Hire (Locatio Conductio)
(1) Nature and Classification of Hire
An oddity about the contract of hire was the breadth of situations that it covered. Take, for example, a lease of land, a contract engaging a tradesman to carry out a piece of work and a contract of employment.
We would not nowadays particuÂlarly consider these arrangements to have anything more in common with each other than they do with other contracts. In Roman law, however, they all fell within the one contract, the contract of hire, without making any clear distincÂtion between them. Modern accounts, though, typically do distinguish between the three: the locatio conductio rei (hire of a piece of property), the locatio conducÂtio operis (hire of a piece of work, an agreement to perform a specific task in exchange for payment) and the locatio conductio operarum (hire of services, in effect a contract of employment).This brings us to a matter of terminology. The two parties to a contract of hire were called the locator and the conductor, but this terminology was used in a way that is capable of causing confusion. The term locator is related to the verb locare (to place, or to place at the disposal), so a locator is âone who places someÂthing at the disposal of another'. The conductor is the person who accepts responÂsibility for that something: the verb conducere means to carry along or to take with one. In a hire of a piece of property, the property is placed by the lessor in the hands of the lessee, so the lessor is the locator and the lessee is the conductor. In a hire of services, the employee places his services at the disposal of the employer, so the employee is the locator and the employer the conductor. In a hire of a piece of work, by contrast, the piece of work is placed in the hands of the workman, so in this case the customer is the locator and the workman is the conductor.
Thus, in a hire of a services, it is the locator who is doing the work, while in a hire of a piece of work it is the conductor who is doing the work.(2) Distinguishing Hire from Sale
There are various texts commenting on the similarity of hire and sale.[2240] Most obviously, both were subject to similar rules for their constitution, being constituted when the subject matter and the amount payable[2241] were agreed. The connection between them went beyond this, though. In some circumstances, it could be difÂficult to tell into which category the agreement fell.
Suppose, for example, that you are a jeweller, and I approach you to make a gold ring for me. Is this a contract of sale of the ring, or is it a contract of hire of the work involved in making the ring? It has characteristics of both. The position that was taken was that the answer depended on who supplied the materials for the ring.[2242] If the gold is supplied by me, then the contract is one of hire of a piece of work: it cannot be a sale, as I retain ownership of the gold throughout, and a transfer of ownership is a fundamental part of a sale. By contrast, if you supply the gold, then the contract is a sale. What if a diamond is to be mounted on the ring, the diamond to be supplied by one of us and the gold for the ring itself by the other? This question is not directly addressed, but it would seem reasonable to suppose that the answer would still depend on which of us supplied the gold. According to the principles of accession, which we saw in Chapter 12,[2243] the ring is the principal thing. On attachment, the diamond's identity is subsumed into that of the ring. Accordingly, even if I, the customer, supply the diamond, I lose ownership of it when it is attached to the ring that you are making with your own gold.
Again, suppose that you are in the business of supplying slaves to fight in gladiatorial shows. Now in such circumstances, it is likely that some of the gladiÂators will come back to you more or less unscathed, while others will not, either because they have been killed or they have been so wounded as to be of no further use to you.
We might therefore agree that I will pay 20 sesterces for each gladiator that is unharmed and 1,000 for each that is maimed or killed. In those circumstances, the view that was reached was that the contract was one of hire of the unharmed gladiators and sale of those who were maimed or killed.[2244] [2245]Although the classification of contracts as sale or hire is not as important in modern law, it can still have significance. In appropriate cases, the Roman materials may still be of use. We can see this in Marjandi Ltd v Bon Accord Glass Ltd,lli a case which shows very well the continuing fertility and vitality of Roman and ius commune sources.[2246] In that case, the defenders were a company which, among other things, supplied and built conservatories. The pursuers were a company which had formerly been engaged, as agents of the defenders, to negotiate with prospective customers for the supply and building of conservatories. For the purposes of the proceedings in the case, it was necessary to determine whether a contract for the supply and building of a conservatory was a contract of sale of the conservatory, or whether it was, instead, a contract of hire of building services. Following discussion of the views of Gaius,Justinian and the French ius commune writer Pothier, as well as of Scottish sources, the sheriff held that this was a contract of hire. The substance of the contract was the performance of work on property belonging to the cusÂtomer, namely the customerâs house and land, with ownership of the components of the conservatory being transferred to the customer by accession, on attachment to the land.[2247] As with the customer who supplies gold for the manufacture of a ring, the principal thing here (the land) was supplied by the customer.
(3) Hire of a Thing (Locatio Conductio Rei)
(a) Creation
This was a hire of a piece of property, which could be either land or moveable. The lessor was the locator and the lessee the conductor.
