Jacques Maritain Center : Elements of Moral Theology

CHAPTER VI. CONTRACTS.

§ 1. Definitions and divisions.

As viewed by Moral Theology, these are constantly recurring applications of the laws of justice, especially of commutative justice. But common law and moral law sometimes move on different lines.

What is a contract? It is an agreement by which one or more persons bind themselves to one or more, collectively or severally, to do, to give, or to omit something.

Divisions. (1) Common law supposes some "consideration," good or valuable, which makes the contract (a) onerous.

In morals, however, contract may be (b) gratuitous, which, for our purpose, at least, may include such contracts as "mutuum" and "depositum" (vid. infra).

An equitable consideration, however, is of no avail if it tend to deprive third parties of their just rights; otherwise it will stand, if accompanied by deed or immediate possession.

A promise, though morally binding, or a moral duty not enforceable by law, will not be recognized as adequate consideration. In law, a promise is binding only if it have been accepted, and another promise given in exchange, or some act done, which constitutes the consideration.

(Qu.: Legal force of subscriptions, apart from expenses incurred in consequence of such subscriptions?)

On the other hand, if the consideration be valuable, law will not inquire into its adequacy if there be no evidence of fraud. Inadequacy of consideration, or hardship in fulfilling the contract, does not per se avoid a contract, unless fraud, or force, or want of understanding of it, be proved (Blackst. ii. 445). If a benefit accrue to him who makes a promise, or loss to him who accepts it, there is sufficient consideration.

(2) Civil law makes four species of contracts: (a) "Do ut des" -- e.g., a sale or loan; (b) "facio ut facias" -- e.g., marriage, or exchange of services; (c) "facio ut des," as in the case of employees; (d) "do ut facias," as in hiring workmen for wages.

(3) Distinguish, also, express contracts from implied ones; e.g., in employing a person to do work, wherein is implied the contract "do ut facias;" or in buying goods without express stipulation concerning the price of them, implying the contract "do ut des." In morals, other examples may be found in persons accepting office with the implied contract of faithful fulfilment of its ohligations.

Express contracts are formally manifested in words or other signs of consent. Implied agreements are "quasi-contracts," in which consent is only implied in suitable action. Thus, a physician, in the exercise of his art, is under what we may call a "quasi-contract" to use his utmost skill and to do all which his profession implies. Where there are social duties to be fulfilled, common law supposes an implied contract which can be enforced. "Implied contracts are such as reason and justice dictate, and which, therefore, the law presumes that every man has contracted to perform; and, upon this presumption, makes him answerable to such persons as suffer by his non-performance" (Blackst. iii. 159).

(4) Contracts are also either executed or executory in futuro, conveying a "chose in action."

Common law, also, divides them, and therefore divides debts, into (a) parol contracts, which, even if reduced to writing, require consideration, "ex nudo pacto non oritur actio;" (b) sealed contracts -- i.e., deeds and covenants in which the seal is by common law supposed to be evidence of consideration, although some of the United States have altered this. A deed, also, is not affected by the statute of limitations as ordinary debts are, which are limited to six years, although minors and married women are exceptions to this rule. (Qu.: the moral obligation?)

Also, since the object of the limitation is to bar forgotten claims where evidence has been lost, etc., any indirect acknowledgment of the contract will suspend the limitation.

(c) Contracts of record are judgments, recognizances, etc., and since they have the sanction or order of the court, there is no going back to defect in the original transaction except by writ of error.

§ 2. Requisites for a valid contract.

(1) There must be suitable matter -- i.e., things and actions, or whatever falls under full dominion and free administration.

Conditions. (a) The matter must be physically and morally possible; (b) it must be existent, or probable in the future (Qu.: contracts in "futures"?); (c) it must be the property of the contractor; (d) it must be licit, prohibited by no right, otherwise promises and contracts are binding neither in morals nor in law; (e) it must be determinate in quantity and quality, an individual thing or act, etc. In morals we would be bound in this regard to consider the mutual understanding and intention.

(2) There must be a lawful cause. In bilateral exchange the cause is the obligation assumed by the other party. Causeless contruct, or one based on false or illicit cause, is binding neither in morals nor in law.

