Sources of subjective rights

Rights are given by the law. But the law has also recognized the existence of circumstances
that give rise to rights, such as contracts by virtue of which contracting parties can create
rights, as long as they do not threat public order or violate rules of morals. This idea finds
expression in the legal maxim; contract is the law of the contracting parties.

Accordingly, these legal circumstances are the direct sources of subjective rights. But the
legitimacy of these legal circumstances derives from the interpretative rules, which are
provided by the law. Thus, the law is the indirect source of the subjective rights resulting
from these legal circumstances.

The direct sources of subjective rights can be reduced to two types, namely, the legal fact,
and legal act.

The legal fact is a material act or an event that give rise to legal effects, such as
compensation.

The legal act is a willful act that is performed unilaterally or bilaterally with the aim of
producing legal effects. The fact of death, which is a natural fact, is a legal material event
that leads to a specific right, i.e. the right to inheritance. An accident, which is a legal fact, is
a legal material event from which is a specific right arises, i.e. the right of the injured to be
compensated for harm done. The contract, however, is a willful bilateral agreement. It is
done with the aim of creating rights and obligations to both contracting parties. A sales
contract, for example, creates for the seller the right to receive the money in exchange of
the item sold, and the purchaser to receive the item sold in exchange of the money.

The essence of the legal fact lies in the material event, whereas understanding the legal act
lies in the will. This why the role of the person’s will in producing a legal fact does not
transform it into a legal act, for the will is not an element in the definition of the legal fact. If
the legal effect derives from a material event, regardless of whether it is natural, voluntary
or involuntary, the event should be deemed a legal fact. But if the legal effect originates in
an agreement whose aim is to produce such an effect, then there should be a legal act.

One of the most important consequences of the distinction between legal facts and legal
acts is noticeable in evidence. For documentary evidence is the mode of proof required by
the law to support a finding of legal acts (if their value exceeds 500,000 LBP), whereas no
such proof is required for legal facts; rather all modes of proof, including witnesses and
presumptions, can support findings of legal facts.

Having made a quick comparison between both acts, we go on studying each separately.
A. Legal fact: is an event that produces unwanted legal consequences. There are two types
of legal fact, voluntary and involuntary

a) Voluntary legal fact

Is a willful event that generates non-willful legal effects. The infliction of harm on
another person gives the latter the right to compensation for harm done. The fact of
constructing on other’s hand land enriches without cause the builder, and
impoverishes the land’s proprietor. Facing such an event, the latter may obtain
restitution of the value that impoverishes him the extent of the enrichment
procured.

b) Involuntary or natural legal fact

Natural legal facts may be the result of a force majeure, such as earthquakes,
volcanos, hurricanes, tsunamis, and tornados. They may excuse the author of any
responsibility. The fact of birth, which is a natural event, gives rise to a specific legal
effect, i.e. the existence of a legal personality which generates rights and obligations.
The fact of death, which is a natural event, ends the existence of legal personality,
and produces a specific legal effect, i.e. the distribution of the deceased estate’s
assets.

Legal facts can also be involuntary. For example, while driving his car, John strikes a
pedestrian recklessly. The fact of having caused unintentionally damage to a
pedestrian requires from John compensation for the damage done.

Since a legal fact is a mere material event, the author’s capacity is not required; for
the production of a legal facts does not depend on the author having complete
capacity. This, however, is not the case of legal acts, which legality requires complete
capacity. Also, it is not required, as said above, that the mode of proof be in writing
to support a finding of a legal fact, it is possible to prove it by all modes of proof.

A legal fact can be a source of real rights: the fact of death, for example, which is a
legal fact, entitles the deceased heirs to a part of the estate’s assets. Also, a legal fact
can be a source of claim rights: family tie, which is a material fact, may confer
entitlement to alimony among parents; a harmful act, which is a legal fact, be it
willful or non-willful, and may give right to compensation for harm suffered.

B. Legal Act
1. Concept
Differently from a legal fact, a legal act is the will to produce legal effects, and especially
to create, transfer, modify, or extinguish a right. A legal act can be a source of claim
rights, such as contracts in general, and non-patrimonial rights, such as a marriage
contract creating family rights.

A legal act can be a source of transfer, modification or extinction of rights. Claim rights
may be transferred by a contract of assignment, which is a legal act: article 280 LCOC
provides that creditor can assign his right to receive payment of a debt to another
person.
Also, a claim right may be extinguished or replaced by another through a contract of
novation (consists in the substitution of a new obligation for an old obligation) or
through discharge of debt.

Other legal effects may be produced by legal acts: making a right irrevocable, such as
donee’s reception of donor’s donation, or beneficiary’s reception of testator’s will.

2. Division of legal acts

The division of legal acts can be made in respect to law or to non-law. Under either one,
legal acts can be divided into two parts, one based on the person and another on the
act.

• The non-law’s division of legal acts:

i- Division based on the person
The division of legal acts on the person takes into consideration the person’s
legal capacity. To that effect, it distinguishes two categories of legal acts (i)
onerous contracts, such as sales contract, contract of lease, and (ii) gratuitous
contracts, such as donation and will. The way these two types of legal acts are
related to the person’s capacity is clear from the fact that the first category,
namely, onerous contracts requires for their validity only an ordinary legal
capacity, while the second category, namely, gratuitous contracts, requires
special legal capacity.

ii- Division based on the act

The division of legal acts on the act itself makes a further subdivision, one
according to the act’s nature, and another in relation of the act’s enforceability.

(A) Nature of the act

Division of legal acts according to their nature takes into consideration the
act being either unilateral or bilateral (or multilateral). It is unilateral when
one person expresses one’s will, such as testament and will. It is bilateral or
multilateral when it results from the meeting of two or more person’s
minds, such as contract (employment contract, contract of agency).

(B) Enforceability of the act

Division of legal acts according to their enforceability distinguishes between
two categories of legal acts : (a) deed inter vivos or, as it is known in Latin,
res intern vivos acta, such as sales contract, contract of lease, deed of
donation, and (b) act of last wishes, such as will. The importance of this
division lies in the fact that the alienator under the act of last wishes is
entitled to revoke the deed before his death. But there is no complete
freedom to dispose of one’s property after death as one wishes, the reason
being that the Lebanese law determines a specific share for heirs one cannot
disregard.

Although the non-law’s division is interesting, it does not cover however all
possible legal acts, the law’s division is much wider and is indicative and not
 restrictive. Parties may choose to adopt other types of contracts, provided
these contracts are not contrary to public order and morale.

• The law’s division of legal acts:

Contract is the most important act among the legal acts. According to article 165 LCOC, a
contract is an agreement by which one or several persons bind themselves, towards one
or several others, to transfer, to do or to refrain from doing something.

There is a difference between agreement and contract. When an agreement tends to

institute mandatory relations, it takes the name of contract. Contract is then a mtg of
wills intended to produce legal effects. Its main legal effect is to create contractual
obligations between the parties. Also the word”contract” refers to the written
document that reveals the parties’s wills.

An agreement is wider in extension than a contract. For these are moral and social
agreements that are not mandatory, such as those among members of the same family
or among neighbors or among members of the same community who help each other in
building their own houses or in seasonal works, such as fruit picking or grape harvesting,
as are the usages in villages in Lebanon. This kind of relation does not create any legal
obligation. There are other kinds of relations which are more difficult to qualify, such as
voluntary transportation of a person by a driver, whether with or without sharing travel
expenses, honoring one’s commitments, doctor-patient relationships.

As a convention, contract is a special agreement which is intended to create civil

obligations, which not all conventions do. The cession of debt permits the assignment of
a person’s debt to another; whereas debt cancellation relieves debtor of his payment
obligation.

Being an agreement, the contract is based on the autonomy of the will, i.e., on the
meeting of the will of the contracting parties. The origin of the autonomy of the will lies
in the maxim pacts sunt servanda, a Latin expression for “agreement must be kept”: had
the contracting parties not agreed to a contract, they would not have to keep an
agreement.

Several legal corollaries stem from the theory of the autonomy of will: (a) the principle
of contractual freedom. Individuals are free to fashion their legal relations as they may
see fit, subject to public order and morals. A person cannot be forced to express his
consent to be bound by a contract is deemed null and void. (b) the principle of the
binding force of contracts. A person who choses freely to be bound by the clauses of a
contract cannot break his commitment (c) The principle of the Relative Effect of
Contracts. Only are bound by the contract those who expressed their consent to be
bound by its terms and conditions.
The freedom of contract has led to a great variety of contracts, article 167 LCOC
provides that contracts are divided into:
- Unilateral and bilateral contracts
- Onerous and gratuitous contracts
- Consensual and solemn contracts
- Mutual and adhesion contracts
- Individual and collective contracts
- Acquisition and guarantee contracts
- Nominate and innominate contracts.

• Unilateral and bilateral contracts:

Division of contracts into unilateral and bilateral contracts is based on the types of
obligations laid down on parties. Unilateral contracts create obligations on one of the
parties, whereas bilateral contracts create reciprocal obligations between parties. In
loan contracts, borrower only has the obligation of returning the money; lender as no
reciprocal obligation. Loan contracts thus are unilateral contracts. In sales contract,
seller has the obligation to transfer the property to buyer, and buyer has the obligation
to pay seller the agreed upon value of the propriety in money. Sales contracts thus are
bilateral contracts.

• Onerous and gratuitous contracts

Division of contracts into onerous and gratuitous contracts is based on the benefits
derived by the parties from the contract. Gratuitous contracts are those by which one
party obligates himself toward done without any advantage in return, whereas onerous
contracts are those by which each of the parties obligates himself toward the other
party while obtaining an advantage without anything in return. Donation contracts are
gratuitous contracts. In sales contracts, each of the seller and purchaser obtains an
advantage from the other; sellers delivers the thing sold to buyer in exchange of the
money paid by buyer. Sales contracts are onerous contracts.

According to article 170 LCOC, onerous contracts are subdivided into commutative
contracts and aleatory contracts. In commutative contracts mutual benefits and
obligations are determined by the parties at the time of the conclusion of the contract.
Each party knows exactly what should be given and received by either party. Differently
from commutative contracts, the execution in aleatory contracts depends on an
uncertain event that is beyond the parties’ will. The term “aleatory” comes from the
French “alea”, which means a game of dice. Where commutative contracts give rise to
specific obligations, aleatory contracts create obligations that depend on an uncertain
event. Sales contracts are commutative contracts, because buyer and seller have specific
pre-determined mutual rights and obligations, seller giving a property to buyer in
exchange for a specific amount of money received from buyer. Insurance contracts are
aleatory contracts, because the insured is not paid until an event, such as a fire, results
in insured’s property loss.

• Consensual and Solemn contracts

Division of contracts into consensual and solemn contracts depends on whether some
formalities are required by the law for the contract to be a valid act. Consensual
contracts are formed by a mere exchange of agreements, without any formality being
required: suffice it a mutual “yes” from both parties, unless the law provides a specific
form or a registration procedure for the act to be valid. For example, the legislator may
require, in some instances, a documentary evidence for proof. This does not restrict the
capacity of the will and does not affect the validity of the contract. In such a case, the
existence of the contract can be proved by other modes of proof. For example, written
document is required as a proof of lease contracts. If there is no written document, the
parties; confession or oath evidence is admitted in court. Even the testimony, under
article 257(3) of LCCP, is accepted in case of prima facie evidence in writing. On the
other hand, solemn contracts are formal contracts. Their validity, in addition to parties’
mutual agreement, depends on the observance of proper formalities. Absence of such
pre-stated formalities would entail nullity of the contract. A marriage, for example,
would not be valid if it were not to be made without solemnity.

Sales contracts are formed by the mere mutual agreement, even verbally, of both
parties. Thus, sales contracts are consensual contracts. Mortgage contracts are formed
only if proper formalities are observed, namely, a written document. Thus mortgage
contracts are solemn contracts.

• Mutual and adhesion contracts

Division of contracts into mutual and adhesion contracts is based on the possibility of
the parties to discuss freely the content of the contract. Mutual contracts are those
contracts in which parties determine their own free will the object, the terms and
conditions of the contract. Adhesion contracts, however, reflects the economic and
social inequality of the parties, namely, contracts between big companies and
individuals, such as insurance contracts. Accordingly, mutual contracts are those in
which both parties negotiate at arm’s length the terms of the contract, whereas
adhesion contracts give the contracting party, the weaker, only the opportunity to
adhere or not to the contract. For example, in sales contract, seller and buyer negotiate
freely the terms of the contract, such as the fixing and payment of price in money, or the
date of transfer of property. Thus, sales contracts are mutual contracts. On the other
hand in air transport contracts, such as the Middle East Airlines contracts, passengers by
purchasing MEA airline tickets, adhere to the conditions established by the MEA. It is
MEA which set the conditions for the passengers, the latter having to adhere or not to
them. No passenger can freely negotiate the terms of the airlift contract concluded with
MEA. Thus, transport contracts are adhesion contracts.

• Individual and collective contracts

Division of contracts into individual and collective contracts is based on the extent to
which the contracting parties have expressed their will to the terms and conditions of
the contracts. Individual contracts are governed by the principle of autonomous will,
according to which contracts bind only those who consented thereto. Collective
contracts, such as workers union contract, the decision taken by the Board reaches all
members, even those who abstained from voting or did not agree on the terms of the
contract. The Concordat is also a kind of collective contract. Concordat is an agreement
between debtor and creditors, by which debtor agrees to give all his assets to the latter.
The concordat is decided by the majority of the creditors for the benefit of the debtor
bankrupt. Another kind of collective contracts is the contract concluded by a company’s
board of contracts on the basis of majority, then imposed on all shareholders. Unanimity
is often, if not always, difficult to reach. The system of collective contracts is a way of
restoring the otherwise paralyzed social and economic movements based on unanimous
vote. In sales contracts seller and buyer only are bound by the terms and conditions of
the contract, whereas in collective contracts, workers unions and employers can by a
collective contract reach not only unionized but also non-unionized workers: many of
the terms negotiated deal with pay, conditions, holidays, pensions, etc. These
terms will be incorporated into a worker's contract, whether or not the worker is a
union member; and the contract of employment is, of course, enforceable. The
employee would always have the right to oppose the contract.

• Acquisition and Guarantee Contracts.

Division of contracts into acquisition and guarantee contracts is based on the
delivery or not of the object of the contract. Acquisition contracts are intended to add a
new value to the patrimony of each or one of the contracting parties, whereas guarantee
contracts are intended to the creditor’s rights. Also, acquisition contracts are principal
contracts which stand by themselves and justify their own existence, whereas guarantee
contracts are accessory and their existence are justified by the principal ones. If principal
contracts are void, accessory contracts become also void. But if guarantee contracts are
deemed void because of being flawed or of lacking conditions of validity, they do not
affect the validity of acquisition contracts. Still, acquisition contracts are not only
constituted by mutual consent, but also by the delivery of the object of the contract. In
the absence of such a delivery, the contract is declared null and void. For example, John
borrows $1000 from Doe. A loan contract was concluded. In order to secure the loan,
John gives Doe a bracelet gold in security. The pledge contract is concluded only if the
bracelet is delivered to Doe. But this point is controversial, for some scholars believe that
delivery of the thing is an effect of the contract, not a condition of the contract’s validity.

• Named and Unnamed contracts

Division of contracts into named and unnamed contract is based on a special name given
by the legislator to the contract. Named contracts are those which have particular
designation and form, such as sales, lease, deposit, etc. The unnamed contracts are
those which have no particular designation and form. They remain, however, subject to
the general legal rules governing contracts.

Unnamed contracts are based on the idea of permutation. There are 4 types of
permutation:
1. Do ut des: I give that you may give
2. Do ut facias : I give that you may do
3. Facio ut des: I do that you may give
4. Facio ut facias: I do that you may do.
I think that these types are the basis of all named contracts. For example, the first type led
to the creation of sales contract, the second and third types are embodied in what is named
employment contract, and the fourth type grounds the marriage contract.

It might occur to us that since these types are based on the idea of permutation, there
would be no difference between sales contract and barter, for both connote the idea of
permutation. But sales contract differs from barter: (A) in sales contracts it is clear who is
the buyer and who is the seller, whereas this is not clear in permutation (B) in sales contract
one can sell things which may belong to another, while this is not the case in permutation
where one can only exchange things which one owns (C) in sales contracts goods and
services are exchanged in return for money, whereas in permutation things are exchanged
with goods and services (D) in sales contract, the non-delivery of the thing is allowed; for
the seller may not deliver the thing until he receives all the price, whereas this is not the
case in permutation where delivery of the thing is essential.

On the other hand, permutation differs from barter. For the latter requires that, if the
values of the things exchanged are unequal, the balance can be compensated in cash. This is
not the case in permutation where there is agreement on the exchanged things regardless
of the real value of either, like exchanging a bin of figs with a bin of grapes.

But the code of obligations and contracts states that all the named contracts are not named
on a restrictive basis, but by way of information. This means that other new types of
contracts may be created by the parties. But I have said above that the legally available
named contracts are based on the four types of unnamed contracts may lead to a new type
of a named contract. All the four types of unnamed contracts are based on the principle “do
unto others as you want others to do unto you”. Thus, these types are not qualifying
contracts, they would rather be given for information only.

Person’s exercise of subjective rights

A. Requirements for the Person’s exercise of Subjective Rights

To be able to exercise subjective rights, a person must exist, be identified, and have legal
capacity. The law distinguishes between two types of person: a natural and a legal person.
The natural person is the on-physical person such as companies. Accordingly, we will study
the existence, identification and legal capacity of natural persons and legal persons.

