The legal institutions that gave life to the present law of commercial contracts can be best discerned by contrasting them to their predecessors in ancient times: The sharper their silhouettes, the easier will be our understanding of what has changed and why. Pre-commercial transactions provide such sharply contrasting silhouettes when compared with their contemporary counterparts, although not always. Some of the features of pre-commercial transactions are still with us, although mostly in our poorest or least economically developed societies. Yet, do not be surprised if they are also found in the laws of emerging economic giants such as China or India. Thus, the same comparison that produces contrasts also finds institutional remnants of a distant past. A good starting question, then, would be: Did the kind of contracts were are concerned with exist in a society devoid of merchants or persons who earned their livelihood by selling, exchanging or lending goods or services produced by themselves or by others? The quick answer is that they did not, at least not as the contracts we know.
In a pre-commercial society, the duty to perform a service or provide goods to others was not created by actual promises exchanged between or among suppliers, users or consumers at a time prior to the delivery of the goods or the performance of services. The duties to produce and give one’s goods or services to others in such a pre-commercial society were derived from the social “condition” or status of the members of a family, clan or tribe. Their preexisting social status and relationships created the customs and practices that determined what, how and when to produce and exchange. Only when these groups started to earn their living from trade did they start to rely upon contracts which were largely shaped by the customs of those who were the actual traders (and who tended to form their own associations of traders) and not directly from the customs of the community at large.1
Moreover, once contracts began to be used in everyday commerce, their practices proved malleable and disposable over time. Consider, for example, the supposedly archetypal practice of exchanging simultaneous promises binding on both parties prior to the performance of the contract. This was a practice that Hugo Grotius (one of the most influential jurists of the seventeenth century as well as the drafters of the Code Civil) thought reflected the universal and permanent components and essence of 82binding contracts.2 As a product of the will of the parties, each party had to express his acceptance to the other’s promise. Otherwise, the promise would have been an unenforceable “pollicitation,”3 an expression often used a century later by Robert Pothier, whose Treatise on Obligations strongly influenced the sections on obligations and contracts of the Code Civil.4 In fact, this assertion did not reflect the full spectrum of Roman contractual practices. Many Roman contracts were enforced even though one party had expressly promised to do or give something and the other did not do so. Instead, the counterparty gave a thing or rendered a service in exchange for the other’s promise. Alternatively, one party gave or did something once the other did the same. These transactions were known as “innominate contracts.”5
Or, consider what happened to Hugo Grotius’ “essential” requirement of an acceptance by the promisee prior to enforcing the promisor’s promise when the mass merchandising of industrially produced goods, among other nineteenth century economic factors, required the enforcement of “firm” promises, i.e., promises enforceable against the promisor during the period he promised they would be binding even if he had retracted them prior to their acceptance by the promisee.6 Contrary to Grotius, Pothier, and the Code Civil paradigmatic contract formation, commercial offers to sell goods at a certain price and during a specified time period could be enforced as if they had been accepted by their offerees. Similarly, “irrevocable” promises by banks to pay or accept drafts or bills of exchange drawn against them by the “beneficiaries” of their commercial letters of credit were enforceable against them even though the promisees-beneficiaries had not accepted or acted upon such promises when their issuers attempted to revoke them.7 The life of contracts, then, has been inextricably intertwined with the requirements of trade. For, as will be apparent throughout this book, if there is something essential, universal and permanent about commercial contracts, it is that they are means towards the end of facilitating trade and that as such they must be consistent with the cooperative instinct of the trading man.
Trade has always depended upon what religion, secular law or observed custom has deemed tradable. Prior to becoming a trader, man and his closely-knit group of nomads hunted and gathered for a living. In this type of society there was very little trade, and what was traded was mostly edible and moveable. Hence, land was not a part of the hunter and gatherer’s trade. Yet, neither was it an object of trade once man settled and made his living as a member of a pastoral-agricultural community. The reason for the restrictions on the trading or mortgaging of agricultural or pastoral land was that it had become the principal source of the sustenance of the family, clan or tribe, and thus it was to be sold or mortgaged only when economic necessity required 83it.8 Further, once man earned his livelihood as a regular trader, few restrictions applied to his trade of moveables, which soon included incorporeal or intangible objects such as rights to things, or rights to rights in things such as the rights to copyrights, trademarks or patents. Even the ancestral restrictions on the sale of family or communal land started to give way to the process of commodification of anything that had marketable value.9
In brief, in those societies that anthropologists describe as dependent upon “dense” social relations,10 the obligation to give something to one or more members of a family, clan or tribe did not arise from what we refer to as contracts. Such dense exchanges were not preceded by explicit agreements between promisor and promisee. They were and are part of an often undifferentiated set of duties of reciprocity owed to each other by members of the same family, clan or tribe. Eventually, these primitive social groups were able to establish a hierarchy of duties and contributions based on what they perceived as most valuable for their survival. Also, rights and duties within the group eventually became synonymous with hierarchy and social status. Those whose ancestors or who had themselves contributed the most to the group’s survival enjoyed the most valuable rights and had to perform the least burdensome duties.
Some legal historians regard this tribal and status-based phase of social life as the beginning of an evolutionary process that culminates in our contemporary contracts’ society. Sir Henry Maine, the pioneer historian of “ancient” law, asserts, for example, that the evolutionary process started with social status as the main basis for the entitlement to rights or imposition of duties.11 As the process evolved, contracts became the basis of entitlement and so it is in our time for most societies. In Maine’s opinion, then, the contract as a vehicle for an individualized exchange of goods and services is the main form of entitlement to goods and services in contemporary societies. This entitlement is not based upon the status of the contracting parties, but upon what they contribute to each other’s welfare, a contribution whose value is measured by what each contracting party is willing to do for or give to the other.12
Following the publication of my Tucker Lecture at Louisiana State University Law Center in 1979,13 which implicitly endorsed Maine’s views as an explanation for the increasing commercialization of civil law, I received a thoughtful letter from Professor Grant Gilmore. Professor Gilmore was one of the most respected and influential commercial law scholars of our time. In his letter, he challenged Maine’s “status to contract” and stated that in contrast to Maine’s linear view, he discerned recurrent cycles of status and contract in societies such as Czarist, Soviet, and post-Soviet 84regimes.14 While contract may have gained ground over status during the period that immediately preceded the demise of Czarist Russia, or even during the Soviet Leninist period,15 status reemerged as the dominant form of entitlement to goods and services during most of Soviet Russia only to give way to contract, perhaps only temporarily, in post-Soviet Russia.
