FIRST PART

OBLIGATIONS OR PERSONAL RIGHTS

BOOK I

OBLIGATIONS GENERALLY

Chapter I Sources of Obligations

Section I Contracts

1. Elements of Contracts

Consent

Article 89

A contract is created, subject to any special formalities that may be required by law for its conclusion, from the moment that two persons have exchanged two concordant intentions.

Article 90

An intention may be declared verbally, in writing, by signs in general use, and also by such conduct as, in the circumstances of the case, leaves no doubt as to its true meaning.

A declaration of intention may be implied when neither the law nor the parties require it to be expressed.

Article 91

A declaration of intention becomes effective from the time that it comes to the knowledge of the person for whom it was intended, who, subject to proof to the contrary, shall be deemed to have knowledge of the declaration of intention from the time that it reaches him.

Article 92

If the person who declared the intention dies or becomes legally incapable before the declaration of intention takes effect, the declaration of intention shall not be less effective at the time it comes to the knowledge of the person for whom it was intended, unless the contrary is shown by the declaration of intention or by the nature of the transaction.

Article 93

When a time limit is fixed for acceptance, the person who makes the offer is bound to maintain his offer until the expiration of the time limit.

The time limit may result from the circumstances or from the nature of the transaction.

Article 94

If at the time a contract is being framed, an offer is made without a time limit being fixed for acceptance, the offeror is released from his offer if it is not accepted forthwith. This also applies, if the offer is made by one person to another person by telephone or by any other similar means.

A contract is concluded, however, even if acceptance is not immediate, when, during the interval between offer and acceptance, there is nothing to indicate that the offeror has withdrawn his offer and the declaration of acceptance is made before the end of the meeting at which the contract was being framed.

Article 95

When the parties have agreed on all the essential points of a contract and have left certain details to be agreed at a later date without stipulating that failing agreement on these details, the contract shall not be concluded, the contract is deemed to have been concluded, and the points of detail will, in the event of dispute, be decided by the court according to the nature of the transaction, to the provisions of the law and to custom and equity.

Article 96

An acceptance that goes beyond the offer, or that is accompanied by a restriction or modification, is deemed to be a rejection comprising a new offer.

Article 97

In the absence of agreement or a provision of the law to the contrary, a contract between persons who are not present at the time is deemed to have been concluded at the place where and at the time when the offeror became aware of the acceptance.

The offeror is deemed to have had knowledge of the acceptance at the place and at the time the acceptance reached him.

Article 98

In the case in which an offeror could not, by reason of the nature of the transaction, in accordance with commercial usage, or on account of other circumstances, have anticipated a formal acceptance, the contract is deemed to have been concluded, if the offer is not refused within a reasonable time.

Failure to reply is equivalent to acceptance when the offer relates to dealings already existing between the parties, or when the offer is solely in the interests of the offeree.

Article 99

A contract of sale by public auction is only concluded when the final bid is accepted. A bid is nullified from the moment a higher bid is made, even if the higher bid is void.

Article 100

Acceptance in the case of a contract of adhesion is confined to adhesion to standard conditions which are drawn up by the offeror and which are not subject to discussion.

Article 101

An agreement by which the two parties, or one of them, promise to enter into a particular contract in the future, is only binding if all the essential points of the contract envisaged and the time when the contract should be concluded are stated.

When the law provides that a contract shall not be valid unless a certain form is observed, this form must also be observed in any agreement embodying a promise to enter into such a contract.

Article 102

If a party, who has promised to enter into a contract, refuses to do so, and the other party takes legal proceedings against him to enforce the promise, and the conditions required for the conclusion of the contract, especially those as to the form, exist, the judgment will, upon becoming final, replace the contract.

Article 103

In the absence of a clause to the contrary in the contract, the payment of earnest money at the time the contract is concluded indicates that either party may withdraw from the contract.

The person who has paid the earnest money and withdrawn from the contract forfeits the earnest money, and the person who has received earnest money and withdraws from the contract shall repay double the amount of the earnest money, even if the withdrawal does not cause any prejudice.

Article 104

When a contract is entered into by a representative, such representative and not the principal will be the person who will be looked to in examining the question of vices of consent, or the effects attached to the fact that the contracting party knew or should necessarily have been aware of certain special circumstances.

When, however, the representative is a mandatory who acted in accordance with the principal's precise instructions, the principal cannot plead the ignorance of his representative of circumstances which the principal knew or should have necessarily known.

Article 105

When a contract is concluded by a representative within the limits of his authority in the name of his principal, the rights and obligations resulting therefrom will be in favor of and binding upon the principal.

Article 106

When a contracting party did not disclose at the time of the conclusion of a contract that he is acting as a representative, the contract only operates in favor of or binds the principal, if the third party with whom the representative contracted should necessarily have known that the contracting party was the representative of the principal, or if it was of no importance to the third party whether he entered into the transaction with the principal or with the representative.