1. Existence of the Person

a. Natural Person.
All human beings, without distinction as to gender, race, nationality or religion, have
legal personality. The person enjoys legal personality from birth until death.

(i) The Fact of Birth. The law requires the father, otherwise the mother, the
legal guardian, the doctor or legal midwife assisting the birth, to make a
declaration of birth to the civil status officer ("Mukhtar") in the vicinity of
birth, within 30 days after birth. The Birth Certificate duly filled by the civil
status officer should state the child's date of birth, time of birth and place of
 birth, the child's gender and first names; the names and ages of the father
and mother, dates and places of birth. A fetus whose father died after its
conception and before its birth, can receive the father's inheritance even if it
was not born at the time of the father's death.

(ii) The Fact of Death. The death of a person is reported in a Death Certificate.
The certificate is issued by the civil status officer ("Mukhtar") in the locality
near where the death took place, on the declaration of two witnesses. The
Death Certificate states the date, time, and place of death; the first name,
last name and age of the deceased; the deceased's date of birth, place of
birth, profession and marital status. However, the personality of the
deceased does not disappear. The death of a person produces legal effects,
such as distribution of his assets among legatees. Also, the deceased's rights
are not extinguished upon death. They are transmitted to his heirs whose
personalities "continue" the deceased personality.

b. Legal Person
With regard to legal persons we will study, first, whether the legal entity exists,
theoretically and historically; second, what the existence of the legal person is
objectively.

(i) Concept and Division. Two opposing theories have dealt with the existence
of the legal person: the theory of artificial entity, and the theory of real
entity. The theory of artificial entity argues that legal entity is not a real
person. It is rather imagined by law. As such, legal entities are endowed with
all the rights given to natural persons, such as the right to enter into
contracts. Legal entity is modeled upon the natural person. It is the function
of the law to decide the legal entities’ existence and rights.

To the contrary, the theory of real entity argues that the legal entity is real
and not artificial; for independently of any intervention of the law, collective
will exists. It is the possibility of expressing this will in its own legitimate
interests that makes it possible the establishment of legal entity, and legally
worth of recognition and protection.

Lebanon has espoused the theory of real entity. The Lebanese court of
appeal stated in 1974 that “the legal entity is not a mere imagination, or a
necessary consequence of the law; it is rather a real entity which is endowed
with separate life. The French court of cassation had already considered in
1954, that “Civil personality is not a creation of the law; it belongs, in
principle to any community which has the possibility of collective expression
for the defense of its legitimate interests, and is, therefore, entitled to be
legally recognized and protected. Some association8s are subjects of law
under the Lebanese law. They have a legal entity distinct from the personality
of the members that compose it. In some cases, the law explicitly refers to
the legal person, such as the religious communities, education institutions,
corporations, labor unions, etc. In other cases, the law implicitly refers to the
 existence of a legal person: it gives the association the right to sue through a
representative, a right which would not exist if a separate legal entity were
not to exist. This is the case of civil societies. The concept of legal entity can
be traced to the second century A.D. in Ancient Rome. For a collegium, a latin
term for joined together was understood under Roman law as an association
having a legal personality. The Collegium Pistorum for example, or the
Collegium Dianae et Antinoi, was granted a seat in the Senate.

It seems that Pope Innocent IV played a significant role in developing the idea
of an artificial person. The doctrine of persona ficta was useful to the
monasteries. Having a separate legal personality different from the
personality of the individual monks, the idea of a fictional person made it
possible to harmonize between the vows of the monks to personal poverty
and the persona ficta acquiring assets.

On the other hand, the idea of a persona ficta was useful to the monks to save their
community, for the community as a legal entity cannot be held liable for non-performance
of contractual obligations, the reason being that it does not have a soul. But the individual
monks have a soul and therefore those who carried out the act, and not the fictional person
as such, would be held liable therefore.

Thereafter, all the development of the concept of persona ficta proceeded with analogy to
the natural person. As a natural person, the fictional person has become a citizen, having a
domicile, a name, a patrimony, etc.

Legal persons are divided into two types: public and private. Public legal persons are
internal and international. Among the public internal legal entities, the state, represented
by the Government is the most important one. Municipality councils which regulate local
interests are also public internal legal entities. Similarly, public enterprises, such as the
Electricity of Lebanon, Lebanese University, or Central Bank; they all have a legal
personality. Although they belong to the State, yet they enjoy autonomy, and have a legal
entity distinct from that of the state.

The State is the primary internal legal person. Article 1 of the Montevideo Convention on
the Rights and Duties of States (1933) outlined the characteristics of a state: territory;
population; government (the political agent for the state), and independence of action
(sovereignty).

All states have equal standing in international law, despite inequalities in their attributes:
The People's Republic of China contains almost one quarter of the human race, while the
population of Nauru is some eight thousand; and Canada's territorial size is twenty-nine
thousand times that of Grenada. This is called the legal equality of nations, and is
enshrined in the United Nations Charter as the most important principle of the
Organization. 392
The Condominium is not a state. The term "condominium" comes from two Latin terms,
"com", which means "together", and "dominium, which means "right of ownership". A
condominium is a joint jurisdiction over a territory shared by two or more states
concurrently or sequentially. The motives behind establishing a condominium can derive
from historic peculiarities or geopolitical considerations. Great Britain and Egypt had a
condominium arrangement over the eastern Sudan from 1898 to 1953 in order to protect
the headwaters of the Nile. Great Britain and France had a joint authority over the New
Hebrides from 1887 to 1980.

Although condominium is largely of historical interest today, there are still some
condominia noticed around the world. An example is the French-Spanish condominium
over the lie des Faisans (Isle of Pheasants) which was established by the Treaty of the
Pyrenees in 1659, and exercised alternatively by Spain and France, the former from
February 1st to July 31st each year and latter the following six months.393 Another
example would possibly be the condominium of Andorra. Some may hold the view Andorra
is a sovereign state, and therefore cannot be deemed a condominium, the reason being
that the latter denotes the idea of a shared possession, and should therefore rightly be
called "joint principality". This argument can however be refuted; because two foreigners
have a joint authority over Andorra, currently the head of France, Emmanuel Macron, and
the Bishop of Urgell in Spain, Joan Enric Vives Sicilia.

The confederation is not a state. It is rather a treaty agreement whereby it is established a

central governing body endowed with a direct power over the confederated member states
but not over their citizens. In the confederation, the confederated states are sovereign and
independent with the right of secession. Although Switzerland still refers to its system
established in 1848 as the Helve tic Confederation, Switzerland has all the characteristics of
a federal state. Prior to 1848, Switzerland was a confederation in the years 1791-1798 and
1815-1848. The United States was a confederation under the Articles of Confederation
from 1781 to 17 89. A confederation called the Republic of Central America (consisting of
Honduras, Nicaragua, and San Salvador) existed from 1895 to 1898. A confederation was
officially created in 1981 when Gambia and Senegal established a Senegambia
confederation. The union of Libya with Morocco created by a treaty between the two
countries in 1984 and denounced by Morocco in 1986 was a kind of confederation.

Contrary to confederation, federation is a state. It is a merger of previously independent

entities into a single state. Also, differently from confederation, federation is governed by
two main principles: the principle of direct effect, and the principle of supremacy.
According to the direct effect principle, the federal law reaches directly the citizens of all
the federated units. It is the "Law of the Land". According to the supremacy law principle,
the federal law prevails over the unit law should both be in conflict. 'this means that the
citizen of any federated unit can raise the applicability of a federal law over that of a unit
law before a unit court.

By having direct power over all the citizens of the federated units, the federal state
becomes a single international legal person, the federated units losing any individual
international personality they previously have possessed, although retaining the
Individuality of their municipal laws. Practically, this means that the central government of a
federal state represents its federated units in foreign affairs. The United States of America
has one embassy representing the central government in foreign countries. Exceptionally,
the central government may allow these units to have a limited role in international affairs.
California and New York are allowed to have a cultural bureau, which is short of national
representation. In Germany, it is the central government that represents Germany in
foreign affairs, unless a lander is given the power by the Constitution to represent the
country to that effect. Similarly, in Switzerland the cantons may represent the country in
foreign affairs if the Constitution gives them the power to do so. In the former USSR, the
Byelorussian and the Ukrainian Soviet Socialist Republics had membership in the United
Nations. Yet such international standing was only for purposes of membership in the
Organization; for the right to engage in foreign relations which had been given by the
constitution of the Soviet state to each of its republics, had been only formal.

The Holy See is a State. The Holy See is the juridical international person of the Roman
Catholic Church, with its physical location at the Vatican in Rome and its sovereign the
pope. The Holy See is a subject of international law; as such, it exchanges diplomatic
representatives with other states, called papal nuncios who have: an ambassadorial
standing; enters into bilateral treaties, called concordats, and is party to multilateral
treaties. In 1984, the United States appointed its first ambassador to the Vatican. The
statehood of the Holy See combines the features of the personality of the Holy See as a
religious entity with its territorial base in Vatican City. Literally speaking, the Holy see has no
population, rather only functionaries. Also, its sovereign territory, which is about 0.44 km 2,
was granted to it by Italy by virtue of the Lateran Treaty of 1929.

The Personal Union is not a state, for it does not create a single international person. It is
rather an agreement whereby several states share a single head of state, each state
retaining its separate legal personality. There are no personal unions today, although they
were common in the past, e.g. , Great Britain and Hanover (1714-1837); Netherlands and
Luxembourg (1815- 1890), Belgium and the Congo Free State (1885-1908) .

The Real Union is not a state. Although it is a treaty arrangement whereby two or more
states form a union, making composite international legal person, yet it does not create a
single state. In consequence, each state would regain its individual international personality
when the real union is dissolved. The real union resembles a federal state, for both create a
single composite international legal person. However both differ in the dissoluble nature of
the real union (the loss of international personality) and the indissoluble nature of. the
federal state. Real unions have included Austria-Hungary (1867- 1918); Sweden and Norway
(1814-1905); Finland and Russia (1809-1917) ; Denmark and Iceland (1918-1944).

In addition to being a public internal legal entity, the state is an international legal entity.
Becoming an international legal person depends on being an internal legal entity. This deals
with the existence of a territorial entity as a state. Also, being an internal public entity
depends on being an international legal entity. This deals with the international recognition
of a territorial entity as a state.

Recognition is a process by which the territorial entity acquires an international legal

personality. It is the acknowledgment by the international community of the international
personality of a territorial entity. There are cases where recognition is made by a formal
declaration. This is called "express recognition". There are other cases, however, where
recognition is not formally declared, but is made through acts, such as signing a treaty with
the recognized state or accrediting a diplomatic envoy or voting in the United Nations in
favor of the membership of another country.396 This is "tacit recognition". 397

However, the criteria for statehood have nothing to do with the ' existenc e of territorial
entities as states. For there are instances where a territorial entity does not fulfill the
conditions for statehood, yet it is recognized as a state by the international community, be
it expressly or tacitly. This is de jury recognition. However, there are other instances of a
territorial entity being not recognized as a state by the international community, yet it
satisfies the conditions for statehood. Recognition here reaches only the effective control
of the territorial entity. For example, the United Kingdom recognized the USSR de facto in
1921, but de jure only in 1924. It is "de facto recognition".

There are two general theories grounding the recognition of state, constitutive and
declaratory. According to the constitutive theory, a new authority becomes an
international legal person through recognition only and exclusively. It seems that this
theory emphasizes the express de jure recognition of state. For, according to the
constitutive theory, a subject of international law comes into being with the conclusion of
the treaty of recognition, creating rights and duties which the new authority did not
have before. An example is the recognition of Poland and Czechoslovakia by the Treaty
of Versailles of 1919.398

Contrary to the constitutive theory, the declaratory theory considers that statehood is
independent of recognition.399 It is rather prior to recognition; and recognition does nothing
but declare the preexistence of statehood. The German-Polish Mixed Arbitral Tribunal
observed, in Deutsche Continental Gas Gesellschaft v. Polish State (1929), that "the
recognition of a State is not constitutive but merely declaratory. The State exists by itself
(par lui-meme) and the recognition is nothing else than a declaration of this existence,
recognized by the States from which it emanates. International practice supports the
declaratory theory, as recognition is often given or refused for political reasons.

As we have mentioned above, the acquisition of international personality is significant as it

creates rights and duties which did not exist before to the emerging state.

But contrary to the acquisition of international personality, which is accomplished through

recognition, its loss is not done by non- recognition or withdrawal of recognition by the
international community. A Federal State loses its personality when it breaks up into many
independent states.402 The loss of international personality brings to end all rights and duties
of the extinct state, such as voiding its treaties and absolving its financial obligations.

The process of annexation results in the loss of state's international personality. Lithuania,
Latvia, and Estonia lost their international personality when absorbed by the former USSR in
1940. Also the international personality of Ethiopia was terminated when annexed by Italy
in 1936; or Austria by Germany in 1938.
The termination of state's international legal personality can occur voluntarily, such as the
annexation of the independent Republic of Texas into the United States in 1845; or forcibly
through conquest, such as the Soviet absorption of the Baltic states of Lithuania, Latvia, and
Estonia, in 1940. Under the United Nations Charter, extinction of a state brought about by
aggression or other means contrary to the Charter cannot be and is not recognized as legal
under international law.

The rights of states under international law can be reduced to two: the right of sovereignty,
and the right of existence.

Sovereignty is the supreme undivided authority possessed by a state to enact and

enforce its law with respect to all persons, property, and events within its borders. A
sovereign state enjoys the following rights : the right to equality; the right to determine
nationality within its territory; the right to regulate entry and exit from its territory; the
right to exercise jurisdiction over the territory under its control, and the right of
nationalization. They can be grouped under two general rights, understanding: the right
to · equality and the right to exercise jurisdiction.

Article 2(1) of the United Nations Charter, states that "The organization is based o the
principle of the sovereign equality of all its Members". The principle of equality of States has
also been emphasized by Article 18 of the same Charter, which gives one vote to each of the
states in the General Assembly, regardless of size or political power.403

Jurisdiction is primarily derived from the state's sovereignty over its territory.404 A state's
jurisdiction extends over all persons within its territories, national air space, and internal and
territorial waters (territorial jurisdiction). A state's jurisdiction also extends to its nationals
beyond its territories (personal jurisdiction). Still, any state can enforce and punish acts that
are prohibited by international law, such as crime against humanity, genocide, or acts
againstjus cogens (universal jurisdiction).

The territoriality principle is based on the notion that the state has primary jurisdiction with
regard to all events taking place within its territory and over crimes committed therein,
regardless of the nationality of the person responsible.405 A corollary of this principle would
be that no state has extraterritoriality rights. For although the embassy enjoys privileges and
immunities under international law, yet no embassy is deemed a state within a state.

The personal jurisdiction (or the nationality principle) assumes that a state's jurisdiction
extends to the actions of its nationals beyond the territorial jurisdiction of the state, the link
between the state and the individual being a personal one independent of location. Of
course, the claim of criminal jurisdiction based on the personality principle depends on the
gravity of crimes committed.406

The universality principle assumes jurisdiction over an individu. I regardless of nationality or

where the action was carried out. The principle of universality suggests that there are certain
crimes that are against all nations regardless of who committed the crime or whom the
crime was directed against, such as piracy, slave trade, aerial hijacking, counterfeiting, war
crimes, and crimes against humanity. Still, the universal principle is not universally accepted
by states, commonly recognized definitions of international crimes being absent.

The second major right given to the state, namely, the right of existence, which is known as
the first law of nature, is enjoyed by all states in equal degree, and no state is entitled to take
steps that would jeopardize the territorial integrity of another State. 407

The right of existence includes the right of self-defense, as provided by Article 51 of the UN
Charter.408 Self-defense does not necessarily suppose the pre-existence of an aggressive act
against the self-defending State. It is well established internationally that the act of
aggression of the State who strikes first as a pre-emptive measure may be justified as an act
of self- defense, when and only when her sole aim is to forestall an act of aggression before
it actually takes place. For example, Israel pleaded self-defense when it attacked Egypt on
1967, arguing that Egypt had amassed forces on its border, and thus had created conditions
for an attack. Sometimes the belligerent states violate, on the grounds of military necessity
or the right of self- defense, the rights of third states which are neutral to the conflict. For
example, during the Russo-Japanese War of 1904, Japan invaded Korea, supposedly to
prevent its occupation by Russia. Also, during the Second World War, Germany occupied in
1940 the Netherlands, Belgium, and Luxembourg, with a view to preventing their occupation
by Great Britain. Article 2(4) of the UN Charter409 specifically declares such action as a
violation of the provisions of International Law.

The private legal persons can be sub-divided into associations (a) and companies (b).

(a) Association.

An association is made up of individuals whose aim is to reach the members' common goal.
There are several types of associations:

Ordinary Associations. Upon completing the required documents, an ordinary association

becomes a legal person. It has a name, domicile, nationality, with a limited capacity:
collecting membership fees, and spending the necessary amounts to reach the set goal.

Associations Declared of Public Utility. An association declared of public utility is an

association which must complete the required documents to become an association, and be
recognized of public utility by virtue of a decree from the council of ministers at the
suggestion of the Minister of social welfare. Only then it can receive donations, and acquire
immovable properties so as to ensure its function. Its legal capacity is wider in extension
than that of ordinary associations.

Union. The union is an association which defends the interests of professionals, and has a
complete legal capacity, upon ministerial authorization.