Regardless of whether status and contract are benchmarks of an evolutionary process or whether there will always be a combination of both, there can be little question that commercialization can only thrive where, as I will discuss shortly, contracts reflect the parties’ intent, especially on the prices they are willing to pay for goods and services. On the other hand, it is also true that many of the legal institutions discussed in this and in following chapters reflect the extent to which familistic and tribal considerations still influence the law of commercial contracts, especially as it applies to the sale of what was family or tribal land and is now land owned by the state.16 In addition, I describe an incident in a later chapter in which a frustrated United States buyer recounted his Chinese seller’s justification for ignoring a contractual promise. The Chinese seller warned that if the U.S. buyer planned to have a profitable business relationship in China, the buyer better understand that it would require that the buyer and seller act as close friends. Such a relationship will only come about from a continuous exchange of reciprocal favors (Guanxi), including the disregard of a contractual promise.17 Yet, please note that one of the most important legal and economic consequences of such a relationship is that it usually is an exclusive relationship. Thus, each of the participants is supposed to enjoy a monopoly with respect to the goods, services and special favors that the other participant provides or can provide. Clearly, then, such a relationship is at the expense of competition and its movement of resources to their most cost effective and productive use.
One of the first features of a pre-commercial society that one discerns from contrasting it to our own commercial society is that the former does not depend upon markets for its regular and mercantile exchange of goods and services. Even though markets exist in these societies, they do not decide or significantly influence what members of those societies produce, sell, exchange, lend or donate.
The late Professor George Dalton of the economics department of Northwestern University provided helpful insights on the forces responsible for non-market exchanges of pre-commercial societies. He combined an anthropologist’s grasp of the cultural principles that guided pre-commercial transactions with an economist’s perception of the economic effects of these principles, especially on the manufacture and distribution of goods. His seminal study, “Traditional Production in Primitive African Economies” published in 1962, profited from a robust anthropological literature on the economies of African tribal societies.18 Because these societies and economies 85remained largely unchanged for thousands of years and often resembled the practices, attitudes and values found in other parts of the pre-commercial world, they enabled him to contrast key transactions and cultural traits of pre-commercial society with their counterparts in the western market economies of the sixteenth and seventeenth centuries.19 In the following sections, I will summarize some of his findings and conclusions.
Professor Dalton found market exchanges of goods and services in many places in indigenous Africa, but typically these exchanges only provided their traders with very minor portions of their income.20 Thus, these exchanges were not what could be characterized as the dominant economic organization of pre-commercial Africa. Professor Dalton characterized the dominant organization as the “community” of inhabitants, a grouping that he contrasted with an “association” of traders. He quoted the English anthropologist Raymond Wirth for the distinction between these two entities:
[An] [a]ssociation is a group specifically organized for the purpose of an interest or group of interests which its members have in common…. [A] [c]ommunity is a circle of people who live together, who belong together, so that they share not this or that particular interest, but a whole set of interests wide enough and comprehensive enough….21
As insightfully pointed out by Karl Polanyi, the distinguished Hungarian economic historian and theorist of social change, this notion of community, a crucial component of primitive economies, was “ ‘embedded’ in society, in the sense that the economic system functions as a by-product of noneconomic institutions….”22
To this, Professor Dalton added:
[In the West] [w]e are used to thinking in terms of “production units” because the Western firm is an association, not importantly affected by kinship, religious, or political affiliation of participants. In Africa, however, production is often undertaken by intimate communities of persons sharing a multitude of social ties and functions, one of which happens to be the production of material goods.23
He later concluded:
[Thus] an African’s role in each production process is usually defined by some aspect of his social status—tribal member, husband, cousin, friend, elder. The question, what forces, institutions, or rules direct labor, land and other resources to specific lines of production, can be answered only with reference to community social organization.24
What are the costs that producers and distributors of goods and services pay when they do not depend upon market exchanges for their livelihood? One of these costs, according to Professor Dalton, is that producers are unable to acquire the machinery or technology that enables them to produce more, cheaper and better products and to employ others. Machines, effective technologies, as well as hired labor are considered “factors” of production. He equated a machine or an effective technology with hired labor in the sense that these are productive “factors” that paid for themselves. They were costs of doing business that should be “[i]ncurred … to enlarge [the producer or distributor’s] sales revenue from which he recovers its cost.”25 He concluded that “without purchased ingredients of production, and without reliance upon market disposition of output, the input and output decisions of producers cannot be based on factor and output prices as guiding parameters.”26 Hence, the cost paid by the pre-commercial community as a producer of goods is not only its inability to produce and sell more and better products, but also the absence of “guiding parameters” of profitability through more realistic pricing. In Professor Dalton’s words: “That neither factor nor product prices exist to constrain the indigenous African agriculturalist (as they do the Western) is crucial to understanding why it is that Africans can organize production in such seemingly bizarre ‘social’ ways.”27
Professor Dalton pointed out that the variables associated with a dependence on technological and market constraints are fewer and less complicated, and therefore less apt to make the pre-commercial producers and distributors materially insecure.28 Community producers do not have to fear unemployment due to an ever-advancing technology or too many goods chasing too few consumers. What these producers have to fear most is bad weather or plant disease. Yet I would ask, how about the opposite? Would they have to fear too many consumers chasing too few goods? Probably not in pre-commercial society, but how about in ours?
Later in this book, you will encounter a prescient warning by Austrian economist Ludwig von Mises in 1920 to the central planners of the Soviet economy: Your planning is bound to fail because it did not rely on market prices.29 Without market prices, argued von Mises, “[T]here is no possibility of allocating resources on the basis of consumer preferences…. [or] of calculating costs or revenues and no way of knowing if products most highly valued by consumers have been produced.”30 After reading that portion of the book, you may wish to ask: What do pre-commercial community exchanges and Soviet central planning have in common other than an absence of market prices? What about the absence of a commercial class or of what Professors 87Dalton and Wirth referred to as an “association” as contrasted with a “community of producers”? You may also wish to inquire into what Max Weber, one of the founders of modern legal and religious sociology, regarded as the rationality of his economic man (homo economicus)—especially his ability to ascertain costs, profits and losses—which received a notable impulse with double-entry bookkeeping during the thirteenth century AD.31
Finally, professor Dalton’s analysis of the distinctions between a community association and an association of growers, producers or distributors shows that the latter (unlike the former) are able to gather the factors of production and distribution, thereby being able to estimate prices and costs and likely profits or losses. They do this by engaging in market transactions with their suppliers and buyers by means of contracts. This sequence and its reliance on contracts as the most accurate reflection of the prices that market participants are willing to pay is at the heart of commercial and economic development. Hence, it will not be surprising that where this sequence is missing, such as in Mao’s collectivization of agriculture in China,32 or “Che” Guevara’s rejection of Marcelo Fernandez’ attempt to introduce cost accounting in the lending policies and procedures of Cuba’s National Bank,33 the economic and social consequences are disastrous. What is ironic and sad is that this is one of the main lessons we should have learned from studying the failures of some pre-commercial societies as they tried to become commercial.