(Qu.: Profits gained by a base contract? See Part II., page 226.)

(3) There must be a capable subject of the contract, He must be in possession of his reason, and not hindered by any law.

The contracts of wives, minors, drunken persons, etc., are ruled by the common law. But, by the law of nature, the contracts of those who are morally responsible may be binding on conscience when by human law, which looks to the universally expedient, they are not so binding. I mean that if the contract have been to his injury, one may conscientiously use the protection of the law; but he may not benefit himself by his contract, and then shelter himself thus (Duct. Dubitant. II. i. rule 5, § 4).

In common law the contract of an infant is voidable; i.e., it is void if the court find it injurious; otherwise it may be avoided when the minor reaches full age, or he may enforce it on the other party. His contract for necessities is binding on his guardian. But when a reasonable sum has been allowed for an absent child's expenses, a parent is not liable for his extravagant expenditure.

A minor is not legally responsible if he borrow money, but he is answerable for his "torts" in that or any other matter.

(4) Common law requires legal proof of contracts; but they are equally binding on conscience when there is no legal evidence (Duct. Dubitant. II. i. rule 5).

(5) Legitimate consent must be manifested outwardly, but it must also be inward and it must be mutual. Even if the contract be gratuitous, there must be an acceptance of it.

Consent, also, must be free and deliberate. An imperfect act cannot produce perfect obligation.

Suppose that a fictitious contract is made, one of the parties to it having no intention of binding himself, or of fulfilling the stipulations of the contract. Although, properly speaking, there may be no contract, because there has been no true inward consent, yet the deceiver is bound in conscience to indemnify the deceived in all damages incurred; and, if he cannot otherwise do so, to stand by his nominal contract. (Vid. infra, fictitious marriage.)

In law and in morals a contract made by an agent within the limits of his authority is completed by his act. But, for legal purposes, distinguish herein general from special agents. The principal acquires the resulting rights and incurs the resulting obligations.

Silence gives consent in the case of a contract if the matter be favourable to the silent party. But saying to some third person that you make a contract with one who is absent is not legally making it.

§ 3. Defects in consent.

Error, fraud, force, and fear, under certain conditions, avoid a contract.

(1) Error is (a) with reference to the matter or thing involved in the contract; (b) with reference to the nature of the contract itself -- e.g., renting, selling, etc. Every such error annuls the contract even if, the error having been discovered, the contract have been entered on, unless there has been a renewal of it. For the parties must have assented to the same thing in the same sense; otherwise there was no contract. This is true both in morals and in law.

(c) Error respecting the qualities of a thing does not usually void the contract if there be no evidence of fraud. The general rule is, "caveat emptor." But the quality maybe virtually a part of the essence of the thing; e.g., in buying a horse, his having some defect which ordinary vigilance cannot discover. In such a case the previous principles will apply.

In gratuitous contract, also -- e.g., subscription for a charitable object -- error of this kind voids the contract; for this supposes a fully voluntary act in despoiling one's self without any return for so doing.

(d) Error respecting the person does not usually avoid an onerous contract, except in the case of matrimony.

(e) In morals, not in law, error respecting the motive, if that be the final end sought for, invalidates the contract, for it affects the substance of it; e.g., subscribing to what is reported to be in need when such is not the fact.

(2) Fraud is cause of nullity in a nominal contract when without that fraud there would have been no contract made. This means that (a) the fraud must be material to the contract; that (b) the fraud works actual injury whether the statement be literally true (e.g., stating that property in question is worth so much, when it is heavily mortgaged), or be known to be false when the statement was made; and (c) that the injured party relied upon the fraudulent statement, and had a right to rely upon it. Thus was created a special trust. A false and even injurious statement believed to be true by the person who makes it is not a legal or moral fraud. (See, further, § 5, Sales.)

