All entries for March 2010

March 30, 2010

Assessment VI – Unlawful Threat

I like the approach of the BGH in the judgement of the 23rd September 1957 "The threatened wife" in determining constitutive elements of unlawfulness of a threat allowing to avoid a contract under § 123 BGB. The BGB reasons according to the very German principle of proportionality (Verhältnismäßigkeitsgrundsatz) in taking into account the values of both sides: the interests of the person whose freedom of action has been taken away and the Schutzbedürftigkeit (extent to what a person deserves protection) of the party issuing the threat. The Court also states that all circumstances which chartacterise the events which occur have to be taken into consideration. There is no rigid definition of the term unlawful threat. There are rather indices that may characterise an unlawful threat. The terms given by the BGH need further interpretation are are flexible to adapt to the actual public opinion. For example the reasonableness of the threat has to be seen "in the view of all fair-minded and right-minded persons". "Considerations of public policy" play a role rather than the question whether the legal order confers an enforceable right to the threatening person or not. Unlawful means contrary to bonos mores (morality). I think that these guidelines allow a case-to-case approach which equates to the Common Law. Thanks to the fact that the definition of "unlawful threat" underlies the content of the actual morality of the society and depends on all unique elements of a case, legal uncertainty arises to some degree, but there is also an important chance to achieve justice between the threatening and the threatened party.

--------end of assessment V entry-------------

Mothers and children 1950 and 2010

The case "The young mother" decided by the BGH on the 14th of June of 1951 illustrates how a threat issued by parents against their pregnant daughter can be seen to be relativised by other person`s influence on the threatened person. And how a temporal difference of two weeks between the threat and the signing of the declaration can be the the reason to distinguish an action under § 123 BGB. I agree that in general if there is a laps of time between the two events, one might doubt the causality. But I would critisize this judgment on the basis of wrong evaluation of facts. Because a threat of this nature once spoken out by the parents does not cease to have effects on the daughter during the course of two weeks. In reality the pressure continues until the reason for the threat disappears (the abortion or adoption of the child) unless the parents change their opinion fundamentally.

However, my principal critic against the case is another, although it leads away from the original subject: The question whether the declaration to give the child free to adoption can be avoided or not due to unlawful threat issued against the mother is not the important point (though it is for the sake of an example of where there is no causal unlawful threat). What counts is the well-being of the child! Even if there was unlawful threat and causality, the child would eventually not be returned to the mother. What makes cases where children are involved so complicated is that even the natural principle saying that a child belongs to its biological mother ceases to be an absolute, imperative principle. Morally it seems unholdable to deny a mother the wish to raise her child. But what if the child has already lived for the first couple of months or years with other persons who the child regards as his or her parents? Such an emotional rupture as the complete change of the child`s keyperson in the early childhood can be as cruel as for the mother to renounce her child. The main objective should always be the well-being of the child and not the enforcement of adults`rights (neither the rights of the biological mother nor those of adoptive parents).

The case makes me think of today`s version of "The young mother": the affair "Baby Donna". A conflict between the biological mother, the couple that had been promised the baby and that had given the sperm and the couple that was going through the adoption procedure after having bought the child from its biological mother. This is an interesting case for international civil lawyers in which the norms of Brussels I about juridictional competence play a role as the parties are of different nationalities of the EU (Dutch and Belgian). "Baby Donna" is also interesting in the sense of comparative law. The case shows how citizens of the European Union benefit of their fundamental freedoms in order to derogate more restrictive norms of their Member State of origin and take the advantage of more liberal laws of another Member State. If it is difficult to find common principles of contract law, it is almost impossible for the Member States to agree upon common principles of family law. This is because family law depends directly on the cultural form of a state, on its traditions and morality and historical relationship to the church. Therefore within the EU there is a wide arrange of different legal dispositions -opposing for example conservative Italy and Ireland on the one hand to the liberal Netherlands on the other hand- as to homosexual marriage (NL), abortion (prohibited in Ireland), carrying mothers, in-vitro-fertilization, anonymous accouchement ("accouchement sous x" in F), Babyklappenregelung (D). 

Leaving the European frame international comparative family law shows that adoption is prohibited in Islamic Law. At least formally because some scholars think the Qu`ran prohibits it. But adoption does exist in practice. Only not in the form of a European adoption where the child`s familiar rootes are completely replaced by the relationship to its adoptive family. The Qu`ran requires to maintain the original identity of the "adopted" child, mainly its name, as far as possible.

March 28, 2010

Assessment V – Critics of the Doctrine of Gentleman Agreements

Refering to the ICP-presentation about the English concept of Gentleman Agreements, these are agreements that are no contracts. Often because they are not precise and clear enough. Sometimes they seem to be performed without any words spoken by the actors. According to the presentation, there is no written document.

