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Justinian I · The Digest of Justinian §4.8.31.pr

Bad Faith Clauses and Stipulated Penalties in Arbitration

Passage 852 of 9271 · Latin

Summary

Ulpian discusses the conditions under which a stipulation is incurred in arbitration, explaining how the presence or absence of a "bad faith clause" in the arbitration agreement determines whether an action on the stipulation or a subsidiary action/exception for bad faith applies.

[ULPIANUS libro tertio decimo ad edictum. ] §4.8.31.prIta demum autem committetur stipulatio, cum aduersus eam quid fit, si sine dolo malo stipulantis factum est: sub hac enim condicione committitur stipulatio, ne quis doli sui praemium ferat.
[ULPIANUS in his thirteenth book on the Edict.] But a stipulation is only incurred when something is done contrary to it, if it was done without the bad faith of the stipulator; for a stipulation is incurred under this condition, that no one should reap a reward from their own bad faith.
sed si quidem compromisso adiciatur 'ut si quid dolo in ea re factum sit', ex stipulatu conueniri qui dolo fecit potest: et ideo si arbitrum quis corrupit uel pecunia uel ambitione, uel aduocatum diuersae partis, uel aliquem ex his, quibus causam suam commiserat, ex doli clausula poterit conueniri, uel si aduersarium callide circumuenit, et omnino si in hac lite dolose uersatus est, locum habebit ex stipulatu actio: et ideo si uelit de dolo actionem exercere aduersarius, non debebit, cum habeat ex stipulatu actionem.
But if indeed there is added to the arbitration agreement: "if anything should be done in that matter with bad faith," the person who acted with bad faith can be sued on the stipulation. And therefore, if anyone corrupts the arbitrator either with money or by influence, or the advocate of the opposing party, or any of those to whom the opponent had committed his case, he can be sued under the bad faith clause; or if he has craftily circumvented his adversary, and in general if he has acted in bad faith in this lawsuit, an action on the stipulation will lie. And therefore, if the adversary wishes to bring an action for bad faith, he ought not to do so, since he has an action on the stipulation.
quod si huiusmodi clausula in compromisso adscripta non est, tunc de dolo actio uel exceptio locum habebit.
But if a clause of this kind is not written in the arbitration agreement, then an action or exception for bad faith will lie.
hoc autem compromissum plenum est, quod et doli clausulae habet mentionem.
Moreover, that arbitration agreement is "complete" which also contains mention of the bad faith clause.

Notes

  1. §4.8.31.prcommittetur stipulatio — A technical legal term meaning that the condition of the stipulation (here, the breach) has been fulfilled, thereby giving rise to the penalty.
  2. §4.8.31.prquibus causam suam commiserat — The subject of the pluperfect verb `commiserat` in the relative clause is the opponent (implied from the preceding `diuersae partis`). The reflexive possessive adjective `suam` refers back to this implied subject.
  3. §4.8.31.prnon debebit — The infinitive phrase `de dolo actionem exercere` (to bring an action for bad faith) is omitted after the modal verb `debebit`. This reflects the rule in Roman law that the action for bad faith (actio de dolo) is subsidiary and cannot be used when another remedy, such as the action on the stipulation (actio ex stipulatu), is available.

Cite this passage

Justinian I, The Digest of Justinian §4.8.31.pr. Humanitext Reader, https://reader.humanitext.ai/en/text/urn:cts:latinLit:phi2806.phi002.humanitext-lat1:4.8.31.pr

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