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Business Law_course 0_Introduction

OCT - 12 - 2013 C.Stoica, Dreptul afacerilor – Contracte, Editura ASE, Bucureşti, 2012; S.Cărpenaru, Tratat de drept comercial român, Ed. Universul Juridic, Bucureşti, 2013; R. Dimitriu, Romanian Industrial Relations Law, Ed. Intesentia, 2007; S.Angheni, M.Volonciu, C.Stoica, Drept comercial (curs universitar), Ed. CH Beck, Bucureşti, 2008; C. Lefter, R. Dimitriu, O. Maican, Civil Law, Ed. Economica, Bucureşti, 2000; F.Baias, E.Chelaru, R.Constantinovici, I.Macovei (coord.), Noul cod civil. Comentarii pe articole, Ed. CH Beck, Bucureşti, 2012

Business law_course 1_Legal Rule
OCT - 13 - 2013 LEGAL RULE THE STRUCTURE OF A LEGAL RULE Each legal rule has an internal structure named the formal-logical structure and an external structure called the technical-juridical structure. The formal-logical structure of a legal rule This structure shows the internal parts of a legal rule and their aims. Thus, any legal rule, usually, has three parts or elements of structure, as follows: a) the hypothesis. It is the part of a legal rule that describes the circumstances when a certain behavior is requested. The hypothesis can be determined – when the circumstances are very detailed or indefinite – when the circumstances are generally provided. b) the provision or command. The command is the substance, the core of the legal rule. It prescribes what the person, the subject of law shall do under the circumstances provided for by the hypothesis. Taking into account how precise the behavior provided for by legal rule is, the command might be absolutely determined or relatively determined. The command is absolutely determined, for example, when legal rule refers to an action or to a non-action, such as: “the merchants should be incorporated”, “the seller is obliged to warrant the buyer”, “the judge is forbidden to” The command is relatively determined when legal rule allows the subject of the law to choose his own

behavior, such as: “the owner may take any appropriate decisions”. c) the sanction – It is a part of a legal rule that specifies whose are the consequences in case of the non-observance of the rule’s command. It means that this part of the internal structure of a legal rule specifies the penalties the judge can take against those who do not comply with the rule’s command. According to the determination rank the penalty can be: - absolutely determined – in this case the judge cannot modify it. For example the nullity of a contract; - relatively determined – in this case, law provides for a minimum and a maximum limit of the penalty and the judge might choose the concrete penalty in accordance with the gravity degree of the fact, the perpetrator and his relapse into crime status. E.g. “the fine is from 100.000 up to 5.000.000 lei”, “the penalty is prison from 2 up to 5 years”; - alternative penalties – in this case the judge might choose between 2 penalties, such as prison or criminal fine; - cumulated penalties – in this case law provides for two or many penalties for a specific crime, such as prison and withdrawal of rights (e.g. loss of parental authority or loss of associate right). It should be mentioned that it is not necessary for a legal rule’ to have in the same article of law all these three parts together. Frequently, the hypothesis or the sanction of a legal rule can be included in another normative act, or in another article, but the legal rule cannot ever be deprived of its command. The technical-legal structure of a legal rule Legal rules are usually included into normative acts, the so-called laws, governmental decisions, ministry orders, and so on. Any normative act is divided into paragraphs, articles, sections, chapters, titles, parts or books. The main element of this structure is the article. As it was mentioned above, it is not necessary that all the three elements of structure of a legal rule belong to the same article. More frequently an article can include many legal rules or a legal rule may be included in many articles.

THE CLASSIFICATION OF THE LEGAL RULES
Due to the fact that a lot of legal rules apply within a specific moment in time and in a particular state, it is important to find out which are the main features of each category of legal provisions. Thus, different criteria are used to classify the legal rules, as follows: A) According to the object under settlement, there are as many legal rules as branches of law are. Thus, there are constitutional legal rules, administrative legal rules, civil legal rules, labor legal rules, etc. B) According to their juridical force, the legal rules form a hierarchic system similar to the hierarchy of

the state bodies which adopt them. Thus, in the top of this hierarchy there lie the state Constitution and other fundamental laws, further, there are ordinary laws and decrees and then decisions and government orders, and finally ministry’s orders and instructions. This hierarchy has a great importance when there are, and usually this is the case, many legal rules adopted by different state bodies for the same field of social behavior. In this case, a well-known principle is used to solve any possible confusion: the legal rules endorsed by the superior state body have priority to apply. C) According to the behavior’s character requested, the legal rules can be classified as imperative rules and disposal rules. 1) The imperative rules are those which require a specific action (imposed rules) and those which forbid a specific action (prohibitive rules). We emphasize that it is not possible to depart from imperative legal provisions and law forbids any contrary agreements as well as any restrictive interpretation. a) The imposed rules are those which expressly provide for the obligation to do something, e.g. “the seller has two main obligations, to deliver the goods and to be responsible for it” b) The prohibitive rules are those which forbid a specific action, e.g. “the judge is forbidden to pass general provisions through his rulings. 2) The disposal rules are those which allow the subjects of law to choose their behavior. These rules can be : a) permissive rules which allow the subjects of law to choose from the options provided for that one which fits better to their interest, e.g. “the landowner may build or till on his land anything he wants to. b) suppletive rules which allow the subjects of law to choose their behavior and if they do not, the provision of law applies, e.g. “the agreements legally concluded have the force of law between the contracting parties” D) According to the extend of their application, legal rules are general rules, special rules or exception rules. 1) The general rules apply either within the entire system of law or within one of its branch, as being the greatest comprehensive rules; 2) The special rules have a limited sphere of application, according to the specific criterion or the qualities of people. It should be noted that there is a close connection between general and special rules. Thus, sometimes a rule can be called “general” rule as compared to a second rule, or “special” rule as compared to a third one. This classification appears to be very important when two legal rules have equal vocation to apply. In this case, always the special rule has priority to apply. 3) The exception rules allow the subject of law or the judge to depart from a general or a special rule and thus their interpretation and application is very strict.

This will forms the core of the legal rule. 2) Reference rules – which do not have all the elements of their formal-logical structure and for the missing parts they send to another normative act. we should emphasize that because of the wide variety of real situations a legal rule. other meanings than those of current speech. THE INTERPRETATION OF LEGAL RULES The interpretation of a legal rule is a logical and reasoning procedure to understand and to explain the content and the real sense of a legal rule. The real situation is the dynamic element of our analysis because specific cases come out in real life. the interpretation is necessary each time when between different normative acts or different prescriptions of the same law contradictions arise. The interpretation’s content deals with the human judgment to understand the legislator’s will. because the legislator cannot describe in detail all the social situations. Finally. when we compare a real situation with the provisions of a legal rule. he frequently uses general terms to protect the person’s rights and that is why the interpretation is more than necessary. the latter appears to be a static element versus a dynamic one. The forms of interpretation According to its juridical force the interpretation can be: . The interpretation is important in order to have an accurate application of the rule to a real situation. from the legal point of view. the interpretation is always necessary because the words may have. but the missing elements will be completed in the future through another normative act. The interpretation is a mind’s work that allows us to understand through the words used by law the legislator’s spirit.E) According to the technique used for their drawing up. The interpretation’s goal is to collect by frame a real situation to the legal provisions in force and thus to make a rightful application of law. The interpretation’s necessity Firstly. 3) Blank rules – which also do not have all the elements of their structure. the legal rules can be classified as follows: 1) Complete rules – which have all the three elements of their formal-logical structure. Fourthly. Secondly. Thirdly. That is why the legal rule cannot take into account all the actual and possible situations. even if it is perfect. his ideas and his aims. it cannot regard all of them. This is why the interpretation is a preliminary step for the application of law.

1. B) The extensive interpretation. It should be mentioned that the interpretation rule has the same juridical force as an imperative rule has. which has this ability under law. the government and the courts of law have this competence. Therefore. the so-called casuistic interpretation. Actually. the so-called “lex ferenda” proposals given through the nonofficial interpretation may support the improvement of law. tribunals. This is given by the judicial organs (courts of law. The legislative state body. C) restrictive interpretation. means that the content of law text and the practical issued solution are identical. Non-official interpretation. the interpretation can be: A) literal interpretation. means that by comparing the content of a legal text and the practical issued solution. 2. From the juridical point of view a judicial judgment (decision or verdict) is compulsory only between the litigation’s parties. 2. A) The literal interpretation. has compulsory power only in the concrete case stand for judgment. gives this form of interpretation. which enacts the legal rule (parliament. We emphasize that this kind of interpretation cannot be used: . government or ministries). The official interpretation. this kind of interpretation. courts of appeal or the Supreme Court of Justice) when they judge concrete cases. can be: A) legal or authentic interpretation. At the same time. Persons who do not act as representatives of a state body give the official interpretation. official interpretation. the Parliament. but may help them towards a unitary application of law. As far as its legal force is concerned. non-official interpretation. B) extensive interpretation. the so-called interpretation “to the letter of law”. The official interpretation is given by the state organ. this interpretation does not bind the judges. B) judicial interpretation.when law’s text gives limitative enumeration. the so-called interpretation “to the spirit of law”. on the other hand. According to the result obtained through interpretation. . 1. it appears that the legal rule covers much more cases than the legal text shows.

very often. The grammar interpretation takes into account the meaning of the words (the sentence’s morphology) as well as the content of the sentences and the syntactical position of the word (the sentence’s syntax).when law’s text provides for exceptions. accurate and precise. 1) The grammatical interpretation As we mentioned above. These means are the so-called methods of interpretation. 3) historical interpretation. 2) systematical interpretation. Thus: . should be well known by the addressees and should help them to understand the legislator’s will. Therefore. But. and thus the rule’s command has to be understood by the addressees. the legislator includes in a legal rule the state will. subjects of law. there are frequently used different methods of interpretation in connection to one another. the text of a legal rule does not fit these requirements. C) The restrictive interpretation. means that comparing the content of the legal text to the practical issued solution. There is not any hierarchy concerning these methods either.. law uses different means than other sciences. as far as the result of interpretation is concerned. 4) logical interpretation. According to the methods used: With the view to its interpretation. without ambiguities.when law’s text establishes presumptions. It also has to allow a simple and common understanding and to be written in a concise style. The methods of interpretation are the following: 1) grammatical interpretation. the so-called interpretation “to support law”.the words are used with the common meaning they have in the usual speech because “law’s language should be the addressees’ language”. That is why the legal rule has to be clear. It should be noted that. The rule’s command is expressed by words linked together in clauses and sentences. we can interpret the legal text according to grammar rules. using the morphological and syntactical analysis. The words used to form the content of a legal rule should belong to common speech. . it appears that the legal text is more broadly formulated than the real intention of the legislator was. It should be emphasized that the meaning of a specific word is the .

the interpreter should analyze the concrete conditions which have been determined for the endorsement of law. even if the word is common. “movable”. Thus. the purpose of interpretation is to support the application of law. 3) The historical interpretation According to this method of interpretation. “ubi lex distinquit. b) nobody can limit the application of a legal rule because its general wording. In a similar way. . nec distingeure debemus”: It means that. “to give” commonly means to hand over something. an exception rule applies only under a specific hypothesis it cannot be extended to other cases with different conditions. “to pay”. c) a legal rule has to be interpreted in order to apply not to remove its application. but general law cannot ever derogate from special law. law was adopted in order to produce a juridical effect. fatherhood. such as divorce. special law (lex specialis) is the exception. we can settle the relation between general and special laws. and general law (lex generalis) is the rule. etc. In other words.dictionary meaning and not the ordinary. the . “payment”.sometimes. . Using this rule. For example: “the creditors may exercise all the debtor’s rights or actions. such as: explanatory notes. “to pay” usually means to give an amount of money.: “to give”. “legal person”. law itself explains the meaning of specific words.when it is necessary. Special law always derogates from general law. If that effect cannot clearly occur. It means that. 4) The logical interpretation In order to explain the meaning of a legal rule. etc.g. local meaning. 2) The systematic interpretation According to this method. Thus. this method of interpretation uses the rules of formal logic and its system of reasons. while from legal point of view it means to execute an obligation (having as object either an amount of money or the handing over of goods). such as : “living place”. except those which are exclusively personal”. . in order to understand the content of legal rules. a general wording implies a general application. the parliamentary debates within the Senate or the Deputies’ Chamber. Theoretically. The best known logical rules of interpretation are the following: a) the exception has a very strict interpretation. while from legal point of view it means to transmit a real right as the ownership right. from the logical point of view. e. etc. the interpretation of law has to take into consideration the existing connection between different legal rules or different normative acts referring to the same object under settlement. “floor space”. the meaning of the word may be specific for the juridical field.

the Latin said “tertium non datur” or “qui dicit de uno. This argument is used in order to extend the application of a legal rule to an unknown case. the judge should take into consideration the spirit of law and not the law’s words. no matter its form. For example. d) The argument of “reductio ad absurdum”. commercial law does not have compulsory provisions regarding the minimum amount of the register capital for some private companies as sleeping partnerships or general partnerships. we should understand that sleeping partnerships and general partnerships companies should have a certain capital. it will be interpreted in order to have an effect. The establishment of a legal rule . meaning that “A cannot be A and non-A at the same time”. Nevertheless. That does not mean that this kind of companies do not have any capital requirements. Indeed. Using the above-mentioned argument. that we can depart from laws that are not related to public regime. no matter who is called to judge the trial (litigation). but its amount is not imposed by law and thus may vary according to the partners’ will and their financial possibilities. negat de altero.adoption of law is senseless. 3) The argument “a majori ad minus”. the labor rights are also guaranteed by Constitution. using the argument ad absurdum. anytime when a specific command is provided for by the legal rule. In this situation. in order to interpret legal rules. potest minus. This argument applies the rule of a third party’s exclusion. the Constitution guarantees the fundamental citizens’ rights and thus. must have a capital in order to fulfill its commercial activities. it should be mentioned that this argument has a relative value because the silence of the law is not always equal to the opposite command. The most frequently logical arguments are: 1) The argument “per a contrario”. or in other words. not in the sense it cannot have any effect”. In this case. it should solve the case according to the existing legal provisions. court of law or arbitration tribunal. This argument means that those who can do more can do less. In this respect. In other words. For example: “it cannot depart from law of public regime towards contracts or specific agreements”. the opposite command is denied. qui de uno negat de altero dicit”. any company. it means. For example. For example: “when a contract clause has two meanings. qui potest plus. per a contrario. This argument is based on the fact that among the different meanings of a legal rule there should be used that one which suits better to the rule’s aim. Another example: “the future litigation between parties will be solved according to law” – it means that. according to the provisions of commercial law. 2) The argument “a fortiori rationae”. d) Besides these logical rules. the logic interpretation uses logical arguments. which has similar conditions with the case provided for by the legal rule or belongs to the same category of cases. in spite of the fact that there is no direct solution for the case under the application of a legal rule.

The conditions of shape and content of a legal act are studied by civil procedural law. It appears that in order to have a correspondence between the state will and the society’s reality.To settle a legal rule means to identify that legal provision which suits the above-established reality and to select that rule which should apply to the present case. Grounded on all these three approaches. the application act will be issued according to the condition of shape and the content provided for by law. the living conditions within the society change every day. . The difficult process of framing a legal rule to a real situation is named “juridical qualification”. . This is why the legality is the second condition of the validity of an application act. legal rules adopted hundreds years ago for regulating the relationships between the king and his subjects. Indeed. it is necessary to modify the legal rules according to these changes. On the ground of the proofs presented to him.The application of law in time As it was mentioned above. 3. in Romania. As soon as the solidity and the legality of the act are pointed out. it is senseless to apply to day. 2. the application of law to people 1.certain persons to whom law addresses its commands. the human behavior requested by state is different in time and the society’s development implies new legal rules.a certain period of time when a particular law applies. . the application of law in space. The application of law When we speak about the application of law we usually take into account three main factors which limit our judgment. not the same throughout the years. An application act based on an accurate judicial qualification is named “legal act”. they are.a certain territory where a particular law applies (because law is always national and there are as many different laws as states are). the application of law in time. These factors are: . The application act must be the result of a logic and scientific process made by the judge. And thus. The application act cannot be mixed up either with normative acts (which express the state will) or with acts (which express a private will). it is frequently included within the application of law the following topics: 1. the judge has to make a correct application of those legal rules appropriate to the case and to issue a legal and justified solution (judgment).

law is sent to the President for enforcement. The enforcement of law is the last stage of the so-called “decision-making process”. to establish the moment when a law begins and ends its application. law enters into force on the date of its publication in the Official Monitor of Romania (the Official Monitor of Romania is the only means of legal publicity in Romania) or on a further date expressly mentioned within the content of law. theoretically. a particular law has to be changed. prepared by the ministers or other state’s bodies or political parties is forwarded to the Parliament in order to be adopted. the enforcement of law means that the President signs the draft of law as it was approved by Chambers and orders its publication.Nevertheless. Thus. law applies from the moment it enters into force until it no longer applies (it ends its application. At the Parliament level. as it will be explained further. It should be also emphasized that there can be a difference. . law is sent back to the Chambers for further discussions. In the respect of its application. From this point of view. In fact. according to the law’s field. no matter in what way). because its legal provisions do not correspond any more to the society’s development. law which is in force should be applied”. nobody can say when. law will be changed whenever it is necessary. a plurality of laws may coexist in a certain space. It means. If the form of the draft approved by each Chamber has the same content. a) The law’s entering into force According to the provisions of Romanian Constitution. At this moment. This process begins when the legislative draft of law. Thus. in time. the draft is subject to the Chambers (Deputies’ Chamber and Senate) discussions. We should also emphasize that at a particular moment. the issue here is to ascertain the period of time when law is in force. first of all. These moments are frequently not the same. as a certain moment in time. Secondly. For state’s bodies or private persons it is very important to know which laws apply at a particular moment. between the moment when law is adopted and the moment it enters into force. the draft is discussed and approved. by the specialized commissions of the Parliament. law can enter into force only after the President of Romania enforced it. The President may enforce it or may reject it. the principle is very simple “at each moment in time. the draft may be amended and goes back to the specialized commissions for a new approval or may be approved by each Chamber. but law is not in force forever. Thus. because the applicable law will be the measure of their behavior. In this latter case.

the application of law in space is governed by the principle of territoriality. From this pointy of view. it can be express or implicit (tacit) abrogation. 2. its laws cannot apply beyond its national territory. but the result is always the same: law ends its application. as well as the continental plateau of the sea and the territorial sea (12 miles)”. law applies only on the national territory. there are laws with general application (such as Constitution or civil code) and laws which apply only to specific persons (Law no. we emphasize that the application of law is always national because. as it was mentioned above. It means that law applies equally to all persons regardless their sex. In addition. The express abrogation. The indirect express abrogation occurs when new law specifies that “all legal rules contrary to that new law are repealed”. it means that people are equal in front of law. . we should remember that a special state body empowered with this task always adopts law. 3. according to the way the abrogation occurs. We may have different kinds of abrogation. By the idiom “territory of the state” we understand “the area of lands and waters contained between the borders of the state including the afferent air space. The direct express abrogation occurs when new law mentions which laws or the articles of a particular law are repealed (abrogated).The application of law in space Speaking about where law has to apply. the legislative power of the state delegated to different state bodies express the state sovereign right to impose certain rules of behavior. without mentioning what old law is abrogated. The implicit abrogation occurs whenever a new law. However. because each state has its own national sovereignty.b) The end of the application of law The application of law usually ends towards its abrogation (or repeal). The abrogation is express when new law expressly specifies that the application of a specific law comes to an end.The application of law to people As it was mentioned above. has incompatible provisions with the latter. . But. the beneficiaries of legal rules are natural or legal persons. Usually. Firstly. taking into account its extend. Thus. Secondly. regarding commercial companies). and has to observe the sovereignty of other states. In other words. nationality or race. can be either direct or indirect. on the other hand.31l1990 republished. the abrogation is total or partial. that does not mean that law applies in the same way and with same limits to all persons.

2) goods with a restrictive circulation which are subject to a special legal security reasons. 1.1. ammunition. Following the regime of legal circulation. a. patrimonial or not.3. regime due to public b).Business Law_course 2_Legal Relation OCT . a). regulated by law. as a rule. The “goods off the civil circuit” are those which cannot be object of civil juridical acts. 2.2. Thus. There are “goods in civil circuit” all the goods that can be object of civil juridical acts. It means that there can be alienated or obtained through civil acts. Such goods can be object of any contract with no restrain.Definition The legal relation is a social relation. Object of Legal Relation 1) Classification of goods The classification of goods has more a practical importance than a theoretical one because it determines the legal regime that applies to different categories of goods. Elements of legal relation 1) the object of the legal relation – the behavior of the parties 2) the content of legal relation – the ensemble of rights and obligations 3) the subjects of legal relation – the legal and natural persons 2.5 para. Thus. such as: guns. there are goods in civil circuit and off civil circuit. Art.13 . 5 from Romanian Constitution “the goods from the public property are inalienable”. according to Art. The goods in the civil circuit are divided in two categories: a. Indeed. In this respect we can say that all the goods are in civil circuit if law does not expressly forbid their free circulation. all the goods are in civil circuit and law must expressly provide the exceptions. In addition. flammable materials.1) goods in free circulation.2013 LEGAL RELATION 2.2 . the goods belonging to public domain are usually out of the civil circuit.

materials coming from demolition of a construction. Based on the nature and qualification made by law. the right to have a firm or a trademark. picking. There are also considered movable goods the perpetual and lifetime revenues on the state or on the private persons. marble). demolition).540 This category includes certain immovable goods by their nature. 2. but which are considered by the parties of a legal act as movable by anticipation because they will become movable in the near future. . either those that are moving themselves. the use right or the pledge right). shares and other social contributions to the registered capital of a company. Indeed. Civil code expressly stipulates that ‘’The goods are movable or immovable”. there are considered movable goods by anticipation: harvests and fruits which are not picked up yet.from Law no.). the innovation right. law considers movable goods: real rights except the ownership right that have as object movable goods (such as the usufruct right. debt rights that have as object movable goods and the obligation “to do” or “not to do”. This characterization is based on a social and economic value criterion. Movable goods are classified as follows: a. have this “movable” character only through the will of the contracting parties who consider them as such. the goods are movable and immovable. In other words. The property right on them is indefeasible”. for third parties these goods are immovable but will become movable by separating them from the background (cutting. Moreover. Similar. the right of industrial property (such as the inventor’s right. bushes attached on roots. they are incorporated in the object.3) Goods movable by anticipation – to Art. the shares and interests in financial. trade or industrial companies are movable goods even if their registered capital is made up of immovable goods. The shares and the interests are considered movable goods only in the respect of each shareholder or the partner and during the time of association. b) Immovable goods Immovable goods are those which cannot be transported either by their own energy or by a foreign . non-extracted products of a quarry (stone. a. the above mentioned goods. a. such as inanimate things. such as animals or those that can be moved with the help of a foreign force. It should be emphasized that. etc.2) The goods movable established by law are those considered movable based on the object they apply to.18/1991 stipulates that “the lands belonging to public domain are off the circuit if law does not provide otherwise. For example. There are movable goods established by law the bonds and the shares that have as object due amount of money or movable goods.l) The goods movable by their nature are those which can be transported from one place to another.

such as the windows.actions regarding the nullity of alienation of a building. This relationship can be established either when the movable goods are affected . If we take into account the fact that the earth is moving all the time.real rights excepting the ownership right (the ownership right is immovable by its nature because the right is confused with the thing). This category is provided by Art.. non-picked’ up fruits. the doors. In order to qualify goods as immovable by destination two conditions should be cumulated observed: 1) both goods (the building by its nature and the movable goods) should belong to the same owner at the moment the destination is established. harvest attached on roots. cancellation of a donation of building. uncut trees. There are immovable goods through the object they apply to the usufruct right of the immovable goods. According to 537 civil code “lands and constructions are immovable by their nature”. brake water. nothing is immovable. such as action of recovery of property. the resolution of selling a building. we emphasize that all the parts of a construction are considered immovable by their nature through their incorporation in the building or by their destination. By interpreting these legal provisions we emphasize that there are included into this category all the rights having as object immovable goods. 2) those two goods should have the same destination.actions regarding the evaluation of the real estate rights. It is the so-called “accessory relationship”. .538 It includes some movable goods by their nature but which can be considered immovable because they are designated as annexes for the service or exploitation of that building. the installations. At the same time.2) Immovable goods through the object they apply to. bridges. or mortgage action and the action for claiming a servitude. . the servitude right.debt rights regarding immovable goods which correspond to the obligation “to give”..energy.3) Goods immovable by destination. lawsuits for recovery of property. Thus: . b. It is usually admitted that the expression “construction” refers to all constructions or works built on the ground or underground such as warehouses. . channels. tunnels. it means that the movable goods follow the same juridical position as the immovable goods have. or petitory action of usufruct. etc.1) Immovable goods by their nature. Immovable goods are classified into: b. b. The legal provisions mentioned above also stipulate that the windmills or the watermills situated on pillars. vegetation stuck to the ground are immovable goods by their nature. accesorium seguitur principalem. the reduction of a donation of building. etc.

for the exploitation or service of the principal (immovable) goods or when it is materially or artificially attached to the immovable goods. There are immovable by destination: - goods used in agricultural operations, such as: animals used for harvesting, different instruments, seeds, animals dependent to the buildings as rabbits, fishes, water channels; - goods used in industrial operations, such as: tables, furniture, machines; - movable goods attached forever to the owner, such as: movable in cement or movable that cannot be removed without damaging them (mirrors, pictures, statutes) etc. This classification is important from the legal point of view because each of these categories of goods (movable and immovable) has a different legal regime. Thus: - the ownership right on real estate is submitted to special publicity which has as purpose to achieve the opposability of this juridical operation towards the third parties; - the alienation of real estate is strongly regulated (taxes, authentically act, registration in a special register, etc.); - the immovable goods can be mortgaged and the movables goods can only be pledged (with some exceptions: ships, aircrafts); - a real estate can be acquired through acquisitive prescription (possession), while the possession in good faith of movable goods is equal to their property right (Art. 928 Civil. code); - the place where the real estate is located determines the judicial court which has the competence to judge the lawsuits having as object that real estate (actor seguitur forum rei sitae). In case of movable goods, the judicial instance legal competent is that of the place of defendant (actor segiutur forum rei); - according to private international law, law of place where the real estate is located applies to immovable goods (lex rei sitae) while law of the owner of the goods applies to movable goods (lex personalis that can be lex patriae or lex domicilii). 3. According to the way used to determine them there are goods individually established (res ceria) and generally established (res genera). a) there are goods individually established, those which by their nature or by the will of the parties are individualized by specific features and characteristics (a certain car, a certain house, a certain watch, as well as all unique things). b) there are goods generally determined, those individualized by features corresponding to a class or category they belong to. These goods can be counted, weighed or sized, such as a certain quantity of

wheat, cement, apples. This classification is important for the following reasons: - the moment when the real right is transferred is different. Thus, in case of individually established goods, the real right is transferred at the very moment when the agreement of the parties was achieved, even if the goods were not transferred yet or the parties did not agree otherwise. In case of generally established goods, the real right is transferred at the moment when the goods was individualized or handed over. - the risk of the contract is differently supported. Thus, if individual established goods accidentally vanished before there were handed over, the debtor is exempted to hand them over. But, if the vanished goods are generally established, the debtor is bound to hand over other goods from the same category. - the place of delivery is different. Thus, the individual established goods must be delivered at the place where they were at the moment the contract was concluded, if the parties did not agree otherwise. In case of generally established goods, the delivery takes place at the debtor’s domicile because the debt is not payable at the address of payee. 4. According to the fact that the goods can be substituted or not where the payment of the civil obligation is concerned, goods are fungible and non-fungible. . a) Fungible goods are those which can be substituted for each other within the payment of a debt. b) Non-fungible goods are those which cannot be substituted for each other and therefore the debtor is not exempted from his obligation if he delivers another good. It should be mentioned that, the fungible character is determined either by the fact that the goods are generally established or by the will of the parties. Usually, the generally established goods can be always substituted for each other, while individual established goods cannot. This classification is important within the payment of the civil obligations. Thus, the debtor is exempted only if he delivers. to the creditor goods of the same good, but the debtor makes a valid payment only if he gives the exact individual established goods agreed upon. 5. After their quality to produce or not fruits the goods are classified into producing and non-producing goods. a) the producing goods are those which periodically produce other goods, the so-called “fruits” without consuming their substance; b) the non-producing goods are those which do not have the quality to produce other goods.

