Commercial Law Obligations
© 2005 – 2008 Michal Černý Ph.D.
www.michalcerny.eu
Obligations
† Contractual obligations (obligatio ex
contracto)
† Liability obligations (obligatio ex
delicto)
Where are the contracts and other
obligations regulated?
† Civil Code (some provisions in part I
(consumer contracts), part VIII –
obligations (contractual), liability
obligations – part VII)
† Commercial Code – part 3 (obligations,
liability), some provisions are also in part 2
(business companies law)
† Other acts – Author Law Act, Act on
Securities …
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Which obligations are governed by
commercial law?
† Several groups of relations
† Contractual obligations and liability
obligations too
† Main borderline rules are in sections
261 and 262 ComC
† Borderline rules – which relations are
commercial and which are civil law
Relative commercial obligations
† Obligations concluded between
entepreneurs
† Related to their business activity
† it is known to both parties
† Typical contracts (many of them are
in 3rd pard of ComC)
† Example: Contract on Sale
Relative commercial obligations –
2nd type - government contracts
† Obligation concluded between 1)
entepreneur and 2) the state/region /
municipal office etc.
† If the purpose of such gov.contract is to
saturate public need
† Those contracts must be concluded within
special contractual procedure according to
Act 40/2004 Col. On Government contracts
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Absolute commercial obligations
† Obligations listed in section 261 § 3 –
several groups of obligations
† Relations between parties (doesn`t
matter who they are)
† Listed contracts
† Relations bewteen company and it
members / shareholders, organs etc.
† Valued realitons concerning securities
Combined obligations (with civil
element)
† Contracts which are in Civil Code only
† Those obligations are governed by
special sections (provisions) covering
that type of contract in Civil Code and
outside this by Commercial Code
† Conditions: Obligations concluded
between entepreneurs, related to
their business activity, it is known to
both parties
Facultative obligations
† Parties may agree (in written form) to
apply Commercial Code on their
relation
† Parties = whoever (physical, legal
persons)
† Protecting clauses from Civil Code
(and other acts and regulations) shall
apply anyway
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Insurance contract
† Insurance contract is never concluded
according to ComC
† Those relations are only civil
Contract of sale (section 409)
† Relative com obligation
† The seller undertakes to deliver to the
buyer a movable thing /the goods/
specified individually or at least in
kond and quantity, and to trasnfer to
the buyer the ownership title to such
thing, the buyer undertakes to pay
the purchase price
† Real estates can be sold by contract
governed by Civil Code only
† The Price – essential element, must
be specified at least the method of its
determination
† Contract of sale can be concluded in
oral form or implied form (real
acceptation)
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Contract on sale of an enterprise
† The seller – undertakes to pass over
to the buyer a certain enterprise and
to assign to him the ownership title
† The buyer – undertakes to assume
the abligations of the seller relating to
the enterprise and to pay the
purchase price
† Also part of an enterprise can be
soled
† Must be in written form
Contract on lease of an enterprise
† Must be in writing, both parties must
be entrepreneurs , the lessee must be
recorded in commercial register
† The lessee must have respective
licence to run business activity
(according to the scope of business
run in enterprise)
Essential elements
† The lessor undertakes to let his
enterprise to the lessee for the latter
to operate it independently and
manage it at his cost and risk and to
have benefits therefrom.
† The lessee have obligation to pay the
rent
† Contract may be concluded for
indefinite period or definite period
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Rights and duties
† Rights and duties are transfered to
the lessee and after termination of
contract those R/D are trasnfered
back to the lessor (including some
new obligations, some of them are
terminated and must be paid)
† Parties may agree on competition
clause. The lessor can be restricted
only in time of the contract (max 2
years), the lessee for time after
termination of cotract only
Contract for a work
† A contract for a work is governed in
sections 536 – 565 of the Commercial
Code.
† This contract is relative commercial
obligation. It is not labour law obligation.
† Basic difference: contract for a work =
commercial law obligation, price is paid
when the work is finished (something is
ready), employment contract = labour law
obligation, salary is paid for working (it
means for activity of the employee)
Essential elements, the price
† Under this contract the contractor
undertakes to carry out a specific
work for the client and the client
undertakes to pay him a price for its
performance.
† The work must be specified, also the
price (price can be agreed also by the
method of determining or parties can
also agree on conclusion without
specific price – then the client must
pay adequate price)
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Typical types of work
† The contract for work is a contract in
which the obligation contains also
the assembly , repair or modification
of a certain thing /including
constructing the building/ or the
materially expressed result of some
other activity.
Right and duties
† The law also governs the rights and
duties of the parties, the inspections
and control of the work, liability for
the defaults of the work and warranty
for the quality of the work.
† The law also stipulates binding
regime for the ownership title to work
if a new thing is being produced –
sections 542 – 545 of the ComC.
Mandate
† A mandate is a basic contractual type.
† Under the mandate the mandatary
undertakes to arrange for the mandant a
specific business matter.
† The mandatary acts on behalf of the
mandant and at the mandant´s expense.
† This activity is done through some legal
forms /to file a proposal, acceptaion of a
proposal etc./ or real acts /tiling the
consideration, acceptance of consideration/.
