Question One: On the Notion and Division of Contract

451. Contract in the broader sense means the same as pact (verdrag); but in the strict sense it is a species of pact, namely a pact bringing in an obligation for each contracting party. If one party alone is obligated, strictly it will be a mere pact, for example, a gratuitous promise, or a donation, which obligates only the donor; whence it is called an act rather than a contract. Nevertheless in the present treatise we take the word in the more general sense.

And therefore contract is defined: an agreement by which one or more persons obligate themselves toward one or more others to give, to do, or not to do something (a. 1101). It is said:

1. an agreement, for contract is a species of agreement; and an agreement is the consent of two or more into one and the same settled decision. This is the formal cause of contract: mutual consent, so that if the consent or acceptance of one party is lacking, by that very fact the contract does not exist;

2. by which one or more: these are the subject of the agreement;

3. obligate themselves toward one or more: that obligation does not constitute the contract but is the effect of the agreement;

4. to give, to do, or not to do something: this is the object or matter of the contract, that into which they must consent.

Therefore an agreement which leads to an obligation toward another is a contract; but the obligation is understood to be true, and indeed strict, namely one which is derived from commutative justice. Whence from an obligation undertaken a right is transferred, namely a right in a thing, or a right to a thing. Hence contract can also be defined: the consent of two or more concerning a right to be transferred. And therefore:

1° Contract is an agreement between two or more, by which a certain obligation is produced and consequently some right is transferred; this is done either directly by conferral of a right, or indirectly by extinction of an obligation.

2° It depends especially on the deliberate will of the contracting parties, so that a contract does not subsist without the will of the contracting parties, and of itself does not oblige beyond their will.

3° It is as it were a private law which they voluntarily impose upon themselves, from which, as an effect, there arises an obligation or moral bond, by which each contracting party, or at least one of them, binds himself to the moral necessity of paying, doing, or omitting some thing.

4° Whence it necessarily supposes at least two persons, since no one can contract with himself, or confer a right upon another who does not know or does not accept.

5° Of these one, the promisor or proposer (promettant; toezegger), offers and promises as debtor; the other, the stipulator (stipulant; bedinger, bepaler), acquires the promise or the right.

452. Elements of contract. - In contract three things are distinguished:

1° The essential or substantial things, without which a contract, or such a contract, can neither be nor be conceived. They are three: a) the consent of the parties concerning some right to be transferred; b) the object about which consent can turn, and indeed the object proper to such a contract, for example, merchandise and money in buying; c) the subject, or persons fit for contracting.

2° Natural things are clauses which from law, custom, or equity are wont to be appended and are tacitly included, and are presumed to be present unless they are excluded by explicit agreement, for example, warranty against eviction or hidden defects in buying and selling (a. 1160).

3° Accidental things are those which can be added, but are not judged to have been added except from a special pact, for example, payment in determined money, or delay of payment beyond the time established by law or custom.

453. Contract is divided in many ways:

A. And principally by reason of effect or obligation:

One is unilateral (eenzijdig, eenerzijdsch), which produces an obligation in only one of the contracting parties, as promise and donation (a. 1103); 2) another is bilateral or synallagmatic (tweezijdig, wederzijdsch), when it produces obligations in each of the contracting parties (a. 1102), whether immediately, and then it is perfectly bilateral (for example, buying and selling), or in the other party only mediately and occasionally, and then it is imperfectly bilateral (for example, commodatum).

A perfectly bilateral contract in the stricter sense is a contract whose notion is more fully verified in it; there is a twofold species of it: a) a contract of certain event, or commutative contract (ruilverdrag), when each is judged to give or receive something equivalent and certain; b) an aleatory contract, or contract of uncertain event (kans- of toevalsverdrag), in which the equivalent is uncertain, namely the hope of another thing to be obtained: of making gain or avoiding loss, or when the thing to be rendered depends upon a fortuitous event, or at least the quantity of the thing, as in gaming, insurance, speculations (a. 1104 and 1964).

B. By reason of cause or motive: a) one is gratuitous (de bienfaisance; weldadigheidsverdrag), which is made from the intention of doing good, unto the sole favor and utility of one party, when someone hands over a right to another gratis or without his own emolument (a. 1105); b) another is onerous (à titre onéreux; onder bezwarenden titel), which is made unto the utility of each party, when each receives some advantage and some burden, as in selling or letting (a. 1106); c) another is mixed, which is partly gratuitous and partly onerous, yet simply onerous, as in the sale of a thing for half its value, or in a donation under an onerous condition.

Every onerous contract is bilateral, since it produces a burden and therefore an obligation in each party; conversely, an imperfectly bilateral contract is not necessarily onerous but of itself is gratuitous, as mutuum, commodatum, deposit: although each party is obligated to something, nevertheless only one receives an advantage.¹

¹ Others speak in the contrary way: they call only onerous contracts bilateral, and divide unilateral ones into gratuitous and onerous.