According to Art.548 Civil code there are three types of “fruits”: natural, industrial and civil fruits. - natural fruits are those produced by the ground itself (berry fruits, grass-land) as well animal breed (according to Art.548 par. 1 Civil code); - industrial fruits are those obtained by culture or by man’s activity(Art.548 par. 2 Civil code);

- civil fruits are: the rent, the interest of due amounts, the profits from rent or lease (Art.548 par. 3 Civil code). It should be mentioned that the fruits are not to be confused with “products”. The products are the benefits extracted from goods that consume their substance (marble, stone or sand from the quarries) – Art.549 Civil code. This classification is important because it explains in what way these fruits are obtained. Thus, natural and industrial fruits are obtained by picking them up, while civil fruits are obtained “daily”. The difference between fruits and products is important from the usufruct and possession points of view, as follows: - the one using the good is entitled only to the fruits and not to the products that belong to the owner of the goods; - the possession in good faith leads only to ownership right of the fruits but not of the products. 6. As far as the use of the goods implies or not their consumption, there are consumable goods or non-consumable goods. a) Consumable goods are those which consume their substance by use or are alienated at their first use. b) Non-consumable goods can be repeatedly used, without consuming their substance by use or alienation. From the legal point of view, the term “consumption” means not only material consumption but legal consumption as well (such as alienation or erasing from the patrimony). It should be mentioned that some goods are consumable by their nature such as the fuel or money. The other goods are not consumable by their nature, such as lands, buildings, and equipment. This classification is important for loan and usufruct. Thus, consumable goods can be only the object of the consumption loan contract (mutuum), while non-consumable goods are object of loan contract If the object of the usufruct is non-consumable goods, the one using the good must return to the owner the same goods and, at the same time, he is obliged to preserve their substance. 7. As far as the goods can be divided without changing their economic substance there are divisible and non-divisible goods:

there are principal goods and auxiliary goods. to co-ownership and joint property). not between goods. 8. This classification is important because it reefers to the acquirement of the ownership title. This is the case of all the rights provided for by law. we emphasize that tangible goods participate within real life only through the rights which are exercised on them. It should be mentioned that most of the things are generally tangible goods. The legal importance of this classification is reflected within civil obligations and conventional or judicial partition. This is why. debt rights or author’s rights. it is usually considered that the goods absorb rights (we do not say “I am selling the ownership right over a car” but “I am selling the car”. b) Non-divisible goods are those that cannot be divided without changing their economic destination. After their perception. Following the correlation between goods. Also. the bearer bonds are transferred by handing or delivery. by their destination these goods are attached to principal goods and support their use. Indeed. such as real rights. At the same time. Thus: . If the goods is not divisible. while registered shares are transferred by cession. b) Intangible goods have an abstract.a) Divisible goods are those that can be divided without changing their economic destination. 9.conventional or judicial partition applies to in case of common property (in fact.only the tangible movable goods can be acquired through possession in good faith or by simple delivery or hand over. Thus.securities can be transferred in different ways depending on their form. even if in reality all the legal prerogatives are alienated together with the car). ideal existence and cannot be touched with our senses. such as the immovable by destination are or the TV antenna. the goods are tangible and intangible. the bills payable to order are transferred by endorsement. a) Tangible goods have a material existence and can be touched using human senses. thus: . .in case non-divisible goods are object of an obligation relationship with more subjects of law (passive pluralism). b) auxiliary goods are those goods which help the use of principal goods. . In fact. this classification makes the distinction between rights and goods. a) principal goods are those that can be use independently. it is given either to one of the owners and the others are entitle to an additional payment in order to equalize their shares or it is sell in auction and the price is divided afterwards. . it determines a natural co-ownership.

etc. When the passive subject’s obligation is negative (not to do) its content is different from one juridical relationship to another. the debtor must pay for the principal goods together with the auxiliary ones. by “not to do”. Content of Legal Relation 1) Classification of Rights Absolute and relative rights a) The absolute right is that subjective civil right according to which the established owner has the possibility to exercise it alone and all the other persons have the general and negative obligation not to do something that could jeopardize the owner’s right. but the debtor himself. the offer to sell a good to a person at an established date obliges the offer or not to sell to another person until the deadline.the obligation of the passive subject consists of his duty to give. .this right is opposable only versus a definite person (“erga certam personam”). For example. to do or not to do something. Thus. .both the active and the passive subjects are determined from the beginning of the juridical relationship. 2.) and patrimonial real rights such as the ownership right and its dismemberments (use. otherwise law does not forbid him to sell the .the absolute rights are opposable to all persons. and so on). usufruct. Thus. The relative rights have the following specific features: . In this category there are enclosed the personal and non-patrimonial real “rights (the right to have a name. We emphasize that in case of debt rights. b) The relative right is that subjective right according to which the definite active subject (creditor) has the possibility to pretend from the definite passive subject (debtor) to give.the juridical relationship that contains an absolute right is established between its owner. the person abstains from doing an action that is not forbidden by law. the content of the passive definite subject’s obligation is to give. it consists either an action or an abstention. It means that everybody is bound to observe the prerogatives held by the owners of these rights.4. . through his own will has limited his own right. unless law stipulates otherwise. to do or not to do something. to do or not to do something for him. “erga omnes”. . Thus.the content of the indefinite passive subjects’ obligation is always the same: not to do something that could jeopardize the owner of exercising his prerogatives. according to the rule accesorium sequitur principalem. the content of the obligation is not always the same. servitude. as definite active subject and all the other persons as passive subjects.The classification is important in case of the achievement of civil obligations. The absolute right has the following specific features: .

to do. . “to do” or “not to do” something. Patrimonial rights and personal. as following: .good to whom he wants to. because that apartment could not be . . while debt rights are relative rights.real rights are limited in number and are expressly stipulated by law. b) The personal.real rights are absolute rights. There are some differences between real and debt rights. The right of pursuit consists in the possibility recognized by law to the owner of the real right to pretend the goods. wherever there are. . not to do). In other words. to do or not to do something.real rights can only have as object sure things (res ceria). There are those subjective rights according to which their owners can directly exercise their attributes towards a thing/goods without the intervention of another person. only the active subject is definite. it cannot be estimated in money and it is connected to the person. if the owner of a mortgaged apartment sold it before the payment of the debt warranted with the mortgage. while debt rights can have as object either sure things or general established goods (res genera). . Therefore it is used to individualize the person. non-patrimonial rights a) The patrimonial right is the subjective right that has an economic content or in other words which can be estimated in money.1) real rights (jus in re).in case of real rights.the real right owner exercises his prerogatives alone. So. the creditor can follow the apartment wherever it is. while debt rights are unlimited.in case of real rights.the owner of a real right has in addition of his prerogatives the right of pursuit and the right of preference. while the debt right owner needs the action or non-action of the others (to give. opposable erga omnes. a. opposable erga ceria personam. Patrimonial rights (that together with their corresponding obligations form the patrimony of the persons) are classified into real and debt rights as follows: a. There are those subjective rights according to which the active subject (creditor) can pretend to the definite passive subject (debtor) to give. the content of the obligation is always “not to do”.2) debt rights (jus in personam). the obligation to sell 10 tones of cement. These rights individualize the person within the society or his family or refer to the non-patrimonial aspects of the intellectual creation rights. . while in case of debt right is “to give”. non-patrimonial right is the subjective right that has no economic content. For example. . while in case of debt rights both subjects are determined.

The right of preference consists in the possibility recognized by law to the owner of a real right to be satisfied with priority in front of other owners who have ‘obtained their rights later. There are accessory real rights: pledge or pawn right. such as : usufruct right.1. Thus. The following are considered principal real rights: . having as owners natural and legal persons (with state or mixed capital.1) Principal real rights have a self-existence and are established by civil code and other normative acts. In case of debt rights the lawsuit is instituted before the court competent according to the headquarters of the debtor. The latter can be general privilege on all the debtors’ goods or general privilege on entire movable goods or special privilege on real estate. or cooperatives) including the state private domain having as owners the State and the administrative territorial units in which they are acting as legal persons under private law. Pure and simple rights and rights affected by modalities Pure and simple right is that created within a juridical relationship in its most simple form. The action is the so-called “real action” because through it only the goods are followed.from the procedure point of view. a debtor and a single object.1. the owners of a real right will be paid according to the order of the date of their rights. Therefore the debt is due from the moment the contract is concluded. mortgage right and privileges. according to the rule actor seguitur forum rei site. . At their turn. . Thus: a. following the rule actor seguitor rei. in case of real rights.2) Accessory real rights are those which cannot exist alone. the regime applicable to this ownership right is legal regime of public law and the goods belonging to the “public domain” are out of civil circuit. or to the administrative territorial unit of the county. right of occupancy. The same right of preference applies versus the owners of debt rights without warranties (the so-called simple creditors). the owner of a debt right warranted with pledge can ask for his debt to be. right of servitude. In the same way. a. . the lawsuit is instituted before the court where the goods are located. paid before the creditors that have not the right of pledge. This right produces its effects immediately. the city (public domain of local interest) as legal persons of public law.the right of private property. It supposes a creditor.the dismemberments of private ownership right. giving to the owner full power. Their lends on other rights that they guaranty. the real rights can be classified into principal and accessory real rights.the right of public property that belongs either to the state (public domain of national interest). while the person is taken into account only in relation with the non-observance of his real right.sold unless the debt is paid. .

from the moment of conception.g. they need a preliminary consent of their legal . We emphasize that. employment contract) on their own name. The abstract capacity also ends by a final judicial conclusion of death or disappearance announcement. all natural persons have the legal capacity under law. Moreover.Rights affected by modalities – the “time” and “condition” produce specific effects. Law divides the so-called restrained capacity. . At this age it is presupposed that the human being has the capacity ‘to understand his actions and to decide what to do. as well as in what conditions a person loses his legal capacity. But. they should have a very restrictive interpretation and application. The concrete capacity is granted. 2. The Legal Capacity of Natural Person The legal capacity can be defined as being the natural persons’ abstract and general ability to have rights and obligations and to exercise their rights or to assume their obligations by concluding juridical acts on their own name. the abstract capacity is granted under law to each human being from the moment of his birth. the period between 14 and 18 years old. 2) the concrete capacity – or the persons’ capacity to exercise the above rights or to assume their obligations by concluding on their own name juridical acts. no matter the ways this event occurs. the legal rules regarding the legal capacity of persons are imperative provisions and thus. Furthermore. law can only state who has legal capacity and when. the person can get only rights. The underage persons (persons under age of 14). In other words. in two intervals: the first between 14 to 16. the way of the correlative obligations is suspended till the moment of the birth when the legal representative of the child (parent or tutor) can assume the obligations. according to Romanian law. Subjects of Legal Relation A. We emphasize that each person has his own legal capacity and has only one. at the age’ of 18. in this latter case. In other words. Sometimes. the non compos mentis (weakly/mental handicap) persons and the people under judicial guardianship have not at all concrete capacity. During the first interval of their restrained capacity the persons can conclude some juridical acts (e.5. Thus. The abstract capacity ends when the natural person dies. as it is the case of the employment contract. at the age of 18 the person is considered under law to be mature and therefore gains his full concrete capacity. by exemption. or. and the second between 16 and 18. but the moment when it is granted to them is different for each part of this capacity. will. The legal capacity deals with two issues: 1) the abstract capacity – or the persons’ ability to have rights and obligations.

Moreover. 2) it is general – meaning that the rights and the obligations which form the content of the abstract capacity are not exactly provided for by law for each legal person. The beginning of the abstract capacity of legal person . Also. Through marriage. the merger. a girl can marry at the age of 15 with the preliminary consent of her legal representative. the general and abstract ability of a legal person to have rights and obligations is limited. 4) it is intangible – meaning that it can be limited only by law and these limits depend on the object of activity of the legal person. These limits also express the principle of specialization. financial. In other words. as it is for the natural person too. etc. 5) it is special – the specialization of the abstract capacity is that character which departs the abstract capacity of a legal person from the abstract capacity of a natural person. the content of the abstract capacity of a natural person is the same for all natural persons and for each of them. the content of its abstract capacity is different according to the goal for which each legal person has been set up. B. This sanction occurs because a renunciation act has as juridical effects the cessation of the legal person and that may happen only through the ways provided for by law (e. no matter which branch of law is involved (commercial. the girl obtains the full concrete capacity because it is possible that she becomes a legal representative for her future child. Thus. Indeed. but for a legal person. but a boy cannot. civil. all the rights and obligations which may occur from these different branches of law will form the content of the legal person’s abstract capacity. The abstract capacity of a legal person has the following juridical features: 1) it is legal – meaning that it is stipulated by law and nobody can extend or limit its content. the legal person has only one legal capacity and each legal person has its own legal capacity. administrative. But. Thus. Nevertheless. the division or the dissolution).) a legal person is a subject of law. the limits of the abstract capacity result from the legal person’s object of activity. as a subject of law. any act of renunciation or alienation regarding the abstract capacity of a legal person is absolutely void (null). an underage person can dispose through will for half of his fortune. the legal capacity of a legal person is unique. unlike the abstract capacity of a natural person. According to the provisions of civil code.g. 3) it is inalienable – meaning that the abstract capacity cannot be alienated or yielded either in total or in part by juridical acts. The Legal Capacity of a Legal Person The abstract capacity of legal persons The abstract capacity of a legal person means its general and abstract ability to have rights and obligations. Thus. in fact.representatives (parents or tutor).

In fact this moment can be the date of the order of the state organ I competent to set them up.Taking into account the fact that the legal person is submitted or not to registration. act of authorization. or other legal requirements) have a constitutive effect. 3) Other legal persons obtain their capacity to have rights and obligations on the date of the order of the state organ competent to set them up.20 from Law no.8 from Decree-Law no. Finally. the date of the authorization act is the date when the judicial conclusion of the admission to the registration of a political party or a public organization became final (irrevocable).4 from Decree-Law no. Legal persons are submitted to incorporation or registration. 6) the date when the Government recognized the setting up of the Chambers of Commerce and Industry. the legal persons submitted to registration obtain their abstract capacity on the date of their registration.26/1990). . the date of the authorization act or the date when any other legal requirements have been fulfilled.the State’s Companies (according to Art. its abstract capacity begins at different moments. This moment is considered as follows: 4) the date of their incorporation in the Register of trade for: .20 from Law no.8/1989 and Art.54/1991. 10 from the Decree-Law no.the consumers’ and credit’s co-operative organizations (according to Art.67/1990). It means that these dates mark the moment when the full abstract capacity begins.19 from Law no.26/1990 and Art. Thus: 1) No matter the way of setting up used. It should be mentioned that according to Art.26/1990 and Art. 2) The legal persons which are not submitted to registration obtain their legal capacity according to the way used to set them up.the commercial companies (according to Art. We should emphasize that the date of registration or the dates of the other acts which have to be observed for a valid setting up (act of recognition. 5) the date of the authorization act for the political parties and public organizations.20 from Law no. if the applicable laws provide for the incorporation or registration.26/1990) .20 from Law no. there are legal persons that obtain their abstract legal capacity and are valid set up on the date when other legal requirements have been fulfilled.the crafts-men’s co-operative organizations (according to Art. the date of the recognition act. The end of the abstract capacity of legal person The end of the abstract capacity of a legal person concerns the anticipated abstract capacity as well as . . on the date of the recognition or authorization act.66/1990) .

the lawful or unlawful facts committed by the organs of a legal person within the exercise of their functions obliged the legal person itself. the full abstract capacity ends when the subject of law (the legal person) ceases. This sanction. by concluding on its own name civil juridical acts through its organs”. This kind of representation is not the same with that settled by civil code. . The common legal rules regarding the concrete legal capacity of a legal person are the following: . It means that the director. a legal person expresses its will through its management organs. Between the legal person and its management organs there is the so-called “legal representation”. as an abstract legal construction. from the date when the dissolution has decided and until the legal person is erasure from the register (either register of trade or other kind of special register). Thus. when a juridical act was concluded without the legal rules regarding the abstract capacity of a legal person having been observed.of specialization was infringed.the full abstract capacity. the absolute nullity of the act. Further. are the acts of the legal person itself. This restricted abstract capacity ends on the date when the legal person is erased from the register where it was incorporated.the juridical acts concluded by the organs of the legal person within the limits of the powers conferred to them. We emphasize that. rights and to pay its debts. It means that without its full abstract capacity a legal person cannot exist. In fact. occurs either if the legal person did not have its full abstract capacity to conclude the act. the anticipated abstract capacity ends when the full capacity is obtained and this moment usually coincides with the moment when legal personality is granted to a legal person. its full abstract capacity still has to exist but it is restricted. – the natural person acting on behalf of a legal person is personally ~ responsible before it and before the third party as well if they commit an unlawful fact. From these legal provisions we should understand that. . . when a legal person begins the clearing off process. it can unfold its activities but only in order to achieve its patrimonial. it is annulled. or the principle .the relationships between the legal person and those who form its organs are submitted to the mandate’s rules if law. In other words.the legal person exercises its rights and fulfills its obligations through its management organs. or the president “represents” the legal person within the relationships with third parties. Therefore. the legal person can no longer carry on its business but it still has rights and obligations with the view to accomplishing the clearing off process. . the general manager. Also. the act is void. the setting up deed or the statute does not provide for otherwise. this representation is only similar due to the fact that it does not represent a real mandate. The concrete capacity of legal persons The concrete capacity of a legal person is defined as being “the abstract and general ability of a legal person to obtain and to exercise subjective civil rights and to assume and to fulfill civil obligations.

Sometimes, the management organs of a legal person can mandate a natural person, such as its legal advisor, to represent it in front of the court of law, or within other relationships with third parties. In this case, without any doubts there is a contractual representation. As far as the management organs are concerned, they can have either unipersonal form, such as the minister, the president, the director or the rector, or a collective form, such as council, committee, board of directors, etc. No matter the form of the management organs is, according to their competencies, they exercise the rights and assume the obligations of the legal person by participating within juridical relationships. . The beginning of the concrete capacity of legal person Due to the absence of legal provisions, the juridical doctrine has expressed several opinions regarding this issue. Thus: it is considered that the legal person obtains its concrete capacity at the same time with its abstract capacity, or on the date when its management organs are appointed. The common opinion is that the legal person obtains its concrete capacity on the date of its setting up. This moment, as it was mentioned above, can be even before its incorporation or registration, or before the recognition/authorization act has been issued or other legal requirements have been fulfilled. Therefore, besides the anticipated abstract capacity, the legal person has an anticipated concrete capacity from the moment of its setting up and with the view to its valid setting up. The end of the concrete capacity The concrete capacity of a legal person ends when the existence of the legal person ends. It can also end in case the legal person is reorganized. It means that the legal person is subject of a fusion or of a merger by absorption or of a total division.

Business Law_Course 3_The Subjects of Business Law
OCT - 20 - 2013

The Professionals
Legal basis: art. 3 Civil code : 1) The provisions of the Code apply to both relations between professional and those between professionals and other subjects of civil law 2) Are considered professionals all those managing an enterprise. The new civil code has erased the term ’’merchant’’ and it has introduced a new one: professional which includes all persons licensed to perform economic activities. Art. 8 from law no. 71/2011 (the law issued for the entering into force of the Civil code) stipulates the

professional includes all types of merchants, enterprises, commercial agents and any other persons authorized to exercise economic or professional activities. The new Civil code presents the professional as the one managing an enterprise, the activity of this enterprise being an systematic exercise for producing, administrating or selling goods, services.

Classification of professionals
For the moment, the doctrine hasn’t presented a clear classification of professionals, but, the provisions of the Civil code and the law no 71/2011 help us issue one: a) Merchants: commercial companies, individual merchants, co-operative organizations, economic interests groups, state institutions, etc b) c) d) Liberal professions: attorneys, doctors, Foundations, Associations, Unions Public institutions

Conditions:
a)The legal capacity Can be defined as being the natural person’s abstract and general ability to have rights and obligations and to exercise their rights and to assume their obligations by concluding juridical acts on their own name. The legal capacity deals with two issues: a) The abstract capacity – the persons’ ability to have rights and obligations (granted to each human being from the moment of birth or, by exception, from the moment of his conception) b) The concrete capacity – the person’s capacity to exercise their rights or to assume their obligations by concluding on their own name juridical acts (granted at the age of 18 years old and a restrained capacity from 14 or 16 years old)

Incapacities
Do not have legal capacity: - underage persons Full capacity from 18 years old and special cases: a) married person after 16 years old (art. 39 Civil code)

b) c)

by court decision (art. 40 Civil code) member of family enterprise (art. 8 oug 44/2008)

Incompatibilities
The business law activity is incompatible, because its speculative character, with certain positions and professions like: deputies, senators, public persecutors, judges, officers, public servants / attorneys, doctors;

Declines
The business legal system has to respect the legal provisions regarding the public order. According to Law nr.12/1990, Criminal Code, Law nr.26/1990 and Law nr. 31/1990, a person who was convicted of a criminal act incompatible with the commercial activity (like: theft; taking/offering bribe), cannot be a merchant.

Interdictions
In order to protect general interests, economical, social or moral ones, some activities cannot be done by private persons, but only by the state (for example: fabrication and commercialization of guns, drugs, narcotics with other purpose than medicine)

Interdictions (legal or conventional)
Are due to legal interdictions or the parties’ will - Legal incapacities – related to public monopoly domains (e.g. mine exploitation) or to public order requests (existence of a labor permit –e.g. foreigners) Conventional incapacities (general/special):

- continuation of trade in case of selling the stock trade (good will) - exclusive distributor - franchisee position b) Name and risk Name = “firm” (according to Law no.26/1990) Exception = permanent commercial agent is merchant according to art.1 par.5 Law no.509/2002. Permanent commercial agent is a natural or legal person who acts as independent intermediary and is entitled constantly

cooperative companies state companies and national companies economic interest groups .to negotiate business for other natural or legal person to conclude business operations on the name and on behalf of the principal Note: It carries on its intermediation acts as principal or accessory acts in exchange of a remuneration => he carries on trade activity as a profession Auxiliary of trade are not merchants (perform commercial acts/facts on the name of their employer): pre-posed agent (prepus) shop vendor (vănzător) delegate commercial traveler (comis-voiajor) Risk = unlimited liability => debtor of all its commercial obligations ─> commercial creditors (as simple creditors) have as warranty the merchant’s entire present or future “fortune” (patrimony) The merchant has to reduce the risk which is objective => clauses for modification /adaptation of parties’ obligations c) Profitability of the activity Finis mercatorum est lucrum = the activity has to be completed with a certain gain necessary to cover the needs of his own existence and of his family. individual enterprises. the activity has a speculative character => non-profit activities are excluded Important is the intention to obtain profit and not the obtainment itself It has no relevance if the activity is his only source of revenue or not d) merchant’s authorization and registration The authorization and registration in Register of Trade is imposed by art.1 of law 26/1990 for: individual merchants. family enterprises. commercial companies. cooperative organizations..

26/1990 modified and republished and art. republished. 1. before starting their business. to keep specific books and to organize and manage their own accounting activity. The obligation of registration within the Register of Trade The publicity within the Register of Trade is regulated by Law no. The obligation to organize and manage his own accounting activity which refers mainly to the yearly financial statements.Inventory ledger.1 of Law no.16 of Law no 300/2004: “the merchants have the obligation to request the registration within the Register of Trade. inventories and so on. 26/1990 republished.General ledger. before the beginning of their activity or during it. Thus. as well as the interests of third parties and merchants themselves.1 para. the merchants are also obliged . During the performance of their commercial activities. the merchants are bound to ask for the incorporation in the Register of Trade. .european companies european cooperative companies european interest groups Authorization is an administrative act issued by the Register of Trade Professional knowledge or practice can be proved with the following documents: college or university diploma or certificate of graduation. accounting books. Thus. on the basis of a yearly inventory. labor book that proves at least 2 years of work within the activity for which the authorization is requested. articles 22-24 and the Law no. the merchants are obliged to accomplish certain formalities of publicity within the Register of Trade. Thus. the merchant is bound to keep the following books: . and to request the registration within the same register of all mentions regarding acts or facts that are submitted to registration by law” The professional obligations of merchants These professional obligations of merchants are provided by the law in order to protect the public interests. Art. 82/1991 on the accounting system.Journal ledger. . The obligation to keep specific books It is provided by the Commercial Code. where all movable and immovable goods of the merchant are recorded. which serves as a summary of the journal ledger. 3. or at the end of it. 2. amended and completed. where all economical and juridical operations of the merchant are recorded daily. certificate of professional competences.

The incorporation and the mentions registered within the Register of Trade have a publicity function. which is a public institution subordinated to the Ministry of Justice.information concerning the legal representative of the merchant. The merchants must apply for incorporation to the Office of the Register of Trade organized in the county where they have their headquarters. concerning the commercial companies. the natural person becomes a merchant by performing commercial facts. the obligation of merchants to ask for the registration of mentions in the Register of Trade is due within 15 days from the date of the acts or facts that are subject to publicity.patents. in order to be opposable to third parties. by the incorporation in the Register of Trade they get . trade marks. as follows: . According to article 22 form the Law no.the insolvency procedure and so on. As far as the merchant natural person is concerned. The Central Register of Trade is kept by the National Office of the Register of Trade. any interested person may have access to all its records. emblem and other distinctive signs upon which the merchant has any right. As we mentioned before. It means the law considers that all records in the Register of Trade are known by third parties form the date of their registration. The registration in the Register of Trade is done on the basis of a decision provided by the judge delegate. 26/1990 republished. However.form the date of the authorization.to ask for the registration in the same register of certain mentions concerning acts and facts that are subject to publicity. . . The Register of Trade consists of a register for recording individuals and family partnerships and another one for recording legal persons. The merchants must apply for the incorporation in the Register of Trade within 15 days: . in the case of commercial companies. The Register of Trade is kept by the Office of the Register of Trade organized in each county and in Bucharest. .any act certifying changes to the records in the Register of Trade.juridical acts such as sale. firm. donation concerning the goodwill. the incorporation in the Register of Trade does not produce constitutive effects in order to obtain the quality of merchant.form the date of conclusion of the constitutive act. in the case of individual merchants. under the conditions provided in the Commercial Code. The Register of Trade is public and thus. . .

the place of business and so on) used by a merchant in order to perform its activity. it is a totality of different elements which together are used by the merchant with the view to carry on his business The performance of commercial activity requests the existence and the use of goods such as buildings. there is a definition of the term “goodwill” provided by the Law no. Thus. The legislator had used the term “goodwill”. patents. firms. As we mentioned before. in order to get clients and to obtain profits. The Civil code does not provide either a definition of the goodwill or legal provisions for its regulation. . without explaining it. within several normative acts. the “good will” is an intangible asset that normally represents the excess of the value of the business over the value of its tangible assets established reputation of a business regarded as a quantifiable asset In legal systems of French inspiration (Romanian). the goodwill is only a part of the enterprise. raw materials. meaning they become legal persons.2013 In common law legal systems. tangible and intangible goods used by a merchant in his commercial activity. the “good will” is more than the merchant’s reputation. emblems. As a consequence. labor or nature for the purpose of producing goods and services and of obtaining profit. according to article 11 point c form the law. Thus. the goodwill represents the ensemble of movable and immovable. 26/1990 on the Register of Trade. The goodwill is an ensemble of goods used for the accomplishment of commercial activities. 298/2001 concerning the amendment of the Law no. republished. However. such as the Law no. The Distinction between Goodwill and other close notions a) Goodwill and Patrimony. The Definition Thus. we may see from these definitions that.25 . beside goods. 11/1991 on the unfair competition. Business Law_Course 4_The Stock-trade OCT . All these goods used for the accomplishment of commercial activity represent the goodwill of a merchant.the legal personality. patents and so on. the goodwill is an ensemble of movable and immovable. Unlike the goodwill. which is an ensemble of goods. the enterprise also combines other elements like capital or labor. the patrimony contains all patrimonial rights and obligations of the merchant. tangible and intangible (trade marks. b) Goodwill and Enterprise. merchandise. industrial equipment. the enterprise is an independent organized activity which combines elements like capital.

