History of contract law
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The history of contract law dates back to Ancient civilizations.


Ancient law

English contract law's history was heavily influenced by Ancient Greek and Roman thought. In ''
The Laws The ''Laws'' (Greek: Νόμοι, ''Nómoi''; Latin: ''De Legibus'') is Plato's last and longest dialogue. The conversation depicted in the work's twelve books begins with the question of who is given the credit for establishing a civilization ...
'',
Plato Plato ( ; grc-gre, Πλάτων ; 428/427 or 424/423 – 348/347 BC) was a Greek philosopher born in Athens during the Classical period in Ancient Greece. He founded the Platonist school of thought and the Academy, the first institution ...
devoted little attention to forms of agreement, but recognized the same basic categories for cancelling agreements as exist today.
Roman law Roman law is the legal system of ancient Rome, including the legal developments spanning over a thousand years of jurisprudence, from the Twelve Tables (c. 449 BC), to the '' Corpus Juris Civilis'' (AD 529) ordered by Eastern Roman emperor Ju ...
identified discrete categories of contractual transaction, each with its own requirements, which needed to be fulfilled in order for promises to be enforced. The general kind, ''
stipulatio ''Stipulatio'' was the basic form of contract in Roman law. It was made in the format of question and answer. Capacity In order for a contract to be valid, parties must have capacity: both ''intellectus'' ("understanding") and '' voluntas'' ("wi ...
'', required various words to be used to generate an obligation, or in a '' contractus litteris'' it could be written down. There were four categories of consensual agreement, and four kinds of contract creating property rights, such as a pledge ('' pignus'') or a secured loan ('' mutuum''). More than appeared from the general rules in Ancient Greece, Roman law represented an early division between specific kinds of contract, depending on the transaction's nature.


