Legal Definitions - usurae centesimae

Usurae Centesimae refers to an annual interest rate of 12%, which was historically calculated as 1% per month. Particularly in ancient Roman law, this rate was often considered the maximum permissible interest that could be charged on a loan. The term itself reflects the Roman method of calculation, where one-hundredth (centesimae) of the principal sum was paid monthly as interest.

Here are some examples to illustrate this concept:

• Personal Loan Agreement: Imagine a Roman citizen, Gaius, lending 5,000 sesterces to his neighbor, Titus, to help him purchase a new plot of land. If Gaius charged usurae centesimae, Titus would owe 50 sesterces in interest each month (1% of 5,000), totaling 600 sesterces over a year. This rate would have been at the legal limit, ensuring Gaius did not exploit Titus with excessively high charges, even if he wished to.

  This example demonstrates the direct application of the 1% monthly (12% annual) interest rate in a private lending scenario, highlighting its role as a legally recognized maximum.

• Commercial Debt for a Business Venture: A Roman merchant, Cornelia, borrowed a substantial sum from a financier to fund a large-scale olive oil export business. If the loan agreement stipulated usurae centesimae, she would be paying interest at the highest rate legally allowed at the time. This meant that despite the inherent risks of international trade, the financier was legally constrained from charging a higher, potentially ruinous, interest rate, thereby offering some protection to Cornelia's enterprise.

  Here, the term illustrates its function in a commercial context, acting as a cap on interest rates for business loans, even when the perceived risk might tempt lenders to charge more.

• Judicial Review of an Unpaid Debt: In a Roman court, a creditor sued a debtor for an outstanding loan and claimed an interest rate of 15% per year. The court, recognizing the principle of usurae centesimae, would likely reduce the enforceable interest owed to the 12% annual maximum. The judge would rule that any interest charged above this legal ceiling was unlawful and therefore unenforceable, protecting the debtor from an illegal demand.

  This scenario highlights how usurae centesimae served as a benchmark for lawful interest in legal disputes, preventing creditors from enforcing rates that exceeded the established legal maximum.