The legal nature of the goodwill
Legal doctrine considers it as “de facto” universality and not a legal universality as the patrimony is. In the juridical doctrine, most authors consider that the goodwill constitute an ownership right over an intangible thing, as the copyright. As a consequence, the features of the goodwill are the following: 1. it is an unitary thing, different from the goods that compose it. Thus, the goodwill can be the object of juridical acts such as the sale-purchase or the donation. 2. it is a movable thing because in its composition the movable goods prevail. 3. it is an intangible movable thing because in its composition the intangible goods have the highest value. 4. It can be object of pledged 5. It is a part of the patrimony of the merchant, not the patrimony itself. 6. It lasts as long as it is exploited (used), so its existence is less stable than of other intangible goods The assignment contract (contract de cesiune), is the agreement concluded between the assignor (“cedent”) and the assignee (“cesionar”) with the view to transfer to the assignee the rights that belong to the assignor

The elements of the goodwill
Because the goodwill contains those goods that are necessary for the performance of a specific commercial activity by a specific merchant, its composition is different from one merchant to another, it depends upon the specificity of the merchant’s activity. In the same time, the elements that compose the goodwill may change, in accordance with the needs of the trade, but the goodwill as a whole continues to exist. Generally, regardless of the specificity of commercial activity, we consider that the goodwill contains two categories of goods: 1. tangible goods 2. intangible goods

1.The tangible elements of the goodwill
They are included within this category:

a. immovable goods, such as buildings, real estate and so on. b. movable goods, such as raw materials used for the production of other goods and products or merchandise which are the result of commercial activity.

2.The intangible elements of the goodwill
They are included within this category: the firm, the emblem, the clients, the place of business, the patents, the trade marks and so on. 1) The Firm It is an element of identification, a name, registered in the Register of Trade, used by the merchant to identify his business. (article 30 Law 26/1990). Natural persons – the firm is composed by the name (full name or only the family name with the first letter of the second name) and, sometimes, with a phrase representing the object of activity. Commercial Companies – the firm has different forms, depends on the type of company we discus about. Characteristics: - each new firm has to be different than the others already in use - the name must be avaible, so we have to check at the “Register office” (Registrul Unic), but an erased name can be taken after 2 years it has been erased. - the firm must not include a denomination, name, used by public institutions; - it can be transmitted through acts intervivos/ mortis causa only together with the goodwill. - protection by: - incorporation and no matter if it is used or not - action in counterfeit (contrafacere) and action for usurpation - action based on unfair competition facts - action for damages (moral or pecuniary) + criminal proceedings 2) The Emblem (Corporate Image) It is a sign or denomination used to make the difference between merchants. Characteristics: it is not compulsory to have an emblem

-

it’s disponibility can be checked at the Registration Office we can use emblems on invoices, letters, catalogues, advertising etc can be transmitted separately of the good will protection by:

- incorporation – if it is used - action for recovery of property (in revendicare) - action based on unfair competition facts - action for damages (moral and pecuniary) 3) The clients (The Practice) It represents the ensemble of natural and legal persons that have juridical relations with a merchant. In accounting is a figure, meaning it can be evaluated. Influenced by: - internal factors: objective (the place where the shop/headquarters is located, the quality of merchandises) or subjective (advertising, clients’ fidelity, shop assistants’ behavior. - external factors (competition, market share owned, possibility to obtain credits)

The trademark
It is a distinctive sign, drawing or denomination that individualizes the products of a merchant from the ones of other merchants. The exclusive usage right of a merchant over a trademark is protected only if the trademark is registered within the State Office for Inventions and Marks, the competent Romanian authority for ensuring industrial property. The juridical protection is granted for 10 years.

The patent
It grants and protects the rights over an invention. The patent is issued by the State Office for Inventions and Marks. The patent grants its owner an exclusive usage right over the invention within the entire protection period of 20 years. However, according to the Law no. 26/1990, in order to ensure the juridical protection, the merchants must ask for the registration, in the Register of Trade, of mentions concerning the trademarks, patents and other distinctive signs.

Juridical acts concerning the goodwill

the business can be continued in the name of the minor by his legal representative. doctors. because of their object. as an unitary movable thing. of mentions related to juridical acts concerning the goodwill. a person who was convicted for committing a crime that is incompatible with . lawyers. priests. 2. 26/1990 the merchant is bound to ask for the registration. According to the Law no.2013 In order to be qualified as a merchant. in the Register of Trade. Thus. to perform trade as a profession. donation. Therefore.19 . In addition. when the minor inherits the stock-trade of a merchant. We should mention that. as follows: 1. public prosecutors. the law provides that certain categories of natural persons are not allowed to be merchants. as well as its elements. the natural person must fulfill several conditions. Business Law_Course 5_Natural persons – merchants NOV . Thus. officers. rental or pledge. the commercial activity is incompatible with certain positions or professions such as judges. the juridical acts concerning the goodwill are objective accessory commercial facts. to perform trade in his own name. 3. public servants. in order to protect the public interest. the minors and the persons under judicial interdiction are not allowed to be merchants. a natural person may be a merchant only after he is 18 years old As a consequence. the owner of the goodwill who wants to become an associate of a commercial company contributes to the capital of that company with the goodwill. to have full concrete capacity. However. the merchant undertakes the risks related to the performance of commercial activities and he is liable toward third parties with his patrimony. on a regular basis. Thus. may be the object of juridical acts such as sale-purchase.The goodwill. The goodwill may be also the object of contribution in kind to the capital of a commercial company. Thus.

activities or professions which the law doesn’t forbid in an express manner for free initiative. Romanian citizen or citizen of another EU or European Economic Space member state. the natural persons mentioned above can carry out economic activities as follows: a) individually and independently. in an independent manner. without legal personality. organized by an individual entrepreneur. Romanian citizens or nationals of one of the EU Member States may perform commercial activities on the Romanian territory. . holders of an individual enterprise. according to the law. mainly using its workforce. Economic activities can be performed in all branches. b) as promoters. According to art. without legal personality. c) as members of a family enterprise. handicrafts. organized by an individual entrepreneur with his family. An individual merchant is a natural person authorized to perform any kind of economic activity permitted by law. Thus. 4 of the Emergency Ordinance no. or may set up a family enterprise or individual enterprise. any natural person. Definitions An individual enterprise is an economic enterprise. in conditions provided by the law. free association and settlement. can perform economic activities on Romania territory. On the strength of the right of free initiative. A family enterprise is an economic enterprise. 44/2008.commercial activity cannot be a merchant. as individual merchants.

44/2008 and for family enterprise representative. respectively natural persons’ promoters which hold an individual enterprise. provided in special laws. b) they cannot have committed facts punished by financial. 4 letters a) and b) of the Emergency Ordinance no.First of all. any member of family enterprise can ask for registration in the Register of Trade and authorization of operation. authorizations. they have to apply for registration in the Register of Trade and ask for authorization. REGISTRATION AND AUTHORIZATION The individual merchants and the promoter and holder of an individual enterprise are obliged to ask for their registration in Register of Trade and authorization of operation. Secondly. Conditions to perform economic activities in one of the forms provided above: a) the persons must have minimum 18 years of age. custom laws and laws on financial-fiscal discipline. in order to be able to operate in legal terms. before starting the economic activity. Also. licenses and other similar. before starting the activity. in case of family enterprise members. in case of natural persons which ask authorization to perform economic activities according to Art. in conditions provided by the law. they are obliged to obtain. these persons must have a professional headquarters on the territory of Romania. The petition for registration in the Register of Trade and authorization of operation must be forwarded in a term of 15 days since the memorandum of association was concluded. before starting the economic activity as individual merchants. respectively 16 years of age. like those stipulated in the tax offence record. . If it doesn’t forward a petition in term of 7 days since conclusion of memorandum of association. to perform certain economic activities. in order to carry out an economic activity. approvals. The representative of family enterprise is obliged to ask for registration in Register of Trade and authorization of operation.

If legal conditions are not met. sanitary-veterinary. then the manager of the Office of Register of Trade attached to the Law court will order by motivated resolution to be rejected the petition of registration in the Register of Trade and authorization of operation for the individual merchant. If documents laid down in the petition’s support are incomplete. the individual enterprise holder or any member of the family enterprise. individual entreprise or inquiring family enterprise. the term of 15 days can be prolonged. Performance of economic activities through a permanent headquarters by citizens of other EU member states or European Economic Space is accomplished according to the provisions in force on permanent headquarters. In all cases it will be indicated the documents which follows to be laid down until the given term. to hold a commonage over the property which they want to be the professional headquarter. individual enterprise and family enterprise is performed based on motivated resolution of the manager of the Office of Register of Trade attached to the Law court. environment and labor protection branches. or by a recommended letter with receiving confirmation. if he is present. Against the resolution given by the manager of the Office of Register of Trade attached to the Lawcourt can be forwarded a complaint in term of 15 days from the date when it was given or its communication. Registration in the Register of Trade of the individual merchant. . the promoter and holder of an individual enterprise and family enterprise have the professional headquarters declared by registration petition in the Register of Trade and authorization of operation. To set up the professional headquarters is necessary that the individual merchants.c) they must have a professional headquarters d) they must declare on own responsibility that meet the operation conditions provided by the legislation specific to the sanitary. then the manager of the Office of Register of Trade attached to the Law court will order by motivated resolution to be awarded a term of maximum 15 days for their completion. Petition for registration in the Register of Trade and authorization of operation will be laid down to the Register of Trade attached to the Law court from the county where the inquirer sets up its professional headquarters. By motivated inquirer’s request. The individual merchants. depending on the case. The term will be communicated to the inquirer either immediately.

A person may cumulate the quality of individual merchant with the one of employee of a third party operating either in the same field or in another economic activity field than the one for which the individual merchant is authorized. certificate of findings issued based on the declaration on own responsibility. i. containing a sole registration code.e. Changing the professional headquarters and main activity objective is registered in the Register of Trade. containig the sole registration code. the holder of individual enterprise and the representative of family enterprise will perform the single entry book-keeping. individual entreprise and family enterprise was admitted. according to the regulations on organization and management of single entry book-keeping by the individual merchants which are contributor. Bias points are registered in the Register of Trade. with further changes and completions. the individual merchant may collaborate with other natural persons authorized as individual merchant.depending on the situation. If registration in the Register of Trade and authorization of operation for the individual merchant. The individual merchant shall not be considered employee of third parties with whom it collaborates. 44/2008. according to the provisions of the Law No. The individual merchant. as well as recording by the competent fiscal body. authorization of operation. the one for individual merchant. by application accordingly to the Emergency Ordinance no. 571/2003 on Fiscal Code. without changing its legal status. holder of an individual enterprise or member of a family enterprise it was authorized for. promoter and holder of an individual enterprise and representative of a family enterprise or with natural persons or legal entities in order to perform an economic activity. depending on the situation. as well as other documents provided by the law. complying with the provisions on professional headquarters and application accordingly to the Emergency Ordinance no. . Certificate of registration. is the document attesting the registration in the Register of Trade. 44/2008. the Office of Register of Trade attached to the Lawcourt will release the certificate for registration. A person can have a single certificate of registration for legal status. LEGAL REGIME OF INDIVIDUAL MERCHANT In order to perform the activity for which an individual merchant has been authorized.

at the date of its registration in the . its own workforce and professional abilities. Creditors shall execute their debts according to the common law if the individual merchant is not a trader. Any interested person may prove its trader quality during the insolvency procedure or separately. c) according to art. The individual merchant shall account for its obligations by the dedicated assets if set up and. republished. LEGAL REGIME OF A NATURAL PERSON ENTREPRENEUR HOLDER OF AN INDIVIDUAL ENTERPRISE The individual enterprise does not acquire legal personality by registration in the Register of Trade. shall be submitted by any interested person to the trade registry office near the court of law where it has its professional headquarter. The natural person entrepreneur holder of an individual enterprise is. in addition. mainly. An individual merchant performs its activity by using. The individual merchant may require the change of the legal status acquired and the authorization as natural person entrepreneur holder of an individual enterprise. by means of a declaratory action if it has a justified legal interest. 25 of the Law nr.even if the collaboration is exclusive. with the further amendments and supplementing. It cannot also cumulate the quality of natural person entrepreneur holder of an individual enterprise. as the case may be. it shall be subject to the procedure provided by the Romanian Law. The cancellation application accompanied by a true certified copy of justifying documents. by its entire patrimony and in case of insolvency. The individual merchant shall cease its activity and shall be cancelled from the trade registry in the following cases: a) by death. 26/1990. b) by free will.

Register of Trade. The natural person entrepreneur holder of an individual enterprise shall cease its activity and shall be cancelled from the Register of Trade in the following cases: a) by death. with the further amendments and supplementing. republished. 26/1990. as natural person employer. 25 of the Law no. with other natural persons entrepreneurs holders of individual enterprises or with representatives of family enterprises or with other legal entities. and in case of insolvency. without changing its legal status. the natural person entrepreneur. In order to organize and operate its undertaking. and may collaborate with other individual merchants. The natural person entrepreneur holder of an individual enterprise shall not be considered employee of third parties with whom it collaborates. in addition. a natural person trader. b) by free will. . c) according to art. The natural person entrepreneur holder of an individual enterprise may also cumulate the quality of employee of a third party operating both in that field as well as in another field of economic activity than the one in which the individual enterprise is operating. by its entire patrimony. it shall be subject to the procedure provided by the Romanian Law. even if the collaboration is exclusive. in order to perform economic activity. The natural person holder of an individual enteprrise shall account for its obligations by the dedicated assets if set up and. may employ third parties by means of an individual labor agreement recorded at labor territorial inspectorate according to the law.

they shall appoint a representative in order to continue the economic activity as family enterprise. participation conditions. under . at the same time.The cancellation application accompanied by a true certified copy of justifying documents. LEGAL REGIME OF FAMILY ENTERPRISE A family enterprise consists in 2 or several family members. As validity condition. The members of a family enterprise may be. on condition of mentioning the successor quality. date of drafting it. individual merchants or holders of individual enterprises. If the natural person entrepreneur holder of an individual enterprise ceases its activity and is cancelled from the Register of Trade due to his death. shares in which net incomes of the undertaking shall be divided. inheritors may continue the undertaking if they so desire. The members of a family enterprise are insured in the public pensions system and other social insurances rights and have the right to be insured in the health and unemployment social insurance system according to the legal provisions. within 6 months as of the inheritance division date. In case of several inheritors. The activity may be continued under the same company. a family enterprise is established by means of an incorporation agreement concluded by the members of the family in writing. relationship between the members of the family enterprise and withdrawal conditions. as the case may be. participation of each member to the undertaking. the representative. by means of an authenticated statement. Moreover. they may also cumulate the quality of employee of a third party operating both in that field as well as in another field of economic activity than the one in which the family enterprise is operating. The incorporation agreement shall provide the members’ names and forenames. shall be submitted by any interested person to the trade registry office near the court of law where it has its professional headquarter. A family enterprise may not employ third parties by means of labor agreement.

jointly and indivisibly. if set up. without changing its legal status. the participation shares of the members to the set up of the dedicated assets shall be established in the incorporation agreement or an addendum thereof. and. may collaborate with other natural persons authorized as individual merchants. the shares may be different than the ones provided for the participation to net incomes or losses of the undertaking. In order to perform the activity for which it has been authorized. according to the participation shares. by means of its representative. by the entire patrimony. The documents by which assets are acquired for the performance of family enterprise’ activity shall be concluded by the representative. on condition that this majority also includes the consent of the owner of the asset object of the act. The representative appointed by means of the incorporation agreement shall manage the family enterprise’ interests based on a special power of attorney. The acts of disposal over the assets included in the activity of the family enterprise shall be made by simple majority consent of undertaking’s members. The members of the family enterprise are natural persons traders as of the date of its registration in the Register of Trade and shall account. the family enterprise. natural persons entrepreneurs holders of individual enterprises or representatives of certain family enterprises or with other natural persons or legal entities in order to perform an economic activity. If the members of the undertaking unanimously agree. A family enterprise does not have its own patrimony and shall not acquire legal personality by registration in the Register of Trade. The decisions on the current management of the family enterprise shall be made by the representative of the family enterprise. in the form of a private signature writ. In this case. if the value of the asset for which the document is concluded does not exceed 50% of the value of the assets included in the .the absolute nullity sanction. The members of a family enterprise may provide in the incorporation agreement of the family enterprise the set up of dedicated assets. The special power of attorney shall be signed by all legally competent members of the undertaking and their legal representatives with a restricted legal competence. for the debts incurred by the representative by operating the undertaking by means of the dedicated assets. without members’ prior authorization. in addition.

such as banking companies. with the further amendments and supplementing. . Beside this general law. insurance companies and so on. The Law no. These provisions are to be completed by the Civil code. amended and completed. The cancellation application accompanied by a true certified copy of justifying documents. shall be submitted by any interested person to the trade registry office near the court of law where it has its professional headquarter. c) according to art. 26/1990. republished. which is the general law that regulates the matter. Acquired assets are co-property of the members depending on the shares.20 .undertaking and the amounts of money made available to the undertaking at the date of the document. b) more than half of its members require its cessation or withdraw form it. 25 of the Law no. 31/1990 on commercial companies. there are special laws which regulate specific companies. as the case may be. A family enterprise shall cease its activity and shall be cancelled from the Register of Trade in the following cases: a) more than half of its members have deceased. Business Law_6_Commercial Companies NOV . 31/1990 regulates the following types of companies: .general partnership. republished.2013 1. Introduction The commercial companies are regulated by Law no.

limited (sleeping) partnership. In this case.it is set up by a company contract. we have to look for a definition in the Civil Code. . This definition refers to the contract. .limited (sleeping) partnership by shares. Features of a commercial company: . The Civil Code regulates the company contract. but certain elements may also be used for defining the commercial company. The definition The commercial companies are not defined by the Law no. . 31/1990 .limited liability company. according to article 1881 Civil Code.company by shares or joint stock company. It contains general rules that are applicable to any commercial company and special rules related to each category of commercial companies.. Thus. the company is a contract by which two or more persons (the associates) agree to put together some goods in order to perform together a certain activity for the purpose of obtaining and sharing the profits. .

limited liability company.affectio societatis.. it is not possible to constitute a commercial company in other form than those provided by article 2 from the Law no.the existence of a common fund.the goal of the associates is to obtain and share the benefits. . limited (sleeping) partnership by shares. The juridical forms of commercial companies According to article 2 form the Law no. the commercial companies can only be set up in one of the following juridical forms: general partnership. The differences between the forms of commercial companies are determined by the extent of liability of associates for the debts of the company. 31/1990 republished. the definition of the commercial company is the following: The commercial company is a group of persons. constituted by the contributions of the members. it is a legal person. limited (sleeping) partnership.the commercial company has legal personality. . . 31/1990 republished. . As a consequence. company by shares (joint stock company). set up by a company contract and having legal personality. meaning the will of the associates to participate in the performance of the common activity and the common use of contributions and capital in order to obtain profits. Thus. taking into account all these elements.the economic activity of the commercial company . in which the associates agree to put together some goods in order to perform economic activity for the purpose of obtaining and sharing the profits.

its registered capital is divided into shares and the obligations of the company are secured by its patrimony. The classification of commercial companies . the persons who want to set up a commercial company are free to choose between the five juridical forms provided by the law. the sleeping partners are liable only within the limits of their contribution to the capital of the partnership. The obligations of the limited partnership are secured by its patrimony and the unlimited and joint liability of active partners. d. concerning the company by shares. the limited partnership has two categories of partners: active partners and sleeping partners. After choosing the juridical form of the company. The juridical form chosen by the associates must be mentioned in the constitutive contract of the company. the obligations of the general partnership are secured by its patrimony and the unlimited and joint liability of all associates. the sleeping partners are liable only within the limits of their contribution to the capital of the partnership. c. However. b. the shareholders are liable only within the limits of their contribution to the registered capital of the company. Its registered capital is divided into shares and its obligations are secured by the patrimony of the partnership and the unlimited and joint liability of active partners. the limited partnership by shares has also two categories of partners: active partners and sleeping partners. the associates are bound to observe the legal provisions which regulate the setting up and the functioning of that type of company. the obligations of the limited liability company are secured by its patrimony and the associates are liable only within the limits of their contribution to the registered capital of the company.Therefore: a. e.

Unlimited liability means that regardless of his contribution to the registered capital of the company. .companies of persons . the commercial companies are divided in two categories: . each partner is liable for the debts of the company with his own patrimony.the liability of the partners for the debts of the company is unlimited and joint.companies of capitals. the liability of the sleeping partners for the debts of the partnership is limited to their contribution to the registered capital. Joint liability means that in the case the commercial company does not pay a debt. However. The general partnership and the limited partnership are companies of persons. there is an exception. any partner can be obliged to pay the whole amount.The commercial companies are classified according to several criteria. concerning the sleeping partners of a limited partnership. According to this criterion. 1. the most important is the criterion of their nature and the prevalence of personal element or the material element. The features of the companies of persons are the following: .the registered capital is divided into parts of interest which are not negotiable. . They can be transmitted only under restrictive conditions. . Thus.a small number of partners. The companies of persons are those commercial companies set up by a small number of persons taking into account the mutual trust between partners and their personal qualities (intuituu personae).

. withdrawal or death of a shareholder does not produce any consequence concerning the dissolution of the company. ..the partners are allowed to contribute with their work to the registered capital of the company.the registered capital is divided into shares which are negotiable and can be transmitted freely. There is an exception concerning the active partners of a limited partnership by shares. . . The features of the companies of capital are the following: . exclusion. incapacity. . withdrawal or death of the other partners.the companies of persons are dissolved when they are reduced to a sole partner because of the bankruptcy. the contribution to the registered capital of a company of capitals may be in kind or in money.the bankruptcy. exclusion. Thus. It means that the undertaking of a partner to perform a certain work on behalf of the company is considered as a contribution to its registered capital.the shareholders are not allowed to contribute with their work to the registered capital of the company. The companies of capital are those commercial companies that are set up by a great number of associates taking into account only the actual contribution of the associates to the capital of the company. the personal qualities of the associates are not important. Thus. . the liability of the active partners for the debts of the partnership is joint and unlimited.a great number of shareholders.the liability of the shareholders for the debts of the company is limited to their contribution to the registered capital. Thus. incapacity. The limited partnership by shares and the company by shares are included in this category.

. However.We should mention that the limited liability company cannot be included in one of these two categories. According to this criterion. the parts of interest of a limited liability company are called “social parts”. the setting up of a limited liability company is based on the trust and the personal qualities of the associates. This feature requires the limitation of the number of associates and restrictive conditions for transmitting the social parts.companies that are not allowed to issue negotiable instruments. such as the company by shares and the limited partnership by shares. . the limited partnership and the limited liability company. as for the companies of capital.commercial companies in which the registered capital is divided into shares such as the company by shares and the limited partnership by shares. the criterion of the structure of registered capital. the liability of the associates is limited to their contributions to the registered capital. . such as the general partnership. the commercial companies may be divided in two categories: . the limited partnership and the limited liability company. 31/1990 republished. Thus. 3. the criterion of the possibility to issue negotiable instruments (shares or bonds). 2.commercial companies in which the registered capital is divided into parts of interest such as the general partnership. the commercial companies may be: . like the companies of persons. According to this criterion. According to the Law no.companies that are allowed to issue negotiable instruments.

such as all the other types of companies.companies with two or more associates. 3. The conclusion of the constitutive act. The incorporation of the company in the Register of Trade. In order to set up a company by shares. the law requires the conclusion of the company contract and the articles of association which both represent the constitutive act of the company. if the associates agree. in order to set up a general partnership or a limited partnership. there are: . .companies with sole associate such as the limited liability company with sole associate. . a limited partnership by shares or a limited liability company. According to this criterion. which must be followed: 1. there are several steps. 31/1990 republished. the partners must conclude a company contract which is the constitutive act of the partnership. The publicity of the company’s setting up. 2. The constitutive act of the company and its form According to the provisions of the Law no. as a single document. 2. The setting up of commercial companies In order to set up a commercial company. the criterion of the number of associates. The company contract and the company statute may be concluded either as two distinct documents or.4.

the Law no. As an exception. .the company by shares is set up by public subscription. 31/1990 republished.it refers to the setting up of a general partnership or a limited partnership. the founders of a commercial company are the persons who sign the constitutive act. use of forgery. . the constitutive act of any company has to be concluded in writing and signed by all associates or by the founders. In order to become a founder. the person must fulfill two conditions. . . breach of trust an so on.he must not have been convicted of any criminal offence related to commercial activity such as forgery.land is contributed in kind to the registered capital of the company. when a company by shares is set up by public subscription. 31/1990 republished requires only the conclusion of the articles of association As a rule. as well as the persons who play an important role in the setting up of the company. According to article 6 form the Law no. The founders of a commercial company The term “founders” is a common element for all the juridical forms of commercial companies. the constitutive act of the company must be concluded in authentic form (it must be authenticated by a notary public) in the following cases: .he must have full concrete capacity.In order to set up a limited liability company with sole associate. as follows: .

the bodies of decision. Beside these general elements.the branches.the time limit of the company. its constitutive act must contain the following common elements: . . . the headquarters and the emblem of the company. the constitutive act of a limited liability company must provide the number and the nominal value of the social parts as well as the number of social parts acquired by each associate on the basis of his contribution.the firm of the company. . agencies or other divisions without legal personality. .the manner in which the associates share the profit and the loss of the company.subscribed and paid-up registered capital. .the identification elements of the associates. .the ways for the dissolution and the liquidation of the company. . . . if any. specifying the main field of activity.The content of the constitutive act Regardless of the juridical form of a commercial company.the company’s object of activity. management and control of the company. its juridical form.

the type of shares. The publicity of the setting up of commercial companies After the incorporation.The constitutive act of a limited partnership or a limited partnership by shares must provide in a distinctive manner the two categories of partners: active partners and sleeping partners. the applicant is obliged to publish the judgment of authorization provided by the delegated judge in the Official Monitor of Romania. Also. The incorporation of the commercial companies in the Register of Trade Within 15 days from the conclusion of the constitutive act.the number and the nominal value of shares. The incorporation is made on the basis of an application filled by the applicant and registered within the Office of the Register of Trade from the county where the company has the headquarters. . in full or only an extract of it. The constitutive act of a company by shares or a limited partnership by shares must also mention: . . the founders. the administrators or their representatives are bound to apply for the incorporation of the commercial company in the Register of Trade. the applicant must publish in the Official Monitor of Romania the constitutive act of the company approved by the delegated judge.the specific advantages of the founders. . meaning bearer shares or registered shares.