Waqf. The waqf is an organism endowed with funds and charitable contributions to
promote general interests, be they religious, artistic, intellectual, or others. It is a collection
of donations that are invested in perpetuity.
 In addition to associations, there are other types of private legal entities, namely,
companies.

(b) Companies.

The company is a contract between two or more persons who voluntarily unite for
performing jointly a commercial enterprise. This contract has a dual character, ,(a) that
the contracting parties consent to the joint operation, and (b) that the joint operation is
profit-sharing.

The word “partner" designates the member of a company of partners, and

"shareholder" denotes the member of a joint stock company, while the term "associate"
refers to the member of an association.

Company differs from an association. A company is a profit- making entity, while an

association is a non-profit entity. Also, company's activities contribute to the
development of public economy, and this would concern both companies of partners
and companies of shareholders; while association 's activities promote public good and
the well-being of society at large: an association includes such entities as public hospitals,
religious institutions, sports club, etc. Still, the company's source of income derives from
the sale of goods and services, while association's considerable part of income comes
from membership fee, donation, government grant, etc.

On the other hand, company and joint ownership are two different things . A joint
ownership is not a legal entity, while a company is one (except joint ventures). Also, a
company results from a contract, like partners or shareholders uniting to conclude
respectively a general partnership or a limited partnership by shares, whereas a joint
ownership (or co-ownership) is the result of the law: on the death of father, sons and
daughters become joint owners of his property.

(i) Requirements of a Valid Company Contract.

Company is a kind of contract. As a contract, it is subject to the requirements for making

any contract valid. They are called "general requirements". But as a company, it is also
subject to requirements for making only a company contract valid. They are called
"special requirements ".

1°) General Requirements for Making any Contract Valid.

Different types of contracts depend on the type of business for which the contracting
parties unite. Nevertheless, there are basic legal elements required for a contract to be
valid under the law. The four general requirements for any valid contract are (1) capacity;
(2) consent; (3) lawful cause; and (4) lawful object.

The first two requirements are related to the contracting parties, the other two concern
the contract itself. Taking into account the contracting parties, it must be ascertained if
they are legally competent to make a contract (capacity), then if there is a mutuality of
agreement as to the terms and conditions of the contract (consent).

Capacity.

To render a contract valid, the contracting parties must, under the LCOC, be legally
capable to enter into a contract. But, capacity denotes ability to act. Thus, an incapable
lacks capacity to contract and his contracts are deemed null and void. Since the Lebanese
business law does not provide any special rules on the legal ability to make a business
company agreement, the rules of civil law should be applicable.

Anyone who has reached the age of eighteen is able to conclude an agreement unless
declared incapable by the law.410 The legal acts made by persons lacking complete
discretion, such as legal minors and the mentally ill, are deemed null and void. On the
other hand, the acts concluded by incapable persons, but endowed with discernment
(emancipated minors), are simply voidable . ·

The minor duly qualified to be engaged in trade or industry cannot avail himself of the
foregoing provisions. Nevertheless, he is deemed major within the limits of his trade or
industry. The convicted persons who are legally deprived of civil rights are deemed
incapable, and any interested party may invoke their incapacity. 413

Consent.

We have said that a company is a kind of contract. But consent is a requirement for a
valid contract.414 Accordingly, in order to form a valid company agreement, the consent of
each of the persons wishing to be part of a company agreement is required.

Consent is subject to the general rules governing contracts. It is the coincidence of two or
more wills, with the intention to create legally binding relations between the parties.
Consent is made up of two elements: offer and acceptance.

In principle, an offer, express or implied, does not bind the offerer. The latter may
revoke it at his discretion. It may also lapses due to the author's death or incapacity .
However, it may be understood that the pollicitor has meant to bind himself, from the
nature of the offer itself, or from the circumstances that surround the offer, or from the
text of the law. In such case, the offer must be maintained for a period determined by its
author, by custom or by law, despite the author's death or incapacity.

Similarly, the acceptance may be express· or implied. Absence of an answer from the
offeree does not imply acceptance, and offeree will not be bound by the contract. This is
so even if the offeror informs the offeree that silence is considered an acceptance. Only
when both parties agree that silence is considered an acceptance , the offeree's silence
implies acceptance. Also, silence implies acceptance if there is an understanding between
the contracting parties in prior dealings that silence is to be considered an acceptance.
The buyer of goods who remains silent after their delivery shall be deemed to have made
an acceptance to the content of the invoice. If seller sends merchandise to buyer, and
buyer uses the items even if he had not solicited them from seller, then buyer's silence is
considered an acceptance .

In principle, the offeree is free to refuse an offer, and therefore no liability would arise.
However, if the offer made by the offeror was triggered by the offeree, and thereafter
the latter declined the offer, the declination must be justified. If the offeree does not
base his refusal on legitimate reasons, refusal is deemed abusive, and offeree
incurs liability.

The acceptance must coincide with the offer for the contract to be regarded as valid.
If an acceptance places a restriction on the offer, it implies a rejection containing a
new offer.419 In such case, the offeree shall be regarded as an offerer, and the new
offer the latter has made shall need the acceptance of the previous offerer, now the
offeree.

The negotiations taking place between the parties present, the consent is deemed
valid and the contract concluded at the very time acceptance and offer were united,
unless the parties have agreed that the contract be in a particular form.421 The contract
concluded by telephone is to be regarded as having been concluded among persons
present.422 However, the contract is deemed to be concluded among absent persons if the
negotiations happen by mail or through messenger, from the moment when and at the
place where the offeree has given his acceptance.

Consent of all the contracting parties must be free and conscious. It is deemed flawed,
and sometimes even totally excluded if it is given by mistake, induced by fraud, obtained
as a result of duress, or in case of lresio enormis or incapacity. 424 The integrity of consent
being presumed, the burden of proof lies on the party who asserts that there is a defect
of consent.425

Mistake. Attempting to define the concept of mistake is a bit short of a thought being in
quagmire. This was a reason for the legislator to drop his arms, leaving the task of
definition to doctrinaires and judges. Generally, mistake should be deemed a ground for
vitiating or excluding consent when the party believed that the object of the contract was
real when in fact it was not, or that it was not real when in fact it was.

The legislator proclaimed a general rule of law, that mistake as to the nature of th
contract or to the identity of the object of the obligation excludes the consent, and that,
in such case, the contract shall be struck by an absolute nullity.426 The legislator's stance
can be justified by the fact that mistake would exclude one of the essential elements,
namely, consent, without which the existence of the contract would be inconceivable.
Witness articles 176 et s. LCOC which state the essential elements of the
contract;427 article 182 LCOC which emphasizes the coincidence of offer and acceptance
of the contracting parties;428 article 186 LCOC which declares the creation of obligations as
the real object of any contract,429 and article 190 LCOC which provides that the consent
of the parties should determine the nature and quantity of the object.
Accordingly, the legislator specified under article 203 LCOC,430 that should there be a
mistake as to the nature of the contract, the contract shall be void, as for example when
one party gives money to another party as a loan, whereas the latter mistakenly believed
that he received the money as a donation. Also, the same article states that the contract
shall be void if there is a mistake about the identity of the object of an obligation; as, for
example, when the buyer sells the purchaser his property located in Byblos whereas the
purchaser mistakenly believed that he purchased the buyer's property located in Tyr.

But consent to a contract would be simply flawed, and the contract only voidable, i.e.,
the contract is valid until one party choses to oppose the contract, (1) when the mistake is
about the substantial qualities of the thing, such as the authenticity of a piece of art; (2)
when the mistake concerns the identity of the person or the essential attributes of the
person, wherever the identity or the essential attributes of the person played a part in the
decision to contract, and (3) when the mistake is about the effectiveness of the cause of
an obligation, such as a contract made on the basis of a pre-existing obligation which was
believed to be civil, when it was only natural.

No regard shall be had as to the validity of the contract for any mistake, if the mistake is
not decisive, and in particular if it is: (1) about the accidental or secondary qualities of the
thing or the person; (2) about the value of the thing, except in the case of lresio enormis
as stated in Article 214 LCOC;432 (3) about the simple motives that prompted one of the
contracting parties to contract, and (4) about numbers or calculations: the rectification
shall then be of right, but the contract remains valid.433

Fraud. Consent is also deemed flawed if it is induced by fraud. Fraud is a ground ·for
avoiding a contract where it is of such a nature that, if it were not, one party would not
have entered into contract. The legislator has only stated the elements of fraud leaving
the definition of fraud to doctrinaires and judges. Generally, fraud is a course of deception
designed as to benefit the fraudster to the detriment of the victim.

Fraud does not destroy consent. Fraud causes the nullity of the contract only if it is
decisive, i.e., it has prompted the party to contract. But if the fraud is incidental, i.e.,
which has modified the clauses without having been decisive, only an action for damages
by the victim could be allowed.

The fraud that has prompted the party to contract entails the nullity of the contract only if
the fraudulent act was designed to benefit the fraudster in a manner detrimental to the
interests of the other party. On the other hand, the act of fraud committed by a third
party is itself nullifying if the beneficiary party was aware of it at the time of the formation
of the contract; but if he was not aware of it, only damages could be claimed by the
victim.

Duress. Consent is also deemed flawed if it is obtained as a result of duress. Duress is the
force or the threat to use force on someone to prompt him to undertake something.
Accordingly, the person who concludes the contract · under the threat that something
unpleasant will happen to his person, or his spouse, or his family, ascendants or
descendants , shall see his contract null and void. This would be the case regardless of the
duress being caused by one of the contractin!;J parties or by a third party, or because of
circumstances that are beyond the will of the contracting parties. Still, when duress is
referred to an external cause, namely, a third party or a circumstance, the victim
intending to withdraw from the operation, may be required to compensate the other
party for damage or loss, if the latter acted bona fide, and to the extent that equity so
requires.436

By themselves, capacity and consent are not legally sufficient to make a valid contract.
There are still two basic legal elements that should be present in any contract for it to be
deemed valid, namely, lawful object and lawful cause.

It should be diligently noted, however, that the cause and the object are related rather to
the will than to the contract; for both parties agree on the object and the cause by which
they are bound. Therefore, the coincidence of the will of the parties is a sign of consent,
and consent makes a valid contract. This is the reason it is legitimate to include the cause
and the object in the theory of contracts.

Lawful Object.

The legislator deals with the object from articles 186 to 193 LCOC. He clarified the
concept of object in articles 186 and 187 LCOC, the first article manifesting the concept of
the object, the second indicating its types. Under articles 188 to 190, and 193, the
legislator makes plain the lawfulness of the object and under articles 191 and 192 its
unlawfulness.
Contrary to the French legislator, the Lebanese legislator distiflguishes between the
object of the contract and the object of the obligation.437 The obligation is an effect of the
object of the contract, 438 whereas the object of the obligation is to do or not to do or to
give.439

Any contract must have an object. This is inferred a contrario from article 188(1) LCOC,
which states that the absence of object involves nullity of the contract.440 This means that
an object must be or possibly be. Now non-existence of the object leads to non- existence
of the contract, such as selling a land which has never existed or which has perished
before concluding the sales contract. But with regard to the possibility of existence, the
precise scope of the concept of possibility is difficult to delineate; for that which is not
extreme bears wider application than what is extreme. Accordingly, we should look for
the understanding of the possible through the impossible. The possibility of the object
connotes the idea that it is not impossible in itself or in respect to all. It is impossible to
sell moonlight or sunlight. But the impossibility must be absolute for the absence of the
object to be a ground for nonexistence of the contract. The impossibility of the object is
absolute when it is impossible for all to perform it; this is the obligation to move a
mountain from one place to another or to pass a camel through the eye of a needle or to
sell a land to a person which has already been sold to another. But if the object is
impossible for the debtor alone, and not for the ordinary person placed in the same
circumstances, then the impossibility is deemed relative, not absolute, and therefore will
not deny validity to the contract.441
This notwithstanding, article 188(2) LCOC provides that "the object may be a future
thing." This means that the thing which is the object of the obligation if it does not yet
exist at the time of contract formation, but which is likely to exist in the future, its
likelihood of existence suffices by itself for the conclusion of the contract, such as the sale
of a house which construction has not begun yet, as long as it is likely to begin, or the
sale of wheat of the next harvest.442

Be it existent or possibly existent, the object must be legal.443 If the object is illegal, such
as selling narcotics, the contract is deemed null and void.444 The general principle in this
regard is the autonomy of the will according to which the contracting parties are free to
determine the content of the contract. But the law places restrictions on contractual
freedom, which the contracting parties cannot disregard, namely, public order, public
morality, and jus cogens.445

Article 192 mentions the terms "immoral" as a ground for denying validity to the contract.
But it does not mention anything about “public order". This however can be
supplemented by article 166 LCOC which mentions that derogation from the rules of
morality, public order, and jus cogens, is bar to the validity of the contract.

Lawful Cause

The cause is the reason that prompts a party to enter into contract ; for the contractual
obligation is the means though which the party reaches one's purpose.
The cause differs from the object in that the object is the "what" of the obligation,
whereas the cause is the "why" of the obligation.446 The cause of one party's obligation
lies in the execution of the other party's obligation. The object of the purchaser's
obligation is to pay a sum of money to buyer, while the cause of the purchaser's
obligation is the buyer's execution of his own object of obligation, namely, to transfer
the ownership and the possession of the property to the purchaser. On the other hand,
the object of the buyer's obligation is to transfer the ownership and the possession of
the property he owns to the purchaser. The cause of the buyer's obligation lies in the
purchaser's execution of his own object of obligation, which is to pay the price of the
property transferred to him by the buyer.

Scholars, then legislators, separate the cause from the motive. The cause is the proximate
reason for contractual commitment. The immediate cause of obligation in sales contract
is for the seller to receive the price of the property sold and for the buyer to receive the
property he purchased. Causa proxima, as it is referred to in Latin, is an objective cause in
all contracts. It is the immediate cause that prompted the seller to transfer the ownership
of his property to buyer sell, and the buyer to give the money to seller in return. On the
other hand, the motive, causa remota, is a personal cause and, therefore, changes from
one person to another . The seller transfers the ownership of the property he owns to
buyer and the buyer gives to seller the price of the property in return. This is the causa
proxima. But seller might use the n:,oney for various reasons, such as travelling,
purchasing a house, and the buyer might use the property he bought to live in it, to rent
it, or to donate it. This is the causa remota. There are three characteristics of the motive.
It is: (a) extrinsic to the contract; (b) subjective, depending on the person, and (c) variable,
depending on the type of the contract and its circumstances. While the unlawfulness of
the cause of obligation bars the validity of the contract, the motive does not deny the
validity of the contract. However, jurisprudence takes into account the motive to avoid
the validity of the contract if one party had knowledge of the illicit motive of the other
party, such as renting a house contract for gambling or prostitution.

The law distinguishing between the cause of obligation and the cause of contract,447 the
cause of obligation corresponds to the causa proxima while the cause of contract
corresponds to the causa remota. The cause of obligation is an integral part of the
contract, and does not change according to the person,448 whereas the cause of contract
is not an integral part of the contract, and differs in every contract. 449

Having examined the notion of the cause under articles 194 and 195 LCOC, the legislator
deals with the existence of the cause from article 196 to article 199. This is divided into
two parts. In the first part, he examines the non-existent cause (article 196); in the
second, the existent cause (articles 197 to 199).

The obligation that is without cause is deemed null, and entails the nullity of the contract.
The cause is non-existent when a person binds oneself to pay a sum of money to another
person in order to prevent aggression from the latter, the reason being that aggression is
by law unlawful. The cause is also considered non- existent when a testatee undertakes to
execute a testament the testator had revoked.450

Having studied the non-existent cause, the legislator manifests the types of existent
causes under articles 197 to 199, namely, invalid cause, apparent cause, illicit cause, and
expressed cause.

With regard to the invalid cause, the legislator examined the invalid cause itself. The rule
proceeds thus. If there is a cause of obligation, but is invalid, the contract is deemed null.
The cause is invalid either because of mistake in cause, where one of the contracting
parties mistakenly believed in the existence of a cause, or because of simulated cause (or
the "apparent cause" as the legislator names it), where the contracting parties conceal
the real cause of obligation under an apparent one. The simulation by itself is not a
ground for avoiding the contract. The validity of the contract is not barred unless the real
cause is unlawful. If one party commits oneself to pay a sum of money to the other party
in return for something, then it was revealed that the real cause for paying the money
was for the latter to carry out a crime; in such case, the simulated cause, the commission
of the crime, denies the validity of the contract, the real cause being unlawful.451

A cause is illicit if it violates the imperative rules of law, or conflicts with the public order
and morals. Examination of the imperative rules of law was had above. I refer the reader
to it.

The cause is deemed illicit for breaching the public order,454 and therefore the validity of
the contract is barred. The judge has a discretionary power to assess whether or not such
obligation has a cause in conflict with public order, even if it does not violate a specific
text. Some of the matters that are related to public order the breach of which causes the
nullity of the contract are the following: matters limiting the freedom of contracting, such
as the rules of law pertaining to marriage, testament and will, and transfer of property;
matters protecting the interests of specific persons, such as minors, idiots, and prodigies;
matters related to employees, such as the rules that regulate employment and work
hours.

