Dēmos · Classical Athenian Democracy · a Stoa Publication
→ Part 1.5.
Edward M. Harris, edition of March 22, 2003
page 6 of 15
Two contracts that are important for an understanding of the dispute between Dareius and Dionysodorus are partnership (koinonia) and real security (apotimema). One of the most striking features of Athenian laws regulating commercial activities is the absence of any concept akin to the modern legal notion of corporation. Despite the presence in Athenian society of numerous koinoniai, groups of individuals cooperating for some purpose, be it commercial or otherwise, Athenian law concerned itself solely with individual persons and did not recognize the separate legal existence of collective entities. And just as Athenian law did not recognize the legal existence of corporations or collective enterprises, it also did not possess the notion of corporate liability. This meant that if someone entered into an agreement with a group of individuals and one of those individuals violated the terms of the agreement, the plaintiff proceeded only against the individual who acted contrary to the agreement, not against the group as a whole. If the plaintiff won his suit, he only had a right to receive compensation from the defendant’s private property; he did not have a claim on all the funds held in common by the group. Instead of forming a corporation, business partners would enter into an agreement called a koinonia (partnership) or koinopraxia, which was similar to the Roman contract of societas (Justinian Institutes 2.25). This arrangement set forth what each party would contribute to the joint enterprise and what share in the profits each was entitled to receive. Suits arising from these agreements received special treatment as “monthly suits” in the Athenian courts, which would indicate that they were sufficiently numerous to merit separate attention (Constitution of the Athenians 52.2).
The practice of providing security was an effective way of providing lenders with some assurance that they could recover their money in the event of the borrower’s default. The Athenians had two basic contracts for security, personal security (engye) and real security (apotimema). In personal security for a loan, the borrower arranges for a third party to come forward and to promise the lender that he will fulfill the borrower’s obligations in the event that the borrower does not make interest payments or repay the principal. In real security, the borrower pledges some of his property, either movable or immovable, as security to the creditor. If the borrower defaults, the creditor has the right to seize the property pledged as security, and, if he wishes, to sell it for cash in lieu of repayment. Some scholars have claimed that the Athenians had no laws about real security and that this reflected the primitive nature of the economy. The sources for Athenian law, however, provide at least three examples of laws about real security. One protected the ownership of the lender who seized property pledged as security as a result of default (Isaeus 10.24). If someone challenged another person’s ownership of property, the laws allowed the latter to defend his ownership by proving that he had received it as security. A second law protected the lender who acquired a security in this way from further claims by the borrower (Demosthenes 41.10). A third law provided the lender with an action against the borrower if he defaulted and refused to turn over goods pledged as security (Isaeus 6.31; [Demosthenes] 56.3, 38, 40, 45). These laws show that lenders did not rely just on social attitudes about reciprocity when making loans. As Dareius says in the speech “Against Dionysodorus,” lenders trusted in the protections afforded by the legal system.
The courts of Athens enforced contracts made not only by citizens but also by metics and foreigners. In modern terminology, the laws of Athens recognized the principle of “supranationality” in commercial disputes. This meant that even if one was not a citizen of Athens, one could still bring a private action against another party no matter what his citizenship. Some scholars claim that the Athenian courts served primarily as an arena for competition among élite citizens, but the preserved court speeches show that foreign merchants were also active in bringing suits. For instance, Demosthenes (21.176) recalls how Evander of Thespiae brought a commercial suit against Menippus of Caria and won a judgment of two talents. Granting foreigners access to the courts and enforcing their contracts was an important way of promoting overseas trade. In fact, all four of the individuals involved in the case described in “Against Dionysodorus” appear to have been metics. Athens was not the only community to recognize supranationality in commercial disputes: Dareius imagines the possibility of Athenians getting involved in legal case in Rhodes (Demosthenes 56.47. Cf. Demosthenes 32.18; 45.64).
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