Curs Business Juridical Relation1

7/31/2019 Curs Business Juridical Relation1

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5/13/2012 Business Law 1

The business juridical relation

1. To exist a social relation

2. To exist a rule that provides the juridical

relation

3. To exist a legal fact or act whose legal rules

link the formation, the modification or the end

of rights and obligations


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Sources of a Business Juridical Relation

1. Legal facts: - natural facts

- human actions

2. Juridical acts:expressions of somebodys will,made with the specific purpose to create, tomodify or to end a juridical relation


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Subjects of Business Juridical Relation

The active subject: the creditorthe person who hasrights

The passive subject: the debtorthe person obliged

to do or not to do something within a juridical relation

Creditor Debtor


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Subjects of Business Juridical Relations

Merchants - Sole proprietorship

Unlimited Liability Companies

Limited Liability Companies

Holders of social shares

Holders of social debentures

Employees

Independent contractors Trade-unions

Bodies of the state with control attributions


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The abstract capacity

Features:

1. Universality

2. Generality

3. Inalienability

4. Legality

When does the abstract capacity begin?

When does the abstract capacity end?


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Birth

Since the abstract capacity is granted under

law to each human being, it begins at the

very moment of birth.Exception: one may be recognised as a

person (as a subject of law) even before

his (her) birth, in order to be recognised asan heir.


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Disappearance

Special statement of the court: disappearance

announcement

Death announcement

If the person reappeared, he is put in the same positionas he was before the disappearance: the goods that are

in the possession of the heirs will be returned.

One exemption: if the wife (or husband) had remarried,this second marriage will be considered as valid.


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The abstract capacity

Limitations:

- In order to sanction somebody

- In order to protect somebody


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The Concrete Capacity

= someones ability to sue or to be sued, andto enter into a binding contract

CC=AC+D

The concrete capacity=The abstract

capacity + Discernment


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Legal persons

A legal person is an entity, such as a corporation,created by law and given certain legal rights andduties of a human being.

Companies and other legal persons have theirown legal personality separate from that of theshareholders or directors or of other companiesin the same group.

Even if a company is totally dominated by oneshareholder, the company and the shareholderare distinct legal persons. In other words, a

corporation is a legal entity with rights,privileges, and liabilities separate from those ofthe individuals who invest money in it, composeits membership, and run it.


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Legal persons

Consequences of the separate legal identities of acompany and its members:

a company can sue and be sued in its own name;

a company can make contracts on its own behalf(and its members cannot claim the benefit nor besubject to the burden of such contracts).

Indeed, companies usually contract in their ownname, and the obligations undertaken by themare not binding personally on their shareholdersor directors or on associate companies.


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Legal personsconstitutive elements

1. Organisation

Internal structure is usually divided into different

departments for production, distribution,

researches, marketing, etc.

Since there is a huge diversity of internal structures

and there are no imperative rules for this matter,

any internal structure is allowed by law, except

those that are expressly forbidden.


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2. Patrimony

= a juridical universality which includes

the total rights and obligations withpatrimonial character which belong to asubject of law, as well as the goods towhich these rights and obligations arereferred to.


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3. The Goal (the purpose or the objectof activity)

- Has to be lawful.

- The purpose of a legal person justifies itsexistence as a subject of law.

- A legal person may own only those rightswhich are meant to achieve theestablished purpose.


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The speciality of the abstractcapacity: any juridical act, which hasbeen concluded for another purpose thatthe one originally assumed by the legalperson, is null and void. Any juridical actconcluded outside the object of activitymay produce no effect.

A legal person can have only those rightsand obligations which correspond to itsaim established by law, the setting updeed or the statute.