Also, the cause of obligation is held to be illicit for breaching morals,455 and therefore
involves the nullity of contract, in the instance of hiring a crowd for cheering or
applauding an artistic work. Cheering and applauding as such have no conflict with morals
as long as their cause accord with honesty. But when they are done by individuals renting
themselves for cheering and applauding, this is expressly regarded illicit. Also, the cause is
taken to be illicit for breaching morals in the case of mediation for marriage. Mediating
for marriage is viewed as licit if the mediator is charged for bringing the two sides
together , regardless of the result. But it is reckoned to be illicit for breaching morals if
the mediator is paid for making sure that the marriage is concluded; for the agreement
will be counted commercial in conflict with the sanctity of the marriage contract.

The cause of obligation is licit regardless of whether or not it is expressed in the

contract.456 This gives us to understand that (a) if a person accepts the obligation to pay
an amount of money without mentioning the cause of obligation in the contract, the
obligation is presumed to be licit; that (b) the cause of obligation expressed in the
contract is valid until it is proved otherwise, and that (c) if it is proved that the real cause
is simulated or that it is illicit, the claimant must prove that there is another licit cause,
otherwise the.contract should be deemed non-existent.

The legislator having examined the cause of obligation now deals with the cause of
contract. The cause of contract is the motive that prompts the contracting party to
contract. In some cases, the cause of contract is licit; in other cases, illicit. The illicit cause
of contract is always a ground for nullity of the contract.457 But even if it is licit, the cause
of contract might be a ground for destroying the contract. Purchaser wants to buy a land
to construct a school. He agreed with the seller on the area needed for that purpose. If the
actual area of the land is found to be less than that declared in the contract, the
purchaser might ask for annulment of the contract; for the buyer knowing the motive that
prompted the purchaser to buy the land, and the area of the land being not to the
purchaser's satisfaction, purchaser might ask for annulment of the contract, though the
cause of the contract is licit.

Capacity, consent, lawful object, and lawful cause, are the general requirements for
making any contract valid. In addition to these general requirements which all individuals
who are entering into a company agreement should meet, there are special requirements
for any "company contract" to be valid.
2°) Special Requirements for Making a Company Contract Valid.

In addition to the general requirements that make any contract valid, there are special
requirements for a company agreement, namely, contributions , distribution of profits
and losses, and possession of legal personality.

Contribution.

A contribution is an increase in a business's capital with a view to reach a goal, or a

benefit. Each partner is required to make a contribution . But the law does not provide for
the kinds of contributions that a partner can make. Accordingly, a partner can make in-
money, in-kind or in-labor contributions.

An in-cash contribution must be done in principle on the day of the incorporation of the
company, unless otherwise stated in the company's By-Laws.

An in-kind contribution consists of tangible properties, be they immoveable or movable,

such as computers or cars, and of intangible properties, such as literary or artistic
property rights, etc.

An in-labor contribution may consist of an obligation to do. The labor provided can be
managerial or executory. However, a company may not be constituted solely of partners
who make in- labor contributions. There must be in addition to in-labor contributions, in-
cash or in-kind contributions . A company which is constituted solely of in-labor
contributions would rather be an operation, and not a company.

Distribution of profits and losses.

Partners may freely settle the distribution of profits and losses. There is no requirement
that such distribution be calculated according to the respective amount of the
contributions. What is forbidden is full allocation or total exemption (The Leonine
Provision or The Unfair Provision).

Legal personality.

All companies, except joint ventures, have a legal personality (Article 45 LCC). The legal
personality of a company is the ability of a collectivity, which is usually made up of
natural persons, to have a patrimony distinct from that of its founders, and to act and be
treated as a natural person.

Similar to a natural person, the personalized company has the ability to sue and be sued,
incur debt and be creditor, enter into contracts, and own property, through the organ of
its legal and statutory representatives: managers, administrators, general directors,
liquidators, etc.
Similar to a natural person, the personalized company has a legal name, a domicile
(headquarters), and a nationality (that of the state where its head office is, or the state
where it is incorporated, or that of the partners, managers or administrators) .

(i) Division of Companies.

There are three types of companies:

1°) Companies of Partners such as general partnership; limited partnership, and joint
venture (or silent partnership).
2°) Companies of Shareholders (or Joint-stock companies) such as partnership limited by
shares, and corporations (or public limited companies as called in UK).
3°) Limited Liability Companies (or private company limited by shares as called in UK).

Companies of Partners
General Partnership.

* A partnership is formed between two or more persons who are jointly and severally
liable for the company's debts. Joint and several liability, is an essential characteristic of
general partnerships. It does not need to be specified in the act of partnership and cannot
be validly excluded or restricted by this act.

If neither the ac·t of partnership nor the practices allow the

recognition of the nature of a commercial company, it is presumed as a general
partnership, solidarity being the rule in commercial matters. Thus, joint venture, which is
a silent partnership, if disclosed to third parties, will be deemed a general partnership.

The creditors of an obligation incumbent on the company have as a pledge: (1) the
company's assets with a preference over the partners' personal creditors; (2) the
partners' assets, but on which they come in competition with the partners' personal
creditors.

Each partner is liable to the creditors for all the company's debt, but then has recourse
against his co-debtors for what he has paid in addition to his contribution under the
company contract, being lawfully subrogated to the creditor. 458

*
Members of the general partnership are necessarily traders merely because of their
membership in the company. This means that the general partnership can only be
validly contracted by persons capable of trading. This also means that the bankruptcy
of the partnership entails the individual bankruptcy of all partners.459

*The company's name consists of the names of all the partners or the names of some
of them, followed by the words "& Co." It must always correspond to the current
partners of the company.460
 * The partners' contributions cannot be ceded to third parties, except with the unanimous
consent of the other partners and provided that they comply with the publicity
requirements.461 In the event that the partners have unanimously approved the transfer of
a contribution to a new partner, this transfer does not lead to the creation of a new
company: the former continues, with modification of its partners, possibly its legal name.

Joint-Venture.

• The joint venture is distinguished from other commercial companies in that it exists only
between the parties; does not have a legal personality,462 and is not intended to be
known by third parties.463

Consequently, the company has no assets distinct from those of the partners. The latter
remain owners of their contributions, although these are allocated to the achievement
of the company 's objective: the participant who buys goods or other properties during a
company operation, even using the other partners' funds, remains the owner of such
goods or properties, but must report to the other partners. Third parties have a legal
relationship only with the partner with whom they have contrac ted.464

In most cases , the partners in a joint venture restrict themselves to declaring that they
handle such an operation under a joint account. No publicity,465 no use of corporate
name, should be made about it, otherwise it would be deemed a general partnership,
with all legal consequences. 466 However, knowledge thereof that third parties might have
in any other way, would not change the nature of the partnership.

• Management is entrusted by an agreement of the partners to one or more persons,

whether or not they are members of the joint venture. In case the appointment of a
managing director lacks or is not agreed upon, management would belong to all the
partners, each contracting in his own name.

The managing director deals with the third parties either in his own name or as a proxy
for one or more other partners. Acting in his own name, he incurs himself all the
company's obligations and debtors could go after his personal assets. Acting as a proxy,
the principals assume liability within the limits of the proxy. In no case, the co-contractor
could go after the partners on a joint-and- several liability basis even if it happens that he
knew of the existence of a social bond.

• Profits and losses arising from joint ventures must be apportioned among the partners
in accordance with their agreement or in the silence of the latter in proportion to the
value of the contributions individually made.467
Limited Partnership.

In a Limited Partnership, there are two types of partners: general partners and limited
partners. The general partners (or active partners) have full management and operation of
business. The limited partners (or passive or sleeping partners) do not participate in the
partnership's day-to-day management and business operations. Their role lies in making an
initial capital investment in exchange for a share of the company's profits.

In a Limited Partnership, the limited partners are nominally chosen by the general
partners in consideration both of their personality and of their contributions. Cession of
their contribution requires the consent of the other partners, unless otherwise stipulated
in the By-Laws.

The general partners have unlimited liability, i.e., joint and several liability for the limited
partnership's debts. The limited partners' liability, however, is limited to their capital
contributed. 468

The limited partnership's name includes exclusively the general partners' names.
Where there is only one general partner, the business name must include the general
partner's name together with this addition: "& Co." The names of the limited partners
must not feature in the business name. Where a limited partner allows his name to
be featured in the business name, he appears to the third parties as a general
partner; in consequence, he incurs unlimited liability, and is considered as a trader,
the LP's bankruptcy entailing his own.469
The bankruptcy of the limited partnership results in the bankruptcy of the general
partners.470 It would involve the limited partners only if they were traders and had
interfered in the management and operations of the limited partnership.471

The creditors of a limited partnership have as a pledge: (1) the company's assets, with
preference over the general partners' personal creditors; (2) the general partners'
personal assets, in solidarity, but in competition with their personal creditors, (3) the
limited partners' actual contributions.

Thus far we have examined the companies of partners: general partnership, limited
partnership, and joint venture (or silent partnership). We go on studying the second type
of companies, namely, the companies of shareholders. They are basically split into two,
partnership limited by shares and corporations .

2°) Companies of Shareholders (or Joint-Stock Companies)

Partnership Limited by Shares.

A Limited Partnerships by Share differs from the Limited Partnership in that the limited
partners' shares may be freely sold and open to the public, regardless of their personality.
These shares are then freely transferable, unless otherwise stipulated in the By-Laws.
Corporations (US)/ Public Limited Companies (UK).

A Corporation is a legal entity with no corporate name, made up of a number of people

who subscribe to shares, and whose liability is limited to their capital contributed.
The corporation's creditors have a comprehensive pledge over all the corporation's assets.
There is also an additional guarantee: The Corporation is required to maintain a minimum
of assets at least equal in value to that of the stated capital. This additional guarantee
given to the corporation's creditors is known as "principle of capital fixity".

The legal business name must not feature shareholder's name, otherwise it would appear
as a general partnership or a limited partnership.

We have studied up to now the companies of sharehold_ers, and we have distinguished

them from the companies of partners. There is still a third type of companies, which is a
mixture of both. It is the limited liability companies.

3°) Hybrid Companies.

Limited Liability Companies.

The limited liability company472 is a hybrid legal entity: It has a mixture of partnerships and
corporations characteristics. Like partnerships, the contributions in a limited liability
company cannot be ceded freely to third parties. Cession of contributions in a limited
liability company can only be made with the consent of the majority (in number) of the
partners representing at least ¾ of the contributions . Also, administration of a limited
liability company is entrusted to a managing director and not to a board of directors as is
the case in a corporation.

On the. other hand, like corporations where the shareholders' liability of the
corporation's debts is not based on a joint-and- several-liability basis as is the case in
general partnerships, the partners' liability in limited liability companies is limited to the
amount individually invested . Also, a partner's contribution to a limited liability company
can be ceded without the consent of the other partners.

We have thus far studied whether "legal entity" exists. We found that Lebanese law
endows it with a separate legal entity, and divides it into many different entities. We go
on studying how the Lebanese law conceives the existence of the legal entity.
 ii. Existence.

The existence of legal persons is comprised between two events, the fact of birth and the
fact of death, the former referring to the moral person's constitution and the latter to its
termination.

(a) The Fact of "Birth" (i.e., constitution).

As natural persons, legal persons have a "date of birth". But differently from natural
persons whose birth is a "legal fact", i.e., a natural involuntary event, the birth of a legal
person is a "legal act", i.e., a willful act.473

Also, like natural persons who are required to declare the child's birthdate to public
authority, similarly legal persons are required to declare the "birth", i.e., the legal
person's act, to public authority, by registering it in the trade register with the Ministry of
Economy and Trade, for trading companies, and by declaring it to the Ministry of Interior
for associations.

(b) The Fact of "Death" (i.e., termination)

As natural persons, legal persons are subjects to the event of "death". But, a natural
person's death is a legal fact whereas that of the legal person is a legal act, i.e., a
voluntary act. For natural persons, the fact of death can be a natural event, be it voluntary
in case of suicide, or involuntary in case of natural death, whereas for moral persons
"death" happens through dissolution, be it "natural" (when the corporation is brought to
an end because the period specified in the corporation's contract ends), or "unnatural"
(anticipated dissolution), as when the members of the corporation agree on dissolving the
corporation before it is due to end, or when the court, for specific reasons, declares the
corporation's dissolution.

Also, like natural persons whose death must be declared to public authorities, similarly
terminating a legal person must be declared to public authorities, namely, registration in
the trade register with the Ministry of Economy and Trade concerning trading
companies, and registration with the Ministry of Interior with regard to associations.

Thus far, we have studied the requirement of existence for the person's exercise of
subjective rights. We go on studying the second requirement.

2. Identification of the Person.

a. Natural Person.

Legal relationships require that a person be identified clearly and unequivocally. There
are three factors that help identify a person, the personal, social, and national factors .
 i. Personal Factors of Identification.

The "name" is the prime personal factor that distinguishes a person from another, for the
exercise of rights. It comprises two elements, a last name and first name. In exceptional
cases, it may comprise additional elements.

(a) Last Name (or Family name or surname).

Persons have the name of the family to which they belong. It passes to children from
their father's family name. The last name is usually acquired either through descent or
through marriage.

Children get their father's last name. This is an imperative rule when it comes to a
legitimate child. If the newborn child's descent is not established and was given to a
host institution or to an orphanage, the latter assigns name to the child. The adopted
child takes the adopting's name. The married woman acquires the use of her
husband's name, although she keeps her maiden name on all the official acts of her
private life.

The right to a name is a personality .right. It allows its holder to defend it against any
illegitimate use by another. Every person has the right to stop the attribution of his
patronymic _ name by another; to forbid anybody to use his family name as a
pseudonym. In the event a family name is used to describe a ridiculous character in a
novel, a play or a movie, all persons holding that name are entitled to ask the author
for damages and forbid any further use thereof .

(b)First Name.

The first name individualizes the person among those who have the same family
name. In some cases, the father or mother gives the child, when declaring his birth,
more than one first name so as to identify him in case two or more persons have the
same first and family names.

(c) Additional Elements.

The additional elements of the person's name are three: nickname, pseudonym (assumed
name), and title of nobility. They can complete the name and, possibly, better
individualize a person.

The term "nickname" derives from the old English ekename (eaca, an increase; eacian, to
increase), which literally means "additional name". By the fifteenth century, the
misdivision of the syllables of the expression "an ekename" led to the use of "a
nekename".474 The term "nickname" is an appellation commonly used by the public to
designate a person, such as Bob for Robert. It has no legal value. But in some instances it
is used in administrative documents, in order to better identify the concerned person.
The term "pseudonym" derives from Greek pseudonymos meaning "having a false name,
under a false name" (from pseudo meaning "false", and onyma, onoma meaning "name").
Thus, the term "pseudonym"is an assumed or a fictitious name used by an author to
conceal his real name. For example, the real name of Moliere was Jean-Baptiste Poquelin.

The nobility title, such as prince, pacha, bey, efendi, or cheikh, is an honorary additional
element of the name. It is transmitted according to customary rules. In accordance with
these rules, the persons who obtained the right to an honorary title can use it and require
that it appear in their birth certificate and in all official documents.

Thus far, we have reviewed the personal identification of the natural person. But we
have said above that the natural person can be identified also socially and nationally.
Socially, the natural person is identified by domicile.

i. Social Factors of Identification: Domicile

There is no legal text in Lebanon that provides a definition of the term "domicile". It is a
lacuna in the law, which can be plug by doctrine and jurisprudence. The term "domicile"
derives from
the latin domus, meaning the place where a person inhabits. Domicile is the social
extension of the person's identity. This is why it contributes to the identification of the
person.

Domicile is the place where an individual is deemed to live permanently. It is the person's
principal establishment. Domicile is not equal to residence. For a person can have "many
transient residences where he may temporarily be found but only one legal domicile
which is the residence to which he always intends to return and to remain indefinitely."475

In some cases, the person's domicile is mandatory; in other cases , however, it is

voluntary.

(a) Mandatory Domicile.

The persons that are legally dependent on another person, are necessarily domiciled at
the latter's place. The non- emancipated minor is legally domiciled with his father and
mother, and in case of the latter's death, with his guardian. If the father and mother have
separate domiciles, the minor is deemed domiciled with the one with whom s/he lives.
The married woman is supposed to have her domicile with her husband. The adult under
tutelage, and the mentally disturbed person, are domiciled with their guardian.

(b) Voluntary Domicile.

Voluntary domicile is that which is selected by a person of his own free will or that is
agreed on by two persons, to assign jurisdiction to a court or to give mandate to another
person. It is elected for the implementation of that act. Its main feature is that it remains a
domicile for the whole period required for the execution of the legal act. It spares the
creditor of the expenses of judicial proceedings against debtor in a place far away.
In principle, election of domicile is optional. But the law may require from the defendant
to elect a domicile within the jurisdiction of the court, if he does not live therein. 476 Also,
Article 71 of the Judicial Organization Law requires from appellants and appellees before
the Court of Cassation to make their attorney's office as their own domicile.

It is not allowed to change one's elected domicile before the implementation of the legal
act for which the domicile was elected, unless the change of domicile was made in the
same way it was elected, namely, by contract or by agreement of the parties. However,
one of the parties can make the change, if the domicile was originally elected in his
interest alone, or if the change would not cause damage to the other party as long as
proper notification was made to the latter.

We have up until now studied the social factor of the natural person's identification . In
addition to the personal and social factors, there is still one factor that contributes to the
identification of the natural person. It is the national factor. And by the national factor we
mean the nationality.

iii. National Factor of Identification: Nationality

Nationality is a legal and a political link between an individual and a sovereign state. As
such, it is an element of personality.

(a) Attribution of Nationality.