(3) Fear is grave or light, produced from an intrinsic or an extrinsic cause, necessary or free, just or unjust, produced in order to compel the contract or otherwise. All sorts of fear greatly disturbing the reason of a well-governed rational man invalidate a contract; if they be not so great as to amount to that, they do not avoid a contract. Force, also, moral or physical, is in effect the same. If a contract be made with one who takes wrongful advantage of necessities, or uses actual and extreme violence or threats producing well-grounded apprehension of such violence, that contract is voidable in law.

(Qu.: Suppose that the force or fear is for just cause, what is the moral obligation of the contract?)

In gratuitous contracts, however, fear or force counts for more than it does in onerous contracts.

The obligation of the contract is to all things fairly implied in it, and not merely to the letter of it. The obligation is not created or the contract made binding by an oath if the contract be per se invalid; and the oath is void if it cannot be kept without sin.

§ 4. Gratuitous contracts.

(1) A promise is a gratuitous contract in which one freely and spontaneously obliges himself to give something gratuitously to another, or to do or to omit something in his favour.

Conditions. (a) There must be at least the implied will of obligating one's self; (b) the promise must be free from all error and fraud respecting the thing and the final cause of it, from all compulsion and fear, even though thicy be just; (c) the promise must be outwardly given and accepted.

Note, therefore, that simple promises usually express merely the purpose of the promiser, and, if all these conditions be not present, the promise may be revocable.

The promise (Whewell's El. Moral. III. xv. 377) is to be interpreted like any other contract, not only by the intention of the promiser, but also by the sense in which, without amphibology, he at the time believes that it is accepted. This makes the mutual understanding, the implied contract.

If the conditions on which the promise is made be unfulfilled, the promise is null, for he that accepted it was bound to do so subject to those conditions.

Unlawful promises were void ab initio; it is an added sin to fulfil them. Here may arise a seeming conflict of duty, for the promisee appears to have a claim on the promiser. But we must apply the rules for a perplexed conscience, and the promiser's conscience is to be the judge herein. Fear and force have been already considered.

Note that a promise without consideration is not binding in common law.

(Qu. 1. Promising the less worthy candidate that you will vote for him? Qu. 2. A promise of marriage, carelessly made, and therefore a sin -- should it be kept?)

(2) Donation includes (a) testament. This requires capacity to give de facto and de jure, and also ability to receive on the part of the recipient. Infants, etc., however, may receive through guardians; but to non-existents in general no testament is valid; and since in some States a legacy cannot he left to uncertain persons, or to a charitable object apart from an existing corporation, the remedy is to appoint definite trustees, which should be done in all cases.

The limits of age in the capacity to bequeath, as well as of title to receive in other than the natural heirs, etc., are fixed by the laws of the State. (E.g., in New York males must be eighteen years of age, and females sixteen, before they can make a valid testament.)

Observe, as a caution for the priest, the objection in common law to the attending physician or priest or lawyer's receiving a legacy. Note that witnesses ought not to be beneficiaries under a will.

Every natural heir on succeeding to his inheritance ought to make allowance for what he has previously received by gratuitous donation. Civil law may seem to contravene the law of nature in requiring legal formalities for a valid testament, but such formalities must be viewed as necessary for the security of society. But if the will of the testator were just and clearly expressed, conscience, says Bishop Taylor (Duct. Dubitant. II. i. rule 5, § 7), is not released from its obligation. This assumes that the rights of property extend beyond the owners death. But if, on the other hand, man have not the natural right to direct the succession to his property, such succession is strictly subject even foro conscientiae to the law of the land (Blackst. ii. 13).

But, again, if the heir accept the testament and act under it, does he not do so subject to all the testator's conditions, even informal ones?

In cases of doubt, the law must decide, and the general rule applies, "beati possidentes."

(b) Gift. In common as well as in civil law there must be actual delivery or else a deed of gift. Anything else would be construed as a mere promise, for the only valid donation is in praesenti. Without delivery of the gift there is merely a contract in futuro, which requires a consideration.

Conditions. (a) The gift must not be prejudicial to creditors; (b) the donor must be competent to give, e.g., of sound mind at the time; and (c) not circumvented by false pretences, surprise, or inebriety. Any of these defects will void in law and in morals even a deed of gift. Gifts are either "causa mortis," which come nearer to testaments, or "inter vivos." The former are revocable in the life-time of the donor, if he recover, even after delivery; not so the latter.

