Introduction To Civil Law PDF

INTRODUCTION TO CIVIL LAW Exam 2-3 theoretical questions, analytical, small case without laws, property, owner, not owner, seminar topics, lcl(what we have discussed), case on lost things Parties to legal relations and litigation 1) Claimant/plaintiff - claims so...

INTRODUCTION TO CIVIL LAW Exam 2-3 theoretical questions, analytical, small case without laws, property, owner, not owner, seminar topics, lcl(what we have discussed), case on lost things Parties to legal relations and litigation 1) Claimant/plaintiff - claims something in the court 2) Respondent/defendant - a person against whom the claim is brought 3) Creditor/debtor Creditor- has a right to claim some (in)action from the debtor (not always money) Debtor - has an obligation (not always money) to do (or abstain from doing) something towards the creditor Private and civil law Private law can be understood as a synonym of civil law Alternatively, private law could be understood as a broader category: Civil law – a general part of private law = often contained in a civil code (civil law) Examples, Swiss Civil Code + Code on Obligations, German Civil Law (BGB), French Civil Code (Code Civil), Spanish Civil Code (Codigo Civil), Italian Civil Code (Codice Civile), Latvian Civil Law (Civillikums), Austrian Civil Code (ABGB), Russian Civil Code, Dutch Civil Law, etc. Private law also includes: commercial law, consumer law, maritime law, contracts of carriage, insurance law, insolvency law, etc. Civil law system is understood as an alternative name to Continental law system Public law mainly protects interests of the society as a whole: Criminal law Constitutional law Administrative law Tax law data protection, social protection law, migration law, law on schools, universities, hospitals, prisons, police, etc…) Procedural law (criminal procedure, civil procedure, constitutional procedure, administrative procedure) Private law focuses (mainly) on the interest of individuals Contracts are very essential Private law 1. Private law concerns interests of individuals (either natural or legal persons) 2. Private law ( usually) treats them as equal In public law there is inequality – you are not equal to tax authority or the police But equality is not always present in private law as well: consumer law or labor law Examples 1) Janis and Ingrida plan to marry each other: they can decide when to do that or not, when, where, they can change their minds Private law 2) Janis and Peteris plan to make a contract on the sale of a computer: they can decide if they want to make this contract or not; determine price; model; time and place when/where to pay; how computer will be delivered to Peteris, etc. It is all their free choice as they are equals Society at large is not that concerned about sale of specific computers = private law 3) If Janis decides that he does not want to pay taxes: The state will pressure him to do that! = public law Janis is no equal to the state Society at large is concerned that all taxes are paid and money can be redistributed to other groups (medicine, social welfare, police, etc.) Substantive law: regulates the behavior of the members of the society (natural/legal persons) Procedural law: governs administration of justice Typically it determines how the decisions are made in courts or state institutions In Latvia principal instruments: Civil Procedure Law, Criminal Procedure Law and Administrative Procedure Law In most European countries there are at least: Civil Procedure Law and Criminal Procedure Law General/Special areas of private law 1. General: those found in civil codes(laws), no criminal law, because of people 2. Special: regimes that derogate from the general regime and are treated as independent sub-areas of law: Commercial law Consumer law Insurance law Intellectual property, etc. History of private law Two main systems: continental (civil) and common (anglo-american/ anglo-saxon) Continental: Romanistic (France, Belgium, Spain, Italy, South America) and Germanic (Germany, Switzerland, Austria, Japan, Turkey, partially Latvia and Estonia) Common Law System I The place of birth: England. Currently also: the US, most of Canada, Australia, India, and former British colonies in Africa. Independent development from 3 elements: 1. Common law courts Lesser influence of Roman Law 2. Equity courts Some influence of Roman Law 3. Commercial courts Strongly influenced by Roman Law Created by judges/practitioners not academia!  