Article 107

If a representative and a third party with whom the representative concluded a contract were both unaware at the time the contract was concluded of the extinction of the representation, the effects of the contract concluded by the representative, whether they involve rights or obligations, revert to the principal or his successor in title.

Article 108

Except where otherwise provided by law or by commercial rules, no one may contract with himself in the name of the person he represents, either for his own benefit or for that of a third party, without the authority of his principal, who, nevertheless, in such a case, may ratify the contract.

Article 109

Every person, who has not been declared to be under total or partial legal incapacity, has the legal capacity to conclude a contract.

Article 110

A minor lacking discretion has not the legal capacity to dispose of his property. All his acts in law are deemed to be void.

Article 111

Contracts and other dispositions of property entered into by a minor possessing discretion are valid when wholly to his advantage and void when wholly to his disadvantage.

Dispositions of property which may be, at the same time, profitable and detrimental, may be annulled, if this is in the interest of the minor.

Annulment cannot be claimed if the act is ratified by the minor upon attaining his majority or by his guardian or by the court, as the case may be, in accordance with the law.

Article 112

A minor possessing discretion, who has attained the age of eighteen years and has been authorized to take possession of his property in order to manage it, or has taken possession of his property by virtue of law, may validly perform acts of management within the limits of the law.

Article 113

The courts shall pronounce or raise interdictions on all persons suffering from insanity, mental derangement or imbecility, and prodigals, in accordance with the rules and the procedure prescribed by law.

Article 114

An act entered into by a person suffering from insanity or mental derangement after the registration of the sentence of interdiction is null.

An act done before the registration of the sentence of interdiction is null only if the state of insanity or derangement was a matter of common notoriety at the time the contract was entered into or if the other party had knowledge thereof.

Article 115

An act entered into by a person placed under interdiction for imbecility or prodigality after the registration of the sentence of interdiction, will be governed by the provisions regulating acts performed by minors possessing discretion.

An act entered into before the registration of the sentence of interdiction shall only be void or voidable if unfair advantage has been taken of the condition of the person under interdiction or if there has been fraudulent collision.

Article 116

The constitution of a wakf, or the execution of a will by a person placed under interdiction for prodigality or for imbecility is valid, if the interdicted person has been duly authorized by the court.

Acts of management carried out by a person placed under interdiction for prodigality, who has been authorized to take possession of his property, are valid within the limits provided by the law.

Article 117

If a person is deaf and dumb, deaf and blind or blind and dumb, and cannot, by reason of his infirmity, express his will, the court may appoint a judicial adviser to assist him in connection with such acts as may be necessary in his interests.

An act for which the assistance of a judicial adviser has been ordered is voidable, if the act is performed by the person provided with a judicial adviser without the assistance of such adviser, after the registration of the decision providing for such assistance.

Article 118

An act by a natural guardian, a legal guardian or a curator is valid within the limits provided by law.

Article 119

A person under legal incapacity, may demand the avoidance of the contract, subject, however, to his liability to payment of damages if he has employed fraudulent methods to conceal his legal incapacity.

Article 120

A party to a contract may demand the avoidance of the contract if he committed an essential mistake, if the other party committed the same mistake or had knowledge thereof, or could have easily detected the mistake.

Article 121

A mistake is an essential mistake when its gravity is of such a degree that, if it had not been committed, the party who was mistaken, would not have concluded the contract.

The mistake is deemed to be essential more particularly:

a) when it has a bearing on the quality of the thing, which the parties have considered essential or which must be deemed essential, taking into consideration the circumstances surrounding the contract and the good faith that should prevail in business relationships.

b) when it has a bearing on the identity or on one of the qualities of the person with whom the contract is entered into, if this identity or this quality was the principal factor in the conclusion of the contract.

Article 122

In the absence of a provision of the law to the contrary, a mistake in law entails the voidability of the contract, if the mistake fulfills the elements of a mistake of fact in accordance with the two preceding articles.

Article 123

Mere mistakes of calculation or clerical mistakes do not affect the validity of a contract; these errors must, however, be corrected.

Article 124

A party who has committed a mistake cannot take advantage of the mistake in a manner contrary to the principles of good faith.

Such a party, moreover, remains bound by the contract, which he intended to conclude, if the other party shows that he is prepared to perform the contract.

Article 125

A contract may be declared void on the grounds of fraudulent misrepresentation, when the artifices practiced by one of the parties, or by his representative are of such gravity that, but for them, the other party would not have concluded the contract.

Intentional silence on the part of one of the parties as to a fact or as to the accompanying circumstances constitutes fraudulent misrepresentation if it can be shown that the contract would not have been concluded by the other party had he had knowledge thereof.