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Legal persons

According to the branch of law to whichthey belong, legal persons are:

legal persons of public law and

legal persons of private law


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Legal persons

The name:

a) Must have the appropriate suffix (ltd or plcin UK, S.A or S.R.L. in RO)

b) Not the same or similar to another nameon the register

c) Not using offensive words

d) Not giving a misleading impression aboutthe scale or nature of the business


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Legal persons

Memorandum and Articles

the moment of registration is the moment of obtaining thelegal personality

Effects:

- Bind each member to the company

- Bind the company to each member

- Bind the members to one another- Dont bind the company to a member or anyone else acting

in a non-membership capacity

(a director of the company or an employee)


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Legal persons

Shares (interests of theshareholders in the company,

measured by a sum of money).

Debentures (loansgiving the

right to a fixed return wheneverthe debenture matures).


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Legal persons

Insolvency - Priority of creditors:

1. Cost of the insolvency procedure

2. Preferential debts (employees)

3. Floating charge holders

4. Unsecured creditors

5. Members


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The content of a business juridical

relation

1. the active part (which includes therights)

A right is a juridical possibility or

prerogative recognized by law to anatural person as active subject to havewithin the limits of the law a certainbehavior and to pretend to other personsas passive subjects to give, to do or notto do something for him.

2. the passive part (which includesobligations).


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relation

To give = to transfer a real right. It is theobligation of the seller in a selling contract to transfer the right of property.

To do = to perform a certain activity, apositive action in favor of the active party.

Not to do = the obligation of the passivesubject to abstain from something that heis entitled to do in the absence of such anobligation.


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relation

Patrimonial:

1. debt rights = those rights according to whichthe active subject (creditor) can pretend to thedefinite passive subject (debtor) to give, to door not to do something

2. real rights = those rights according to whichtheir owners can directly exercise theirattributes toward goods without the intervention

of another person. Non-patrimonial


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The distinction between the debt

rights and the real rights

1. Real rights are limited in number and are expresslystipulated by law, wile the debt rights are unlimited. Thedebt rights are at the mere imagination of the parties,who may create any contract, which fits their interest;

2. In case of a debt right, we know both the active and thepassive subject from the beginning (i.e. from themoment the contract has been concluded). In case of areal right only the active subject is known, the passive

one including the entire society;

3. in case of a debt right, the correspondent obligation maybe togive,todo or not to do, wile in case of a realright, the correspondent obligation is always not to do.


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Relative rights Absolute rights

The relative right is that right according towhich the definite active subject (the creditor)has the possibility to pretend from the definitepassive subject (debtor) a certain behaviour. A

relative right is opposable only to a definiteperson.

The absolute right is that right according towhich the established owner has the possibility to

exercise the right alone and all the other personshave the general and negative obligation not todo something that could jeopardize the ownersright.


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Absolute rights

The absolute rights are opposable to allpersons, erga omnes.

It means that everybody is bound toobserve the prerogatives held by theowners of these rights.


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Real rights

The principal real rights do not dependon any other right; they are self-sufficient,as is the case of property.

The accessory rights depend on a debtright. In this category can be included themortgage and the lien rights.


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The mortgageas a contract The conventional mortgage is that not imposed

by the law but concluded between parties as anexpression on their own interests.

Characteristics:a) accessory character. Its existence depends onthe existence of the principal contract. Theobligation's execution on the base of the maincontract has as effect the ending of the mortgagecontract;b) right constituting character;

c) solemn character. The mortgage contractconcludes only in an authentic form, required bythe law for the validity of the contract.


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The mortgageas a rightCharacteristics:

it is a real right. As any real right, the mortgage grants itsmortgagor the right to observe the goods no matter whocurrently has possession over them;

it is an accessory right. The mortgage goes along with thedebtor's debt to the creditor and shares its fate;

it is indivisible. Even if the debt has been partly paid, themortgage over the whole estate continues to exist until thefinal payment of the debt.

it has an estate character. Unlike the lien that constitutes areal warrantee that has as object mobile goods, themortgage can be constituted only over real estate(immovable goods).


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Mortgage - effects

No dispossession of the debtor. The debtor will still be able to exercise all his

prerogatives resulting from his property right.Therefore, constituting a right to mortgage overan object does not lead to making it unavailable.