Common Law System II 1. Stare decisis principle Ratione decidendi vs obiter dictum Distinction between different cases 2. Non-comprehensive legislation (“statute”) Metaphorically: «Statutes are like islands in the sea of Common Law» Areas of Private Law in Common Law tradition Notion of general private law is less obvious Separate areas: 1) Contracts; 2) Property; 3) Unjust enrichment; 4) Inheritance; 5) Trusts; 6) Torts These areas are neither fully codified nor combined into one area of law Most books in English with these titles in the RGSL library deal with common law Continental System §Most Continental Europe + plus numerous systems elsewhere: France, Germany, Latvia, Estonia, Lithuania, Russia, Spain, South American countries, China, Japan, S. Korea, former French colonies in Africa (Egypt, Algeria, etc.) § Mixed Common/Continental law systems: Quebec (Canada), Louisiana (US), South Africa, Philippines, Israel Continental tradition derived from Roman Law § Corpus Juris Civilis (further – “CJC”) (sometimes ”Code of Justinian”) (6th century) § Code § Institutions (textbook) § Four parts: 1) Nature and Sources of Law; 2) Things and intestate succession; 3) testate succession, contract and quasi-contracts; 4) delicts and quasi-delicts. § Pandects (saying of the greatest lawyers) also called “Digest” § Novels (”New Laws”) § English version: https://droitromain.univ-grenoble-alpes.fr  Corps Iuris Civilis Recovered Corpus recovered around 1070 (11th century) in Italy § 1064 William the Conqueror conquers England The birth of common law: non-codified, judge made independent system of private law Continental law developed by scholars in universities who for centuries analyzed the CJC, this analysis became the basis of Continental jurisprudence France was divided: Roman Law in the South; Germanic customary law in the North = both sources influenced the French Civil Code Germany fully accepted CJC, but each territory had it own local rules in addition Scandinavia is the least affected by the CJC among Continental states (sometimes it is argued that Scandinavia is not part of Continental legal tradition) Areas of Private Law Already from Roman legal tradition we have division of areas of private law: Family (Persons), Inheritance, Things and Obligations (see, Latvian Civil Law) Currently there are others areas: Commercial Law, Consumer Law, Insurance Law, Maritime Law, Transportation Law, intellectual property law, etc. 19th- 20th Century § CJC ceases to be shared law of the European Continent – due to creation of national states and nationalism § Divided into Romanistic and Germanic traditions § In 1804: French Code Civil codifies French private law tradition § In 1811: Austrian Allgemeines bürgerliches Gesetzbuch (AGBGB) § In 1900: German Bürgerliches Gesetzbuch (BGB) § in 1912: Swiss Civil Code § In 1865: Baltic Private Act (Baltijas likumu kopojums); in 1938 it was modernized as Latvian Civil Law Current situation § Romanistic system: based on Roman Law in its French interpretation § Ironically, less influenced by CJC than Germanic system, because Northern France developed it own customary law that also influenced the French Civil Law and systems based on it § Germanic system: based on Roman Law in its German interpretation § Germans applied the CJC for the longest time – until the end of 19th century Latvian private law system and history I § Derived from Roman Law of the 19th (Pandect system): at this stage it was mainly elaborated by German scholars § In 1865: Baltic Private Law Act by Prof. Georg Friedrich von Bunge (Tartu University): § 1) He used a number of treatises in German on Roman Law and took formulations from there § 2) From those books he also took direct references to CJC (and added citations under articles)  § 3) Minority of rules taken from local sources (rules of knighthood, rules of Baltic cities, Swedish laws, customary law, etc.) § 4) Different rules for different territories (particularism) § 5) Probably not meant to apply to merchants: they had their own customs § 6) Not meant to apply to peasants: they had special simplified rules § 7) Latgale was subject to a different private law as a majority of Russian Empire Civil Law (CL) of 1937 Entered in force in 1938 Still in force: basically, a shorter version of the Baltic Private Act § With some updates and changes Restored in force after Latvia regained independence CL has following structure: 1) Family Law, 2) Succession; 3) Thing and 4) Obligations -- > not General Part BGB: 1) General Part; 2) Obligations; 3) Things; 5) Family; 6) Succession; French Code Civil: 1) Persons; 2) Things; 3) Acquisition of Property; 4) Guarantees (surety); Swiss Code: 1) Persons; 2) Family; 3) Succession; 4) Things (property); 5) Obligations. Unification perspectives within the EU Internationally: Unidroit (International Institute for the Unification of Private Law Principles of International Commercial Contracts (last version 2016) European Union – no competence to unify private law Different academic models for future codification: 1) Principles of European Tort Law (European Group on Tort Law) 2) Principles of European Contract Law (PECL) (Commission on European Contract Law) 3) Draft Common Frame of Reference (DCFR) (Study Group and Acquis Group) Common European Sales Law (CESL) – prop Mandatory vs dispositive rules 1) In private law: everything that is not prohibited is allowed 2) In public law: everything that is not allowed is prohibited Both statements are way too generalized and categorical Contract law – dispositive rules Mandatory rules Law of Obligations: most rules are dispositive Other areas of private law have more significant mandatory rules For example, same-sex marriage prohibited in many countries § People do not have absolute freedom over their children, etc. Mandatory rules are usually established: 1) For protection of the society as whole (also its morals) 2) For protection of third parties 3) Protection of individuals when we doubt that they can protect themselves: Consumers, children, etc. 4) Other reasons: e.g. efficiency of litigation. E.g., preference for written contracts may be justified by procedural reasons: avoid complicated litigation about verbal contracts INTRO TO FAMILY LAW Who participates in private law relations? Two key subjects (actors): 1) Natural Persons (humans) 2) Legal persons (artificial/juridical persons) Legal persons Legal person (artificial person) is an organization created for a certain purpose that is recognized by the legal order as a legal subject with its own separate patrimony. A fiction that allows a group of people to organize their participation in the circulation and limit liability of those people. Examples 1) State (Latvia, France, Belgium, etc.) In Latvia, the state has one legal person; in some states different ministries, departments, institutions might have their own legal personalities 2) Municipalities 3) Companies (have their own property and debts): 1) Gmbh (Germany)/SARL (France)/SIA (Latvia); 2) AG (Germany)/ SA (France)/ AS (Latvia) Main characteristics of Legal Persons 1) Separate personality: brings claims in courts, can be defendants, etc. 2) Can conclude contracts and act in their own name 3) Have separate patrimony (assets) and are liable within the limits of their patrimony 1) Capacity to Have Rights In some states there is a distinction between two capacities: 1) To have rights 2) To perform legal acts and to be liable in torts All natural persons have capacity to have rights from their birth All legal persons have capacity to have rights Minors: Capacity to Perform Legal Acts 1) Minors (normally) before 18 years do not have full capacity E.g., Latvian CL Art. 219: children before 18 are minors Minors will have guardians (normally, parents) who contract in their name Minors II: contracts without guardian approval French law: contracts - invalid unless: 1) law/usage allows them to contract; 2) no economic disadvantage to the minor; German law: 1) before 7 years: full invalidity; 2) After 7: contracts conveying only benefits; money/things given by parents (pocket money rule) Latvian law: contracts by minors - full invalidity unless 1) emancipated children; 2)conveying manifest benefit; 3) concerning independent property (from 16 years) CL Arts. 195, 221, 260, 261 Persons with mental disorders 1. Incapacitated persons: Declared to be fully/partially incapacitated by court In Continental tradition: they get appointed curatele/wardship Their contracts are void or voidable unless confirmed by the ward Continental system usually protects more strongly the incapacitated person Common law looks at the knowledge of the other contracting party Contracts might also be void/voidable if the person with capacity was unable to understand/control its will when contracting BGB §105/French Code Art. 414-1 – invalid; BGB §105a: exception for everyday transactions LCL Art. 1408: contracts invalid  Common law looks at the awareness of the other party Contract for necessities (everyday things) always valid: even if the other party knows about the mental disorder Delictual (tort) capacity §CL: Arts. 1637-1639: 1) children below 7; 2)mentally incapacitated persons not liable and people with capacity but at the moment when they could not understand or control their actions §1639: responsibility of wards/parents for lack of supervision §However, Art. 1780 seems to contradict Art. 1637. Think yourself how could we resolve this contradiction? §BGB Art. 828(3) limits liability of children from 7-18 to their understanding § DCFR VI: 3:103, VI: 3:104 and VI.: 5:301 (read on your own) Family Law I: Relations between spouses Covers: 1) validity of marriage, partnerships, 2) divorce and its effects (maintenance/alimony) 3) Matrimonial property: who owns what, who can represent the family, dispose of property Family Law II: Relations with children How to determine paternity and status of children (in and outside marriage) Representation (guardianship) over minors and their property Adoption: when it is possible; its consequences for the parties involved Law of Succession I When a natural person dies all rights/obligations pass to heirs Unless they are personal (labor, rights, rights to pension, etc.) 2 principles methods: testamentary, intestate