Introduction to Private Law (Civil Law) PDF

Katjana Kohl Unit 1 General introduction; The concept of global law; The Western legal tradition Sirena, Chapter 1 I. The functions of law ⇒ Ubi societas, ibi (et) ius → no society without law...

Katjana Kohl Unit 1 General introduction; The concept of global law; The Western legal tradition Sirena, Chapter 1 I. The functions of law ⇒ Ubi societas, ibi (et) ius → no society without law → no law without society Law prevents and solves conflicts among members in a group ○ Negative functions of law: Impeding the disruption of society ○ Positive functions of law: Enhancing the unity of society ○ Settling disputes (disagreements): law ensures that the settlement of future disputes is predictable and consistent → framework society as a whole II. Law and religion Legal traditions are founded upon a substrate of religious nature ○ Authority: what is good for the community? Law and religion: societal control Secularization → religion lost its grip on Western politics III. The process of juridification of Western society Societal control → intervention of the state in areas of social life Law competed with other systems of private ordering (example: religion) IV. Law and technology ⇒ Big data is a further technique of societal control Use of data allows it to control the life of people in a pervasive way Use of personal information → personalized laws ○ Social stereotypes & standardized patterns of behavior May determine judgment involving civil/criminal liability → “predictive justice” Decision-making by AI → neural mechanism to implement the application of law in a more efficient and impartial way → no bias  Sirena, Chapter 2 I. The Roman invention of law Roman law could have been influenced by other ancient cultures ○ However, it is in ancient Rome where all items were combined into a unique mix ⇒ “ius” = pureness ➡ Earlier stages (753 bc - 451 bc): Fixed procedure & extreme formalism ○ Loosened through historical development of the trial system Shift of attention from law applied to juridical proceedings → facts alleged by the parties ➡ Late republic (201 bc - 27 bc): Initially legal decisions made by jurists were based on intuition and experience ○ Over time: high degree of reasoning ➡ Classical Roman law (27 bc - ad 235): Highly specialized and autonomous field of rational knowledge → governs social conflict (⇒ shared education, culture, mentality) Inner rationality & ideal existence ○ Raise expectations of justice II. Classical Roman law and the justinian compilation Roman law ≠ stable and full-fledged legal system → It grew and changed over centuries ➡ Codex ➡ Digest or Pandects (Digesta, Pandectae): compilation and collection of texts of the most important Roman jurists of the classical age → legal thoughts ➡ Corpus of jurisprudence (iura): contained the best opinions and writing authored by jurists ➡ New laws (Novellae Constitutiones)  III. The medieval renaissance of roman law Irnerius (jurist) discovered a copy of the Digestum ○ He started commenting on it and teaching it ⇒ First university to teach law: Bologna Students copied the texts of the Digesta and took those back to their home → spread throughout Europe IV. The continental Ius Commune and the English common law Glossators and commentators disregarded the historical remoteness of the justinian compilation → focused on how the law can still address and solve social problems Their comments in the glossae grew over time ○ Published as a work of their own ⇒ “Ius commune”: Combination of Roman law and the interpretation of the scholars V. The advent of national law (ius patrium) ⇒ “Ius commune” was challenged by growing complexity of interplay between Roman law and local law Cure = national law → attain strong political unity  Unit 2 National and international law; The national codifications Sirena, Chapter 3 I. Statism and nationalism of contemporary Western laws Private law in Western legal tradition: law set out by nation states ○ Exercises their own sovereign powers to create & apply its own law II. Westphalian paradigm: The split of national and international law Medieval ius commune had no territorial basis Peace of Westphalia → ended war of religion Westphalian paradigm: Separation between domestic and international law ➡ Domestic law: Sovereignty of a state cause to bind its citizens by enacting legal rules National state produces own laws ➡ International law: State can limit its sovereignty by concluding contracts and agreements with other states State has duty to enforce international agreements it has entered → Binds states, not their citizens III. Comparative law ⇒ Measure similarities and differences between legal systems → not a legal system in itself Aims and methods: ○ No system is necessarily ‘better’ Goal: gain knowledge on subject matter Indirect benefits of comparative law: ○ Aid to the legislator ○ Tool of construction of national or international law ○ Subject taught at universities ○ Incentive & guide to uniform existing laws ○ Driver of a European law → Basis of a common denominator Easier in areas of private law: contracts and obligations Harder in family and succession laws IV. Private international law ➡ Procedural part: Which court is competent to hear the case and which law governs the proceedings brought before the court? ➡ Substantial part: Which law rules the rights and duties of the parties and decides how the case is to be adjudicated? V. Uniform law ⇒ States aim to have identical rules in their legal systems Instruments or sources of uniform law: ○ International conventions → oblige states applying them to change their own legal systems accordingly ○ Model laws → although not binding, command a wide consensus and, therefore, are voluntarily mirrored by national legislators  Sirena, Chapter 4 I. The national codifications; Civil law Jurisdictions ➡ The Code civil des Francais (or Code Napoleon) Ideal of national law was replaced by French Revolution → ius commune dismissed ○ Through Enlightenment thought: Unique law Intelligible to all men Easily accessible Understandable Unification of the country Depart from Catholic religion and enact a secular law ○ Particularly important regarding marriage → divorce allowed The “Code”: ○ Freedom of contract ○ Protection of private ownership ○ Clarity and rationality Unit 3 The national codifications; The structure of a civil law legal system Chapter 11 (Zwiegert & Kötz) ➡ The German Bürgerliches Gesetzbuch (BGB) The German BGB rested completely on Roman law ○ Contemporary Roman law Structure: ○ General Part (first book): Sets forth all institutions, definitions and general rules ○ Special Part: Second book: “Law of Obligations” Third book: “Law of Property” Fourth book: “Family law” Fifth book: “Law of Succession”  Chapter 4.3 ➡ The Italian Codice civile of 1942 ⇒ Compromise between the German and the French model ○ Eliminated the distinction between commercial and civil law First Italian Civil Code (Codice civile) (1865): Mostly based on the French Code civil Long process of drafting new norms from 1923-1938; enactment of the new Codice civile in 1942 Structure: ○ First Book: About persons and their family ○ Second Book: About successions ○ Third Book: About property ○ Fourth Book: About obligations ○ Fifth Book: About labor ○ Sixth Book: About the protection of rights Chapter 4.3 I. The legal systems ⇒ “A legal system is an order of norms which proves certain, dynamic, and efficient” Primary rules: ○ Forbid or require certain actions and can generate duties or obligations Secondary rules: ○ Identify primary rules ○ Regulate a possible change/ repeal of primary rules ○ Enforce primary rules Rules not directed at individual, but at legal regulations of the state (example: legalizing gay marriage) ⇒ Ensure certainty, dynamism and efficiency of law → result of social