A contractum trinius was a set of contracts devised by European bankers and merchants in the Middle Ages as a method of circumventing canonical laws prohibiting usury as a part of Christian finance. At the time, most Christian nations heavily incorporated scripture into their laws, and as such it was illegal for any person to charge interest on a loan of money.
To get around this, a set of three separate contracts were presented to someone seeking a loan: an investment, a sale of profit and an insurance contract. Each of these contracts were permissible under canon law, but together replicated the effect of an interest-bearing loan.
The way this procedure worked was as follows: The lender would invest a sum equal to the amount of financing required by the borrower for one year. The lender would then purchase insurance for the investment from the borrower, and finally sell to the borrower the right to any profit made over a pre-arranged percentage of the investment. This system replicated the effects of a loan with any interest rate agreed between the two, yet provided protection to the lender against default, while the borrower remained under the protection of the law when it came to collection of the money by threats or force (loan sharking).
The Church proved utterly unable to legislate against the contractum trinius, and the idea quickly spread to merchants and bankers across Christendom. It was accepted by writers such as Gabriel Biel; it helped in part to improve public perception of the practice of usury by moneylenders, and ultimately the doctrine was rewritten by the School of Salamanca, and the ban on interest-bearing loans overturned in many Protestant countries, starting with England by Henry VIII.
Some Muslims are of the view that the present practice of Islamic banking relies on devices similar to the contractum trinius as a means of working around a ban of riba (usury) in religious scripture.
An essay comparing Islamic banking practices to the contractum trinius
November 23, 2023
contractum, trinius, this, article, does, cite, sources, please, help, improve, this, article, adding, citations, reliable, sources, unsourced, material, challenged, removed, find, sources, news, newspapers, books, scholar, jstor, august, 2013, template, remov. This article does not cite any sources Please help improve this article by adding citations to reliable sources Unsourced material may be challenged and removed Find sources Contractum trinius news newspapers books scholar JSTOR August 2013 template removal help A contractum trinius was a set of contracts devised by European bankers and merchants in the Middle Ages as a method of circumventing canonical laws prohibiting usury as a part of Christian finance At the time most Christian nations heavily incorporated scripture into their laws and as such it was illegal for any person to charge interest on a loan of money To get around this a set of three separate contracts were presented to someone seeking a loan an investment a sale of profit and an insurance contract Each of these contracts were permissible under canon law but together replicated the effect of an interest bearing loan The way this procedure worked was as follows The lender would invest a sum equal to the amount of financing required by the borrower for one year The lender would then purchase insurance for the investment from the borrower and finally sell to the borrower the right to any profit made over a pre arranged percentage of the investment This system replicated the effects of a loan with any interest rate agreed between the two yet provided protection to the lender against default while the borrower remained under the protection of the law when it came to collection of the money by threats or force loan sharking The Church proved utterly unable to legislate against the contractum trinius and the idea quickly spread to merchants and bankers across Christendom It was accepted by writers such as Gabriel Biel it helped in part to improve public perception of the practice of usury by moneylenders and ultimately the doctrine was rewritten by the School of Salamanca and the ban on interest bearing loans overturned in many Protestant countries starting with England by Henry VIII Some Muslims are of the view that the present practice of Islamic banking relies on devices similar to the contractum trinius as a means of working around a ban of riba usury in religious scripture See also editChristian finance Discretionary deposit Round tripping finance Substance over form Islamic financeExternal links editAn essay comparing Islamic banking practices to the contractum trinius Retrieved from https en wikipedia org w index php title Contractum trinius amp oldid 1080595003, wikipedia, wiki, book, books, library,
