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26 Cards in this Set
- Front
- Back
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General principles of German contracts
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Unwritten principle: Freedom of contract
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Contracts: Good faith
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A obligor needs to be in good faith when he enters into a contract
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Requirements for a contract to be valid
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Offer: (in bgb)
- declaration of intent - offer is binding - offer expires if not accepted, otherwise due time Acceptance: - acceptance of the whole offer, if not seen as new offer |
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Legal capacity
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Needs legal capacity to enter a contract (BGB)
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Form requirement
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None, according to German Law
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Agency: Three preconditions (§164)
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-own declaration of intent
- in the name of a third party - with power of attorney |
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Agency: statement
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The agent has to state that he works on behalf of someone else, if not the agency is not valid (§164, 2)
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Power vs Authority (IMPORTANT)
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Power: (frame) abstract legal ability to act on behalf of another person
Authority: (content) principal consent to tak a spesific action |
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Power of attorney: two situations where proxy can bind principal, even if he doesn't have the necessary POA
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1. POA by tolerance
- original POA revoked - Agent continues - Principal knows it, doesn't do anything with it 2. POA by appearance - Principal would, using ordinary care, could have discovered and prevented the Agent from acting, given that the third party trusted that the A acted on behalf of the P |
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The self contract rule
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A may not enter into a contract with himself §181
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POA by operation of law
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Created for persons who can not make own POA (for instance legal person etc, because the trustee and trustor would be the same
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General business conditions
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Mainly three functions:
-Rationalisation and efficiency - Filling the gaps the statutory law doesn't cover - Divertion of risks But: risk of the stronger party dictating the weaker one. Hence §§ 305-310 limitations |
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Rights in rem
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Eiendomsrett
- a right competent or available against all persons - physical objects or rights |
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Rights in rem under german law
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Ownership
Servitude Usufructus Pre-emption right Land charge Mortgage Pledge |
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Most powerful right in rem
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Ownership: absolute and generally unlimited right of dominion
The owner can dispose the thing in whole(transfer of ownership) or grant a limited right |
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GP: Principle of absoluteness
(IMP!) |
ownership brings absolute and generally unlimited right of dominion over a thing. Under G law, ALL rights in rem are considered absolute rights.
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GP: Principle of public disclosure (IMP!)
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requires that a transaction of a rights in rem is recognisable by a third party, either by posession (movables) or registration (immovables)
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GP: Principle of speciality
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a transfer of a right in rem must be specified as regards to what is transfered
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GP: Principle of abstraction
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Two levels of legal transfer of rights in rem:
1. Obligation: refers to the creation of the contractual obligation, e.g. those duties the parties have to fullfill vis-a-vis each other 2. Transfer: of a right is a separate contract this time a contract about rights in rem The two contacts must be STRICTLY distinguished! Hence, a transfer of a right in rem can be valid irrespectively of an valid underlying obligation. |
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Unjustified enrichment § 812
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Gaining something without legal cause for doing so:
1. someone must have obtained something 2. by virtue of performance 3. without legal cause 1. Subject can be: - any rights in rem - claims - contractual rights - posession or, - legal appearance in a public register 2. Virtue of performance: -act of will 3. Without legal cause - absense of any objective justification for the shifting of the asset in question |
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Difference between Pledge and Security assignement
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Pledge: only hold, do not own. MUST HOLD
Security assignment: becomes OWNER, must not hold |
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Types of securities: Security in rem
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- security with an underlying real value
- safer than security in personam |
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Types of securities: Security in personam
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- linked to a person (N/L)
- only effect against the party granting the security |
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Types of securities: Atypical
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- letter of credit
- letter of comfort - close out netting (set off) - negative pledge |
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Security over movables
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1. Retention of title § 449
- secure payment by withholding the title to the object until payment 2. Security transfer - transfer ownership from a security grantor to a security trustee - legally it gives the ST right to: a. realize the object upon default b. obligation to re-transfer the right when the debtor has paid in full |
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Pledge over movables: § 1206
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- delivery of the thing to the creditor
- agreement - authority of pledge - secure "claim" |