Article 126

A party who is the victim of fraudulent misrepresentation by a third party can only demand the avoidance of the contract, if it is established that the other contracting party was aware of, or should necessarily have been aware of the fraudulent misrepresentation.

Article 127

A contract is voidable as a result of duress, if one of the parties has contracted under the stress of justifiable fear unlawfully instilled in him by the other party.

Fear is deemed to be justified when the party who invokes it has been led to believe, in view of the circumstances, that a serious and imminent danger to life, limb, honor or property threatened him or others.

In appreciating the extent of duress, the sex, age, social position and the condition of health of the victim should be taken into consideration, as well as any other circumstance that might have aggravated the duress.

Article 128

When the duress is practiced by a person other than one of the contracting parties, the victim cannot demand the avoidance of the contract, unless it is established that the other contracting party had, or should necessarily have had, knowledge thereof.

Article 129

If the obligations of one of the contracting parties are out of all proportion to the advantages that he obtains from the contract or to the obligations of the other contracting party, and it is established that the party who has suffered the prejudice entered into the contract only as a result of the other party exploiting his obvious levity of character or his unbridled passion, the judge may, at the request of the party so prejudiced, annul the contract or reduce the obligations of such party.

Proceedings instituted on such grounds shall be barred unless commenced within one year from the date of the contract.

In a contract entered into for valuable consideration, the other party may avoid annulment proceedings by making such an offer as the judge may consider adequate compensation to cover the lesion.

Article 130

The preceding article shall apply subject to special provisions of the law relating to lesion in certain contracts, and to the provisions of the law as regards rates of interest.

Object

Article 131

Things that may happen in the future may be the object of an obligation.

An agreement with regard to the succession of a living person is void, even if he consents to such an agreement, except in cases provided for by law.

Article 132

If the object of an obligation is something impossible in itself, the contract is void.

Article 133

When the object of an obligation is not certain as to its nature, it must at least be determinate as to its kind and quantity, as otherwise the contract is void.

The object of an obligation may, however, only be determinate as to kind, if the contract provides a method of ascertaining the quantity. If there is no agreement as to the degree of quality and the quality cannot be ascertained by usage or by any other circumstances, the debtor must supply an article of average quality.

Article 134

When the object of an obligation is a sum of money, the debtor is bound only to the extent of the actual figure of the sum of money stated in the contract, whatever be the increase or decrease in the value of such money at the date of payment.

Article 135

A contract is void if its object is contrary to public policy or morality.

Consideration

Article 136

A contract is void when an obligation is assumed without consideration or for a consideration contrary to public policy or morality.

Article 137

An obligation is deemed to have lawful consideration, even if such consideration is not expressed in the contract, unless the contrary is proved.

The consideration expressed in the contract is deemed to be the true consideration until evidence to the contrary is produced. Upon evidence being produced that the consideration is feigned, the onus falls on the person who maintains that the obligation has another lawful consideration of proving his contention.

Nullity

Article 138

When the law recognizes the right of one of the contracting parties to procure the avoidance of the contract, the other party cannot avail himself of this right.

Article 139

The right to procure avoidance of the contract is extinguished by an express or implied ratification of the contract.

Ratification is retroactive to the date of the contract, without prejudice to the rights of third parties.

Article 140

The right to procure the avoidance of a contract is prescribed, if not invoked within three years.

This period runs, in case of legal incapacity, from the date of the cessation of such incapacity; in the case of mistake or fraudulent misrepresentation, from the date the mistake or misrepresentation is discovered; in the case of duress, from the date it has ceased. In no case can avoidance be claimed as a result of mistake, fraudulent representation or duress, when fifteen years have elapsed from the date of the conclusion of the contract.

Article 141

When a contract is void, its nullity may be invoked by every person having an interest in the contract and such nullity may also be ordered by the court on its own initiative. Nullity cannot disappear by ratification of the contract.

Nullity proceedings are prescribed after fifteen years from the date of the conclusion of the contract.

Article 142

When a contract is void or annulled, the parties are reinstated in their position prior to the contract. If such reinstatement is impossible, damages equivalent to the loss may be awarded.

When, however, a contract concluded by a person without legal capacity is annulled by reason of his lack of capacity, he shall only be liable to refund such profits as he derived from the performance of the contract.

Article 143

When part of a contract is void or voidable, that part alone will be annulled, unless it is established that the contract would not have been entered into without such a part, in which case the contract will be void as a whole.


Article 144

When a void or voidable contract contains the elements of another contract, the contract will be deemed to be valid to the extent of the other contract, if it appears that the parties intended to conclude such another contract.

2. The Effects of a Contract

Article 145

Subject to the rules relating to successions, the effects of a contract apply to the parties and to their universal successors in title, unless it follows from the contract, from the nature of the transaction or from a provision of the law, that the effects of the contract do not pass to the universal successors in title of a party.

