Sale (Emptio Venditio)

(1) Formation

A contract of sale was formed by agreement on the subject matter and price. There are therefore three elements to consider: agreement, subject matter and price.

(a) Agreement

As with all of the consensual contracts, the contract of sale was constituted by the parties' agreement. As we saw in Chapter 17,^[2134] if either party was in error as to an essential element of the agreement, the contract would be void. If payment was not to be made immediately, the buyer might give an arra (sometimes spelled arrha) or earnest to the seller. This could be in the form of money, as a deposit, or it could be something else. An arra, though, was in no sense necessary for the validity of the contract. Rather, it was merely evidence of the parties' intentions to enter into a sale transaction.^[2135] Nonetheless, Justinian provided that a buyer who wrongfully withdrew from the transaction forfeited the arra, while a seller who wrongfully withdrew had to pay double its value.^[2136]

In the classical period, there were no special formalities for a valid contract of sale. It was unsurprisingly common to record important sales in writing, but this was only as evidence of their terms. It was not a requirement. Justinian made a change here. He provided that, where the parties had agreed that the contract was to be recorded in writing, this was required for validity. Until the contract had been properly written in the correct form, either party could with­draw, unless an arra had been given.^[2137]

(b) Subject Matter

For a valid contract of sale, there had to be agreement on the property to be sold. Where a sale of a particular item of property had been agreed, the seller was bound also to transfer any accessories forming part of the property or anything produced by the property after the contract was made.^[2138] The question of whether some item was an accessory could cause difficulty in practice.^[2139]

One weakness of the Roman law of sale was that it made only limited provi­sion for sales of generic goods.

As we saw in Chapter 17, there could be no valid contract if the subject matter of the contract had, unbeknownst to the parties, been destroyed before the con­tract was made.^[2141] Such a contract was void for impossibility.^[2142] This could cause difficulties in practice where destruction was less than total, as Paul explains:

I bought a house, when both the seller and I were unaware that it had burned down. Nerva, Sabinus and Cassius say that there is no sale, even though the site remains, and I can recover the money paid by condictio. But if part of the house remains, Neratius says that the question largely depends on how much of the house is left, so that if the greater part of the house has been destroyed, the buyer is not compelled to complete the sale and can recover whatever has been paid. However, if half of the property or less has been destroyed, then the buyer will be compelled to complete the sale, with an estimate being made, according to the standard of the reasonable man, of the extent to which the fire has reduced the value of the house, so that he can be relieved of the obligation to that extent.^[2143]

As we shall see below, when we consider the topic of risk, destruction that hap­pened after the contract was made was treated quite differently.

In certain cases, the law was prepared to show some flexibility. There could be an emptio rei speratae (sale of an expected thing) or an emptio spei (sale of a chance). The sale of an expected thing was a minor concession to the practical needs of commerce: it was a sale of something that had not yet been brought into existence, but which could in principle be identified.

A sale of a chance is a more substantial departure from the principle that there had to be an identifiable piece of property. Pomponius explains:

Sometimes indeed there is held to be a sale even without a thing, such as when, so to speak, a chance is bought. This is the case where there is sold a catch of fish or birds or largesse thrown, for a sale is contracted even if nothing results, because it is a sale of a chance...^[2146]

Here, the buyer was taking the risk that nothing at all might result.

As far as the validity of the contract was concerned, there was no requirement for the seller to be owner (assuming that the buyer was not aware that the seller was not owner).^[2147] Of course, a non-owning seller would not be able to make the buyer owner, but that is a separate issue.^[2148] The point here is that, when the true owner appears and demands the property, the buyer will need to have a con­tractual remedy against the seller, and there can only be a contractual remedy if there is a valid contract.

(c) Price

There could no sale without a price,^[2149] which had to be certum (certain).^[2150] There was some doubt as to whether it was possible to provide for the price to be set by a third party,^[2151] but it was settled by Justinian that such a term was a valid condi­tion in a sale.^[2152]

It was disputed between the two schools of jurists, the Sabinians and Procu­lians, whether the price had to be in money.

