Contracts in Civil Law: Types, Obligations, and Termination
EXCHANGE AGREEMENT
Under the Civil Code, a swap contract is one where each party agrees to convey property in exchange for something else. This contract involves a transfer of ownership.
Elements of Existence
- Consent of the parties
- The object of the exchange
Elements of Validity
- Absence of defects in the will
- Capacity of the contractors
GRANT AGREEMENT
A grant agreement is a contract where a donor transfers part or all of their assets to a donee, who accepts the transfer during the donor’s lifetime.
Personal Items
- Donor
- Donee
Purpose
- Transfer of property (partial or total)
Classification of Donation Contracts
- Free (upon acceptance)
- Bilateral (both parties can accept)
- Retroactive (in case of donee’s ingratitude)
- Present property
- Main (subsisting itself)
- Formal or consensual
- Instantaneous or successive
Types of Donations
- Pure: Instantaneous donation
- Conditional: Dependent on a future uncertain event
- Onerous: Involves obligations or charges on both sides
- Remuneratory: For services rendered to the donor
- Antenuptial: Made between a couple or by a third party
- Between spouses: Donations between spouses
- Simulated: Disguised as another type of contract
- Individual: Specific goods
- Universal: All goods
Obligations of the Donor
- Transfer ownership of the thing
- Respond to eviction
TRANSFER OF RIGHTS
This contract involves a creditor transferring rights against a debtor to another party (assignee). This is often referred to as a transfer of credit.
Elements
- Transferor (assignor)
- Transferee (assignee)
- Debtor
A lien can be involved, and the transfer can be a sale, a grant, or payment in kind.
Advantages for the Assignor
- Immediate payment for the credit
- Debt settlement
Advantages for the Assignee
- Profitable investment opportunity
The transfer of rights applies to real rights.
Extent of Assignment
The assignee receives the credit and its accessories, including the right to collect the debt.
Forms of Assignment
Usually by endorsement, notarized with two witnesses. Notification can be judicial or extrajudicial.
Warranty
The seller is responsible for the validity of the loan. The transferor is not liable for the debtor’s insolvency. Liability changes if the credit is resold.
Effects Against Third Parties
Effective against third parties upon registration in the Public Registry of Property and Commerce.
CIVIL SOCIETY
A civil society is a private legal entity formed by two or more persons for a lawful, predominantly economic purpose, through the provision of goods or services, without engaging in commercial speculation.
It can include industrial partners (contributing knowledge) and capital partners (contributing funds).
Requires registration in the Public Registry of Property and Commerce.
Constitutive Act
Must include partners’ names, nationality, company name (“civil society”), purpose, capital, and each member’s contribution.
Organization and Operation
Partner meetings, administrative bodies, and representation are required. The partners’ meeting is the supreme body.
Rights of Members
- Economic: Profit share, liquidation share, additional contributions
- Corporate: Voting, management positions, access to documents
Obligations of the Partners
- Compensation for eviction
- Responsibility for losses
- Accountability for capital increases
Dissolution of the Company
- Mutual consent
- Expiration of term
- Fulfillment of purpose
- Death or incapacity of partners with unlimited liability
- Death of industrial partner (if their industry was essential)
- Judicial decision
MUTUAL AGREEMENT OR LOAN
A mutual agreement is a contract where a mutuante transfers ownership of money or fungible things to a borrower, who agrees to return an equivalent amount.
Characteristics
- Transfer of ownership
- Main (subsisting itself)
- Bilateral
- Free (simple mutual) or expensive (with interest)
- Consensual (no formality required)
- Can be successive
Types of Mutual Agreements
- Civil
- Commercial
- With interest
- Simple/free
Mutuante’s Obligations
- Transfer ownership of the thing
- Guarantee against hidden defects and eviction
- Deliver the thing at the agreed place and time
Borrower’s Obligations
- Guarantee against hidden defects and eviction
- Return the equivalent amount of fungible things
- Deliver the same amount of money in legal tender (or equivalent national currency for foreign currency)
ANNUITY CONTRACTS
A random contract where a debtor agrees to make regular payments (pension) to a creditor for their lifetime, or another’s, in exchange for a sum of money or a thing.
TACIT RENEWAL
Continuation of a lease after its expiration due to the tenant’s continued use and the landlord’s lack of opposition.
SECURITY AGREEMENT
A personal contract where a surety is liable for a debtor’s obligation in case of default. The creditor can recover from the guarantor.
