Contractual Relationship and Alteration of Private Rights

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Contractual Relationship and Alteration of
Private Rights
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Core Subject of Civil Relationship
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The Concept of Private Rights

• Meaning of legal relationship or privities
• Concept of private rights
• German scholar V. Tuhr said A right is the core
  concept of private law and the ultimate abstract
  expression for diversified life.
• A right is a legal power entitled by law to
  protect a specific interest.
• The function of private rights
• The function of rights is to protect the extent
  of individual freedom and to allow individual to
  organize or create its social life, especially to
  achieve autonomy in private life.
• A right is a subjective law and a law is an
  objectified right. Enjoying a right is the
  struggle for the law. (Rudolf von Jhering)

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Classification and System of Private Rights

• Categorized by their contents or interests
  protected
• Personality rights
• the right to life
• the right to the inviolability and integrity of
  his person
• the right to the respect of his name, reputation
  and privacy
• Rights arising from obligation
• The right to claim prestation
• Rights in rem (rights of thing)
• Intellectual property rights
• Other rights

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Classification and System of Private Rights

• Categorized by their power or function entitled
  by law
• The right of claim
• The right of defense
• The right to form a legal relationship
• The right to control or to manage

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The right of claim

• Definition
• A right of claim is a right entitled a specific
  person (claimant) to carry out a specific act
  (including to do or to refrain from doing) .
• Subject to extinctive prescription
• A legal ground to launch a litigation.
• Developed by German scholar Winscheid based on
  the concept of Actio under Roman Law.
• The buyers right to claim the seller deliver the
  goods sold and the title of goods sold. (ROC
  Civil Code348I, Korea Civil Code568I, Japan
  Civil Code560, and China Contract Law135)

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The right to defense

• Concept of defense
• Defense can be defined as an opposing or denial
  from a party against the other party when the
  other party exercises its right.
• Category of defense
• Defense in narrow meaning
• Proposing inexistence of the right of claim
• Contract is never formed.
• Contract is valid.
• Impossibility
• Failure to acknowledge indeterminate contract.

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The right to defense

• Proposing extinction of the right of claim
• Compensation (set off)
• Where two persons are reciprocally debtor and
  creditor of each other, the debts for which they
  are liable are extinguished by compensation, up
  to the amount of the lesser debt
• confusion
• Where the qualities of creditor and debtor are
  united in the same person, confusion is effected,
  extinguishing the obligation. Nevertheless, in
  certain cases where confusion ceases to exist,
  the effects cease also.
• Release
• Release takes place where the creditor releases
  his debtor from his obligation.
• Invalid of right (Verwirkung)

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The right to defense

• The right to defense
• Concept
• A private right which owns by a individual, not
  the State.
• Category
• The eternal right to defense
• A defense right arising from extinctive
  prescription.
• The provisional right to defense
• A defense right on reciprocal performance
• ROC Civil Code Article 264 A party to a mutual
  contract may refuse to perform his part until the
  counter-prestation has been performed by the
  other party, except he is bound to perform
  first.
• A defense right on beneficium excussionis
• ROC Civil Code Article 745 A guarantor may
  refuse performance to the creditor, so long as
  the creditor has not filed proceedings for
  compulsory execution, against the property of the
  principal debtor, without results.
• Japan Civil Code 453, Korea Civil Code China
  Contract Law, German Civil Code 771-773, French
  Civil Code 2021-2024, Swiss Obligation Code 495

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The right to form a legal relationship

• Definition
• A right to create, alter, or extinguish a legal
  relationship upon exercising such a right.
• Category
• The right to rescind a contract
• The right to annul a declaration of intention
• The right to recognize a declaration of intention
• The right to deny a declaration of intention
• The right to choose a subject matter under
  selective obligations.

