Christian Wolff: Natural right 5 - The art of removing obligations

After having gone through in detail various ways in which obligations are created by contracts, Wolff decides to investigate how such obligations defined by contracts are terminated. For instance, if the contract in question is dissolved by mutual consent of all parties, all the obligations defined by it dissolve also: if a sale of a thing is cancelled, the former buyer is not obligated to provide money nor is the former seller obligated to deliver the thing. Wolff notes that if the contract in question is unilateral, such as a donation, it can be cancelled just by the person benefiting from the contract.

The most straightforward way to terminate obligations determined in a contract is just to provide whatever has been agreed upon. Once this is done, Wolff emphasises, the other parties have no right to exact anything further because of this contract. Whatever the contract says about the obligations, they must usually be fulfilled to the letter: if I should give you my house, I cannot give you money instead. Similarly, if I am due to pay something at a certain date, I can be compelled to pay when that day arrives. Of course, Wolff adds, deviations from the conditions imposed by the contract are allowed, if the other parties of the contract agree to that. For example, if my creditor allows it, I can provide only a partial payment at the agreed date and promise to give the rest later.

Wolff notes that while sometimes it is certain what obligations have been determined in a contract and who is the person supposed to fulfill this obligation, at other times this is not so certain: in the former case, Wolff speaks of liquid debts, in the latter case of illiquid debts. When debts are illiquid, no one can be compelled to pay or fulfill them. Thus, debts should at first be made liquid by investigating the exact terms of the contract in question.

Wolff considers also several more detailed questions pertaining to debts. For instance, what happens to obligations of a person in debt, when their creditor cedes the debts to someone else (the person in debt is now obligated to pay their debt to this new creditor, and if they ignorantly pay to the original creditor, they must give up the right to demand the payment back to the new creditor), what happens if someone else pays your debts without you mandating them to do it (they can do so and you are not legally obligated to pay them back, but it is morally right to do so, if the terms of debt were clear and the person in question did not wish to make a donation), and what if someone gives a thing they do not own as a payment and the creditor consumes it (the outcome depends on whether the person in debt and their creditor knew the debtor was not the real owner).

Debts can also be annulled, Wolff notes, either by a declaration of the creditor (this is called acceptilatio) or by a contract between debtor and creditor (this is known as pactum de non petendo). Such annulment can happen for all of the debt or only a part of it, furthermore, it can happen unconditionally, but also with other conditions attached such as other obligations to be provided instead.

A peculiar case of annulment of debts is what Wolff calls compensatio, where two persons are in debt to one another and both of their debts are annulled. Compensatio has various preconditions, for example, the debts should be equally valuable. Furthermore, if any of the debts involves a unique thing (e.g. if one person is obligated to give a certain house to the other person), compensatio is impossible. Debts must also be liquid, that is, one must be certain who owes and what is owed.

Debts can also be taken care of, Wolff says, by datio in solutum, that is, by providing something else than what one was obligated to provide. This replacement can be anything agreed with the creditor: a thing, use of a thing or some work. Datio in solutum frees debtor from the original obligation, that is, if the debtor would later have a chance to fulfill the earlier obligation, they need not do it. A more general version of datio in solutum is what Wolff calls novatio, where creditor and debtor agree to replace a prior obligation with a new obligation, possibly with new conditions. Novatio naturally cancels everything related to the former obligation, for instance, if the payment of the first debt was in delay, the payment of the new debt is not.

Another way to get a debt cleared is to get someone else to pay it. If this transfer of debt has been agreed with the new person, Wolff calls it delegatio, while by assignatio he refers to a case, where the debtor just assigns someone else to pay the debt (for this to work, the assigned person must be in debt to the original debtor). In a sense, delegatio is a much more assured arrangement: in delegatio, if the new person eventually does not pay the debt, the original debtor is still freed of the obligation, but with assignatio creditor can always get their due from the original debtor, if the new debtor does not want to pay.

In an extensive part of the chapter Wolff deals with the question of disputes concerning rights (jus controversum), that is, cases where two or more persons declare that they have the right to something, although only one of them could do so. Such disputes might arise, for instance, with illiquid debts, where it is unclear who exactly owes and what. Simplest way to end the dispute is what Wolff calls amicabilis compositio, in which one party of the dispute declares that they will want nothing of the disputed thing, even without any compensation. A similar case where some compensation is given or at least it is promised, Wolff calls transactio. Wolff notes that neither in amicabilis compositio nor in transactio is it really decided, who has the right to the disputed thing - a claimant just gives up their possible right to the thing. Even if later it would be found out that the claimant truly had the right to the thing, they would not retrieve that right anymore. In case of transactio, of course, if the claimant is not provided what they have been promised, they can renew their claim on the disputed thing.

Disputes on rights might lead the claimants to hold a tractatus. Tractatus does not mean an end to the dispute, but is merely a process in which the pros and cons of the various claimants are considered. Tractatus might also lead to a suggestion for settling the dispute, such as amicabilis compositio or transactio, but as such it does not obligate anyone, before all the parties have agreed to the terms suggested. Although tractatus as such creates no obligations, Wolff clarifies, all the parties are morally obligated to consider the various pros and cons in a fair and equitable manner.