Medieval law


England in the Middle Ages

During the
middle ages In the history of Europe, the Middle Ages or medieval period lasted approximately from the late 5th to the late 15th centuries, similar to the post-classical period of global history. It began with the fall of the Western Roman Empire ...
, the English court system was minimal and so a number of In the local and manorial courts, according to the first treatise by
Ranulf de Glanville Ranulf is a masculine given name in the English language. It is derived from the Old Norse name ''Reginúlfr''. This Old Norse personal name is composed of two elements: the first, ''regin'', means "advice", "decision" (and also "the gods"); the s ...
, '' Treatise on the laws and customs of the English Kingdom'' in 1188, if people disputed the payment of a debt they, and witnesses, would attend court and swear oaths (called a
wager of law Compurgation, also called trial by oath, wager of law, and oath-helping, was a defence used primarily in medieval law. A defendant could establish their innocence or nonliability by taking an oath and by getting a required number of persons, typi ...
). They risked perjury if they lost the case, and so this was strong encouragement to resolve disputes elsewhere. The royal courts accepted claims, without a wager of law, if "
trespass on the case The writs of trespass and trespass on the case are the two catchall torts from English common law, the former involving trespass against the person, the latter involving trespass against anything else which may be actionable. The writ is also known ...
" was alleged. A jury would be called, but to access the royal courts, which were fixed by the Magna Carta 1215 to meet in London, some breach of the King's peace had to be alleged. But gradually, the courts allowed claims where there had been no such trouble, no
tort A tort is a civil wrong that causes a claimant to suffer loss or harm, resulting in legal liability for the person who commits the tortious act. Tort law can be contrasted with criminal law, which deals with criminal wrongs that are punishable ...
''
vi et armis Trespass ''vi et armis'' was a kind of lawsuit at common law called a tort. The form of action alleged a trespass upon person or property ''vi et armis'', Latin for "by force and arms." The plaintiff would allege in a pleading that the act commi ...
'', even though it was still necessary to inventively plead this. For instance, in 1317 one Simon de Rattlesdene alleged he was sold a
tun TUN or tun may refer to: Biology * Tun shells, large sea snails of the family ''Tonnidae'' * Tun, a tardigrade in its cryptobiotic state * Tun or Toon, common name for trees of the genus '' Toona'' Places * Tun, Sweden, a locality in Västra G ...
of wine that was contaminated with salt water, "with force and arms, namely with swords and bows and arrows". The
Court of Chancery The Court of Chancery was a court of equity in England and Wales that followed a set of loose rules to avoid a slow pace of change and possible harshness (or "inequity") of the common law. The Chancery had jurisdiction over all matters of equ ...
and the King's Bench started to allow claims without the fictitious allegation of force and arms from around 1350. Otherwise, a breach of ''
covenant Covenant may refer to: Religion * Covenant (religion), a formal alliance or agreement made by God with a religious community or with humanity in general ** Covenant (biblical), in the Hebrew Bible ** Covenant in Mormonism, a sacred agreement b ...
'' required production of proof of an agreement from a
seal Seal may refer to any of the following: Common uses * Pinniped, a diverse group of semi-aquatic marine mammals, many of which are commonly called seals, particularly: ** Earless seal, or "true seal" ** Fur seal * Seal (emblem), a device to imp ...
. However, in '' The Humber Ferryman’s case'' a claim was allowed, without any documentary evidence, against a ferryman who dropped a horse overboard that he was contracted to carry across the
River Humber The Humber is a large tidal estuary on the east coast of Northern England. It is formed at Trent Falls, Faxfleet, by the confluence of the tidal rivers Ouse and Trent. From there to the North Sea, it forms part of the boundary between t ...
. Despite this liberalisation, in the 1200s a threshold of 40 shillings for dispute value had been created. Though its importance tapered away with gradual inflation, it foreclosed court access to most people. Moreover, freedom to contract was firmly suppressed among the peasantry. After the Black Death, the Statute of Labourers 1351 prevented any increase in workers' wages, fuelling among other things the
Peasants' Revolt of 1381 The Peasants' Revolt, also named Wat Tyler's Rebellion or the Great Rising, was a major uprising across large parts of England in 1381. The revolt had various causes, including the socio-economic and political tensions generated by the Blac ...
. With the courts' hostility to restraints on trade, the doctrine of consideration was forming, that to enforce any obligation something of value needed to be conveyed. Some courts remained sceptical that damages might be awarded purely for a broken agreement (that was not a sealed
covenant Covenant may refer to: Religion * Covenant (religion), a formal alliance or agreement made by God with a religious community or with humanity in general ** Covenant (biblical), in the Hebrew Bible ** Covenant in Mormonism, a sacred agreement b ...
). Other disputes allowed a remedy, notably in '' Shepton v Dogge'' where a defendant had agreed in London, where the City courts' custom was to allow claims without covenants under seal, to sell 28 acres of land in
Hoxton Hoxton is an area in the London Borough of Hackney, England. As a part of Shoreditch, it is often considered to be part of the East End – the historic core of wider East London. It was historically in the county of Middlesex until 1889. It li ...
. Although the house itself was outside London at the time, in
Middlesex Middlesex (; abbreviation: Middx) is a historic county in southeast England. Its area is almost entirely within the wider urbanised area of London and mostly within the ceremonial county of Greater London, with small sections in neighbour ...
, a remedy was awarded for
deceit Deception or falsehood is an act or statement that misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage. Deception can involve dissimulation, propaganda and sleight o ...
, but essentially based on a failure to convey the land. The resolution of these restrictions came shortly after 1585, when a new
Court of Exchequer Chamber The Court of Exchequer Chamber was an English appellate court for common law civil actions before the reforms of the Judicature Acts of 1873–1875. It originated in the fourteenth century, established in its final form by a statute of 1585. The ...
was established to hear common law appeals. In 1602, in '' Slade v Morley'', a
grain merchant The grain trade refers to the local and international trade in cereals and other food grains such as wheat, barley, maize, and rice. Grain is an important trade item because it is easily stored and transported with limited spoilage, unlike other ...
named Slade claimed that Morley had agreed to buy wheat and rye for £16, but had backed out. Actions for debt were in the jurisdiction of the
Court of Common Pleas A court of common pleas is a common kind of court structure found in various common law jurisdictions. The form originated with the Court of Common Pleas at Westminster, which was created to permit individuals to press civil grievances against one ...
, but it had required that there needed to be both (1) proof of a debt, and (2) a subsequent promise to repay the debt, so that a finding of
deceit Deception or falsehood is an act or statement that misleads, hides the truth, or promotes a belief, concept, or idea that is not true. It is often done for personal gain or advantage. Deception can involve dissimulation, propaganda and sleight o ...
(for non-payment) could be made against a defendant. But if a claimant wanted to simply demand payment of the contractual debt (rather than a subsequent promise to pay) he could have to risk a
wager of law Compurgation, also called trial by oath, wager of law, and oath-helping, was a defence used primarily in medieval law. A defendant could establish their innocence or nonliability by taking an oath and by getting a required number of persons, typi ...
. The judges of the Court of the King's Bench was prepared to allow "
assumpsit Assumpsit ("he has undertaken", from Latin, ''assumere''), or more fully, action in assumpsit, was a form of action at common law used to enforce what are now called obligations arising in tort and contract; and in some common law jurisdictions, u ...
" actions (for obligations being assumed) simply from proof of the original agreement. With a majority in the Exchquer Chamber, after six years Lord Popham CJ held that "every contract importeth in itself an Assumpsit". Around the same time the Common Pleas indicated a different limit for contract enforcement in ''
Bret v JS ''Bret v JS & Wife'' (1600) Cro Eliz 756 is a formative English contract law, which held that a good consideration for courts to enforce contracts did not include promises for "natural affection". Facts Mr William Dracot was the husband of the w ...
'', that "natural affection of itself is not a sufficient consideration to ground an assumpsit" and there had to be some "express '' quid pro quo''". Now that wager of law, and sealed covenants were essentially unnecessary, the
Statute of Frauds 1677 The Statute of Frauds (29 Car 2 c 3) (1677) was an Act of the Parliament of England. It required that certain types of contracts, wills, and grants, and assignment or surrender of leases or interest in real property must be in writing and sign ...
codified the contract types that were thought should require some form.