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Effect of a valid contract

• Concept of the rights arising from a contract
  (Obligation-right?)
• the prestation the right entitle to enjoy the
  interest of prestation
• contractual duty obligation
• Main obligation
• The seller of a thing is bound to deliver the
  thing to the buyer and to make him acquire its
  ownership.The seller of a right is bound to make
  the buyer acquire the right sold. If, by virtue
  of such right, the seller can possess a certain
  thing, he is also bound to deliver the thing.
• The buyer is bound to pay to the seller the
  agreed price and to accept delivery of the object
  sold.
• Incidental obligation
• If performed, contractual duty discharged
• if in default or breach, it gives rise to a right
  to claim damages or the right of rescission

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Questions

• Why is is so important to learn the concept and
  system of private rights before we get into the
  rules of contract in civil law countries?
• What relationship between variations of private
  rights and the structure in the Civil Code?

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Rights arising from obligation

• Obligation (zhai)
• A legal relationship that one party can claim
  the other party to do or not to do specific
  behavior.
• Parties
• Obligor (debtor) the person who has engaged to
  perform some obligation.
• Obligee (creditor) the person in favor of whom
  some obligation is contracted, whether such
  obligation be pay money or to do or not to do
  something.

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Owner of Right
The facts caused legal effect
Legal effect
Occurrence, change, and extinguish of right
Juristic Facts (Juristische Tatsache)
Private Rights
Exercise of Right
Object (subject matter) of Right
Legal relationship
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Juristic Facts
Human conduct
others
Legitimate act
Illegitimate act
Expressive act
Non-expressive Act
Torts
Default
Juristic Act
Qusai Juristic Act
Management of affairs without mandate
Contract
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Freedom of assembly, Freedom of speech Freedom of
religion
Public right
Rights
Private rights
Classified by its contents
Classified by its function
Property right
Non-property right
Right to claim
Right arising from obligation
Right of personality
Right to defense
Right in rem
Right of family Status
Right to form a legal relationship
Intellectual property right
Right to control
Other property rights
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Juristic Act (Rechtsgeschäft)

• Definition
• An act by which the party or parties declare
  their intention of effecting changes in legal
  relations and to which the law attaches the power
  of producing such changes.
• A lawful act composed of a declaration of
  intention by which a legal effect in private law
  arises.

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Category of Juristic Act

• Unilateral Juristic Act
• Property Act
• Obligatory act
• Definition A juristic act that create an
  obligation in personam between the parties
  whereby one party is entitled to demand the other
  party to perform a particular act.
• Examples the establishment of a foundation, the
  promise of a reward, the issuance of a instrument
  payable to the bearer
• Dispositive Act
• Definition A juristic act that creates or alters
  a right in rem that is effective not merely
  between the parties but also against the world at
  large.
• Examples Relinquishment of a property right
• Status Act making a will, bequeathment
• Act to form legal relationships rescission of a
  contract, a notice to quit given to a tenant, a
  notice to recognize juristic act, a promise to
  offset payment. annulment of a juristic act

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Category of Juristic Act

• Multilateral Juristic Act
• Bilateral Juristic Act (contract agreement)
• Property Act
• Obligatory act (Obligatory contract)
• Sale, Lease, Gift, Mandate, Loan
• Dispositive Act (Contract regarding the right in
  rem)
• Conveyance of the right in rem, create a lien,
  create an easement, create a hypothecary right.
• Assignment of the right arising from obligation
  or intellectual property right.
• Status Act engagement, marriage, divorce,
  adoption
• Common Juristic Act Vote of stock holder in
  share holders meeting, establishment of an
  association.

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Questions

• Are there any similarities and differences
  between a promise and a declaration of intention?
• Could you describe the relationship between a
  contract and a declaration of intention or a
  contract and a juristic act?