. each associate gets parts of interest. The absence or the fictiveness of contributions is a ground for the absolute nullity of the company contract. In exchange for his contribution. The contributions of the associates to the registered capital of the company may be unequal and may have a different nature. 3. contribution as the obligation to contribute to the registered capital of the company. For example. The contributions to the registered capital of the commercial companies The contribution means the obligation assumed by each associate to put together some goods. this contribution may be as follows: 1. such as the contribution of a trademark that is no longer protected. Concerning the transfer of a right. if they prejudice his interests in any way. as follows: a. contribution in money. to transfer a right from his patrimony to the patrimony of the commercial company or even to perform a certain work in behalf of the company. this right may be either an ownership right over a thing or only a usage right. in all situations they have to be real. the contribution of a thing without an economic value is a fictive contribution. b. Thus. meaning that the law considers that the existence of the company is known by third parties form the date of the publication.This publicity has an opposability function. According to the object of the associates’ contribution to the registered capital of a commercial company. social parts or shares. any interested party has the possibility to bring an action against the constitutive act of the company or even against the existence of the company. The term “contribution” has two meanings. contribution as the goods that are the object of this obligation. Nevertheless.

the law considers that the goods which are contributed in kind are the property of the company from the date of its incorporation in the Register of Trade. The evaluation must be made by an expert in the following cases: a. contribution in kind. This contribution is performed by the transfer to the company either of the ownership right or the usage right over specific goods. 1. . The contribution in kind may consist in the following goods: . The contribution in money is compulsory at the setting up of any juridical form of commercial company. The thing that is the object of the contribution in kind must be evaluated in money.2. in order to determine the value of the parts of interest. such as receivables. the goodwill and so on.intangible movable goods. the contribution in money of the associates does not give them the right to interests. patents.tangible movable goods. . The contribution in kind is allowed for any juridical form of commercial company.immovable goods. . If there is no provision in the constitutive act of the company concerning the right that is transmitted. 3. such as raw materials. 2. contribution in work (in industry). merchandise. such as buildings. in the case of limited liability company with sole associate. According to article 68 from the Law no. social parts or shares the associate must get in exchange for his contribution. real estate and so on. 31/1990 republished. This evaluation may be made by the associates or by an expert.

b. The contribution in work is not included in the registered capital of the company. such as the receivables. the associates contributing receivables to the capital of the company are not exonerated of liability towards the company until the latter obtains the actual payment of the receivable. the limited partnership by shares or the limited liability company. in the case of companies by shares. . the contribution in work must be evaluated in money and provided in the constitutive act of the company. this associate has the right to participate in sharing the profits and the assets of the company. Nevertheless. c. For this purpose. Also he has the obligation to participate in sharing the loss of the company. The contribution in receivables is not allowed for the company by shares set up by public subscription. As we mentioned before. Thus. If the payment can not be obtained from the debtor. the associate is liable towards the company for the amount representing the value of the receivable and interests. The contribution in work is allowed only in the case of the general partnership and the limited partnership. 3. the contribution may have as object intangible movable goods. the associate who contributes his work is not entitled to get parts of interest in exchange for his contribution. when the delegated judge decides the performance of an expertise in order to evaluate the contributions in kind. calculated from the date when the receivable becomes due. because the payment of the receivable may be difficult to obtain. The contribution in work (in industry) represents the associate’s undertaking that he will perform a certain work or activity in behalf of the company. in the case of the company by shares set up by public subscription. If the contribution in receivables is allowed.

the powers of the administrators end upon the expiry of their mandate or before that date. The administrators of any commercial company may be associates of the company or persons unrelated to the company. in any of the following situations: . A legal person may also be appointed as administrator of a commercial company. In this case. The administrator is the legal representative of the company. Any commercial company is administrated by one or several administrators. The administrators may perform all operations required for the fulfillment of the object of activity of the company.4. . . The administrators of commercial companies are appointed and revoked exclusively by the General Meeting.the revocation of the administrator.the resignation of the administrator. the legal person must appoint a permanent representative. incapacity or incompatibility of the administrator. natural person. The functioning of commercial companies General rules concerning the administration of commercial companies Generally the administrator represents the company within the relations established with third parties. . The first administrators can be appointed by the constitutive act. Normally. in order to carry out its duties. The administrator of a commercial company may be a natural person having full concrete capacity.the death. except for the restrictions set forth by the constitutive act or by law.

The control of commercial companies’ operations The control of commercial companies’ operations may be performed as follows: .by internal auditors. . The appointment of internal auditors by the constitutive act is compulsory in the following cases: .for the companies of capitals.by the associates who are not the administrators of the company. General Partnership Associates’ rights and obligations 1.for the limited liability company with more than 15 associates. .Rights: a) to vote(name) the administrators b) to receive all documents concluded by administrators .

c) to request any information related to the company’s activity d) may elect one or more administrators among themselves. on his own or on another one’s behalf. without the consent of the other associates. duration of their mandate and their possible remuneration. e) in case the constitutive act prescribes that the administrators should operate together. b) to participate to losses c) The associates are unlimitedly and jointly liable for the operations carried out in the company’s name. cannot take part in any proceedings or decision-making regarding this operation. in case of disagreement among the administrators. in the same trading branch. establish their powers. in a certain operation. f) to participate to profit The associate who. neither in other competing companies or having the same goal.Obligations: a) The associates may not take part. the decision will be made by the associates. 2. the decision must be made unanimously. without his vote. as partners with unlimited liability. nor may they operate on their own or on others’ behalf. interests contrary to those of the company. unless otherwise stipulated by the constitutive act. the required majority would not have been met. The associate breaking the legal provisions is liable for the damages caused to the company if. has. by the persons representing it. or in a similar one. .

for the expenses which were incurred or for those he will make in the company’s interest. establish their powers.The judgement in court obtained against the company is opposable to each associate. uses the capital. f) In case of breaking the provisions regarding the interdiction of competition. e) No associate may take out of the company’s funds more than what was allotted to him. unless otherwise stipulated by the constitutive act. The right to represent the company belongs to each administrator. They are bound to take part in all the company’s meetings. except for the restrictions mentioned by the constitutive act. This right is cancelled after a three months’ period passing from the day the company took knowledge of the situation without making any decision. d) The associate who. duration of their mandate and their possible remuneration. in the meetings of the managing board and of managing bodies similar to this. the company. The associates representing the absolute majority of the registered capital may elect one or more administrators among themselves. Management The administrators can carry out all the operations required for the fulfillment of the company’s goal. beside the right to exclude the associate. . can decide whether he worked on its behalf or can claim for damages. the assets or the credit of the company for his own or another person’s benefit is bound to reimburse the resulting profits to the company and to pay the damages caused. without the written consent of the other associates. unless otherwise stipulated by the constitutive act.

The same majority may decide the administrators’ discharge or the limitation of their powers. having all the rights and obligations like the partners from Partnership. Managers can be also persons unrelated with the company. In case a administrator takes the initiative of an operation exceeding the limits of an ordinary operation in the line of trade carried out by the company. or can grant the administrators’ authorization in performing operations exceeding their powers. Limited Partnership Associates’ rights and obligations In order to determine Associates’ rights and obligations we need to make the distinction between active and passive partners. except for the case when the administrators were appointed through the constitutive act. only on the basis of a special power of attorney for certain operations. The active partners have the right to represent the company. can be elected as administrators. The passive partner also has the right to ask for a copy of the balance sheet and of the profit and loss . within the limits of the constitutive act. The passive partners can conclude operations on behalf of the company. granted by the company’s representatives and registered in the trade register. may take part in the procedures for appointing and dismissing the administrators in cases provided by law. The passive partner can perform actions of supervision. he must advise the other administrators prior to concluding respective operation under the sanction of bearing the consequences resulting therefrom.

b) to appoint the administrators and the auditors. after listening to the administrators and auditors’ report and to determine the dividend. within 5 months as from the end of the financial year. Joint-stock companies The General Meeting The General Meeting is the main decisional body. The ordinary meeting is convened at least once a year. . because has the obligation to decide all the other bodies and their powers.account and to verify their exactness by means of checking the commercial registers and the other supporting documents. d) to give their opinion on the administrators’ administration of budget. c) to establish the proper remuneration for the administrators and auditors for the current financial year. The general meetings are ordinary and extraordinary. unless it was settled by the constitutive act. approve or amend the balance sheet. Besides the debate of other issues on the agenda the general meeting is obliged: a) to discuss upon.

f) to decide upon the mortgaging. renting or dissolving of one or several of the companies’ units. f) writing down of the registered capital or its completion by means of the issue of new shares. Quorum. e) increase of the registered capital.e) to determine the income and expenditure budget and the activity program for the next financial year as the case may be. . c) changing the object of activity of the company. If the meeting cannot operate due to unfulfillment of the conditions of paragraph (1) the meeting gathered after a second convening may proceed upon the issues on the first meeting’s agenda. With a view to ensuring the validity of the proceedings of the ordinary meeting it is necessary to have the shareholders’ attending it representing at least 1/4 of the registered capital and that the decisions be made by the shareholders representing the absolute majority of the registered capital represented in the meeting in case the constitutive act or the law does not stipulate a larger majority. whatever the registered capital part represented by the attending shareholders is. with a majority. d) extending the company’s life. The extraordinary general meeting gathers whenever a decision is necessary to be made for: a) changing the legal form of the company. b) changing the location of the registered office of the company.

upon the subsequent convening. . With a view to ensuring the validity of the proceedings of the general extraordinary meeting. and the decisions to be made with the vote of the majority of those present or represented. with the exception stipulated under The constitutive act can limit the number of votes belonging to the shareholders who possess more than one share. j) conversion of one category of bonds into another or into shares. the attendance of shareholders representing at least1/5 of the registered capital. i) conversion of shares from one category into another. the following are necessary: . The right to vote. in case the constitutive act does not stipulate otherwise.upon the first convening. . The shareholders exercise their right to vote in the general meeting proportional to the number of shares they hold. Quorum. l) any other modification of the constitutive act or any other decision for which the approval of an extraordinary general meeting is requested.g) merging with other companies or its division. k) issue of bonds. h) early dissolution of the company. the attendance of shareholders representing at least 1/4 of the registered capital and the decisions to be made with the vote of the majority of those present or represented.

In case there are several administrators. The company by shares is represented by the administrators empowered to represent it or by the chairman of the board. as follows: a. with an administrator or a board of administration. they are organized as a board. will have to refrain from taking part in the proceedings concerning that operation. On company’s administration The administration of the company by shares may be performed according to two systems. with regard to a certain operation. the dual system. with two bodies. an opposite interest to that of the company. If a company is run by a board. unless provided otherwise by the constitutive act.The exercising of the right to vote is suspended for the shareholders not updated on the payments which are falling due. The unitary system The company by shares is administered by one or several temporary and revocable administrators. The shareholder who. The administrators who have the right to represent the company are not allowed to delegate this right. b. b. has a personal. The dual system . one of the administrators will be appointed as chairman of the board. namely the Supervision Board and the Directorate. a. the unitary system.

The Managing Board may delegate part of its powers to a Managing Committee. Liability. c) existence of the registers required by law and their correct updating. The executive of the company is the Directorate composed by one director or a board of directors. at the same time determining their remuneration. In the relations with the third parties. d) exact fulfillment of the decisions of the general assembly. e) strict fulfillment of the duties imposed by the law and by the constitutive act. Directorate. made of members elected from among the administrators. Supervisory board are made with the majority of the attending members. The decisions in Managing Board. unless the constitutive act stipulates a larger number. The administrators are jointly liable towards the company for : a) reality of payments effected by associates. b) actual existence of the paid dividends. . Directorate. the General Meeting of shareholders appoints the Supervision Board and this Board elects the Directorate. The Supervision Board controls the activity of the Directorate. the company by shares is represented by the Directorate. Supervision Board the attendance in person of at least half of the number of administrators is necessary. For the validity of the decisions of the Managing Board.In this system.

The administration of the partnership is entrusted to one or several active partners. if these are regularly kept. Limited Partnership by Shares The limited partnership by shares is regulated by the provision regarding joint-stock companies except for the provisions regarding the partners. to check if the balance sheet and the profit and loss account are legally drawn up and according to the registers. In the limited partnership by shares. the administrators can be dismissed by the shareholders’ general assembly according to a decision made with the majority required for the extraordinary meetings. The new administrator becomes an active partner. The appointment must also be approved by the other administrators if there are several ones. The auditors are bound to supervise the company’s administration. died or who ceased to exercise his mandate. and whether the assets assessment was made according to the regulations settled for the drawing up of the balance sheet. . The auditors have to carry out their mandate personally. The auditors may be shareholders of the company except of the authorized or certified accountant. In all cases. The general assembly elects with the same majority another person instead of the manger who was dismissed.Auditors The joint-stock company will have three auditors and one deputy member unless the constitutive act stipulates a larger number. the number of the auditors must be an odd one.

The dismissed administrator remains unlimitedly liable towards third parties for the obligations he was committed to during his administration. c) to decide upon the suing of the administrators and auditors for damages caused to the company. keeping his right to subsequently sue the partnership. Each social participating share gives the right to one vote. to dismiss them and to release them of their activity. The active partners who are administrators cannot participate in the proceedings of the general assembly for the election of auditors even if they possess shares in the partnership. Quorum. The vote of all associates is needed for decisions having as their subject amendments to the constitutive act. The general assembly makes decisions by the vote of the absolute majority of the associates and of the participating shares. The assembly of the associates has the following main duties: a) to approve the balance sheet and to establish the allotment of the net profit. also . b) to appoint the administrators and the auditors. Limited Liability Company General Assembly The associates’ decisions are to be made in the meeting of the general assembly.

designating the person in charge of taking action against them.by the associates. 1. . . Dissolution and Liquidation The dissolution The dissolution of commercial companies may be decided in three ways. associates or non-associates. d) to modify the constitutive act. The Law no.by the court of law. 5. appointed through the constitutive act or by the general assembly. 31/1990 republished provides general cases of dissolution of commercial companies and special cases which are applicable to certain juridical form of commercial companies. General cases .by law. It means that in this case the dissolution of the company is imposed by a provision of the law. as follows: . Management The company is administered by one or several administrators.

In the cases prescribed at a. e) the court decision. at least 3 months before the final moment. Special cases 1) The joint-stock company (company by shares) enters dissolution: a) in the case the administration board or the directorate notices. the carrying out of the consultation. consultation of the associates must be held. that the . f) bankruptcy. In this case. at least 3 months prior to the company’s expiration date. g) other reasons as prescribed by the law or by the constitutive act of the company. 2. regarding the possible extension of its life. whether they intend to extend the company’s existence. such as serious dispute between the associates that hinder the company’s operation.a) expiration of the period established for the life of the company. When such a consultation lacks. following the anual losses. initiated by any one of the associates. b) impossibility to carry out the object of activity of the company or its fulfillment. at the initiative of any one of the associates the court may order. by a decision. for justified reasons. d) the decision of the general assembly. the associates must be asked by the administrators. c) the declared nullity of the company.

This is not to be applied in case the company was temporarily inactive. Other cases of dissolution At the request of the local chamber of trade and industry or of any interested person. withdrawal or death of one of the associates when. the number of the associates was reduced to only one. owing to these causes. a fact notified to the public fiscal agencies and registered with the trade . b) The latter case is applicable also to limited liability company. the Tribunal can decide the dissolution of the company. b) the company did not submit within 6 months from the legal required terms the financial statements and other documents c) the company ceased its activity or it has no known registered office or the associates have disappeared or they have no domicile or known residence. legal inability. An exception makes the case where the constitutive act contains a clause according to which the company may continue its existence with the heirs or when the only remaining associate decides the company to continue in the form of a limited liability company with one sole associate.active of the company (established as the difference between the total active and the totality of debts) has diminished to less than half of the social capital. exclusion. 3. The provisions of the preceding paragraphs are to be applicable also to the limited partnership or limited partnerships by shares providing those clauses are applicable to the only active or the only sleeping partner. in the cases when: a) the company lacks the bodies required by the constitutive act or these bodies cannot meet any more. 2) The general partnership and limited liability companies are dissolved through bankruptcy.

the payment of the creditors from these amounts and the distribution of the rest to the associates. Even under these conditions. without liquidation. However. the company maintains its legal personality. otherwise they are personally and jointly liable for the operations they started. . the company maintains its legal personality during the liquidation operations until the liquidation is finished. Dissolution may take place without liquidation in case of merging or of total division of the company and in other cases stipulated by law. all the documents issued by the company must mention that it is subject to the liquidation process. The duration of inactivity cannot exceed 3 years. Liquidation The liquidation of commercial companies involves all the operations concerning the conversion of the company’s assets into cash. During the liquidation. becomes effective against third parties only after a thirty days’ interval has passed from the publication in the Official Gazette of Romania. The dissolution of the company.register. the beginning of the liquidation procedure. but only for the purpose of performing the operations required for its liquidation. Dissolution of a limited liability company with an only associate brings about the universal transfer of the company’s assets towards the only associate. before expiration of the period established for its duration. As from the moment of dissolution. Dissolution’s effects Dissolution of the company has. as an effect. the managers cannot start new operations. The ban imposed is to be applied as from the day the time established for the company’s life expires or as from the date of its dissolution as decided by the general assembly or as declared by a court decision.

until the liquidators take over their duties.In order to declare the company’s liquidation. under the same conditions as those requested by the law for their appointing. All the documents issued by the company must show that it is undergoing liquidation. we need official receivers. the official receivers are obliged. to make an inventory and to draw up a balance sheet to ascertain the exact situation of the company’s assets and liabilities and to sign them. c) to keep a register with all the liquidation operations. by their date order. along with the company’s managers. the registers committed to them by the managers and the documents of the company. the following rules shall be observed in liquidating and distributing the social assets: . The liquidators are entitled to exercise the powers conferred upon them by the associates or shareholders. . the administrators must continue their mandate. natural or legal persons.the act of appointing the liquidators or the judgment that replaces it and any subsequent act concerning their replacement must be deposited with the Office of the Register of Trade in order to be registered and published in the Official Monitor of Romania. authorized by law. Official receivers obligations a) to make an inventory and to draw up a balance sheet to ascertain the exact situation of the company’s assets and liabilities b) to receive and keep the company’s assets. Even if the constitutive act of the company stipulates provisions concerning the company’s liquidation. .

After the liquidation is completed the official receivers must request the erasing of the company from the trade register. f) to contract bills of exchange.d) to request the erasing of the company from the trade register. to make unmortgaged loans and generally to carry out all other necessary acts. . e) to liquidate and to cash in the company’s debts even in case of the debtor’s bankruptcy. The company’s liquidation must be completed within 3 years at the most as from the date of its dissolution. the goods cannot be sold in the lump. the real estate and any movable estate of the company. For justified reasons the court may extend the said time limit with not more than 2 years. the rules established under the constitutive act or law are also applied to the companies undergoing liquidation to the extent to which they are not incompatible with the liquidation. issuing a receipt. b) to carry out and to conclude the trading operations related to liquidation. d) to make transactions. Official receivers rights a) to go to law and be sued to the benefit of the liquidation. c) to sell. by public auction. Beside the provisions of the present title.

this notion is used with the meaning of a written statement. as an expression of a person’s will. Civil code uses both of these meanings.26 . the civil code provides that “the acceptance of a succession can be expressed or implied”. For instance. as we already defined it. 2) Secondly. This is the negotium sense. which is known as the instrumentum sense. Business Law_7_Legal Act NOV . and it is implied whenever he simply makes an act (negotium sense) which can be concluded only by a person who has a successor quality.2013 The most accurate definition of a legal act is an expression of somebody’s will made with the intention to bear. CLASSIFICA TION OF LEGAL ACTS There are different criteria to classify the civil acts as follows: .All the documents issued by the company must show that it is undergoing liquidation. It is expressed whenever the successor makes an act in an authentic form (instrumentum sense) in order to acquire the inheritance. Our law commonly uses this notion (act) with two different meanings: 1) Firstly. modify or cease a juridical relationship.

and the borrower is the promisee. It means that. a legally recognized promise or bargains made by two or more persons and including all rights and duties resulting from their promises or bargains. Acts made by onerous title and acts made by gratuitous title . in a loan contract. If there is no such exchange and only one part assumes obligations. For instance. On the contrary. a contract may involve an exchange of promises in which two parties agree that each of them will perform a certain obligation. contracts may be classified. It is common to assume that it involves two distinct steps: the first is an offer by one party and the second is an acceptance by the other. consignment. Moreover. The process by which the parties arrive at a bargain will vary widely according to the circumstances. Examples of contracts include: contract of sale. being obliged to give it back. a bilateral or multilateral act is an agreement between two or more parties with distinguished interests. mandate. loan.Unilateral and bilateral acts A unilateral act is an act that involves the expression of a single person’s will. being entitled to demand the loan. the loaner is the promisor. in this case. Indeed. in their turn. It can be included in this category the will. the acceptance of a succession. employment contract. there is only one person expressing his intention to produce juridical effects. as unilateral. the contract is unilateral. and bilateral contracts. We emphasize that. etc. A bilateral/multilateral act is a contract. the offer to contract. The exchange of a promise for a promise is known as a bilateral contract. the contract involves two will but only one part assumes obligations. contract of exchange.

. .. In fact.g. sale contract). Examples of such acts include life and fire insurance contracts or life annuity contracts. any promise.. an act made by gratuitous title is one in which one party promises to the other an economic benefit without expecting.This transfer can be achieved either by a person to another. The acts made by gratuitous title are subdivided in: a) grants – a voluntary transfer of goods from a patrimony to another.g. in exchange. the loan contract without or with interests). Although many of the unilateral contracts are made by gratuitous title (e. from the very moment of concluding the act.g. there are some which may have both gratuitous or onerous titles (e. the donation or the gratuitous mandate). An act made by onerous title is that act in which each party promises an economic benefit to the other in exchange of another economic benefit.The criterion of this distinction is the aim pursued by parties concluding the act. which will be their mutual obligations (e. The acts made by onerous title subdivide into: a) commutative act – one in which the parties know. On the contrary. b) aleatory act – an agreement wherein the performance of one party depends on the occurrence of an uncertain event (alea). Such agreements are enforceable notwithstanding an uncertainty of terms at the time of their conclusion or an undertaken risk clearly appears. when the contract is concluded the parties do not know the extent of their obligations because their performance depends of the occurrence of an uncertain and fortuitous event.

For instance. constitutive and declarative act The criterion of this classification is the effect of the act. A constitutive act is one that constitutes a right which does not previously exist. sale contract or exchange contract). Consensual.g.b) acts of benevolence – a favor made by a person to another without decreasing the patrimony of the former (e.. code the most juridical acts are enforceable by simple consent. law requires a written form. For instance. for concluding acts as . According to the civil A formal act is enforceable only if there are observed some additional formal conditions. A “partition” is a dissolution of the unity of a possession that exists between mutual owners. The most juridical acts have this character (e.g. the gratuitous mandate). The form required for concluding such acts is. most frequently. A declarative act is one that consolidates a pre-existing subjective right. formal and real acts A consensual act is an enforceable one with no formal conditions requested. and sometimes even an authentic form.. the partition is a constitutive act. Translative. a written settlement. the juridical institutions of mortgage or of usufruct are such constitutive acs. For instance. the partition or the settlement is a declarative act. Accordind to the New Civil Code. other than the simple consent. A translative act is an act which transfers a pre-existing right.

etc. life annuity contract. Therefore. One of the most important differences is that the sanction for culpable failure or improper performance will be rescission in case of the contracts with an instantaneous execution. a mortgage depends on the loan . sale contract).. Principal and accessory acts A principal act is one independent of any other act. but to conclude it as well. the deliverance of the goods is requested not only to perform the real act. For instance. there is no difference in what concerns the nullity of those acts. It means that we have successive operations (e. rent contract. Acts with instantaneous execution and acts with successive execution An act with an instantaneous execution (uno ictu) is one that involves a single performance. There are real acts loan or deposit contracts. the deliverance of the goods is required by law for a valid conclusion of the act itself. whereby the simple consent is not enough for the validity of the transaction. while for the contracts with successive execution the sanction will be dissolution. Thus.). An accessory act is one that depends on a principal act.. mortgage or farm contract. will. An act with successive execution involves multiple performance. A real act is one that can be concluded only by delivering the thing by the transferor to the transferee.donation.g.g. meaning made at once (e. According to the New Civil Code.

g.g. the donation in Art. The unnamed acts are those created by the parties for their specific interests. e.contracted by the mortgagor. like marriage or adoption. civil code regulates the sale contract in Art. the donation with a task or the insurance contract. the loan. the exchange contract in Art. Certain acts are essentially dependent upon a modality. Pure and simple acts and acts affected by modalities A pure and simple act is one that does not contain a modality. 1011-1033. the rule is that the accessory act has the same destiny as the principal one (accesorium sequitur principale).. etc. 1650 – 1762. There are modalities the term. In this case. They are as legal as the . until then it has no effects. that always involves a term. the condition and the task. 1763 -1765.).. There are several acts that are incompatible with modalities. which will be later treated in this chapter. It cannot continue after the time when the mortgagor performed his obligation to the benefit of the encumbrance. A mortis causa act is one which produces its effects after the death of the promisor. but most of them may be affected by the modalities. That category includes all contracts and the most of unilateral acts. A “modality” is’ a future event that determines the existence or performance of a juridical act. Inter vivos acts and mortis causa acts An inter vivos act (lifetime act) is that which produces its effects unconditioned until the death of the promisor. Their conclusion and performance will be governed by the specific provision of law (e. In other words. (the will) Named acts and unnamed acts The named acts are the acts described and regulated by law.

It has happened recently with the sponsorship contract. it means. . In as much as there is not a specific provision in law. they are governed by the rules determined according to the general principles of contract law. when a special law. Thus. . CONDITIONS OF VALIDITY By conditions of validity of juridical acts we understand their elements of enforceability. Sometimes an unnamed contract may become a named one. becoming a named act by coming into force of Law no.a lawful consideration. any person unable to take care of his or her property for any reason. The capacity To test the capacity of concluding a juridical act does not mean to see whether a person’s mind is impaired or unsound. The capacity. to see whether that person has the ability to comprehend the nature of the transaction he or she is engaged in and understand its consequences.a genuine assent of the promisor. which is a state of law (de jure) is distinguishable from judgment. . and whether that person understands all the terms of the act.a certain subject matter. or disease is considered incompetent. These conditions are the following: . the civil code provides the main conditions for the validity of juridical acts. advanced age. but. which is a state of fact (de facto). comes into force. . Essentially.the capacity of the parties to contract.named ones. including mental illness. 32/1994. which describes and regulates it.