The contract was formed when the parties agreed on the subject matter and the rent to be paid. It is genÂerally thought that the rent had to be in money, with the exception of leases of agricultural land, in which case the rent could partly consist of a share of the produce of the land.[2248]Normally the hire would be for a specified period,[2249] at the end of which the property had to be surrendered to the lessor. A special rule existed in agricultural leases, however.[2250] According to this rule, if the lessee was allowed to remain on the land beyond the agreed end date, the parties were considered to have impliedly agreed a renewal of the lease. This implied renewal is known as âtacit relocationâ, and exists also in modern Scots law.[2251]
It is important to understand that a hire of a thing was, in Roman law, entirely a contractual arrangement. That is to say, it gave the lessee no right in the propÂerty itself. This contrasts with medieval and modern attempts to provide greater protection to tenants of land: in Scots law, for example, a lease of land has been capable of becoming a real right since the Leases Act 1449.[2252] In Roman law, the position was different. A lessee had only a personal right against the lessor, and no real right in the property itself.[2253] The consequence of this was that, if the lessor transferred ownership of the property to someone else, the lessee would not be able to enforce the hire agreement against that acquirer. The lessee would certainly have a remedy against the lessor, who by disposing of the property breached his or her obligations under the hire contract, but the lessee would have no remedy against the third party acquirer.[2254] Indeed, so little protection did the lessee have that the lessee was not even considered to possess the property, and so had no access to the possessory interdicts if a third party interfered with the lessee's use of the property.[2255]
(b) Duties of Locator
We can identify three specific duties as owed by the locator to the conductor in a hire of a thing.
First, the property had to be delivered to the conductor in accorÂdance with the agreement, along with any accessories customary for the type of property in question,[2256] and the locator had to uphold the conductorâs position for the full term of the lease.[2257] The locator would be in breach of this obligation if, for example, the conductor was ejected from the property, whether or not this was the locatorâs doing.Second, the property had to be provided by the locator in the appropriate conÂdition[2258] and maintained in that way through the whole term of the hire. If the locator failed to comply with the repairing obligation, the conductor could deduct the cost of this from the rent.[2259]
Third, the locator was responsible for any extraordinary expenses on the property beyond ordinary maintenance costs. For example, the conductor was entitled to reimbursement for useful improvements made to land that had been leased.[2260]
The obligations of the locator were enforced by the actio conducti.
(c) Duties of Conductor
The conductor was subject to certain obligations, enforceable by means of the actio locati (action for a thing let out). The main obligation was of course payment of the agreed rent and, as we saw in Chapter 15, where land had been leased out the landlord had an implied security over certain categories of goods on the property.[2261] The conductor was also obliged to take care of the property,[2262] to the standard of the âmost careful paterfamiliasâ fa[2263]
(4) Hire of Services (Locatio Conductio Operarum)
(a) Creation
A hire of services is, in effect, a contract of employment. Here the locator is the employee and the conductor the employer. The contract was made when there was agreement on the work to be done and the payment to be made.
One important limitation on the scope of the hire of services is that it could only be used for low-status occupations, of a kind commonly carried out by slaves.[2264] Thus, one could employ a labourer, a craftsman, a business manager, a schoolteacher or a doctor,[2265] but not a lawyer, advocate[2266] or philosopher.
It was seen as unseemly for high-status Romans to engage in such activities for such a low, mercenary reason as the pursuit of money[2267] (which, as high-status individuÂals, it would be supposed anyway that they did not need).[2268] The appropriate contract for such occupations was the contract of mandate, considered below.(b) Duties of Locator
The locator was obliged to carry out the agreed duties with due diligence, to the standard of any professional expertise claimed. Absence of the proper skills counted as fault.[2269]
(c) Duties of Conductor
The conductor was liable for any loss caused by fault, for example by providing an unsafe system of work. The conductor's main obligation, however, was payment of the agreed wage. This had to be paid even if the work was not done, as long as that failure was not the fault of the locator.â˘
(5) Hire of a Piece of Work (Locatio Conductio Operis)
(a) Nature and Creation
A hire of a piece of work was similar to a hire of services, in that both involved work being done for money, and was likewise constituted as a contract when those matters were agreed. Where, though, a hire of services created essentially an ongoing employment relationship, a hire of a piece of work was concerned with payment for some specific task. For example, if I employ a chauffeur, that is a hire of services; if I book a taxi to the airport, that is a hire of a piece of work. Likewise, if I ask a craftsman to make me a wooden chair, that is a hire of a piece of work; if I set up a workshop for the making of such chairs, those working there are engaged under a hire of services.
Another (perhaps confusing) difference between hire of services and hire of a piece of work is the terminology involved. As we have seen, in a hire of services, the person doing the work is the locator and the employer is the conductor. In a hire of a piece of work, it is the other way around: the customer is the locator and the workman is the conductor. We have seen above the reason for this difference of terminology.
(b) Duties of Locator
The locator was, of course, obliged to pay the agreed fee, and would be liable for any loss caused by fault on the part of the locator.
(c) Duties of Conductor
The conductor had the duty to carry out the work to the required standard. This was an objective test, based on thejudgement of the hypothetical reasonable man.[2270] [2271] Accordingly, the conductor was liable where failure resulted from inexperience or lack of skill as well as where it resulted from subjective fault.[2272] The conductor bore the risk of failure to perform the agreed task to the required standard, even where there was no specific fault on the part of the conductor.[2273] To this rule, there were two excepÂtions. First, where the failure arose from a defect in materials provided by the locator, the conductor was not liable.[2274] Second, the conductor was excused liability where the failure arose through vis maior, that is some overwhelming event that could not have been guarded against,[2275] such as a work in progress being destroyed by earthquake[2276] or landslide.[2277] Serious adverse weather might be another example.[2278]
D.