Priorities: spouse and children Law of Succession II Testamentary: - A person, who is alive decides how his property will be distributed: - Unilateral act that the testator can unilaterally change/terminate - In the will: decides that one or more people get all patrimony or its share or decides to give legacies: specific objects given to a specific person (legatee): Different traditions on the validity of wills In the continent: some of the intestate heirs are protected as “forced heirs”: they get some monetary equivalent of their “normal” share even if in in the will their share diminished or removed altogether: usually such “forced heirs” are children/spouse of the passed away person. Law of Succession III Instate succession: No will; the law decides who will succeed - Usually spouse, children, possibly parents - Different hierarchies of succession in different states - Some might always prefer children and spouse and allow further relatives to inherit only in case there are no children/spouse - In some countries only close relatives may inherit; in other the circle is very wide Law of things Law of obligations: in personam rights vs Law of things (property law): in rem rights (smth connected to things/ public things) - Law of obligations establishes claims between persons to do or not to do something - Law of things (property): rights regarding the tangible things Objects of private law I Tangible vs intangible things Tangible: - Land, objects around you: computers, houses, cars, animals… - Humans are not things; parts of body might be - Air is not – unless it is in an isolated state Intangible things: - Rights (arising from the law of obligations) and rights related to property, intellectual property → these things do not exist in “material” world Movable/immovable - Computer, cow, book – movable - Real estate (including buildings) – immovable - In most legal systems: building is a part of the land Objects of private law II Divisible/indivisible: Divisible: land fungible things (rice, liquids) - The sum of the parts of these objects has similar values to the whole and it does not affect the functionality of these objects Indivisible: - Animals, books, computer, cars, etc. - Certainly, in a contract parties could agree that they sell/buy only an engine of the car or screen of the computer, etc. : but at that point the value of the thing will be significantly diminished and they will lose most of their functionality Objects in Private Law III Fungible/non-fungible things - Wine, money: counted by weight, size and quantity: thus, fungible A specific object, specific dog, etc: not counted by weight, size and quantity, thus non-fungible - These objects have individual characteristics Objects in Private Law IV Consumable/non-consumable Drinks, food, medicine, etc. : destroyed while being used (consumables) Clothes, cars, immovable, ships, planes, etc. : not destroyed while used (non- consumable) What is ownership? Central right The most complete set of rights over an object (owner – master of things) CL Art. 972: right to use, possess, obtain benefeits, dispose of the thing and retrieve it from third parties DCFR VII.-1:202: refers to enjoy, modify, destroy dispose and recover the property Limitations to ownership rights are usually established by public law or an agreement (other in rem rights are such limitations) Protection of the owner I 1. Owner can reclaim property from others (rei vindicatio) An owner can reclaim things from others who possess them without his consent (see, DCFR Art. VII. – 6:101(1)) CL Art. 1044: owners may bring an ownership action against any person who is illegally retaining their property; the objective thereof is declaration of ownership rights and in connection therewith, granting of possession - As it follows from Art. 1045: “possession” here includes any physical control, - over the thing (including holding by a lessee, storer, etc.) Protection of the owner I 2. Owner can ask others to not disturb their property CL Art. 1039: Owners may prohibit all others from affecting their property, as well as from using or exploiting it, even if no losses are caused the owners themselves thereby. -- > terminology is not precise, but the claim follows from against disturbances follows from this provision DCFR Art. VIII-6:101(2): "Where another person interferes with the owner's rights as owner or where such interference is imminent, the owner is entitled to a declaration of ownership and to a protection order." See also: DCR Art. VIII-6:101 (3) Protection of the owner III Owner can also exercise reasonable and immediate self-help to protect your property: e.g., protect your home from robbers Under delict (tort) law: every damage to the property is a delict (tort) → the victim must be compensated for the damage caused by another subject of law (CL Art. 1052 (“compensation for all that the plaintiff has lost”; DCFR VIII> - 6:401 and VI. 2:206:) How