Therefore. the former is the one which will be taken into account. the issue is analyzed according to the rule provided by Decree no. and. to determine the form of the act. It means that the parties of a civil act are free to conclude or not a certain act. to stipulate any particular clauses. if there is any incongruity between the real intent of the parties and the expressed clauses of the act. or by the statute under which it was created). the presumption of law is that a person has the legal capacity to contract or to make a unilateral act. In our legal system. 31/1954. in most cases. . 2) the principle of real will of the parties. any legal provisions related to the absence of capacity cannot be extensively construed. to determine the specific content of the act. The parties’ freedom to conclude any juridical acts is limited by the compulsory rules of law and by the public policy. the activities of a corporation beyond the powers conferred upon it by its charter. 34 the ultra vires acts (meaning. In company law. which prohibits in Art. The assent The assent and the consideration constitute the juridical will of the parties.Civil code provides that “any person is assumed to be able to contract unless he is declared incapable by law”. the rule is the capacity. In this matter. It means that without a court determination of legal incompetence. According to this principle. the juridical will of parties is governed by two principles: 1) the principle of freedom of juridical will of the parties. The parties voluntarily and knowingly conclude the act as a result of their intention. and the lack of capacity is the exception.

the assent cannot be implied. Mere inaction and silence are usually not regarded as manifestations of intention to agree over a contract. Does silence have any juridical value? Generally speaking. the civil code stipulates that the rent contract is considered restored in force if. the elements required for a valid and enforceable contract appear to be present but in reality they are not. if a store owner accepts a gang leader’s offer to protect his property from gang violence by agreeing to pay the gang $100 per month. Indeed. The assent externalizes the party’s intent to conclude a juridical act. the proof of the real intention of the parties is taken into account.It should be mentioned that. several problems arise in case of silence. However. either orally or written expressed. the buyer who relies on that information and signs a purchase contract does not have a valid juridical will to conclude the act. if a used-car salesperson deceitfully states that a car has a rebuilt engine and has never been in an accident. some exceptions to this rule occur. For example. the act has to be construed upon the expressed words used by parties. usually. or even derived from their actions. For instance. Thus. the store owner is not genuinely assenting to the terms of the act. Similarly. in some cases. the assent has to fulfill several conditions. . and in case of silence it is considered that it is no assent. 2) It has to be unambiguously externalized. law expressly provides. Any act concluded in the absence of the assent will be declared null and void. It results there from that the validity of the act depends on the validity of the juridical will of the parties. in order to apply this principle. in some cases. that the silence of one of the parties has to be considered an assent. if it is possible to determine the real will of the parties. as follows: 1) It has to exist. For being the basis of a valid act. depending on the subject matter of the act. It means to result from the words of the parties. Firstly. any reasonable means of communication are effective to externalize a valid assent. While.

the person is able to comprehend the nature of the transaction he or she is engaged in and to understand its consequences. To be genuine. the parties silently continue to perform it. Thirdly. In other words. For instance. 4) It has to be expressed by a person who intents to engage himself in a legal relationship. the initial agreement between the parties may constitute the basis for regarding silence as an assent. law considers that he has performed a tacit acceptance. The lack of genuine assent may arise by the so-called “vices of consent” or defects. if an heir conducts himself like an acceptant of an inheritance. elsewhere there is no valid contract between them.after the term of the contract has been fulfilled. certain conducts of the party may be assumed as expressing an assent. Secondly. 6) It has to be genuine. 3) It has to be expressed by a person who is mentally competent to conclude the act. . the assent must be conceded voluntarily and knowingly by each of the parties. c) the duress. b) the misrepresentation. 5) It has to be definite and certain as the essential terms of the act are concerned. Law considers as vices of consent the following: a) the mistake/error.

an act is avoidable for error in personam only if it is concluded intuitu personae. for example. and the buyer believes that it is a grand piano. A similar case is when one party believes that he or she buys a car while the other party believes that he or she sells a toy car. It should be mentioned that the error is produced by the person himself. Thus. Another example of essential error is the one which refers to the qualities of the subject matter of the act (error in substantiam) or to the contracting person (error in personam). A case of error in substantiam arises. For instance. It is an erroneous belief about the facts as they exist at the time when the agreement is concluded. . which refers to the nature of the act (error in negotium) or to the identity of the subject matter (error in corpore). when the seller believes that the subject matter of the contract is an upright piano. the error should be serious.d) the injury. and the other one believes that it is a sale. In order to vitiate the party’s assent. These acts are concluded on the ground of one of the parties’ qualities If the offer or receives an acceptance from one whom he mistakenly believes to be the addressee of the offer. Another type of error is one concerning a person’s identity. Types of errors: a) essential error. the offer may avoid the contract for error in personam. the party is entitled to claim the cancellation of the act. generally. when one of the parties believes that the act is a donation. a) The mistake (error) The error is generally defined as a state of mind which has not accordance with the facts. In that case.

which refers to a contract. but had unintentionally prepared and executed one which did not express the true agreement. meaning the misrepresentation. This rule is based on the fact that law is presumed to be known from the moment it is published in the Official Monitor of Romania. The misrepresentation has the same essence as the error/mistake.The sanction for these types of error is relative nullity. in case of errors about the facts the party can claim the rescission of the contract. the error about law is not accepted for pleading somebody’s ignorance. a mutual error is where both parties understood that the real agreement was what one party alleges it to be. an error could be bilateral or unilateral. It should be mentioned that within our system of law. whenever somebody is fully cognizant of the facts and the substance of his behavior. the misrepresentation results from one . A nonessential error can attract a decrease or increase in value of the benefit. in the sense that the mistaken party would have signed the act whether he had had a fair representation of those circumstances. From another point of view. But unlike the error/mistake. Thus. It doesn’t confer to any of the parties unenforceable. he cannot plead his ignorance regarding the legal consequences of his conduct for justifying the rescission of the contract. but may remain even without any legal consequences c) immaterial error. A future distinction should be drawn up between an error about law and an error about the facts. b) nonessential error is the false representation of less important circumstances at the moment when the contract was signed. b) The misrepresentation The misrepresentation is the misrepresentation of a fact that is made with knowledge and with intention to deceive the other party. A mutual (bilateral) error means that both parties are misunderstood the same matter. By contrary. For example.

Generally. Moreover. Since misrepresentation requires this intent. however. he also knows that if those facts were known by the other party there would be no contract. For example. because it was concluded by mistake. the misrepresentation has two main elements: 1) intentional element (which consists of the will to fraud the other party). who. However. Sometimes. a number of exceptions to this rule. a misrepresentation of facts may be unintentional. changes his or her legal position in concluding the contract. For instance. Suppose one party knows certain material facts and knows the other party is not aware of them. relying on the misrepresentations. From a structural point of view. Occasionally. silence may constitute a misrepresentation of facts leading to fraud. Thus. mere negligence or carelessness cannot constitute fraud. when . The intention to deceive is expressed by the party’s intention to create a false impression. when a prospective seller of land has knowledge of a hidden defects in the property that cannot be observed through inspection.contracting party action. an active ceasing of the fact is the most obvious type of misrepresentation. mere failure to disclose information to the other party does not constitute a misrepresentation. 2) material element (which consists of the activities performed in order to lead the other party into mistake). law commonly requires either an affirmative act or an express statement. If the seller fails to inform the purchaser about these defects. There are. but the act is still avoidable. because law does not impose a duty of disclosure. In order to have a misrepresentation. the seller could be held liable for misrepresentation because his or her silence was intended to mislead the purchaser into assuming there were no defects. the party who misrepresents the facts clearly intends to do it and to deceive the second party. It means that there is no misrepresentation.

The essence of duress is the lack of free will or voluntary assent. In other words. It should be mentioned that duress is not limited to the above situations. but against a relative or closed friend of the party as well constitutes duress. If a contracting party. duress has occurred. although not carried out. in a juridical meaning. whether brave or timid. and other uses of moral or social force to put a person in such fear that his or her act is not voluntary. Any wrongful act or threat that overcomes the free will of the consenting party constitutes duress. which exists when a person exercises mental coercion over another. Indeed. it should be mentioned that duress cannot be limited to the fear that might overcome an ordinary person. c) The duress The relief from an agreement on the grounds of duress is clearly avoidable if a person is deprived of his freedom or his property through physical or moral force. . At the same time. undue influence. misrepresentation has occurred. can also lead to lack of genuine assent.the seller of a used car turns back the odometer to conceal the number of kilometers the car has been driven. the coercion exercised not only against the contractual party. any economic coercion. constitutes duress. Even the threat of physical force. constitutes duress. it is necessary to ascertain whether the acts or the threats were wrongful and whether these events and not the free will of the party have induced the required contractual assent. is actually coerced to conclude a contract. Thus the state of mind of the person who is being threatened must be examined. threats on a person’s family and the beloved ones. Furthermore. In order to determine whether a contract can be avoided on account of duress.

but it is commonly recognized that it has this effect. It should be mentioned that not every juridical act could be avoided on the ground of injury. Thus. In fact. a contract). duress presupposes an intentional element and a material one as well. Law requires several conditions that have to be fulfilled to obtain the rescission of the act based on injury. duress can arise not only from the activity of the contracting party. Thus. it should be mentioned that. the following conditions must be fulfilled *) it has to be a bilateral act (e. otherwise the disproportion assumed by the parties appears as a normal risk of an aleatory contract (the terms “commutative” and “aleatory” contracts are explained in another chapter of this book). which are unreasonably favorable to the other party. but also from the wrongful activity of a third party. As a conclusion.Unlike misrepresentation. bilateral contracts are susceptible of disproportion of parties’ mutual promises. . d) Injury Injury represents an obvious disproportion between mutual promises of the parties within a bilateral contract. *) It has to be a commutative contract. . the intentional element is the fear induced to a contracting party for determining he or she to conclude a juridical act. That condition is imposed by the fact that only these kind of juridical acts are defined as promises made in exchange of promises. for the injury in case of the underage child. injury is not provided by civil code as a real vice of consent.g. Injury includes the absence of the meaningful choice of one party together with the terms of the contract. as a vice. As consequences.

the loan and so on. For the injury on case of an adult. agreed by the parties. 1225 (1) NCC stipulates that the subject matter of the contract is the legal operation. In case of the adult. The distinction between the suject matter of the contract and the subject matter of the obligation is . made by onerous title It is necessary that one of the party. inexperience or lack of knowledge of the other party stipulates in its own favour or another person a benefit of a considerably greater value at the time of concluding the contract than the value of their own benefits.*) the party who alleges to avoid the contract has to be an underage person between 14 and 18 years old. the lease. the ridiculous low price is sanctioned with the relative nullity of the contract without the need for the party to demonstrate that the other had taken advantage of the state of need. Art. taking advantage of the state of need. the action for annulment is admissible only if the damage exceeds half the value of the performance guarantee or executed by the injured party at the time of concluding the contract and the disproportion must subsist until the request for cancellation. in case of the sale contract. 1226 (1) NCC stipulates that the subject mater of the obligation is the benefit to which the debtor engages. the following conditions must be fulfilled: It has to be a bilateral contract It has to be a commutative act. such as the sale. lack of experience or lack of knowledge of the seller. As an exception. *) it has to be a contract whereby such minor can conclude on his own name and without any additional consent. The subject matter Art.

the seller supports these risks. Within a juridical act. unless the risk has passed to the buyer. not on the ground of non-existence of the subject matter. unless it does not have an actual existence (e. If the object does no longer exist (at present). damaged. The subject matter has to be identified or identifiable. Law considers the subject matter as existing even if it exists in the near future. 2. which is completely prohibited by law. when the goods are general established. In this last case. the parties’ conduct can refer to goods and thus. 3. A transaction in futures occurs when a person contracts to deliver goods that either does not exist. the sale of future harvest is a valid contract). but on the ground of immoral consideration. or destroyed. The process of selecting or setting aside the specific goods is referred to as identification of the goods within the contract. as follows: 1. while general established goods (res genera) are identified by their quantity. the seller is bound to deliver goods from the same category. the subject matter of a juridical act has to fulfill seven different conditions requested by law. In order to be valid. The identification of goods has important legal consequences for the contracting parties. According to the civil code. or the seller does not own them at the time of contracting. according to the civil code “only the goods on the market can be the object of a contract”. Thus. size. the subject matter does not fulfill this requirement. the toads become subsequent objects of the act. It is the case of the sale of future inheritance. There is only one exception from this rule. even if it has existed in the past. .g. the goods individual established (res ceria) are identified by their features. etc. the buyer bears the loss.very useful. if the goods are individual established and are lost. By contrary. number. Therefore. The subject matter has to belong to the civil circuit. Thus. the subject matter of the contract is the same with the subject matter of the civil legal relation and the subject matter of the obligation consists of the positive or negative performance that contracting party undertakes to each other. quality.. The subject matter has to exist.

The consideration represents the goal pursued by the parties who conclude a particular juridical act. It is neither legal possible to sell goods that belong to public property of the state. 4. at least. The subject matter has to be free from legal or moral prohibition. Law usually cannot enforce an act whereby the parties promise to do something illegal or against public policy or morals. For example. The consideration In order to be enforceable. unless its object/subsequent subject matter is identified or. This requirement is not considered fulfilled if the performance of the contract is impossible only for a particular promisor. The consideration is analyzed by our juridical literature from two points of view: . is not material possible to alienate the moon. 6. Each party has to assume his or her owns behavior. The impossibility of the subject matter means the impossibility of anyone to perform a particular promise. The subject matter has to be legal or material possible (impossibilium nulla obligatio est). It means that nobody can promise somebody else’s conduct.It should be mentioned that the act is null. identifiable. For instance. but it is generally possible. For example. it is forbidden to sell the goods which belong to somebody else. a contract whereby a part promises to the other to pay an amount of 5. a legal consideration or cause must support a juridical act. It means that the subject matter of the act should be lawful. or to engage performance the performance of somebody else.

. he or she wants to use the object or he wants to sell it for a better price. The problem of the validity of the consideration does not arise unless the intermediate cause is analyzed. In fact. or he wants to pay a former debt. Nevertheless.to be non-prohibited by law or public morals (contra bonos mores).the intermediate or specific consideration. .to exist. being an abstract one. the parties who conclude a sale contract resume the same instant consideration in all cases. he or she wants to buy another object with that money. . The form .consideration for selling (e.to be real. etc. a promise to undertake a social obligation cannot be considered a valid one.the instant consideration. which is essentially the same in all acts of a certain type. At the same time. every seller has his or her own intermediate.g.).. For instance. secondly that it is valid. and. . The instant cause is always valid. etc. which is different from a certain agreement to another. For instance. every purchaser has his own intermediate consideration for buying (e. that the consideration exists. In order to support a valid contract..g. the civil code provides two presumptions: firstly. the seller is interested to obtain the price while the purchaser is interested to acquire the goods.). the consideration has to fulfill several conditions as follows: .

2) Form requested ad probationem. Examples of such acts include insurance contract. are divided into three main categories as follows: 1) form requested by law ad validitatem. There are only a few types of juridical acts that should be concluded in a certain form imposed by law for their enforceability. law does not usually impose that. lease or settlement. Sometimes. which is compulsory. voluntary deposit. Law also requires some formal conditions for certain other acts. the civil code specifically requests the written form for an act with an object having a value over 250 lei. The non-observance of this form flaws the act and a later complaining with the legal rules cannot cover the nullity of the act. articles of partnership or mortgage). although the act is valid even in the absence of the due form. despite the normal exceptions provided by law. the formalism does not apply as a principle. Therefore. Within the common understanding. Due to the power of the national currency. The legal rules. This form has to be observed in order to proof (to attest) the content of the act. sale of land. This form has to be observed for the very validity of the act. several acts are valid only when they are drawn up in a deed stricto sensu. the written form is . which stipulate formal requirements. meaning an authentic form (e. as it is the case of the will (the will is valid only if it is executed in the accordance with the formalities prescribed by statute for each type of will). It means that within Romanian law system. it means that today.g. However. In fact. donation. many people assume that juridical acts should be drawn up in a written form in order to be enforceable.The observance of the proper legal form is one of the validity conditions required for concluding a juridical act. the simple consent of the contracting parties is enough for concluding a valid agreement and law requires a written form only for constituting evidences that can be used within a lawsuit.

the act is valid between contracting parties. a land or real estate contract has effects only between the seller and the purchaser. it should be concluded in a specific form. there can be mentioned the legal requirement to notify the debtor within the assignment of debts and the registration of selling and purchasing contracts of land or of real estate. unless he or she has observed the due form of act. unless he or she is informed about that assignment. The modalities of the juridical act are: the term. one of the contacting parties can transfer his contractual rights to a third party. Within a contract. but in order to make it opposable to third parties. In other words. juridical acts may be pure and simple or affected by modalities. unless it is registered in the real estate register. This is why. The form imposed by law has to be also observed. the condition and the task.requested for proving any agreement. The contract between the assignor and the assignee has no effect against the debtor. The act’s modalities are future events that determine the existence or performance of the act. the assignment of debts is a debt transfer to another person’s benefit. 3) Form requested for the opposability to third party. The person entitle to do that is the so-called “assignor” while the recipient of these rights is the so-called “assignee”. otherwise the debtor may validly pay his debts to the assignor. For example. The term A term is a sure and future event until the beginning or the extinguishing of a right and of correlative . THE MODALITIES OF THE JURIDICAL ACT As it was mentioned above. otherwise the act’ could not produce its effects over any third party. Being governed by the same rule. In fact. the purchaser of the land or other real estate would not be able to prove his rights in case of eviction from a third party.

The term. Therefore. the extinctive term brings the debtor’s obligation to its end.duty adjourns. which suspends the creation or the execution of legal obligation. In other words. An extinctive term is one that adjourns the end of a right and of correlative duty (e. There are two categories of terms: suspensive and extinctive terms. . .Unlike the suspensive term. the so-called term of payment). the term ‘when the debtor becomes liable for devolve duty. The condition A condition is a future and uncertain event.g. the creditor cannot claim the payment of his debt right and the debtor is not liable to pay. within condition the achievement of the future event is not sure. the date of a creditor’s death within a life annuity contract). It means that the creditor may claim his debt right and the debtor is liable for his duty.Until the payment is not due. the creditor is entitled to pursue the debtor (to sue) for imposing him to execute his obligation. the debtor has voluntarily renounced to the benefit of the term. Apart from term. not its very existence.g.If the promisor (the debtor) performs his obligation before the suspensive term provided by the contract. A suspensive term is one that adjourns the beginning of enjoyment of a right and of correlative duty (e. the payment is valid. affects only the performance of the act. each of the above categories of tenns produces different effects as follows: .After the payment is due. either suspensive or extinctive. The . .

If that condition occurs any performance under the contract takes end. any juridical relationship between the parties is retroactively canceled. pure and simple one and as consequences the creditor’s right is retroactively strengthened. the sale is canceled”. can be classified upon many criteria. either suspensive or resolutive.conditions.Until the achievement of the suspensive condition (pendente conditione). he is entitle to obtain the restitution. he can claim the refund of his payment because it was not due. but if I have to move in another locality. In this case. A condition. the condition has the following effects: . The following example expresses a promise affected by a resolutive condition “I’ll sell you my car. A suspensive condition is one upon which the enforceability of a contractual right and its correlative obligation depend. A resolutive condition is one upon which the cancellation of a contractual right and its correlative obligation depend. the creditor is not entitled to request the performance of the contract and the debtor is not liable to execute it.the further promise “I’ll sell you my apartment. . It should occur before the party executes his obligation within the contract.if the suspensive condition cannot be achieved. . there are suspensive conditions and resolutive conditions. Along with specific effects arising from them. Nevertheless. the act becomes a. if I have to move in another locality” is a suspensive condition. if the debtor fulfils his obligation. For instance.after the achievement of the suspensive condition (eveniente conditione). . . as modalities of juridical acts. Therefore. affects not only the Iperformance of the act but its very existence.

but prohibits it if depends on the promisor’s will (e. Secondly. Finally. whenever you want to sell it”). I’ll buy your apartment.g. the act is retroactively canceled. a condition is joint (mixed) whenever it depends on one of the parties’ will. the joint (mixed) condition and the willed (“potestative”) condition. Another distinction is made between the fortuitous (causative) condition..after the resolutive condition is achieved (eveniente conditione). the parties should return their achieved services. Firstly. . . “I’ll buy your apartment. For example “I’ll buy your apartment if I get married until the end of the year”.until the fulfillment of the resolutive condition (pendente conditione) the act has the appearance of a pure an/d simple one and therefore the creditor’s right is enforceable and the debtor is liable to execute his obligation. Law allows the conditions that depends on the promisee’s will (e.if the resolutive condition cannot be achieved. if it rains”. if I feel like it). .g. a condition is willed (potestative) whenever it depends only on one of the parties’ will. just as no contract had been concluded between them. the act is retroactively considered as a pure and simple one. Consequently.. a condition is fortuitous (causative) whenever it consists of a casual event. For instance “I’ll lend you my umbrella.

within a gratuitous act (donation or a legacy. required by the grantor to the grantee. A task provided to the benefit of the third party is almost similar with the contract to the benefit of a third party. the gratuitous act is not retroactively canceled. to do or not to do. otherwise the contract becomes a bilateral one. For instance. the condition has a retroactive effect..g. An example of tasks provided to the grantor’s benefit includes the contract whereby the grantor required to the grantee to pay an amount of money to a third person. but the grantor may revoke it. Whether the grantee does not execute the task. It means that. A task may be also included in a will. However. its achievement makes the act a pure and simple one (in case of a suspensive condition).g. the task may never overtake the value of the gift. the devise whereby the devisor specifically requests that the devisee cultivate the land that constitutes the object of the devise is a legacy affected by a task provided to the benefit of the grantee. The task A task is an obligation to give. a donation or a legacy affected by a task stipulated to the benefit of the third party grants the grantee (e. a life insurance whereby the insurance company promises to pay a certain amount of money to the benefit of a non-contracting third party if the insured person die). to the grantee’s benefit or to the benefit of a third party. a contract to the benefit of a third party is a contract whereby the promise’s primary interest is to bestow a ~ft upon a third party (e. either bequest or devise). It may be required to the benefit of the grantor. Unlike the contract to the benefit of the third party. Essentially. the task imposed to the legatee to pay a certain alimony to the surviving spouse of the legator). and cancels it (in case of a resolutive condition).Since it affects the existence of the creditor’s right and the debtor’s duty. .

2) to determine the act’s effects through the interpretation of the acts’ provisions. It means that the following steps should be achieved: 1) to determine the existence of the act and to prove it through the means of evidence. despite the literal meaning of the words .THE EFFECTS OF JURIDICAL ACTS The effects of the juridical act mean the rights and the correlative duties that arise. It should be mentioned that the content of each provision expresses the parties’ will and their intention to conclude that particular act. Thus. modify or extinguish it. In order to analyze the content of the act’s provisions the following interpretation rules stipulated by civil code should be observed: . the content of the act (the parties’ rights and obligations) should be analyzed together with the parties’ will. but also the effects requested by law or by public morals . in order to determine the act’s effects. The effects of juridical acts are identically with their content.juridical act has to be interpreted according to the real will of the parties.juridical act yields not only the effects the parties had in mind at the time it was concluded.the usual clauses of the act are considered written. unless the parties expressly forbid them .

not in the way that excludes any effect .doubtful clauses are interpreted according to the nature of the act .doubtful clauses are always interpreted to the debtor’s benefit .if a doubtful clause cannot be understand otherwise. .’ c) the principle of relativeness (privacy) of the act’s effects. according to the meaning of the whole act .the act will be essentially considered to cause the effects intended by the parties. b) .. . it is interpreted according to the customs of the place where the act is concluded . no matter how general are the words used in the act . it should be interpreted that it produces effects.whenever the parties use an example within the act that does not mean they intended to restrict their obligations at this example The effects of a juridical act are governed by the following three principles: a) the principle of compulsory force of the act.whenever a clause has two different meanings. The principle pacta sunt servanda The principle of compulsory force of the act is expressed by the Latin I idiom pacta sunt servanda.the clauses of a juridical act are systematically interpreted.the principle of irrevocability of the act.

Furthermore. For instance.Indeed. law allows: – the cancellation of a gift made by one of the spouse to another .the contracts concluded intuitu personae are generally terminated by the promise’s death. . Nevertheless. despite the parties’ will the contract takes end is the following cases: . previous one (the principle of compulsory force of the contract). the principle of compulsory force is effective even upon the court of law. incompetence.the dissolution of a partnership.the death. Thus. insolvency or bankruptcy of any of the contracting parties terminates the mandate contract . This rule is a corollary of the. For instance. By way of exception. A lease is an agreement whereby one party (the so-called landlord) transfers his or her right into immediate possession to the other party (the so-called lessee) for a commonly consideration. the court solves the litigation between parties according to the legal provisions and also based on the convention existing between the litigants. if there is no certain term for the contract.the termination of a lease (rent) contract by the lessee. there are several cases where the unilateral revocation of the act is allowed by law. The principle of irrevocability of the act The principle of irrevocability of the act restrains the promisor to revoke his promise. the so-called rent . law expressly provides the exceptions from the compulsory I force of the act. the civil code synthetically expresses this idea by stipulating that “the conventions legally concluded have the force of law between contracting parties”.