That did, though, leave the problem of transactions in which payment was to be made partly in money and partly in something else. A modern example would be a car being traded in as part payment for a new car. There is no text address­ing part-payment in goods specifically. However, a passage in the Digest taken from Pomponius does say that part of the price may be made up of services to be rendered,^[2154] and the analogy with part-exchange seems clear. The same view has been taken in modern law.^[2155]

The price to be paid did not have to be a fair one: it could be either higher or lower than the true value of the property.^[2156] To this rule, though, there arose a major exception in the post-classical period.^[2157] According to this exception, if the price paid for land was less than half of the iustum pretium (fair price), the seller was said to have suffered from laesio enormis. The buyer could be required to choose between returning the property in exchange for the price paid, or making the price up to the iustum pretium.^[2158]

(d) The Parties’ Position after the Making of the Contract

Suppose that I agreed to sell you a certain quantity of wine. After the contract was made, but before the wine was handed over to you, the container in which I was keeping the wine cracked and the wine drained away.

In Chapter 17, we came across the concept of ‘perfection’ of contracts.^[2160] In Roman law, risk passed to the buyer of goods when the contract became ‘perfected’. In most sales, this happened as soon as the contract was made. Sometimes, though, perfection of the contract was delayed. This happened in three cases: where prop­erty to be sold had still to be identified; where the price still had to be determined; and where the contract was subject to a suspensive condition.^[2161] Thus, for example, where the goods had been identified but had to be weighed to determine the price, the contract was not perfected until the goods had been weighed.^[2162] Similarly, if I sold you three amphorae of wine from my cellar, the contract was not perfected until the amphorae had been identified and set aside for you. Again, if the sale was subject to a suspensive condition, the contract was not perfected unless and until that condi­tion was met.

As we shall see below, unless the property was handed over to the buyer imme­diately, the buyer would not yet be owner at this point.

Thus if a slave dies or some part of his body is injured, or a building is wholly or partly destroyed by fire, or all or part of a piece of land is carried away by the force of the water, or also if it is made much smaller or worse by alluvio^[2164] or the blowing down of trees in a gale, the loss falls on the buyer, and he must pay the price even though he has not obtained the property. The seller is not liable for anything that happens without malice or fault on his part. But if anything is added to the land by alluvio after the sale, that goes to the buyer, for the benefit must go to the one who bears the risk.^[2165]

On this view, then, the buyer bears the risk because the buyer is also the one who is entitled to benefit from the property.^[2166] For example, the buyer will be entitled to any fruits of the property that emerge after the contract is made and, indeed, the seller will be liable for any steps taken to prevent such fruits emerging.^[2167] Still, the transfer of risk to the buyer before he or she has physical control of the property, and thus can take steps to safeguard it, and before he or she can sue as owner for damage to it, is not altogether easy to justify. This difficulty is not completely eliminated by the requirement for the seller of property, damaged after the pass­ing of risk but before the passing of ownership, to assign to the buyer any rights the seller may have to be compensated for the loss.^{[2168] [2169]}

(e) The Transfer of Ownership

The making of the contract did not in and of itself transfer ownership from seller to buyer. We saw in Chapter 11 how ownership transferred: either by delivery to the transferee or, according to strict law with certain types of property, by one or other of the formal procedures known as mancipatio and in iure cessio.³ In sale, unless it was intended to give the buyer credit, it was also necessary for the buyer to pay the price or to find security for it.^[2170] Only once all of these things were done did ownership pass to the buyer. Until that point, the seller remained owner and could effectually sell to someone else instead. Of course, if that happened, the seller would be in breach of his or her obligations under the contract of sale, and would be liable to the buyer accordingly, but the buyer would have no right to recover the property from the third party who ended up with it.

(2) Seller’s Duties

The law imposed various duties on the seller. The general remedy for enforce­ment of these was the actio empti, the formula for which ran (translated) as follows:

Whereas Aulus Agerius bought from Numerius Negidius the slave Stichus, what­ever Numerius Negidius ought to give or do for Aulus Agerius on the basis of good faith, let the judge condemn Numerius Negidius to Aulus Agerius. If it does not so appear, let him be absolved.

