the portions were upset, the world would overbalance' (Quaest. nat., 3, 10).

(298) Plautus uses it in this sense: `An even spirit is the best condiment for hardship' (Rud., 2, 3, 71).

(299) Cicero properly distinguishes two kinds of equality between giving and having, and therefore two forms or acts of equity: first, the equity between what is owed and what is given by strict right, and second, the equity by which kindnesses and offences are reciprocated: `Equity has a double meaning: one meaning is dependent on what is direct, true, just and, as we say, fair and good; the other pertains to the reciprocity in the favour to be bestowed. This is called `favour' in the case of kindness, `revenge' in the case of an injury' (Partit., c. 37).

(300) Cicero very often uses `equity' where he could have used `justice'; for example, in De Officiis, he says: `What kind of equity allows a person to take possession of a field he does not own, while the person who owns it, loses it?' (2, 22).

(301) In this sense Cicero employs the form: `To speak in favour of equity against right' (De orat., 3, 56).

(302) This opposition between strict justice and equity results from the fact that what we call strict justice holds to the letter of positive laws, which in many cases are a long way from justice. Thus when positive laws truly harmonise with justice they are called `fair' (`fair rights', Cic., pro Quintio, 14 - `law which is fair and useful for all', Ibid., pro Cornel. Balbo, penult. c.). In this case `equity' means `natural justice', and `law' or `right' means positive justice. However, when Cicero says: `What is true must be judged by what is fair and good, not by what is clever and shrewd' (pro Caecin. 23), he means we must not keep so close to the words of positive law that we abandon the prescriptions of rational law.

(303) From epi and ekw.

(304) The Romans took to an extreme the principle: `What language dictates, right dictates'.

(305) For example, the following regulations of the Austrian civil code: `The regulation is valid when it is evident that the thing enjoined or the person in whose favour the regulation was made was erroneously named or described. - The regulation also remains valid when the testator has added a clause which is found to be false, unless it is proved that the testator's will was based solely on this erroneous motive' (§§571, 572; cf. §901).

(306) Bk. 2, De act. empt. - Bk. 22, §2, ff. De usur. - Bk. 54, ff. De O. et A. - Canon law acknowledged and permitted this division as just, c. 1 and 2 De N. O. N., - c. 6, § ad haec, de except. c. fin. de deposito.

(307) Positive civil laws are either in harmony with rational laws and as such cannot be ignored, or they are simply positive, that is, freely-chosen and designed to regulate contracts in areas left undetermined by the wills of the contracting parties. It is only to this second part of civil laws regarding contracts that our two proverbs apply: `Where there is agreement there is no deception' and `Agreements break laws'.

(308) Bk. 3, c. De jud. - Papinian also thinks that `anything equitable and good is to be defended, even when subtlety would seem to impugn it' (Digest., bk. 28, tit. 3, leg. 17; Celsus, speaking about strict right, says: `Many have perniciously erred in this matter, invoking the authority of the right of knowledge.'

(309) St. Thomas says: `If a person simply transfers what is his to another without incurring any debt, as in donation, it is an act of liberality, not of justice' (S.T., II-II, q. 61, art. 3).

(310) Instit. de action., §28. - Cf. Beuch (De Pactis et Contract., c. 2, sect. 2, §4) where he shows that Roman laws did not however restrict actions of good faith solely to these two classes. All contracts formed by mutual agreement were considered contracts of good faith and so too were some real contracts: commodation, deposit, pledge, precary and unnamed contracts.

(311) If the goods cost the vendor more to produce or get to market, this circumstance would reduce their production or manufacture. But in the case of existing goods, he would have to be content with selling them at a loss rather than keep them unsold without any hope of a better sale. Hence, the expenses necessary for the manufacture of the goods and for putting them on sale are the reason why the quantity of goods is not, generally speaking, so abundant that the price must be reduced below the expense sustained by the farmer, manufacturer and vendor.

(312) All legislators agree that the sentimental value of a thing is just. One instance of this may be found in cases of a single vendor who prefers to keep something which he treasures rather than sell it. He has to be offered a high price to convince him to sell although the buyer would pay less if there were other sellers available. However, others may not have anything similar for sale, or the buyer himself may want to buy that single object only. In this case, there is one sole vendor who as a consequence of his right of ownership sets the price justly. No harm is caused to the buyer whatever price he is forced to pay for the object of his affection.

(313) Portalis says: `It states that the sale of chattels does not involve this claim in any way. The frequent movement of chattels and the extreme variation in their price would render a rescissory system impossible because of the harm to the sale and purchase of similar objects, unless we wished to cause universal upset in all commercial relationships and halt the course of daily business in life. In these matters, we must allow more for public freedom of trade than for the particular interest of a few citizens' (Exposé des motifs de la loi relative à la vente).- However, according to rational Right, there can be injury in the sale of chattels. Even granted that the price changes very frequently and very notably, we can know more or less what it is at the time the parties make their contract. This price must be the norm for the contract.

(314) The injury can be caused by either the seller or the buyer. But the French code admits this claim only for the seller because, like Portalis in his exposition of the motives for the law, it considers that a buyer is never forced to buy. This however is false. If a buyer is rarely forced to buy because of necessity, his passions and the clever seductions of others lead him to buy. I find the regulations of the Austrian code more just than those of the French code in this matter. I readily support the Austrian civil legislation because it seems to me very deserving of merit and is more liberal than the French. The Austrian code is more reluctant to impede private freedom but more favourable to the natural equality of the human race. I readily quote its regulations on injury:

`If one of the parties to a bilateral contract has not received half of what he gave the other, according to its ordinary value, the law grants the offended party the right to request the rescission of the contract, and to restore things to their former state. -
`This remedy in right has no effect 1. if one of the parties has expressly renounced it or declared that the thing has been accepted at an exceptional price because of some particular affection for it; 2 if, despite knowledge of the true price, consent is given to an exorbitant price; 3. if personal relationships necessarily induce the presumption that a contract of both onerous and lucrative title was desired; 4. if the true price can no longer be ascertained; or finally, 5. if the judge has sold the thing by auction' (§§934-95).

(315) This explains why modern codes do not accept private auction or pure licitation in the division of an inheritance, but require public auction. In private auction the price is not decided by the competition of all the buyers available at the time of the auction. - Cf. the Albertine code, art. 1062.

(316) Jurisconsults use these expressions: `It is not injury but rather deception, and the deception extends to more than half of the contract' (cf. Dumoulin, Tract. De usuris). Portalis states that in the statutes and practices of various French cities the expression used is: `Deception beyond half'.

(317) Bk. 206, § De R. I. - Grotius (De I. B. et P., 2, 12, §8 and 12) and Wolff (I. N., t. 4, §926) acknowledge that injury is also found in natural Right. - Grundling (I. N., c. 23, §24) and Zeiller (D. N. Priv., §§129, 133) hold the contrary opinion. It seems to me that what I have said shows that the first two are correct.

(318) Hence, rescission as a result of injury is not admitted in a contract of exchange. Cf. the French code, art. 1706.

(319) The Austrian code does not recognise injury for contracts of chance, §1268.

(320) According to Ulpian, Celsus correctly defines jurisprudence as `The right and art of what is good and equitable' (bk. 1, tit. 1, c. 1).

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