The present world of industrial society is heavily dependent of Contracts, right from employee to horticulture, from employee pick-up and drop facility to canteen and many more, list is growing day by day in the era of outsourcing. This led me to inquire and to read about contracts, its history, its origin and development. I came across so many interesting facts and the purpose of this article is to share with you all - the information. Hope it is meaningful.
Before understanding the history of contract one has to understand the overall development of legal system, in brief -
1. Ecclesiastical (pertaining to church) or religious system - based on religious, textual and customary faith and strong belief.
2. Roman - Germanic system - based on codification on logical ground with customary practices secular in nature. For instance - Justenian Code.
3. Civil Law system - based on well defined constitutional legal regime.
4. Socialist system - based on high public interest.
5. Common Law - developed under British Empire. More than half of the globe was under domination of common law during the 18th, 19th and early 20th Centuries.
Common law is regarded as golden opportunity for the development of mercantilism and capitalism. During the period of common law, the industrialization was one of the supporting factors for the development of laws in relation to contracts.
In common law, law of contract has origin from the law of tort during the period of 14th and 15th Centuries. In early days of its development phase three writs (specific order or direction by the Court) played important role -
1. Writ of debt - issued in case of agreements for loan and credit
2. Writ of Covenant - issued in case of agreements in writing for transfer of landed properties, asking the party to perform his part.
3. Writ of trespass - issued in case of physical injury to person and property.
Some other notable writs used by the Courts -
1. Writ of deceit - issued in the event when a party to the contract committing breach.
2. Writ of debt-debtenu - issued in a situation where the defendant unjustly detain something on which plaintiff had the claim or entitled for possession.
The basic principles of action on civil wrongs were based upon three clear cut actions and inactions on the part of the defendant -
1. Misfeasance - something done by a person which is per se (itself) wrong.
2. Malfeasance - a right course of action wrongly done.
3. Nonfeasance - a right course of action not done at all.
Need was felt for stabilization of law in relation to contracts. In the mean time King's Bench formulated another notable remedy known as "Assumpsit". According to King's Bench - one could trace the conflict of ideas on remedying in the event of breach. Under every executor contract the parties used to promise to pay an amount or deliver the goods. The action on assumpsit was held more appropriate than the limited application of writs.
Another principle of Roman-Germanic System is notable with regard to development and codification of Contract Law. The principle of "Pacta Sunt Servanda" meaning "promise once made is binding" or "one must observe one's word given to other, else he take the curse of the God".
Requirement for codification of Contract Law—
1. During the early period of industrialization, it was felt that writs were insufficient to remedy.
2. Writs has "pigeon-hole application whereas contract required a wider legal remedies, especially in case of contract of services.
3. Rapid industrialization required more transparency in the legal system.
Benefits flow from codification can be --
1. Transparency of law at any given point of time.
2. Stabilization in society.
3. Easy public accessibility.
4. Possible amend-ability with need and change of time.