To revoke a relinquish of the inheritance means “to accept the inheritance. .party (the so-called “contracting party” in case of a bilateral act). conceptually. a plaintiff can maintain a lawsuit only against the party with whom the contract has been concluded.the termination of the gratuitous mandate by any of the parties .the will. Notwithstanding.acceptance of an inheritance (the acceptance should be expressed within 6 months from the death of the person inherited and the inheritance should not to be previously accepted by another heir).. the effects of a juridical act are produced strictly between the parties of the act (promisor and the promisee). a will is not a true juridical act until the testator’s death. . because it has no juridical force. the conditions requested for revocation of the relinquish are the same as they are for the . The principle of privacy of the act According to the principle of relativeness (privacy) of the act’s effects. the following basic notions have to be explained: . Obviously. after the testator’s death it cannot be revoked anymore. such as: . Therefore. Hence.the relinquish of an inheritance. The testator may revoke a will at any time until his or her death. In order to understand that principle.the termination of a gratuitous deposit by the deponent There are also several unilateral juridical acts that may be merely revoked by their author.

third party.”party” can be a single person or group of Itwo or more persons. A universal heir succeeds an universitas bonorum. A “party” is a person who concludes a juridical act. landlord-tenant. Essentially. and every juridical act made by the deceased takes effects upon him or her. legator-legatee. the parties can have specific names: grantor-grantee. whether they have the same interest within the act. Universal successors and successors with universal title. the interested parties are persons who are recognized either as aving enforceable rights or as being liable for duties created by an act where they ‘e not parties. Depending on the nature of the act. leasor-Ieasee. mortgagor-mortgagee. with assets and liabilities. From a juridical point of view. assignor-assignee. An “interested party” (known. or as a “contracting party” (in case of a bilateral act). The former company ceases its existence but the absorbent company continues to exist and succeeds into . The absorption supposes that a company becomes a part of another company (the so-called absorbent company). These persons are grouped into three classes: 1. etc. devisordevisee. either intestate or testamentary. either referred to as an “author” (in case of a unilateral act). a case of universal succession is the merging through absorption.interested party.. In company law. bargainer-bargainee. A “third party” is a person who was not involved in the conclusion and the performance of the act. . as ayant cause or habentes causam) lis a non-contracting party who uses the existence of the act as a basis for a lawsuit. also. a . consignor-consignee. vendor-purchaser.

by any lawful transfer.the transfer . Thus. At the same time. The transferees are interested persons only related to the acts which fulfill certain conditions as follows: . franchises and power of the company that ceases to exist. decreased by expensive gifts). The only distinction between them and the universal heirs is that the former inherits a fraction of the patrimony. Thus. Another case provided by company law is the merge. being bounded by any contract or unilateral act made by the deceased. there are cases where law allows to a special category of heirs to avoid the gratuitous acts made by the deceased. whereas the latter inherit a whole patrimony. such persons are the purchasers. at the same time. two or more companies are united and form a new company.g. within company law. even if they were not parties of the act. being its universal successor. . the divided company ceases to exist and the resultant companies bequeath fraction of its patrimony. It should be mentioned that. Universal successors and successors with universal title are interested parties in any act concluded by the deceased because they inherit the patrimony as it is (e. acquires the assets. In both the case. the original companies cease to exist. They have the same position like universal heirs. Within merge.the act is previously concluded. For instance. they become interested parties. due to their inheritance right. One of the absorption effects is that the absorbent company retains its name and identity’ and.the rights and duties owed by the former corporation. the heirs who inherit a specific right. For example. Successors with universal title are persons who bequeath a fraction of the deceased’s patrimony. the assignees. the absorbent company or the company resulted from merge acquires the assets and liabilities of the former company/companies. liabilities. 2. Successors with a particular title A successor with a particular title is a person who acquires a certain enforceable right. the division of a company leads to such succession with universal title.

considered apparent exceptions from above mentioned principle. because such acts may influence the promisee’s solvency. But. THE NULLITY OF JURIDICAL ACTS . Let’s take the following example: we suppose that X owns $500. life insurance contract).g. a charge. holds or claims upon the property of another as security for some debt or charge) are generally referred to as secured creditors. We emphasize that the transferee can be either a party (in the act whereby he or she acquires the right). Apart from them.the act refers to the right acquired by the transferee. law allows them to avoid the gratuitous acts concluded by their debtor with the view to jeopardize the creditors’ rights. the simple creditors are interested parties in any juridical act made by their debtor. the universal successors and successors with universal title. Therefore.000 to Y. or a third party (in the act which has another object than the acquired right). The creditors who are entitled to a lien (e.. There is considered real exception to the principle of relativeness effects of the act the so-called contracts to the benefit of a third party (e. known as simple creditors. According to law. the creditor has the right to demand and to be recovered by a certain performance of his debtor. there are some creditors who have no such guarantees. as well as the simple creditors are. Simple creditors A creditor is a person to whom an obligation is due.g. Inasmuch as their claims are unsecured.

the nullity is different from dissolution or rescission of the contract. the concept of “nullity” does not destroy the act itself. Thus. It means that. because the parties refrain from concluding an unlawful act. It is only a sanction due to the non-observance of legal rules at the time when the act was concluded. It should be mentioned that. Nevertheless. Thus. which presupposes a valid act that cannot produce its effects any more due to specific events. a) The absolute and the relative nullity. an act concluded against law is sanctioned through a specific civil sanction. whenever. the nullity supposes that the act was defectively created. . but only its effects. But. The nullity fulfills a preventive function.Definition An act concluded with the observance of legal rules is a valid act. when the acts are concluded without the observance of legal rules. It should be noted that the nullity applies from the moment when the act was concluded (ex tunc) and consequently the parties are restored to the positions prior to their agreement. the so-called nullity. nullity is not seeing as an organic state of the act. But. Classification of nullities. The nullity is that juridical means which deprives the act of its effects. against law and as result has never existed. It can be enforced under the contracting parties and can produces its legal effects stipulated by law. the legal provisions are not observed and the act disregards certain legal expressed rules. It is just as no act has been ever concluded between them. then the nullity has a punitive function. then the act is void or avoidable. within Romanian legal system.

the act is only avoidable and the nullity is relative. . . .in case the form requested ad validitatem by law has not been observed.in case of activities performed by a company beyond the powers conferred upon it by its articles of association or other constitutive deeds (known as ultra vires acts).An act concluded disregarding the legal provisions could be void or avoidable. If the protected interests are private. It is a null act or an act having no legal force or validity because it was concluded disregarding the statutory provision of law. according to the nature of the interests protected by nullity.when the act has been concluded by fraud and evasion of law. . The following reasons call the absolute nullity of an act: .when one of the validity condition of the act is missing. . An avoidable act has an in-between status. . It means that it can become a valid act because one or more of the parties have the power to render it enforceable. A void act is not enforceable by anyone.when the object or consideration is prohibited by law or public morals.when a special permission requested by law for the transaction is missing. It means that the nullity is absolute. the act is null and void. When the interests protected by nullity are public interests.

mistake. b) According to the extent of the nullity. . there are partial and total nullities. In a such as it is a high degree of irregularity. it is up to the party who benefits from the nullity to claim the cancellation of the act.For example if the lack of genuine assent (error. it can be avoided. then the act is valid and produces its effects. By contrary. that nothing can cover them. 2. law draws no limits in enforceability of the right to sue. Anybody may claim to make null and void a juridical act. the party whom consent was affected by one of the vices of consent). As far as the relative nullity is concerned. a party who benefits from nullity can claim the avoidance of the act only within a specific limit of time. an avoidable act can produces its effects until its avoidance is claimed. the so-called extinctive prescription (the general time of extinctive prescription is 3 years).g. Thus. there are no limits in time for claiming an act to be null and void. duress or injury) occurs within the conclusion of the act. The absolute nullity can be claimed anytime. if the party ratifies the act by covering its defects. Thus: 1. But. This situation cannot occur for a null and void act that cannot be subject of ratification because its defects are so essential. only the interested persons may avoid an act (e. 3. This classification presents a particular importance because of the differences between the rule governing the void and the avoidable acts. Generally speaking.

As for the past (ex tunc). which are not avoided by nullity. and the total nullity is the exception. Consequently. The rule is that an act null or avoided cannot produce effects in the future.principle of restoring the parties into their positions before the contract (restitution in integrum). whenever it is possible.principle of retroactivity. . and to cancel only those clauses which have been drawn up through the non-observance of legal rules. and the effects already produced will be eliminated. It should be mentioned that. It is obvious that an act null and void or avoidable cannot produce any effects in the future (ex nunc). the tendency is to save the act. Therefore. the parties are liable to return each other the services already carried.Total nullity affects the whole act. In this latter case. the partial nullity is the rule. within Romanian legal system. An example would be the case of a putative marriage . the effects should be retroactively eliminated. The effects of nullity and avoidance As it was mentioned above. But. Nevertheless. The nullity or avoidance of an act is governed by three principles: . produce their legal effects. while partial nullity affects only a part of it. the parts of the act. when the parties have total or partial fulfilled their obligations. the judge declares within the nullity or the avoidance of the act the retroactive elimination f act’s effects. this principle has its exceptions. the judge declares within the nullity the ineffectiveness of the act. the nullity of the act deprives it of its effects. If the parties of the act have not fulfilled their obligation until the nullity is established.

it is up to the party who benefits from the nullity to claim the cancellation of the act. a party who benefits from nullity can claim the avoidance of the act only within a specific limit of time.principle of cancellation of accessory acts. Thus: 1. Generally speaking. law draws no limits in enforceability of the right to sue. But. the party whom consent was affected by one of the vices of consent).Exceptions to this rule include the right of the bona fide acquirer (i.g. This classification presents a particular importance because of the differences between the rule governing the void and the avoidable acts. an avoidable act can produces its effects until its avoidance is claimed. having no knowledge that the act is defective) to maintain the benefits yielded by the goods acquired on the basis of a null act. there are no limits in time for claiming an act to be null and void. the acquirer in good faith. 2. As far as the relative nullity is concerned. only the interested persons may avoid an act (e. . Inasmuch as it is a high degree of irregularity. It means that the nullity or avoidance of the act also affects the subsequent acts concluded on the basis of a null act. . It should be mentioned that the case of a good faith tenant is an exception to this principle. This principle represents an exception of the rule . By contrary. the so-called extinctive prescription (the general time of extinctive prescription is 3 years). The absolute nullity can be claimed anytime. 3. if the party ratifies the act by covering its defects. Thus.e. then the act is valid and produces its effects. Anybody may claim to make null and void a juridical act.that an accessory act has the same destiny as the principal act has (accesorium sequitur principale)..

whether named or unnamed. are in the civil code. there are implied or express nullities. b) According to the extent of the nullity. c) Taking into account if the nullity is or is not provided by law. For instance.” The main regulations governing the contracts. but the cancellation (avoidance) of the act results indubitably from that legal provision.This situation cannot occur for a null and void act that cannot be subject of ratification because its defects are so essential. the parts of the act. . the act is null because the conditions imposed for its validity have not been observed. Total nullity affects the whole act. produce their legal effects. which are not avoided by nullity. we should mention that the provisions of the Civil Code are the common law of contracts.03 . they apply to all contracts whether civil. In this latter case. even if law does not expressly provide the nullity. 1166 NCC the contract is the „will agreement between two or more persons with the intent to establish. In this case. there are partial and total nullities.the nullity is expressed. and to cancel only those clauses which have been drawn up through the non-observance of legal rules. the partial nullity is the rule. according to civil code “all donations should be concluded in authentic form”. It should be mentioned that. the nullity is implied when law does not expressly provide it. modify. By contrary. commercial or administrative. whenever it is possible. and the total nullity is the exception. the tendency is to save the act. transfer or extinguish a legal relation.2013 According to art. that nothing can cover them. while partial nullity affects only a part of it. Therefore. As a consequence. Business Law_Course 8_ Contracts DEC . De lege lata. within Romanian legal system. Whenever law expressly establishes that the infringement of the rule leads to the state of nullity of the act .

and sometimes even an authentic form. a written settlement. According to the new civil code. Thus. Formal contracts – they are enforceable only if there are observed some additional formal conditions. The contract is always a will agreement between two or more persons. as well as to determine its content. the most contracts are enforceable by simple consent. The form required for concluding such acts is. other than the simple consent. Therefore. according to art. mortgage or farm contract. public interest or good morals. Real contracts – they can be concluded only by delivering the thing by the transferor to the transferee.” This principle must be coroborated with the principle of compulsory force of the act which provides that “the conventions legally concluded have the force of law between contracting parties”. the deliverance of the goods is requested not only to perform the real contract. in art. for concluding acts as donation. will.. 1270 (1) NCC. 1169 the freedom of contracting principle as follows: „The parties are free to conclude any contract. whithin the limits imposed by law. The contract produces juridical effects. The right to undertake legal acts is recognized by the NCC. most frequently. but to conclude it as well. the deliverance of the goods is required by law for a valid conclusion of the contract itself. whereby the simple consent is not enough for the validity of the transaction. For instance. Classification By the way they were created Consensual contracts – they are enforceable with no formal conditions requested.The features of the contract Patrimonial effect – the contract is a legal instrument through which the movement of goods or rights is performed. law requires a written form. the New Civil Code regulates expressis verbis in art. Moreover. the existence of the will is a necessary condition (sine qua non) for the existence of a contract. There are real contracts loan or deposit contracts. 11 which provides the following: „it can not be derogated by conventions or unilateral legal acts from the laws which are of public interest or from the good morals. By their content: . Moreover.

Such agreements are enforceable notwithstanding an uncertainty of terms at the time of their conclusion or an undertaken risk clearly appears. in exchange. Unilateral contracts – The New Civil Code does not regulates expressis verbis the features of this kind of contract. when the contract is concluded the parties do not know the extent of their obligations because their performance depends of the occurrence of an uncertain and fortuitous event.g. the contract is unilateral even if its execution involves obligations for both parties.. The contracts made by onerous title subdivide into: a) commutative contracts – those in which the parties know.. Contracts made by gratuitous title – those contracts in which one party promises to the other an economic benefit without expecting.This transfer can be achieved either by a person to another. b) aleatory contracts – an agreement wherein the performance of one party depends on the occurrence of an uncertain event (alea). Otherwise. which will be their mutual obligations (e. In fact. 1171 NCC. . (see art. Examples of such contracts include life and fire insurance contracts or life annuity contracts. from the very moment of concluding the contract. any promise. The acts made by gratuitous title are subdivided in: a) grants – a voluntary transfer of goods from a patrimony to another.g. 1171 NCC. b) acts of benevolence – a favor made by a person to another without decreasing the patrimony of the former (e. the gratuitous mandate). this contract is only presented as the opposite of the bilateral contract. sale contract). mentioned above) By the the aim pursued by parties concluding the act: Contracts made by onerous title – those contracts in which each party promises an economic benefit to the other in exchange of another economic benefit.Bilateral contracts – according to art. a contract is bilateral when the obligations arising from it are reciprocal and interdependent.

Examples: sale contract. the exchange contract etc Contracts with successive execution – those in which the obligation of both parties or at least one of them must be carried out gradually over a period of time. comes into force. By the way the parties expresses their will: negotiated contracts – those that are entirely negociated by the parties. namely normative force. Accesory contracts – those that depend on a principal contract. the regulation and provision of special names to such contracts are in the exclusive competence of the legislature. For instance. by the rules of the contract that resemble the most. They are as legal as the named ones. donation. We should mention that a sale contract where the price is paid in monthly rates is a contract with an instantaneous execution. Example: rent contract. which describes and regulates it. By the way they are regulated or not in the legislation Named contracts – those contracts whose essential content is expressly governed by the express provisions of the Civil Code and other civil laws with a name prescribed by law in accordance with legal operations they generate. when a special law. and if these are not sufficient. As a consequence. the rule is that the accessory contract has the same destiny as the principal one (accesorium sequitur principale). the named contracts can not be created by agreement between the parties because they do not enjoy the attributes of the legislature. usually the moment when the contract is concluded. Unnamed contracts – those created by the parties for their specific interests. the settlement is a declarative contract. personally or by . Declarative contracts – the ones that consolidates a pre-existing juridical situation. maintenance contract etc.By the effects they produce Constitutive or translative contracts – these contracts are concluded in order to transfer real rights. The number of these contracts are unlimited. they are governed by the rules determined according to the general principles of contract law. even if the parties agreed that the transfer of property right will take place upon payment of the final installment of the payment price. Sometimes an unnamed contract may become a named one. An important feature of this contract is that there is a period in which pre-contractual negotiations between parties. In the absence of specific legal regulations. Contracts giving rise to debt rights (jus in personam). In as much as there is not a specific provision in law. By the way they are carried out Contract with an instantaneous execution (uno ictu) – those in which the parties are required to execute the benefits they owe to each other in one and the same time. By some correlation between them: Principal contracts – those independent of any other contract. In this case.

a genuine assent of the promisor. Examples: insurance contract. one party has a superior economic position in relation to the other party. 1177 NCC. . An example would be the liability insurance (RCA) New Civil Code regulates a new category of contracts. The general features of these contracts are: a) the two contracting parties are unequal from the economic point of view. the consumer contracts. tv subscription etc. phone subscription. The other party is free to agree to them or not. period that is placed under the sign of freedom. If he agrees. Forced contracts – those we have to conclude because there is an obligation for all the people regulated by law. The conditions of validity These conditions are the following: the capacity of the parties to contract. Therefore. Their content is extablished also by law. The framework contracts – representing the will of the parties by which they agree to negotiate. c) The adhesion contracts are the exclusive work of one of the party. Adhesion contracts – those contracts whose content is predetermined entirely by one party. without any possibility to negociate. the consumer contract is regulated by special laws that regulate commercial activity and in completion by common provisions applicable to the contract in general. conclude or maintain contractual relationships whose essential elements are determined by these type of contracts. b) The offer to contract is general because it adresses to the public and permanent because it reffers to the conclusion of all contracts within a certain period of time.their representatives. According to art. he simply joines to the specific contract.

the rule is the capacity. Moreover. In this matter. *) the concrete capacity – or the persons’ capacity to exercise the above rights or to assume their obligations by concluding on their own name juridical acts. the presumption of law is that a person has the legal capacity to contract or to make a unilateral act. as well as in what conditions a person loses his legal capacity. The capacity Civil code provides that “any person is assumed to be able to contract unless he is declared incapable by law”. A.a certain subject matter. We emphasize that each person has his own legal capacity and has only one. It means that without a court determination of legal incompetence. . the legal rules regarding the legal capacity of persons are imperative provisions and thus. and the lack of capacity is the exception. The Legal Capacity of Natural Person The legal capacity can be defined as being the natural persons’ abstract and general ability to have rights and obligations and to exercise their rights or to assume their obligations by concluding juridical acts on their own name. In other words. The legal capacity deals with two issues: *) the abstract capacity – or the persons’ ability to have rights and obligations. any legal provisions related to the absence of capacity cannot be extensively construed. Therefore. law can only state who has legal capacity and when. a lawful consideration. they should have a very restrictive interpretation and application.

from the moment of his conception. at the age’ of 18. A new rule is provided by art. all natural persons have the legal capacity under law. In other words. and the second between 16 and 18. will. employment contract) on their own name. by exemption. in two intervals: the first between 14 to 16. 40 NCC which states that the underage persons of 16 years old can have an anticipated concrete capacity. in this latter case. but the moment when it is granted to them is different for each part of this capacity. no matter the ways this event occurs. they need a preliminary consent of their legal representatives (parents or tutor). the period between 14 and 18 years old. Also. the person can get only rights. the guardianship court can .We emphasize that. as it is the case of the employment contract. The abstract capacity also ends by a final judicial conclusion of death or disappearance announcement. an underage person can dispose through will for half of his fortune. Thus. At this age it is presupposed that the human being has the capacity ‘to understand his actions and to decide what to do. The abstract capacity ends when the natural person dies. According to the provisions of civil code. Law divides the so-called restrained capacity. the underage person obtains the full concrete capacity because it is possible that he becomes a legal representative for his future child. The concrete capacity is granted. through marriage. Sometimes. the abstract capacity is granted under law to each human being from the moment of his birth. The underage persons (persons under age of 14). the non compos mentis (weakly/mental handicap) persons and the people under judicial guardianship have not at all concrete capacity. or. according to Romanian law. During the first interval of their restrained capacity the persons can conclude some juridical acts (e. This means that for grounded reasons. at the age of 18 the person is considered under law to be mature and therefore gains his full concrete capacity. But. the way of the correlative obligations is suspended till the moment of the birth when the legal representative of the child (parent or tutor) can assume the obligations.g. Furthermore.

administrative. financial. as a subject of law. Nevertheless. the legal capacity of a legal person is unique. The Legal Capacity of a Legal Person The abstract capacity of legal persons The abstract capacity of a legal person means its general and abstract ability to have rights and obligations. the approval of the familly council is also requested. etc. B. In other words. 3) it is inalienable – meaning that the abstract capacity cannot be alienated or yielded either in total or . Indeed. the general and abstract ability of a legal person to have rights and obligations is limited.) a legal person is a subject of law. all the rights and obligations which may occur from these different branches of law will form the content of the legal person’s abstract capacity. the limits of the abstract capacity result from the legal person’s object of activity. in fact. But. the legal person has only one legal capacity and each legal person has its own legal capacity.recognize to this person a full capacity. The abstract capacity of a legal person has the following juridical features: 1) it is legal – meaning that it is stipulated by law and nobody can extend or limit its content. after the hearing of their parents or their tutors and. if it is necessary. no matter which branch of law is involved (commercial. person too. unlike the abstract capacity of a natural person. civil. Thus. as it is for the natural. 2) it is general – meaning that the rights and the obligations which form the content of the abstract capacity are not exactly provided for by law for each legal person. Thus.

Thus.in part by juridical acts. the date of the recognition act. its abstract capacity begins at different moments. Moreover. 3) Other legal persons obtain their capacity to have rights and obligations on the date of the order of the state organ competent to set them up.g. the content of its abstract capacity is different according to the goal for which each legal person has been set up. These limits also express the principle of specialization. the legal persons submitted to registration obtain their abstract capacity on the date of their registration. The beginning of the abstract capacity of legal person Taking into account the fact that the legal person is submitted or not to registration. Finally. This sanction occurs because a renunciation act has as juridical effects the cessation of the legal person and that may happen only through the ways provided for by law (e. 2) The legal persons which are not submitted to registration obtain their legal capacity according to the way used to set them up. the date of the authorization act or the date when any other legal requirements have been fulfilled. the merger. there are legal persons that obtain their abstract legal capacity and are valid set up on the date when other legal requirements have been fulfilled. the content of the abstract capacity of a natural person is the same for all natural persons and for each of them. but for a legal person. any act of renunciation or alienation regarding the abstract capacity of a legal person is absolutely void (null). on the date of the recognition or authorization act. 1) No matter the way of setting up used. 4) it is intangible – meaning that it can be limited only by law and these limits depend on the object of activity of the legal person. . the division or the dissolution). In fact this moment can be the date of the order of the state organ I competent to set them up. 5) it is special – the specialization of the abstract capacity is that character which departs the abstract capacity of a legal person from the abstract capacity of a natural person.

4 from Decree-Law no. or other legal requirements) have a constitutive effect.the State s Companies (Autonomous Regie) (according to Art. This moment is considered as follows: 4) the date of their incorporation in the Register of trade for: .the consumers’ and credit’s co-operative (according to Art.26/1990 and Art. . The end of the abstract capacity of legal person The end of the abstract capacity of a legal person concerns the anticipated abstract capacity as well as the full abstract capacity. 10 from the Decree-Law no. 6) the date when the Government recognized the setting up of the Chambers of Commerce and Industry. act of authorization. .20 from Law no.26/1990) . . the date of the authorization act is the date when the judicial conclusion of the admission to the registration of a political party or a public organization became final (irrevocable).20 from Law no. the anticipated abstract capacity ends when the full capacity is obtained and this moment usually coincides with the moment when legal personality is granted to a legal person.the commercial companies (according to Art.20 from Law no.the crafts-men’s co-operative (according to Art.26/1990 and Art.19 from Law no.8 from Decree-Law no.20 from Law no. It should be mentioned that according to Art. 5) the date of the authorization act for the political parties and public organizations.8/1989 and Art.67/1990).We should emphasize that the date of registration or the dates of the other acts which have to be observed for a valid setting up (act of recognition. It means that these dates mark the moment when the full abstract capacity begins. Thus.66/1990) .26/1990).54/1991.

This restricted abstract capacity ends on the date when the legal person is erased from the register where it was incorporated. or within other relationships with third parties. Therefore. It means that without its full abstract capacity a legal person cannot exist. when a legal person begins the clearing off process. the management organs of a legal person can mandate a natural person. It means that the director. The concrete capacity of legal persons The concrete capacity of a legal person is defined as being “the abstract and general ability of a legal person to obtain and to exercise subjective civil rights and to assume and to fulfill civil obligations. occurs either if the legal person did not have its full abstract capacity to conclude the act. the absolute nullity of the act. In fact. In other words. Also. without any doubts there is a contractual representation.of specialization was infringed. . the legal person can no longer carry on its business but it still has rights and obligations with the view to accomplishing the clearing off process. or the president “represents” the legal person within the relationships with third parties. its full abstract capacity still has to exist but it is restricted. the act is void. such as its legal advisor. or the principle . the full abstract capacity ends when the subject of law (the legal person) ceases. This kind of representation is not the same with that settled by civil code. from the date when the dissolution has decided and until the legal person is erasure from the register (either register of trade or other kind of special register). rights and to pay its debts. it can unfold its activities but only in order to achieve its patrimonial.Further. I should be stated that between the legal person and its management organs there is the so-called “legal representation”. by concluding on its own name civil juridical acts through its organs”. when a juridical act was concluded without the legal rules regarding the abstract capacity of a legal person having been observed. the general manager. This sanction. this representation is only similar due to the fact that it does not represent a real mandate. Sometimes. In this case. it is annulled. We emphasize that. to represent it in front of the court of law.

the president. according to their competencies. . or on the date when its management organs are appointed. This moment.that the legal person obtains its concrete capacity on the date of its setting up. such as the minister. they exercise the rights and assume the obligations of the legal person by participating within juridical relationships. as it was mentioned above. the juridical doctrine has expressed several opinions regarding this issue. It can also end in case the legal person is reorganized. or before the recognition/authorization act has been issued or other legal requirements have been fulfilled. The assent The assent and the consideration constitute the juridical will of the parties. or a collective form. The beginning of the concrete capacity of legal person Due to the absence of legal provisions. The concrete capacity of a legal person ends when the existence of the legal person ends.As far as the management organs are concerned. board of directors. such as council. etc. Thus: it is considered that the legal person obtains its concrete capacity at the same time with its abstract capacity. No matter the form of the management organs is. committee. The common opinion is . the director or the rector. can be even before its incorporation or registration. they can have either unipersonal form. The end of the concrete capacity. The parties voluntarily and knowingly conclude the act as a result of their intention. It means that the legal person is subject of a fusion or of a merger by absorption or of a total division.

the juridical will of parties is governed by two principles: 1) the principle of freedom of juridical will of the parties. According to this principle. as follows: . the former is the one which will be taken into account. Similarly. The assent externalizes the party’s intent to conclude a juridical act. in some cases. 2) the principle of real will of the parties. It should be mentioned that. the act has to be construed upon the expressed words used by parties. The parties’ freedom to conclude any juridical acts is limited by the compulsory rules of law and by the public policy. For example. if there is any incongruity between the real intent of the parties and the expressed clauses of the act. if it is possible to determine the real will of the parties. in order to apply this principle. and. the assent has to fulfill several conditions. It results there from that the validity of the act depends on the validity of the juridical will of the parties. in most cases. the elements required for a valid and enforceable contract appear to be present but in reality they are not. to stipulate any particular clauses. to determine the specific content of the act. to determine the form of the act. Thus. Indeed. the store owner is not genuinely assenting to the terms of the act.In our legal system. It means that the parties of a civil act are free to conclude or not a certain act. For being the basis of a valid act. the proof of the real intention of the parties is taken into account. if a used-car salesperson deceitfully states that a car has a rebuilt engine and has never been in an accident. the buyer who relies on that information and signs a purchase contract does not have a valid juridical will to conclude the act. if a store owner accepts a gang leader’s offer to protect his property from gang violence by agreeing to pay the gang $100 per month.

or even derived from their actions. and in case of silence it is considered that it is no assent. depending on the subject matter of the act. any reasonable means of communication are effective to externalize a valid assent. For instance. the civil code stipulates that the rent contract is considered restored in force if. . law considers that he has performed a tacit acceptance. Mere inaction and silence are usually not regarded as manifestations of intention to agree over a contract. Secondly. In other words. the person is able to comprehend the nature of the transaction he or she is engaged in and to understand its consequences. either orally or written expressed. For instance. that the silence of one of the parties has to be considered an assent. However. certain conducts of the party may be assumed as expressing an assent. after the term of the contract has been fulfilled. Does silence have any juridical value? Generally speaking. some exceptions to this rule occur. the assent cannot be implied. in some cases. usually. the parties silently continue to perform it.1) It has to exist. Any act concluded in the absence of the assent will be declared null and void. Thirdly. several problems arise in case of silence. While. 3) It has to be expressed by a person who is mentally competent to conclude the act. if an heir conducts himself like an acceptant of an inheritance. 2) It has to be unambiguously externalized. Firstly. 4) It has to be expressed by a person who intents to engage himself in a legal relationship. the initial agreement between the parties may constitute the basis for regarding silence as an assent. It means to result from the words of the parties. law expressly provides.

b) the misrepresentation. Types of errors: a) essential error. For instance. when one of the parties believes that the act is a donation. and the other one believes that it is a sale. Law considers as vices of consent the following: a) the mistake/error. . the error should be serious. which refers to the nature of the act (error in negotium) or to the identity of the subject matter (error in corpore).5) It has to be definite and certain as the essential terms of the act are concerned. 6) It has to be genuine. In that case. elsewhere there is no valid contract between them. c) the duress. The lack of genuine assent may arise by the so-called “vices of consent” or defects. the assent must be conceded voluntarily and knowingly by each of the parties. It should be mentioned that the error is produced by the person himself. a) The mistake (error) The error is generally defined as a state of mind which has not accordance with the facts. To be genuine. In order to vitiate the party’s assent. d) the injury. the party is entitled to claim the cancellation of the act. It is an erroneous belief about the facts as they exist at the time when the agreement is concluded.

the offeror may avoid the contract for error in personam. From another point of view. c) immaterial error. an act is avoidable for error in personam only if it is concluded intuitu personae. The sanction for these types of error is relative nullity.A similar case is when one party believes that he or she buys a car while the other party believes that he or she sells a toy car. These acts are concluded on the ground of one of the parties’ qualities If the offer or receives an acceptance from one whom he mistakenly believes to be the addressee of the offer. but had unintentionally . generally. Another example of essential error is the one which refers to the qualities of the subject matter of the act (error in substantiam) or to the contracting person (error in personam). for example. and the buyer believes that it is a grand piano. which refers to a contract. but may remain even without any legal consequences. when the seller believes that the subject matter of the contract is an upright piano. an error could be bilateral or unilateral. Thus. A mutual (bilateral) error means that both parties are misunderstood the same matter. a mutual error is where both parties understood that the real agreement was what one party alleges it to be. in the sense that the mistaken party would have signed the act whether he had had a fair representation of those circumstances. b) nonessential error is the false representation of less important circumstances at the moment when the contract was signed. For example. Another type of error is one concerning a person’s identity. It doesn’t confer to any of the parties unenforceable. A case of error in substantiam arises. A nonessential error can attract a decrease or increase in value of the benefit.