Dalton defines reciprocity as the giving of gifts and counter-gifts between persons who stand in some socially defined relationship.34 The gifts of produced items or of other factors of production such as labor are regarded in pre-commercial society as an expression of interest in the social relationship between the gift givers and recipients. He notes that in our own society, significantly, a birthday gift from father to son is just one among many ways of expressing their kinship relation. Yet, reciprocity plays a much more important part in pre-commercial African economies than in our own: The frequency and amount of such gifts are greater; the number of different people with whom one person may engage in gift exchange is larger; the social obligations and sanctions to do so are stronger. Above all, such gift reciprocity in pre-commercial Africa may play an important part in production (especially in labor allocation) which is rarely the case in our own economy.35
Professor Barbara Sebek teaches English literature at Colorado State University and has contributed to a better understanding of the role of the gift in both a pre-commercial and commercial society.36 Despite the generalized assumption that there is little in common between literary analysis, anthropology, economics and law, Professor Sebek, among others of a similar persuasion, disproves that assumption. She points to anthropologist Marcel Mauss’s classic 1923 work “The Gift” as a source of unusual insight into the social meaning of gifts in both primitive and contemporary societies. 88For Mauss, gifts are never “free.” His famous question was: “What power resides in the object given that causes its recipient to pay it back?”37 His answer was that the gift is imbued with “spiritual mechanisms” that engage the honor of both giver and receiver in a way that is almost “magical.” Mauss, who studied gift exchange in diverse societies, stated that:
[I]t is clear in Maori law, the legal tie, a tie occurring through things, is one between souls, because the thing itself possess a soul, is of the soul. Hence it follows that to make a gift of something to someone is to make a present of some part of oneself…. In this system of ideas one clearly and logically realizes that one must give back to another person what is really part and parcel of his nature and substance, because to accept something from somebody is to accept some part of his spiritual essence, of his soul.38
In a predominantly gift economy, such as the pre-commercial Africa described by Professor Dalton, Mauss contends that the objects that are given remain attached to the givers; they are “loaned rather than sold and ceded.” As restated by Professor Sebek, because the identity of the giver is invariably bound up with the given object, the gift has a power which compels the recipient to reciprocate and thereby return them. She further states that:
[I]n gift exchange, transactors are in a state of “reciprocal dependence” … the exchange of gifts creates “personal relations between people” …. Those who engage in a gift transaction … are bound perpetually in a network of giving, receiving, and requiting gifts. These bonds and obligations are the basis of social organization in a culture based on gift exchange.
Mauss proposed that…. [g]ift giving confers upon its participants a special relationship of trust, solidarity, and mutual aid…. [and] that gifts were the threads of social discourse, the means by which such societies were held together in the absence of specialized governmental institutions.39
Given the importance of gifts in a pre-commercial society, and as noted by the distinguished comparative law scholar Professor James Gordley, anthropologists who have studied the relationships of reciprocity in these societies describe two types of reciprocity, one generalized and the other balanced. When reciprocity is generalized, the original benefactor should receive something equivalent to that which he gave, not necessarily at that moment, but eventually. When reciprocity is balanced, each transaction requires that a benefit given be repaid with an equivalent benefit.40
Intermediate forms of reciprocity, as part of balanced reciprocity, also exist. For example, the United States anthropologist Professor Marshall Sahlins of the University of Chicago describes an equivalent form of reciprocity among the members of the Kapauku tribe of Papua, a region where fresh meat spoils quickly. When one tribe member gives freshly killed pork meat to another, the recipient ends up supplying 89a type of refrigeration service, without the need for a real refrigerator. A tribe member who gives excess pork to the other member lacking pork does so with the expectation that when he needs pork in the future, the donee will return to him an amount equivalent to what he originally received.41 This large variety of gifts explains why so much of the production in these societies is “invisible”: A gift of labor to help a kinsman clear his land, a gift of cattle to help him acquire a bride, or a gift of a song or a name wind up contributing to the process of production of goods and services.
An online manual on the writing of commercial contracts in the United States makes the following comparison:
A familiar funny phrase illustrative for the difference between contracts governed by a common law system and European continental contracts are the so-called ‘words of agreement’: [A common wording in the United States is:]
“NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows.”
[The online commentary adds that] [t]he phrase is loaded with common law elements: consideration, as a requirement for the validity and enforceability of any unilateral promise or obligation (i.e., in most cases this is the (purchase) price); this consideration is suggested to be present in all parts of the agreement and whatever may be related but outside the contractual words; this consideration is anyhow sufficient for the obligations to which it pertains; whatever the nature of the consideration is, it is received; and, together with some redundant and archaic other wording, the phrase ends with a step-up to the contract provisions themselves.42
Please notice the emphasized phrase: “… whatever the nature of the consideration is, it is received” in the U.S. consideration clause. This wording assumes a transactional sequence in which something of value is given as consideration to someone else in exchange for that person’s promise or performance. Do you believe that the giving of something of value prior to the expected promise or counter-performance has anything to do with a culture of gift giving? Could the giving of consideration, then, be regarded as a distant remnant of gift giving and as a form of establishing a bond of solidarity between the contracting parties? If not, would such a gift giving contribute to a greater legal certainty of the enforceability of commercial contracts? These questions will be explored in comparative detail in a later chapter.43
According to Professor Dalton, redistribution entails obligatory payments of material items, whether as money or labor, to an authority—usually a chief of a tribe or clan or to a king or priest—who reallocates portions of what he receives to provide 90community services and to reward specific persons.44 Frequently, the authority also has the power to distribute unused land or hunting sites in exchange for the recipient’s tribute as payment or contribution.45
Variations of this reciprocity are still discernible in Latin America’s subsistence agricultural regions, as part of the reign of the “caciques,” “gamonales,” or chieftains. They involve family members and friends as part of close or dense relationships such as among “compadres” in Mexico or exchangers of favors in Brazil’s Jeito.46 The universality of this contractual or extra-contractual reciprocity can be found in present-day China’s Guanxi, a widespread method of doing business that relies on close personal connections with other business people or government officials.47 As in feudal Europe, the overlords or government officials in familistic societies often exchange their political, military and educational “protective” services for part of the commercial or economic output of their subjects.
In contrast with the “densely” personal elements of each transaction in pre-commercial society and in parts of present-day developing nations, many contractual obligations in market societies are “impersonal.” They take place frequently among “unknowns” or “strangers.” In addition, the legal obligations derived from each contract consummated in the commercial marketplace are limited to each transaction or group of transactions, and as such, they are extinguished with each contract’s performance or waiver thereof.
Typical of this commercial context are contracts between parties dealing with each other from a distance (inter absentes), such as the purchase of commercial or consumer goods and services from unknown parties, including the performance of such economically significant services as banking, insurance, investment and transportation. Many of these contracts take place every day among millions of strangers in different places of the global commercial and financial market with an aggregate value in excess of trillions of dollars and without greater formality than an electronic bookkeeping entry.48
Professor Gordley enumerates the legal advantages and disadvantages of a normative system based on dense relationships. One advantage is that the adjudication of disputes is mostly extrajudicial and thus less cumbersome and costly than judicial adjudication. Generally, obligations stemming from dense relationships presuppose a self-regulating, extrajudicial system of adjudication, which punishes serious or repeated breach by expelling the guilty person from the family, clan or tribe. This 91extrajudicial remedy of expulsion likely leads to begging as the only means of survival.49
From the vantage point of a contemporary market economy, a disadvantage of this system is likely an unfair adjudication of default in individual transactions. Generally, the adjudication of dense obligations does not pay attention to the inequity of the individual breach, especially in relationships of a generalized balance. In these transactions, if the balance over the long term is positive, the inequity of the specific transaction is ignored or deferred. Given the lack of predictability of the outcome of a dispute involving an individual transaction, whoever seriously relies on the likely profit from a single transaction will find it difficult to cope with the uncertainty of disputes emerging from dense relationships.50 In addition, as pointed out by Professor Gordley,51 a significant result of this normative system is its stifling effect upon upward mobility. A person who wants to improve his standard of living cannot distinguish himself from the competition and offer better goods or services. Duties and performances are standard and undistinguishable.
