Manon Moerman

This thesis examined the content and normative nature of the rules of conduct – a concept introduced by the legal sociologist Eugen Ehrlich during the first half of the twentieth century – on private partnerships in Amsterdam on the basis of an in-depth analysis of approximately 850 notarial partnership contracts which were registered between 1601 and 1791. More specifically, we examined whether and to what extent Roman-Dutch law (norms for decision) and non-legal rules (living law or norms for behaviour) shaped the law on private partnerships in early modern Amsterdam. Although the economic success of the seventeenth-century Dutch Republic was largely built from the bottom-up and therefore mainly rested on the economic activities of companies that generally consisted of two or three partners, private partnerships have received little scholarly attention to this day. Consequently, this thesis serves to enhance our understanding of the organisational features of early modern partnerships and the norms that governed the relationship between the business partners.

Before starting with the substantive analysis of contractual clauses, the first chapter introduces the members of the Amsterdam partnership (societas) and the wide range of economic activities in which they were involved. Moreover, the chapter shows how early modern private partnerships served multiple functions beyond profit-making by enabling individuals to unite the necessary resources to start or continue a business, while reducing their individual workload. Additionally, partnerships were found to be instrumental in facilitating the economic participation of women, minors, and religious minorities, and providing different forms of social security for the business partners and their families.

In the second chapter, the thesis continued with an analysis of the three main constitutive elements of private partnerships in early modern Amsterdam, i.e. consensus, investments, and profit-sharing. Following their consensual nature, private partnerships were founded by virtue of the unanimous and informal agreement between the contracting parties without (in principle) requiring any formalities to fix the parties’ obligations. Nevertheless, this study revealed a growing appreciation for the institutional advantages of public documentation, including the probative strength of notarial deeds, their accessibility to future generations, and their role in preventing disputes. Moreover, the contractual flexibility regarding the partners’ contributions to the partnership, the ways in which the profits were shared, and the diversity in remuneration structures, turned partnerships into a versatile instrument that could accommodate partners with different resources, skills, and risk preferences. This versatility helps to explain why partnerships remained the dominant form of business organisation across diverse economic sectors throughout the early modern period. Third, a number of notarial contracts demonstrated how business partners and notaries creatively interpreted, combined, and sometimes circumvented legal categories in pursuit of their practical objectives.

Once established what constituted a legally valid partnership and how these constitutive elements were translated into practice, the thesis proceeds with an analysis of the binding rules of conduct concerning three main legal challenges for early modern business partners, i.e. safeguarding the continuity of their business, limiting their liability towards third parties, and ensuring the enforceability of their contract. The third chapter addresses the question of how (if at all) business partners could safeguard the continuity of their business despite, for example, early withdrawals or the premature death of a member. Although private partnerships were a widely used means of business cooperation throughout the early modern period, the power of each individual business partner to leave the partnership at will could threaten the continued existence and stability of the business. Nevertheless, the discussions by several early modern legal scholars on this issue remained focused on the rigid theoretical provisions that were found in Roman legal sources and failed to provide practical solutions. Consequently, entrepreneurs themselves developed these solutions through their living law which provided the necessary flexibility to safeguard the continuity and stability of partnerships in three ways. First, partners tried to discourage early withdrawals, by either including a prohibition to leave the partnership prematurely, or by imposing financial penalties which made withdrawals costly but without eliminating the autonomy of the individual partners.

Second, business partners increasingly facilitated the transfer of shares during the course of their partnership, a development which represented a striking departure from the legal norms for decision. Nevertheless, through arrangements permitting both partial transfers to sub-partners (croupiers) and full transfers of ownership, Amsterdam entrepreneurs gradually incorporated features typically associated with the corporate form. Third, business partners developed elaborate contractual arrangements to address the death of a partner and to ensure that the partnership could be continued despite the premature death of a partner. However, even though the business partners carefully crafted contractual arrangements that allowed the transfer of shares, the locking-in of capital, and successions by heirs, their living law maintained a number of consensual elements to avoid a complete rupture with the norms for decision. Nevertheless, the gap between the living law and the norms for decision regarding the continuity of private partnerships remained unresolved throughout the early modern period, driving legal innovation from the bottom-up.

The extent to which business partners were liable towards third parties for their partnership’s debts is the central question of the fourth chapter. Here, the notarial partnership contracts which were examined revealed a remarkable diversity of arrangements through which Amsterdam entrepreneurs sought to balance opportunity with risk. While the norms for decision continued to rely on Roman law, the living law of Amsterdam’s entrepreneurs reflected a more diverse framework. By tracing the distinctions between declared, covert, and cooperative partnerships, it becomes clear that Amsterdam business partners operated across a spectrum of visibility and liability. The business partners in most declared partnerships formalised and visualised their shared liability towards creditors through their firma, whereas the existence of covert partnerships remained hidden for the outside world. The Amsterdam vemen or cooperatives – established between the dockworkers, packers, weighers, and boatmen at the harbour – appeared to share a number of characteristics with the cooperative form of business organisation (e.g. continuity despite a change of ownership, strong emphasis on the (reputation of the) collective, the continued use of an impersonal name which did not reveal the identity of its members).

The fifth and final chapter discusses the enforceability of Amsterdam partnership contracts and reveals a sophisticated interplay of interacting judicial and non-judicial enforcement mechanisms. From this, it appears that business partners did not simply choose between private ordering and public adjudication but instead moved fluidly across multiple enforcement mechanisms, deploying each according to strategic needs and contextual factors. The resulting system successfully managed most disputes in a way that preserved the contractual innovations in the living law, though this success depended on the ability of merchants to settle their disputes outside of the courtroom. When conflicts escalated in courts, the disjuncture between the living law and the norms for decision became apparent, revealing the fragility of those rules of conduct which were established through private ordering rather than legislative reform. The enforcement landscape of early modern Amsterdam thus exemplifies both the possibilities and the limits of creating enforceable rules of conduct through bottom-up innovation and in the absence of formal legal change.

A general conclusion unites the findings from the individual chapters with a view to answering the main research question and reflecting on potential topics for future research.