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Commission
† This a contract for value – the mandant
provides to the mandatary a commission,
unless gratuitous performance of
representative activity would be agreed.
† If the mandatory is an entrepreneur in
performance of representative activity /i.e.
e.g. agency trade/, legal fiction is in force
stipulated in section 566 of the ComC – the
commission is deemed to be agreed.
† This contract needn´t be in writing.
Result (liability), costs
† The manadatory is not liable for the result
of the activity. Adverse situation can be
stipulated in the contract, then the
specification of the activity is needed to
determine clearly performance or nonperformance of the mandatory´s duties.
† ComC presumes that necessary and
reasonable costs of the mandatory´s
activity are comprised in the commission, if
not otherwise stipulated by the parties or it
results from the nature of the costs.
Contract on commercial
representation
† contract under which the commercial
representative undertakes to engage in
long-term activity on behalf of the principal
aimed at the conclusion of specified
contracts or to negotiate and conclude
transactions in the name of the principal
and third parties.
† The transactions are – e.g. contract of sale,
agency contract etc. The contract can these
contracts with third parties specify even in
greater detail.
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† The commercial representative receives a
commission for performance of
representative activity.
† This contract must be in writing . A person
stated in law cannot be a commercial
representative – then e.g. statutory organ,
liquidator, trustee in bankruptcy.
† The contract made in such a way is invalid.
Elements
† The contract on commercial
representation is concluded for fixedtime period which is longer than
agency contract.
† The activity of commercial
representative is specified materially
and territorially as well.
† This contract is made principally with
the specification of a territory.
The object of obligation
† The object of the obligations undertaken by
the commercial representative is to find
parties interested in concluding such
commercial transactions as are specified in
the contract.
† In the framework of commercial
representation the commercial
representative can perform legal acts in
the name of the principal -e.g. to conclude
specific contracts – but only in the case he
is authorized by giving a power of attorney.
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† The rights and duties are governed reasonably
by the provisions on the mandate.
† The commercial representative is obliged to
conclude particular transactions only on such
commercial terms as are set by the principal.
† The commercial representative shall carry out
his activity with professional care, he is under
duty to follow the instructions of the principal
and to heed his interests. The commercial
representative should suggest to make
contracts only with such persons who are
expected to perform their obligations
† The commercial representative shall inform
the principal of the development in the
market - detailed information, especially
then terms and content of particular
statements should be prescribed in the
contract.
† The commercial representative must assist
in settling disputes resulting from
transaction made under provision of section
656 /e.g. solving th warranty claims/.
Commission
† The commercial representative is entitled to
an agreed commission.
† If the amount of commission is not
stipulated in the contract, then he is
entitled to the commission customarily paid
for comparable commercial representation.
† Subsidiarily the entitlement to the
commission arises when the principal has
executed the transaction with third party
and the obligations have been performed
/mostly the payment for goods was done/.
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Credit contract
† The creditor undertakes that at the
demand of the debtor he will provide
a certain sum of money for
consideration.
† The debtor udertakes to return the
means and to pay fee for the service.
Who can provide the credit?
† Provider of the means could be whoever,
but only the bank or saving credit cooperative can provide the credits
continuously.
† The amount of the fee is agreed in the
contract, otherwise the debtor is obliged to
pay customary sum at the time of
conclusion the contract in the place of his
seat. The interest rate is often agreed in
contract.
Current account contract
† A bank opens a current account in a certain
currency for an account holder from a
certain date.
† A current account is used both for receipt of
cash deposits and payments from others
and for effecting payments from this
account and cash withdrawals.
† The bank enables the client the
participation in non-cash bank transfer.
The client receives the interest in agreed
amount. The contract must be in writing.
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Disposal – acount, money
† Only the account holder can dispose of the
account and further a person authorized by
power of attorney in notarial deed.
† Disposal of the financial means in the
account is then on the basis of the current
account contract enabled to the following
persons or groups of persons: 1) the
account holder, 2) a person authorized to
disposal of the account by the power of
attorney in notarial deed, 3) statutory
representative, 4) a person stated in the
contract authorized to restricted type of
disposal of means, which is given in
signature card or determined otherwise.
Industrial property licence contract
† Special contractual type which is
governed by the Commercial Code in
section 508. It is a relative
commercial obligation.
† For copyright there is a special
contractual type governed in Act
No.121/2000.
Which rights?
† intangible industrial rights – e.g.
trademarks, rights protected by
patents, for applied designs,
industrial designs, topography of
semi-conductor products, new variety
of plants and breeds of animals.
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Assets not specifically protected
† For intangible assets which are not
protected by the law – e.g. know-how
this contractual type is applied
analogously on the basis of the
agreement of the parties on the
content of the obligation and
determination of the provisions of
the law.
Essential elements
† obligatorily in writing form
† essential elements are the
determination of the industrial right
in which the right to use is granted,
the determination of time, the
territory and the determination of the
amount of consideration. The
specification of the parties is implied.
When is contract concluded and
when has it effectivness?
† The contract itself is valid from its
conclusion /the signature of the
licensor and the licensee/, its
effectiveness becomes in practice
much later – by the register in
respective register of industrial rights.
The same situation is in the case of
trademarks, patents on a invention
etc.
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