do you obtain property ▪ Some of the original means of obtaining rights: ▪ Mixing your property with that of another ▪ Creating new things ▪ Occupatio (control + intention): ▪ 1) Hunting wild animals; fish, birds ▪ 2) Obtaining things that do not belong to anyone (also abandoned things)  ▪ In Latvia you cannot have real estate without an owner: then it goes to the state ▪ Under specific circumstances the finder of the things ▪ Accession (e.g., house built on the land) ▪ Etc. Derivative acquisition Derivative acquisition: 1) through succession (e.g., daughter inherits property of the passed away mother) -- > law of succession 2) merger of companies (if two companies decide to join and become one company that new company will succeed to these companies in relation to their patrimony) - company law 3) contracts (sale, barter, gift, loan for consumption, etc.) Transfer of property: Consensual/Delivery I 1. Consensual system (France, Belgium): - A sells car to B: B is owner even though the car is still in A's garage. 2. Delivery/register system (Germany, Switzerland., Latvia): - A) delivery for movables: A sells car to B: A is owner until he gives B the car: Transfer of property: Consensual/Delivery II - B) Registration of immovables: A sells his house to B: B has possession of the house, but in the register of property, A is still an owner. (requires interaction with the state) ▪ This is the situation in Germany, Switzerland, Latvia ▪ Here possession (actual control) is irrelevant for transfer of property ▪ Protection of possession is still dependent on possession of the immovable ▪ Acquisitive prescription still depends on possession (see later on what is acquisitive prescription) Delivery/registration in Latvia and DCFR ▪ Delivery/registration as means to acquire property is described in Art. 987 – 997 of the Latvian LCL ▪ For the delivery vs consensual system under the DCFR, see: ▪ Arts. VIII. – 2:101 - VIII. – 2:203. ▪ Basically: the DCFR requires delivery of the thing to transfer property unless the contract provides otherwise ▪ ---- > in Latvia (and similar “classical” delivery systems) parties cannot derogate from the delivery by agreement Typical other in rem rights 1) Servitudes (a good way to demonstrate the actual state of ownership) 2) Pledge/mortgage (discussed later in the “Contract Law” course) Servitudes (see, e.g. LCL 1130 and further) - the condition of being enslaved or of being completely under the control of someone else.... a life of servitude. ▪ Typical servitudes: 1) a road (surrounded by other people’s property and cannot get to the road) 2) use of water 3) support of buildings 4) building projection (construct over the “airspace” of the neighbor 5)Drainage (from roof of one to land of another) 5) Limiting height of buildings on the neighbor's land, etc. ▪ Only applicable to immovables! Negative servitude – a type of burden on a piece of land that allows a person to stop the owner of that land from doing something. For example, if someone has a negative servitude on a piece of land, they can prevent the owner from building something that would block their view or light. Creation of servitude ▪ Created by: 1) law 2) will (testament) 3) contract (most typical ground) 4) judgment ▪ In Germanic systems: servitude is valid and binding on future owners of immovables only once it is in the Land Register Three different concepts - Protection of possession - Acquiring ownership after some period of possession (adverse/acquisitive possession - Good faith acquisition (discussed in contract law course) (instant adverse/acquisitive possession) Functions of possession - Original ownership: can be obtaibned through possession, e.g., finding things that have no owner, hurting animals - Derivative ownership: (in Latvian law) is obtained through possession for movable property: e.g. delivery of a car after a contract was concluded - Possession is an element of “adverse possession”: obtaining ownership after a long-term possession - Possession is [rotected on its own (without any regard to ownership) Latvian (Roman) system of protection of possession Who is possessor? A thief is a possessor, somebody who bought the thing from a non-owner, owner is also a possessor (while controlling the thing) Who is not possessor? Tenant, a user of a thing that belongs to another = holders (factual possessor) Did it make a difference? Yes, in Roman law - > there was no possession protection for the holder LCL 876: progressive development: even a holder (factual possessor) can reclaim the property as a possessor (different from Roman Law) Possessor: control of the things for him/herself (LCL Art. 875-876) Legal and illigal possession (illigal – taken by force or withour=t the knowledge of the owner) (art. 909) Good/bad faith: knowing/ not knowing that somebody has better rights over the things (Art. 910) Possessor (holder) can reclaim the thing (LCL Art. 920) - movable or