(3) "Bailment;" loans and borrowing. Civil law makes various classes of bailment, which more or less affect moral and legal responsibility in the matter.

(a) "Commodatum" is a gratuitous contract by which a thing is granted for the sole use of the "bailee" during a certain time, with the obligation of restoring that thing at the expiration of the appointed time. If revocable at the pleasure of the "bailor," it is called "precarium."

(b) "Mutuum" is also a gratuitous loan, but the thing being perishable, a similar thing is to be returned. Money-lending would be an example of mutuum if, as in former ages, interest were illegal and held to be morally wrong.

These are ordinary forms of borrowing. But in the former the bailee has no dominion over the thing; he cannot loan or rent it, and if it be stolen or lost he must give full recompense to the owner, unless he can prove extraordinary care (Instit. iii. tit. xiii.). If the injury have occurred despite alh such precautions, he is not morally bound for the loss, but the question will be one of civil law as well as of morals.{1}

In mutuum, also, the borrower being solely benefited is bound in case of accidental loss. A quasi-contract of this kind is a loan made to a minor, which cannot be recovered in law. So, also, if a payment be made to him when it is not due.

(c) "Depositum" is a gratuitous contract where the benefit is solely on the side of the bailor, as when valuable papers are left in care of a banker. Imperfect dominion is given, -- i.e., of the thing, not of its use. The bailee is bound in re -- i.e., he must restore the thing as it was with all its increase, if any there be; but he may in good faith deliver it to another who claims and is believed to be the rightful owner. He is only answerable for his fraud, or for gross negligence in the care of it. If loss occur otherwise he is not morally answerable for that loss.

Similarly, if one find property, he is not bound in justice to take charge of it; but if he do so, he becomes a depositary, and must use the same care as if the thing were his own, and he is answerable for gross negligence.

(Qu.: A lawyer has gratuitous charge of his client's funds; by forged endorsement they are withdrawn from the bank; which, if either, is answerable for the loss? I answer, probably the bank, as having an onerous contract, deriving profits, and being bound, therefore, to use the greater care.)

(d) A pledge binds in re, and the bailee (e.g., a pawnbroker) is bound to use ordinary care, for the benefit is supposed to be on the other side. So, he is not answerable if the thing be stolen from him.

(e) "Mandatum" is a gratuitous commission where the mandatory agrees to do something with or about the thing bailed. Being for the exclusive benefit of the bailor, the bailee is held only for gross negligence. If one undertake to do simply what is requested, no property being put in his possession, he is not legally liable unless he begin to execute his agency. In that case he is liable for malfeasance, but there is no mandatum, no contract in law.

§ 5. Onerous contracts.

In ordinary onerous contract by mutual consent a right is transferred on both sides; dominion is given by delivery of some thing.

(1) "Locatio," hiring, is (a) of things lent for pay. He who hires a thing must take ordinary care; if he do so, he is not responsible for loss or injury unless his servants were negligent. The owner is bound to keep the thing in good repair, and if the bailee is obliged to do so, he must be recompensed by the owner. But tenants of houses under lease are subject to special rules. What they have added they may remove, if they can do so without injury.

(6) "Locatio operis faciendi," as when mechanics are employed to use materials furnished to them. They warrant ordinary care and the requisite skill. If the workman deviate from the terms of his instructions or contract, and so render his work of no use, he is entitled to no pay, either in law or in morals. The workman retains a passive lien (not a right of sale) upon the materials for his pay.

Inn-keepers are another example of the same. They are liable for loss through servants, other guests, robbery, etc. (If a trunk be lost in the free hack they are liable.) They have a lien for pay on the property, not the person, of their guests.

(c) "Locatio mercium vehendarum;" carriers, both private and common. (The latter carries for any who will hire him; e.g., cartmen, express agents, etc.) Common carriers are responsible for all loss or injury, except the "act of God, or the public enemy." The private carrier is answerable only in case of negligence. Without special agreement, the carrier can receive only the usual pay. He is bound to deliver what is intrusted to him; but the common carrier has a lien on the goods for his pay. The private carrier has no such lien.

