Econlib

The Library

Other Sites

 Front Page arrow Titles (by Subject) arrow chapter xv: Of those Contracts in which the Value of Things is pre-supposed; and of the Duties thence arising - The Whole Duty of Man According to the Law of Nature

Return to Title Page for The Whole Duty of Man According to the Law of Nature

Search this Title:

chapter xv: Of those Contracts in which the Value of Things is pre-supposed; and of the Duties thence arising - Samuel von Pufendorf, The Whole Duty of Man According to the Law of Nature [1673]

Edition used:

The Whole Duty of Man According to the Law of Nature, trans. Andrew Tooke, ed. Ian Hunter and David Saunders, with Two Discourses and a Commentary by Jean Barbeyrac, trans. David Saunders (Indianapolis: Liberty Fund, 2003).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


chapter xv

Of those Contracts in which the Value of Things is pre-supposed; and of the Duties thence arising

I.Pacts and Contracts. L. N. N. l. 5. c. 2. §1.A Pact or Agreement in general, is the Consent and Concurrence of Two or more in the same Resolution. But because oftentimes simple Agreements are contra-distinguish’d to Contracts, the Difference seems chiefly to consist herein, That by Contracts are understood such Bargains as are made concerning Things and Actions, which come within the compass of Commerce, and therefore suppose a Property and Price of Things. But such Covenants as are concluded upon, about other Matters, are called by the common Term of Pacts or Agreements.

* Although even to some of these is promiscuously given the Name of Pacts and Contracts.

II.General Division of Contracts. L. N. N. l. 5. c. 2. §8.Contracts may be divided into Gratuitous and Chargeable. The former Sort affords gratis some Advantage to one of the Parties contracting: the latter subjects each of the Parties contracting to some Charge, or lays upon them some Condition or Obligation equally burdensome to them both; in which Case, nothing is done or delivered by either Party, but with a Prospect of receiving an Equivalent.

III.L. N. N. l. 5. c. 4. §1.Of Gratuitous Contracts, there are three Sorts; a Commission, a Loan, and a Charge.

A Commission is, When any one takes upon himself gratis, and in mere good Will, to transact the Business of his Friend, who requests this Trouble of him on the Account of Friendship only. And this may be done two Ways; first, When the Method of transacting the Business is prescribed to the Person who is so kind as to undertake it; and, secondly, When it is wholly left to his Judgment and Discretion.

But as no one would commit the Management of his Affairs to any one but a Friend, and one of whose Honesty and Integrity he has a good Opinion; so he who undertakes this Trust, ought to be careful not to abuse this Confidence reposed in him; but to execute it with the greatest Care, and with the utmost Fidelity. But then, on the other hand, he who has given him this Commission, ought to prevent its being any Loss to him that executes it, by repaying him any Expences he is at in the Execution of it, and likewise by satisfying him for any Loss he may suffer in his own Affairs, while he spends his Pains and Time thus in Friendship to him.

IV.Of Loans. L. N. N. l. 5. c. 4. §6.When we give to another the free Use of what is ours, without any Consideration for the Use of it, this is called a Loan; and the Rules to be observed in this Case, are:

  • 1. We must take all possible Care most diligently to look after and preserve intirely the Thing lent us.
  • 2. We must put it to no other Uses, nor detain it any longer Time, than the Proprietor is willing.
  • 3. We must restore it to the Owner intire, and in the same Condition we received it; or at least with no other Detriment than what it must of Necessity receive by the common and ordinary Use of it.
  • 4. If after a Thing is lent us for a certain Time, something, not foreseen at the Time it was lent, should fall out, so that the Proprietor wants it before the Time he had lent it us for, we are to restore it without Delay, as soon as ever it is required of us.
  • 5. If the Thing lent us, comes to any Damage, or is destroyed by any unforeseen and unavoidable Accident, and not by any Fault of ours, we are not obliged to make it good, if it be reasonable to think, it would have been in the same manner damaged or destroyed, had it been in the Proprietor’s Custody, as it was in ours. But if it lay in our Power to have prevented such Damage or Loss, then we ought to make Restitution to the Proprietor to the full Value, * since it is very unreasonable in us to make any one lose what is his, only for being so kind to us, as for our sakes, to deprive himself of the Use of it.

He that lends any Thing to another, lies under no other Obligation to the Person he lends it to, but this only; If the Borrower has been at any necessary Charge, more than what the ordinary Use of the Thing requires, in preserving it, then this extraordinary Expence ought to be made good to him by the Proprietor.

