Section C: On Justice and Injustice in Voluntary Commutations or Contracts

S. Th. II-II, q. 61, a. 3.

448. Voluntary commutations are said to occur when someone voluntarily transfers his own thing to another. This can be done in many ways: for he can transfer

either 1° the thing itself simply:

or a) gratuitously, without debt, as in donation and succession,

or b) for the recompense of another equivalent thing, as in buying and selling, to which census and exchange are reduced;

or 2° his own thing as to be recovered, because credited for mere use, namely granting the use of the thing with the debt of recovering the thing:

or a) gratuitously, either in things non-fungible or non-consumable, and then it is a commodatum; or in fungible and consumable things, and then it is a mutuum; or in fruitful things, and then it is usufruct;

or b) not gratuitously, and then it is letting and hiring of things or of works;

or 3° his own thing as to be recovered, not by reason of use but by reason of preservation, as in deposit and sequestration; or by reason of obligation, as in pledge and suretyship, "when someone binds his own thing as a pledge, or when someone gives surety for another."

All these, like many others, are called contracts, whose necessity arises from the social nature itself and the indigence of man.

For since man cannot acquire happiness without the help of others, by that very fact he tends not only to live in society, but also to make agreements with others. Once the division of goods has arisen, not everyone possesses all things; and since human powers are limited, each easily understands that he cannot at the same time devote himself to agriculture and to various arts; indeed, even if he could, it would not be expedient, since by devoting himself to one art he becomes more skilled in it and produces many more and more perfect things: by division of labor, indeed, manufactured things increase immensely. But if he produces things of one kind, he will have more than are necessary to him, and on the other hand he needs many things which by his own labor he cannot produce for himself; whence it is necessary that, by commuting those things which he has more abundantly for those which he does not have, he obtain these things by making agreements with others.

And therefore, since man is not always able to possess, or by his own art to make for himself, all things which are necessary or useful to him, he strives to procure the same from others, namely by exchange, buying and selling, letting and hiring, and other pacts or contracts. Whence the faculty of alienating and contracting is proved from this, that without commerce in things and exchanges men would not receive from the right of dominion all those utilities on account of which precisely it was conceded by nature.

449. General principle to be attended to in contracts. - From what has been said it is understood that contracts more strictly so called, by distinction from a gratuitous act or an act of beneficence, instituted for the common utility of both parties, are ruled by the rule of justice which is prior and superior to every consent of the parties, namely by the law of equivalence between what is given and what is received. This principle rules the whole matter. St. Thomas notes it for the contract of buying and selling, in which the marks of a perfectly bilateral pact are more manifestly verified:

"Buying and selling seems to have been introduced for the common utility of both, namely when one needs the thing of the other, and conversely... But what has been introduced for common utility ought not to be more to the burden of one than of the other; and therefore the contract between them ought to be established according to equality of thing. But the quantity of the thing which comes into man's use is measured according to the price given... And therefore if either the price exceeds the quantity of the value of the thing, or conversely the thing exceeds the price, the equality of justice is taken away," q. 77, a. 1.

Hence 1) that principle holds concerning all contracts more strictly so called, introduced for the utility of both parties, such as the letting and hiring of merchandise and of works, partnership, exchange, census, also gaming, wagering, stock-exchange speculations, etc.;

2. insofar as someone most freely wills to depart from the said rule of equivalence in favor of another, the contract has the character of gratuitous beneficence or friendship;

3. if equality is injured against someone's will, the contract becomes by that very fact unjust;

4. he who would abuse another's ignorance, or would use fraudulent or violent means, so that the other would renounce the said equality or consent to inequality, by that very fact would sin against justice, making the contract inequitable.

450. Matter to be treated. - St. Thomas does not treat of the nature and species of contract, but supposes these things known from the law and custom of his time, and from the general principles of human acts; but he treats only of two special sins which can be committed in contracts alone, namely fraudulence, which occurs in buying-selling and in similar contracts; and usury, which occurs in mutuum and in similar contracts; because, as he says, "concerning other voluntary commutations there is not found another (new) species of sin which is distinguished from theft and robbery," of which there has already been discussion.

It will be for us to deal with the principal contracts in general and in species; namely:

A. Concerning contracts in general: 1. concerning the notion and division of contract; - 2. concerning the consent required for contract; - 3. concerning the object or matter of contract; - 4. concerning the subject of contract; - 5. concerning the effect or obligation of contract.

B. Concerning unilateral contracts: 1. concerning promise; - 2. concerning donation; - 3. concerning testament; - 4. concerning principles common to donation and testament; - 5. concerning legal succession.

C. Concerning bilateral onerous commutative contracts, namely: 1. concerning buying and selling; - 2. concerning letting and hiring; - 3. concerning the contract of partnership; - 4. concerning census and exchange.

D. Concerning bilateral gratuitous contracts: 1. concerning the contract of credit, or concerning commodatum and mutuum; - 2. concerning deposit and sequestration; - 3. concerning mandate and management of affairs.

E. Concerning aleatory contracts: 1. concerning insurance; - 2. concerning gaming, wagering, and lottery; - 3. concerning stock-exchange speculations.

F. Concerning subsidiary contracts: suretyship, pledge, and mortgage.