Liability could go beyond simply the agreed price. Instead, damages for breach of the seller's duties were based on the buyer's ‘interest in having the thing'.^[2171] This could be greater than the value of the property or the price paid, but had to be closely related to the property. For example, the seller's liability might be increased where the value of the property had risen since the sale was agreed, but the seller would not be liable, for instance, for the death of a slave that resulted from the seller's failure to deliver agreed upon wheat.^[2172]

(a) Care of Property

The seller was under an obligation to take care of the property until delivery was made to the buyer.^[2173] The standard of care to be met, though, is unclear. Certainly, the seller would not be liable for loss caused by damnum fatale^[2174] or overwhelming force.^[2175] Was the seller liable for anything falling short of this?^[2176] This may have been the classical law,^{[2177] [2178] but some texts suggest the slightly lower standard of the most careful paterfamilias.4 In many cases, of course, the outcome would be the same either way, because in many cases it would be clear either that the seller was at fault or that there was nothing that could have been done. There would be cases, how­ever, in which the circumstances did not count as damnum fatale, but in which the seller was not clearly at fault. In those cases the precise rule would matter.}

(b) Delivery with Vacant Possession

As already mentioned (and which is obvious in any case), the seller was obliged to give the buyer possession of the property. The buyer was also entitled to get posses­sion of certain things that were considered to be pertinents of the land. For example, the buyer would also be entitled to any keys,^[2179] and to things dug or cut from the land, such as chalk or felled trees, unless they were expressly reserved in the sale.^[2180] If these were not produced, the actio ad exhibendum (‘action for production') could be used to compel their production.^[2181]

The possession given had to be ‘vacant possession', which is to say, without any encumbrances of which the buyer was unaware.^[2182] For example, if the land was burdened by a servitude^[2183] or creditors of the seller took possession of the property,^[2184] the seller would be liable to compensate the buyer. Similar obligations exist in modern law.^[2185]

(c) Guarantee against Eviction

The seller was certainly bound to transfer whatever right he or she had, but what if, in fact, the seller was not owner of the property? As we have seen,^[2186] a seller who was not owner could not make the buyer owner. Strictly speaking, though, the seller gave no guarantee that the buyer would become owner. However, the practice arose of the seller agreeing by stipulatio to compensate the buyer with double damages if a third party came forward and successfully challenged the buyer's right to the property. Such a challenge is known as ‘eviction'. In the classi­cal law, it came to be seen as a breach of the duty of good faith that was imposed by the form of the actio empti to refuse to do this.^[2187] The developed position, then, was that the seller did not guarantee ownership, but instead guaranteed to com­pensate the buyer if the latter should be evicted from the property.^[2188] It should be noted here that, while eviction may involve physical removal from the property, it need not necessarily do so. The essence of eviction is not physical removal, but the successful challenge by a third party. For example, suppose that I buy an area of land from you. It turns out that part of the land in fact belongs to a neighbour. The neighbour successfully sues me for recovery of the land. Follow­ing this, however, I agree with the neighbour to buy the disputed area from him. Even though I remain in possession of the property, the neighbour’s successful challenge means that I am considered to have been evicted, and accordingly you are liable to compensate me. With the exception of the requirement for double damages, these rules have been received in Scots law, and still apply to sales of land.^[2189] The requirement for eviction is capable of causing practical difficulties. However, it should be remembered that defects in title would often in Roman law be cured by usucapio after a relatively short period of time.^[2190]

(d) Guarantee against Defects What if the property sold turned out to be defective in some way? A distinction has to be made first between patent and latent defects. A patent defect is one that should be obvious to the buyer, and for that reason the buyer had no remedy for patent defects. Anyone who was unaware of a patent defect was considered to have ‘deceived himself’.^[2191]

The position with latent (i.e. non-obvious) defects was more complicated. Originally, there was no liability for latent defects unless the seller had given an express undertaking of soundness, which undertaking could be either general or specific.^[2192] Over time, though, greater protection for the buyer was developed.

