Recht Basics

General principles of contract law, specific contracts, company law

• legal capacity art 11
• The ability to create rights and obligations - capacity to act (art 12 et seq.CC): 18 years old (art 14 CC) and capable of judgement (art 16 CC)

Associations, Foundation and Company limited by shares

Partnership limited by shares, limited liability company, ccoperative.

Simple partnerships (art 530 et seq), general partnerships (art. 552 et seq.), limited partnership (ar. 594 et seq)

Partnerships are several people endowed with same right, subject of commonly held right and often have personal liability/ fixed stated capital.

Mandatory law: no deviation by way of agreement, must provision, can often be found in rent and employment law.

Optional provisions: parties can deviate from rules, should provision, default rule.

Art 2.

• useless exercise of legal rights
• crass disproportion between interests
• contradictory behaviour.

• The burden of proving the existence of an alleged fact lies on the person who derives right from that fact.

Legal relationship between an obligor and an obligee: obligor is obligated to perform, obligee has the right to demand performance. -> relative right.

Infringement of absolute rights, torts, unjust enrichment, agency without authority, other statutory provisions.

Breach of confidence and culpa in contrahendo

• Must act in good faith
• Must not mislead or trick the counterparty
• No obligation to conclude the contract!

Liability for damage - culpa in contrahendo if breaching party at fault

1. Non diclosure agreement
2. letter of intent -> the will to act, bind oneself and declare ones intent through explicit/implicit (quit work) communication. Must have entered recipients domain so recipient could have taken notice of declaration od acceptance.
3. memorandum of understanding
4. heads of agreement

Essential characteristics include parties &type of contract, performance & counterperformance.

Offer is

• binding (either limited. it is unlimited in the parties presence [art. 4CO] = to be accepted immediatly/ in the parties absence [art 5 CO] = to be accepted duly and promptly
• in general unchangable and irrevocable, except when declared ( art 7, para 1 CO), defined by law ( art 6a and 7 para 2 CO see sending price lists, catalogues etc) or due to specific circumstances (cleance seals, offering goodsto general public)

Must be directed towards conclusion of contract.

Non retracable expression of intent that must be received by offeror.

• Must be identical to the offer content seeing essential characteristics.
• differences about non essetial terms do not hinde rconclusion (art 2 CO)
• explicitly, implicity, but in general not by remaining silent, doing nothing (art. 6 CO)

(art 9CO)

withdrawal reaches recipient before or at same time as offer or acceptance itself, or it is communicated before recipient receives offer or acceptance.

Contract concluded timewise with receipt of acceptance. offer and acceptance have to be congruent.

1. actual will is congruent ( both want/meant to want the same)

2. if, applying principle of trust, expressions of intent of the parties are congruent.

-->no natural/ normative consent, parties are in dissent. No contract.

Open dissent: parties know they disagree

Hidden dissent: the parties falsely assume they are in agreement.

Confirmation of oral agreement - evidence of the contract.

Discrepancy between agreement and letter of confirmation:

objection against letter in reasonable amount of time (not needed if objection is related to essential term)

no objection against letter: assumed that letter is accurate, in commerce no proof of contrary oral agreement possible if recipient should have reacted.

principle freedom of form.

simple written form: written and signature of the party that commits itself (apprenticeship contract ( 13-15 CO)

qualified written form: simple plus extra element. (art. 505 para 1 CC) handwritten will

Public deed (salescontract of immovable property

1. contract is only valid when it complies with the form.
2. presumption of simple written form

For free revocation of agreement to use form ol (unless contract states otherwise)

Legal consequences

nullity (art 11 para 2 CO)

exception: abuse of right.

principle of freedom of content.

Barriers:

• Impossibility (actual, legal, economic)
• unlawful terms
• bonos mores and infringement of personality rights
• unfair advantage (art 21 CO)

legal consequences of a violation of content provisions (art 20 CO) - complete or partial nullity

Initial

• initial objective impossibility - co 20 I
• initial objective impossibility

- obligors fault - co 97 I

-both parties fault - co 97 I

-Nobody´s fault - co 119

-Obligee's fault - co 324 analogue

subsequent subjective and objective impossibility - see initial subjective.

art 21 CO

Requirements:

1. Clear discrepancy between performance and counterperformance

2. Contract must be concluded as a result of the weaker party’s economic or personal dire straits, carelessness or inexperience, and

3. Counterparty must know of the discrepancy

Legal Consequence: Injured party may declare within one year that he will not honor the contract; contract becomes unilaterally non-binding

• If the person declaring his will is making an error about the motive for his will to do something

• Generally not considered material (art. 24 para. 2 CO)

(art. 24 para. 1 sec. 4 CO)
Requirements:

1. Subjective materiality

2. Objective materiality

3. Recognizability for the counterparty

• Must be objectively and subjectively material
• Is assumed to be material in the cases of art. 24 para. 1 sec. 1-3 CO)

Requirements: 1. Act of deception 2. Intention to deceive 3. Causal link to the error

Right to contest:

• Only person who erred or was deceited

Declaration of contestation:

• Explicitly, implicitly

• Recommended: In writing

• Contract is being transformed

• Irrevocable

Contestation period:

• One year (relative forfeiture period, art. 31 para. 1 CO)

• Begins to run with discovery of error or fraud

• Absolute period: ten years after conclusion of the contract (art. 67 para. 1 CO)

No contestation, in case of ...:

• Ratification (art. 31 para. 1 CO)

• Pure calcuation error (Art. 24 Abs. 3 OR)

• Contract is unilaterally nonbinding, 

• Termination of the contract with retroactive effect

• Exception: Contracts with continuous obligations -> effects are limited to the future

• Restitution of the contractual performances: • Things: according to art. 641 para. 2 CC • Claims: according to art. 62 para. 1 CO

• Art. 26 CO: possible liability for damages of the party that acted in error  

• Direct agency: agent acts in the name of and on behalf of the principal

• Consequence: contract is concluded between the third party and the principal •

Indirect agency: agent acts in his own name, but (financially) on behalf of the principal

• Consequence: contract is concluded between agent and third party, but these rights and obligations are eventually attributed to the principal (art. 32 para. 3 CO)

• Internal power of attorney: the principal gives an agent the right to represent him vis-à-vis third parties

• External power of attorney: makes it explicitly or implicitly known to a third party that the agent may represent the principal

• Scope of the power of attorney: determined by the principal, can be curtailed, e.g. often only two persons can legally sign for a company: joint powers of attorney

• Procuration is a commercial power of attorney (art. 458 et seq. CO): The scope of this authority is fixed by law. Internal limits have no effects towards third parties acting in good faith.  

Reasons: #

• After a certain period of time or after the fulfillment of the deal or legal act for which the power of attorney was granted

• Revocation (art. 34 para. 1 CO, 465 para. 1 CO)

• Death, declaration of legal death following disappearance, loss of legal capacity or bankruptcy of either the person represented or the agent (art. 35 CO) 

Effect:

• The agent can no longer legally act on behalf of the principal

• Exceptions: o Protection of a third party’s good faith: art. 33 para. 3, art. 34 para. 3 CO o Protection of the agent’s good faith: art. 37 CO

• Principal can ratify a contract that his agent entered into without authorization (art. 38 CO)

…the right parties (art. 68 CO)

…the contractually agreed upon obligations

…at the right place (art. 74 CO)

…and at the right time (art. 75 CO