All entries for Saturday 27 March 2010

March 27, 2010

Assessment III – Mistake and Misrepresentation

Comparing the solutions to problems of mistakes made in contractual terms and in the formation and expression of the volitions of the parties given by different legal systems is indeed complicated as conflicts are not dealt with under the same legal figures.

The vices de consentement of the French Code Civil are erreur, dol and violence. These figures can be compared quite easily to the cases considered by the authors of the German BGB: erreur being Inhaltsirrtum, dol -the provoked error- being Irrtum aufgrund arglistiger Täuschung and the role of violence played by the dispositions of Drohung. With the exception of the concept of the Erklärungsirrtum that doesn`t find its pair in the Code civil. So other legal systems can do without the German purely juridical, not psychologically justified, construction based on an artificial distinction between Erklärungswille, Erklärungsbewusstsein and Handlungswille. Having always had difficulties with the juridically correct determination of cases of Irrtum, it feels like foreign lawyers would finally give me the consent that the mentionned German classification is to be abolished.

As pair for erreur and Irrtum (which one ? ;) ) there is the institution of mistake in English law. And as French law contains fraude/dol and German law arglistige Täuschung, there`s fraudulous misrepresentation in Common Law. But how does English law deal with forced expression of volition? I think that declarations induced by threat or violence could never be considered as being susceptible to form a valid contract, because this is fundamentally contrary to the principle of contractual liberty implying logically the free expression of volition. As Common Law emphasizes contractual liberty and autonomy, there is the concept of "duress" meaning that if a person was forced to enter a contract, he or she was not bound by it.

The real problem lawyers in all legal systems face is that there is no certainty about whether human beings do have a freewill or not. Though legal systems -from the idea of democracy over criminal law to contract law- are based on the presumption that there is such a thing as a freewill. This presumption is a practical necessity for the functioning modern social organisations. The same applies for rules of mistake/misrepresentation. They are required to facilitate inter-human relationships (there`s a human behind every legal entity).   For the same reason of the object of  well-functioning society rules tend to aspire to relative justice between the parties. Modern legal systems fulfill these exigencies. There might be different solutions to individual legal problems between the French, English and German system, but there`s coherence between the entireness of norms of each legal system. A norm appearing to induce a lack of justice is compensated by the interference of another legal disposition, always creating relative justice between humans no matter which nationality the parties are and no matter if it`s English, French or German law that applies. Examples can be find by considering the interplay of all the norms of the BGB that is famous for its systematic interaction of rules and then also by placing the BGB in its jurisprudential context adding adequate interpretation of terms. Examples about how to find relative justice by combining norms of different national legal systems are the compromises suggested in PECL or UNIDROIT.

The conclusion is that a to a certrain degree objective approach as to the evaluation of the behaviour of persons is indispensable in order to obtain legal security. This might in some cases lead to a person being bound to terms he or she didn`t mean to agree upon. But in my opininion extreme subjectivism carries more risks as to legal security needed to found a stable economy, source of wealth of a society. Let aside the impossibility to determine without doubt if a person really wanted (to declare) something or not and if yes, what. But concerning the case where one party is mistaken and the other does not know it, I wouldn`t favour the very objective approach of English law saying that the mistaken party was bound. Here I would prefer the German solution allowing the mistaken party to void/anfechten the contract and putting into place the mechanism of an obligation compensate the other party for her reliance losses (unless the other party ought to have known of the mistake). The BGB is a highly sophisticated civil code covering nearly all eventual cases, unfortunately to the detriment of an easy reading and understanding of the text.


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