I would add that another disadvantage is the damage that dense relationships and their dependence on status do to market economies. Today’s marketplace is made up not of family members, close friends of “strangers” or third parties who are unknown to their counterparties. As exemplified by the history of Chinese commercial legal institutions, the status conferred in Imperial China to the members of the same family, clan or tribe frequently prevented competition and fostered exclusive or monopolistic dealings. Thus, third parties were unable to profit from businesses that ranged from distributing salt or lumber, building governmental buildings or operating pawn shops. Interestingly, similar dense relationships of the Guanxi variety are responsible for many an investment or business enterprise in contemporary China despite the “socialist” component of its market economy. To understand the “familistic” pre-commercial roots of China’s bargains and exchanges is at least—if not more—important in understanding the principles that guide its commercial marketplace as it would be to understand China’s interpretation of Karl Marx’s “The Capital.” For as noted in an earlier section, dense relationships52 and the familistic marketplace they engender are perennial obstacles to competition.
It is for this reason that a comparative analysis of the contemporary law of contracts must take into account the legal-cultural reasons that justify the entitlement to contractual promises, even if these reasons bear a remarkable similarity to those peculiar to pre-commercial society. For if pre-commercial society attitudes and values, often reflected in concepts, principles and rules, still govern from their graves, the legislator, judge, practitioner and scholar can only ignore them at his peril. As will be apparent in future chapters, the resort to institutions rooted in pre-commercial society’s attitudes and values have serious developmental consequences.53
The following principles associated with the exchanges of goods and services in pre-commercial society are not the only ones, but are among the most common and characteristic of that society. Nonetheless, and as will be discussed in this and in other chapters, attitudes, values, customs and practices guided by these principles are also found in contemporary societies whose legal and business cultures are either in part or as a whole familistic or tribal.
In pre-commercial society, strangers to the family, lineage, clan or tribe were often regarded as enemies and thus were not given the benefit of contractual rights similar to those enjoyed by members of the same family, lineage, clan or tribe. Nor did the members in these local or regional associations feel that they owed duties of fair dealing or good faith toward strangers. As we will discuss with respect to the principle of “peace of the marketplace” found in some of the most successful medieval fairs,54 it was not until this principle was implemented that fairs were able to attract a high enough level of participation by foreign traders. Prior to its implementation, if a foreign trader “A” came from a city “X” and an unknown colleague “B” from the same city defaulted on his obligation to a local merchant “C,” C could have A arrested and made subject to severe punishment until he paid the debt owed by B, his unknown colleague. Thus, the “peace of the marketplace” that required all merchants doing business at the fair be treated alike and as if they were local merchants and subject to the same local law was a forerunner to the contemporary free trade principle of “national treatment” that has made possible a volume of international trade undreamt of prior to the Second World War.55
In a pre-commercial society, especially one that depended upon survival agriculture, valuable property was that which provided sustenance for the family or closely-knit social group. Such property was not to be sold, or at least not easily. For example, according to the Hindu law doctrine of “necessity,” family or ancestral property could only be sold for an urgent necessity and never for “frivolous” purposes.56 Even in contemporary Hindu law, if an administrator of a family estate sells valuable property, such as the family land, to support a mistress or to throw lavish parties, the heirs of that estate can recover the land from third parties, regardless of the time of sale.57 Alternatively, the law can surround the sale of valuable family property with cumbersome formalities, as was the case with the Roman law mancipatio which was designed for a real or fictitious conveyance of res mancipi.58
Pre-commercial and contemporary property, therefore, seem to have different social and economic functions. During agricultural survival times, ownership was a tool to implement and preserve the power of the tribal or clan leader or subsequently of the Roman head of household (“paterfamilias”) over valuable family assets. It was not a device to encourage their sale, but to keep them within the tribe, clan or family fold and to fend off strangers’ claims. What we presently understand as property, however, is directly related to its marketability. The more certain or unconditional an owner’s rights are, the more saleable, marketable or property-like in nature they are.59
What is truly remarkable is how this principle continued to govern the sales of family land until as late as the end of the eighteenth century in a society as seemingly commercial as France’s. As described by the late Professor John P. Dawson of the Harvard School of law, one of the great comparative law scholars of the twentieth century:
[The retrait lignager] was the power of the owner’s kindred to cancel any sale of inherited land and any conveyance, if one had already been made to the purchaser, and then to recover the land, reimbursing the purchaser for any payments he had made…. This power, which came to be called the retrait lignager, could be exercised by any relative, even distant collaterals, provided that they shared with the seller a common ancestor…. The time limit was short, a year and a day from the purchaser’s entry into possession…. Despite all the disruption it produced and its severe effects in obstructing commerce in land, this power to prevent diversion to strangers through the sale of family land had a long career before it.60
The power of a seller’s (landowner’s) kindred to retract the sale of family land in China has lasted at least as long as that of India. Under Imperial Chinese law, it was sometimes possible for the kindred of the sellers of family land to retrieve the land sold subject to an “economic necessity” clause in the sale agreement for generations.61 All they had to do was repay the price paid by the original purchaser.62 Under present law, and as part of the Chinese government’s status as absolute owner of the land, its conveyance of land rights (directly or through provincial or municipal entities) does not require the special clauses of revocation of rights of the Imperial law. The official grantor has the power to revoke or expropriate what it gave subject only to a duty of 94“relevant compensation” that rarely specifies the amount, time, source and procedure for it.63
Another important feature of the exchange of goods in pre-commercial societies is that the seller or, more accurately, the one who supplies valuable property to others and his family, often remains liable for the defects of the property conveyed for a much longer period of time than is typical in societies with organized markets. Finality of liability seems to be an essential feature of these organized markets but not of pre-commercial society. For example, Jewish sellers of land in fourth century B.C.E. Egypt and their descendants remained liable to defend the title of the land virtually indefinitely.64 And, as you read the early Imperial Chinese contracts,65 please notice the standardized reliance on the family’s indefinite and unlimited “defension” clauses with respect to attacked or impeached title to the land sold. Similarly, in certain parts of Africa today, a seller of pigs remains liable to his buyer if, following the sale, one of the pigs sold becomes ill or does not eat well during an unspecified period of time, regardless of whether the seller is at fault.66
The long-lasting liability of the seller or grantor in pre-commercial societies has forced the creation of commercial law institutions whose effect is to mitigate such liability. For example, in certain regions in India that until very recently depended on a subsistence agricultural economy, unpaid interest on loans was accumulated without limitation from one generation to another on members of the same family of the original debtor. To prevent such accumulation, Hindu law created the doctrine of “damdupat” that limits the aggregate amount of interest that can be accumulated: Interest cannot exceed the principal amount of the obligation.67 Clearly, this rule put an end to the indefinite and overwhelming accumulation of family debts. Similarly, medieval Arab and Jewish traders found it necessary to create business association forms that limited the liability of the silent or investment partners to the amount invested, as did seventeenth century English insurers with respect to maritime risks.68
Another feature of pre-commercial societies that remains the law of some developing nations today, in a slightly modified fashion, is the non-binding effect of promises made or obligations assumed by an agent on behalf of his principal, especially when the latter finds such an agency harmful to his best interests. Typically the principal would not be bound if he can prove that the agent’s contract harmed him or was entered into without sufficient authority. This is true even when the latter’s 95identity is disclosed to the third party contracting with his agent or when the agent acted with the apparent authority of his principal.69
The reason for the non-binding promise or obligation of the agent vis-à-vis his principal in pre-commercial society was the Biblical injunction that an agent can only benefit and not harm his principal.70 This injunction belonged in a setting where agents were fully dependent on their mostly rural principals for their survival and where whatever trade they conducted on behalf of their principals was mostly with parties who knew them. This injunction could hardly support a commercial society of strangers who often deal with each other through intermediaries whose promises must be relied upon, especially when they have been ostensibly empowered to enter into contracts or other obligations by their principals.