changes ➡ Structure of a civil law legal system ➡ The gaps in a legal system (lacunae) → Gaps can be filled by analogy: Analogia legis: application of laws that regulate similar matters (important exceptions, e.g. criminal law) Analogia iuris: application of general principles of law (secondary function to the first) ➡ The conflicts of norms (antinomies) Lex superior derogat legi inferiori → hierarchical criterion Lex specialis derogat legi generali → content-based criterion Lex posterior derogat legi priori → time-based criterion Unit 4 European private law and European model rules Sirena, Chapter 8 I. European union law (Acquis communautaire): History and concept 1. History and concept ⇒ After two world wars they promoted the idea of a supranational unity, aimed at achieving peace and freedom for their citizens. Main purpose of creating EEC → creating a European common market (ECM): ○ Free trade area  ○ Sovereign powers and own institutions Single European Act (1986-1987) → fundamental aim of EEC shifted from common market to single (internal) market ○ Fully-fledged freedom of movement of 1. Capital and persons 2. Goods and services ➡ Maastricht Treaty (1992-1993) EEC extended to sectors of social and political importance: ○ Creation of the European Union (EU) and the Union Citizenship ➡ Treaty of Lisbon (2007-2009) EC and EURATOM absorbed into EU Three pillars abolished Gradual growth of the EU starting with 6 states now 27 Member States Integration between Member States through law ○ Legislative power → Parliament, Commission, EU Council ○ Judiciary power → Court of Justice EU law was influenced by German ordo-liberalism → society based on private law ○ Protecting individual freedoms incorporated into strong economic regulation Foundation of EU builds upon its economic constitution: ○ Economic freedoms → right to undertake private initiatives Risk: market failure, private power ⇒ Social market economy «negative integration» of provisions, that endanger the exercise of economic freedoms (pars destruens) «positive integration» of provisions, that unify the legal systems of the Member States (pars construens) 2. The sources of European Union law Unit 5 Party autonomy; Legal facts and legal acts Sirena, Chapter 9 I. Private Autonomy Private autonomy: Refers to an individual's ability to make decisions and enter into legal relationships, such as contracts, according to their free will and personal preferences, within the bounds of the law. Linguistic origin in ancient Greek: stipulation of rules (nomìa) by oneself (autòs) Power to produce legal effects on one's own property or personality Limits of private autonomy are set by the law A legal act (Rechtsgeschäft) is an instrument of private autonomy → autonomous legal act  Free decision on whether to undertake a certain legal action Free election of the legal effects attached to an action E.g.: contracts, last wills (testaments) and marriage Party autonomy Parties are free to make a contract or other juridical act and to determine its contents, subject to any applicable mandatory rules. Parties may exclude the application of any of the following rules relating to contracts or other juridical acts, or the rights and obligations arising from them, or derogate from or vary their effects, except as otherwise provided. A provision to the effect that parties may not exclude the application of a rule or derogate from or vary its effects does not prevent a party from waiving a right which has already arisen and of which that party is aware. II. Default rules and mandatory rules Heteronomous legal acts: Human actions whose legal effects are stipulated by the law irrespective of their intention  III. The legal relevance of natural events and human actions ⇒ “State of affairs” = description of a single or a chain of event(s) or action(s) whose occurrence (according to a norm) trigger a legal effect One practical issue may be regulated by many different norms (e.g. a person´s death → law of succession or criminal law) All legally relevant events or actions are classified as legal facts ➡ German tripartite taxonomy: Rechtsgeschäft Tripartite taxonomy: (1) Legal facts, (2) heteronomous legal acts and (3) autonomous legal act 1. Legal facts 2. Heteronomous legal acts: Legal system attaches effects 3. Autonomous legal act: Create legal effects and determine the contents of the legal effect a. Contract b. Will c. Testament d. Marriage «Rechtsgeschäft» ○ Meaning: legal act/ legal transaction ○ Set of rules (§§ 104-185 BGB) in the General Part of the BGB ○ Consists of one or more declarations of will Declaration of will ○ Intent to achieve a change in the rights or duties of its author (= legal effect) ○ Declaration can be pronounced through language or through conduct (e.g. gesture) Material facts ○ Legal facts that are adressed by a norm irrespective of the particular judgement or discernment of their authors ○ Or also natural events  ○ E.g.: A person's death leads to the inheritance of its heirs (irrespective of the event or action that caused the death – murder, heart attack, etc.) Relativity of legal qualifications ○ An event or an action can be regarded both as an autonomous and a heteronomous legal act, depending on the relevant norm ➡ French bipartite taxonomy Bipartite taxonomy: (1) Legal facts and (2) Legal acts Every legal fact is either an acte juridique or fait juridique Acte juridique has been de facto used with the meaning of autonomous legal acts. ○ Art. 1100 (1) Code Civil: Legal acts are expressions of will intended to produce legal effects. They may be conventional or unilateral. Their validity and effects are subject to the rules governing contracts. Faits juridique comprise material facts as well as heteronomous legal acts ➡ Italian eclectic taxonomy Eclectic taxonomy: (1) Legal facts and (2) Legal acts The Codice Civile names fatti giuridici and atti giuridici Italian codification mirrors the French Code civil ○ However the Italian scholarship is German-oriented ○ Therefore there is a certain «mismatch» between the categories acknowledged by the Codice Civile and the Italian scholarship Predominant acknowledgement of the categories negozi giuridici and atti giuridici in senso stretto These are equivalent to autonomous legal acts and heteronomous legal acts ➡ European taxonomy and the centrality of legal acts in private law Legal acts: ○ Unilateral: performed by the declaration of wills of one single party Example: Withdrawal from a contract Exception: Testaments or last wills ○ Bilateral: Mutual consent of two parties Example: Contracts ○ Multilateral: Establishment of companies Subject-matter of legal acts:  ○ Patrimonial: Contracts ○ Non-patrimonial: Testaments, marriage ○ Personal: Mandatory prohibitions → personal integrity worth protecting Illegality of a legal act → act affected by invalidity, i.e. a legal pathology Invalidity due to a deficiency of judgment or discernment: ○ Incompetence/ no capacity to act ○ Consent affected by vitiating factors (fraud, mistake, duress, …) Legal consequences of invalidity are voidness or voidability ○ Voidness: Legal act becomes ineffective from the outset (ex tunc), whether or not any of the parties has disaffirmed it. Possible Reasons: Legal act is affected by indefiniteness or vagueness Legal act lacks a formal requirement (e.g. obligatory conclusion of contract in writing) Every party (even, when affected by the act, third parties) can invoke voidness ○ Voidability: A voidable act stays effective until its avoidance (or annulment) at the election of the innocent party. Only the aggrieved party can avoid the legal act The right of avoidance is time-barred When a voidable act is avoided, it becomes retrospectively (ex tunc) reversed, triggering the return of every performance made Unit 6 Rights and duties Sirena, Chapter 10 I. Legal positions