European trade

Increasingly, English contract law was affected by its trading relations with northern Europe, particularly since the Magna Carta 1215 guaranteed merchants "safe and secure" exit and entry to England "for buying and selling by the ancient rights and customs, quit from all evil tolls". In 1266 King Henry III had granted the Hanseatic League a charter to trade in England. The "Easterlings" who came to trade brought goods and money that the English came to call " Sterling", and standard rules for commerce that formed a ''
Lex Mercatoria ''Lex mercatoria'' (from the Latin for "merchant law"), often referred to as "the Law Merchant" in English, is the body of commercial law used by merchants throughout Europe during the medieval period. It evolved similar to English common law as ...
'', the laws of the merchants. Merchant custom was most influential in the coastal trading ports like
London London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
,
Boston Boston (), officially the City of Boston, is the state capital and most populous city of the Commonwealth of Massachusetts, as well as the cultural and financial center of the New England region of the United States. It is the 24th- mo ...
, Hull and King's Lynn. In the 1500s, litigation sharply increased, although the causes are unclear and it may have been due to a centralization of lawsuits in the King's Bench and Common Pleas. The Chief Justices received a large portion of their income from fees paid by litigants, mostly in civil disputes. Over the late 17th and 18th centuries
Sir John Holt Sir John Holt (23 December 1642 – 5 March 1710) was an English lawyer who served as Lord Chief Justice of England from 17 April 1689 to his death. He is frequently credited with playing a major role in ending the prosecution of witches in Eng ...
, and then
Lord Mansfield William Murray, 1st Earl of Mansfield, PC, SL (2 March 170520 March 1793) was a British barrister, politician and judge noted for his reform of English law. Born to Scottish nobility, he was educated in Perth, Scotland, before moving to Lond ...
actively incorporated the principles of international trade law and custom into English common law as they saw it: principles of commercial certainty, good faith, fair dealing, and the enforceability of seriously intended promises.''
Pillans v Van Mierop ''Pillans & Rose v Van Mierop & Hopkins'' (1765) 3 Burr 1663 is a case concerning letters of credit, and the doctrine of consideration. It has been recommended as a landmark case in English contract law. Lord Mansfield tentatively expressed a vie ...
'' (1765) 3 Burr 1663
As Lord Mansfield held, "Mercantile law is not the law of a particular country but the law of all nations", but also that "the law of merchants and the law of the land is the same".