Nevertheless, the drafters of the nineteenth century French and Spanish Civil Codes were not fully convinced of the benefits of commercialization and thus retained the Roman characterization of the contract of agency (mandatum) as gratuitous service to another, regardless of how necessary such intermediary services were in business transactions.71 In addition, these civil codes imposed upon the third parties who dealt with the mandatarius (or party instructed by his mandans to perform a certain act or service on his behalf) the risk of the former exceeding his authority. In other words, the third party could not sue the principal for the obligation assumed by his mandatarius; he could only sue the mandatarius.72 In fact, it was not until 1992 that Spain enacted a statute which specified the liability of a principal for the acts of his commercial agent.73 Following France’s and Spain’s nineteenth century legislative model, a number of Latin American countries continued to insulate principals from liability entered into by agents on their behalf, in some cases without distinguishing between civil and commercial agents.74
Finally, as reported by Professor Gordley, anthropologists have observed that pre-commercial societies do not enforce executory promises or promises where performance is deferred.75 I had the occasion to verify this observation in a contemporary and arguably commercial setting, when one of my commercial law students conducted a field study that compared U.C.C. sales law with the tribal law of sales of the Zuni Indians of New Mexico. He reported as follows:
I asked the silversmith in charge of jewelry production in the tribe how he documented a promise to sell jewelry, i.e., in a contract signed by both parties or by an annotation in a book or record. He seemed perplexed and asked me: “What promise are you talking about?” I responded that it was the promise he made to those buyers who ordered a quantity of jewelry that he couldn’t supply at that moment. “I don’t make such promises,” he stated firmly. “I only 96sell what I have at hand. I don’t know what’s going to happen in the future.” Similar responses were given to me by virtually all the traders I interviewed.76
Transactions, such as the delivery of something beyond the normal cycle of its production, consumption, sale or exchange, were too uncertain to be part of ordinary trade. Salomon Nahmad, a Mexican anthropologist and friend who I consulted about this response, told me that he had observed similar behavior among Mexican tribal craftsmen. He linked the unwillingness of Zuni and Mexican tribal traders to issue a promise of future performance to a culture shaped by the inexorability of agricultural or more generally productive cycles, including the cycle to dispose profitably of what one has managed to accumulate.77
Even though the law of contracts is, at best, incipient among primitive societies, I found the anthropological analysis of how these societies decide who is entitled to that which has been jointly hunted or fished helpful in the formulation of customary commercial law. The work of the late E. Adamson Hoebel, a great scholar, teacher and dear friend, was especially significant. Together with Karl N. Llewellyn, Hoebel wrote “The Cheyenne Way,”78 the pioneering work of joint legal and anthropological research which adapted the legal analysis of cases to discern cultural-legal patterns (“law-ways”) among the Cheyenne Indians of the United States.
Subsequently, in his equally classic “The Law of Primitive Man,” Hoebel described property and possessory bases of entitlement among Eskimos to what they hunted or fished:
Game and most articles of personal use … are objects of property notions. Deep-rooted Eskimo individualism, expressed in the postulate that the self finds its realization through [possessory] action, breeds law-ways in support of private property by way of the corollary idea that the creation of an object makes it the private property of the creator, as it also does, up to a point, in hunting. Game that can be taken by individual effort belongs to the person who makes possible the kill. Consequently, among the Ammassalik of East Greenland the hunter who chops a seal hole “has a potential right to seal caught in it.” More definitely, a seal which escapes with a harpoon head in it belongs to the hunter who actually succeeds in capturing and killing the creature, although the harpoon, identifiable with ownership marks, should be returned to its owner. But—any seal harpooned with a bladder float attached 97to its line goes to the owner of the float no matter who captures it, since it is reasoned that the capture is made possible by the drag and visibility of the float.79
Hoebel comments that when the hunting is such that by its very nature more than one man is usually needed, then each man establishes demand-rights for specific portions of the kill. The Baffin islanders furnish a typical example:
Who first strikes a walrus receives the tusk and one of the forequarters. The person who first comes to his assistance receives the other forequarter; the next man the neck and head; and each of the next two, one of the hindquarters.80
The above entitlement is explained by Hoebel as follows:
By joining the fray, a hunter exercises his power to open a new legal relation with respect to the other hunters of the moment. They accept a no-power to stop him and so they become bearers of a duty correlative to his claim.