In my point of view (conform to the French and German legal system) the fact that there is an agreement means that there IS a contract. The written form or any other criterium of behaviour of the parties is not required for the existence of a contract. It seems obvious to me that there is a contract determining precisely the obligations of the parties, otherwise they wouldn`t act in the way the other party expects him or her to perform.

In my opinion the problem is not that the agreements are not clear enough and that there`s no written evidence for the contract, but that in most of the cases the object of the agreement is of such a nature that a state does not want it to be executed. This might be the case for daily life promises between familiar persons, where a state doesn`t want to intervene due to the privity of the affair and/or because of the triviality of the content of the contract. The rest of the so-called gentleman agreements are not wished to be qualified as executory contracts on behalf of the illegality of their object. Taking the example of a contract about dealing smuggled diamonds against arms, I wouldn`t say that there is no contract because the acting parties behave in a dubious manner that isn`t clear for an objective observing third person. I would say the simple reason why there is no valid contract is that the agreement is about an illegal deal, hence an affair that a state doesn`t want to be executory but prohibited if possible. The same is true for agreements between huge supermarket chains fixing identical prices for products. This is not a non-contract because its hidden. It is rather a contract that is void because it infringes laws prohibiting price-fixing.

I prefer identifying things as what they are as far as possible, therefore I dismiss the concept of gentleman agreements as far as it denies the contractual character to agreements that are clearly contracts fulfilling requirements as the essential elements offer and acceptance and a very French certain object but also, refering to the Common Law, consideration/ quid pro quo. Their only failure consisting in being in its essence against the law or more directly spoken against the volition of the state.

My approach is consequently applied positivism. As problems that so-called failed-states with unjust norms, suppression and violence against humans, may present are not solved by denying their character of a state, deals with immoral content do not vanish by refusing naming them contracts. The existence of law and legal structures should be determined in a scientifical, moral-neutral way.

Assessment IV – Good Faith/ Culpa in Contrahendo

(Led by the suggested questions about the subject of Good Faith...)

1. Why might the judgment of the ECJ Tacconi v Wagner (C-334/00) have only limited impact for the purposes of substantive law?

The question raised by the Corte Suprema di Cassazione in the reference for a preliminary ruling of the ECJ is about the classification of an action for pre-contractual liability under the regime of Brussels I. In Tacconi v Wagner the application of either art. 5.1 or 5.3 of Brussels I determines the competent jurisdiction, either the courts for the place where the harmful event occurred or the courts for the place of performance of the obligation in question. This means that either the Italian court, that happens to be the court of the domicile of the claimant, or the German court, here also the court of the domicile of the defendant, is competent to judge in the subject matter.

For the purposes of the main proceedings, the answer to the above mentionned legal question should not be decisive for the outcome of the substantive conflict between the parties (unless the judges would apply the applicable law in a discriminative way, for example in favor of the party of their nationality) because it only determines the competent jurisdiction, but not the applicable law on the original litigation concerning the obligation to deliver the moulding plant.

2. In contrast, the reference to Rome II might be conclusive for the outcome of the conflict between Tacconi and Wagner, because Rome II determines the law applicable to non-contractual relationships. (Whereas Rome I does not play a role in Tacconi because it applies to contractual relationships). And the solution to legal problems depends on the applied law rather than on the competent jurisdiction! Article 4.1 of Rome II says that the law applicable to a non-contractual obligation arising out of a tort/delict (and the action for pre-contractual liability in Tacconi has to be qualified as such according to the preliminary ruling of the ECJ) shall be the law of the country in which the damage occurs. The applicable law would be the Italian one. But even Rome II might have a limited impact on the case, because of the similarities of Italian and German law in the area of pre-contractual liability:

"In Italian law Article 1337 of the Codice Civile contains a specific provision governing pre-contractual liability. Parties must act in good faith during negotiations over and the formation of a contract. A party who breaks off negotiations without just cause, having created an expectation that a contract will be entered into, is liable for the negative contractual interest. Fault is not required.

In German law a party who culpably breaks off negotiations without just cause or on irrelevant grounds, having created an expectation on the part of another party that a contract will certainly be entered into, is liable for the negative contractual interest. Usually the liability is based on the doctrine of culpa in contrahendo: a party who suddenly breaks of negotiations is liable for the culpable non-fulfilment of the obligation to take account of the other party's interests. Therefore, in German law almost the same criterion applies as in Italy, except that the requirement relating to fault has a role to play" (see paragraphs 59 and 60 of the Opinion of Advocate General Geelhoed in the litigation).

In contrast to the Common Law there is a doctrine of Good Faith in Civil Law systems, namely in Italian and German law that show many similarities as both derive from Roman law.

Interestingly Rome II also contains para. 30 of its preamble saying that culpa in contrahendo is to be treated as an autonomous concept and should not necessarily be interpreted within the meaning of international law.

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.

March 2010

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