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Early Modern Private Partnerships and Company Law in the Meuse-Rhine Region

Final Report Summary - PRIPAR (Early Modern Private Partnerships and Company Law in the Meuse-Rhine Region.)

The project was designed to serve the most fundamental aim of the Marie Curie Intra-European Fellowship, i.e. the development of the career of the applicant. In the concrete, the fellowship was to enable the applicant to prepare himself for the position of full professor of comparative legal history of the Meuse-Rhine region at the Maastricht Law Faculty. Therefore, the project was designed to reach two overall objectives that were inextricably bound up with obtaining the aforementioned position of professional maturity in the medium-term: (1) the enhancement of the researcher’s expertise on the historical development of law in the Meuse-Rhine region, and (2) the improvement of the researcher’s international renown as a scholar. In order to meet these overall objectives, the researcher was (1) to study early modern private partnerships and company law in the Meuse-Rhine region, and (2) to interpret his results against the background of internationally, heavily debated topics like the myth of the customary law merchant (‘lex mercatoria’) and the origins of early modern capitalism. Within the course of the past two years, the researcher had managed to meet these objectives sufficiently, while providing for the deliverables as set out in the original research proposal: five scientific publications and the organisation of one symposium.

With regard to the study of early modern private partnerships and company law in the Meuse-Rhine region, two case studies were carried out on the use and characteristics of such commercial institutions in the cities of Maastricht and Liège.* These case studies were based on sample-based analyses of seventeenth-century notarial deeds, whereby the preserved protocol books of all notaries, that were active in Maastricht and Liège during the years 1651-1655, have been analysed in search for partnership agreements establishing private partnerships. In total, about 32.200 (Maastricht) and 13.900 (Liège) notarial deeds have been examined, a quest that resulted in the identification of respectively nine and sixteen original partnership agreements. Despite their modest number, the extant notarized partnership agreements enabled the researcher to provide for a general description of the overall characteristics of Maastricht and Liège private partnerships as well as the corporate usages that were generally accepted in these cities. In combination with a substantial number of preserved partnership agreements, notarized in sixteenth-century Antwerp, these data sets not only allowed for an assessment of the common features and idiosyncrasies of early modern private partnerships as they occurred in the Low Countries, but they also engendered the researcher to interpret his results comparatively in a broader, European context, and thus touching upon the controversial idea of a so-called ‘lex mercatoria’ existing in late medieval and early modern Europe.

With regard to the intended research objectives, the following observations stand out. In the Meuse-Rhine region, and by extension the whole of the early modern Low Countries, notarized partnership agreement were generally designed in a similar manner, despite the existence of a large degree of contractual freedom among early modern contracting parties. Most contractual clauses defined all kinds of rights, obligations, privileges and/or restrictions that aimed at (1) establishing, securing and maximizing a partnership’s profitability, while reducing potential risks; and (2) distributing the eventual earnings (or potential losses) as equitable as possible. In addition, the extant partnership agreements gave proof of numerous clauses stipulating anticipatory measures that were chiefly directed at guaranteeing the continuous existence of the partnership. Only with regard to early modern mining companies, as established in seventeenth-century Liège, a significantly different - more succinct - kind of contract design could be observed. Here, notarized partnership agreements merely centred on the distribution of costs, losses and profits, and the internal organization of the company.

Secondly, the research demonstrated a wide variety of scopes of application as regards private partnerships. Whereas a commercial metropolis like Antwerp showed an unmistakable preference for the use of private partnerships in the framework of commercial activities, the Liège partnership agreements indicate that the city’s inhabitants primarily used notarized partnership agreements in organising their mining and metallurgical operations, whereas Maastricht citizens showed an increased interest in partnership agreements as regards the exploitation of local taxes that had been farmed out by the municipal government. Sometimes, different fields of application called for different elaborations of early modern company law. In Liège, for example, mining companies demonstrated a particular interpretation of the joint and several liability of a partnership’s constituting partners, for such external liability appeared to be limited in time. In addition, and in opposition to early modern commercial and artisanal companies, mining companies gave proof of a much greater degree of transferability, as far as their shares were concerned, whereby the transfer of a share not only required the consent of the other partners, but in such a case they were also granted a right of pre-emption.

As such, the Liège case study provided a first warning with regard to the existence of a customary law merchant, i.e. the hypothesis that from the medieval period onwards merchants created, from the bottom up, independent of all kinds of government involvement and on the basis of their mercantile practices, a distinct set of gap-filling rules which, by their uniformity and universality facilitated international trade. By means of a comparative analysis of the conditions that were required in early modern Europe in order to bind one’s co-partners for obligations with third parties on behalf of the company, the researcher provided for an additional argument in order to debunk the myth of a ‘lex mercatoria’. Despite the fact that contracting parties were primarily concerned with the internal and only a few notarized partnership agreements addressed the external liability of its constituting partners, such rare examples did offer opportunities to understand and explain the manner by means of which one was able to bind one’s co-partners externally. In the Low Countries, partners clearly could only be held liable for those obligations that were concluded by their fellow partners ‘in re societatis’, i.e. in line with the object or industry that the company was initially created for. As such, local practices adhered to a different condition than the one imposed by, for example, the Antwerp city statutes of 1608, which required such obligations to be contracted ‘in nomine societatis’, i.e. while making use of the name of the company or ‘firma’. The condition to contract ‘in nomine societatis’ was a typically Italian innovation, and in the Low Countries its unimportance is confirmed by the quasi-complete absence of so-called ‘firma clauses’, defining the composition of the name of the company, in the extant notarized partnership agreements. In opposition to early modern Italian, Spanish, French, and Southern German merchants, their counterparts in the Low Countries were not concerned at all with the (composition of the) name of their company. Likewise, substantial differences existed within early modern Europe and one can no longer speak of a ‘lex mercatoria’ as a universal and uniform set of rules - at least not with regard to early modern European company law - that might have facilitated international trade.

Finally, the scarcity of externally-oriented clauses in notarized partnership agreements in the Low Countries, serves as an invitation to rethink present-day categorization approaches, which prefer to distinguish between early modern private partnerships by means of a twenty-first-century terminology based on the external liability criterion in the first place. It has become clear, however, that early modern contracting parties did not think in (such anachronistic) categories. They merely created what they considered to serve their needs at best. Moreover, Antwerp notaries did not distinguish terminologically between various partnership types. Every kind of private partnership was called a ‘compaignie’, ‘societeyt’, ‘association’, or ‘geselschap’, irrespective of the presence of fundamentally distinguishing features. Nevertheless, it has become possible, by means of an in-depth analysis of the content of the contracts, to identify indirectly private partnerships that resemble theoretical ideal-types like a general partnership, an anonymous partnership, a limited partnership, etc. Whereas illustrations of partnership types like the anonymous partnership and the triple contract remained limited to a minimum, the early modern Low Countries appeared to be populated by general and - to a lesser extent - limited partnerships in the first place. Especially the presence of the latter category, as a means to invest money in the expectation of making a profit without participating in the corporate activities, proved to be vital for a better understanding of the organization of merchant capitalism in the early modern Low Countries.


*Originally, the city of Aachen was supposed to provide for a third case study. However, due to unforeseen circumstances, which rendered the Aachen notarial archives inaccessible, the researcher had to provide for an alternative solution by means of the incorporation of the city of Antwerp into the project. For more information, see ‘Letter to Miss Demsar’ among the attached documents.