The first stage in the development of general liability for latent defects arose from the good faith clause in the actio empti.^[2193] As we have seen, the liability of the parties to the contract was to be judged according to the standard of what good faith required. This opened the door to holding the seller liable for failing to disclose something that he or she was aware of, which in good faith ought to have been disclosed. The first case that we know of involved sale of a tenement building on the Caelian Hill^[2194] by an individual called Titus Claudius Centuma- lus, to Publius Calpurnius Lanarius.^[2195] Centumalus failed to disclose that he had been ordered by the augurs^[2196] to reduce the height of the building, as it interfered with their observations of the flight of birds. Centumalus was held liable for fail­ing to disclose this, which was considered to be a defect which should have been disclosed to the buyer. As this case shows, the defect need not be physical. Thus, for example, where a slave was sold who, to the knowledge of the seller, was a thief, that was a defect for which the seller could be held liable.^[2197] In all of these cases, however, liability was based on a lack of good faith, which implied that the seller would not be liable if he or she was unaware of the defect.

The second stage in the development of general seller's liability for defects came in the edict of the aediles, magistrates who were responsible among other things for the proper management of the marketplace.^[2198] They made provision requiring sellers to make buyers aware of any defect in slaves or livestock exposed for sale in the marketplace. The relevant provision for slaves comes down to us as follows: ‘Those who sell slaves are to make purchasers aware of any disease or defect there may be and whether the slave is a runaway or a loiterer or is subject to undischarged noxal liability...'^[2199] The aediles would grant an action if this was not done. It was irrelevant that the seller was unaware of the defect. Similar provision was made for livestock.^[2200] If no undertaking was given that the slave or animal was free from defects, the buyer could rescind the contract within two months using the actio redhibitoria, even if no defect had appeared. If a defect did appear, then the buyer had six months from that point to rescind using the actio redhibitoria,^[2201] returning the property and reclaiming the price.^[2202] Alternatively, the buyer could keep the property, but claim the difference between the value of the property as it was and the value that it would have had if free from defects. This was done using the actio quanti minoris (the ‘action for how much less'), which had to be brought within a year of the defect becoming apparent.^[2203]

What, then, counted as a defect for these purposes? Certain preliminary points must be made. First, what counted as a defect might differ between slaves and livestock. For example, there are animals for which castration is not uncom­mon, and this did not count as a defect if the animal's stamina or usability was not reduced; the contrary was true of a slave.^[2204] Second, the edict was concerned only with latent defects. Patent defects, that is defects which the buyer should have been able to spot, such as blindness or visible scarring, were not covered.^[2205] Third, where the defect was an illness or disease, the edict could apply even if the condition was temporary.^[2206]

As a general test, the edict applied to ‘any defect or disease which impedes the use and serviceability of the slave' or animal, but not very minor defects.^[2207] The texts abound with examples of both. For instance, a slave who could not speak or who could only do so unintelligibly was considered defective; one who merely had difficulty in speaking clearly was not.^[2208] Short-sightedness counted as a defect in slaves.^[2209] There was great concern with the fertility of female slaves: a female slave who was sterile^[2210] or who regularly gave birth to stillborn children^[2211] was considered to be defective for these purposes, as was a woman who menstruated twice in a month or not at all (unless, in the latter case, this was on account of age).^[2212] Unsurprisingly, therefore, pregnancy was not considered a defect.^[2213] Left­handedness was not considered a defect,^[2214] and nor was bad breath, unless it was a symptom of a more serious complaint.^[2215] This last example illustrates very well the difficulty of making a clear distinction between those defects that were suf­ficiently serious and those that were not, for one might have considered very bad breath a more serious defect than mild short-sightedness.

One important limitation to the scope of the aediles' edict was that, in a sale of a slave, character defects did not normally count except to the extent that they were mentioned by the edict itself.^[2216] For example, a seller did not have to disclose the fact that the slave was a gambler, a drunkard or a liar or was quarrel- some,^[2217] or the slave was prone to religious fanaticism, frivolity or superstition.^[2218] Likewise, incontinence in a slave was not a defect, as long as it resulted from deep sleep, drunkenness or laziness, rather than an illness.^[2219] Some character defects were, however, considered serious enough to come within the edict. For example, a slave who had committed a capital crime^[2220] or who had attempted suicide^[2221] was considered defective. Equally, a physical affliction with mental consequences would fall within the edict.^[2222] Here, though, it is the underlying physical affliction that is the defect, rather than its consequences on the slave's character. A charac­ter defect might, though, be something that would give rise to liability under the actio empti if known about and not disclosed, so the general exclusion of character defects is less important than might otherwise be thought. After all, a slave-owner would often have been in a position to know of the character defects of the slave, which would then, if they were serious enough, make the owner liable under the actio empti for failing to disclose them on sale.