and legal relations Legal positions are usually qualified as «subjective» (predicated on specific people/groups) ○ Legal facts and legal acts → natural events and human actions ○ Legal positions → relations between legal subjects Based on entitlement of a specific person (or group) ○ Legal positions of may do/ can do… ○ …against another that shall do/must do Position of advantage entails a matching position of disadvantage Legal relation structured as a pair of correlative legal positions ⇒ Concept by HOHFELD: not only correlative but also contradictory or opposite relation (logically) possible Simultaneous holding of contradictory legal positions is usually not tolerated by legal systems Two categories of legal relations: ○ First-order relations → direct application to people´s conduct and social intercourse «Right» is usually a first-order relation (direct pursuit of entitlement) ○ Second-order relations → direct application to people´s entitlements, indirect to conduct and social intercourse «Power» is usually a second-order relation (transfer of entitlement to someone else, who afterwards acts) II. Simple positions of ‘may do’: Freedoms (or privileges or liberties) Freedom does not necessarily equal right or power ○ E.g.: freedom of speech does not confer the power to enforce the freedom → other people could make so much noise that a speaker´s words cannot be heard anymore Freedoms often accompanied by rights to protect their exercise → liberty-rights Most freedoms are ancillary (= subordinate) to rights Specific freedoms can be restricted through agreement Or contrary: a specific privilege may be vested in someone through a license (leave, permission) III. Simple positions of ‘can do’: Powers (and power-rights) Enforcement of a power by means of legal act or lawsuit  Two constructions: ○ Powerholder = Holder of entitlement ○ Powerholder ≠ Holder of entitlement Powerholder: ○ Power arises from law or from authorization of the holder of entitlement ○ → Can change the entitlement Holder of entitlement: ○ Bear liability ○ Is exposed to changes made by the powerholder ○ → Underlies the exertion of the powerholders power - foundations that allow someone in power to use and exercise their authority Power does not necessarily mean that the holder has the liberty to exercise it ○ Duty to refrain the exercise of power Breach of duty → penalty Exercise of private power according to the general principle of good faith ○ Good faith and fair dealing: (1) The expression “good faith and fair dealing” refers to a standard of conduct characterized by honesty, openness and consideration for the interests of the other party to the transaction or relationship in question. Legitimate interest in being protected against abuse of power Immunity to the exercise of power: ○ Legal position that negates liability and protects the holder of entitlement from any change ○ Immunity creates a disability (absence of a power) on the side of the power holder IV. Subjective rights Objective right → law, i.e. the legal principles and rules Subjective rights are enforceable A claim on the one side is accompanied by a duty on the other side ○ Rights and duties are interconnected; one person's right implies that someone else has a duty to honor that right. Duty ≠ liberty to perform it  ○ Contrary duties → a person has two or more duties that directly oppose each other, making it impossible to fulfill both ○ Conflicting rights → rights that oppose or interfere with each other, making it difficult to uphold all rights simultaneously. Example: A business has the right to operate and make a profit, but nearby residents might have the right to a clean environment. If the business causes pollution, these rights conflict, and some form of compromise or resolution is needed. 4.1 Will theory (or choice theory) vs interest theory (or benefit theory) Savigny’s theoretical conception of rights as actions, which were to be brought against someone else in court Inappropriate theory for modern law because of its merely procedural character → today’s focus on substantive law ⇒ Will theory: Definition: Will theory sees rights as expressions of a person's control or autonomy over certain actions or decisions. According to this theory, having a right means having the ability to make choices about how that right is exercised. Focus: Autonomy and freedom to choose. Key Idea: A right exists to protect the individual's will or choice, meaning the right-holder has control over whether to exercise that right or not. Example: If you have the right to free speech, under will theory, the key point is that you have the choice to speak or remain silent—it's your autonomy to make that decision that defines the right. ⇒ Interest theory: Definition: Interest theory, in contrast, views rights as protections of an individual's well-being or interests, rather than just expressions of their will. A right is there to ensure that something essential to the person’s welfare or well-being is safeguarded, regardless of whether the person actively claims or exercises it. Focus: Protecting the individual's important interests. Key Idea: A right exists to protect interests that are fundamental to an individual’s well-being, even if the individual doesn’t have the power or choice to control the right themselves. Example: A child's right to education. Even if the child isn't capable of making decisions about their education, the right exists to ensure their well-being and development. 4.2. Classifications of rights Patrimonial rights vs non-patrimonial rights ⇒ Patrimonial rights: Definition: Patrimonial rights are rights that have an economic or monetary value and can be transferred, inherited, or sold. These rights are related to a person's property, assets, or financial interests and can directly affect their wealth or estate. Examples: ○ Ownership rights (e.g., owning property or land). ○ Intellectual property rights (e.g., copyrights, patents, which can be licensed or sold). ○ Contractual rights (e.g., the right to receive payment from a contract). ○ Inheritance rights (e.g., the right to inherit property or money from a deceased person). ⇒ Non-patrimonial rights: Definition: Non-patrimonial rights are rights that do not have a direct economic value and cannot be transferred, sold, or inherited. These rights are usually tied to personal dignity, freedom, or relationships, and they protect the individual’s non-economic interests. Examples: ○ Right to life (e.g., protection from harm or death).  ○ Right to privacy (e.g., protection of personal information). ○ Right to family relations (e.g., maintaining parent-child relationships). ○ Moral rights (e.g., the right to be recognized as the author of a work, even if the work itself is sold). Relative rights (in personam) vs absolute rights (in rem) ○ Enforcement against one particular person (or group) → relative right ○ Enforcement against anyone who interferes with the holder’s legal position → absolute right 4.2.1 Relative rights (or rights in personam) Enforcement against one particular person (or group) ○ Exist between defined parties in a legal relationship, such as in contracts, and they only affect those involved in that particular relationship. ○ Enforcement can be brought only against one who holds the correlative position of disadvantage. ○ Patrimonial rights in personam → credits and power-rights ○ Non-patrimonial rights in personam → rights and duties among family members, e.g. spouses/ parents and children ○ Obligation: Legal relation between creditor and debtor 4.2.2 Absolute rights (or rights in rem) Enforcement against anyone who interferes with the holder’s legal position ○ These rights are universal in the sense that they can be asserted against anyone who violates them. ○ Enforcement can be brought against whoever interferes with the rightsholder’s possession of an entitlement ○ Ius exludendi alios → power to exclude everyone else from interfering Patrimonial rights in rem: ○ Patrimonial rights in rem give the right-holder control over property or financial interests, and they can be sold, transferred, or inherited. ○ Examples: Ownership of property: If you own a house or land, your right to that property is a patrimonial right in rem. This means you can prevent anyone from using or trespassing on your property. Intellectual property rights: Patents, copyrights, and trademarks are patrimonial rights in rem, as they have economic value and can be enforced universally to stop others from using them without permission.  