According to Articles 1 and 2 of Order no. 15/5 of 19 January 1925, Lebanon grants
citizenship at birth based on the principle of jus sanguinis, by which citizenship is
inherited through parents. Lebanon also grants citizenship based on the principle of jus
soli, by which citizenship is granted by place of birth. Jus sanguinis is the most common
means by which a person acquires Lebanese citizenship. It rests on paternal filiation,
except for the case of illegitimate children who acquire the Lebanese nationality from
their mother, only after maternal filiation has been established.

Jus soli is taken into consideration in limited cases, when it is necessary to avoid
statelessness. Such is the case of individuals who are born in Lebanon of unknown
parents, or who fail to produce evidence of a foreign nationality by filiation.

(b) Acquisition of Nationality.

A person can acquire the Lebanese nationality either by l aw, or by decision of the
public authority. Thus, a woman foreigner who marries a Lebanese man becomes of right
Lebanese one year after registry of the marriage on the civil status records. The
acquisition of. the Lebanese nationality by decision of the public authority results from
naturalization given by decree at the request of the foreigner. A five year uninterrupted
residence in Lebanon is usually required. The five- year requirement is reduced to one
year only for foreigners married to Lebanese. The requirement period would not be
applicable for persons who rendered great services to Lebanon. In such a case, public
authorities have full power to grant citizenship.
By the above-studied factor of identification , we would be completing all the three
factors that identify the natural person, namely, the personal, social, and national. But as
was had above, identification is one way of distinguishing the natural person from the
legal person. We go on then to show how the legal person differs from the natural
person in terms of the factors of identification.

b. Legal Person.

As natural persons, moral persons have a name, a domicile, a capacity, a nationality.

Name.

A company is identified by a "trade name" (or business name). The company's name is
attributed by the founders, and the law requires that the name be mentioned in
company's by- laws.

In some cases, the business name reflects the subject of the company, as with regard to
associations and joint-stock companies. In other cases, however, it comprises the name of
one or more members of the legal person, as regarding general partnership .
If the trade name is that under which the legal person operates business, then the trade
name is of financial value: it is an element of the legal person's business fund, and is
assignable . Also, the trade name is modifiable, 9onsequently to its amendment in the
by-laws. However, unlike natural persons who have, in addition to family name, a first
name, legal persons possess only a business name.
As natural persons' name, legal persons' name is protected y the law. In case of trade
name infringement, the injured company is entitled to ask the court for an injunctive order
restraining infringement upon its trade name, and for monetary damages for any losses
suffered.

Domicile.

The company's domicile is th.e headquarters of the company is.

 Nationality

The company's nationality is that of the state where the headquarters of the company is.
It can also be the nationality of the members who control the company.

3. Legal Capacity.

As natural persons, legal persons are required to have a legal capacity to exercise the
subjective rights.

a. The Natural Person's Legal Capacity.

The legal capacity is the person's ability under the law to engage in legal acts. It is based
on two aspects: capacity to have rights, and capacity to act (or to exercise rights). The
capacity to have rights is the capacity to hold rights (and thus to assume obligations).
The capacity to c;1ct is the capacity to exercise subjective rights: to undertake binding
agreements, to make gifts, or to make a valid will.

Since the capacity to act supposes a will that understands the legal consequences of the
act that the person undertakes, discernment and will are then the components of legal
capacity.

People are not equal in legal capacity, because they are not equal in discernment and
will. Scholars divide legal capacity into three types: complete, deficient, and imperfect,
according as discernment and will are complete, deficient or imperfect.

Now, a person who has the capacity to act can perform by and for himself all types of
legal acts, which can be classified 'as (a) beneficial acts, like accepting donations; {b)
unbeneficial acts, like making donations and writing a valid will, and (c) hard acts, i.e., a
mixture of beneficial and unbeneficial act, such as sales contract or lease agreement.

Accordingly, if one's legal capacity is complete, one can perform all the three types of
acts. If one's legal capacity is imperfect, one cannot undertake any of these acts. If one's
legal capacity is deficient, one can only perform the beneficial acts, but not the
unbeneficial acts, and must be protected for the hard acts.

A person may lose his capacity to exercise subjective rights if he is unable to make legal
decisions on his own, because of incapacitation through age or disability. In such a case,
the person is placed under guardianship. A legal guardian is a person who has the legal
power to make legal decisions on behalf of a minor or an incapacitated adult.

455. Thus far, we have studied the requirement of capacity for the natural person's
exercise of subjective rights. We go on studying the capacity requirement to be met by
the legal person for the exercise of the subjective rights.
 a. The Legal Person's Capacity.

The legal person's legal capacity concerns the acts that fall within the company's
objective. The corporation's objective is clearly defined in the company's by-laws. Thus,
legal persons are legally capable if they perform the acts that are permitted ?Y the
corporation's by-laws (if companies), or by · the law (if associations) .

Accordingly, unlike natural persons who are incapacitated for natural causes , such as age
(minors) or mental state {a dults), or for non-natural causes, such as legally deprived
persons of the capacity to act, legal persons are incapacitated by the nature of the acts,
i.e., the acts that are without the company's objective.

Unlike natural persons' incapacity which is remedied either by a representation by a

guardian (minors; adults under guardianship) or by an assistance of a curator, the
incapacity of legal persons is absolu te. However, as the punishment for the performance
of acts by legally incapacitated persons is nullity of the acts, also the punishment for the
performance by a company of acts that are not contemplated by the company's
objective, is nullity of the acts.

Thus far, we have studied the requirements to be met by a person for the exercise of
subjective rights. These requirements are existence , identification, and legal capacity.
They apply equally, but differently, to natural and legal persons. Once these requirements
are met, the person is considered as legally capable to act.

Being capable to act, a person can be held liable for any damage or loss caused by his act
to another person. But the legal person's liability is differently conceived than the liability
of the natural person.

B. Person's Liability for the Exercise of Subjective Rights.

1. The Liability of Legal Person.

The liability of legal entities is separate from the liability of their members.

Usually the members' liability depends on the type of company and is determined by the
company's by-laws. For example, joint and several liability is an essential characteristic of
general partnerships. In joint ventures, the managing director when acting in his own
name incurs himself all the company's obligations and debtors could go after his personal
assets ; when acting as a proxy, he assumes liability within the limits of the proxy. In no
case, the co-contractor could go after the partners on a joint-and- several liability basis
even if it "happens" that he knew of the existence of a social bond. In limited
partnerships, the general partners have unlimited liability, i.e., joint and several liability
for the limited partnership's debts, whereas the limited partners' liability is limited to
their capital contributed.478

With regard to the legal entity's liability, we separate the civil from the criminal
liability.
 a. The Civil Liability of Legal Person.

The legal entity's civil liability is recognized by the LCOC. Article 127 states as follows:
"Masters and· superiors are liable for damage caused by the unlawful act of their
servants and subordinates in the performance of their duties or in the course of the
functions they were employed for, and even if they have not freely chosen them ,
provided that they are invested with effective control and direction over them.
This responsibility rests with both legal entities and human persons."

b. The Criminal Liability of Legal Person.

Lebanon has also recognized the criminal liability of legal entities.479 France has not.

A legal entity is held criminally liable when a natural person commits a crime on behalf of
the legal entity or with one of the means at its disposal. The means used by the agent will
not incriminate the legal entity unless the agent acted in the interests of or for the
benefits of the legal entity. If the means were used by agent in his own interests or for his
own benefits, it is the agent, not the legal entity, who will be held criminally liable.
Accordingly, if a bank manager forged his client's signature on checks to withdraw money
from her bank account, the bank will not be criminally held liable for forgery and use of
the checks, because the means put by the bank at his disposal does not include the means
of forgery . The legal entity is not considered criminally liable for the director's act unless
the rneans used by the director is in the interests and for the benefits of the bank, which
is not the case here.480

It was clear to the legislator that sanctions handed down on legal entities can only be of
financial nature.481

If the legal entity's state of dangerousness has been established, meaning that "there are
grounds for fearing that [the legal entity] will commit other acts punishable by law", then
"security measures shall be pronounced", such as restriction of the legal entity's activities
or its liquidation according to articles 108 to 111 L P C .

Having studied the liability of the legal entity, we go on to studying that of the natural
person.

2. The Natural Person's Liability.

The law has also recognized the criminal and the civil liability of natural persons.

a. The Criminal Liability of Natural Person.

In principle, criminal liability rests with natural persons. They are prosecuted and
punished for unlawful acts if they acted consciously and voluntarily. "Will' can only be
attributed to humans. The law recognizes the will if it is "conscious"; and consciousness is
proper to humans. Thus, the criminal legislator recognizes' the natural persons' criminal
liability if they "acted with conscience and will."484

b. The Civil Liability of Natural Person.

If the damage or loss caused by a person results from his "legal act", then the person's
liability is called "contractual liability"; but if the damage or loss caused results from his
"legal fact", then his liability is called "non-contractualliability" (or tort liability). Both
contractual liability and tort liability constitute what is named "civil liability".

i. Concept of Civil Liability.

Whether a person is run over while crossing the street, or a purchaser of a television is
harmed while turning it on, we would naturally look for the wrongdoer whom we ask for
remedy. Civil liability is thus defined as the duty of a person to provide compensation for
loss or damage caused to another person.

Civil liability is not insurance. Both actually tend to the loss or damage suffered by the
victim. But differently from the insurer who is totally alien to the damage, the wrongdoer
is closely linked to an action resulting in loss or damage.

Civil liability is not criminal liability. Actually both tend to prevention, and to punishment
of wrongdoer, requiring from a person to remedy the damage he has caused to another
person. Also, one single act may give rise to civil and to criminal liability, and civil action
may be exercised before criminal courts.

Both types of liability differ, however, in that civil liability calls for compensating the
individual harmed, while criminal liability asks for remedying society at large. Social
damage is a harm done to public order, which forms sufficient threat to provoke a gross
social reprobation, and is manifested in crimes because it violates moral and social values
deemed to be essential to a specific society. Social reaction to such damage done to
society comes in the form of (a) criminal punishment, whose function is essentially
punitive and repressive, (b) prevention, be it through intimidation or dissuasion, or (c) re-
habilitation of the condemned or re- education or social re-integration of delinquent.
Sanctions may also call for safety measures for the sake of public interest.

Civil liability, however, aims to remedy the individuals harmed in a manner to re-establish
the harmony disturbed by the wrongful act. Civil liability is thus centered on restituting
the lost order and repairing the harm done to the victim.

Still, all forms of responsibility are different from moral responsibility. Differently from
civil and criminal liability, the doer under moral responsibility is not anymore to answer
for his or her act before individuals or society at large, but before God Himself.
 ii. Division of Civil Liability.

There are two kinds of civil liability, contractual liability and non-contractual liability (or tort
liability). Liability is contractual if the damage caused results from the non-performance of
contractual obligation; for example, seller fails to deliver the item sold; buyer fails to pay the
agreed price. On the other hand, tort liability, or non-contractual liability, concerns all the
other cases to which contractual liability is not related. For example, an automobile driver
negligently runs over a pedestrian. It may be sprung up from harm done (a) by one's own act,
or (b) by another's act, such a child or an employee (vicarious liability), or (c) by things or
animals under a person's guardianship (strict liability).

(a) Contractual Liability.

(i) Concept.

Contractual liability arises when either contracting party fails to carry out his contractual
obligation. Suppose that a homeowner hires a contractor to build an outdoor storage shed.
The contractor fails to render the performance. What may the homeowner do in this case?
He may either compel the contractor to perform his promise through adjudication, or
rescind the contract and collect damages for contractor's failure to fulfill contractual
promise.

Three elements are required to engage contractual liability:

• a fault, which consists in full or partial non-performance, or in late performance, of
contractual obligation;
• a damage, be it moral or corporal, and
• a causal link between the fault and the damage, i.e., that the damage results
directly from the non-observance of the contract.

1°) Fault.

Under contractual liability, the fault results from non- performance of, or any delay in
performing, contractual obligation. Now, there are two kinds of contractual
obligation: an obligation to achieve a specific result, and a performance obligation (or
a best-efforts obligation).

Obligation of Result. As regards to the first obligation, namely, the obligation to

achieve a specific result , promisor's liability can be proven by showing full or partial
failure to perform or any delay in performing his contractual obligation. In our
example above, the contractor has the contractual obligation to carry out a specific
performance, which is to build a storage shed. If the contractor fails to offer his
performance, he would be presumed liable. But the promiser (contractor) can exempt
himself from liability by showing that he was unable to honor his contractual obligation: (a)
because of force majeure, i.e., a natural event which the promiser did not expect to
happen, and which he could not avoi d, such as the flood of the river over the field where
he was to build the storage shed. In such a natural disaster, the promiser would be
exonerated from all liability for non-performance of contractual obligation; or (b) because
of the victim's fault; like when, in a transport contract, the traveler jumps from the train
before the latter takes full stop at the station. In such a case, there would be no
responsibility on the company's part for injury sustained by the traveler.

Best-Efforts Obligation. With regard to the best-efforts obligation, the debtor of a

performance promises to perform his contractual obligation on the best efforts basis.
Accordingly, the promiser will be liable only if he has not exercised "due diligence and
care" in respect of his contractual obligation. For example, a surgeon undertakes to use all
reasonable means to achieve the desired result (i.e. saving the injured from death), but
_without guaranteeing that result. Thus, the patient should prove that the surgeon has
not used all due diligence and care in performing the surgical operation, that he was
negligent or careless, and thus liable for not achieving the desired result.

2°) Damage.

Damage can be property damage; pecuniary (loss incurred or lost profit); moral
(damaging a person's honor); or physical injury (comprising two elements: pecuniary
element such as medical costs, and non-pecuniary element such as mental suffering).

The damage that can be taken into account is that which is foreseeable at the time of the
conclusion of the contract. And it is on the creditor of the obligation (the promisee) to
prove the existence of damage. The damages due to the promisee usually equal the loss
he incurred and the profit he was deprived of.

3°) Causal Link.

Causal link refers to a wrongful act from which results a specific damage. It rests with the
victim to substantiate his allegations in respect of the direct link between the wrongful act
and the resulting damage. On the other hand, the promiser can exonerate himself from
liability for non-performance if he provesthat failure was due to (i) Force Majeure (a natural
disaster which is unforeseeable, unavoidable and exterior to the person or to the thing), (ii)
a third person's act, or (iii) the victim's fault.

So far we have examined the concept of contractual liability. It arises from non-
performance of contractual obligations. For failure to perform may lead to harm; and
harm must be repaired. Reparation for harm may be done by payment of damages or by
forced execution.
 (i) Failure to Perform.

1°) Payment of Damages.

Payment of pamages for harm done may be carried out either through adjudication or
through agreement.

Adjudication. Before filing a complaint, the creditor may send a warrant to the debtor
claiming non-performance of his contractual obligation. It must be notified to the debtor by
a registered letter or served on him by a deed of court bailiff.

The recalcitrant debtor refusing to honor his contractual obligation

may be subject to a legal complaint by the creditor or (b) may determine with creditor
the value of the damages. If creditor choses to lodge a complaint against debtor before
the tribunal, it is for the magistrate to determine the amount of damages to award the
creditor. In case of full or partial non-fulfillment of contractual obligation, damages are
known as "compensatory damages", and in the case of late performance, damages are
called "damages for delay". For example, in some cases the contractor does not refuse
performance, namely, to build an outdoor storage shed in our example above, but is late
in honoring his obligation. In such a case, the homeowner may request from the judge
that contractor pay a penalty for each day of delay in an amount of pounds as may be
determined by the judge.

Agreement. The contracting parties may also agree, under a "penalty clause", on the
amount of compensatory or delay damages that are to be paid, in the case of late
performance or non-performance of contractual obligation, by the promisor. This would
exempt the promisee from proving the loss suffered. But in order to prevent any abuse
which might arise from arbitrary determination of the financial penalty, the judge can, in
case of dispute, restraint or increase the financial penalty as stipulated in the contract.

The contracting parties may even agree on including an "exemption clause" in the
contract, namely, non-payment of damages in case of non-performance of contractual
obligation. In such a case, one of the contracting parties would be exonerated from
liability' should he fail to perform. However, such a clause would not be valid in case of
debtor's gross fault or intentional fault, or in case of freight transpo rt.
The contracting parties may still agree on inserting a "restrictive liability" clause in the
contract, by which a lump sum would be paid in case of failure to perform.

2°) Forced Execution of Contract.

In case of non-performance by debtor, the promisee has the right to demand the
execution of the obligation. Forced execution varies depending on whether the obligation
is an obligation to do or not to do, or an obligation to give.
Obligation to do or not to do. As regards to the obligation to do or to refrain from doing
a specified work, the execution cannot be forced when the obligation is "personal",
meaning dependent on such a person that he, not another person, is able to perform the
obligation in the way the promisee wants it to be performed. In this case, the promisor
cannot be forced to perform. All that the creditor can do is to request from the court
payment of damages by debtor.

Obligation to give. However, forced execution can be carried out when it comes to an
obligation to give. Suppose that Doe sold his penholder to Smith for an amount of 35
thousand dollars. Suppose also that Smith paid him the amount agreed on, but that Doe
failed to deliver the penholder to Smith. In such a case, Smith may have recourse to public
forces to seize the penholder; he may also appeal to financial penalty for each day of
delayed performance of obligation. In all cases, however, a judgment must be rendered by
the court to that effect.