Industrial revolution


Continental Europe

* Code Napoleon 1810 *
German Civil Code German(s) may refer to: * Germany (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ger ...
1900


United Kingdom

Over the industrial revolution, English courts became more and more wedded to the concept of " freedom of contract". It was partly a sign of progress, as the vestiges of feudal and mercantile restrictions on workers and businesses were lifted, a move of people from "status to contract". On the other hand, a preference for ''
laissez faire ''Laissez-faire'' ( ; from french: laissez faire , ) is an economic system in which transactions between private groups of people are free from any form of economic interventionism (such as subsidies) deriving from special interest groups. ...
'' thought concealed the
inequality of bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater power ...
in contracts of employment, consumer, and tenancy. At the centre, captured in nursery rhymes like Robert Browning's '' Pied Piper of Hamelin'' in 1842 was the fabled notion that if people had promised something "let us keep our promise". But then, as if everybody had the same degree of free will, a generalised law of contract purported to cover every form of agreement was expounded. Courts were suspicious of interfering in agreements, whoever the parties were, so that in ''
Printing and Numerical Registering Co v Sampson ''Printing and Numerical Registering Co v Sampson'' (1875) 19 Eq 462 is an English contract law and patent case. It is most notable for strong advocacy of the principle of freedom of contract put forward by Sir George Jessel MR. The strict princi ...
'' Sir George Jessel MR proclaimed that "contracts when entered into freely and voluntarily shall be held sacred and shall be enforced by Courts of justice." The Judicature Act 1875 merged the Courts of Chancery and common law, with equitable principles (such as estoppel,
undue influence Undue influence (UI) is a psychological process by which a person's free will and judgement is supplanted by that of another. It is a legal term and the strict definition varies by jurisdiction. Generally speaking, it is a means by which a per ...
, rescission for misrepresentation and
fiduciary duties A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties (person or group of persons). Typically, a fiduciary prudently takes care of money or other assets for another person. One party, for exam ...
or disclosure requirements in some transactions) always taking precedence. But the essential principles of English contract law remained stable and familiar, as an offer for certain terms, mirrored by an acceptance, supported by consideration, and free from duress, undue influence or misrepresentation, would generally be enforceable. The rules were exported across the
British Empire The British Empire was composed of the dominions, colonies, protectorates, mandates, and other territories ruled or administered by the United Kingdom and its predecessor states. It began with the overseas possessions and trading posts e ...
, as for example in the
Indian Contract Act 1872 The Indian Contract Act, 1872 prescribes the law relating to contracts in India and is the key act regulating Indian contract law. The Act is based on the principles of English Common Law. It is applicable to all the states of India. It determi ...
. Further requirements of fairness in exchanges between unequal parties, or general obligations of good faith and disclosure were unwarranted because was said that liabilities "are not to be forced upon people behind their backs". Parliament's statutes, outside general codifications of commercial law like the
Sale of Goods Act 1893 The Sale of Goods Act 1893 (56 & 57 Vict. c.71) was an Act of the Parliament of the United Kingdom of Great Britain and Ireland which regulated contracts in which goods are sold and bought. Its purpose was to define the rights and duties of the ...
, left people to the harsh " freedom of contract" of the
market Market is a term used to describe concepts such as: *Market (economics), system in which parties engage in transactions according to supply and demand *Market economy *Marketplace, a physical marketplace or public market Geography *Märket, an ...
until the property qualifications for Parliament were reduced, and the electoral vote finally became democratic.