Mortgage rights: A lender’s right over a property (collateral) as security for a loan is a patrimonial right in rem, enforceable against anyone. Non-patrimonial rights in rem → rights of personality/human rights ○ Non-patrimonial rights in rem protect aspects of a person's dignity, personal well-being, or moral interests, but they do not have direct monetary value and cannot be sold, transferred, or inherited. ○ Examples: Right to bodily integrity: This is a non-patrimonial right in rem because it protects a person’s body from harm or violation by anyone, and it cannot be transferred or given up. Right to privacy: This right ensures that no one can unlawfully invade your personal space or misuse your private information. It applies universally (in rem) but does not have direct economic value. Moral rights of authorship: Even if an author sells the copyright to their work, they retain a non-patrimonial right in rem to be recognized as the creator of the work, enforceable against everyone. 4.3 The doctrine of abuse of rights General principle in civil law jurisdictions Applies when a right is maliciously exercised with the sole purpose of harming or bothering someone else (chicane) Used to ground a defense against the rightholder’s claim… ○ …when claim is tainted with immorality ○ …when claim proves to be inequitable Venire contra factum proprium → contradictory/inconsistent behavior Also relevance in EU law ○ U-turn transactions (artificial agreements) ⇒ Good faith and fair dealing (1) The expression “good faith and fair dealing” refers to a standard of conduct characterized by honesty, openness and consideration for the interests of the other party to the transaction or relationship in question. (2) It is, in particular, contrary to good faith and fair dealing for a party to act inconsistently with that party’s prior statements or conduct when the other party has reasonably relied on them to that other party’s detriment. V. Delayed exercise of rights III. - 7:201: General period The general period of prescription is three years. III. - 7:501: General effect (1) After expiry of the period of prescription the debtor is entitled to refuse performance. (2) Whatever has been paid or transferred by the debtor in performance of the obligation may not be reclaimed merely because the period of prescription had expired. III. - 7:601: Agreements concerning prescription (1) The requirements for prescription may be modified by agreement between the parties, in particular by either shortening or lengthening the period of prescription. 5.1 Prescription and statutes of limitation If patrimonial rights are not enforced within certain time periods (that are set out by the law) they become unenforceable Objective: finality, certainty and predictability of disadvantageous legal positions ○ Finality: Legal disputes should have an endpoint. Once a certain period passes, the potential for legal action should end to give parties confidence in their legal standing. ○ Certainty: Individuals and businesses need to know that, after a certain time, they no longer need to fear being sued or having old claims brought against them. It creates legal stability. ○ Predictability: Setting clear time limits for legal claims allows parties to plan and act with confidence, knowing their legal position won’t be challenged after the statute of limitation has expired. These rules also prevent the injustice that might arise if a claim were made after evidence has become outdated or lost, witnesses have disappeared, or memories have faded.  Length depends on the type of right Dies a quo: Issue of enforcement 5.2 Statutes of repose and nonclaim statutes Statutes of repose extinguish a right due to prolonged non-use Applications to claims as well as to power-rights Cannot be tolled, waived, or interrupted Objective: limitation of long-term liability Unit 7 Legal subjects Sirena, Chapter 11 I. Legal personhood Legal rules impose duties upon and assign competences and rights to legal subjects Two main categories of legal subjects: ○ Human beings: Natural persons ○ Artificial entities -groups, organizations, etc.-: Legal persons § 90a BGB Animals: «Animals are not things. They are protected by special statutes. They are governed by the provisions that apply to things, with the necessary modifications, except insofar as otherwise provided». Both natural persons and legal persons: ○ Are (potentially) vested with rights and duties; legal personhood ○ Have the power to establish (or modify) legal relationships; capacity (or power) to act 1.1 Natural persons ➡ Legal personhood Human beings may generally be the holders of rights since birth (only in very few legal systems since conception)  When natural persons die, most of their (patrimonial) rights (e.g., property) and duties (e.g., most debts) go into probate, except some which shall cease (e.g., rights of personality) Embryos and fetuses: ○ Generally, not considered legal subjects ○ But might be vested with specific right: To health To heirship 1.2 Legal persons Rules of agency For profit / Non for profit Foundations / Associations Company / Partnership Limited liability company / Public listed company II. Capacity to act 2.1. Natural persons Therefore, minors lack by definition the capacity (power) to act, and particularly, to enter into a valid contract, to make a valid will, to contract valid marriage. If they earn emancipation (by a court), however, they acquire a partial capacity to act (marriage and acts of ordinary administration). Continental legal systems grant a limited capacity to act to minors. Mental illness or pathological factor (incapacitation) that considerably compromises the discernment. ○ Need of a legal representative Incapacity can also be of punitive nature Incapacitation de facto concerns persons who are temporarily not capable to understand the contents of the legal act ○ Legal act can be invalidated in presence of certain circumstances BGB: Section 106; Limited capacity for minors to contract ○ A minor who has reached the age of seven has limited capacity to contract under sections 107 to 113. Section 107; Consent of legal representative ○ For a declaration of intent as a result of which minors do not receive merely a legal benefit, the minors require consent by their legal representative. Section 108; Entry into a contract without consent ○ (1) If the minor enters into a contract without the necessary consent of the legal representative, the effectiveness of the contract is subject to approval by the legal representative. ○ (2) If the other party demands that the representative declare approval, the declaration may be made only to the other party; a declaration or refusal of approval made to the minor before the demand of the other party becomes ineffective. The approval may only be declared before the expiry of two weeks following receipt of the demand; if approval is not declared, then it is considered to have been refused.  ○ (3) If the minor has become fully capable of contracting, then the approval by the minor will take the place of the approval by the representative […] Section 110; Performance affected with means of the minor’s own ○ A contract concluded by the minor without the approval of the legal representative is deemed effective from the outset if the minor effects performance under the contract with means that were made available to the minor for this purpose or for the minor’s free disposition by the legal representative or by a third party with the representative’s approval Unit 8 Contracts; Formation of contracts; Intention to create legal relationships Smits, Ch. 3 I. Offer and Acceptance ⇒ Contract = legally binding agreement One party (offeror) has to make an offer and other party (offeree) has to accept it by way of an acceptance Offer + acceptance = contract ➡ What is an offer? A valid offer: ○ Intention of the offeror to be bound → To be regarded from the perspective of a reasonable person ○ Terms by which the offeror is willing to be bound → Offer must be able to bring about a contract by a simple “Yes I accept” + offer must contain all essential elements  II. Offers to the public: advertisements Proposal to public ○ Offer not only addressed to one person… ○ …but addressed to the general audience Advertisements? ○ Different approaches by European jurisdictions: Offer vs. Invitation to treat Offer = French and Dutch law Invitation = English and German law ➡ Case: Stitching Postwanorder v Otto BV (2008) Online retailer «Otto» offered for sale a Philips HD Ready LCD TV for €99,99. This advertisement, however, has been posted by mistake. In six days, eleven thousand customers ordered fourteen thousand televisions through the website, all customers received an automatic e-mail confirming the order. Otto refused to deliver, claiming that there has been made an obvious mistake in the pricing. How did the Dutch court decide? What if the case would have been decided in Germany? Solution: Under Dutch law the advertisement is considered an offer – the consumer (as a reasonable person), however, must have noticed the inaccuracy and at least doubted the intent of the retailer, which should have led them to further investigate the matter Under German law the retailer could have immediately rejected the deliveries, as the advertisement would have been a non-binding invitation to treat  III. Offers to the public: goods on display in shops Goods displayed in a shop or window? ○ Can the customer claim that the good is to be sold to him at the indicated price? ○ Again, answer depends on national jurisdiction: One view: shopkeeper is obliged to sell to anyone who is willing to pay the price Other view: bargaining still needed; freedom to select whom the seller wants to serve → freedom of a business not to accept a customer is limited by anti-discrimination rules Depending on the jurisdiction, a buyer could - by expressing his will to buy the good - bring about the conclusion of a sales contract IV. Revocation of an offer Different interests touched by a revocation: ○ Offeror may have discovered that he is able to sell at much better terms to someone else or he may have become disinterested to sell to the offeree ○ Offeree however relies on the offer and may have already taken action to make the contract happen (e.g. taken on a loan) Examples: ○ In German law, § 145 BGB states «One who has offered to conclude a contract with another is bound by that offer unless he states that he is not bound» → revocation not possible (however withdrawal until the moment the offeree has received the offer) ○ In French law a revocation possible, but the offeror must compensate the damage the offeree suffers as a result II. - 4:202: Revocation to offer (1) An offer may be revoked if the revocation reaches the offeree before the offeree has dispatched an acceptance or, in cases of acceptance by conduct, before the contract has been concluded. (2) An offer made to the public can be revoked by the same means as were used to make the offer. (3) However, a revocation of an offer is ineffective if: (a) the offer indicates that it is irrevocable; (b) the offer states a fixed time for its acceptance; or (c) it was reasonable for the offeree to rely on the offer as being irrevocable and the offeree has acted in reliance on the offer. (4) …  V. How long does the offer last? ⇒ Infinite validity of offer would lead to unjustifiable burden on offeror + standstill of commercial intercourse Option 1: Offer is rejected ○ When an offer is rejected, it cannot be accepted afterwards ○ Counterparty has to make a new offer ○ Counter-offer: acceptance with modified terms (e.g. lower price) is a new offer Option 2: Time for acceptance expires ○ Either: fixed time for acceptance (e.g. until 30 April) ○ Or: no fixed time → acceptance must take place within a reasonable time Inter praesentes: immediately Inter absentes: depending on the means (post, e-mail) Reasonable time can also depend on the nature of the good (fresh fish, share on the stock market) VI. Acceptance of the offer Acceptance of the offer leads to the conclusion of the contract ○ Unconditional agreement with the terms of the offer ○ Form of acceptance could be prescribed by the offer Acceptance in silence? ○ Does not indicate any intention of acceptance and therefore (in general) does not lead to conclusion ○ However: exception in commercial relationships Acceptance by conduct? ○ E.g.: taxi driver offers his service and passenger just opens the door and sits down and tells the driver where to go VII. Time of conclusion of the contract Why is it important to determine the exact moment? Revocation of offer Certainty regarding when to perform the contract Transfer of property can be dependent on the conclusion of contract ○ Usually the contract is concluded upon the acceptance of the offer ➡ Example: On 1 May, Brad offered for sale to Amelie the Golden bear he won at last year´s Berlin film festival. On 2 May, Amelie saves in her «drafts» folder a draft email in which she accepts Brad´s offer. On 3 May at 22:58, she sends the message to Brad, who receives it in his mailbox on 4 May at 00:03. On 5 May, Brad checks his email and reads Amelie´s acceptance. Which is the time of conclusion of their contract? Four theories: ○ The moment the message of acceptance is written (2 May) ○ The moment the message is sent (3 May) ○ The moment the message is received (4 May) ○ The moment the offeror actually reads the message (5 May) II. – 4:204: Acceptance (1) Any form of statement or conduct by the offeree is an acceptance if it indicates assent to the offer. (2) Silence or inactivity does not in itself amount to acceptance. II. – 4:205: Time of conclusion of the contract (1) If an acceptance has been dispatched by the offeree the contract is concluded when the acceptance reaches the offeror. (2) In the case of acceptance by conduct, the contract is concluded when notice of the conduct reaches the offeror. (3) If by virtue of the offer, of practices which the parties have established between themselves, or of a usage, the offeree may accept the offer by doing an act without notice to the offeror, the contract is concluded when the offeree begins to do the act. II. – 4:206: Time limit for acceptance (1) An acceptance of an offer is effective only if it reaches the offeror with- in the time fixed by the offeror. (2) If no time has been fixed by the offeror the acceptance is effective only if it reaches the offeror within a reasonable time. (3) Where an offer may be accepted by performing an act without notice to the offeror, the acceptance is effective only if the act is performed with- in the time for acceptance fixed by the offeror or, if no such time is fixed, within a reasonable time  Smits, Ch. 4 I. Intention to create legal relations Parties must agree upon legal binding (and accordingly upon the possibility of legal enforcement) of the agreement Agreement without legal consequence equals a simple promise ○ Morally, it may be wrong not to keep the