Wolff clarifies that in addition to claimants, other people can also be involved in tractatus, if their council could help to settle the case. An important example is the mediator, who is a person obligated to find some agreement on the dispute. Thus, the mediator has to impartially weigh all the claims to the disputed thing and on the basis of these considerations offer a suggestion to settle the dispute. The suggestion of the mediator has to be founded on what truly is the case, not on what would benefit the various parties. The mediator can make only suggestions, and if any of the parties refuses to accept, it does not become a valid agreement.

An arbiter, Wolff explains, has a slightly more powerful position than a mediator. An arbiter is decided by compromissum between the disputants, that is, by a mutual agreement that they will accept the decision of the arbiter as a truth. The chosen arbiter is then not just obligated to suggest an agreement between all the claimants, but to decide upon the truth of their claims. Because of the compromissum, no single claimant can nullify the decision of the arbiter, but such a cancellation of compromissum requires yet another mutual agreement between the claimants. Wolff notes that even after the arbiter’s decision of the real owner, claimants can still choose to settle the dispute in a different manner, for instance, by a transactio in which one claimant pays some compensation for the real owner, if they give up their ownership. Still, arbiters have more power in their hands than mere mediators. Thus, they should be not just impartial, but what Wolff calls vir bonus, that is, persons known to be honorable and acquainted with what is truly good and just. They should avoid even the semblance of dishonesty and therefore decline, if one of the claimants offered a reward for a decision on their behalf, before the decision. Wolff admits that the arbiter can accept a reward, if there’s no possibility of a suspicion that it would have affected the decision, for instance, if all the parties agreed in the comprossimum that the winner of the dispute should reward the arbiter.

In addition to the claims of the parties, there might be other relevant pieces of evidence to consider in a dispute. One type of these, Wolff notes, is instrumentum, that is, a document describing what persons negotiating a contract have agreed upon. If a person is obligated to do or provide something in instrumentum, it must be signed by that person. Only the original instrumentum is to be accepted as evidence, Wolff says, unless the validity of the copy is confirmed by trustworthy persons. Even the validity of the original, signed instrumentum can be contested, Wolff adds, if a signatory can show that she has been deceitfully induced to sign it without reading. A possible evidence for such deceit is protocollum, that is, a memorandum on the main points to be written in intstrumentum. Signatories can also refuse to accept instrumentum made from charta blanca - a piece of paper containing nothing but the signature - if they would have never agreed to the terms written on it.

In addition to written documents, other physical objects might be used as evidence for deciding a dispute. Wolff gives as an example bacilla fissa. This is essentially a wooden stick, divided in two halves: to one half is made notches, indicating how much a person is obligated to provide, while similar notches are made to the other half, when a part of the debt is provided. By comparing the two halves, it is easy to see how much of the debt is still left.

In some cases disputes must be solved through witness accounts - Wolff points out that especially in cases where a person was obligated to do something, witnesses are the only possible proof for a person having worked. Witnesses are not expected to speak what is true in the logical sense, Wolff explains, but only what is morally true, that is, what they believe to be true. Of course, they are also supposed to be acquainted with the facts, in order that their testimony has any relevance. In a best case, witness is vir bonus, that is, as trustworthy as can be. On the other hand, witnesses who have been bribed should not be believed. In a refreshingly progressive fashion, Wolff notes that women can as well be reliable witnesses. Then again, relatives of the parties involved should not usually be accepted to give their testimony. Wolff believes that the reliability of witnesses can be strengthened by oaths, because the fear of divine punishments might make people hesitant to lie. In general, Wolff adds, only one witness is not enough to prove anything.

If all else fails, disputes over rights can be settled with a lot, Wolff admits. On the other hand, he expressly forbids settling disputes with duels or physical attacks, because the life of other people should be respected. If a legal dispute turns into a state of war, all participants should aim to find a more peaceful solution.

If the ownership of something is in dispute, Wolff notes, claimants are not allowed to force the possessor of the thing to yield it. This is true, even if a claimant knows for certain that they are the rightful owner - the ownership must be first proved by documents, witnesses etc. On the other hand, if the ownership is not in dispute, the owner can force the possessor to yield the thing. In the case the possessor does not want to give the thing, Wolff says, the owner can enforce what is called expletio juris, in other word, they can take from the possessor something else. This something else should be either equal in value to what is owned, or if it is more expensive, the owner has to provide the possessor compensation for the surplus. The owner has to then provide the possessor enough time to consider whether they want to return the originally owed thing or whether they want to accept the removal of the other thing.

The final topic Wolff considers in this chapter is precarium, by which he means a contract, whereby an owner concedes use of a thing to another person, without any payment and for as long as the owner wishes. Obviously, the thing in question cannot be such that it would be consumed by use, but something more permanent, for instance, when a person relinquishes a house for use to a friend. As the name of the contract indicates, the use allowed is precarious - as soon as the owner wants, the thing in question must be returned to their possession. Wolff mentions two other possibilities of how precarium could end. Firstly, if the person enjoying the use of the thing dies, precarium ends: thus, it is not something inherited through generations. Secondly, precarium could end by consolidatio, that is, by the user acquiring also the ownership of the thing. Interestingly, Wolff thinks that if the owner relinquishes the ownership of the person to a third person, precarium is not as such terminated. Of course, the new owner has the right to revoke precarium, but before that, the thing can be used as before.