V.Deposit or Trust. L. N. N. l. 5. c. 4. §7.The Third and Last Sort of gratuitous Contracts, is a Charge, Trust, or Deposit: Which is, When we commit any Thing of our own, or which we have any manner of Title to, or Interest in, to the Trust and Care of another Person, to keep the same Gratis: And what the Person’s Duty is, to whom the Deposit is made, will easily be understood.

1. The Thing thus trusted in his Hands, must be carefully looked after, nor must any Use be made of it, without the Knowledge and Consent of the Proprietor, if it can in any ways receive Damage by such using it; as also if it be any Profit or Benefit to the Proprietor to have it kept concealed from any one’s Sight: And if the Person intrusted shall take the Liberty of using it, he ought to make good any Damage or Disadvantage that shall accrue from the Use of it to the Owner. Likewise, it is not just to untye, unseal, or otherwise open any Thing we are intrusted withal, that is sealed or ty’d up, or to take it out of any Box, Chest, or other Thing in which the Owner had inclosed and secured it, when he put it into our Hands.

2. We ought immediately to restore any Thing deposited with us, as soon as ever the Proprietor claims it; at least, unless the Redelivery of it, at such Time it is so claimed, should be a real Prejudice to the Claimant, or to some other Person. But to deny that we have it, when the Owner comes to reclaim what he trusted us with, is a most infamous Piece of Wickedness, and even more base than Theft it self: And it is yet a more detestable Crime, to withold or disown a miserable Deposit; that is, what is put into our Hands in the Time of any Misfortune, during the Danger of Fire, or in the Midst of Tumults and Confusions, or the like Calamities.

He who makes the Deposit on his Part, ought to re-imburse, to the Person with whom it is made, all the Charges that he has necessarily laid out upon the Thing deposited, while it continued in his Hands.

VI.Equality in all chargeable Contracts. L. N. N. l. 5. c. 3. §1.In all Contracts that are purely chargeable, and have nothing gainful in them, where the Law or the Market hath fix’d the Prices of Things, a just Equality is to be observed, that is, one Party ought to receive as much Benefit as the other; and if it happens, that one receives less than the other, he has a Right to demand the Rest, which if denyed him by the other Party, he is at Liberty to set aside the Contract.

Now to find out and adjust this Equality, it is necessary that the Parties contracting be each of them alike thoroughly acquainted with the Commodity about which they are treating, and with the several Qualities of it; and therefore whosoever is going, by way of Contract, to make over the Property of a Thing to another, is indispensably obliged to expose not only the good Qualities of it, but also, to the best of his Knowledge, the Faults and Defects of it; since otherwise no just Price or real Value of the Thing can be assign’d. But this is not to be extended to minute and circumstantial Matters, which affect not the Substance of the Thing; nor need the Faults already known to the Buyer, be mention’d to him; for if, knowing the Faults, he purchases the Thing, such Defects do not annull the Contract, which shall stand good, and the Buyer must be contented with the Inconvenience he has consented hereby to bring on himself.

VII.If an Inequality is discover’d after the Bargain is made, it must be redress’d. L. N. N. l. 5. c. 3. §9.The Equality we have been mentioning, is so absolutely necessary in all chargeable Contracts, that although in making such a Contract, all the Faults of the Thing contracted for, have been fairly expos’d, and nothing demanded more than was really believed to be the just Value of the Thing; yet if afterwards there appears to have been an Inequality, without any Fault of the Contractors, (as suppose some Defect or Blemish lay undiscover’d, or there was some Mistake in the Price) it ought to be corrected, and he that has too much, must make Amends to the Sufferer. In notorious Abuses of this Kind, the Laws of every Country have made Provision for Reparation; but in lesser Breaches of this Duty, they are silent, for the avoiding a Multitude of unnecessary Suits, supposing herein, that every Body will take Care, in his own Concerns, not to be impos’d upon.

VIII.Bartering L. N. N. l. 5. c. 5. §1.Now among chargeable Contracts, or Covenants which imply somewhat to be done or given on both Parts, the most ancient, and that whereby Trading and Commerce was carried on before the Invention of Money, was Permutation or Bartering, whereby, on each Side, something was given for some other Thing equivalent thereto. Altho’ at this Day, since the Invention of Money, that Sort of Exchange is chiefly practis’d among Merchants, whereby Things are not simply compar’d between themselves, but they are first reduced to Money, and afterwards deliver’d as so much Money. But reciprocal Donation is a different Sort of a Thing from the Contract of Barter; for in this there is no Necessity that an Equality should be observ’d.