immovable - or ask protection from interference (LCL Art. 915) The owner can bring a claim against the possessor and get control over the object via a court, provided he/she can prove ownership and that the possess controls the thing without a legitimate reason (usually, a contract with the owner) Important exceptions: if the defendant shows that the claimant without defendant's permission unlawfully deprived the defendant of his possession, then the claimant's claim will be rejected: this is a special defense against possessory claims: LCL Arts. 917/922 Possessory claims must be brought during 1 year after the infringement (LCL Arts. 925) Examples: Latvian approach 1. A stole a car from D. Nobody can physically take that car away or prevent D from using it (except police) D can recalim it from a person whi takes it. - If A stole D’s car, D can reclaim it from him → even without proving ownership 2. B owns a land. A is a lessee(user) of that piece of land. A’s naighbr is burning leaves, smoke goes to A’s land, A cannot work because of that - Although only a holder, A can request that the neighbor stop interfering with his “possession” (based on LCL Art. 876) Good/bad faith possession: not relevant for protection of possession Bad faith possession is also protected -- > but relevant for acquisitive prescription Legal/illegal possession: mostly relevant in one case: A robbed B, taking his car and then B took (stole) his car back: If A brings a possessory claim for return of the car against B: B has a defense proving that A established illegal possession by robbing/stealing from the very B --- > this special defense provided by LCL Arts. 917/922 B loses the case: if he all that he can prove is that A obtained illegal possession by robbing C --- > B will not be able to rely on the special defense provided by LCL Arts. 917/922 Acquisitive Prescription (Adverse Possession) under LCL Arts. 998-1031 Requirments 1) For movables: not obtained through a crime (Art. 1003) Irrespective of whether it was stolen by the possessor or a third party: if the movable was stolen it cannot be acquired by acquisitive prescription until it returns back to the person from him it was stole 2) Uninterrupted possession (holders never benefit from AP) 3) A legal basis (with a defect) - Arts. 1006-1012. Most usually a contract intended to transfer property (sale, gift, barter) It could also be a contract where the seller was a non-owner 4) Good faith = not knowing that there are impediments to become owner (not being informed that somebody else considers him/herself also an owner) Unlike DCFR: if there is bad faith AP is not possible 5) Possession during: 1) for movables - 1 year; 2) for immovables - 10 years = good faith must be present all this time not only in the beginning of Possession Latvian examples In Latvian law AP has very limited importance for movables (see: Art. 1065 --- > we will discuss it in "Contract Law" course); it has some importance for immovables (real estate) 1) A bought a land lot from C. LCL Art. 994: "Only such persons shall be recognised to be the owners of immovable property, as are registered in the Land Register as such owners." A's ownership was never registered in the Land Register. Later C transferred the lot as a gift to his brother K. Now K is registered as an owner. If A will have 10 consecutive years of possession acquire property by acquisitive possession and will be able to sue the "registered" owner in court requesting the court to rule that A has to be registered as an owner. Important: during those 10 years neither C, nor K have not informed A that they deny his rights over the land + A was able to preserve possession! AP under DCFR VIII.-4.101 (acquis. by continuous possession in terminology of DCFR) Acquisitive prescription needs 3 elements: 1) Owner-possession of goods: possessing goods like an owner 2) Possessor (himself) has not stolen the goods 3) 10 year possession in good faith (possessor reasonably believes to be an owner )/30 year in bad faith (knows/must know that is not an owner) AP under DCFR VIII.-4.101 (acquis. by continuous possession in terminology of DCFR) Acquisitive prescription needs 3 elements: 1) Owner-possession of goods: possessing goods like an owner 2) Possessor (himself) has not stolen the goods 3) 10 year possession in good faith (possessor reasonably believes to be an owner /30 year in bad faith (knows/must know that is not an owner) Law of Obligations Obligation: is a legal duty to do (abstain from doing) something - Every obligation has a corresponding right = claim ▪ I give you money - loan: you are obliged to return it; I have a right to ask it ▪ I have a claim against you outside court, but I can also sue you to enforce my claim Sources of obligations: all obligations arise from law: but additional criteria are necessary 1. Permissible legal (juridical) acts: most often contracts: examples? 