"Mutuum," money-lending, has become a case of (a) in modern times. Usury has been debated. Moral justice demands that a full equivalent for the loan be returned, and interest will be grounded (1) on the lender's loss, if any, in parting with the money; or (2) on gain having ceased; or (3) in the fact that there is risk of losing if the money be lent. By the law of nature you are not bound to risk the losing, except in case of grave necessity. Ordinary fear of loss would give no just title to interest; extraordinary does.

(Qu.: Interest when none of these are true?)

(2) Sale or exchange. (Blackst. ii. 449.) Real property when sold requires the formality of a deed, but a contract to sell binds in law and in morals with due limitations. Personal property may be transferred by parol contract even without immediate delivery. Dominion may be transferred at once, even if the contract name a future day for delivery. If the seller retain possession, he is bound to use ordinary care. In that case gain or loss, if any, accrues to the buyer.

If a finder or thief sell, the owner may take wherever he finds, without compensation to the holder. This is moral justice.

The thing sold must be substantially as described. Fraudulent misstatement avoids a sale. A buyer also is discharged from a sale made under "catching conditions."

If the misstatement were not fraudulent, compensation must be made for any loss thereby. This is law and morals. A warranty guarantees all statements. The seller, even if not asked, is bound to show all substantial defects relatively to the end of the buyer. If asked, he is bound to show secret defects, for then the contract is of the nature of a special trust. The seller is not bound to call attention to manifest defects, if he have charged a suitable price. Special cases are determined by law. "Caveat emptor" applies herein.

(Notes on common law of sale. If the value exceed $50, in order to bind the contract part must be paid down ("earnest"), or the goods, in part at least, delivered, or a memorandum of the contract signed. But the vendee cannot take the goods unless the price is paid, or the contract has been for future payment. Delivery may be made to a carrier on credit, but the goods may still be stopped in transitu before actual delivery. In such a case loss, if any, falls on the vendee. If, e.g., a horse thus delivered die, the vendor is still entitled to the price. But some of the United States have abolished these restrictions on sale.)

(Qu. 1. May you sell at a high price when you know that there will be a speedy fall? Yes; justice does not require yon to impart your special information.

Qu. 2. Suppose that the article is harmlessly adulterated, or the quantity diminished, and the price is proportional?)

Monopoly by private persons is immoral, (1) when, by fraud or falsehood, in order to keep up the price, other merchandise of the same nature with that monopolized is hindered from coming on the market; (2) when the market is bought up for the same reason; (3) when false intelligence is spread for the same reason; (4) when workmen conspire to keep up the price of labour by excluding others.

Bets, gambling, lotteries are not immoral per se, as contracts, but through attendant evils. Relatively large gain blind debts, however, are not binding in conscience, though called "debts of honour." {2}


{1} A very conspicuous and interesting case of commodatum is that of Carlyle's lending to J. S. Mill the first ms. volume of the French Revolution, if this were done simply for Mill's gratification. But how did the loss of the ms. occur? If it were due to the negligence of Mill's servant, the sending of the 200 was an act of justice.

{2} On payment of debts what is binding in morals may not be binding under civil law, in which experience has shown the need of many precautions. To be legal tender, the sum must be actually produced, not promised or offered to be produced. It must be unconditionally tendered at the time named. A tender of money cannot be pleaded in an action for general damages, or for a tort, or for voluntary trespass, or in action against a carrier for goods spoiled, unless he have, by valid contract, limited his responsibility. (Some of the United States, however, have abolished this.)

Tender may he made in case of involuntary trespass.

Tender of money due on a promissory note stops the interest but it admits the contract.

One may pay into court what he acknowledges to be due and then, if the creditor proceed, it is at his own peril. If he do not recover more than the amount paid into court, costs and interest are saved. The debtor may also plead a "set-off," and pay into court what he claims to be the balance. But set-off is not allowed where damages are uncertain as in action for tort, trespass, replevin, etc. (Blackst. iii. page 303).

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