IX.Buying and Selling. L. N. N. l. 5. c. 5. §2.Buying and Selling, is, When for Money the Property of any Thing is acquired, or else such a Right as is equivalent thereto; of which Kind this is the most plain and obvious; When the Buyer, after the Value is agreed upon, immediately pays down the Price, and the Seller thereupon delivers the Commodity. Yet oftentimes the Agreement is made so, that the Commodity shall be immediately delivered, and the Price thereof paid at a certain Time. And sometimes the Price is agreed upon, but the Delivery of the Thing or Commodity is to be within a certain Time limited. In which Case, it seems but Equity, that before the Time be elaps’d, the Seller should stand to the Hazard of it; but if, after the Time is elaps’d, the Buyer makes Delay, and neglects the taking it away, then, if the Commodity perishes, the Buyer shall stand wholly to the Loss thereof. Now to this of Buying and Selling, are wont to be added several other Kinds of Bargains: As that which is term’d Addictio in diem,47 whereby any Thing is sold with this Proviso, That it may be lawful for the Seller to accept of better Terms, offered by another within a certain Time. So also the Lex Commissoria,48 which is such a Condition in any Contract, as not being perform’d within a Time limited, the Bargain becomes void. So likewise any Kind of Recalling, or Privilege of Recanting a Bargain, which is to be either so understood, That if the Price be laid down within a certain Time limited, or at any Time whatever is offer’d, the Buyer shall be obliged to restore it again to the Seller; or else so, as if the Thing be offer’d again, the Seller is bound to return back again the Price thereof; or so as if the Buyer be willing to sell the same again, the first Seller should have the Refusal of it, before any other, which is likewise call’d Jus Protimeseos, or the Right of Pre-emption. It is also customary that the Seller should reserve to himself a certain Portion of the Lands which he sells, or some Use or Acknowledgement for the same.

There is another Way of Buying, which they call Per Aversionem,49 when several Things of different Prices are not valued singly, but at Hap-hazard, and, as it were, in the Lump.

In that Way of Sale, which is call’d an Auction, the Thing is adjudged to that Person who, among several Bidders, offers most.

Lastly, There is another Way of Buying, whereby not any certain Thing is bought, but only the probable Hopes and Expectation thereof which implies something of Chance; so as neither the Buyer, if his Expectation fails him, nor the Seller, though it much exceed, hath any Reason to complain.

X.Hiring and Letting. L. N. N. l. 5. c. 6. §1.Hiring and Letting, is, When the Use of a Thing, or any Labour is granted to another, upon a certain Consideration.

  • 1. The usual Method is to agree beforehand, how much shall be received for doing the Thing propos’d; yet if any one makes no actual Bargain for what he undertakes to perform, or for the Use of any Thing he lends, he is suppos’d to expect so much as the common Custom allows, and for that to refer himself to the Honesty and Justice of the Person hiring.
  • 2. He who lets out a Thing, ought to take care, that it be in a serviceable Condition, and must therefore be content to undergo all Charges necessary to render it fit for Use. On the other Hand, the Person who hires the Thing, ought to be a good Husband in the Use of it; and if it be lost or damaged by his Fault, he is responsible for it. And for the same Reason, he who is hired to do any Work, if by his Fault it be spoil’d or damaged, must make it good.
  • 3. If a Man be hired only for some transient Business, which does not require his constant Attendance to perform, and any Mischance hinders him from performing what he undertook, he can have no Title to the Wages agreed for: But if a Man takes another into his Service for a continu’d Time, and he should, by Sickness or other Misfortune, be hinder’d from doing what he undertook, in common Humanity, he ought neither to be discarded, nor have his Wages refus’d or abated.
  • 4. When any Thing let out happens wholly to perish; from that Time, the Person hiring is no longer obliged to pay the Wages or Stipend agreed on. But if the Thing let out, has a known, certain, and determin’d Use assigned to it, for which Use the Owner is obliged to make it fit and serviceable; in this Case, if by any Misfortune it becomes less fit and proper for this Use, the Owner is obliged to abate of the agreed Price in such Proportion as the Thing falls short of the design’d Use. Thus, for Instance, I hire a House to dwell in, which my Landlord is obliged to make habitable; if, in this Case, the Violence of a Storm, or my Neighbour’s Fire, should intercept the Use of it, I may fairly with-hold, in Proportion, so much of the Rent as I suffer by Want of the Use of the House. But if the Profit or Increase of the Thing farmed out be uncertain, and have any Thing of Chance attending it, wherein, as a large Increase happens to the Advantage of the Hirer, so a small one is to his Loss; in such Case there can be nothing deducted from the Pension in Strictness of Law, upon the Account of Barrenness, especially since a Dearth of one Year may be recompenced by the Plenty of another: Unless those Accidents, which prevent the Increase, do but very rarely happen, and the Person hiring be presumed not to have intended to run any manner of Risk; and if so, it is but equitable that his Rent be abated, when such uncommon and unforeseen Accidents happen.

