The history of contract law dates back to ancient civilizations and the development of contract law has been heavily influenced by Ancient Greek and Roman thought. There have been further significant developments in contract law during and since the Middle Ages and especially with the development of global trade.
Ancient law
English contract law's history was heavily influenced by Ancient Greek and Roman thought. In The Laws, Plato devoted little attention to forms of agreement, but recognized the same basic categories for cancelling agreements as exist today. Roman law identified discrete categories of contractual transaction, each with its own requirements, which needed to be fulfilled in order for promises to be enforced. The general kind, stipulatio, required various words to be used to generate an obligation, or in a contractus litteris it could be written down. There were four categories of consensual agreement,(emptio venditio), hire (locatio conductio), partnership (societas) and mandate (mandatum) and four kinds of contract creating property rights, such as a pledge (pignus) or a secured loan (mutuum). More than appeared from the general rules in Ancient Greece, Roman law represented an early division between specific kinds of contract, depending on the transaction's nature.See further B Nicholas, An Introduction to Roman Law (Clarendon 1963) 165-193
Medieval law
England in the Middle Ages
During the Middle Ages, the English court system was minimal. In the local and manorial courts, according to the first treatise by Ranulf de Glanville, Treatise on the laws and customs of the English Kingdom in 1188, if people disputed the payment of a debt they, and witnesses, would attend court and swear oaths (called a wager of law).R. de Glanville, Tractatus de legibus et consuetudinibus regni Angliae (1188) 216 ff They risked perjury if they lost the case, and so this was strong encouragement to resolve disputes elsewhere. The royal courts accepted claims, without a wager of law, if "trespass on the case" was alleged. A jury would be called, but to access the royal courts, which were fixed by Magna Carta to meet in London, some breach of the King's peace had to be alleged. But gradually, the courts allowed claims where there had been no such trouble, no tort vi et armis, even though it was still necessary to inventively plead this. For instance, in 1317 one Simon de Rattlesdene alleged he was sold a tun of wine that was contaminated with salt water, "with force and arms, namely with swords and bows and arrows".Rattlesdene v Grunestone (1317) Year Books 10 Edw II, Selden Society vol 54 The Court of Chancery and the King's Bench started to allow claims without the fictitious allegation of force and arms from around 1350. Otherwise, a breach of covenant required production of proof of an agreement from a seal. However, in The Humber Ferryman’s caseBukton v Tounesende (1348) Baker & Milsom 358 a claim was allowed, without any documentary evidence, against a ferryman who dropped a horse overboard that he was contracted to carry across the River Humber. Despite this liberalisation, in the 1200s a threshold of 40 shillings for dispute value had been created. Though its importance tapered away with gradual inflation, it foreclosed court access to most people.See Statute of Gloucester 1278 Moreover, freedom to contract was firmly suppressed among the peasantry. After the Black Death, the Statute of Labourers 1351 prevented any increase in workers' wages, fuelling among other things the Peasants' Revolt of 1381.
With the courts' hostility to restraints on trade, the doctrine of consideration was forming, that to enforce any obligation something of value needed to be conveyed.e.g. Dyer’s case (1414) 2 Hen. V, fol. 5, pl. 26 Some courts remained sceptical that damages might be awarded purely for a broken agreement (that was not a sealed covenant).Watkins’ or Wykes’ case (1425) Baker & Milsom 380, 383, where a man had promised to build a mill, but had failed, per Martin, J., 383, ‘if this action should be maintained… then a man would have an action of trespass for every broken covenant in the world.’ Other disputes allowed a remedy, notably in Shepton v Dogge(1442) Baker & Milsom 390 where a defendant had agreed in London, where the City courts' custom was to allow claims without covenants under seal, to sell 28 acres of land in Hoxton. Although the house itself was outside London at the time, in Middlesex, a remedy was awarded for deceit, but essentially based on a failure to convey the land. The resolution of these restrictions came shortly after 1585, when a new Court of Exchequer Chamber was established to hear common law appeals. In 1602, in Slade v Morley,(1602) 76 ER 1074 a grain merchant named Slade claimed that Morley had agreed to buy wheat and rye for £16, but had backed out. Actions for debt were in the jurisdiction of the Court of Common Pleas, but it had required that there needed to be both (1) proof of a debt, and (2) a subsequent promise to repay the debt, so that a finding of deceit (for non-payment) could be made against a defendant.e.g. D. Ibbetson, 'Sixteenth Century Contract Law: Slade's Case in Context' (1984) 4(3) Oxford Journal of Legal Studies 295, 296 But if a claimant wanted to simply demand payment of the contractual debt (rather than a subsequent promise to pay) he could have to risk a wager of law. The judges of the Court of the King's Bench was prepared to allow "assumpsit" actions (for obligations being assumed) simply from proof of the original agreement.See further, A. W. B. Simpson, A History of the Common Law of Contract: the Rise of the Action of Assumpsit (1987) With a majority in the Exchquer Chamber, after six years Lord Popham CJ held that "every contract importeth in itself an Assumpsit".See further, J. H. Baker, ‘New Light on Slade's Case’ (1971) 29 Cambridge Law Journal 51 Around the same time the Common Pleas indicated a different limit for contract enforcement in Bret v JS,(1600) Cro Eliz 756 that "natural affection of itself is not a sufficient consideration to ground an assumpsit" and there had to be some "express quid pro quo".In the popular consciousness, see Christopher Marlowe, The Tragicall History of the Life and Death of Doctor Faustus (1604) Now that wager of law, and sealed covenants were essentially unnecessary, the Statute of Frauds 1677 codified the contract types that were thought should require some form.
European trade
Increasingly, English contract law was affected by its trading relations with northern Europe, particularly since Magna Carta guaranteed merchants "safe and secure" exit and entry to England "for buying and selling by the ancient rights and customs, quit from all evil tolls".Magna Carta §41 In 1266 King Henry III had granted the Hanseatic League a charter to trade in England. The "Easterlings" who came to trade brought goods and money that the English came to call "Sterling",HS Barker, 'The Rise of the Lex Mercatoria and Its Absorption by the Common Law of England' (1916–1917) 5 Kentucky Law Journal 20, 24 and standard rules for commerce that formed a Lex Mercatoria, the laws of the merchants. Merchant custom was most influential in the coastal trading ports like London, Boston, Hull and King's Lynn.
In the 1500s, litigation sharply increased, although the causes are unclear and it may have been due to a centralization of lawsuits in the King's Bench and Common Pleas. The Chief Justices received a large portion of their income from fees paid by litigants, mostly in civil disputes.
Over the late 17th and 18th centuries Sir John Holt,e.g. Lethulier's Case (1692) 2 Salk 443, "we take notice of the laws of merchants that are general, not of those that are particular. and then Lord Mansfield actively incorporated the principles of international trade law and custom into English common law as they saw it: principles of commercial certainty, good faith,Carter v Boehm (1766) 3 Burr 1905 fair dealing, and the enforceability of seriously intended promises.Pillans v Van Mierop (1765) 3 Burr 1663 As Lord Mansfield held, "Mercantile law is not the law of a particular country but the law of all nations",Luke v Lyde (1759) 97 Eng Rep 614, 618; (1759) 2 Burr 882, 887 but also that "the law of merchants and the law of the land is the same".
Early modern period School of Salamanca
First movement to systematise contract law, the contractual doctrin of School of Salamanca is based on two pillars : freedom and equity.
The School of Salamanca played a great role in the diffusion of the contractual consensualism. If this idea was already admitted in canon law since the 12th Century and the application of the principle pacta sunt servanda, the civil law only followed this way in the 16th century after the call of famous jurists like Luis de Molina. Moreover, preceded notably by Leonardus Lessius, the Jesuit Pedro de Oñate claimed the existence of a "contractual freedom" and an "autonomy of the will" on the grounds that the Man, created by God who made him free, have an autonomy in the management of his goods and of his commitments. However, this liberty isn't complete because it cannot overstep the principle of free consent and because the contrat cannot ignore the formalism required by the authorities or have an immoral object.
The members of the School of Salamanca also thought, following Luis de Molina, that contracts have been established for common utility and consequently, that natural law can't tolerate a privileged party. To allow the application of this principle of commutative justice, they elaborated the concept of just price. Every violation of this notion constitutes a laesio for one, and an unjust enrichment, an infraction to the seventh Commandments and a sin for the other. Only a restitution of the undue prince enables the absolution and bring back the contractual equilibrium.
Industrial revolution
Continental Europe Code Napoleon 1810 German Civil Code 1900
United Kingdom