promise ○ But legally, no party can enforce the promise Dissensus ○ When sender and receiver have different legal intentions ○ Contract is not concluded when there is no “meeting of minds” (consensus ad idem) ○ Intention of a party may also diverge from its own declaration → mistake Objective approach ○ Focus on objective, not subjective intention of the declaration → perspective of a reasonable person ○ Responsibility on the person expressing itself Factors: ○ How easy is it to investigate for the addressee whether the declaration was really intended to mean what it says? ○ Is the transaction beneficial for one of the parties? ○ What is customary in the branch/ location? ○ Meaning of the disputed term in everyday speech? ○ In which place is the contract concluded? ○ What expertise and experience do the parties have? ⇒ Effect: when objective meaning is found, parties can rely on the contract (and other way around) II. Test of earnestness in problematic cases Commercial agreements ○ Parties are assumed to have the intention of being legally bound ○ They have to explicitly state that there is no intent to be bound (e.g. “subject to contract” or “bound in honor”) “Gentlemen’s agreement” → an agreement entered into between two persons, neither of whom is a gentleman, with each expecting the other to be strictly bound, while he himself has no intention of being bound at all”  Gratuitous and disadvantageous transactions ○ Intention of being legally bound is not assumed ○ Donations → notarial deed, with warning function ○ Gratuitous/disadvantageous transactions → no notarial deed, but only when promisee could reasonably expect that the promisor wants to be legally bound Social agreements ○ Promises on social sphere (e.g. friends) ○ Not legally binding until explicitly proven otherwise ○ Private lives should be free from legal interference Domestic agreements ○ Domestic/family promises usually assumed to not be legally binding ○ Most cases deal with (former) spouses or cohabitant Divorce, prenups etc. III. Consideration and causa ⇒ “Causa” = A proper reason to be legally bound to a promise 1. Consideration must be sufficient but it need not be adequate Consideration must be “sufficient” → must consist of something of value in the eye of law Does not have to be “adequate” - economic value not taken into account 2. Past consideration is not good consideration Any act carried out before a promise is given is not given in exchange for the promise → does not qualify as consideration 3. An existing duty does not amount to valid consideration If the promisee does something that he is already obliged to do he suffers no detriment, while the promisor only obtains what he already was entitled to and therefore obtains no benefit from the ‘extra’ promise. 4. There is no good consideration for the promise to accept part payment of a debt as discharge of the entire debt 1. Agreement by deed Document must indicate that it is a ‘deed’ Signed by the maker Signing must be attested by a witness → Makes gratuitous promise enforceable  2. Promissory estoppel Binding if the promisee reasonably relied on that promise. “A shield but not a sword” IV. “Causa” in french-based jurisdictions ⇒ “Causa” = A proper reason to be legally bound to a promise Objective causa: ○ Abstract level → objective goals of the parties are identical E.g. counterperformance of the other party (employment etc.) Subjective causa ○ Concrete level → subjective goals of the parties differ ○ Individual motive of entrance into the contract E.g. receiving money in order to pay debt Criticism: exact function of causa unclear and overlap with other doctrines → thus no use of causa in DCFR (Draft Common Frame of Reference) Unit 9 Formalities Smits, Ch. 6 I. Formalities ⇒ Contracts may require certain forms in order to be valid or to prove their existence Exception to the general principle of informality ○ Art. 3:37 (1) of the Dutch Civil Code: « Unless provided otherwise, declarations, including communications, can be made in any form and can be inferred from conduct.» II. Reasons for formalities 1. Cautionary (or warning) function → before entering into an important or financially dangerous transaction Consumer credit → high interest rate could burden the debtor Consumer suretyship 2. Information function Notarial deed for the transfer of immovable property 3. Evidentiary function Secure evidence of the contract - existence and the contents of the parties’ obligation Holographic testament - “do it yourself” → only valid if handwritten III. Types of formalities A. Contracts to be made by notarial deed Most strict formality required under civil law jurisdiction Typically required for the more complex and less frequent transactions ○ Donation ○ Mortgage ○ Matrimonial contract ○ Public testament ○ Establishing of a corporation Need to balance formality and every-day transactions Exception to the notarial deed: ○ DCFR Art. IV. H. – 1:104: Application to unilateral undertakings and immediate donations ○ This Part applies with appropriate adaptations where the donor gratuitously, with an intention to benefit the donee: (a) unilaterally undertakes to transfer the ownership of goods to the donee; or (b) immediately transfers the ownership of goods to the donee B. Contracts to be made in writing Requirement based on the cautionary function of formalities EU Directives aimed at consumer protection (1) Directive on Credit Agreements Schriftform under German law Ecrit ordinaire under French law Akte for potentially dangerous truncations under Dutch law  C. Contracts to be evidenced in writing The legislator introduces a formality as a form of evidence Formality required probationis causa → with an eye to proof Consumer suretyship under Dutch law Evidentiary formalism under French law D. Contracts requiring pre-contractual information duties Formality requirement which is often the result of EU Directives on consumer protection Aim of restoring the balance of power between the parties to a contract IV. Formalities on internet shopping New technologies and interpretation of the “written” form ○ Directive 2000/31 on Electronic Commerce Member States shall ensure that their legal system allows contracts to be concluded by electronic means. Member States shall in particular ensure that the legal requirements applicable to the contractual process neither create obstacles for the use of electronic contracts nor result in such contracts being deprived of legal effectiveness and validity on account of their having been made by electronic means. ○ Directive 1999/31 on Electronic Signatures, Art. 5 (1) 1. Member States shall ensure that advanced electronic signatures which are based on a qualified certificate and which are created by a secure-signature-creation device:(a) satisfy the legal requirements of a signature in relation to data in electronic form in the same manner as a handwritten signature satisfies those requirements in relation to paper-based data; and (b) are admissible as evidence in legal proceedings, ○ Art. 6:227a Dutch Civil Code “1. If a statutory provision implies that a contract can only be formed validly in writing, then this formal requirement is also met if the contract is entered into by electronic means and: a. the contract is and remains accessible for the parties; b. the authenticity of the contract is sufficiently guaranteed; c. the moment at which the contract was formed, can be determined with sufficient certainty; and d. the identity of the parties can be established with sufficient certainty. → Paragraph 1 does not apply to contracts for which the law requires the intervention of a court, a public authority or a person whose profession it is to exercise a public responsibility.” V. Sanctions if a contract lacks the required form A. Voidness and avoidability of the contract Under German law, § 125 