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Constituent elements of formation of Juristic Act

• General requisites for formation
• The Parties
• Declarant (offeror as to offer, offeree as to
  acceptance)
• Subject Matter
• Declaration of intention
• offer and acceptance mutual assent.
• Special requisites for formation
• Delivery of object (real contract), written
  formation (formal contract)

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Questions

• What are the differences between formation of
  contract and effectiveness of contract?
• What is the reasons behind the dichotomy of
  formation and effectiveness of contract ?
• If a contract without any consideration has been
  formed, is it an enforceable contact in Civil Law
  countries?
• Where the contract is formed but not effect, can
  the party claim the other party to carry out the
  prerequisite elements to effect the contract?
• If the contract is formed but not effect, is this
  contract a preliminary contract? What is the
  effect of a preliminary contract? Can you
  distinguish a main contract from a preliminary
  contract?

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Case Study

• X promised to lend 10,000 for six month with
  interest to Y on Jan 1. At the same time, X
  promised to transmit the said amount of money to
  Ys account at the date of Jan 10. However, X
  didnt honor his promise due to economic
  hardship?

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Rules regarding formation of loan for consumption

• Japan Civil Code 587
• A loan for consumption becomes effective when one
  of the parties receives from the other party
  money or other things and agrees to return things
  of the same kind, quality, and quantity.
• ROC Civil Code Article 474
• A contract of loan for consumption is a contract
  whereby one of the parties shall transfer to the
  other the ownership of money or other fungible
  things, and the parties agree that the latter
  shall return things of the same kind, quality and
  quantity.
• PRC Contract Law
• Article 196 A contract for loan of money is a
  contract whereby the borrower borrows a sum of
  money from the lender, and returns the sum
  borrowed and pays interest thereon at the
  prescribed time.
• Article 197 A contract for loan of money shall
  be in writing, except where the loan is between
  natural persons who have agreed otherwise.A
  contract for loan of money includes terms such as
  the loan's type, currency, purpose, amount,
  interest rate, term and method of repayment, etc.
  
• Article 210  A contract for loan of money
  between natural persons becomes effective at the
  time the lender tenders the amount of loan to the
  borrower.

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Rules regarding preliminary contract of loan

• Japan Civil Code art. 589
• A preliminary contract to make a loan for
  consumption shall cease to be effective if one of
  the parties has subsequently been adjudged
  bankrupt.
• ROC Civil Code Article 475-1
• Under a preliminary contract to make a loan for
  consumption, if interest or other remuneration
  has been agreed upon for a loan for consumption
  and one of the parties becomes incapability to
  pay after the preliminary agreement constituted,
  the lender of the agreement may revoke such
  agreement.
• Under a preliminary contract to make a loan for
  consumption, if it is without remuneration, the
  provisions of Article 465-1 shall be mutatis
  mutandis applied.

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Rules regarding formation of loan for use

• ROC Civil Code
• Article 464 A contract of loan for use is a
  contract whereby one of parties shall deliver a
  thing to the other, and agrees that the latter
  shall return the thing after gratuitously using
  it.
• Article 465-1 After a preliminary contract to
  make a loan for use is constituted, the lender of
  the agreement may revoke such an agreement.
  Unless otherwise the borrower of the agreement
  has demanded to perform the agreement and the
  lender of the agreement hasnt revoked
  immediately.
• Japan Civil Code
• Article 593 A loan for use becomes effective
  when one part receives a thing from the other
  party and agrees to return it after gratuitously
  using and taking profits therefrom.

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The institute to balance the interest
betweencontractual parties in non-onerous
Contract

• Gift in ROC Civil Code
• Article 406 A gift is a contract whereby the
  parties agree that one of the parties delivers
  his property gratuitously to the other party and
  the other party agrees to accept it.
• Article 408 So long as the right of the gift has
  not been transferred to the donee, the donor may
  revoke the gift. If the thing given has been
  partially transferred, the donor may revoke the
  gift for the portion has not been
  transferred.The provision of the preceding
  paragraph shall not apply to gifts notarized or
  to gifts made for the discharge of a moral
  obligation.