The basic elements are the agreement between the creditor and guarantor, and the guarantor’s subsidiary obligation.
Any obligation can be guaranteed.
COMODATO AGREEMENT
A contract where a lender grants free use of a non-expendable thing to a borrower, who agrees to return the same thing.
Features
- Conveys use
- Free
- Bilateral
- Consensual/real (consent is sufficient)
Essential Elements
- Free use of a non-expendable thing
- Obligation of restitution
Lender’s Obligations
- Grant free use
- Deliver the thing
- Reimburse extraordinary expenses
- Pay for damages due to defects
Borrower’s Obligations
- Keep with diligence
- Use as agreed
- Return the thing
- Pay ordinary expenses
Grounds for Termination
- Maturity
- Fulfillment of purpose
- Fulfillment of a condition
- Loss or impairment of the thing
- Lender’s will
- Borrower’s death
- Expropriation
MORTGAGE CONTRACT
A real contract establishing a real right over property to secure an obligation. In case of default, the property can be used for payment.
Features
- Collateral
- Real goods (not delivered to the creditor)
- Incidental (depends on the main contract)
- Granted in a public deed
Personal Items
- Guarantor (mortgagor)
- Mortgagee
Termination of Mortgage Agreement
- Payment of the principal obligation
- Cancellation of registration
- Destruction of property
- Prescription
- Creditor’s will
DEPOSITORY CONTRACT
A contract where a depositor gives possession of a movable thing to a depositary for safekeeping, who must return it upon demand.
COMODATO AGREEMENT (repeated section – removed)
MANDATE AGREEMENT
A contract where one party (agent) agrees to perform legal acts or services for another (principal).
Classes of Mandate
- Commercial
- General and special
- Judicial
Characterization
- Main or accessory
- Costly or free (exceptions exist)
- Representative or non-representative
Essential Elements
- Consent (express or implied)
- Purpose
- Form (not solemn)
- Capacity of the parties
Duties of the Agent
- Execute the mandate personally (with exceptions)
- Follow instructions
- Account for their actions
- Indemnify for damages caused by exceeding authority
Termination of Mandate Contract
- Renewal or waiver
- Death of principal or agent
- Expiration of the term
- Provisions of civil law
DEPOSIT AGREEMENT (repeated section – content merged)
A contract where a depositor gives possession of a movable thing to a depositary for safekeeping, who must return it upon demand. It is generally free and unilateral (though not strictly). The depositor delivers the thing, and the deposit can be extrajudicial. Essential elements include consent and the object of the deposit. Legality requires capacity of the parties and proper form. The depositary must safeguard and return the thing. The depositor must deliver the thing, pay compensation (if agreed), indemnify for preservation costs, and pay delivery costs.
Termination of Deposit Agreement
- Expiration of term
- Fulfillment of conditions
- Loss of the thing
- Confusion (depositor and depositary become the same person)
- Waiver
COMPROMISE AGREEMENT
A contract where parties make reciprocal concessions to end a present or prevent a future dispute, by defining their rights. It is bilateral, consensual, and expensive. It resolves litigation and can correct nullity in a previous contract.
PARTNERSHIP AGREEMENT
An agreement between two or more people for a common, lawful purpose (not predominantly economic), creating a separate legal entity.
COMPUTER CONTRACTS
Contracts related to computer hardware and software, including sales and service agreements.
Personal Elements
- Manufacturers
- Users (public/private entities or individuals)
CONTRACT TO PROVIDE SERVICES
A contract where one party provides a service to another for financial compensation. It is expensive, bilateral, and instantaneous.
WORKS CONTRACT TO FIXED PRICE
Also known as a contract of enterprise, industry, or works contract. One party (principal) pays another (contractor) to perform work on movable or immovable property, using their own materials and assuming the risk.
PORTERS AND RENTAL AGREEMENTS
A transport contract where a porter provides transportation services for people or things, assuming direct responsibility even if the transport is physically carried out by a subordinate.
Elements
- Shipper/customer
- Porter
- Consignor/consignee
ACCOMMODATION CONTRACT
A contract for providing shelter and assistance for a price. It is bilateral, onerous, commutative, and has a duration. It is related to the deposit contract, as hostel owners are responsible for guests’ belongings.
PARTNERSHIP AGREEMENT (repeated section – removed)
CONCLUSION
Contracts are legal acts creating, terminating, or modifying rights and obligations. They are present in everyday life, even if not always apparent (e.g., carrier contracts).