Against this postulated extension of individualism, however, the postulate that no man can have more than he can effectively use comes into play. It is the giving away of food and goods, not the possession of them, that wins honor and leadership among the simple Eskimos.81
In Hebbel’s opinion, anthropology contributes to a better understanding of law for two reasons. The first is that anthropologists have learned to deal “with cultures as integrated, working wholes…. [which] has made possible the development of comprehensive theories of cultural dynamics embracing legal phenomena as but one aspect of culture?”82 The second is that anthropology is a comparative science. It draws its data from all orders of society—primitive and civilized, prehistoric and contemporary, and even from all portions of the globe. Consequently, it provides the means to check hypotheses as to the nature of man and human behavior (including its normative behavior) by “finding ready-to-order variables somewhere in the anthropological inventory of observed societies.”83
I believe it would also be useful to re-read carefully the above two paragraphs and see how Professor Hoebel identified a general and influential moral principle, value or postulate when discussing the entitlement to what is hunted or fished by the Eskimos, especially when they join a fray. The principle is: “[N]o man can have more than he can effectively use….”84 Notice the connection between this norm and the opinions and behavior of the most respected leaders he interviewed. These leaders are characterized by a form of behavior that the rest of the members of that community find worthy of emulation. You will find such a leader in Rome’s community of “respected men of affairs” or the boni viri. Thus, when Hoebel describes the everyday rules of entitlement 98to what was hunted or fished, he identifies not only standard behavior represented by what was done or said should be done by archetypal fishermen or huntsmen, but also the behavior of those community leaders that engenders the most respect and desire of emulation in their community. One such honorable behavior is expressed in the rule that “the giving away of food and goods, not the possession of them … [is what] wins honor and leadership among the simple Eskimos.”85 It becomes obvious, then, that this behavior was inspired by the above principle-postulate (“no man can have more than he can effectively use”) and it was exemplified by the behavior of respected, admired and emulated members of the community of fishermen and hunters. But before you dismiss this excursus into the ancestral behavior of pre-commercial society, I would ask you to reserve judgment until you read the following chapter on Roman law86 and notice why Ulpian, one of the most respected classical Roman jurists, deferred the determination of whether a contractual condition is “illusory” and totally subjective or whether it is objectively ascertainable. Similarly, review the chapter on Anglo law,87 discussing the influence that the equally pre-commercial giving of gifts had upon the inducement of trust among early commercial contracting parties in England and eventually upon the development of “consideration” as a central element in the development of the Anglo-American law of contracts.
Suffice it to say, that ability to differentiate between ordinary or standard behavior and honorable and highly-respected behavior often distinguishes the good commercial legislator, judge, law professor and litigator from a mediocre one. Depending upon the accuracy of the behavioral features ascribed to such archetypal merchants, key concepts such as “reasonableness,” “good faith” or “uberrrima fides” (the most exacting form of good faith) could be used successfully or fruitlessly when drafting statutory provisions, interpreting a commercial contract or convincing a judge or jury on the diligence, reasonableness or good faith that should be observed by a plaintiff or defendant. And even though “lawmen” (as Professor Karl Llewellyn referred to the above key legal players) should not be expected to engage in the field research that anthropologists engage in, they should become aware of the important legal data that such research can yield.
One of the principal benefits of an anthropological (and social science) vision of law is its facilitation of an analysis of law in its socio-economic context. Hoebel quotes Eugen Ehrlich, as one of the founders of legal sociology, for the proposition that “[a] juristic act is never an individual, an isolated thing, it is part of the prevailing social order.”88
This vision of the law is divorced from the legal positivistic vision found, among others, in English author John Austin’s “Lectures in Jurisprudence.” Austin conceived the law to be nothing more than a “command of the sovereign.”89 Hoebel also rejected Austria’s Hans Kelsen’s “Pure Theory of Law.”90 For Kelsen, as long as a norm is 99accompanied by a sanction, made effective by an authority which is part of an orderly hierarchy, it can be considered as law. Thus, each norm must be sanctioned by a superior norm, and the ultimate norm from which every legal norm must be derived is what he refers to as the basic norm or the “Grundnorm.” This basic norm is a purely logical construct and is assumed as an initial hypothesis for the existence of a legal system.
The late Julius Stone, another great teacher, friend and highly persuasive advocate of the linkage of law and the social sciences, provides a thoughtful assessment of Austin’s and Kelsen’s theories. Neither theory is related to an actual society or to an actual law. Theirs is an analysis of legal propositions by reference to their logical consistency and no more.91 An earthier assessment by other law and society observers is that this positivistic version of the law is “without social content or significance … law without flesh, blood or bowels. It is not even zombie-law….”92
Is the research methodology of legal positivists such as Austin and Kelsen suitable to describe or explain the validity of commercial law rules? Is it possible that commercial institutions such as contracts or commercial usages or practices could be enforced without an a priori validating command by a sovereign or without the threat of a sanction by a hierarchical legal authority? Consider, for example, New York’s original non-conforming amendment to 5–102(4) of the U.C.C. (1964 version) which provided:
Unless otherwise agreed, this Article 5 does not apply to a letter of credit if by its terms or by agreement, course of dealing or usage of trade such letter of credit or credit is subject in whole or in part to the Uniform Customs and Practice for Commercial Documentary Credits fixed by the Thirteenth or any other Congress of the International Chamber of Congress.93
While a follower of Austin or Kelsen might say that the above statute should be regarded as the command of the sovereign or the formulation of a hierarchical threat, where does that command or threat appear in the quoted language? If anything, it would be a command reminiscent of that in the notorious Code of the Anarchist: “Article 1. Everyone is free to do whatever one wishes; Article 2. Everyone is free to disregard Article 1.” What would be the effects of adopting a positivistic methodology for the identification of commercial law norms, such as proclaimed by Professor Alfredo Rocco, whose treatise “Principles of Commercial Law” was quite popular during the nineteen forties and fifties in Italian, Spanish and Latin American law schools?94 In its initial chapter he minced no words: “Civil law is not a source of commercial law…. ‘Commercial law’ [positive or enacted statutory law] is the only source…. Neither are case law, equity, the nature of things and the general principles of the law, or foreign law.”95 How much would the regular participants in the market feel about an enumeration of sources that excludes their own customs and practices as a source? I witnessed one such a reaction as a member of the legislative committee that drafted 100the revision of Article 5 of the U.C.C. (on letters of credit) during the early nineteen nineties. As an initial task, the reporter presented the drafting committee with a number of definitions of letter of credit transactions that he faithfully distilled from court decisions, one of them pertaining to the all-important banking term “confirmation.” When these were first shown to the bankers who participated as observers, one of them said to me: “I do not know where Judge X or Professor Y got this definition of a letter of credit confirmation, but that is not what I and my colleagues do when we confirm letters of credit.”96 By now, the reader may have an opinion as to whether any sound reason exists for not taking into account custom and usage and especially best practices in the drafting of commercial contract law.
Among Hoebel’s most important legal-behavioral imperatives were the following:
[Human behavior is mostly learned, and] [t]his learned behavior in its aggregate isculture, and we say that culture is the integrated sum total of learned behavior patterns which are manifested and shared by the members of a society….
[These] cultural patterns for behavior exist prior to the entry of the individual into his society….
Law, which exists in human beings acting, also exists above and beyond the individual as one aspect of culture.97
It can no longer be doubted that legal norms, such as in the landmark United States Supreme Court decision Brown v. Board of Education98 forbidding segregation in public schools in the United States, can contribute to the change of cultural patterns. However, there are certain inherent cultural “imperatives” that ultimately limit the choice of legal behavior by a lawmaker or adjudicator. Hoebel refers to one of these imperatives as the “imperative of selection.”99 “[It] is imposed by a number of factors…. [including the] inherent incompatibility among certain forms of behavior so that contradictory forms may not be performed simultaneously by the same person or persons. [Put simply, a] people cannot cook the same piece of meat and eat it raw.”100
What is the likely economic effect of a failure to take into account the imperative of behavioral selection upon the availability of commercial credit at reasonable rates of interest to small- and medium-sized businesses? What about William Graham Summer’s reminder that folkways are often the “right ways”?101 Could this reminder be useful in the above discussion and, if so, what is the merit of consistency between a prescribed legal behavior and a society’s folkways or mores? If prescribed behavior need not be consistent with social mores, such as a preference to keep liens as well as 101other commercial transactions hidden from the public, how can such prevalent commercial mores be changed by law?