Twentieth century

Over the 20th century, legislation and changes' in court attitudes effected a wide-ranging reform of 19th century contract law. First, specific types of non-commercial contract were given special protection where "freedom of contract" appeared far more on the side of large businesses. Consumer contracts came to be regarded as "contracts of adhesion" where there was no real negotiation and most people were given "take it or leave it" terms.


United Kingdom

In the UK, the courts began by requiring entirely clear information before onerous clauses could be enforced, the
Misrepresentation Act 1967 The Misrepresentation Act 1967 is a United Kingdom Act of Parliament of the United Kingdom which amended the common law principles of misrepresentation. Prior to the Act, the common law deemed that there were two categories of misrepresentation: ...
switched the burden of proof onto business to show misleading statements were not negligent, and the
Unfair Contract Terms Act 1977 The Unfair Contract Terms Act 1977c 50 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most impo ...
created the jurisdiction to scrap contract terms that were "unreasonable" considering the bargaining power of the parties. Collective bargaining and growing number of employment rights carried the employment contract into an autonomous field of labour law where workers had rights, like a minimum wage, fairness in dismissal, the right to join a union and take collective action, and these could not be given up in a contract with an employer. Private housing was subject to basic terms, such as the right to repairs, and restrictions on unfair rent increases, though many protection was abolished during the 1980s. This reduced the scope of the general law of contract, and meant that most contracts individual people made in their ordinary lives were shielded from the power of corporations to impose whatever terms they chose in selling goods and services, at work, and in people's home.cf '''' [1983QB 284 Nevertheless, classical contract law remained at the foundation of specific contracts, unless particular rights were given by the courts or Parliament.


Globalisation

Internationally, the UK had joined the European Union, which aimed to harmonise significant parts of consumer and employment law across member states. Moreover, with increasing openness of markets commercial contracts were receiving ideas from abroad. Both the Principles of European Contract Law, the
UNIDROIT UNIDROIT (formally, the International Institute for the Unification of Private Law; French: ''Institut international pour l'unification du droit privé'') is an intergovernmental organization whose objective is to harmonize international privat ...
Principles of International Commercial Contracts The Principles of International Commercial Contracts 2016 (most frequently referred to as UNIDROIT Principles and often also referred to as PICC) is a set of 211 rules for international contracts. They have been drawn up since 1984 by an internation ...
, and the practice of international commercial arbitration was reshaping thinking about English contract principles with the rest of the globalising economy.


See also

*
US contract law Contract law regulates the obligations established by agreement, whether express or implied, between private parties in the United States. The law of contracts varies from state to state; there is nationwide federal contract law in certain areas, s ...
* English contract law


Notes

{{reflist, 2


References

;Articles *F Kessler, 'Contracts of Adhesion—Some Thoughts About Freedom of Contract (1943) 43(5) Columbia Law Review 629 *MJ Horwitz, 'The historical foundations of modern contract law' (1974
87(5) Harvard Law Review 917
*AWB Simpson, 'The Horwitz Thesis and the History of Contracts' (1979
46(3) The University of Chicago Law Review 533
;Books * G Gilmore, '' The Death of Contract'' (1974) *
PS Atiyah Patrick Selim Atiyah, (5 March 1931 – 30 March 2018) was an English lawyer and academic. He was best known for his work as a common lawyer, particularly in the law of contract and for advocating reformation or abolition of the law of tort. He ...
, '' The Rise and Fall of Freedom of Contract'' (Oxford 1979) * AWB Simpson, ''A History of the Common Law of Contract: the Rise of the Action of Assumpsit'' (1987) * OW Holmes, '' The Common Law''
1881
especiall

Contract law