By contrary. but the act is still avoidable. the misrepresentation has two main elements: . mere negligence or carelessness cannot constitute fraud. meaning the misrepresentation. the party who misrepresents the facts clearly intends to do it and to deceive the second party. a misrepresentation of facts may be unintentional. From a structural point of view. A future distinction should be drawn up between an error about law and an error about the facts. It should be mentioned that within our system of law. changes his or her legal position in concluding the contract. The intention to deceive is expressed by the party’s intention to create a false impression. Since misrepresentation requires this intent. who. The misrepresentation has the same essence as the error/mistake. It means that there is no misrepresentation. in case of errors about the facts the party can claim the rescission of the contract. b) The misrepresentation The misrepresentation is the misrepresentation of a fact that is made with knowledge and with intention to deceive the other party. law commonly requires either an affirmative act or an express statement. Occasionally. But unlike the error/mistake. Thus. relying on the misrepresentations. the error about law is not accepted for pleading somebody’s ignorance. silence may constitute a misrepresentation of facts leading to fraud. In order to have a misrepresentation. because it was concluded by mistake. he cannot plead his ignorance regarding the legal consequences of his conduct for justifying the rescission of the contract. the misrepresentation results from one contracting party action.prepared and executed one which did not express the true agreement. Thus. whenever somebody is fully cognizant of the facts and the substance of his behavior. This rule is based on the fact that law is presumed to be known from the moment it is published in the Official Monitor of Romania. Sometimes.

It should be mentioned that duress is not limited to the above situations. 2) material element (which consists of the activities performed in order to lead the other party into mistake). mere failure to disclose information to the other party does not constitute a misrepresentation. If the seller fails to inform the purchaser about these defects. c)The duress The relief from an agreement on the grounds of duress is clearly avoidable if a person is deprived of his freedom or his property through physical or moral force. a number of exceptions to this rule.1) intentional element (which consists of the will to fraud the other party). he also knows that if those facts were known by the other party there would be no contract. For example. Generally. however. when a prospective seller of land has knowledge of a hidden defects in the property that cannot be observed through inspection. misrepresentation has occurred. can also lead to lack of genuine assent. the seller could be held liable for misrepresentation because his or her silence was intended to mislead the purchaser into assuming there were no defects. when the seller of a used car turns back the odometer to conceal the number of kilometers the car has been driven. Moreover. because law does not impose a duty of disclosure. Suppose one party knows certain material facts and knows the other party is not aware of them. There are. constitutes duress. Even the threat of physical force. although not carried out. For instance. which exists when a person exercises mental coercion over another. However. . undue influence. Indeed. an active ceasing of the fact is the most obvious type of misrepresentation.

At the same time. Thus. any economic coercion. but also from the wrongful activity of a third party. . constitutes duress. In other words. threats on a person’s family and the beloved ones. In order to determine whether a contract can be avoided on account of duress. is actually coerced to conclude a contract. it should be mentioned that duress cannot be limited to the fear that might overcome an ordinary person. Unlike misrepresentation. duress has occurred. As a conclusion. whether brave or timid. duress presupposes an intentional element and a material one as well. the intentional element is the fear induced to a contracting party for determining he or she to conclude a juridical act. in a juridical meaning. but against a relative or closed friend of the party as well constitutes duress. Thus the state of mind of the person who is being threatened must be examined. and other uses of moral or social force to put a person in such fear that his or her act is not voluntary. Any wrongful act or threat that overcomes the free will of the consenting party constitutes duress. it should be mentioned that.Furthermore. The essence of duress is the lack of free will or voluntary assent. the coercion exercised not only against the contractual party. as a vice. it is necessary to ascertain whether the acts or the threats were wrongful and whether these events and not the free will of the party have induced the required contractual assent. d)The injury Injury represents an obvious disproportion between mutual promises of the parties within a bilateral contract. If a contracting party. duress can arise not only from the activity of the contracting party.

. *) It has to be a commutative contract. which are unreasonably favorable to the other party. *) it has to be a contract whereby such minor can conclude on his own name and without any additional consent. As consequences. the following conditions must be fulfilled: • It has to be a bilateral contract • It has to be a commutative act. made by onerous title . the following conditions must be fulfilled *) it has to be a bilateral act (e.Injury includes the absence of the meaningful choice of one party together with the terms of the contract. Thus. Law requires several conditions that have to be fulfilled to obtain the rescission of the act based on injury. a contract). For the injury on case of an adult. for the injury in case of the underage child. It should be mentioned that not every juridical act could be avoided on the ground of injury. bilateral contracts are susceptible of disproportion of parties’ mutual promises. otherwise the disproportion assumed by the parties appears as a normal risk of an aleatory contract (the terms “commutative” and “aleatory” contracts are explained in another chapter of this book). That condition is imposed by the fact that only these kind of juridical acts are defined as promises made in exchange of promises.g. *) the party who alleges to avoid the contract has to be an underage person between 14 and 18 years old.

Within a juridical act. Art. the toads become subsequent objects of the act. such as the sale. in case of the sale contract. The distinction between the suject matter of the contract and the subject matter of the obligation is very useful. The subject matter Art. 1226 (1) NCC stipulates that the subject mater of the obligation is the benefit to which the debtor engages. taking advantage of the state of need. the subject matter of a juridical act has to fulfill seven different conditions requested by law. inexperience or lack of knowledge of the other party stipulates in its own favour or another person a benefit of a considerably greater value at the time of concluding the contract than the value of their own benefits. As an exception. the lease. the parties’ conduct can refer to goods and thus. lack of experience or lack of knowledge of the seller. In case of the adult. the subject matter of the contract is the same with the subject matter of the civil legal relation and the subject matter of the obligation consists of the positive or negative performance that contracting party undertakes to each other. as follows: . the ridiculous low price is sanctioned with the relative nullity of the contract without the need for the party to demonstrate that the other had taken advantage of the state of need. In order to be valid. the loan and so on. agreed by the parties. 1225 (1) NCC stipulates that the subject matter of the contract is the legal operation.• It is necessary that one of the party. the action for annulment is admissible only if the damage exceeds half the value of the performance guarantee or executed by the injured party at the time of concluding the contract and the disproportion must subsist until the request for cancellation. Therefore.

the seller supports these risks. damaged. It is the case of the sale of future inheritance. if the goods are individual established and are lost..g.1. The subject matter has to exist. If the object does no longer exist (at present). The impossibility of the subject matter means the impossibility of anyone to perform a particular promise. In this last case. The identification of goods has important legal consequences for the contracting parties. The subject matter has to be identified or identifiable. quality. size. according to the civil code “only the goods on the market can be the object of a contract”. 2. The process of selecting or setting aside the specific goods is referred to as identification of the goods within the contract. which is completely prohibited by law. not on the ground of non-existence of the subject matter. while general established goods (res genera) are identified by their quantity. There is only one exception from this rule. or destroyed. unless its object/subsequent subject matter is identified or. the goods individual established (res ceria) are identified by their features. etc. at least. but on the ground of immoral consideration. the sale of future harvest is a valid contract). the subject matter does not fulfill this requirement. the buyer bears the loss. number. Thus. According to the civil code. A transaction in futures occurs when a person contracts to deliver goods that either does not exist. . unless it does not have an actual existence (e. the seller is bound to deliver goods from the same category. is not material possible to alienate the moon. By contrary. unless the risk has passed to the buyer. It should be mentioned that the act is null. identifiable. when the goods are general established. Law considers the subject matter as existing even if it exists in the near future. The subject matter has to be legal or material possible (impossibilium nulla obligatio est). It is neither legal possible to sell goods that belong to public property of the state. Thus. 4. 3. even if it has existed in the past. or the seller does not own them at the time of contracting. For example. The subject matter has to belong to the civil circuit.

6. etc.).consideration for selling (e. 5..This requirement is not considered fulfilled if the performance of the contract is impossible only for a particular promisor. 2. The consideration is analyzed by our juridical literature from two points of view: 1. Each party has to assume his or her owns behavior. the seller is interested to obtain the price while the purchaser is interested to acquire the goods.g.). or to engage performance the performance of somebody else. Law usually cannot enforce an act whereby the parties promise to do something illegal or against public policy or morals. every purchaser has his own intermediate consideration for buying (e. he or she wants to buy another object with that money. he or she wants to use the object or he wants to sell it for a better price. the parties who conclude a sale contract resume the same instant consideration in all cases. The consideration represents the goal pursued by the parties who conclude a particular juridical act. Nevertheless. it is forbidden to sell the goods which belong to somebody else. The consideration In order to be enforceable. the intermediate or specific consideration. which is different from a certain agreement to another. . For instance. At the same time. every seller has his or her own intermediate. which is essentially the same in all acts of a certain type. or he wants to pay a former debt. etc. It means that the subject matter of the act should be lawful. For example. a legal consideration or cause must support a juridical act.g. the instant consideration. but it is generally possible. The subject matter has to be free from legal or moral prohibition.. It means that nobody can promise somebody else’s conduct.

In order to support a valid contract, the consideration has to fulfill several conditions as follows:

- to exist;

- to be real;

- to be non-prohibited by law or public morals (contra bonos mores). For instance, a promise to undertake a social obligation cannot be considered a valid one.

The problem of the validity of the consideration does not arise unless the intermediate cause is analyzed. The instant cause is always valid, being an abstract one.

In fact, the civil code provides two presumptions: firstly, that the consideration exists, and, secondly that it is valid.

The legal form of the contract

The observance of the proper legal form is one of the validity conditions required for concluding a juridical act.

Within the common understanding, many people assume that juridical acts should be drawn up in a written form in order to be enforceable. In fact, law does not usually impose that. There are only a few types of juridical acts that should be concluded in a certain form imposed by law for their enforceability.

It means that within Romanian law system, the formalism does not apply as a principle, despite the normal exceptions provided by law.

The legal rules, which stipulate formal requirements, are divided into three main categories as follows:

1) form requested by law ad validitatem. This form has to be observed for the very validity of the act, which is compulsory. The non-observance of this form flaws the act and a later complaining with the legal rules cannot cover the nullity of the act.

Therefore, several acts are valid only when they are drawn up in a deed stricto sensu, meaning an authentic form (e.g. donation, sale of land, articles of partnership or mortgage). Law also requires some formal conditions for certain other acts, as it is the case of the will (the will is valid only if it is executed in the accordance with the formalities prescribed by statute for each type of will).

2) Form requested ad probationem. This form has to be observed in order to proof (to attest) the content of the act, although the act is valid even in the absence of the due form.

Sometimes, the simple consent of the contracting parties is enough for concluding a valid agreement and law requires a written form only for constituting evidences that can be used within a lawsuit. Examples of such acts include insurance contract, voluntary deposit, lease or settlement.

However, the civil code specifically requests the written form for an act with an object having a value over 250 lei. Due to the power of the national currency, it means that today, the written form is requested for proving any agreement.

3) Form requested for the opposability to third party. In other words, the act is valid between contracting parties, but in order to make it opposable to third parties, it should be concluded in a specific form. The form imposed by law has to be also observed; otherwise the act’ could not produce its effects over any third party. For example, there can be mentioned the legal requirement to notify the debtor within the assignment of debts and the registration of selling and purchasing contracts of land or of real estate.

In fact, the assignment of debts is a debt transfer to another person’s benefit. Within a contract, one of the contacting parties can transfer his contractual rights to a third party. The person entitle to do that is

the so-called “assignor” while the recipient of these rights is the so-called “assignee”. The contract between the assignor and the assignee has no effect against the debtor, unless he or she is informed about that assignment, otherwise the debtor may validly pay his debts to the assignor.

Being governed by the same rule, a land or real estate contract has effects only between the seller and the purchaser, unless it is registered in the real estate register. This is why, the purchaser of the land or other real estate would not be able to prove his rights in case of eviction from a third party, unless he or she has observed the due form of act.

Special forms – new disposition

According to art. 1244 NCC, except the cases where the law provides, the contracts which havr to be registered in the Land Registry and whom subject matter is the transfer or the constitution of real rights must be concluded in authentic form, under the sanction of absolute nullity.

Art. 1240-1245 NCC stipulates the electronic form between the forms in which a contract can be concluded. Therefore, the will may be expressed:

-

verbally

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in a written statement

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in such a matter that leave no doubt over the intention to produce juridical effects

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by electronic means.

An electronic form consists of a message data which can express any information with a juridical value, including a will agreement over a legal relation, such as a contract.

General rules for the interpretation of a contract The priority of the real will of the parties According to art. contract law or equity give to the contract. apart from the specific effects expressly stated. 1266 alin (1) NCC „contracts shall be interpreted according to the will of the parties and not by the literal meaning of the terms”. to exchange or to rent a product must handle virtual advertising. usages. he sends a message to let the others know that he wants to conclude a contract. The contract produces. For this purpose. The real will of the parties must be proved. other effects According to art. he will have to click the button „click deal”. The contract will be considered signed at the moment when the acceptance of the offer will have been received by the informatic system of the offerer. we have to go through 2 stages: the publicity the negociation We should mention that the party who wants to sell. The proof can be made by any means and until proved otherwise. 1272 (1) NCC „A valid contract obliges the parties not only to what is expressly stipulated but also to all the consequences that practices established between the parties. The meaning of the usual clauses is implied .In order to conclude a contract in an electronic manner. the form that corresponds to the manifestation of the parties’ will will be considered to meet their real intention. according to its nature”. to buy. If someone wants to conclude the contract.

because our legislation stipulates that the partial nullity is the rule and the total nullity is the exception and. the clauses should be interpreted in the way in which they can produce some effect. It can not be accepted that the parties have stipulated a clause without the intention that this certain clause would produce juridical effects. athough they are not expressly stipulated”. in adittion. . The interpretation of the doubtful clauses The doubtful clauses cand be defined as the ones that can be undertsood in more than one way or the ones that can not be understood in any way. In order to interpret these types of clauses. the following rules should be respected: a) When a certain clause can be interpreted in two different ways.” We should not understand from this principle that if one clause is declared null. This principle has its origin in the Roman Law which stipulated the principle „actus interpretandus est potius ut valeat quam ut pereat”. An example would be the case of the sale contract where the obligation of the seller to guarantee the buyer for the crowd is implied. the contract itself will be declared null.1272 (2) „The meaning of the usual clauses is implied. although this obligation was not expressly stated in the contract Special rules for the interpretation of a contract The systematic interpretation of the clauses According to art. 1267 NCC „clauses are interpreted one through the others giving each of them the meaning resulting from the entire contract. it will be interpreted in a way that can produce a effect.According to art.

Practical application: .the case when a sale contract is declared null. according to art. the circumstances in which it was concluded. 1260 (1) NCC „a contract which is declared null and void will produce the effects of the legal act for which all the condition specified by law are accomplished” b) When the terms of the clause have more than one meaning. with the exception of the rules applicable to the consumer contracts and adhesion contracts”. the doubtful clauses will be interpreted in favour of the buyer. the sense that generally is assigned to the clauses and expression in this domain and the usages. they will be interpreted in the way that fits the most with the nature and the subject matter of the contract c) The doubtful clauses will be interpreted taking into consideration the nature of the contract. e) No matter how general are the terms of the contract. their number and scope are not restricted to the example given. according to the principle in dubio pro reo. g) The clauses in the adhesion contracts will be interpreted against the one who have proposed them. we have a special rule which derogates from the rule mentioned above. 1671 NCC „In a sale contract. according to the principle of the conversion of the legal act. This principle is stated in art. In case of the sale contract. the previous interpretation of the clauses and expressions of the contract given by the parties. its only subject matter are the benefits to which the parties have committed. we are given an example for a specific obligation. f) In the case when in the content of the contract. The principle pacta sunt servanda . but it is valid as a sale promissory agreement (?). the clauses will be interpreted in favor of the debtor. according to the principle in dubio contra stipulantem. Therefore. d) When in doubt.

law expressly provides the exceptions from the compulsory force of the act. previous one (the principle of compulsory force of the contract). A lease is an agreement whereby one party (the so-called landlord) transfers his or her right into immediate possession to the other party (the so-called lesee) for a commonly consideration. For instance. the civil code synthetically expresses this idea by stipulating that “the conventions legally concluded have the force of law between contracting parties”.the contracts concluded intuitu personae are generally terminated by the promisee’s death. Indeed. despite the parties’ will the contract takes end in the following cases: . Thus.the dissolution of a partnership. The principle of irrevocability of the act The principle of irrevocability of the act restrains the promisor to revoke his promise. incompetence. Nevertheless.the death.The principle of compulsory force of the act is expressed by the Latin I idiom pacta sunt servanda. For instance.the termination of a lease (rent) contract by the lesee. Furthermore. . there are several cases where the unilateral revocation of the act is allowed by law. the so-called rent . By way of exception. law allows: – the cancellation of a gift made by one of the spouse to another . if there is no certain term for the contract. insolvency or bankruptcy of any of the contracting parties terminates the mandate contract . the court solves the litigation between parties according to the legal provisions and also based on the convention existing between the litigants. This rule is a corollary of the. the principle of compulsory force is effective even upon the court of law.

Obviously.the termination of a gratuitous deposit by the deponent There are also several unilateral juridical acts that may be merely revoked by their author.acceptance of an inheritance (the acceptance should be expressed within 6 months from the death of the person inherited and the inheritance should not to be previously accepted by another heir). a plaintiff can maintain a lawsuit only against the party with whom the contract has been concluded. the conditions requested for revocation of the relinquish are the same as they are for the . To revoke a relinquish of the inheritance means “to accept the inheritance. Hence. conceptually. .the termination of the gratuitous mandate by any of the parties .party (the so-called “contracting party” in case of a bilateral act). In order to understand that principle. The testator may revoke a will at any time until his or her death. Notwithstanding.the relinquish of an inheritance. because it has no juridical force. Therefore.. the effects of a juridical act are produced strictly between the parties of the act (promisor and the promisee). such as: .the will. after the testator’s death it cannot be revoked anymore. The principle of privacy of the act According to the principle of relativeness (privacy) of the act’s effects. the following basic notions have to be explained: . a will is not a true juridical act until the testator’s death. .

third party. or as a “contracting party” (in case of a bilateral act). The former company ceases its existence but the absorbent company continues to exist and succeeds into . assignor-assignee. and every juridical act made by the deceased takes effects upon him or her. a . the parties can have specific names: grantor-grantee. Universal successors and successors with universal title. A universal heir succeeds an universitas bonorum. the interested parties are persons who are recognized either as aving enforceable rights or as being liable for duties created by an act where they ‘e not parties. . with assets and liabilities.interested party.. A “party” is a person who concludes a juridical act. From a juridical point of view. Depending on the nature of the act. leasor-Ieasee. The absorption supposes that a company becomes a part of another company (the so-called absorbent company). consignor-consignee. These persons are grouped into three classes: 1. as ayant cause or habentes causam) lis a non-contracting party who uses the existence of the act as a basis for a lawsuit. legator-legatee. landlord-tenant. In company law. whether they have the same interest within the act. vendor-purchaser. etc. bargainer-bargainee. also. devisordevisee. A “third party” is a person who was not involved in the conclusion and the performance of the act. either referred to as an “author” (in case of a unilateral act). either intestate or testamentary. mortgagor-mortgagee. An “interested party” (known.”party” can be a single person or group of Itwo or more persons. Essentially. a case of universal succession is the merging through absorption.

Universal successors and successors with universal title are interested parties in any act concluded by the deceased because they inherit the patrimony as it is (e. For instance. by any lawful transfer. Successors with a particular title A successor with a particular title is a person who acquires a certain enforceable right. Thus. such persons are the purchasers.the act is previously concluded. the absorbent company or the company resulted from merge acquires the assets and liabilities of the former company/companies. being its universal successor. . the division of a company leads to such succession with universal title. liabilities. Within merge. the original companies cease to exist. whereas the latter inherit a whole patrimony. the divided company ceases to exist and the resultant companies bequeath fraction of its patrimony. two or more companies are united and form a new company. there are cases where law allows to a special category of heirs to avoid the gratuitous acts made by the deceased. The transferees are interested persons only related to the acts which fulfill certain conditions as follows: . the heirs who inherit a specific right. at the same time. even if they were not parties of the act. The only distinction between them and the universal heirs is that the former inherits a fraction of the patrimony. due to their inheritance right. the assignees. Successors with universal title are persons who bequeath a fraction of the deceased’s patrimony. Another case provided by company law is the merge. acquires the assets. One of the absorption effects is that the absorbent company retains its name and identity’ and. 2. Thus. At the same time. It should be mentioned that. decreased by expensive gifts).the rights and duties owed by the former corporation. franchises and power of the company that ceases to exist.g. being bounded by any contract or unilateral act made by the deceased.the transfer . In both the case. they become interested parties. within company law. They have the same position like universal heirs. For example.

But. life insurance contract). The specific effects of the mutually binding contracts . the creditor has the right to demand and to be recovered by a certain performance of his debtor. Simple creditors A creditor is a person to whom an obligation is due. known as simple creditors.g. Inasmuch as their claims are unsecured. the universal successors and successors with universal title.. there are some creditors who have no such guarantees. Let’s take the following example: we suppose that X owns $500. The creditors who are entitled to a lien (e. Apart from them. There is considered real exception to the principle of relativeness effects of the act the so-called contracts to the benefit of a third party (e. According to law. the simple creditors are interested parties in any juridical act made by their debtor.the act refers to the right acquired by the transferee.000 to Y. because such acts may influence the promisee’s solvency. a charge. as well as the simple creditors are. or a third party (in the act which has another object than the acquired right). We emphasize that the transferee can be either a party (in the act whereby he or she acquires the right). law allows them to avoid the gratuitous acts concluded by their debtor with the view to jeopardize the creditors’ rights. holds or claims upon the property of another as security for some debt or charge) are generally referred to as secured creditors.g. Therefore. considered apparent exceptions from above mentioned principle.

does not carry out his obligation. c) If one of the party can not by any means carry out his obligations and because this situation.The principle of reciprocity and interdependency of the obligations of the parties in the mutually binding contracts The specific feature of this type of contract is the reciprocity and interdepency of the obligations of the parties which basically means that each party is at the same time both debtor and creditor. the question which arise is who bears the risk of contract. Given this principle. If the buyer asks such a thing. Let’s take as an example the case when A – seller sells to B – buyer a mobile phone. The conditions that must be fulfilled in order to invoke the exception for non-performance of the contract: . Nevertheless. guilty of culpable misconduct. we have some specific effects: a) If one of the party does not fulfill his obligation but he request the other party to perform his. the other can ask the court to pronounce the rescission of the contract. after the good will have been given. the seller can successfully invoke the exception for non-performance of the contract. The exception for non-performance of the contract (exceptio non adimpleti contractus) Exceptio non adimpleti contractuls can be defined as a muniment made available for the party that is asked to carry out his obligations although the party who is asking did not carry out his own obligations. If in the contract is stated that the phone will be given only after the price will be paid. b) If one of the party. if in the contract’s content exists a clause that states that the buyer will pay the price at a certain date agreed by the parties. the party who was asked to carry out the obligation can invoke the exception for non-performance of the contract. the seller will not be able to invoke this exception because he had given up his right. the contract is terminated. A won’t be forced to give the good before he receives the price.

1548 which states that „The fault of the debtor of a contractual obligation is presumed by the simple fact of the non-performance. The most important consequence which arises from this exception is the temporary suspension of the obligation of the party who invokes it. New Civil Code introduce a presumption of guilt in art. but important enough from the other party.a) The mutual and interdependent obligations of the parties must have their basis in the same contract b) To exist a non-performance. uno-ictu. the other party could not perform his own obligation d) Parties should not have agreed a term for the performance of their mutual obligations. he can suspend the work until the payment is made. without the intervention of a judge and without giving notice to the debtor. c) The non-performance should not be due to a certain fact of the party that invokes the exception and because of this. In this case. Rescission of the contract The rescission of the contract is the abolition of a contract. Moreover. but only a suspension of its effect. the NCC states that the enforcement may not be refused if according to the circumstances and taking into account the small matter of the performance which was not executed this refusal would be contrary to good faith. For example. This exception can be invoked between the parties that have concluded a contract. the party does not want the rescission of the contract.”. if an architect does not receive the money agreed for his work. usually mutually binding. by the party who is entitled to this. even a partial one. at the request of a party when the other party did not perform the obligations that he had taken when the contract was concluded . In this situation.

If a third party had concluded conservation acts or acts of administration and rescission was obtained. As an exception. usually mutually binding. this sanction can arise also in the case of a unilateral contract. such as the contract of pledge. these rights will be disbanded as well. once the rescission was obtained. b) Arises when the non-performance of the obligations is due to the debtor’s guilt and not to the force majeure or due to some unforeseeable circumstances. of an unilateral declaration of rescission or if the law expressly provides it. the contract is disbanded. uno-ictu. d) If this exception is invoked and obtained. c) Operates by virtue of a court judgment.Features a) Institution sanctioning the non performance of the obligations in a contract. f) The most important effect of the rescission of the contract is its retroactive nature which produces the following consequences: - The benefits which were performed will be restored If a third party had obtained some rights from the purchaser of the good. g) Is optional – the creditor may choose between the forced execution of the obligation or the cancellation of the contract . these acts will remain valid. e) The rescission frees the one who obtain or invoke it from its own commitment.