The third and final stage was the extension during the classical period of the rules of the aediles' edict to all sales, not just those of slaves and livestock, on the basis of the good faith clause in the actio empti⁹ For example, where a container for holding liquids was sold, there was an implied undertaking that it was sound, even if nothing was expressly agreed.^{[2223] [2224] Liability for defects included not just the reduced value of the property, but also consequential losses. For example, if unsound timber was sold and then used to build a house, the seller would be liable for the building's value if it collapsed due to the unsoundness; if diseased animals were sold, the seller would be liable also for the damage caused to any other of the buyer's animals that were infected as a result.[2225]}

The reception of these ideas in Scots law also has a complex history. We must first distinguish between land and moveable property. As far as moveables are concerned, this and other issues in sale are regulated by a UK statute, the Sale of Goods Act 1979.^[2226] The question of defective goods is addressed in section 14 of that Act, which imposes an implied term, in sales of goods in the course of a business,^[2227] that the goods are of ‘satisfactory quality'.^[2228] Although this is a UK statute, it has been said that there is ‘every reason to believe' that section 14 was inspired by the writings of the French ius commune writer Pothier, and thus ulti­mately by Roman law.^[2229] Thus, for all that it is a UK statute, anyone concerned with an issue of fitness of goods could do worse than to explore the Roman and ius commune materials on the matter.

As far as land is concerned, although this has been argued to be historically incorrect,^[2230] it is widely thought in modern Scots conveyancing practice that there is no implied guarantee of fitness in a sale of land or buildings.^[2231] Such guarantees may be, and commonly are, provided for in respect of specific attributes of the property. However, beyond that, the practice is to rely instead on an examination of the property by a professional surveyor to disclose any defects that may be dis­covered in that way, and on insurance for any defects that may emerge later. For situations where the seller is in breach of an obligation under the contract of sale, it came to be accepted during the nineteenth century that the actio quanti minoris had not been received as part of Scots law, with the result that the buyer could not keep the property and recover damages. Instead, the buyer had to rescind the contract and reject the property. This development may have been based on con­fusion with the Roman rules on laesio enormis, which were certainly not accepted.^[2232] The rule excluding the actio quanti minoris in contracts of sale was removed by section 3 of the Contract (Scotland) Act 1997.^[2233]

(3) Buyer’s Duties

The buyer was also subject to a number of duties, enforced by the actio venditi. This was in substantially the same wording as the actio empti, above, with the obvi­ous change of the property having been sold to the defender rather than having been bought from him or her.

(a) Payment of Price

The buyer's basic duty was to pay the agreed price, with interest payable on failure to do so.^[2234]

(b) Acceptance on Delivery

Where delivery was offered in accordance with the contract, the buyer was obliged to accept delivery and could be compelled to do so.^[2235] Failure to accept delivery had the additional consequence that, from that point until delivery was actually made, the seller ceased to be liable for damage to the property except to the extent that the damage resulted from the seller's intentional wrongdoing.^[2236]

(c) Payment of Expenses

The buyer was obliged to reimburse any necessary, unforeseen expenses in caring for the property. An example might be money caring for a slave who became ill before delivery to the buyer of that slave.^[2237]

(4) Additional Terms

In addition to these implied obligations, it was common for parties to a sale to agree additional terms. These were fully enforceable as long as they were agreed at the time the contract was entered into.^[2238] Often these special terms imposed conditions, whether suspensive or resolutive, as for example where one party was given the right to withdraw from the agreement. We saw in Chapter 17 how con­tractual conditions worked.^[2239] Other possibilities existed, however. For example, the parties might want to make special provision for the time and place for per­formance of the contract.

C.