Article 146

Obligations and personal rights created by contracts relating to property that has subsequently been transferred to particular successors in title are transferred to such particular successors in title together with the property, when such obligations and rights constitute essential elements of the property and the particular successors in title had knowledge at the time of the transfer of the property to them.

Article 147

The contract makes the law of the parties. It can be revoked or altered only by mutual consent of the parties or for reasons provided for by law.

When, however, as a result of exceptional and unpredictable events of a general character, the performance of the contractual obligation, without becoming impossible, becomes excessively onerous in such way as to threaten the debtor with exorbitant loss, the judge may according to the circumstances, and after taking into consideration the interests of both parties, reduce to reasonable limits, the obligation that has become excessive. Any agreement to the contrary is void.

Article 148

A contract must be performed in accordance with its contents and in compliance with the requirements of good faith.

A contract binds the contracting party not only as regards its expressed conditions, but also as regards everything which, according to law, usage and equity, is deemed, in view of the nature of the obligation, to be a necessary sequel to the contract.

Article 149

When a contract of adhesion contains leonine conditions, the judge may modify these conditions or relieve the adhering party of the obligation to perform these conditions in accordance with the principles of equity. Any agreement to the contrary is void.



Article 150

When the wording of a contract is clear, it cannot be deviated from in order to ascertain by means of interpretation the intention of the parties.

When a contract has to be construed, it is necessary to ascertain the common intention of the parties and to go beyond the literal meaning of the words, taking into account the nature of the transaction as well as that loyalty and confidence which should exist between the parties in accordance with commercial usage.

Article 151

In cases of doubt the construction shall be in favor of the debtor.

The construction, however, of obscure clauses in a contract of adhesion must not be detrimental to the adhering party.

Article 152

A contract does not create obligations binding upon third parties, but may create rights in their favor.

Article 153

A person who binds himself to procure the performance of an obligation by a third party, does not in so doing bind the third party. If the third party refuses to perform the obligation, the person who bound himself to obtain such performance will be liable to indemnify the other contracting party by himself performing the obligation, the performance of which he undertook to procure.

In the event of the third party consenting to perform the obligation, his consent is effective only from the time that it is given, unless it is indicated expressly or by implication that the consent is retroactive as from the date of agreement between the contracting parties.

Article 154

A person may by a contract in his own name stipulate that an obligation shall be performed for the benefit of a third party, when he has a personal interest, material or moral, in the performance of such an obligation.

As a result of such a stipulation and in the absence of an agreement to the contrary, the third party beneficiary acquires a direct right against the person who undertook to perform the obligation, and may call upon him to do so. The person who gave the undertaking may set up against the beneficiary the defenses arising out of the contract.

The stipulation may also demand the performance of the obligation in favor of the beneficiary, unless it appears from the contract that performance may only be demanded by the beneficiary.

Article 155

The stipulator himself, but not his creditors or heirs, may revoke the stipulation for a third party, provided that the revocation is made before the beneficiary advises the debtor or the stipulator of his wish to have the benefit of the stipulation, and that the revocation is not contrary to the spirit of the contract.

In the absence of any express or implied agreement to the contrary, the revocation does not liberate the debtor vis-a-vis the stipulator. The stipulator may substitute a new beneficiary in the place of the former beneficiary, or may retain for himself the benefit of the stipulation.

Article 156

A stipulation in favor of a third party may be made in favor of future persons or institutions, and also in favor of persons or institutions who are not identified at the date of the contract, provided that these persons or institutions can be identified at the date when the effects of the contract come into operation in accordance with the stipulation.

3. Dissolution of Contract

Article 157

In bilateral contracts (contrats synallagmatiques) if one of the parties does not perform his obligation, the other party may, after serving a formal summons on the debtor, demand the performance of the contract or its rescission, with damages, if due, in either case.

The judge may grant additional time to the debtor, if it is necessary as a result of the circumstances. The judge may also reject an application for rescission when the part of the contract which the debtor has failed to perform is of little importance in comparison with the obligation in its entirety.

Article 158

The parties may agree that in case of non-performance of the obligations flowing from the contract, the contract will be deemed to have been rescinded ipso facto without a court order. Such an agreement does not release the parties from the obligation of serving a formal summons, unless the parties expressly agree that such a summons will be dispensed with.

Article 159

When an obligation arising out of a bilateral contract is extinguished by reason of impossibility of performance, correlative obligations are also extinguished and the contract is rescinded ipso facto.

Article 160

When a contract is rescinded, the parties are reinstated in their former position. If reinstatement is impossible, the court may award damages.

Article 161

When, in the case of bilateral contract, correlative obligations are due for performance, either of the contracting parties may abstain from the performance of his obligation, if the other party does not perform his obligation.