” The non-performance of the obligation must be due to the debtor’s guilt and not to the force majeure or due to some unforeseeable circumstances. Still. the non-performance must have been considered essential at the moment when the contract was concluded b) The party who did not perform his obligation should be responsible for this situation – according to art. The judicial rescission can be admitted if the following conditions are fulfilled: a) One of the party did not perform his obligation – the non-performance may be either total or partial and in this last case. c) The debtor who did not perform his obligations must have been given notice. the creditor will not be able to obtain the rescission of the contract. if the non-performance of the debtor’s obligation is of little significance. The creditor is not obliged to ask for the rescission of the contract. the non-performance must have a repetitive character. However. 1548 NCC „The fault of the debtor of a contractual obligation is presumed by the simple fact of the non-performance. Though.Rescission may be: Judicial Conventional Legal The judicial rescission The judicial rescission will be decided by the court at the request of the interested party. he can ask the court to compel the debtor to perform his obligations instead. in the conditions . there is an exception to this rule – the case of the contracts with successive execution where the creditor may ask for the rescission of the contract even though the non-performance of the obligation is of little significance.

it will not be considered that the debtor had been given notice. The damages are: 1) compensatory damages .provided by the law. it is necessary a manifestation of the creditor’s will. For this purpose. Action for rescission of the contract In order for the rescission of the contract to operate. the creditor is entitled to damages. If the debtor does not carry out his obligation. it must be requested by the interested party.the damages that the creditor is entitled to if the debtor does not perform his obligation or if he performs it inadequately 2) punitive damages (?) – the damages that the creditor is entitled to if the debtor does not . The action for rescission of the contract must be submitted in the general term of prescription (3 years). It will be considered that the debtor was given notice: - if he had received a written notice - if the creditor submitted the request for summons. If the obligation had not been carried out in the term stipulated in the contract. the judge will give the debtor a reasonable period of time in which he can perform the obligation. If the debtor had not been given notice and the creditor submitts a request for summons.

the conventional rescission becomes the rule in this domain. while the judicial rescission becomes the exception. the creditor has a right of choice.perform his obligation in time. This type of clause produces effects only if expressly stipulates the obligations for which the non-perfomance leads to the rescission of the contract. This clause only leads to the rescission of the contract if the debtor was given notice or if the parties have agreed that the simple fact of non-performance would lead to the rescission of the contract. The conventional rescission New Civil Code expressly stipulates that the conventional rescission is possible. Therefore. he can request the forced execution of the contract if this is still of interest to the creditor. The effects of the rescission . he is not forced to ask for the rescission of the contract. when the parties agreed this way. The conventional rescission can take place through a written notice send to the debtor. The resolutive clause in a contract A clause by which the parties stipulate the rescission of the contract for non-performance of the obligations of one of them is called a resolutive clause in a contract. moreover. The parties must stipulate clearly in the contract the content of the resolutive clause and also the condition in which it operates. when the debtor is in default without notice or when the debtor did not perform his obligation in time.

The effects between the parties If the rescission is admitted. The dissolution of the mutually binding contracts The action for dissolution of contracts is a procedural means which allows the party that had performed his obligation from a contract with a successive execution to ask the court the dissolution of the contract when the other party did not performed his own. but also towards the third parties. The rescission produces effects between the parties of the contract. irrespective of its type (judicial or conventional) and this is the cancellation of the contract for the past and for the future as well. it must follow the same rules as the rescission of the contract. these rights will be disbanded as well.The rescission produces the same effect. the parties must give back the benefits which were obtained at the conclusion of the contract The effects towards third parties If a third party had obtained some rights from the purchaser of the good. resolvitur ius accipientis. according to the principle resuluto iure dantis. In order to be admitted. which means that the contract will produce no effects from the moment when the dissolution was admitted to the future – this is one of the differences between these two juridical institution Differences between rescission and dissolution . once the rescission was obtained. the dissolution only produces effects in the future. but unlike the rescission.

. it is not necessary that the non-performance to be essential. However. while the dissolution only produces effects for the future 4. it means that the seller looses the good and the price as well. The principle res perit debitori The rule is that the risk of the contract is beard by the debtor whose obligation had become impossible to perform. it can be non-essential. For example.The rescission is a sanction applicable to the contracts with an instantaneous execution. Which is the solution of the Romanian law? The risks of the contract is a juridical institution consisting of a rule – res perit debitori and an exception – res perit domini. The risk of the contract is beard by the creditor whose obligation had become impossible to perform. due the force majeure. can not carry out his obligation. in the case of the mutually binding contracts. according to the principle res perit debitori. respectively by the party that. according to the principle res perit creditori. while the dissolution is applicable to the contracts with a successive execution The rescission of the contract can be obtained if the non-performance of the obligation is essential. it means that he will have to pay the price even though he didn’t receive the good. but it must have a repetitive character The rescission produces the cancellation of the contract for the past and for the future as well. the risk is beard by the debtor whose obligation had become impossible to perform. if we agree that the seller bears the risks of the contract. while for the dissolution the non-performance of the obligation. Risks of the contract The question that arises when we say „risks of the contract” is whether a party must or must not perform his obligations if the other party fails to execute his own. If we agree that the buyer bears the risks of the contract.

but also the situation in which the obligation can not be performed due to an impossibility of performance of the contract. The principle of privacy of the act 1. there are possible two situations: a) A decrease of the other party’ benefits. he will not be able to compel the other party to perform his own obligations. the debtor whose obligation had become impossible to perform bearing the risks of the contract if he hadn’t carried out his obligation. which means that the risk is beard by the party who was the owner of the good at the moment of the fortuitous/accidental loss – an exception from the rule res perit debitori -. we must take into consideration the risks of the contract. according to the rule res perit creditori. The effects of the contract towards third parties. then he would have to bear the risks. b)Termination of the contract when the part that still can be carried out is not able to assure the scope of the contract. the debtor whose obligation had become impossible to perform is completely bearing the risks of the contract. The principle of privacy of the act . If the obligation is only partially impossible to be carried out. Although in the previous legislation the rule for these types of contracts was res perit domino. The risks in the mutually binding contract that transfers property rights In this situation. In this case.Because of the fact that he is in an impossibility to perform his obligation. the New Civil Code states that for these types of contract is applicable the general rule: res perit debitori. as a consequence of the principle res perit domino. If the creditor was given notice.

the effects of a juridical act are produced strictly between the parties of the act (promisor and the promisee). leasor-Ieasee. In order to understand that principle. a plaintiff can maintain a lawsuit only against the party with whom the contract has been concluded. Hence. whether they have the same interest within the act. also. etc.According to the principle of relativeness (privacy) of the act’s effects.interested party. a . A “third party” is a person who was not involved in the conclusion and the performance of the act. mortgagor-mortgagee. assignor-assignee.third party. An “interested party” (known. From a juridical point of view. the following basic notions have to be explained: . Essentially. legator-legatee. These persons are grouped into . .”party” can be a single person or group of Itwo or more persons. devisordevisee. bargainer-bargainee. the interested parties are persons who are recognized either as aving enforceable rights or as being liable for duties created by an act where they ‘e not parties. landlord-tenant. consignor-consignee. the parties can have specific names: grantor-grantee. Depending on the nature of the act.party (the so-called “contracting party” in case of a bilateral act). either referred to as an “author” (in case of a unilateral act). as ayant cause or habentes causam) lis a non-contracting party who uses the existence of the act as a basis for a lawsuit. . or as a “contracting party” (in case of a bilateral act). vendor-purchaser. A “party” is a person who concludes a juridical act.

The former company ceases its existence but the absorbent company continues to exist and succeeds into the rights and duties owed by the former corporation. The only distinction between them and the universal heirs is that the former inherits a fraction of the patrimony. The absorption supposes that a company becomes a part of another company (the so-called absorbent company). two or more companies are united and form a new company.three classes: a. In company law. For example. Thus. It should be mentioned that. In both the case. either intestate or testamentary. the original companies cease to exist. A universal heir succeeds an universitas bonorum.g. decreased by expensive gifts). One of the absorption effects is that the absorbent company retains its name and identity’ and. due to their inheritance right. a case of universal succession is the merging through absorption. and every juridical act made by the deceased takes effects upon him or her. whereas the latter inherit a whole patrimony. Universal successors and successors with universal title are interested parties in any act concluded by the deceased because they inherit the patrimony as it is (e. there are cases where law allows to a special category of heirs to avoid the gratuitous acts made by the deceased. being bounded by any contract or unilateral act made by the deceased. at the same time. franchises and power of the company that ceases to exist. even if they were not parties of the act. acquires the assets. they become interested parties. . Thus. the divided company ceases to exist and the resultant companies bequeath fraction of its patrimony. Another case provided by company law is the merge. Successors with universal title are persons who bequeath a fraction of the deceased’s patrimony. They have the same position like universal heirs. At the same time. liabilities. with assets and liabilities. the absorbent company or the company resulted from merge acquires the assets and liabilities of the former company/companies. Universal successors and successors with universal title. being its universal successor. the division of a company leads to such succession with universal title. within company law. Within merge.

Apart from them. . by any lawful transfer. the simple creditors are interested parties in any juridical act made by their debtor. Inasmuch as their claims are unsecured. or a third party (in the act which has another object than the acquired right). known as simple creditors. Therefore.the act refers to the right acquired by the transferee. there are some creditors who have no such guarantees. The creditors who are entitled to a lien (e. a charge. holds or claims upon the property of another as security for some debt or charge) are generally referred to as secured creditors.the transfer . the assignees. because such acts may influence the promisee’s solvency.the act is previously concluded. Successors with a particular title A successor with a particular title is a person who acquires a certain enforceable right. We emphasize that the transferee can be either a party (in the act whereby he or she acquires the right). .2. Simple creditors A creditor is a person to whom an obligation is due. the heirs who inherit a specific right. such persons are the purchasers. For instance. The transferees are interested persons only related to the acts which fulfill certain conditions as follows: . the creditor has the right to demand and to be recovered by a certain performance of his debtor. law allows them to avoid the gratuitous acts concluded by their debtor with the view to jeopardize the creditors’ rights. According to law.g.

in general. Opposability According to art. life insurance contract). 2. because a third party.000 to Y. that does not mean that other persons can completely ignore its effects. 1281 NCC “The contract is enforceable against third parties who are required to respect the rights and obligations of the contracting parties.” Even though a contract produces effects only towards its contracting parties. There is considered real exception to the principle of relativeness effects of the act the so-called contracts to the benefit of a third party (e.Let’s take the following example: we suppose that X owns $500. But. becomes creditor as a consequence of the agreement will of the contracting parties. as well as the simple creditors are. the universal successors and successors with universal title. Exceptions from the principle of privacy of the act The genuine exception from this principle is the stipulation for somebody else.g. The other persons who were not parties in the contract are held to respect all the rights and obligations which arose from this particular contract. a stranger to the contract. The apparent exceptions from this principle are: . considered apparent exceptions from above mentioned principle.

called proxy. Direct actions – A third party has the right to ask directly his debtor’ contracting party in order to recover his own debt. c. in such a way that the effects of the contract which is concluded are produced towards the proxy – the person who was not present at the moment when the contract was concluded. so they can ask for the money directly to the beneficiary of the work. but through this act of acceptance. usually a contract. the representative.Reprezentation – a party. the third party makes an act of acceptance through which he consolidates the right acquired from the contract concluded between the one who stipulates and the promisor. The promise for other (porte-fort convention) The porte-fort convention is a contract or a clause in a contract through which a person – debtor – commits towards the creditor to determine another person to make a legal commitement in favor of the creditor from the contract. while in the case of the stipulation for somebody else. The porte-fort convention is an apparent exception from the principle of privacy of the act. concludes a legal act. the promisor undertakes the obligation to give or to make something in favor of the third party beneficiary. the promisor undertakes the obligation to determine the third party to conclude or to ratify an act. An example would be the situation when some persons who concluded a contract with an entrepreneur does not receive money for their work. while stipulation for somebody else is a genuine exception from this principle b. Differences between the porte-fort convention and stipulation for somebody else: a. the third party makes an act of ratification through which becomes a party in the contract concluded initially between promisor and creditor. he does not become a party in the contract. in the name and on behalf of another person. In the case of the porte-fort convention. In the case of the porte-fort convention. . while in the case of stipulation for somebody else.

d. the real act. but secret. the parties conclude the public act. but it produces effect toward third parties. Simulation – exception from the principle of opposability of the contract The simulation is a legal operation stipulated expressis verbis in the New Civil Code and it is based on the mutual intention of the parties to simulate. and through another act (a secret act) modifies entirely or partially the legal appearance created through the public act. Conditions of the simulation: a) the mutual intention of the parties to simulate (anumus simulandi) b) the simultaneous existence of 2 acts: the public one and the real one (secret) . the promisor is only debtor towards the creditor. c) Unitary characteristic – simulation is a single legal operation: first. The features of the simulation: a) Conventional characteristic – the intention of the parties is to hide under an untrue appearance the true reality b) Legal characteristic – simulation is permitted by law only if the parties do not pursue the breaking of the law. In the case of the porte-fort convention. while in the case of stipulation. creating through a public act (but untrue) a legal appearance which does not corresponds to the reality. but untrue. depending on the decision of the third party. is concluded and after this operation. the promisor becomes creditor for this third party.

the simulation is not sanctioned with the nullity. the secret one to be already concluded. The parties conclude an act. The secret act (“contra-lettre”) is the legal act in which we can find the real manifestation of the parties’ will. the public act must meet all the conditions imposed to the acts. The secret act . They are not required to follow any formal conditions. but also when first is concluded the secret act and afterwards the public act. This act does not produce any effect towards the parties because they were never intent to give this act a legal significance.The mutual intention of the parties to simulate The intention of the parties to simulate is a sine qua non condition for the existence of the simulation. that is secret. but the specific sanction for this institution is the unenforceability of the secret act towards third parties. It is essential that at the moment the public act is concluded. The secret act must meet only the substantive conditions provided by law for legal acts. but it will not produce any effects towards third parties. This “contra-lettre” should follow this two conditions: - It must have a secret characteristic It must be contemporary to the public act – the act are contemporary when they are concluded simultaneously. This act and only this will produce effects between the parties. but untrue. This act must meet all the substantive condition provided by law for legal acts. According to the New Civil Code. The simultaneous existence of 2 acts: the public one and the real one (secret) In order to be valid. public. but is real and afterwards they conclude another act. in genere.

Contractual liability The contractual liability means the debtor’s obligation to repair the damage that he had caused to the creditor due to the non-performance. not only between the contracting parties. then we will apply the tort liability The contractual liability has two forms: - The contractual liability for his own deeds - The contractual liability for the other’s deeds Conditions for contractual liability . but not in time. If the action is admitted. it only produces effects to the third parties. If a contract does not exist.only produces effects between the contracting parties. improper execution of his own obligation or due to the fact that he had performed his obligation. The essential condition to exist a contractual liability is to have a valid contract between the debtor and the creditor. then the secret act will produce effect towards the third parties. unlike the public act which does not produce any effect between the parties. but they have to be of good faith. The third parties can ask the court to ascertain the existence and content of the secret act in order to remove the effects of the public act.

The debtor’s guilt The illegal act An illegal act means the non-performance of the obligations lato sensu. 1548 which states that „The fault of the debtor of a contractual obligation is presumed by the simple fact of the non-performance. The existence of a valid contract 2.1. An illegal act 3. The existence of a connection between the illegal act and the injury 5. The injury may be: . The non-performance may be either totally or partially. New Civil Code introduce a presumption of guilt in art. This means that the debtor is held responsible if he does not perform his obligations or if he performs in an inadequate way or if he performs them too late. The existence of an injury 4.” The injury The injury may be defined as the damages caused to the creditor by the non-performance of the obligations of the debtor. or by the inadequate performance of these or by the performance of the same obligations too late.

1533 NCC. The creditor must prove the existence of the injury.moral – the physical pain and sufferings caused to the creditor by the non-performance of the obligation . to be sure b.corporal – the damages caused to the health and physical integrity of a person. to be foreseeable c. According to art. Also. In genere.-patrimonial – consists of the actual damage suffered by the creditor (damnum emergens) and the loss of profit (lucrum cessans) . the future injuries are sure if their existence is sure. the debtor can only be held responsible for the injuries that he foresaw or could have foreseen at the moment when the contract was concluded The injury must be attributable to the debtor which mean that the debtor should be guilty of non-performance his obligations. unless the law stipulates otherwise ot the parties have agreed otherwise The injury must fulfill the following conditions: a. . the actual injuries are sure. to be attributable to the debtor An injury is sure when its existence is certain.

the creditor is entitled to damages. he accepts the possibility that this outcome will produce. According to art. but he does not accept it considering that it will not produce or he does not foresees the outcome of his action although he was supposed to foresee it. . The offense is committed with negligence when the author either foresees the outcome of his action. 16 New Civil Code.The connection between the illegal act and the injury According to the New Civil Code. The debtor’s guilt Only if the debtor is guilty of non-performance his obligations. there are two forms of guilt: 1) intent 2) negligence The offense is committed with intent when the author foresees the result of his action and he either follows its outcome or although he doesn’t follow the outcome. the damages cover only what is a direct and a necessary consequence of the non-performance of the obligation.

In contract law. Damages are always established in money.In contract law. The debtor is considered to have been given notice when the creditor send him a written statement asking to perform the obligation or when the creditor introduce a writ of summons to the court. for an inadequate performance of the obligation or for not performing the obligation in time. it is necessary a manifestation of the creditor’s will in order to give notice to the debtor to perform his obligation. The debtor is in default without notice in the following cases: a) when the law expressly provides b) when the contracting parties agreed this way c) when the obligation. This is the general rule. Damages Damages can be defined as compensation money that the debtor is held to pay for repairing the injury suffered by the creditor as a consequence for non-performance of the obligation of the debtor. through his nature. The court can force the debtor to pay damages to the creditor if the creditor has given notice to the debtor. had to be performed in a certain time and the debtor had not performed it . if the time in which the obligation must have been performed had expired. but we have exceptions as well. the debtor is held responsible no matter the form of his guilt.

d) in the case of continuous obligations (the obligation to supply water) e) if the obligation of not to do was breached f) in other cases provided by law If the debtor was given notice. . Penalty cause According to art. in the amount agreed by the parties or in the amount stipulated by the law. but by the creditor who did not took the good. the debtor is held to compensatory damages c) if the obligation is to transfer an individually determined good. 1538 NCC. he will have to pay a certain amount of money. If the parties have not agreed to a specific interest. from the moment when the debtor was given notice. If an amount of money is not paid in time. the creditor has the right to receive punitive damages. the risk of the contract is not any more beard by the debtor of the obligation of releasing the good. the following effects arise: a) from the moment when the debtor was given notice. a penalty clause is a clause through which the parties agrees that if the debtor does not perform his obligation. then it will be applicable the legal interest. the debtor is held to punitive damages b) from the moment when the debtor was given notice. The parties sets in advance the value of the injury caused to the creditor and they will not be able to ask for more damages in court and the judge will not be able to reduce or to increase the amount of the damages.

They are permitted no matter the debtor’s guilt The contractual liability for the other’s deeds The debtor is liable for damage caused by negligence of the person who is used by him in the performance of the contractual obligations.Clauses concerning the contractual liability Irresponsibility conventions – the debtor is not held responsible for any obligation. they are permitted only if the creditor’s guilt is negligence Limitation of liability clause – the parties agrees to a maximum amount of money which the debtor has to pay if he causes a damage to the creditor. Aggravation of the liability clause – the debtor agrees to be held responsible for any obligation. The clause is only valid if the creditor’s guilt is negligence. The conditions under which the contractual liability for the other’s deeds can be applied: a) contractual obligation of the debtor to be executed through another person b) the third party who has to perform the obligation has to be assigned c) absence of the exemption from liability of the debtor by the creditor .

This principle is an application of the “accesorium sequitur principale” rule. The right of action means the right to compel a person using public force.2013 Definition: The extinctive prescription is a sanction which consists of the extinction of right of action not exercised in the period of limitation. Also. when the law expressly provides. as the case may be. The effect of the extinctive prescription is governed by 2 principles: The prescription of the action concerning an accessory right together with the prescription of the action concerning a principal right. . The effect of this institution According to art. which means that after the fulfillment of the prescription term..Business law_9_The extinctive prescription (termination of act) DEC . the right itself continue to exist. other rights of action. which was The substantive law of action. 2500 (1) NCC. the extinctive prescription has as an effect the termination of the right of action. The rights of action having a patrimonial object undergo extinctive prescription unless by law is specified otherwise. to execute a particular performance. undergo extinctive prescription. which means that the court cannot apply this sanction unless it is requested by the party. the legislation gives the possibility for the parties who have full capacity to modify the length of the prescription terms or their course. to meet a specific legal situation or to support any other civil penalty. According to this principle. referred to as the right of action is extinguished by prescription if it is not exercised within the time limit which has been set by law. The New Civil Code stipulates that the termination of act is an institution of private order. Also.04 . no matter their subject matter.

The domain The extinctive prescription and the rights of claim. or stipulated by law or a convention. The second principle is applied if the debtor is obliged to successive benefits. but the other way around is not possible. If A sues B on 1 October 2011. with an interest of 0. the court will not be able to grant the action because the extinctive prescription of the principal right drew to the extinctive prescription of all the benefits which make the subject matter of the accessory right. The extinctive prescription and the non-ancillary rights in rem.5% per month. requesting the money with interest. As a rule. the rights of claim are subject to extinctive prescription. leases.000 RON to B on 1 February 2008 agreeing that this amount of money will be given back on 1 August 2008. As a rule. The extinctive prescription and the ancillary rights in rem. The law stipulates that the majority of the non-ancillary rights in rem are not subject to statute of limitations. a whole unit. the ancillary rights in rem are subject to extinctive prescription. In order to understand this principle. Examples: - action for the recovery of possession - Partition . but there are exceptions (art. let’s take as an example the case when A borrowed 10. the right of action concerning an accessory right is terminated as well.once the right of action concerning a principal right cannot be exercised. 2237 NCC – the rights of policyholders on the amounts resulting from technical reserves provided to life insurance payment obligations falling due in the future are not subject to prescription). such as rents. except the case when all these benefits make up by their purpose.

Exceptions: action for declaring a non patrimonial legal act relatively null. during which legal action can be brought.- actions over land boundaries. action in establishing parentage toward the mother etc. The extinctive prescription and the non patrimonial rights. action in the relative nullity of marriage etc Period of limitation/lapse of time/statute of limitation Definition: a period of time. The statute of limitation period is not a fundamentally legal term anymore. as for settling a claim. fixed by law or agreed by the parties. As a rule. if the law does not provide any other term. because the parties are allowed to modify it. Examples: action concerning the defense of a right to a name. However. The general statute of limitation period is 3 years. the Romanian law stipulates some special statute of limitation periods: a) 10 years – the right of action regarding moral or material damages caused to a person through torture and other rights of action expressly stipulated by law b) 2 years – the right of actions based on an insurance relationship and other rights of action expressly stipulated by law c) 1 year – the right of action of attorneys against their customers for the payment of fees and expenses and other rights of action expressly stipulated by law . the non patrimonial rights are subject to extinctive prescription.

in the case of the right of action for annulment of a legal act.d) other terms expressly stipulated by the Romanian legislation. from the day when it was discovered . . the prescription of the right of action begins to run from the date when each obligation had become enforceable .in the case of liability for hidden defects of the work or construction. the extinctive prescription begins to run from the date when the obligation had become enforceable and the debtor should have performed it. the extinctive prescription will begin to run from the moment the term or the condition have fulfilled. The course of the extinctive prescription According to art. 2523 NCC states that extinctive prescription begins to run from the date the holder of the right of action knew or ought to have known the birth of this right of action. b) in the case of misrepresentation.in the case of successive benefits. from the day when it stopped. . Examples: -in the case of the obligation of to give or to do. the extinctive prescription begins to run: a) in the case of duress. but no later than the expiration of the period of warranty for these defects. the extinctive prescription begins to run from the discovery of the defects. If the right is affected by a suspensive term or condition.

from the day when the person entitled or his legal guardian knew the cause for annulment. but no later than the expiration of 18 months from the day of signing the legal document. administrates other persons’ goods and those whose goods are administrated as long as the management has not been terminated and the reckonings have not been released and approved. 2532 NCC.c) in the case of error or other cases of annulment. . between spouses. under the law. the extinctive prescription will not start running and if it starts. The suspension of the extinctive prescription The suspension of the extinctive prescription means that change of the course of extinctive prescription consisting in stopping the course of prescription within the time it takes for the situations which enable the holder of the right of action to react to disappear General causes for suspension: According to art. between parents. as long as the marriage lasts and if they are not separated. 3. legal guardians and those with restrained capacity or with no capacity or between curators and those who are represented as long as this situation lasts and the reckonings have not been released and approved. under a court ruling or under a legal act. it will be suspended: 1. except the cases the law provides otherwise. between any person who. 4. 2. in the case of the person with restrained capacity or with no capacity as long as he doesn’t have a legal guardian.

deliberately. but only if these were held in the last six months prior to the expiration of the limitation. 9. 7.5. throughout the duration of negotiations carried for the settlement of disputes in an amiable way between the parties. as long as the creditor founds himself in a situation of force majeure The law also provides some special causes for suspension: The prescription does not run against the heirs of the deceased as long as they have not accepted the inheritance The prescription does not run against the deceased’s creditors about the debts that they have on heritage as long as it has not been accepted by the heirs. while they are in a state of mobilization or war. in the case when the person entitled to the right of action must or wants to use a preliminary procedure as long as he doesn’t know the outcome of this procedure. if the law or the contract does not stipulate otherwise. but no later than the expiration of 3 months from the day this procedure had started. 6. - Etc The effects of suspension . 8. hides the existence of the debt or its enforceability to the creditor. as long as the debtor. in the case when the holder of the right of action or when the person who violated the right of action is part of the Romanian armed forces.

If the party invokes the suspension. The interruption of the extinctive prescription The interruption of the extinctive prescription means that change of the course of extinctive prescription consisting in removing the prescription elapsed before occurrence of the interrupted cause and the start of another statute of limitations. The suspension of the extinctive prescription can be invoked only by the party who was prevented from doing acts of interruption. The special effect According to art. After the cause of prescription had disappeared. the suspension does not produce any legal effect. 2534 (2) NCC the prescription will not be fulfilled before the expiry of six months from the date when the suspension has ceased with the exception of the prescriptions of six months or shorter which will not be fulfilled until after the expiration of one month after cessation of the suspension.The general effect For the period prior to the cause of the suspension. its effects will occur by default. the course of prescription starts running again. As long as the cause of suspension lasts. the effect of suspension consists in stopping the course of the extinctive prescription. . except the cases where the law provides otherwise. taking into consideration the elapsed time before the cause of suspension as well.

by introducing an application for summons or an application for arbitration.Causes for interruption: The extinctive prescription is interrupted: 1. other cases provided by law The effects of the interruption The interruption of the extinctive prescription produces the following effects: Erasing the extinctive prescription which started to run before the cause of interruption had appeared . only if the debtor is sued within six months from the date the debtor had received the notice of default. the right whose action is prescribed made by the debtor 2. notice of default given to the debtor. only if they are admitted 3. through a voluntary act of enforcement or by admitting. by bringing a civil action in the criminal proceedings 4. in any way. initiation of criminal proceedings 5. 6.

According to New Civil Code. he can ask the court to be reinstated in the period of limitation and to hear the cause. counted from the day that he knew or should have known that the reasons which enabled him to introduce an application for summons had disappeared. it has to be requested. the reinstatement in the period of limitation can not be decided ex officio. If the last month has not a day corresponding to the one in which the period of limitation began to run. months or days.- After the interruption. the law offers the judge the possibility to appreciate if the reasons invoked by the party are reasonable or not. The reinstatement in the period of limitation has a judicial character. The reinstatement in the period of limitation has as an effect considering the extinctive prescription as unfulfilled although the period of limitation had expired. a new course of extinctive prescription is starting to run. . the period of limitation will be considered fulfilled in the corresponding day in the last week or month or the last year. The causes for reinstatement in the period of limitation are not stipulated by law. the period of limitation will be considered fulfilled in last day of this month. The reinstatement in the period of limitation If a party has good reason for not performing his right of action. The reinstatement in the period of limitation can not be admitted unless the party had performed his right of action prior to the expiration of a period of 30 days. The fulfillment of the extinctive prescription If the period of limitation is established in weeks. The period of 30 days is a period of limitation. which means that the court has to deliver a judgment.

If the period of limitation is established in hours. . The period of limitation will be considered fulfilled at midnight of the last day. Acts of any kind are considered to be made in time if the documents were delivered to the post office no later than the last day of the period of limitation. the first and last day will not be taken into consideration. the first and last hour will not be taken into consideration.If the period of limitation is established in days. until the closing date at this specific post office.