Most of the exchanges described by the anthropologists in this chapter belong to social groups whose survival was based on hunting and fishing and who relied very little, if any, on agricultural exploitation. What effect did agricultural exploitation have in the development of a law of contracts? Does the fact that agricultural societies are more sedentary and stable in character and can often enjoy regularity of crops contribute to their inclination to sell or trade their surpluses to others, especially strangers? Does such a sedentary character contribute to less dense relationships?
Hoebel points out that viable cultures invariably rely on some criteria of choice to govern or influence the selection of prescribed legal behavior:
These criteria are the broadly generalized propositions held by the members of a society as to the nature of things and as to what is qualitatively desirable and undesirable. We prefer to call these basic propositions “postulates.” Philosophers and sociologists commonly call them “values.”102
As was apparent in the discussion of “Peopled Logic,” cultural values and logic that compares the behavior of actual people is an important aid in the formulation of these jural postulates.103
Jural postulates, however, are not only useful in the more accurate formulation of legislative principles, but also in reflecting a society’s existing values—values that facilitate considerably not only the legislative process but, more generally, the process of adjudication. This was the mission assigned to jural postulates by Dean Roscoe Pound, one of the most influential legal thinkers of the United States during the twentieth century. Hoebel became intimately familiar with Pound’s views not only through his close friend and collaborator Karl N. Llewellyn, but also through Julius Stone, Pound’s most insightful exponent and critic.
In Julius Stone’s restatement of Pound’s thought:
In order to understand what law in that society should do, the first step … must be to observe and record the social phenomena with which the law is concerned, namely, the interests which human beings are actually pressing for recognition by law. From this comprehensive picture the jurist can also draw out, by as impersonal a synthesis as possible, the fundamental principles concerning human conduct (or “the jural postulates”) which substantially all of the phenomena presuppose…. The jural postulates then are distinct from the actual claims in two respects. First, they are rationalisations of these claims, not necessarily coinciding with the actual psychological origins of the claimants’ behaviour. Second, they are 102rationalisations not of all the actual claims but only of substantially all…. What is their utility when found?
On the one hand, they are working hypotheses which have been found by observation to rationalise, within the limits above stressed, the claims, demands or interests pressing in a given society. They are, therefore, not mere speculation. On the other hand, the process of drawing the jural postulates from the mass of claims can scarcely be a very exact one…. It must be noticed, further, that they are working hypotheses, not of what the law is, but what the men in the given society want the law to do.104
As was discussed in the preceding chapter 105 the National Law Center foInter-American Free Trade (NLCIFT) adopted Twelve Principles to facilitate its adoption and implementation by the member states of the OAS.106 The first two of these principles read as follows:
Principle 1. Secured commercial and consumer credit is an important tool for economic development because it relies on the self-liquidating nature of the transaction and collateral involved, i.e., the collateral and its proceeds will repay the loan. Self-liquidation can take place only when the following corollary principles are implemented by legislators, the parties, registries and courts.
Principle 2. A security interest is a preferential right to possession or control of personal property. As such, it does not require that the debtor who grants the interest have title to the personal property collateral; his right to its possession, even though co-existent with other possessory rights in the same property, will allow the creation of the security interest.107
Why was it necessary to draft these principles? As once stated to me by the late Raul Cervantes Ahumada, one of Mexico and Latin America’s most renowned commercial law writers and draftsman of commercial laws, “A law is not the place to explain or justify its provisions. It would be like Cervantes’ depiction of the bad painter, i.e., one who paints a chicken and states in the painting ‘This is a chicken and these are the reasons why you should like my chicken.’ ” What about these principles, should they be used as part of the text of the law? What should be their role in good statutory or code drafting?
__________________________
1 See infra § 3:3 (for a discussion of the work of Professor George Dalton).
2 See generally Jon Miller, The Stanford Encyclopedia of Philosophy (Edward N. Zalta ed., Fall 2011), http://plato.stanford.edu/entries/grotius/. See also infra § 8:2(B)(1), on Grotius’ influence on the contract provisions of the Code Civil.
3 See infra § 8:2(B)(1)(b).
4 Pothier, I Obligations, at 5.
5 See infra § 4:4(D)(3)(b).
6 See e.g., U.C.C. § 2–205.
7 See Boris Kozolchyk, Commercial and Standby Letters of Credit, in III United States Law 24–12 to 24–13.
8 See infra note 56 and accompanying text for an explanation of the Indian restriction against “frivolous” or non-necessitous conveyance of family land. See also infra § 18:1(F)(6) on the Chinese economic-necessity clause in the conveyance of family land.
9 See NLCIFT, 12 Principles.
10 See generally Carlos Velez-Ibanez, Bonds of Mutual Trust: The Cultural Systems of Rotating Credit Associations among Urban Mexicans and Chicanos (1983) (describing “dense” relationships in contemporary society).
11 Sir Henry Sumner Maine, Ancient Law 151 (1905). As noted by Harvard’s Dean Roscoe Pound, this meant that status was a condition “that could not be divested voluntarily, and that rights duties and liabilities flow from or are annexed to this condition of a person rather than his volition.” Roscoe Pound, The End of Law as Developed in Juristic Thought, 30 Harv. L. Rev. 200, 211 (1917).
12 Maine, supra note 11, at 149–51.
13 See Kozolchyk, Commercialization.
14 See personal letter to Boris Kozolchyk from Professor Grant Gilmore (on file with author).
15 See infra § 15:4(D)(4).
16 See e.g., infra § 18:3.
17 See infra § 17:5(H).
18 See George Dalton, Traditional Production in Primitive African Economies, 76 Q. J. Econ. 360 (Aug. 1962).
19 Id.
20 Id. at 361 n.4.
21 Id. at 362 (citing Raymond W. Firth, The Elements of Social Organization 137 (London 1951)).
22 Id. at 365 (citing Karl Polanyi, The Great Transformation 45–58 (1944)).
23 Id. at 362.
24 Id. at 367.
25 Id. at 363.
26 Id.
27 Dalton, supra note 18, at 363.
28 Id.
29 See infra § 15:4(F).
30 E. C. Pasour, Jr., Land-Use Planning: Implications of the Economic Calculation Debate, 7 J. Libertarian Stud. 127, 127–28 (1983), available at http://mises.org/journals/jls/7_1/7_1_7.pdf. See Ludwig von Mises, Socialism: An Economic and Sociological Analysis 113–22 (Liberty Classics (1981) (1951). For related criticisms, as discussed in infra § 15:4(F), see F. A. Hayek, Individualism and Economic Order 149 (Chicago Univ. Press, 1948).