C. By reason of mode or form, one is properly so called, explicit or formal, which is entered into by words, writings, signs, or deeds expressly manifesting consent; 2) another is improperly so called, implicit and virtual, which is entered into by tacit consent by assuming the office of judge, pastor, teacher, etc.: by that very fact implicitly and by force of a quasi-contract the obligation is undertaken of rightly fulfilling the annexed offices.²

² In French civil law quasi-contract is taken in a diverse sense: it is a contract which the law feigns, a presumed contract (a. 1371), a voluntary and solitary deed of man from which he is obligated toward another, and sometimes two are obligated between themselves. The Code indicates only two species: the deed by which someone voluntarily manages the goods of another, whether the latter knows it or does not know it (a. 1372 sq.), and the deed by which someone knowingly or unknowingly receives from another what is not owed to him (a. 1376 sq.).

Of explicit contracts, a) one is consensual, which is perfected by consent alone (bij enkel overeenstemming), and this is simple (eenvoudig) if it is contracted without special formality (sale, letting), whether it is written or not written; or solemn (plechtig) if it cannot be validly contracted without formalities (matrimony, donation of an immovable thing, testament, mortgage); b) another is real (zakelijk), which is perfected not by consent alone but by delivery of the thing, for example, commodatum, mutuum, pledge, deposit.

D. By reason of consent, 1) a contract is absolute or conditioned; 2) it can be pure, to which no special accidental circumstance is added, or qualified, which has annexed to it an accidental quality or modification, for example, a contract to a day, to a demonstration, to a cause, under a mode (a. 1168 sq.). Hence a conditioned contract differs from a modified contract, because a condition suspends the obligation or the resolution of the contract until it is fulfilled; a mode does not suspend, but imposes only the obligation of observing the mode, and if it is not observed the contract nevertheless is not revoked.

E. By reason of denomination, it is 1) named (benoemd), which has its proper name in law; or 2) unnamed (onbenoemd), which lacks a proper name (a. 1107), such as many bilateral contracts, which then are reduced to four categories: do ut des, do ut facias, facio ut facias, facio ut des, or to opposite modes: do ut non faciam, etc. Thus, for example, I give a garment so that you may not exact a debt; I do not exact a debt so that you may labor for me.

F. By reason of subsistence, it is principal, which subsists of itself; and accessory or subsidiary, which accedes to another principal contract, depends on it, and strengthens it, for example, pledge, mortgage.

G. Finally, by reason of relation to human law, a contract is naked or clothed according as it is not recognized by civil law or is fortified by its patronage.

454. Human law, especially civil law, rules contracts, and accordingly defines the obligations and rights of the contracting parties, the manner of entering into a contract, their effects, and even the conditions of the act required for firmness and effect, or also for validity. In this last respect human law can touch contracts in five ways:

1. Sometimes it neither prohibits nor approves them, but does not recognize them nor attribute any force to them in the external forum; thus, for example, gaming contracts (a. 1965: a naked contract, not clothed).

2. Sometimes, in order that it may recognize them, it requires special proof, for example, by writing, witnesses, presumptions (a. 1316). Thus, for example, writing is required when a contract exceeds the value of 1500 fr. (a. 1341 modified by the Belgian law of 21 Apr. 1938): in sale (a. 1582), in letting (a. 1715), in settlement (a. 2044).

3. Sometimes a contract is not declared null through itself since it is not annulled by law, but it is decreed that it can be annulled, for example by a judge, and then it becomes invalid (even in the forum of conscience) from the moment of the sentence; for example, sometimes the contract of minors.

In French law it is called rescindable (rescindable; verbreekbaar), revocable (révocable; herroepelijk), or even null (nul) without addition.

4. Sometimes it is declared invalid by the law itself. Namely, when conditions simply required for validity are lacking, it is invalid from law; but that law must be applied by the sentence of a judge; whence it remains valid before the sentence, but after the sentence it is invalid (even in the forum of conscience), not indeed from the moment of the sentence, but it is judged never to have been posited.

Then in law it is called null from law (nul de droit, nul de plein droit) or simply null (simplement nul; ongeldig).

5. Finally it is altogether invalid (and in the forum of conscience) even before the sentence of a judge. Namely, when conditions essential to the nature, object, or existence of the act, and thus altogether required for its validity, are lacking, so that without them it could not even be conceived. The public good then demands that it be held null even before the intervention of a judge. Then in law it is called null by the fact itself (nul par le fait même), radically null (radicalement nul), nonexistent (non avenu; nietig, onbestaande); for example, a contract concerning an illicit thing (a. 1131 and 1133). But if the matter is doubtful, the sentence of a judge is to be awaited.

455. For a contract there is required (a. 1108): legitimate consent, - a capable subject or fit person, - apt matter, - a licit cause or legitimate reason in the obligation, which nevertheless is to be understood as objective and proximate, or the end of the work by which the contracting party is immediately moved to undertake the obligation. Hence we shall speak of three things: of consent, of subject, of object or matter of contract; when these have been given, a fourth follows, namely the obligation, which is the effect of contract.