2. Delicts (torts): you broke your neighbor's window: what is the obligation? 3. Other cases provided by law: e.g., ▪ You see your neighbor's fence is falling apart: you repair it: what is the obligation? ▪ You want to pay to transfer money to you landlord, but you enter a wrong account number and the money is transfer to a different person. ▪ What is the obligation? Juridical/Legal acts Different understanding: DCFR II:1:101 - Juridical Act: contracts and statements having legal effect: grant of authority, ratification of a contract, offer/acceptance, etc. Germanic approach: division: lawful and unlawful acts (delicts/torts): Legal transaction is any expression of the will creating legal consequences E.g., a will (testament), contract, rescission of the contract, abandoning property, promise of a reward, etc. Unilateral/bilateral Lawful acts (Germanic Approach) Unilateral lawful acts (unilateral transactions) – only will of one person is involved: - A will/testament in succession law - A promise of reward of regard (e.g. CL 1540) - Abandoning property, etc. Bilateral lawful acts (bilateral transactions): contract – two or more persons express their will - A contract requires consent between two/more persons Contracts  DCFR II:1:101: “A contract is an agreement which is intended to give rise to a binding legal relationship or to have some other legal effect. It is a bilateral or multilateral juridical act.” - No contract without consent of all parties involved (See, DCFR II.-4:101 – (all) parties must intend to enter binding relationships) - Many legal systems distinguish unilateral, bilateral and multilateral contracts → whether one or more parties have obligations 1. Unilateral: loan for consumption or loan for use 2. Bilateral – sale, barter, enterprise 3. Multilateral: contracts of partnership Assignment (cession in South Africa) (the formal giving up of rights, property, or territory by a state.) DCFR: Book III, Chapter 5: very good treatment of the subject - The idea: transfer of the claim - Why not obligations? ▪ The personality and financial solvency of the debtor is way more important than that of the creditor (change of the debtor requires consent of the creditor) Latvian civil law art. 1793-1810: cession of rights to claim Buyer is a creditor Examples B is a landlord who owns a real estate. A is a tenant of an apartment. A has to pay EUR 500 to B each month. B leaves for Germany, but the contract remains in force. B agrees with company C that the company will maintain the real-estate and will have the right to claim money from tenants. What happens? An assignment of claim from B to C Is this possible and why?: claim is an asset, while creditor's person is not so important; thus for economy it is better if claims are transferred to those who value them more. Should A pay to B or C?: in most systems after A has been duly informed about the assignment → have to pay to C Parties: - Debtor – an original debtor: in our example A - Asignor (cedent) – original creditor – B - Assignee (cessionary) – new creditor – C In principle, for most claims: identify of the creditor is unimportant - Some claims cannot be assigned (DCFR III. – 5:109) - A has promised to draw a painting of B; B cannot assign his claim to C for a drawing in a way that A would have ro draw C. A certainly can assign his rights for remuneration. Requirements for assignment 1. A claim (non-personal): existing or future (DCFR III-5:106) 2. An agreement between assignor and assignee (unless assignment is required by law (subrogation)) 3. Form: most legal regimes do not require specific form for this agreement The role of notice 1. DCFR and German approach: assignment is valid before the notice - But the debtor can perform to assignor until receiving the notice - See DCFR III.-5:119 2. Another approach: assignment is finalized by the notice - Different opinions (were) about the situation in Latvia Position of the debtor Debtor does not need to participate in the assignment - What are the consequences? ▪ His position cannot be aggravated by the assignment - What it means in practice? ▪ Every defence that the debtor had against the assignor he will have against the assignee Contractual prohibition of assignment Art. 1799(1) CL seemingly makes assignments invalid if they infringe a contractual prohibition Art. III.-5:108 DCFR contains a much more permissive rule: in principle assignment can be be valid even if violating the contractual clause For details, read the commentary to Art. III.-5:108 General principle: on assignor’s liability Assignor is only liable for non-existence of the claim Assignor is not liable for collectability of the claim (CL Art. 1810; DCFR III.- 5:112(7))  - Of course, the assignor is liable if he acts in a way that damages the rights of assignee - LCL Art. 1810: specifies that the assignor is liable if he knew about the debtor being insolvent and did not inform the assignee Plurality of the parties