31 See Richard Swedberg & Ola Agevall, The Max Weber Dictionary: Key Words and Central Concepts 22–23 (Stanford Univ. Press 2005) (on Max Weber’s main ideas, including the rational economic man).
32 See infra § 18:3.
33 See infra § 15:4(H).
34 See Dalton, supra note 18, at 370.
35 Id. at 371.
36 See infra ch.20, on the origins of English commercialization.
37 Marcel Mauss, The Gift: The Form and Reason for Exchange in Archaic Societies 3 (W.D. Halls trans., Routledge 2000) (1950).
38 Id. at 12.
39 Barbara Sebek, Good Turns and the Art of Merchandizing: Conceptualizing Exchange in Early Modern England, ¶ 5 (2001), http://emc.eserver.org/1–2/sebek.html (citations omitted) (on file with author).
40 Gordley, Contract in Pre-Commercial Societies, at 2–8 to 2–9, on generalized and balanced reciprocity.
41 Id. at 2–8.
42 See Drafting Principles, Weblog, Weagree.com, (Mar. 13, 2009), http://www.weagree.com/weblog-detail/14–now-therefore-the-parties-agree.html (emphasis added) (on file with author).
43 See infra ch. 22 (on the formation of contracts).
44 Dalton, supra note 18, at 372.
45 Id.
46 See infra § 14:4(A)(4).
47 See infra § 17:5(H).
48 See generally Marek Dubovec, The Law of Securities, Commodities and Bank Accounts: The Rights of Account Holders (forthcoming, Edward Elgar 2014).
49 See Gordley, supra note 40, at 2–13.
50 Id. at 2–14 to 2–17.
51 Id. at 2–3.
52 See supra § 3:3.
53 See, for example, on Mexico’s economy infra § 14:4(A)(6), and for the effect on the Chinese economy see infra § 17:3(F)(2).
54 See infra § 9:2(A) & (B) (on the fairs and the principle of peace of the marketplace).
55 Id.
56 Kozolchyk, Transfer, at 1469.
57 Id.
58 According to the Institutes (the rough equivalent of a manual type of legal textbook) by the Roman jurist Gaius, res mancipi were properties valuable enough to include buildings and land in Italian soil, servitudes connected with this land, slaves and farm animals. See Zulueta 1 at 1.120. Gaius describes the ceremony as follows: “in the presence of not less than 5 Roman citizens of full age and also of a sixth person, having the same qualifications, known as the libripens (scale-holder)….” Zulueta 1 at 1.119. According to Adolf Berger, “All these things and rights … [conveyed as res manicipi in the sale procedure known as mancipatio] represented the highest value in a primitive rural economy.” Berger, Encyclopedic Dictionary, at 678.
59 Kozolchyk, Transfer, at 1456. It is no accident that the unconditionality is a central feature of the most saleable of commercial paper. Hence, a negotiable instrument is defined by U.C.C. § 3–104 as an “unconditional promise or order to pay a fixed amount of money….” See U.C.C. § 3–104 (2011).
60 See John P. Dawson, Gifts and Promises: Continental and American Law Compared 31–32 (1980).
61 See infra § 18:1(F)(3).
62 Id.
63 See infra § 19:3(B)(2)(c) on the Property Rights Law of the People’s Republic of China, Arts. 42 & 44.
64 See Yaron, Introduction, at 79–92.
65 See infra § 18:1.
66 See Gordley, supra note 40, at 7.
67 Kozolchyk, Fairness, at 257–58.
68 See infra § 5:9(C) (on business association contracts among Medieval Jewish traders).
69 See infra § 5:9(A).
70 Kozolchyk, Transfer, at 1468.
71 See C.C. (Spain) art. 1711.
72 Id. art. 1714.
73 See Ley 12/1992, de 27 de Marzo, sobre Contrato de Agencia (1992).
74 See infra § 5:13(D).
75 Gordley, supra 40, at 7.
76 Report by former student Chester Jones following his visit tothe Zuni reservation in New Mexico on or about May 12, 1982 (on file with author).
77 Conversation between the author and Chester Jones of May 30, 1982 (on file with author).
78 Karl Nickerson Llewellyn & Edward Adamson Hoebel, The Cheyenne Way; Conflict and Case Law in Primitive Jurisprudence (William S. Hein & Co. 2002) (1941). For an evaluation of Hoebel’s contribution to the anthropology of law, see Leopold Pospisil, E. Adamson Hoebel and the Anthropology of Law, 7 Law & Soc’y Rev. 537 (1973). See also Max Gluckman, Limitations of the Case-Method in the Study of Tribal Law, 7 Law & Soc’y Rev. 611 (1973); and A.L. Epstein, The Reasonable Man Revisited: Some Problems in the Anthropology of Law, 7 Law & Soc’y Rev. 643 (1973).
79 Hoebel, Primitive Man, at 79–80.
80 Id. at 80 (citations omitted).
81 Id.
82 Id. at vii (Preface).
83 Id.
84 Id. at 80.
85 Id.
86 See infra ch. 4.
87 See infra ch. 20 (on English Law).
88 Eugen Ehrlich, Fundamental Principles of the Sociology of Law 397 (1936), cited in Hoebel, supra note 79, at 5.
89 See John Austin, I Lectures on Jurisprudence, or, The Philosophy of Positive Law 89 (Robert Campbell ed., 5th rev. ed. 1885).
90 See generally Hans Kelsen, Pure Theory of Law (Max Knight trans., 1967).
91 Julius Stone, The Province and Function of Law: Law as Logic, Justice, and Social Control, a Study in Jurisprudence 61 (2d prtg. 1950), cited in Hoebel, supra note 79, at 6.
92 Sidney Post Simpson & Ruth Field, Law and the Social Sciences, 32 Va. L. Rev. 855, 862 (1946).
93 See N.Y. U.C.C. Law § 5–102(4) (McKinney) (1964).
94 See infra § 13:1(C)(2)(b).
95 Alfredo Rocco, Principios de Derecho Mercantil: Parte General (1952).
96 See infra ch. 21 & 24, for a description of the process of drafting U.C.C. Article 5.
97 Hoebel, supra note 79, at 7–9.
98 Brown v. Board of Ed. of Topeka, Shawnee County, Kan., 347 U.S. 483 (1954).
99 Hoebel, supra note 79, at 10.
100 Id.
101 Id. at 15 (citing William Graham Summer, Folkways 28 (1906), and pointing out that Graham Summer was addressing the problem that frequently, in society, existing conduct (what “is”) takes on the compulsive element of “ought,” and hence the folkways are the “right ways.”).
102 Hoebel, supra note 79, at 13.
103 See supra § 1:2.
104 Julius Stone, Human Law and Human Justice 267–68 (1965).
105 See Model Law.
106 See NLCIFT, 12 Principles, at 1 & 2.
107 Id.