XI.Things lent. L. N. N. l. 5. c. 7.In a Contract of Things lent, Something is given to a certain Person upon this Condition, That he be obliged to restore the same Kind after a certain Time in the same Quantity and Quality. Now those Things which are usually lent, are called Fungibiles, that is, such Things as are capable of being repaid in Kind, though not in Specie; 50 because any Thing of that Kind may so perform the Part of another Thing, that he who receives any Thing of that Kind in the same Quantity and Quality, may be said to have receiv’d the same, which he gave. The same Things are likewise determined and specified by Number, Weight, and Measure, in which Respect also they are commonly called Quantities, as they are contra-distinct to Species. Now a Thing is lent either gratis, so as no more is to be received than was deliver’d; or else for some Profit or Advantage, which is call’d Usury; and which is no Ways repugnant to the Law of Nature, provided it be moderate, and proportionable to the Gain, which the other Person makes of the Money or the Thing lent; or to that Gain I my self might have made with the same Money; or to the Loss I suffer by the Want of the present Use of it; or, lastly, that it be not exacted of Poor Men, to whom a Thing lent, is sometimes as good as an Alms.

XII.Partnership. L. N. N. l. 5. c. 8.In a Contract of Partnership, Two or more join together their Money, Wares, or Works, with an Intention that every one should receive a proportionable Share of the Profit; and if there happens to be any Loss, that likewise must be born ratably51 by each Party. In which Kind of Society, as all Parties are obliged to Faithfulness and Industry; so no Party must break off the Partnership before the Time, or to the Detriment of his Partner. But when the Time of the Partnership is expired, after the Gain and Loss is allow’d, each Party is to receive what Stock he put in. But if one Person puts in Money or Goods, and the other contributes his Labour, we must consider, after what Manner such a Contribution was made. For when one Man’s Labour is only concern’d about the Managing and Disposing of the other Person’s Money or Goods, the Shares of the Gain are so to be determin’d, as the Profit of the Money or Commodity bears Proportion to the Value of the Labour; the Principal still remaining the Property of him only, who first contributed it. But when any Labour is bestow’d in the Improvement of any Commodity, which is put in by another, he is suppos’d to have such a Share in the Thing it self, as is proportionable to the Improvement it has received. Again, when Men ingage all that they have in any Joint-Stock, as each of the Partners must faithfully bring into the Account the Profits they have made; so also every one of them is to be maintain’d out of the Joint-Stock according to their Condition. But when the Partnership is broken off, the Division of the Goods is made ratably, according as each Party at first brought in; without any Regard had, by whose Goods any Gain or Loss happened to the Company, unless before-hand it was otherwise agreed.

XIII.Contracts upon Chance. L. N. N. l. 5. c. 9.There are likewise several Contracts which imply a Chance: Amongst which may be reckon’d *Wagers, when the Certainty of any Event, which is not yet known by either Party, is affirmed by one, and denied by the other, a Certain Value being laid on both Sides, it is adjudg’d to that Person, to whose Assertion the Event is found to agree. Hitherto may also be referr’d all Sorts of †Games, wherein we play for any Thing of Value. Among which, those have the least Chance which contain a Trial of Wit, Dexterity, Skill, or Strength. In some of these Skill and Chance have both a like Share. In others, Chance does chiefly determine the Matter. Altho’ it is the Part of the Civil Magistrate52 to consider how far such Kind of Contracts may be tolerated, as consistent with the publick or private Good: Among these we may reckon the various Sorts of Lotteries; as either when several Men, having paid for a Thing by Money laid down jointly, refer it to a Decision by Lot, which of them shall have the Whole; or when a Box or Pot of Lots is made Use of, into which a certain Number of Lots or Papers, both Blanks and Prizes are put, and for some set Price, Liberty is granted of drawing them out, so that the Person drawing, may receive the Prize mark’d upon the Lot. To these Contracts, the receiv’d Methods of ‡Insurance have some kind of Affinity, which are such Bargains whereby is undertaken the securing from, and making good any Damage, so that the Insurer, for a certain Sum of Money paid down, takes upon himself, and is obliged to satisfie for whatsoever Losses or Damages any Commodities may undergo in their Transportation to remote Countries; so that if it shall happen that they be lost, he is bound to pay the Owner the Value of them.

