Private law

Instrumental view of priv. law

sees priv. law as a means to an end —> legal rules should be designed to achieve specific societal goals

• incentives for right and penalties for wrong behavior

normative view of priv. law

priv. law exists to uphold inherent principles of fairness, autonomy, and individual rights, independent of social/economic outcomes it might produce

• INTERPERSONAL JUSTICE: right outcomes between individuals

• no external aims of priv. law —> pub. law deals w/ distributive justice

social (distributive) justice

justice in the distribution of whichever divisible goods there are in society (focus often on wealth & income)

• Rawls says that it is the responsibility of societies to deliver justice through their institutions

interpersonal (commutative) justice

focuses on relationships between individuals, ensuring every person is treated w/ basic dignity, respect, & fairness

• focus on restoration of equality after it brought one party a loss (& another a corresponding gain)

leading principle of contract law

freedom of contract

sources of contract law

1. rules that emerge from official sources (nat., int. European)

2. rules made by parties themselves

3. informal rules made by others than official institutions (e.g. industry guidelines)

3 dimensions of property rights

1. rights of use

2. rights as security

3. the right to transfer property rights

property rights can be invoked against the whole world, but there are 3 LIMITATIONS:

1. administrative regulations

2. a right ends where another man’s right begins (i.e. use of property must not be disproportionate)

3. the use of property rights must not go against community interests

matrimonial property regimes

provide default rules on what happens to the assets of spouses when they get married (can usually be deviated from by means of a pre-nup)

private law

governs interactions between individuals, companies, & organizations

• focus on individual interests of parties

• voluntary (e.g. contract) & involuntary (e.g. tort) relationships

• key value if often considered to be autonomy

priv. law provides a public standard of interpersonal conduct: it tells ppl how to behave towards each other & what kind of conduct they can expect from each other in priv. settings

aims of private law

1. autonomy

2. equality of parties

3. good faith & fair dealings

4. prohibition of abuse of rights

5. unjust enrichment

6. freedom of contract

7. protection of property rights

8. liability for wrongs

common law

• no civil code, only disperse acts

• judicial precedent

• no general rules

• case law development

civil law

• based on civil code

• judicial precedent is relevant, but judges have to apply the law

• general rules

main rules in contracts

• enforcement rules

• default rules

• mandatory rules

Main principles of contract law

• freedom of contract

• binding force

• informality (no specific form required(

• contractual fairness

main requirements for the formation of a contract

1. agreement of the parties (offer & acceptance —> indicates consent)

2. intention to create legal relations (i.e. intention to be bound)

reasons an offer ceases to exist

1. acceptance of offer

2. revocation

an offer lapses/expires when

1. it is rejected or a counter-offer is made

2. time of acceptance expires

3. if no time of acceptance has been fixed, acceptance take place within a reasonable time

advertisement to the public … offer?

• France: offer

• Germany: not an offer, merely an invitation to treat

• England & Wales: not an offer, merely an invitation to treat

Theories on when a contract is concluded

• externalization theory = when the acceptance is written

• dispatch theory = when the acceptance is sent (England non-instantaneous communication)

• receipt theory = when the acceptance is received (Germany & France + England instantaneous communication)

• actual notice = when the acceptance is read

Diverging declaration & intention

reasonable reliance = reasonable belief of the addressee induced by the conduct of the addressor in light of all circumstances

Elements of a mistake (Art. 1132 CC & S. 119 BGB)

1. mistake is based on essential qualities of the contract

2. decisive to the consent of the mistaken party (would not have contracted otherwise)

3. excusable (mistake inexcusable if info available/negligence)

4. no assumed risk (acceptance of risk abt a quality of the act of performance)

5. both parties must know abt the essential importance of the quality to which the mistake relates

Can the offer be revoked BEFORE it reaches the offeree?

• France: yes

• Germany: yes

• England & Wales: yes (concept of retraction)

Can an offer be revoked AFTER is reaches the offeree?

• France: yes/no (unable to withdraw, but if done so —> compensation)

• Germany: no

• England & Wales: yes (concept of consideration —> Dickinson v. Dodds)

illegal/immoral contracts

• limit contractual freedom

  • contracts contrary to manadtory law, public policy, or good morals

    • —> consequence = void

reasonable reliance (English interpretation of common intention of parties)

ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation which they were in at the time

—> Investors Compensation Scheme

gap-filling

after interpretation of the express terms of a contract, it might be concluded there is smt that the parties failed to cover (i.e. gap needs to be filled)

interpretation

aims to give a text a single meaning

If a party does not perform, the other party may:

1. demand performance (routine in France & Germany)

2. terminates the contract

3. claim damages (routine in England & Wales)

4. withhold/suspend its own performance

5. claim a price reduction

In France & Germany, a contract CANNOT BE PERFORMED if performance is IMPOSSIBLE!

S. 275 BGB

1. absolute impossibility

2. unreasonable cost

3. moral impossibility

Requirements for claiming damages

1. non-performance (debtor in breach of contract)

2. attributable (debtor must be responsible)

3. causality (there must be a link between the non-performance & the harm)

4. extent of damages (there can be no doubt as to whether the harm is compensable & how it can be calculated)

Breaking off negotiations (pre-contractual liability)

• France: parties free to end negotiations, but must negotiate in good faith (Art. 1112 CC)

  • liability for breaking off negotiations (damages) based on tort law (Art. 1240 CC)

• Germany: parties can break off negotiations, but must deal in good faith

  • liability based on culpa in contrahendo (liability caused by party’s wrongful behavior during negotitations)

• England: no requirement of good faith during negotiations

  • liability in tort if party concluded negotiations w/ deceit, misrepresentation, or negligence (Walford v. Miles)

Libertarians (property law)

any given distribution of property is just, as long as it is historically justified

