SOCIETÀ ITALIANA DI DIRITTO ED ECONOMIA
Mitja Kovac (University of Ljubljana School of Economics and Business)
Amelie Van Belleghem (Court of First Instance West Flanders, Bruges,)
Abstract
Lawmaking in ancient Rome has produced remarkable legal solutions to omnipresent problems. Cicero’s concepts of virtue, honourable conduct and good faith appear as the most fundamental ones and yet as ones whose nature and contents are still ill-understood. This paper explores the common foundation of the good faith duty in the contract law of ancient Roman law and its modern comparative materializations in the French, Belgium and English law of contracts. More particularly, while focusing on the famous Cicero decisions related to good faith, paper attempts to trace, with the help of behavioural and economic tools, the underlying common structure of the good faith obligations as originally designed by ancient Roman jurists. Paper seeks to shed additional light on the boundaries of the good faith concept and whether such common structures may be invoked in enhancing our understanding of the modern decisions which invoke good faith. Paper argues that the duty of good faith serves as a multi-functional legal mechanism that ex post regulates the optimal amounts of different social behaviours, lowers transaction costs, fosters efficient reliance, addresses information asymmetries, enables sequential exchanges and is essentially a risk-allocation and risk-sharing mechanism. Furthermore, this paper overcomes an old legal and moral crux and examines good faith standard in the ancient Roman law and in particularly the famous Cicero concepts of virtue and honourable conduct in daily contracting.