XIV.Sureties and Pledges. L. N. N. l. 5. c. 10. §8,9, &c.For the rendring of Contracts and Covenants more firm and secure, Sureties and Pledges are frequently made Use of. * A Surety is, when another Person, who is approv’d of by the Creditor, takes upon himself the Obligation of the principal Debtor; so that unless he makes Payment, the other must make it good; yet so, that the principal Debtor is obliged to repay him, and save him harmless. And altho’ the Surety cannot stand bound for a greater Sum than the principal Debtor, yet nothing hinders but that the Surety is more firmly ty’d than the other, because more is rely’d upon his Credit, than upon that of the principal Debtor. Yet in course, the principal Debtor is to be call’d upon before the Surety, unless he has wholly taken the Obligation upon himself; and such a Person in the Civil Law is commonly called Expromissor, or an Undertaker. Now if several Persons be Security for one, each of them is to be call’d upon for his Proportion only; unless by Accident, any one of them becomes insolvent, or is not to be found: For in such a Case, the others must be charged with his Share.

XV.Pledge or Mortgage. L. N. N. l. 5. c. 10. §13.’Tis likewise oftentimes customary for the Debtor to deliver, or make over to the Creditor for the securing his Debt, some certain Thing, which is call’d a Pledge or a Mortgage, until the Debt be paid. The Intent of which is, not only that the Debtor should be excited to make Payment out of a Desire of recovering what belongs to him; but also that the Creditor should have some Prospect how he may be satisfied. And upon this Account, Pledges ought regularly to be of equal, or greater Value than the Debt it self. Now the Things which may be offer’d as Pledges, are either Improveable, or not Improveable: As to the former Kind, there is commonly added a Covenant called Pactum αντιχρησεωσ,53 which impowers the Creditor to enjoy the Fruits and Profits of that Pledge, instead of Interest: Now as to the other Sort, the Lex Commissoria takes Place; which provides, That the Pledge shall be forfeited to the Creditor, if Payment be not made within a certain Time limited: And this is no ways unreasonable, when the Pledge is not of greater Value than the Debt, together with the Use for the intermediate Time, and provided the Overplus be restored to the Owner. But as the Creditor is obliged to restore the Pledge upon Payment of the Debt; so in the mean Time he ought to be as careful in the preserving thereof, as if it were really his own. And when there is no Pactum αντιχρησεωσ, and the Thing be of that Nature, as to receive any Damage by Use, or if it be any way for the Debtor’s Advantage, he ought not to make Use of it without his Consent. Now a Mortgage differs from a Pledge in this, That a Pledge consists in the Delivery of the Thing, but a Mortgage, though the Thing be not deliver’d, holds good by the bare Assignation of a Thing altogether immoveable, from which, Payment not being made, the Creditor may receive Satisfaction for his Debt.

And thus what the Duties of Persons contracting are, will plainly appear from the End and Nature of these Contracts.

[*] Grotius de Jure Belli & Pacis, lib. 2. cap. 12.

[*] There is, in Cases of this Nature, always a tacit Agreement, by Virtue of which, he that borrows any Thing, ingages to restore the Thing lent, either in Kind, or to make Amends by something of equal Value. See L. N. N. l. 5. c. 4. §6. [Barbeyrac’s IV.1, p. 204.]

[47.]Provisional sale.

[48.]Forfeiture clause.

[49.]Buying a job lot.

[50.]Added by Tooke, “in Specie” is a now archaic legal term meaning the precise or actual form of something. The idea is that fungibles are items that may be repaid by any acceptable thing, rather than by something exactly the same as the loaned item.

[51.]That is, in a rateable or proportionate manner.

[*] A Wager shall be deem’d Good, though one of the Parties, who lay the Wager, knows perfectly the Truth of what he lays upon; unless he pretends himself ignorant or doubtful about it, in order to draw the other Party on to lay with him. See L. N. N. l. 5. c. 9. §4. [Barbeyrac’s XIII.1, p. 215.]

[†] To make Games, and other Contracts, in which there is Hazard, lawful, it is not only necessary that what both Parties playing run the Risk of losing, be equal; but also, that the Danger of losing, and the Hope of gaining, on both Sides, bear a just Proportion with the Thing plaid for. [Barbeyrac’s XIII.2, p. 215.]

[52.]This is Tooke’s rendering of Pufendorf’s rector civitatis, or “ruler of the state,” which Barbeyrac translates without embarrassment as Souverain.

[‡] The Insurer may demand more or less, according as there is more or less Hazard run. But the Contract shall be null, if, at the Time of making thereof, the Insurer knew, that the Goods were safe arrived, or if the Owner of the Goods at that Time, knew that the Goods were lost. [Barbeyrac’s XIII.3, p. 216.]

[*] Grotius de Jure Belli & Pacis, l. 3. c. 20. §59.

[53.]Antichresis.