The Dual Origin of the Duty to Disclose in Ancient Rome

Abstract: The Roman remedies for failure to disclose in sales contracts were developed by two different institutions: the aediles, with jurisdiction on market transactions effected through auctions, and the praetor, with general jurisdiction including private transactions. The aedilitian remedies—the actiones redhibitoria and quanti minoris—allowed for rapid negotiations and inexpensive litigation but generated some allocative losses ex post, as they did not enable the parties to exchange information about idiosyncratic characteristics of the goods for sale. In contrast, the remedy developed by the praetor—the actio ex empto—implied lengthier negotiations and more expensive litigation but eliminated the ex post allocative loss, as it fully protected the buyers’ idiosyncratic interests. Our analysis sheds some light on how differences in lawmaking institutions affect the laws produced by them.