Thus far, we have studied the contractual liability, and we have defined it as the duty of a
person to provide compensation for damage resulting from the non-performance of a
contract. Now, when liability is not deemed contractual, it is then non- contractual (or
tort liability) .

(a) Non-Contractual Liability (or Tort Liability).

Tort liability is the duty of one to repair the damage that he has caused to another, by
reason of one's own act or for the act of another or because of the acts of animals or
things. For example, a weekly review is prosecuted for libel by an artist whose wife was
pictured as having severe breakdown. Another example: Doe and Smith are minor
children. They are playing football in the backyard of Doe's parents' house. Missing the
ball, Doe shoots instead a stone into Smith's eyes. Smith is injured. A third example:
Defendant keeps a dog in the backyard. The dog escapes, and bites Plaintiff, a pedestrian
crossing the street in front of Defendant's house. Plaintiff is injured.
Under the first example a fault was committed by the weekly journal: it is the invasion of
the artist's privacy. Under the second example, Doe's parents are liable for the wrongful
act of their minor child Doe. Under the third example, Defendant is liable by reason of the
dog's act.

Generally, the tort liability is fault-based. This is true of the liability for one's own act and
for the act of another. Accordingly, to engage the tortfeasor 's liability for one's own act,
such as the Review case above, the victim must prove that the latter has committed a
fault. As regards to the liability for the act of another, such as the Doe case above, the
liability of parents and guardians (as well as that of teachers and artisans, and of masters
and superiors), is a "simple-presumption liability": The victim must prove the minor child's
fault to engage the tort liability of parents and guardians (Art. 126, al.1, LCOC); and the
pupils and apprentices ' fault to engage the liability of teachers and artisans (Art.
126LCOC), and the servants and subordinates' fault to engage the liability of
masters and superiors (Art. 127 LCOC). On the other hand, tortfeasors , parents and
guardians, teachers and artisans , and masters and superiors, all can escape liability
by proving absence of fault or external cause (force majeure, victim 's fault, third
person's fault).

However, the tort liability for the acts of animals or things is risk- based. It does not
suffice for the guardians of animals and things to show absence of fault to escape
liability. Their liability is an "absolut e-presumption liability". It can only be rebutted
by proving external cause.

Accordingly , there are two general types of tort liability:

(i) Liability with fault, where one is liable for one's own act or for the act of
another, and
(ii) Liability without fault, where one is liable for the act of animals or things.

(i) Liability with Fault. 1°) Elements of Liability

with Fault.

Three elements are necessary to engage tort liability: fault, damage, and causal link
between the fault and the damage. The onus of proof of all the three elements lies
on the plaintiff.

Fault. A fault is a wrongful conduct. It may arise out of negligence or imprudence. In

describing the commission· of an act, a fault is a conduct that falls below the standard of a
reasonable conduct, meaning that the defendant acted negligently: where he has the duty
to act, yet he did not perform the act.

On the other hand, a fault is a conduct that falls below the standard of bonus pater
familias (Latin for the French "agir comme un bon pere de famille"), meaning that the
defendant acted imprudently: where he has the duty not to act, yet he did perform the
act.

Damage. The second element necessary to engage tort liability is "damage". It is justified
by the established legal maxim, "No Action without Cause". This means, that one who
claims reparation for harm done must prove that one has . incurred damage. Otherwise,
there would be no cause of action.

For the damage to be recoverable, it must be certain (actually exist or would certainly
exist), and it must be directly related to the plaintiff. The jurisprudence has developed a
new notion of damage, the loss of an opportunity. This damage consists in the loss of an
opportunity to receive a benefit, which resulted from the Defendant's commission of an
act where he should have not performed the act, or it consists in the loss of an
opportunity to avoid a damage which resulted from the Defendant's omission of act
where he should have performed the act. To be recoverable, the opportunity must be real
and serious.

There are two kinds of damage: material and moral. Material Damage is that which has a
financial value. It is proportional to the amount of destruction or deterioration. Moral
Damage is also taken into account by the law (Article 134(2) LCOC). Differently from the
material damage that results from a wrong done to a patrimonial right, the moral damage
that is reparable concerns a wrong done against a non-patrimonial right, such as
damaging the honor, defaming the name, disclosing elements of a person's private life,
etc., or moral suffering that results from the death of a parent or from an injury.

Bodily injury comprises material damage as well as moral damage: material, by raison of
the costs incurred resulting from damage, such as medical or surgical or pharmaceutical
costs; or by raison of lost salary or of incapacities arising from injury; and moral damage,
by raison of moral suffering which the monetary damages aim to redress.
But the liability of the perpetrator arises only from the fault being closely in link with the
damage caused.

Causal Link. In matters of tort liability with fault, the defendant is not obliged to repair the
damage incurred by the victim unless the latter proves that this damage is generated by
the defendant's fault. And defendant escapes liability by proving absence of fault or
external cause (force majeure, victim's fault, third person's fault).

Some scholars express doubt about whether the third element (causal link) is
independent.from the other two elements (fault and damage). They argue that by the
very fact that the victim establishes the defendant's fault and the damage incurred, a de
facto presumption would arise, that this damage is caused by this fault. A sign of this, they
would argue, is the notion of fault itself, which implies the blame attached to the author
that he should have foreseen the consequences of his act: the proof that the fault exists
implies that this fault has caused this damage to repair. This is the reason these authors
reduce the requirements of the tort liability to two elements, fault and damage.

This argument is refuted by other scholars. Of course, they argue, fault and damage can
co-exist, yet it is not necessary to refer the latter to the former. There are cases where
fault can exist without damage, as well as damage without a fault. For example, the
bankruptcy of a trader (the element of damage), who was subject to a competitor's libel
(the element of fault), is not necessarily caused by the latter's libel; it could as well be
originated in the trader's mismanagement. Another example: Doe puts poison in Smith's
food. Before the poison seeps into Smith's blood stream, a third person shot Smith dead.
Here, there is a fault, which is the deliberate act of poisoning Smith; and there is damage,
which is Smith's death. But there is no causal link between the act of poisoning and
Smith's death, since the latter resulted from the gun fire and not from the poison. Thus,
the fault can exist without a resulting damage. Also, the damage (Smith's death) can exist
without a fault, it being that Smith's death (damage) was not caused by'the act of
poisoning (fault).485

Thus, fault does not necessarily imply the existence of damage. This why there must be a
proof that this fault led to this damage. The "causal link" element should, therefore, be
conceived as a separate element independent from the other two elements. This means
that it is not enough for the victim to establish the existence of the fault and of the
damage; he must also prove, on the basis of a cause-effect relation, that there exists a
direct link between the fault and the damage.
By What standard "causal link" should be decided? There are several theories that
proposed a standard on the basis of which existence of a causal link is decided. They can
be reduced to two: the equivalency of causes, and the adequacy of causes.

The theory of equivalency of causes claims that every previous cause can be considered
as contributing to the occurrence of the damage. Suppose that the defendant, who was
driving a car, heading towards Sarepta, could not avoid, due to his careless driving and
his loss of control of the car, hitting the plaintiff who was using the sidewalk. The victim
was immediately transported to the hospital. Suppose also that the hospital caught fire,
which led to his death. Is there any causal link between the driver's fault and the victim's
death?

According to the theory of equivalency of causes, there is a causal link between the
driver's fault and the victim's death, since without the driver's fault the victim would not
have been injured, and if the latter was not injured he would not have been transported
to the hospital, and omit the fact that the hospital caught fire the victim would have not
died. Thus this theory does not limit the victim's death to the defendant's fault. Rather, it
adds to the defendant's fault all the intermediate facts that contributed to the victim's
death.

492. The theory of adequacy of causes holds that every cause

should be retained if ad quate to the result; and the causes that are deemed adequate to
the result are the ones that are legally significant to the result.

Ac cordingly , there is a causal link between the driver's fault and the victim's injury, and
no causal link between the driver's fault and the victim 's death, since the link was
interrupted by the intervention of a "foreign cause", namely, fire. Actually, if asked,
witnesses would normally relate the incident by saying that the victim's death occurred
because of a fire erupted at the hospital; they would not even mention the victim's injury.
According to this theory, the driver would be held liable for the victim 's injury incurred,
and not for his death.

493. We have thus far studied the concept of liability with fault. We go on to examine its
types; and we have said above that tort liability arises by reason of one's own act and
because of the act of another.

2°) Types of Liability with Fault.

49. Liability for One's Own Act. (Art. 122 to 124 LCOC)

The liability by reason of one's own act is regulated from Articles 122 to 124 LCOC. Article
122 states that any act of man, from which results damage to another, obliges the
person by whose fault it occurred to repair it, and Article 123 LCOC provides that one is
liable not only for one's own act but also for one's negligence or imprudence. Accordingly,
the tort liability for one's own act can be either intentional (Article 122 LCOC) or
unintentional (Article 123 LCOC). Both require an act of commission. They can also cover
the omission to act.
 - Fault by Commission

495. The fault by commission engaging the liability based on one's own act is split into
intentional and unintentional.

• Intentional Fault.

496. An intentional fault is one that is committed with the intention to harm someone. It
can find expression in two instances: (a) misuse of the legal process. One who brings a
legal action or appeals a judgement, without producing any document to support his
allegations, only for the sole purpose of damaging the defendant's reputation, misuses
the legal process.
(b) abuse of the right to dismiss. It concerns the employer, when he has no legitimate
reason in dismissing employees.

To engage the tort liability of the tortfeasor, it suffices that the author of the intentional
fault knows that his act is causing damage. But fault by commission is not taken to mean
only intentional. It is also that which is committed unintentionally.

• Unintentional Fault.

497. Unintentional fault is differently conceived. A medical doctor called at night to

examine a sick child, finds it unnecessary to move before the morning because, on the
basis of the mother's description of the symptoms over the phone, he makes a diagnosis
of a good angina. In the morning, the child dies. Should the medical doctor be held liable
for the death of the child? Yes. The doctor's failure to act (examining the patient in
person), where he is supposed to act, denotes negligence under the law, and
consequently engages the doctor's liability for the child's death.
Another example. Defendant was driving a car heading towards Byblos. He could not
avoid, due to his driving at top speed, and his loss of control of the car, hitting the
plaintiffs' father and two other persons who were using the sidewalk, thus causing
Immediate death to the plaintiffs' father, and total work disablement to the other two
persons for a period exceeding three months, noting that defendant failed to report the
accident.

Should the defendant be held liable for causing the death of the plaintiff's father and total
disablement to the other two persons for a pried exceeding three months? Yes. Drivers
have the duty not to exceed the posted speed limit. Failing to perform their duty, drivers
would be held liable for imprudence.

Negligence and imprudence are the two forms of the unintentional fault. Negligence is a
failure to act when the law commands you to act, while imprudence is a failure not to act,
when the law orders you not to act. In both cases, defendant did not intend the harm.
But, if he acted prudently, the harm would not have resulted from his act.

The notion of fault is subjective. It is difficult to assess it objectively. The courts have
discretionary power to interpret it according to the circumstances of the case at hand.
Unintentional and intentional fault constitute what is called fault by commission. But
commission does not exclude omission. For omission is understood to be a passive act.
Yet, it is deemed an act. As such, a fault may arise from omission.

- Fault by Omission.

The liability by reason of abstention is justified by this maxim, "he who can and does not
prevent, commits a fault".

Some may argue that Article 122 LCOC has mentioned the fault that results from
commission, and not from omission. A fault that results from omission would, therefore,
be, according to these scholars , impossible by law.

This notwithstanding, Article 122 LCOC understands the "act" (of a ·man) as referring to
commission (or positive act). Now the opposite cannot be understood but through its
opposite, such as left through right, or up through down. Thus, the term "act" is
understandable in connection with both commission and omission, one being made
possible by reference to the other.

An act by omission can be purely formal (without taken into account the intention): The
very omission, where the law commands commission, is deemed a fault. An act of
omission may also denote commission: It is when a person omits an act with a specific
purpose, as when he refuses to give assistance to another in danger, with the intention of
inflicting harm on him. This is known as "commission by omission".

Thus, a person is liable by reason of omission (a) when the law obliges liim to perform an
act, yet he does not perform the act (pure omission). (b) when the omission of an act
denotes an Intention to inflict harm to another (commission by omission).

In all cases, whatever the nature of the fault is, be it by commission or by omission, it is on
the victim to substantiate the allegations: all the modes of proof can be used by the victim
to show that what he is saying is true, such as witnesses, presumptions, etc.

So far we have studied the liability for the injury he caused because of his own act. And we
have devised the word "act" to signify commission as well as omission.

Liability for the Act of Another. (Art. 125 to 128 LCOC)

But Article 125 LCOC states that a person is liable not only for the injury he causes by his
own act, but also for that caused by the act of persons for whom he is responsible or of
things that he has under his guard: (a) Parents and guardians are liable for the injury
caused by their minor children who live with them (Art. 126(1) LCOC); (b) Teachers and
artisans are liable for the injury caused by their pupils and apprentices during the time
they are under their supervision (Art. 126(2) LCOC); (c) Masters and superiors are liable for
the injury caused by their servants and subordinates in the course of or in connection with
the performance of the duties for which they have been employed (Art. 127 LCOC);
 The aforesaid liability attaches unless parents and guardians, teachers and artisans,
masters and superiors, can prove that they could not prevent the act that gave rise to
this liability.

- The Liability of Parents and Guardians for the Acts of their Minor Children.

The persons here refer to the parents who exercise their parental authority. Three
requirements are necessary to engage this liabi lity: (a) the child must be a minor; (b)
the child must be living with his parents or his guardian, and must be under their
authority; and (c) a fault by the child, be it intentional or unintentional, or an act of a
thing under the child's guard, such as a ball, a stick, a bicycle, etc.

If these requirements are met, the liability of the parents and guardians is engaged.
For example, two minor children are playing football in the backyard. Missing the
ball, one of them shoots instead a stone into the eye of the other child. The parents
would be held liable for the act of their minor child.

The presumption of the fault of the parents and guardians is a simple presumption,
meaning that parents and guardians can rebut it by proving absence of fault: They
were unable to prevent the child's fault. Jurisprudence has referred also to the
notion of bonus pater familias to assess the presumption of the parents and
guardians'. For example, lack of parental surveillance may engage the parents and
guardians' liability.

- The Liability of Teachers and Artisans for the Acts of their Pupils and
Apprentices .

According to Article 126, paragraph 2, LCOC, teachers and artisans are liable for the injury
caused by their pupils and apprentices during the time when they were under their
supervision. However, the liability of the state can be substituted for that of the members
of the public teaching.

The liability would also be attached, according to Article 127 LCOC, to masters and
superiors for the acts of their servants and subordinates.

The Liability of Masters and Superiors for the Acts of their Servants and
Subordinates.

The persons liable here are those who have the power to give instructions or orders to a
person under their authority. The term "comme ttant" in the original French text of Article
127 LCOC is not limited to the principal-agent relationship. For the French text used the
term "prepose" to refer to the person under the authority of the "commettant"; and the
term "prepose" denotes, inter alia, the meaning of "Ajeer" in Arabic which means
"salaried" or "wage-earner" in English. Accordingly, the master-servant relationship is
narrower in context than the "commettant-prepose" relationship. The latter incudes, inter
alia, the relationships of principal/agent and employer/employee. Since the common
ground of all the relationships that are covered by the concept "commettant-prepose"
refers to the idea of subordinate (" Tabee' ") and superior ("Matbouu' "), I have
therefore used the term "superior" ("Matbouu' ") for "commettant" and the term
"subordinate" for "prepose" ("Tabee "').

Article 127 LCOC does not specify expressly whether the liability of masters and superiors
is risk or fault based. In the absence of such specification, I would consider it fault-based,
for the following reasons:

(a) The type of relation that Article 127 LCOC regulates is not different in substance than
the relationships stated under Article 126 of the same. Therefore the kind of liability that
is stated expressly under Article 126 should be the same under Article 127. But
Article 126 expressly mentions that the liability of parents and guardians, and teachers
and artisans, is fault-based. Thus, the liability of masters and superiors should also be
fault- based.

(b) In order to apply the strict liability, there must be a risk taken by the defendant. This
risk lies in the guard of animals or things. But it is not clear how the master-servant or
superior-subordinate relationship differs from the parents-children and teachers-pupils
or artisans-apprentices relationships in terms of risk. Since the liability of the latter is not
risk-based, the former should not be either.

In the absence of the kind of liability, we should take into account the defendant's
interest; because the defendant is always in a weaker position. But a fault-based liability is
easier to escape than the risk-based, because the former can be exonerated from by
proving absence of fault whereas the risk- based liability can be escaped by proving force
majeure which is harder to prove. Therefore in the absence of a text specifying the type of
liability that attaches to masters and superiors, the fault- based should be adopted.

Three elements are necessary to engage the liability of masters and superiors by reason of
their servants and subordinates' acts:
(a) the subordinate must have committed a fault (intentional or unintentional). It is on the
victim to establish the fault; (b) the fault must be committed in the course of or in
connection with the performance of the subordinate's duties. This means that the servant
or the subordinate who acts in his own interest does not engage the liability of his mater
or superior. For example, if an employee who takes advantage of the truck that he uses in
the course of his duties, to transport his things during his annual vacations , does engage
his own liability, and not his employer's, for any injury that he may cause during this trip;
and (c) there must be a relationship of subordination between the master or superior and
the servant or subordinate.

If these three requirements are met, the superior's liability attaches. The superior can
escape liability by proving absence of fault, or an external cause (force majeure,
employee's fault or a third person's fault).

