• Video

Roman Categories of Contracts versus Modern Standards of “Reasonableness”

There is a debate in modern law about whether strict rules should govern transactions, or instead, they should be judged on a standard of reasonableness. Professor Richard Epstein argues that a system with hard rules does a better job of managing the majority of cases, and only a few marginal situations require a different approach. The Romans had firm categories and clear standards which made it simpler and more efficient to create and enforce contracts. https://youtube.com/watch?v=aI__5hHaOiY


The Romans had this very strong system of classification. They put something into this category, into that category. What the Romans believed is that what you did is you did the hard categories. You are a social guest on the one hand or you are a business guest. Then we give you legal rules to figure out what the risk of liability are. They are the exact same principles you use in other areas, whereas for mutual benefit there is a higher standard of care. Whereas gratuitous the party who is doing the favor gets the benefit of the doubt on these cases and so on down the line. When you get to modern law, the common law I think goes wrong today. What we do is we do this stuff as a reasonableness standard, but there's a subtle change in the way in which the rules work. The Romans stuff was the categories had to be right and the difficulties came in dealing with marginal cases. What the modern law tends to do is to say, "Look, we don't trust these categories. We are going to have sliding scales of reasonableness that go from one end to another and we are not going to have these hard lines." What happens is in this system with the continuity you don't have to worry about the borderline cases because there are no borders, but the greater failing is this, if in fact human conduct is highly regular so that the probability of getting yourself into one of these marginal cases is relatively low the better business judgment is to give you clear rules that cover 98% of the cases and worry about the 2% of the cases later rather than to jeopardize the 98% of the cases 'cause you are not quite really sure what's going to be required and leave it to everybody else's imagination. This then becomes in modern terms the rule v. standards debate. There may be circumstances where standards are certainly going to be appropriate, but by and large they are not going to be in everyday relationships. Why is that? Because when people organize their own lives in dealing with small transactions, they are really not particularly congenial with the type of situation in which they don't know where they stand. If you are trying to figure out how you give people instructions to resolve disputes outside of the framework of a legal system on a category approach and the normal standards are there. The genius is to get the right rules and the Romans did that because they understood that gratuitous promises were a really important class of cases. It may not be executory enforcement, but there are all sorts of things that take place once a transaction is started before the thing is completely unwound.

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