But if he who has made an error in an agreement says that he tacitly assumed that the event about which he was mistaken was understood on both sides to be a condition of the agreement, despite the fact that the other party did not and reasonably could not understand that the agreement was limited by that condition, the claim of error is still not completely excluded even in this case, provided that the claimant proves by proper evidence that he really understood the situation the way he says he did (for even in natural liberty the same judgment holds about what does not appear and what does not exist, as far as the external forum is concerned), and provided that he is prepared to reimburse any loss the other party may have incurred, in accordance with what we shall argue below at pp. 84–85. [I.9.12.ii]
[Pufendorf gives as his third form of “error”: “When a mistake has occurred concerning the actual object of the agreement, the agreement is defective, not so much because of the mistake, but because it has failed to satisfy the conditions of an agreement.” Carmichael has two notes on this:]
That is, as may be understood from what has been said before, that one of the parties to the agreement not only supposed that the object was of a different kind, or of different valuable qualities, than is in fact the case, but thought in good faith that this supposition of his and the will to make a contract on such an object was understood on both sides. [I.9.12.iii]
The celebrated Titius correctly observes here that the author was not right to make the distinction he does make, since the reason why this kind of agreement does not satisfy the terms of an agreement is that it is not being made about the proposed object as it really is.10 [I.9.12.iv]
[Carmichael concludes:]
The nature of the object of the agreement and its valuable qualities or lack of them, which may be thought to have had some weight in determining either of the contracting parties to make a contract which he would not otherwise have made, are naturally understood to belong to the essence of the actual contract. Hence an error committed in any of these matters, by natural law, vitiates the contract as long as no performance has been made by either party; if discovered after the contract has been wholly or in part fulfilled, it gives a right to the injured party to withdraw from it, and to require that any performance be restored on both sides. But if the error in question concerns only the external value of the object or other qualities without regard for which the party in error would clearly have made the contract though with different conditions, it is at the discretion of the other party, provided he is clear of fraud, either to release him from the contract or to make up the value to him.
Here we must note that in every case in which a contract is voided for error, if fault on the part of one party to the agreement (whether the party making the claim for error or the other party) has given cause for error concerning either the object itself or the circumstance on which the claim is based or concerning the deception of one party by the other, and if the other party will suffer loss as a result of the voiding of the contract, then the former is obliged to compensate the latter for his loss; he must ensure that he is in no worse situation than if he had not entered into the agreement. And if one of the parties to the agreement recognizes the other’s error with regard to the object or its qualities, and fraudulently claims that the other had accepted it, he ought also to pay what the other lost thereby, i.e., the benefit which the deceived party would have got if the agreement had been fulfilled, in accordance with his expectation and intention; for this is what he seems to have committed himself to by his consent. These positions are not far from what is laid down in Roman law on these cases, provided we remember that the distinction between things which void an action in their own right and those which give rise to a claim or an action by which it may be quashed, are a subtlety of the courts which has no place in the simplicity of natural law. [I.9.12.v]
Force and agreements
[Pufendorf argues that in general agreements made under compulsion are invalid. Once again, as in the case of promises or agreements made in error, Carmichael takes a more restrictive line.]
Our opinion on this much discussed point will be clear from the three following propositions.
1. Agreements extorted by unjustified force give no right to the extortionist which he may legitimately use against anyone; nor by mere natural law do they bind the conscience of those who succeed to the position of the person who was subjected to force, to justify them in refusing performance, or if it has already been made, in demanding compensation for damage inflicted by unjust force. These points we grant to the considerations adduced by the author.
2. Nevertheless, the promisor is bound in conscience, on the ground of truthfulness and good faith, if he has promised anything that may be lawfully offered and therefore lawfully promised, in order to preserve life or avert serious loss (even though the most unjustified force by the other party imposed on him the need to make the promise). For he seems to have promised that he will not make use of the counterclaim of force and fear, even though it is quite evident, I suppose, in the very nature of the action.
3. Grotius aptly observes (II.XVII.19) that it seems to have been accepted by the consent of nations that the claim of force and fear cannot be brought against agreements extorted by the success of declared wars or by fear of them, whether by the parties to a treaty or by their successors, lest public disputes should never have an end. To declared wars however I think that one should add (for this purpose alone) all other actions done publicly, deliberately, and as it were, in the eyes of the world, and which are ended by agreements which have not been suddenly or secretly extorted. The purpose is that the conditions of peace established by these agreements, whether between princes and subjects or between different factions of citizens after a civil war, should be held sacred and inviolable. If the thing were otherwise, it is not clear that there would be any use in treaties restoring peace, or that old disputes, about which wars had been fought in the past, would not always be open to further conflict. For individuals enter into agreements to end disputes on the basis which the fortune of war has given to their side.11 [I.9.15.ii]
[Carmichael later adds that, while such a promise is valid in itself, the addition of an oath to it provides a further ground for respecting it.]12
We said in the previous note that the extortion of a promise by unjustified force does not prevent the promisor from being bound in conscience to perform it, if the thing promised may be legitimately performed. If it were not so, it is not at all clear how in good faith one could buy off with an onerous promise a threat of greater evil leveled unjustly at oneself by another person. What is certain is that it would be horribly impious to try to give such a promise the sanction of an oath, believing that it would still be invalid even with this sanction. Grotius indeed contends that a promise extorted by unjust fear is invalid by itself, but acquires force from the addition of an oath, and adds an inappropriate argument which our author refutes at Of the Law of Nature and Nations, IV.II.8. [I.11.6.3]
[Consideration of error, fraud, and force in the formation of agreements leads to a discussion of truthfulness and falsehood in the use of language in general.]
Language as signs
To understand this whole matter clearly one must recollect from logic that two kinds of signs need to be distinguished. One kind, by reason of nature or convention, signifies something without any regard to the supposed intention of the sign-user as to what is to be signified. The other kind of sign signifies precisely because it is assumed to be employed by a rational agent of his own accord to signify his thoughts to another person. And this is achieved either by some prior explicit convention about their significance, or (in the absence of an explicit convention about their use) because of some accompanying tacit convention about using the signs employed in the sense which either their nature or accepted usage indicates. This distinction by no means coincides with the commonly accepted distinction between natural and arbitrary signs. For natural and arbitrary signs are found equally in both of the categories we propose. It is however in fact the same as Grotius gives at Rights of War and Peace, III.I.8, n. 2, and following him our author at Of the Law of Nature and Nations, IV.I.12, and the use of this distinction in this matter is obvious. For the rule [of nondeception] should be understood of signs