Up until now, we have examined the liability for the act of another. This connotes the
liability of parents and guardians for the acts of their minors; the liability of teachers and
artisans for the acts of their pupils and apprentices, and the liability of masters and
superiors for the acts of their servants and subordinates. The liability for the act of
another and the liability for one's own act are fault-based liabilities. The law has
recognized two other types of liabilities, namely, the liability for the act of animals and
that for the act of things. Differently from the liability for one's own act and that for the
act of another, these two liabilities are liabilities without fault.

(ii) Liability without Fault.

Doe has caused damage to another person because of an act he has carried out. Doe has
not intended to hurt anyone. Nor has he done anything careless. Still, Doe might be held
liable without fault, because of the activity he was engaged in.

Since it is not based on fault, this liability should then be based on something that it is not
a fault. Accordingly, a person would be held liable for any damage he would cause,
regardless of fault, but which would result from an act he carried out at his own risk.
Therefore, the liability without fault is a risk-based liability.

In this line of thought, the law states that the guardian of an animal or of a thing is
liable without fault for the damage the animal or the thing under his guard has
caused.

1°) Liability for the Act of Animals (Art. 129 - 130 LCOC).

Article 129(1) states that "The guardian of an animal is liable for the injury the
animal has caused, whether it was under his guard or whether it had strayed or
escaped."

2°) Liability for the Act of Things. (Art. 131 to 133 LCOC)

Under the law, the thing covers all animate and inanimate things, such as an escalator, a
wall, a vehicle, a ball, a stick, etc. Suppose that a child was injured by pieces of glass as a
result of knocking the glass door of a building. Can the owner of the building be held
liable for the injury incurred by the child? Suppose also that a child injured his teeth as
a result of falling down an escalator at a mall. Can the company which runs the mall
be held liable for the child's injury?

The guardian of a thing is the one who makes use of it, enjoys it or exercises control over
it. The presumed guardian of a thing is the owner. However, the guard of a thing may have
been transferred to another person by virtue of a legal act, such as rent or loan. It may
have also been transferred to another person because of loss or theft of the thing. In such
cases, the person who finds the thing lost becomes the guardian thereof, and the thief
becomes the guardian of the thing stolen.

For the guardian to be presumed liable for the damage that the thing under his guard has
caused to another, the thing must generate damage.
Suppose that the owner of a truck is exonerated from liability when traces of a breaking
on a piece of ice are established. The reason for that is force majeure, which is the ice.
Suppose also that a cyclist was injured upon striking a lawfully parked car. The guardian
was exonerated from liability because the vehicle had a passive role.

For the guardian to be presumed liable, the victim must prove that the thing under his
guard had intervened in the realization of the injury, and not just played a passive role.
But the guardian can exonerate himself from liability by proving force majeure, or another
external cause not imputable to the guardian..

3°) Strict Liability.

However, be it for the liability for the acts of things or for the acts of animals,
jurisprudence has established a general principle of law based on the notion of risk. The
guardian assumes the risk of the thing or the animal under his guard, and therefore he
would be held liable for the damage the animal or the thing under his guard has caused to
another even though he may have exercised all due care. This is the strict liability (or
liability without fault or absolute liability).
The absolute liability may be rebutted only by proof of a force majeure or of an external
cause not imputable to the guardian. It does not suffice to prove that the guardian
committed no fault or that the cause of the damage remains unknown.

Strict liability is a liability that concerns the activity and not the person. Because it is based
on non-fault, the question of strict liability is raised when the defendant is not doing
anything negligent, and is not intending to carry out any harmful act against anyone. Still,
the defendant may be engaged in an activity to which liability without fault might attach.

The American courts were able to define specific activities calling for strict liability.
Some of the activities are regarded as abnormally dangerous; others are related to
keeping of animals , administ ration, products, occupational injuries, or accident
insurance.

1. Abnormally Dangerous Activity.

Most questions related to the abnormally dangerous activiti es address the issue of
the dangerous nature of the activity that is carried out. A person who is engaged in
an abnormally dangerous activity is liable without regard to fault for any damage that
results from the abnormally dangerous nature of the activity. But how can we know
that an activity is abnormally dangerous by itself? American jurisprudence has set a
number of factors to look for in deciding the natural dangerousness of an activity.

Based on non-fault, strict liability is risk-based. And in order for an activity to be

abnormally dangerous it must be of high degree of risk of some harm. But, the
understanding of the existence of a high degree of risk leads us to the understanding
of the harm ensuing from this risk being great in magnitude. And the high degree of
risk and the great harm resulting therefrom, cannot be avoided by reasonable care,
otherwise we would be dealing with fault-based liability. And since the activity is of a
high risk of harm and the harm would likely be great and cannot be avoided by reasonable
care, the activity must be of unusual character. In fact, the unusualness of the activity is
measured by the appropriateness to the place where it is carried out, and the extent to
which its value to the community is outweighed by its dangerousness. Activities that are
usually deemed abnormally dangerous would be blasting or other use of explosives;
transporting of flammable or very toxic liquids (e.g., propane). In all cases, it should be
diligently noted that the risk-based liability is a special risk liability, and not a general one.
This is taken to mean that. There will be strict liability only for damage
commensurate with the risk that made the activity abnormally dangerous.

There are exceptions to the absolute liability . At one end of the strict liability spectrum,
the intervention of a force majeure is often enough to relieve the defendant of strict
liability. In Rylands v. Fletcher, the Court stated that the defendant could escape liability
by showing that the accident occurred because of "vis major or the act of God", such as a
storm of unprecedented severity.

Also, the defendant will not be held strictly liable for his abnormally dangerous activities,
such as blasting, if there is a finding of hypersensitive reactions to these activities. A
blasting operation causing the mother mink to kill her kittens in reaction to her freight was
not a reason for the courts to impose strict liability.493 The defendant may escape liability
for the damage sustained by the mink, because frightening animals is not one of the
special risks that make the use of explosives abnormally dangerous.494 The plaintiff
knowingly and voluntarily subjecting himself to the danger will be barred from strict
liability recovery. A driver sees a "basting zone ahead" sign. Nonetheless, he voluntarily
decides to enter the blasting zone, and is subsequently injured by
the blast. His voluntary assumption of the risk bars him from recovery. Still, there are cases
where, regardless of the plaintiff acting re sonably or unreasonably, assumption of risk will
preclude him from any strict liability recovery. For example, the plaintiff agreed to
transport dynamite, in a truck owned by him, for the defendant. In route, the dynamite
exploded, and the plaintiff was injured. The plaintiff cannot recover from the defendant in
strict liability, the reason being that the plaintiff has assumed the risk: he knows that
dynamite is a severe explosion risk, and yet agreed to transport the dynamite for the
defendant.

This involves saying that in cases where the plaintiff has ordinary negligence, such as
inattentiveness, an intermediary liability will be considered, understanding a reduced
strict liability recovery. Under the same mentioned instance, the plaintiff negligently
ignoring the sign, entered the blasting zone, and was subsequently injured by an
explosion on the site. The plaintiff's ignorance of the signs will only reduce his recovery
from the defendant even if his claim against the defendant is based on strict liability.
At the other end of the strict liability spectrum, strict liability may attach, and the
defendant must compensate for the injury caused to the plaintiff even though he may
have exercised all due care. In Luthr inger,495 the defendant was engaged to exterminate
cockroaches in the basement of a commercial building. The next morning, plaintiff,
walking in the lobby, is almost poisoned by the hydrocyanic acid gas. The court held that
the defendant's activity was ultra-hazardous . It reasoned that it may be common among
exterminators , but is not a "common usage", arid that the injury caused to the plaintiff is
one of the special risks that make the defendant's activity abnormally dangerous.

2. Keeping of Animals.

Usually, the keeper of an animal is its owner, but the scope of the term "keeper" is wider.
It includes a person who has the animal in his possession. In some instances, the animal is
not kept by anyone and injuries were sustained by the plaintiff because of the animal's
action, who would be held liable? The previous owner should be held strictly liable. But
suppose that a person keeps an animal to prevent it from causing damage to others, until
the time he returns it to its owner. Suppose also that meanwhile the animal causes
damage. Would the keeper be strictly liable for the damage sustained by the animal?
Usually, the keeper is not subject to strict liability. But he has the duty to take reaso·nable
care. If he fails to do so, he would be held liable with fault.

The Anglo-saxon doctrine distinguishes between animals domitae naturre (or domestic
animals) and animals ferre naturre (or wild animals). Domestic animals are by custom
devoted to the service of mankind. Bees, bulls, horses, cats, dogs, cows, pigs, are all
generally held to be domesticated, even though they can be dangerous. Wild animals
are by custom not devoted to the service of mankind. Lions, tigers, bears, wolves, and
snakes, are all generally held to be wild, and dangerous to humans, even though they
can be tamed.

The keeper of domestic animals is held strictly liable for their actions of which dangerous
propensities he knows, but not liable for their unexpected actions . If the dog has never
bit anyone before, the defendant is not subject to liability, the dog being a domesticated
species. But if the defendant had reason to know that the dog has attacked people
before, he would be strictly liable.

However, the keeper of wild animals is strictly liable for the damage resulting from the
dangerousness that is typical of their species. If the defendant keeps a lion, he would be
liable for the Injuries caused by the lion to the plaintiff, it being that lions are Wild
animals, and the risk that makes lions dangerous is because they can attack people
unexpectedly.

So far, we have studied the kinds of persons entitled to exercise the subjective rights, and
we have found that they are the natural persons and the legal persons. These persons are
to be held liable for any damage or loss resulting from their acts. The liability attached to
them is deemed contractual if the damage they have caused results from a legal act, and
it is regarded as non-contractual (or tortious) if the damage they have caused results from
a legal fact.

To make our study complete, we still have to treat of evidence, it being the purpose of
the subjective rights.

Not to have a right or to have a right but not to be able to prove it, amounts to the
same thing. Thus, to assert one's rights, one often needs to prove that what one
alleges is true. If the opposition persists, evidence must be produced at trial.
 Accordingly, when acting, a person should think as a lawyer, i.e., thinking in terms of
evidence. Evidence, then, appears to be the aim of subjective rights.

Given the importance of the subject, we will approach it from two points of view,
namely, civil and commercial.

A. Rules of Evidence in Civil Law.

The theoretical study concerns two questions: (1) with horn lies the onus of proof? (2)
What are the means of proof?

1. Onus of Proof (Burden of Proof).

The onus of proof (onus probandi) is the duty to prove that what has been alleged in court is
correct. In some cases, it is incumbent on both, the parties and the judge; in other cases, on
the parties themselves.

a. Onus of Proof on the Parties and Judges.

In civil cases, the judge had traditionally a passive role. It was not for him to discharge a
burden of proof. It was for the parties to prove that what they allege is true, and for him to
render a judgment accordingly . As such, opposition is made between a civil judge and a
criminal judge. The latter investigates the case, i.e., who investigates the elements of fact
for the prosecution and those for the defense. Today, however, civil judges have a more
active role. First, it is for the judge in civil cases to "declare the law", the parties having only
the duty to prove that what they allege is true. It is not for them to prove that, legally, such
facts give them such or such a right. Second, even for the establishment of facts, the judge
may help the parties to administer the proof. He may order measures of inquiry to be taken,
such as requiring expert testimony, calling witnesses or asking one party to make written or
spoken statement of facts which helps to prove something at trial.

b. Onus of Proof on the Parties alone.

In practice, each party in civil cases discharges a burden of proof. The creditor, for example,
produces a piece of evidence to convince the judge that he had loaned the debtor money,
and the debtor seeks to prove that he had not borrowed that money. But if pieces of
evidence are not firm, meaning that doubts still exist about their truth, a determination
should be made about the outcome of the case.

In principle, the onus of proof is on plaintiff (actori incumbit probation). If plaintiff makes
a statement in court alleging that a contract exists between him and respondent, and if
the latter does not deny the truth of plaintiff's statement, there is no need for plaintiff in
such a case to prove that what he alleges is true. But if defendant contests the statement
made by plaintiff, then plaintiff must produce evidence to prove that what he alleges is
true. If he does not, he will lose his case. On the other hand, if defendant, instead of
 contesting plaintiff's statement, makes a statement that incriminates plaintiff, in such a
case defendant becomes a plaintiff (reus in excipiendo fit actor), which means that it is
on him to prove that what he alleges is true. For example, suppose that I make a
statement in court alleging that I had loaned you ten thousand dollars, and that you have
never paid them back to me. Suppose also that you have contested the statement I have
made, saying that I have never loaned you anything. In this case, the burden is on me to
prove that I had loaned you the money. But, suppose that you make a statement alleging
that you have paid me off the money. In this case·, the onus of proof is on you, i.e., it is
your obligation to prove that your statement is true, by referring to the means of proof
provided by the law.497

2. Means of Proof.

There are five modes of proof: Documentary evidence; confession; oath; testimony, and
presumption. Documentary evidence, confession when made in-court, and oath when it is
decisive, all three are deemed primary evidence; the remaining modes are regarded as
secondary evidence.

b. Primary Evidence.

The primary evidence is required when the value of the contract equals or exceeds
500,000 LBP.
i. Documentary Evidence.

Documentary evidence is the 'queen' of evidence in civil l aw. It is that which can be
introduced at a trial in the form of documents. Documentary evidence usually refers to
writings on paper, such as a contract or a will. However, the concept is extended as to
reach any media by which information can be preserved, such as photographs; a medium
that preserves sounds such as a tape recording or actions to be viewed such as a film; and
an electronic printed form such as e-mails.

Documentary evidence is governed by the best evidence rule, which deems it

imperative that the original document be produced as evidence unless there is a good
reason not to do so.
I
Two types of documentary evidence are admitted in court:

(a)Authentic Act.

The authentic document is also called notarial or legalized deed. It is an instrument that is
executed and drawn up by a notary public or by a public authority authorized to perform
that function, in presence of two witnesses, free and aged at least lghteen years. If the
party does not know how to sign, the notary must cause him to affix his mark to the
instrument.
 The authentic act has full probative value against the contracting· parties and their heirs
or assigns, unless it be proved to be a forgery.

(b)Act under Private Signature (or Simple Deed).

A simple deed is a private agreement made in writing, signed, and witnessed. If the
signature is acknowledged by the party who executed the act under private signature,
and the court admitted that act without further means of proof, the act under private
signature is deemed a true and genuine act. But an act under private signature, though
acknowledged by the party who executed it, cannot be taken in lieu of an authentic act
when the law requires such an act.

Documents that do not fall within one of these two types of documentary evidence
have, in principle, only the value of a simple presumption, and must satisfy the
requirements of a simple presumption. In some cases, a copy of a deed may have the
same value as the deed itself.498

The probative value of a written document is not the same for an authentic act and for an
act under private signature. The authentic act attests for its content, unless it is proved
that the deed is a false instrument on the basis of a procedure that establishes the
validity of a document. Otherwise, the judge must give a regular notarial deed full
faith.

The act under a private signature has a much less probative value. In principle, the
judge must give it faith, but the parties can always disavow their signature. They can
also submit contrary proof to its content.

ii. In-Court Confession.

Confession is the party's recognition of a fact that is in disfavor to him. Confession is of

two kinds, an 'in-court' Uudicial) and an 'out-of-court' confession (non-judicial). The in-
court confession is primary evidence; the out-of-court evidence is secondary
evidence.499 As mentioned above, only is primary evidence required when proving the
existence of an act whose value exceeds LBP 500,000.

If the confession is judicial, it has full probative value. 500 The judge cannot admit in.
court some confessions and reject others. The confession cannot, in principle,
be.dismissed by he who has made it. 501

(iii) Decisive Oath.

Oath is a mode of proof much less used. There are two kinds of oath, decisive and
suppletory.502 The decisive oath is primary evidence, whereas the suppletory oath is
secondary evidence.
The decisive oath runs this way: during a trial, one party may always demand that
the other party take an oath/swear in a witness, that he tells the truth. It is called a
decisive oath because it decides the outcome of the trial: if the other party takes the
oath, he wins his case; if he refuses to take the oath, he loses it.

The court cannot take a decisive oath on confirming the existence of a crime or an act in
contempt of public order or morals, nor on a contract which validity depends on being a
written deed,504 nor on denying the existence of a fact which is confirmed by an
irrebutable legal presumption.
The wording of the oath is not a matter of agreement between litigants. It is rather
decided by the court. If a mute is literate, the court may ask him to take the sworn oath in
writing. However, in case he is illiterate, he can take the sworn oath in the usual sign
language.505

We have thus far reviewed the primary evidence. It is named "primary" because it may
decide by itself the outcome of the trial. Contrary to primary evidence, secondary
evidence does not decide by itself the outcome of the trial. It needs· to be completed by
other secondary proofs to be conclusive.

b. Secondary Evidence.
i. Out-of-Court Confession.

The out-of-court confession can be made in a letter or in front of witnesses. It has the
same legal value of a testimony or a presumption. Non-judicial confession may be
admitted as evidence in court if made freely. The probative value of non- judicial
confession is made by the Judge.506 Non-judicial confession may be made on tape
recording. If denied by the party, an expert named by the judge may ascertain its truth.507

ii. Suppletory Oath

A suppletory oath compensates for the absence of other proofs. It is added to other
modes of proof to convince the judge. This gives us to understand that the judge is not
bound by a suppletory, it being by its very concept an incomplete proof. If there were a
complete proof, suppletory oath would not be in need of.509

The suppletory oath is personal. If tendered by the court to one party, the latter cannot
redirect it to the other litigant.510 The amount at stake cannot be subject of a suppletory
oath, unless it is impossible to determine it by a different means of proof. In such a
case, the court indicates the maxi um limit of the jurisdictional amount which the
claimant confirms by a sworn oath.511

i. Testimony.