Christian Wolff: Natural right 5 - As it were a contract

Wolff’s next topic is quasi contracts. These are no real contracts, but in a sense mere fictions. That is, in a quasi contract, the consent of a person for something is just assumed. In other words, there is not even a tacit consent, which might be implied e.g. by the actions of the person in question. Such a fictitious contract is valid, Wolff notes, only if her consent cannot be asked. For instance, if a student wants to buy some books, but cannot verify from her parents, whether she can use their money for this purchase, she might still have a right to assume that they would consent to it. Similar quasi contracts can be made, Wolff continues, if the person in question is underage or otherwise incapable of giving consent.

A particular type of quasi contract Wolff calls negotiorum gestio. In effect, this means a quasi mandate, where a person called gestor handles some affair for another person assuming that this other person would mandate her to do it, if he just knew about it. This type of contract, Wolff notes, is valid only if what gestor does is useful to the other person and if not doing it would cause some economic damage to the other person - for instance, gestor could hire someone to fix a building owned by the other, which was damaged in a fire. Gestor is also bound by strict rules: she can only do what the other person could be assumed to do in a similar situation and she has to explain her reasons for doing whatever she has done for the other. Gestor also cannot at the same time handle her own and the other person’s businesses, which would imply e.g. that she took advantage of the other’s property for her own sake. Then again, gestor shouldn’t be assumed to freely donate her time and effort for the other’s sake, but the other person is obligated to honour the gestor with some reward.

Similar quasi versions of other forms of contract can also appear in exceptional circumstances, Wolff notes. For instance, if something like food has been left for safekeeping and it is in danger of becoming spoiled, the custodian can do a quasi loan, by consuming the food and preparing to return something similar, when she meets the owner. Similarly, if a person holds a thing that is to be sold by the owner and she herself suddenly needs it, she can do a quasi purchase and prepare to pay the owner later what the owner would have suggested as a price.

Wolff also notes the possibility of quasi societas, that is, people becoming part of a same company-like project without consenting to forming such a company. Wolff calls such quasi societas also communio incidens, emphasising that members of this quasi society have incidentally received common obligations. A simple example of such communio incidens is people inheriting some piece of property that they must administer in common. Quasi societas can turn into an actual societas by members of the quasi societas agreeing on how to administer the common obligations.

A curious form of quasi contract rises in relation to what Wolff calls indebitum. Indebitum is, simply taken, something that is not a debt - in other words, if you pay indebitum, you erroneously pay something that you need not have paid or you pay it to a wrong person, to whom you do not owe it. A person receiving such erroneous payment is then under a quasi contract, whereby she has to return what was given, once she notices the error. Of course, she might have handed the thing further, and then it belongs to the person it was handed to. In such a case, she must at least give something equal in value to the original owner.

A case that might seem similar and thus involve a quasi contract is linked to notions of ob causam dari and causa non sequi. By ob causam dari Wolff means simply giving something in order to get the receiving person give or do something in return - for instance, paying a worker to fix a car. Causa non sequi refers then to a situation where this receiving person fails to do what she had to do. In this case, the receiving person should return what was given to her, just like in the case of indebitum. Yet, this obligation is no quasi contract, Wolff says, because by refusing to do what she should have done, she already has tacitly consented to returning what was given.

Wolff notes that accepting an erroneous payment of indebitum is a particular example of a more general notion of unknowingly accepting something sine causa, that is, accepting something that one doesn’t have a right to accept. In addition to accepting indebitum, Wolff notes, examples of accepting sine causa include all cases where something is accepted as a payment for something that is impossible or against the natural law. Now, if someone accepts sine causa without knowing it, she can be presumed to want to return what was given to her, if she just knew she shouldn’t have accepted it. Thus, she is under a quasi contract.

A related case is what Wolff calls accepting something quasi sine causa. In such a case, accepting itself is in accordance with the natural law, but keeping what was accepted is not. A good example happens, when a person has accepted something for a future business, which then fails to become a reality. After such quasi sine causa accepting, the person receiving the payment is obligated to return the payment to the owner. Yet, this obligation forms no quasi contract, because the person accepting tacitly assumes with this very act of accepting the obligation to return the payment.

Wolff also briefly considers contractus mixtus, in other words, contracts composed of other contracts; for instance, he notes, if a tenant farmer pays the rent of the land with a ratio of the produce of the land, the contract between the farmer and the owner is a mix of a locatio conductio (in this case, rent of something) and societas (because both the farmer and the owner share in the produce of the land). As Wolff himself also says, the primary interest does not lie in the numerous ways in which one can combine different types of contract, but in the general principle that this is possible and that the characteristics of the new contract can then be deduced from the characteristics of the components.