BGB: ○ “A juridical act that lacks the form prescribed by statute is void. In case of doubt, lack of the form specified by juridical act also results in voidness.” Under Dutch law, Art. 3:39 BW: ○ “Unless the law provides otherwise, a juridical act that is not performed in accordance with formal requirements, is null and void.” B. Curing a lack of form The statute indicates that an invalid contract might be converted into a valid one in the interest of the party for whose protection the formality was introduced (§550 BGB) The parties perform the contract without considering its formalities (Art. 7:859 BW; §766 BGB) One party makes the other intentionally or negligently believe that no formalities are needed  Unit 10 Interpretation and gap filling Smits, Ch. 7 I. Interpretation of the party agreement Parties to a contract frequently dispute the meaning of what they actually agreed upon ○ Law is an interpretive discipline ○ Interpretation often occurs implicitly ○ Interpretation: the tool at the disposal of the parties when they disagree on the meaning of the agreement they have concluded between themselves When is interpretation necessary? ○ Parties cannot conceive of all possible contingencies that could happen during the course of the contract ○ It is not efficient to foresee all possible contingencies in the contract ○ The law provides solutions to deal with incomplete contracts: gap filling ⇒ Subjective and objective interpretation ⇒ Factors relevant to interpretation ⇒ Maxims of interpretation ⇒ Gap filling II. Subject and objective interpretation Interpretation must be directed at ascertaining the intention of the parties Search for the common intention of the parties ○ Subjective interpretation: search for the real intention of the parties ○ Objective interpretation: the most suitable interpretation of the contract Art. 1188 French Code Civil; BGB §§133, 157; Art. 1362 Codice civile This distinction is present in all European jurisdiction as well as international instruments ➡ Code Civil (French) Article 1188: A contract is interpreted according to the common intention of the parties, rather than the literal meaning of its terms. When this intention cannot be detected, the contract is interpreted according to the meaning that a reasonable person in the same situation would give to it. ➡ BGB (German) Section 133: Interpretation of a declaration of intent When a declaration of intent is interpreted, it is necessary to ascertain the true intention rather than adhering to the literal meaning of the declaration Art. 8 of the United Nations Convention on Contracts for the International Sale of Goods (CISG): ○ (1) For the purposes of this Convention statements made by and other conduct of a party are to be interpreted according to his intent where the other party knew or could not have been unaware what that intent was ○ (2) If the preceding paragraph is not applicable, statements made by and other conduct of a party are to be interpreted according to the understanding that a reasonable person of the same kind as the other party would have had in the same circumstances ○ (3) In determining the intent of a party or the understanding a reasonable person would have had, due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties DCFR Art. II. – 8:101: General rules ○ (1) A contract is to be interpreted according to the common intention of the parties even if this differs from the literal meaning of the words. ○ (2) If one party intended the contract, or a term or expression used in it, to have a particular meaning, and at the time of the conclusion of the contract the other party was aware, or could reasonably be expected to have been aware, of the first party’s intention, the contract is to be interpreted in the way intended by the first party. ○ (3) The contract is, however, to be interpreted according to the meaning which a reasonable person would give to it III. Case discussion IV. Factors relevant to interpretation How does a court apply the interpretative criteria? ○ Both parties are mistaken about the meaning of a term: falsa demonstratio non nocet (Art. 5:101 PECL) ○ The parties common understanding of a term differs from its meaning (Art. 5:101 s.2 PECL)  ○ Parties have drafted ambiguous clauses: Art. 5:102 PECL Art. 5:102 PECL: In interpreting the contract, regard shall be had, in particular, to: a. the circumstances in which it was concluded, including the preliminary negotiations; b. the conduct of the parties, even subsequent to the conclusion of the contract; c. the nature and purpose of the contract; d. the interpretation which has already been given to similar clauses by the parties and the practices they have established between themselves; e. the meaning commonly given to terms and expressions in the branch of activity concerned and the interpretation similar clauses may already have received; f. usages; and g. good faith and fair dealing Additional facts to consider: ○ Position of the parties → what knowledge and experience can be expected from them V. Maxims of interpretation General rules of thumb implemented when interpreting a contract: e.g. the contra proferentem rule Frequently used in European jurisdictions: ○ Arts. 1190 and 1602 of the French Code Civil ○ § 305c (2) BGB ○ Art. 6:238 (2) BW ○ Art. 5(2) of the EU Directive 93/13 on Unfair Terms in Consumer Contracts: In the case of contracts where al or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language. Where there is doubt about the meaning of a term, the interpretation most favorable to the consumer shall prevail. VI. Gap filling Contracts can never foresee all eventualities: the courts has to supplement the party agreement through ad hoc gap filling ○ Present under all jurisdictions, in different names: Ergänzende Vertragsauslegung under German law Interpretation creatrice under French law Close relationship between ad goc gap filling and the principle of good daith  Art. II-9:101 DCFR: (1) The terms of a contract may be derived from the express o tacit agreement of the parties, from rules of law or from practices established between the parties or usages. (2) Where it is necessary to provide for a matter which the parties have not foreseen or provided for, a court may imply an additional term, having regard in particular to: ○ (a) the nature and purpose of the contract; ○ (b) the circumstances in which the contract was concluded; and ○ (c) the requirements of good faith and fair dealing, (3) Any term implied under paragraph (2) should, where possible, be such as to give effect to what the parties, had they provided for the matter, would probably have agreed.(...) ⇒ Ad hoc gap filling provides tailor-made solutions for a specific contract, while gap filling through default rules provides standard solutions to typical interpretative problems It is a service provided by the legislator or by the court to the parties ○ Example: Parties are able to rely on provisions such as: Sold goods must be of satisfactory quality Any good must be suitable for normal use Etc. Unit 11 The principle of good faith and unfair contract terms Smits, Ch. 8 I. The principle of good faith ⇒ The principle of good faith plays a central role in the entire life of the contract Art. 1104 (1) CC: ‘Contracts must be negotiated, formed and performed in good faith’ § 242 BGB: ‘The debtor is obliged to perform in such a manner as good faith requires, regard being had to general practice ⇒ “Super-provision”: Art. 1:102 (1) PECL: ‘Parties are free to enter into a contract and to determine its contents, subject to the requirements of good faith and fair dealing, and the mandatory rules established by these Principles’ Art. 1:201 PECL: ‘Each party must act in accordance with good faith and fair dealing. The parties may not exclude or limit this duty’. II. Good faith in the civil law ➡ Lord