The object may be alienated, but the third partythat receives it, (by selling contract, donation,etc.) will take the object as is, meaning burdenedby the mortgage.

The creditor will have the possibility to

compensate, by auctioning the mortgaged goodseven if these are now under somebody else'sproperty, different from the original debtor.


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The object of a business juridical

relationthe goods

I. corporal goods non-corporal goods.

II. movable goods (chattels) immovable goods(real estates).

III. goods in civil circuit goods off the civilcircuit.

IV. fungible non-fungible goods.

V. goods individually identified goods generallyidentified.

VI. producing goods non-producing goods.

VII. consumable goods non-consumable goods.


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Contracts

A unilateral act is an act that involves theexpression of a single will.

(e.g., the will, the offer to contract, theacceptance of a succession).

On the contrary, a contract is anagreement between two or more partieswith distinguished interests (e.g., sale

contract, loan, mandate or employmentcontract).


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Unilateral contracts bilateral contracts

A contract may involve an exchange of promisesin which two parties agree that each willperform in a certain future.

The exchange of a promise for a promise = a bilateral

contract. E.g., in a sale contract, both parties are, in thesame time, creditor and debtor, i.e., the purchaser isentitled to receive the goods and is obliged to pay the saleprice, and the seller is entitled to receive the price and isobliged to deliver the goods.

If there is no such exchange, the contract isunilateral. For instance, in a loan contract, onlythe loaner is creditor, being entitled to requirethe loan, and only the borrower is debtor,being obliged to give it back.


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Contracts made by onerous title contracts made by gratuitous title

An act made by onerous title is an act inwhich each party obliges himself to theother in exchange of the other's oneobligation.

On the contrary, an act made bygratuitous title is one in which one party

obliges himself to the other withoutexpecting in exchange any obligation fromthe other one.


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Commutative contracts aleatorycontracts

The commutative acts are those in whichthe parties know, from the very momentof concluding the act, which will be their

mutual obligations (e.g., selling contract).

The aleatory acts are those in which theparties' obligations are dependent on afortuitous event (the luck!) - e.g.,insurance contract or life annuity contract.

C i i i i d


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Constitutive, transmissive and

declarative contracts

A constitutive act is one that constitute asubjective right that doesn't previous exist. Forinstance, the institutions of a is such aconstitutive act.

A transmissive act is one that transfer a pre-existing civil right. So are the most of thejuridical acts (e.g., sale contract or exchangecontract).

A declarative act is one that consolidates a pre-

existing right (e.g., the act by which thecommon owners divide the common property intoshares - the dissolution of the unity of possessionexisting between common owners).


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Consensual, formal and real contracts

A consensual act is one enforceable without beingrequested any formal conditions for this.

A formal act is one enforceable only if there areobserved some additional formal conditions,

other than the simple consent. (e.g. a writtensettlement).

A real act is one that can be enforced only ifgoods were delivered by the transferor to thetransferee. Therefore, deliverance of the goods is

requested not only to perform the real act, but toconclude it. Such real acts are loan or depositcontract.


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Freedom of contract

Civil Code: Agreements formed legally takeplace of law for those who have made them.

These rules are not law, as they only apply to thepersons who have created them. Nevertheless,

the consequences of breaking them may be justas unpleasant as the consequences of breakingany rules of civil law.

Freedom of contract is a concept, which means

that the law permits people to agree whateverthey want to - one with another.


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Contractual validity conditions

1. the consent of the party who obligehimself;

2. his capacity to contract;

3. a certain object which forms the subject-matter of the commitment;

4. a lawful cause in the obligation.

(5) In case of formal acts, there is asupplementary element of enforceability:the form.


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The consent

= the partys intent to conclude the juridicalact.

The consent:

1. has to exist. Any act concluded in theabsence of the consent will be declared nulland void;

2. has to be externalized.

3. has to be expressed by a person who intentsto engage himself in a juridical relationship.

4. has to be genuine.


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Vices of consent

1. the mistake;

2. the fraud;

3.

the duress;4. the injury.