Testimony is an oral statement given by a witness in court about a particular event.

Testimony is out of favor in civil law. The admissibility of testimony is strictly limited,
especially in respect of the persons to testify, such as minors, mentally ill persons,
and criminals,512 ancestors and descendants, spouses, and servants, 513 public
 employees,514 attorneys, agents and others.

Any person may be summoned to testify in court to an event without authorization

whatsoever, 516 unless the witness is public employee, 517 enrolled in the army,518 or
imprisoned. 519 A special procedure is adopted if the witness to an event is the
President of the Republic, the Speaker of the House, or the Prime Minster. 520

Witnesses are summoned at least three days before the appointed date of testimony,
unless the court decides to shorten the period or in cases of emergency. 521 Witnesses are
obliged to appear in court, to take an oath, and to give testimony.522 If a duly summoned
witness submits legitimate excuse which prevents him from appearing in court on the
fixed date, the court may grant him a time limit or decide to move to his place to hear his
testimony, or may, according to circumstances, retract from hearing this witness. 523 But if
a duly summoned witness fails to appear in court without sufficient reason, the court
imposes an administrative fine, and may order that he be brought to testify by force. 524

A distinction must be made as to the nature of the thing to prove. If the thing to prove is a
legal act (especially a contract), evidence thereof must be made in writing, testimony
being not admitted in court.525 However, testimony is admitted if there is a prima facie
proof by writing or in cases where it is impossible to produce evidence in writing.
Otherwise, evidence of acts of commerce is free against traders.

If the thing to prove is a legal fact, such as a fact generating civi liability, proof thereof can
be made by all means, especially by testimony or presumption.

i. Presumption.

The word presumption is made up of two Latin words, the prefix pre, which means
"before", and sume, sumere, "to take". Thus, presuming something is assuming that an
unknown fact is true or false on the basis of a known fact proved by one party or admitted
by law or judicially noticed.527

Presumption is of two kinds, rebuttable (or simple) and irrebuttable. A rebuttable

presumption, or a Juris tantum presumption, is that against which defendant may
produce a contrary proof.528 For example, in a car accide·nt that is caused by a minor living
with his parents, the victim may allege that the parents are presumed responsible for
their minor children, i.e., of less than 18 years old. However, the parents may allege the
opposite proof, by showing that they had had neither a defective education nor a
defective supervision.

An irrebuttable, or a juris et de jure presumption, is stronger. It is irrebuttable simply

because it cannot be refuted by opposite proofs. Defendant may still demand that the
plaintiff take an oath or obtain from judge that plaintiff declares, by a compulsory personal
appearance , a confession. Cases of irrebuttable presumption are strictly enumerated in
the texts: 1°) a sick person, before dying, gives a part of his properties to his physician. 529
The latter is actually "unable to receive" the property. The act done between the patient
and his doctor is null and void. 2°) Res judicata (a matter adjudicated finally).530
 The study we have so far undertaken is meant to be only theoretical. But the aim of a
practical study is not an application of theories. It is rather to complete them. We go
on then to study evidence in practice.

The primary (or perfect) evidence requirement

According to civil law, evidence of a legal act exceeding a specific sum can only be
made by means of primary evidence. In the case at hand, the conditions of application
of this principle are satisfied: (a) the contract of service is deemed to be a bilateral
contract. (b) This act exceeds the sum of 500 000 LBP. Therefore, proof of this
contract must be made by means of
primary evidence .

Now the law provides for three types of primary evidence, namely, (i) documentary
evidence, including authenticated act and simple deed, (ii) in-court confession, and
(iii) decisive oath.
'
Since the matter has not been referred before any judge, evidence (ii) and iii) do
(
not stand. Also , since the act between
your client and the married has not been concluded before a notary public, a simple
deed seems to be concluded by the parties. However, your client is unable to
produce the original, it having been destroyed by fire; and only can stand as primary
evidence the original simple deed. Accordingly, it is impossible for your client to
prove the services he performed to the married by means of primary evidence.

b. Exceptions to the Primary Evidence Requirement.

Being unable to provide a perfect evidence to show the existence of an act concluded
between him and the married, your client can still allege an exception to the primary
evidence requirement. Should this exception be accepted, proof of the existence of the
act can be made by all means of proof. In the case at hand, your client cannot allege
some exceptions to the primary evidence requirement, such as fraud or moral
impossibility to provide pre-constituted documentary evidence.

However, your client can allege other exceptions to the perfect evidence
requirement, especially (a) prima facie documentary evidence; (b) material
impossibility to produce pre-constituted documentary evidence, or (c) a substantial
copy of the contract.

If your client succeeds in proving one of these exceptions, he can then prove the
existence of the contract between him and the married by all means of proof.

i. Prima Facie Documentary Evidence.

A legal act having an amount that exceeds 500 000 LP can be proved by all means
when there is prima facie documentary evidence. For a document to be deemed as
prima facie documentary evidence, three conditions must be satisfied simultaneously: (i)
 that there is a document; (ii) that this document comes from the person against whom it
is opposable, and (iii) that this document makes the alleged fact likely to be true. In the
case at hand, the photocopy of the contract may satisfy the three above mentioned
conditions: (i) it is a matter of a document. (ii) This document comes from the married
couple, it being signed by them. (iii) We can legitimately think that this document
establishes more likely than not the truth of the performance of services which amount to
550 000 LBP since all the circumstances of the performance of services seem to have been
recorded in the original document.

Since the document may be deemed prima facie documentary evidence, your client can
thus provide complementary evidence by all means. In the case at hand, the
photographer can ask his assistants to testify the truth of his statement. He can also ask
the wedding guests to testify, who certainly appear in pictures with the spouses.

ii. Material Impossibility to provide a pre- constituted document.

a legal act exceeding an amount of 500 000 LBP may equally be proved by all modes of
proof when material impossibility to produce the document exists. For a material
impossibility exception to be admissible in court, several conditions must be met: (i) that
there is a pre-constituted act; (ii) that this pre-constituted act has been destroyed
because of force majeure, and (iii) that this force majeure can be proved. In the case at
hand, these three conditions are satisfied. (i) The agreement of performing services
seems to have given rise to a simple deed. (ii)-This document has been destroyed by fire,
which may be assimilated to force majeure, it being unforeseeable, irresistible and
beyond the photographer's will. (iii) The eruption of a fire at the building may be proved
since it was reported by the media.

These conditions being met, it is thus possible for your client to prove the existence of
the simple deed by all modes of proof, and especially by testimony made by his assistants
and by the wedding guests.

iii. Substantial Copy.

549. A legal act which value exceeds the sum of 500 000 LBP
can also be proved by providing a substantial copy of the contract. Is deemed
substantial, an indelible reproduction of the original document. In this matter, judges have
full power.

If the copy is proved to be substantial, proof of the existence of the original legal act
would ipso facto be deemed complete without need for providing complementary
modes of proof.

In civil law, the admissibility of evidence depends on whether it is intended to prove a

legal fact or a legal act. The proof of legal facts may be established by all means,
including testimony and presumption. Thus, the proof of legal facts is not required to
be a documentary one. On the other hand, the proof of legal acts may in principle
only be in the form of a document. Accordingly , your friend must determine whether
the proof he shall establish is related to a legal fact or a legal act. A legal fact entails
legal consequences independently of the will of the subject of law concerned. In fact,
it is the law that attaches to the fact legal consequences that have not been asked for
by its author. A legal act, to the contrary, is an expression of will that produces legal
consequences which nature and extent are precisely determined by this will. The
legal effects produced are the very object contemplated by the will. Thus, it is the
legal persons' will that generates legal effects.

In the case at hand, your friend has undertaken to do some works at your house for
an amount of 750 000 LBP. It is thus possible to conclude that there was a legal act,
i.e., an agreement by which the two contracting parties create legal obligations
between them. Accordingly , the proof of this contract should be a written document,
any other means of proof being, in principle, excluded. In fact, the Lebanese civil law
provides that every legal act of an amount that exceeds 500 000 LBP must be made
before a notary public or in a simple deed form. This is the case here, since the job
was done for 750 000 LBP. In consequence, if your friend intends to establish a proof
supporting the existence of a contract with you, he must produce either an authentic
act or an act under private signature (simple deed). The first is an act received or done by
a competent notary public who must observe the solemnities required, and which he
witnesses himself. The second is an act which is not under seal, but is made in writing and
signed by the parties. In the case at hand, a simple deed appears to be sufficient.
Nevertheless, in order for such an act to have full probative value, it must meet some
conditions. First, although it is not required that it be typed, it must however be signed by
th,e contracting parties themselves, namely, you and your friend. Second, since it is a
bilateral contract, it must be written in duplicate, each party having one original in his
possession. Failing the satisfaction of these conditions, the contract is worth only a prima
facie evidence. Besides, because of friendship ties to you, judges may admit that there
was moral impossibility to have a written document. It is an exception to the primary
evidence requirement. This moral impossibility would allow your friend to show by all
means of proof that there exists a contract. In fact, in some cases, the judges have
admitted, under similar circumstances, moral impossibility in case of friendship ties.533 In
other cases, however, the judges have not admitted it.

We have so far studied the rules of evidence in civil matters. In commercial matters,
where there are no special rules governing evidence, the civil rules of evidence apply. But
where there are commercial rules of evidence, and should there be a conflict between
them and the civil rules of evidence, the commercial rules of evidence prevail. We go on
studying the rules of evidence governing commercial matters.

B. Rules of Evidence in Commercial Law.

The rules of evidence in civil law are rigid. The party must enter into commitment in full
knowledge of the facts, and pass an act by being informed precisely and unambiguously
thereof. On the other hand, the rules of evidence in commercial law are less formal, the
reason being that commercial law is a constantly changing field, and needs to adapt to
the fast paced business . A reason to see merchants applying customary rules to the deals
concluded between them. Notwithstanding the lack of formalism in matters of
commercial law, there are some instances where the law requires specific means of
proof, in this regard joining the formalism of civil law.

i. The Principle of Free Proof.

The basic principle governing commercial matters in Lebanon is the rule of free proof of
contracts, that is, the ability to provide proof of the existence and terms of a commercial
contract by all the means of proof provided for in the LCC.535 Acceptance or rejection of
such a proof is usually based on customary rules and the circumstances of the case at
hand. The judge here has full power and his assessment is not subject to the court of
cassation judicial review.536

We have mentioned above that civil law does not accept the rule of free proof when the
value of the contract exceeds LPB 500 000. The means of proof in such a case is limited to
primary evidence, namely, documentary evidence, in-court confession, and decisive oath.
To the contrary, the rule of evidence in commercial contracts is free proof whatever the
value of the contract is, whether the contract is commercial in substance or accessory, or
it is intended to prove the constitution or the dissolution of the contract.537 In all cases,
the judge cannot just rely on his own knowledge of a fact gained from other cases, or from
documents or any means of information, which have not been proven by the evidence
presented in court.

In civil law, there is a hierarchy among the means of proof;a documentary proof can only
be challenged by a documentary proof. However, in commercial law there is no such a
hierarchy. Every contacting party may challenge the documentary evidence submitted by
the opponent on a basis-free proof, by means of documentary evidence as well as
testimony or presumption. In commercial matters, all evidence is subject to judicial
evaluation. The judge may ignore documentary evidence and qualify presumptions for
example. The judge may also, contrary to the rule provided under Article 153 LCCP, base
his decision on free proof against or beyond the content of the instrument submitted, an
authentic act notwithstanding. It is also allowed to furnish evidence as to the inaccuracy of
legal presumption by means of testimony or commercial books, unless the presumption is
deemed irrebuttable, such as res judicata which the law gives full authority. Accordingly ,
all means of proof may be produced in commercial matters against the presumption of
payment resulting from the handover of the instrument to the debtor.538 The judge has full
power to admit or not to admit proof by testimony, as long as his decision is motivated.
The judge's decision in this regard is not subject to the court of cassation judicial
review.540

The means of proof employed in commercial law to obtain evidence of a legal act
are documents, testimony, presumptions, 541 commercial books, invoices,
correspondence, copy of a manuscript, confession, and oath. In addition, the courts
has deemed it possible to rely on certificates issued by the customs administration to
prove, for example, shipment of cargo moving from shipper to consignee, 542 and on
documents not issued by either party.
The authentic act is an instrument of evidence not often used in land trade except in
matters related to companies. All commercial companies, except joint-ventures, are
required by the law to be stated in writing.544

The act under private signature (or simple deed), that is to say a deed bearing only the
signature of the debtor, or those of both parties, but not that of the notary public,
requires in civil law compliance with formalities which are no longer required in
commercial matters, namely, that of the plurality of originals and that of "·good for".

The invoice is a detailed statement of the goods of a sale or lease indicating the price and
sometimes specifying other conditions, whether written or printed; it constitutes proof
for the benefit of the buyer or the tenant , but also provides evidence against the buyer
or the tenant, if he has received it and accepted it expressly or tacitly.

The production of a copy of an act does not dispense with the production of the
original, where the latter exists. Pursuant to Article 149 LCCP, if the original is lost, it
should be supplemented by an authentic or certified copy.

Correspondence is the mode most commonly used for the proof of ordinary
commercial contracts: it is the exchange of a missive letter or a telegram, each of which
may be used against the signature for the benefit of the addressee. The indications
contained in missive letters have the same value as those of an act under private
signature (private deed).547

Commercial books are also likely to be used as evidence of commercial contracts. As we

have mentioned above, the principle of free proof prevails in commercial matters.

Accordingly, _ the proof by a book of commerce, even regularly held, is never imposed on
the judges who can still dismiss it, provided that they motivate their decision to that
effect. The party, to whom the produced books do not provide sufficient proof, may
supplement it by all modes of proof, such as documentary evidence, testimony,
presumptions, or oath.

Although according to the text of Articles 20 LCC 549 traders must be allowed to produce as
evidence only their books which are regularly kept, Article 166 LCCP, based on the
principle of free proof in commercial matters, recognizes the judge's ability to draw
evidence in irregular books, within the meaning of the law, but not suspect ones, or in
optional books, provided that they are supplemented by other evidence.550 Still judges
may deem it admissible in court evidence drawn from irregular books only, without
requiring further evidence.551 This liberal solution may also be covered by the very broad
terms of Article 166 LCCP. Testimonial evidence is generally accepted as a means of proof
of commercial contracts.

Presumptions are admissible in commercial matters, except where

testimonial evidence is also excluded. The legal presumptions that can be invoked in
commercial matters are those of the commercial nature of acts ancillary to the
commercial enterprise, and those of the solidarity of debtors of a commercial
 obligation.552

Proof by confession or by oath is dealt with respectively under articles 210-217 to 235-
253 LCCP,553 are general provisions which can be applicable in commercial matters.

The principle of free proof also applies when commercial contracts are used as
constituent elements of a criminal offense.

The offense of abuse of trust, for example, assumes that the offender has
misappropriated a movable property given to him by virtue of one of the contracts listed
on a restrictive basis under Articles 670 and 671 LPC,554 such as depository or agency
contract. In such a case, the proof of such contracts is subject to the rule of free proof.

I. Exceptions to the Principle of Free Proof.

However, there are exceptions to the principle of free proof. The legislator has determined
the cases in which the rule of free proof is not applicable, be it partially or totally.

1. In commercial matters, as the case in civil law is, the judge shall not base his
judgment on his own information on the case.555 But he may decide to move to the
scene or to the location of the dispute and to make a personal disclosure at the scene
of the incident or at the location of dispute, thus basing his conviction on the results
that he might have derived from the disclosure.

2. Article 43 LCC requires that all contracts of commercial companies, other than joint
ventures, be proved in writings.556 Along this line of thought, the jurisprudence argues
that in the case of a company contract, one of the partners may not prove by
testimony against the contents of this contract, as the receipt of the fund by a person
other than the one designated by the contract to receive it.557 On the other hand, a
well-established jurisprudence allows the proof of commercial company by testimony
concerning the relations between the partners and the resolution of these relations in
the past because the written document that regulates the company contract and
determines all the relations of the parties is but a means of proof and not a
component of the basic contract.558 Lease and sale contracts for shipping, and land,
sea and air insurance contracts, are to be stated in writing. In this case, non.
conclusion of written contract does not lead to nullification of the contract, but to
the possibility of proving the contract only by confession or oath.

3. With regard to deposits and withdrawals, the law requires written document 559
containing specific information the absence of which makes the operation null and
void.

4. A contract, even if commercial, which object is the creation or transfer of a real right
must be in writing, on the basis of which the procedure of registration at the land
register would be completed.
5. In some instances, the same act can be commercial for one party and civil for the
other party. When a merchant buys from a farmer items, the act is deemed
commercial for the merchant and civil for the farmer. When the merchant sells the
items he bought to the consumer, the act is still commercial for the merchant and
civil for the consumer. Also, when an author submits his book to an editor, or an
artist signs a contract with a theatre director, the act is commercial for the editor or
director, but civil for the author or artist. In such cases, the non-merchant party can
apply the rule of free proof· against the merchant, while the merchant must refer to
the civil rules of evidence against the non-merchant party; the reason being that
civil law is the common law, i.e ., the general law applicable to all citizens.