Bingham, Interfoto Library Ltd v Stiletto Ltd (1988): ‘In many civil law systems, and perhaps in most legal systems outside the common law world, the law of obligations recognizes and enforces an overriding principle that in making and carrying out contracts parties should act in good faith. This does not simply mean that they should not deceive each other, a principle which any legal system must recognise; its effect is perhaps most aptly conveyed by such metaphorical colloquialisms as ‘playing fair’, ‘coming clean’ or ‘putting one’s cards face upwards on the table’. It is in essence a principle of fair and open dealing […]’ ⇒ ‘Objective’ good faith III. Objective good faith ⇒ Norm for the contracting parties - Each party is required to take the interests of the other party into account Open-ended: the application of the norm depends on the circumstances of the case The courts exercise a discretionary power (e.g. the good faith provision has been used to develop the pre-contractual duties to inform the other party in French law) IV. Functions of good faith 1. Supplementing function French and German courts have developed ‘collateral duties’ on the basis of good faith: ○ Protective duties, aimed at protecting the other contractual party (e.g. against physical damage) ○ Duties to inform, aimed at ensuring that the contractual will is formed in a conscious manner 2. Interpretative function The contract must be interpreted in the light of how reasonable parties would construe the contract 3. Restrictive function It allows a party to ‘escape from a binding contract’ → This function has been counterbalanced: ○ Dutch Art. 6:248 (2) BW: the restrictive function of good faith can limit a right only if it would be ‘unacceptable’ for a party to invoke this right It comes into play in cases of: ○ Abuse of rights: even though the contract recognizes the party a right, he/she cannot exercise it because of its own previous behavior ○ Hardship: the contractual parties assume that the circumstances under which the contract is concluded will not change too much Some jurisdictions allow a party to escape from the contract only if the performance has become excessively onerous due to an unforeseen and unforeseeable change of circumstances  V. Standard contracts → general conditions 3 problems: ○ Incorporation problem: Not self-evident how a set of rules drafted by one party can become part of an individual contract with somebody else who was not involved in the drafting ○ Interpretation problem: Interpretation of standard terms in line with the parties’ intentions is difficult if one of the parties was not involved in the drafting of the terms. ○ Fairness problem: Conditions may be unbalanced and unfairly favor the party who drafted them. VI. Information asymmetry → George Akerlof, The Market for Lemons: Quality Uncertainty and the Market Mechanism (1970) The quality of goods traded in a market can degrade in the presence of information asymmetry between buyers and sellers ○ E.g. market for used cars: There are good used cars (‘peaches’) and defective used cars (‘lemons’) ○ The buyer of a car does not know beforehand whether it is a peach or a lemon ○ The buyer will be willing to pay for the used car only the price of a car of known average quality  ○ The owner of a carefully maintained and good used car will be unable to get a high enough price to make selling that car worthwhile ○ The owners of good cars will not place their cars on the used car market ○ The withdrawal of good cars reduces the average quality of cars on the market → adverse selection problem ⇒ The market for standard terms can be assimilated to the ‘lemon market’ Standard terms deal with contingencies that are not core to the transaction and are unlikely to occur A party confronted with them does not try to understand or negotiate them (because usually the costs outweigh the likely benefits) Bad clauses are likely to drive out the good ones → State intervention VII. Unfair terms: control systems VIII. EU consumer law COnsumers should be protected against one-sided standard contracts and the unfair exclusion of essential rights in contracts Member States must ensure that unfair terms are not included in contracts It is necessary to fix in a general way the criteria for assessing the unfair character of contract terms  Courts or administrative authorities of the Member States must have at their disposal adequate and effective means of preventing the continued application of unfair terms in consumer contracts ‘Signing-without-reading-problem’ Substantive control of contract terms Supplementary rules as a benchmark ○ Objectification of the community’s idea of justice ○ Default rules apply to ‘fill the gap’ IX. Unfairness test ‘Significant imbalance’ in the parties ‘rights and obligations arising under the contract’ → ‘It must in particular be considered what rules of national law would apply in the absence of an agreement by the parties in that regard’ ‘Contrary to the requirements of good faith’ → ‘the national court must assess for those purposes whether the seller or supplier, dealing fairly and equitably with the consumer, could reasonably assume that the consumer would have agreed to such a term in individual contract negotiations’ Terms which have the object or effect of :  (a) excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier; (b) inappropriately excluding or limiting the legal rights of the consumer vis-d-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations, including the option of offsetting a debt owed to the seller or supplier against any claim which the consumer may have against him; (c) making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realization depends on his own will alone; (d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party canceling the contract; (e) requiring any consumer who fails to fulfill his obligation to pay a disproportionately high sum in compensation X. Consequences of unfairness → ‘national courts are required to exclude the application of an unfair contractual term in order that it does not produce binding effects with regard to the consumer, without being authorized to revise the content of that term. That contract must continue in existence, in principle, without any amendment other than that resulting from the deletion of the unfair terms‘ XI. Enforcement Actors: Consumers Administrative authorities Consumer organizations XII. Individual Enforcement ECJ, 4 June 2009, Case C-243/08, Pannon The national court is required to examine, of its own motion, the unfairness of a contractual term A consumer may choose whether to take advantage or not from the declaration of unfairness The binding effect of the term is finally remitted on the consumer, who is considered the person in the best position to know which should be the outcome of the judge’s assessment XIII. Public or collective enforcement Actors: public authorities or consumer organizations Actions may be directed separately or jointly against a number of sellers or suppliers from the same economic sector or their associations (which recommend the use of particular standard terms) Main instrument: Injunction (Judgment prohibiting the continued use of the unfair term) Exam: Smits: till chapter 8 (good faith) - not chapter 9 & 10 Read additional readings - different books of the civil code - Roman/canon law - differences - Outside of the book (cause contracto/italian law) - Court decisions (demonstrate that you worked on the cases in class - example: dwarf tossing) - Problematic: subjective rights- know what power rights are/absolute right etc. What is patrimonial/not patrimonial? - Give examples of different rights that can be patrimonial or not patrimonial - Hans Kelsen is important - Terzes competizione - common denominator needed for comparative law - Zweigert and Kötz