Egalitarians (property law)

property should be distributed more equally between people

Transfer of IMMOVABLE property

1. consent/agreement to transfer the movable

2. transfer via a formal delivery by means of a notarial deed (signed by both parties + the notary & registered in a public register; same applies for other registered goods like vessels)

droit de suite

if a sub-right is attached to a property, the right continues to exist & follows the object even if the owner sells/transfer the property to someone else

• property rights remain attached to objects regardless of who possesses them

maxim nemo plus principle

you cannot dispose of more than you have/own

• if you establish a sub-right on the property you own, you can only dispose of the ownership of this property including the sub-rights

ownership

gives an individual the exclusive legal authority to use, enjoy, dispose of, etc. their asset

servitude

right to use/restrict another person’s property for a specific purpose (linked to land e.g. right to cross someone’s lot)

right of leasehold/empytheusis

grants you the authority to possess & use an IMMOVABLE owned by another party, while the land remains w/ the owner

principle of superficies solo cedit

everything built on/part of the land forms part of the land & thus falls under the ownership of the landowner (related to IMMOVABLES)

right of superficies

right to have ownership of a building/plants/trees on an immovable good owned by someone else

the claim/money claim

applies to intangibles

intellectual property rights

protects INTANGIBLE assets, allowing creators to legally control & profit from their creations (e.g. copyrights, patents)

right of mortgage (security)

allows the lender to use the borrower’s property as collateral for a loan

• registration of a mortgage in a public register

• applies to IMMOVABLES

• if borrower defaults on the loan, the lender is legally authorized to seize & sell the property to recover the debt

possessory right of pledge (security)

creditor takes physical possession of a debtor’s movable asset as collateral for a loan/debt (can be disclosed/undisclosed)

• if debtor defaults, the pledgee (creditor) can sell the asset & recover the debt

non-possessory right of pledge (security)

allows borrower to use a movable asset collateral without handing it over to the lender (can be disclosed or undisclosed)

floating charge (security)

floats over assets, allowing borrower to buy/sell them without needing the lender’s prior approval

• if debtor defaults, the charge crystallizes —> charge locks onto the assets & converts into a fixed charge

  • —> borrow loses the right to sell/dispose of the items

transfer of ownership (France)

1. authority to transfer ownership

2. mere consent (e.g. a contract) for a valid transfer of ownership

NO DELIVERY REQUIREMENT

transfer of ownership (Germany)

1. authority to transfer ownership

2. a real agreement = parties agree to hand over & obtain ownership

3. DELIVERY (= fulfillment of the principle of publicity via transfer of possession)

transfer of ownership (England & Wales)

1. authority to transfer ownership

2. consent (contract of sale)

NO DELIVERY REQUIREMENT

possession

= to control a movable for oneself

requirements:

1. corpus (physical control of the movable)

2. animus (intention to possess a movable for oneself)

constitutum possessorius

the transferor (seller) agrees to hold the property on behalf of the new owner (buyer)

traditio brevi manu

ownership of the object is transferred to the person who already has physical possession of it

requirement for possession (France)

Art. 2255 CC

1. corpus (material/physical act of possession)

2. animus (intention to possess/psychological element)

requirements for possession (Germany)

S. 854 BGB

1. corpus (factual control of the movable)

2. restriction to corporeal things (= physical objects)

3. animus (intention to possess the movable)

transfer of possession (England & Wales)

1. corpus (factual control of the movable)

2. animus (intention to exclude everyone else from the control of that movable, i.e. animus possidendi)

Allcard v. Skinner

undue influence (vitiating factor)

Derry v. Peek

deceit/deliberate misrepresentation (vitiating factor)

Inverstor’s Compensation Scheme

in interpretation of contracts, the reasonable reliance theory prevails

Paradine v. Jane

a contract is a guaranteed promise —> if the debtor has not done what he promised in the contract, he must pay for damages

limited community of property (france)

assets acquired during marriage form the community of property, whereas assets spouses had before marriage remain separate

• same goes for liabilities

• some exceptions apply (e.g. gifts)

deferred community of property (germany)

during marriage assets remain separate, but, after dissolution of marriage, the property is pooled & shared between the spouses (compensation for accrued gains)

separation of property (england & wales)

no matrimonial property rights (total separation; property rights do not change after getting married)

• BUT, upon dissolution of marriage, judges have discretion to reallocate the property

equality (principles of matrimonial property law)

men & women have equal rights to administer their own property & the community property of spouses

autonomy (principles of matrimonial property law)

each spouse is free to administer his/her own property during marriage

solidarity (principles of matrimonial property law)

each spouse is entitled to an equal share of the community property nonwithstanding the way he/she has contributed to its increase (paid employment or childcare)

concurrent administration of community property

each spouse can administer community property (no consent of other spouse required)

• applies in all 3 jurisdiction

common administration of community property

both spouses must consent to the administration of community property

White v. White

YARDSTICK OF EQUALITY

• non-financial contributions are completely equal in value to financial contributions

• BUT, equality is a principle, not an absolute right —> courts may depart from 50/50 split if there is good reasons to do so

Miller v. Miller and McFarlane v. McFarlane

court established that fairness comprises 3 strands:

• needs

• equal sharing

• compensation

needs (strand of fairness)

both parties’ reasonable financial requirements remain the baseline priority when dividing assets, even if it exceeds strict mathematical equality

(equal) sharing (strand of fairness)

while the standard benchmark for dividing material assets is 50/50, fairness may require adjustments depending on the duration of the marriage & the sources of the assets

—> no equal sharing if one of the spouses made a stellar contribution to the marriage

compensation (strand of fairness)

a party may suffer a relationship-generated disadvantage (e.g. sacrificing a career to raise a family) —> ongoing financial support can be granted to com