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The mistake

= a false belief relating to one of the elements ofthe contract, at least one of the parties beingmistaken.

Conditions:

must occur at the moment the contract is made. if a party knows and accepts that there is an element

of risk in the transaction, then this is not a mistake.

must be sufficiently serious in order to have an effectin law.

mistake as to the substance of the thing which is theobject of the contract mistake as to the person withwhom a party had the intention to make a contract.

It is not accepted for pleading somebodys ignorance.


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The fraud

= a cause of nullity of an agreement if artifices madeby one party are such that it is obvious that, withoutthese artifices, the other party would not havecontracted. It will not be presumed, and must beproved.

The artifices may consist of lies, making falsedocuments or even of silence. A fraud can also consistof doing nothing to alert someone of a damaging fact.

The fraud must be deliberate and it must proceedfrom the other party.

Two main elements: the intentional one (whichconsists of the will to fraud the other party) and thematerial one (which consists of the activitiesperformed in order to lead the other party intomistake).


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The object

The object of a contract is the subjectmatter of content of the contract, theduty, which each party has to perform. It

is the legal activity the parties haveagreed to undertake.


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The nullity of the juridical acts

The nullity is a sanction, which deprives the actof its effects. In case of an act defectivelyconcluded, the nullity applies from the moment ofthat conclusion restore the parties in the positionprior of their agreement. It is just as no act hasbeen concluded between them. This effect ofnullity is known as restitutio in integrum of theparties.

The nullity is retroactive, and parties will be put

back in the positions they were in before thecontract.

This requires the parties to restore anything theyreceived on the ground of the contract.


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The nullity

a) Absolute nullity is a nullity imposed in the generalinterest. It can be invoked by anyone having an interest inthe matter, such as the parties, third parties, the publicprosecutor, etc.

The absolute nullity can be invoked in case of absence of

(or illegality of) cause or object, lack of consent, or failureto observe formal requirements where these are required(in case of formal acts).

b) Relative nullity is a protective nullity: only the personwhom the law intends to protect (or his representatives)can bring an action for relative nullity. It can be invoked incase of mistake, fraud, duress or injury.

The protected person can however decide to confirm thecontract.

B t b l t llit d l ti


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Between absolute nullity and relative

nullity are three main differences:

1. Anybody may claim to make null and void a juridical act.Law draws no limits in enforceability of the right to sue.

By the contrary, only interested persons may avoid an act(e.g., the party whose consent was affected by one of thevices of consent);

2. The absolute nullity can be claimed anytime; there are nolimits in time for claiming an act to be null and void.

As far as the relative nullity is concerned, a party whobenefits from nullity can claim the avoidance of the act onlywithin a specific limit of time, which normally is 3 years;

3. An avoidable act can produce its effects until its avoidanceis claimed. Thus, it is up to the party who benefits from thenullity to claim the cancellation of the act. But, if the partyratifies the act by covering its defects, then the act is validand produce its effects.


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Principle of compulsory force of the act

in Latin: pacta sunt servanda

According to this principle, agreements lawfullyformed take place of law for those who havemade them.

So, the contract is mandatory for the contractingparties.

Furthermore, the principle of compulsory force iseffective even upon the court of the law. Forinstance, the court solves the litigation between

parties according to the legal provisions and alsobased on the convention existing between thelitigants.


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The principle of irrevocability of the act

According to this principle, the partiescannot revoke the contract except bymutual consent or on grounds allowed by

the law. This principle restrains the contracting

party to revoke his promise.

There are some exceptions, meaning acts

that can be however revoked.


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The principle of privacy of the act

Only the contracting parties can sue on thecontract. Conventions have effects only amongthe contracting parties; they do not affect thirdparties, nor do they create any benefits(advantages) for third parties.

A party is a person who concludes the act.

It is considered as well an interested party(habentes causam) a person who is recognizedeither as having enforceable rights or as being

liable for duties created by an act where he is nota party (e.g. the heirs).

Third parties are persons who are completelyaway from the contract.

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Curs Business Juridical Relation1