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Randy Bishop

Six Things You Didn't Know About the History of Contracts

The history of contract law offers fascinating insights.

Unless you're a contract law attorney, you probably don't lie awake at night asking yourself what a contract is. But in our modern economy, we live in a world that is, in many ways, defined by contracts.

We wake up in our home that was purchased with a real estate sales agreement. But before we purchased, the builder entered into contracts with the seller of the land, sub-contractors, the real estate agent, construction material suppliers, and probably a bank for financing. Then we get into our car for which we entered into a purchase agreement or sales contract. The car dealer perhaps has a commercial lease for the dealership building and numerous agreements with one or more car manufacturers. We arrive at work, and many of us walk into an office environment in which we can look around and see evidence of dozens of contracts – office supplies, furniture, internet providers, telecommunications, and utilities, just to name a few. All of these providers probably have hundreds or thousands of contracts. Then, the company you work for may have thousands of contracts related to its own business, and employ or consult with contract law specialists to help cross t's and dot i's.

Many people think of all these business and contractual relationships as a relatively recent phenomenon. This couldn’t be further from the truth. While it is true that the complexity and number of contracts have increased, contracts have actually been around for centuries. In this article, we’ll look at some interesting facts related to the history of contracts and contract law.

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  1. Mesopotamia Boasted Many Types of Contracts

Many of us grow up learning at least a little bit about Mesopotamia in religious or historical contexts. The region existed in the eastern Mediterranean near the Tigris and Euphrates rivers, and is sometimes called “the cradle of civilization.” Human settlements have been traced back as far as 10,000 BCE. And guess what – they had numerous forms of contracts, including the following:

  • Sales and Purchase Agreements
  • Employment/Labor Contracts
  • Partnership Agreements
  • Marriage and Divorce Agreements
  • Powers of Attorney

Fun fact: one of the main reasons writing was created was for contracts. So, in a way, you can thank Mesopotamians for your favorite books and magazines.

  1. Contract History Scholars Are Aware of a 4,300-Year-Old Written Purchase/Sale Agreement

In a written contract from approximately 2300 B.C., Sin-Ishtar purchased a slave named Ea-Tappi from Akhia and Ilu-ellatti for ten silver shekels. While the subject of this contract is highly offensive by modern standards, the contract demonstrates a relatively advanced legal development for the era.

  1. For Thousands of Years, Contracts Have Been Instrumental to Market Economies

Before going further, let’s address the fundamental question – “What is a contract? In this context, we’ll be simplistic and consider contracts to be mutual promises that are legally enforceable (in a later article, we will address the elements of a contract in detail). Societies have developed numerous strategies designed to compel compliance with social commitments, such as religious and familial mores.

But market-based economies developed something more – a system in which parties entered into enforceable agreements which would be honored, even if the business circumstances changed over time. Such enforceable commitments are instrumental in supporting a market economy and can be traced to many ancient countries and civilizations, including Egypt, Israel, Mesopotamia, Persia, Greece, and Rome.

  1. This Mesopotamian Had to Worry about a Mortgage Payment!

In a written contract from approximately 611 B.C., Iqisha-Marduk loaned money to Nabu-etir with an interest rate of 11.33 percent. In return, Nabu-etir pledged property (a field) located close to the gate of Bel. Luckily, today’s borrowers can obtain much more favorable interest rates, although they are going up! On the other hand, Nabu-etir probably didn’t have to worry about a credit score and three credit- reporting agencies!

  1. You Can Read Copies of a Peace Treaty (if you know the language) from 1269 B.C.

Speaking of the question, “What is a contract?”, it's easy to forget those that exist not between individuals, but rather between whole societies. In approximately 1274 B.C., the Hittites and Egyptians waged a massive battle for Kadesh, a city strategically located on important trade routes. Egypt sent 20,000 men and the Hittites devoted 37,000 men to the battle. Both sides claimed victory, but in truth, both sides had reason to seek peace – which is exactly what they did. In 1269 B.C., the oldest surviving peace treaty, the Kadesh Treaty, was signed. The treaty, now on display in the United Nations, calls for “everlasting peace”. Wouldn’t it be nice if modern leaders could aim so high.

  1. The History of Contract Law Even Addresses Infertility

Archaeologists in Turkey have located a 4,000-year-old tablet, believed to be a marriage contract. Laqipum, the male, married Hatala, the female. Interestingly, if Hatala does not produce a child, she agrees to purchase a slave woman to bear a child for her husband. Once offspring is produced, Laqipum may dispose of the slave by selling her. Talk about a tough prenup!

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At ContractSafe, we admittedly lack experience with ancient contracts chiseled into stone and silver tablets. The history of contract law offers great insights, but historical methods of storage are a bit too old-school for us. When it comes to efficiently storing all your modern-day contracts, forget the warehouse and manpower needed to locate your tablet--we have everything you need to find your contract at your fingertips.  Start your free trial today!

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