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• Gift in PRC Contract Code
• Article 185 A gift contract is a contract
  whereby the donor conveys his property to the
  donee without reward and the donee manifests his
  acceptance of the gift.
• Article 186 Prior to the transfer of rights to
  the gift property, the donor may revoke the
  gift.The previous paragraph does not apply to
  any gift contract the nature of which serves
  public interests or fulfills a moral obligation,
  such as disaster relief, poverty relief, etc., or
  any gift contract which has been notarized.

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• Gift in Japan Civil Code
• Article 549 A contract of gift becomes effective
  when one party declares his intention
  gratuitously to transfer property of his own to
  the other party and the other party agrees to
  accept it.
• Article 550 A contract of gift which is not in
  writing may be revoked by either party however,
  this shall not apply with regard to any part as
  to which performance has been accepted.

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Mutual Assent Delivery
Loan for Consu- Mption Japan ROC Preliminary agreement (revocable) Executed and cannot be revoked
Loan for Consu- Mption Japan ROC Formed, effective, and executed
Loan for Consu- Mption PRC Written Contract required (formed and effective) Executed
Loan for Consu- Mption PRC Within Natural person (Formed, effective, and executed)
Loan for use ROC Preliminary agreement (revocable) Executed and cannot be revoked
Loan for use ROC Formed, effective, and executed
Loan for use Japan Formed, effective, and executed
gift ROC PRC Formed and Effective (revocable) If notarized or made for the discharge moral obligation (irrevocable) Executed and cannot be revoked
gift Japan In writing, formed and effective Executed
gift Japan Not in Writing, formed and effective (revocable) Executed
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Prerequisites to Validate a Juristic Act

• The validity of Juristic act
• Valid, Void, Avoidable (voidable), Indefinite
  (uncertain)
• General requisites for validity
• The Parties shall have the appropriate capacity
  to form (enter into) a juristic act (contract).
• Subject Matter shall be lawful (illegality),
  certain (uncertainty), possible (impossibility),
  and proper (violate public policy and good moral)
• Declaration of intention shall be without any
  defects.
• Variances between declaration and intention
  mental reservation, malicious collusion, mistake
  
• Involuntary declaration of intention fraud
  duress
• Special requisites for validation
• Register required. A contract subject to a
  condition precedent or a time limit for its
  effective.

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Void

• ROC Civil Code Article71A juridical act which
  violates an imperative or prohibitive provision
  of the act is void except voidance is not implied
  in the provision.
• ROC Civil Code Article72A juridical act which is
  against public policy or morals is void.
• ROC Civil Code Article73A juridical act which
  does not follow the formality required by the act
  is void unless otherwise provided by the act.

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Void

• ROC Civil Code Article86An expression of intent
  shall not be void for the expresser did not
  intend to be bound by it, except the fact was
  known to the other party.
• ROC Civil Code Article87A fictitious expression
  of intent made by the expresser in collusion with
  other party is void, but the voidance can not be
  a valid defense against any bona fide third
  party.

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Avoidable (revoke)

• ROC Civil Code Article88If the expression was
  acting under a mistake as to the contents of his
  expression of intent, or had known the situation
  of affairs, he would not make the expression he
  may revoke the expression provided that the
  mistake or the ignorance of the affairs was not
  due to his own fault.
• ROC Civil Code Article92An expression of intent
  which is procured by fraud or by duress may be
  revoked by the expresser. If the fraud was done
  by a third party, the expression may be revoked
  only under the circumstances that the other party
  knew, or might know the affairs.

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Indefinite

• Incapacity and without approval of guardian
• Contract made by a person limited in capacity to
  make juridical acts without the approval of his
  guardian is valid upon the acknowledgement of the
  guardian (ROC Civil Code Article79)
• Disposing others property without authority
• The disposition of any object which is made by a
  person without title is effective only upon the
  acknowledgement of the person entitled. (ROC
  Civil Code Article 118)
• Agency without authority
• A juridical act made in the name of an agent by a
  person of no authority of agency shall not be
  effective to the principal except it is
  acknowledged by the principal. (ROC Civil Code
  Article 170)

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Valid
Avoidable
Indefinite
Void