Pufendorf: On the Duty of Man and Citizen according to Natural Law

1. In its general sense an agreement [pactum] is the consent and concurrence of two or more men to the same intent [placitum]. But a distinction is often drawn between simple agreements and contracts [contractus], and the essence of the distinction seems to be that those agreements are called contracts which deal with things and actions of commercial significance and which consequently rest on a presupposition of ownership and value in things. Concurrence on other matters takes the common name of agreements, although to some of them the terms ‘agreement’ and ‘contract’ are applied indifferently.

2. Contracts may be divided into gratuitous and onerous. Gratuitous contracts confer a benefit on only one of the contracting parties, for example, mandate, loan for use, deposit. Onerous contracts bind both parties to an equal ‘burden'; their characteristic is that something is given or some Performance made for the purpose of getting the equivalent in return.

3. A requirement of all onerous contracts is that equality should prevail in them, or that both contracting parties receive equal benefit. Where inequality occurs, a right arises for the party which has received less to claim that his loss be made good, or simply to terminate the contract. This occurs particularly in states, since there the prices of things are determined by the custom of the market or by law. The essential requirement for discovering and determining this equality is that both contracting parties have knowledge of the thing which is the object of contract and of all its relevant qualities. Hence too in the process of passing a thing to another person by contract, one must point out its faults and defects as well as its good qualities. Without this a fair price cannot be settled. However one does not need to point out circumstances which in themselves do not affect the thing, nor need one indicate faults which are known to both parties. Anyone who knowingly acquires a faulty object has only himself to blame.