The Rights of War and Peace

by Hugo Grotius

X. and XI. Nor is the equality that has been explained confined solely to the communication of all the circumstances of the case to the contracting parties, but it includes also an entire freedom of consent in both.

In the principal act itself, the proper equality requires that no more should be demanded either party than what is just. Which can scarce have a place in gratuitous acts. To stipulate for a recompence in return for a loan, or for the service of labour or commission is doing no wrong, but constitutes a kind of mixed contract, partaking of the nature of a gratuitous act, and an act of exchange. And in all acts of exchange, this equality is to be punctually observed. Nor can it be said that if one party promises more, it is to be looked upon as a gift. For men never enter into contracts with such intentions, nor ought the existence of such intentions ever be presumed, unless they evidently appear. For all promises or gifts, in these cases, are made with an expectation of receiving an equivalent in return. "When, in the words of Chrysostom, in all bargains and contracts, we are anxious to receive MORE and give LESS than is due, what is this but a species of fraud or robbery?" The writer of the life of Isidorus in Photius, relates of Hermias, that when any thing, which he wished to purchase was valued at too low a rate, he made up the deficiency of the price, thinking that to act otherwise was a species of injustice, though it might escape the observation of others. And in this sense, may be interpreted the law of the Hebrews.

XII. There remains another degree of equality to be considered, arising out of the following case. It may happen in contracts that although nothing is concealed, which ought to be made known, nor more exacted or taken by one party than is due, yet there may be some inequality without any fault in either of the parties. Perhaps, for instance there might be some unknown defect in the thing, or there might be some mistake in the price. Yet, in such cases, to preserve that equality, which is an essential requisite in all contracts, the party suffering by such defect or mistake, ought to be indemnified by the other. For in all engagements it either is, or ought to be a standing rule, that both parties should have equal and just advantages.

It was not in every kind of equality that the Roman law established this rule, passing over slight occasions, in order to discourage frequent and frivolous litigation. It only interposed its judicial authority in weighty matters, where the price exceeded the just value by one half. Laws indeed, as Cicero has said, have power to compel, or restrain men, whereas philosophers can only appeal to their reason or understanding. Yet those, who are not subject to the power of civil laws ought to comply with whatever reason points out to them to be just: So too ought they, who are subject to the power of human laws, to perform whatever natural and divine justice requires, even in cases, where the laws neither give nor take away the right, but only forbear to enforce it for particular reasons.

XIII. There is a certain degree of equality, too, in beneficial or gratuitous acts, not indeed like that prevailing in contracts of exchange, but proceeding upon a supposition of the hardship, that any one should receive detriment from voluntary services, which he bestows. For which reason a voluntary agent ought to be indemnified for the expence or inconvenience, which he incurs, by undertaking the business of another. A borrower too is bound to repair a thing that has been damaged or destroyed. Because he is bound to the owner not only for the thing itself, by virtue of the property which he retains in it, but he owes a debt of gratitude also for the favour of the loan; unless it appears that the thing so lent would have perished, had it even remained in possession of the owner himself. In this case, the owner loses nothing by the loan. On the other hand, the depositary has received nothing but a trust. If the thing therefore is destroyed, he cannot be bound to restore what is no longer in existence, nor can he be required to make a recompence, where he has derived no advantage; for in taking the trust he did not receive a favour, but conferred one. In a pawn, the same as in a thing let out for hire, a middle way of deciding the obligation may be pursued, so that the person taking it is not answerable, like a borrower, for every accident, and yet he is obliged to use greater care, than a bare depositary, in keeping it safe. For though taking a pledge is a gratuitous acceptance, it is followed by some of the conditions of a contract. All these cases are conformable to the Roman law, though not originally derived from thence, but from natural equity. Rules, all of which may be found among other nations. And, among other works, we may refer to the third book and forty-second chapter of the Guide for doubtful cases, written by Moses Maimonides, a Jewish writer.

Upon the same principles the nature of all other contracts may be explained; but the leading features in those of certain descriptions seemed sufficient for a treatise like the present.

XIV. The general demand for any thing, as Aristotle has clearly proved, constitutes the true measure of its value, which may be seen particularly from the practice prevailing among barbarous nations of exchanging one thing for another. But this is not the only standard: for the humours and caprice of mankind, which dictate and controul all regulations, give a nominal value to many superfluities. It was luxury, says Pliny, that first discovered the value of pearls, and Cicero has somewhere observed, that the worth of such things can only be estimated by the desires of men.

But on the other hand, it happens that the plentiful supply of necessaries lowers their price. This Seneca, in the 15th chapter of his sixth book on benefits, proves by many instances, which he concludes with the following observation, "the price of every thing must be regulated by the market, and notwithstanding all your praises, it is worth nothing more than it can be sold for." To which we may add the authority of Paulus the Lawyer, who says, the prices of things do not depend upon the humours and interest of individuals, but upon common estimation, that is, as he explains himself elsewhere, according to the worth which they are of to all.

Hence it is that things are valued in proportion to what is usually offered or given for them, a rule admitting of great variation and latitude, except in certain cases, where the law has fixed a standard price. In the common price of articles, the labour and expence of the merchant in procuring them is taken into the account, and the sudden changes so frequent in all markets depend upon the number of buyers, whether it be great or small, and upon the money and marketable commodities, whether they be plentiful or scarce.

There may indeed be casualties, owing to which a thing may be lawfully bought or sold above or below the market price. Thus for instance, a thing by being damaged may have lost its original or common value, or that, which otherwise would not have been disposed of, may be bought or sold from some particular liking or aversion. All these circumstances ought to be made known to the contracting parties. Regard too should be had to the loss or gain arising from delay or promptness of payment.