KRG 120
Commercial Law
Contents
PART 3: AGENCY.............................................................................................................. 3
Chapter 10: Introduction to the law of agency ........................................................... 3
1. Introduction and basic concepts .......................................................................... 3
2. Act of Agency ......................................................................................................... 3
3. Authority ................................................................................................................... 4
Chapter 11: Relationship between parties to agency ................................................ 8
1. Relationship between principal and agent .......................................................... 8
2. Miscellaneous aspects of tripartite relationship .................................................... 9
Chapter 12: Special types of principals and agents .................................................. 11
1. Special types of principals .................................................................................... 11
2. Special types of agents ......................................................................................... 11
PART 4: PURCHASE AND SALE ....................................................................................... 15
Chapter 13: General Introduction to the law of purchase and sale ........................ 15
1. Introduction ............................................................................................................ 15
2. Essentialia of the contract of Sale ........................................................................ 16
3. Formalities ............................................................................................................... 19
Chapter 14: Duties of the seller .................................................................................... 21
1. Safe-keeping of object sold ................................................................................. 21
2. Passing of ownership ............................................................................................. 22
3. Warranty against eviction ..................................................................................... 24
4. Warranty against latent defects .......................................................................... 26
Chapter 15: Duties of the buyer................................................................................... 29
1. Payment of purchase price .................................................................................. 29
2. Receipt of thing sold ............................................................................................. 29
3. Miscellaneous duties ............................................................................................. 29
Part 5: Letting and Hiring .............................................................................................. 30
Chapter 16: Formation of contract of lease ............................................................... 30
1. Introduction ............................................................................................................ 30
2. Definitions ............................................................................................................... 31
3. General requirements for conclusion of lease .................................................... 32
4. Essentialia of contract of lease............................................................................. 33
5. Incidentalia of contract of lease.......................................................................... 33
1
,Chapter 17: Duties of lessor and lessee....................................................................... 34
1. Duties of lessor ........................................................................................................ 34
2. Duties of lessee ...................................................................................................... 36
Chapter 18: Miscellaneous aspects of law of lease................................................... 39
1. Sub-lease, Cession, Delegation and Assignment ............................................... 39
2. Termination of lease .............................................................................................. 39
PART 8 – SECURITY.......................................................................................................... 42
Chapter 27 General Introduction and Suretyship ...................................................... 42
1. Security ................................................................................................................... 42
2. Suretyships .............................................................................................................. 42
Chapter 28: Mortgage, Pledge and Cession in Security: .......................................... 46
1. Introduction ............................................................................................................ 46
2. General Characteristics and requirements ......................................................... 46
3. Pledge .................................................................................................................... 47
4. Mortgage ............................................................................................................... 49
Chapter 29: Hypothecs and Liens ............................................................................... 50
1. Introduction ............................................................................................................ 50
2. Tacit hypothecs ..................................................................................................... 50
3. Liens ........................................................................................................................ 50
4. Execution and hypothecs by order of court ....................................................... 52
Business Law text book ................................................................................................. 53
Chapter 12: General Introduction to credit agreements .......................................... 53
1. Introduction ............................................................................................................ 53
2. Parties ..................................................................................................................... 53
3. Field of application of national credit act .......................................................... 53
4. Consumer credit institutions .................................................................................. 55
Chapter 13: Rights and duties of parties ..................................................................... 56
Chapter 14: Alteration and termination of credit agreements, repayment, debt
enforcement, dispute settlement and miscellaneous matters ................................. 58
1. Rescission and termination of credit agreements .............................................. 58
2. Repayment and debt enforcement .................................................................... 58
3. Dispute settlement other than debt enforcement ............................................. 59
2
,PART 3: AGENCY
Chapter 10: Introduction to the law of agency
1. INTRODUCTION AND BASIC CONCEPTS
Agency Also called representation
Legal phenomenon where authorized person (agent)
performs juristic act on behalf of another (principal)
Occurs in circumstances
o where inconvenient for principal to act in person
o where principal is incapable of concluding own
contracts
Examples:
o Natural person acting on behalf of company (juristic
person)
o Curators/ guardians act on behalf of mentally
incapacitated persons/ infants/ minors
o Estate agents
Tripartite relationship between
o Principal
o Agent
o 3rd party
To be an agent needs to have proper permission and act
within its confines
Authority can originate:
o via contract (mandate/ employment contract)
o by operation of law
o ratification
o estoppel
Agent will not be a party to legal relationship
Definitions Agent:
person who has authority to represent another
Principal:
person who authorizes someone else to act on his behalf
will acquire rights/ duties under the act performed on his
behalf
Authority:
Power of consent
given to agent
to act in a way that binds the principal
2. ACT OF AGENCY
Act Refers to juristic act that agent performs on behalf of principal
Legal consequences will be attributed to principal and not
agent
Provided agent was properly authorized
and to do so within confines of authority granted
3
, In concluding a contract:
o All requirements for contractual liability must be fulfilled
by agent
Requirements
o Consensus
o Contractual capacity
o Contract must be legal
o Performance must be possible
o Formalities must be fulfilled
Acts that Where act is of personal nature
must be Marriage
performed If there are statutory rules requiring someone to perform the
by act himself
principal in
person
3. AUTHORITY
General Agent might incur personal liability if:
o He did not have proper authority
o He acted outside of his authority
Sources Contractual authority:
Can be granted:
o Orally
o In writing
Usually takes form of mandate
1. The mandator instructs the mandatary to do something on his
behalf (offer)
2. which the agent can then accept/ reject
3. Once he accepts, there is consensus
4. And thus, necessary authority
5. Naturalia will also be applicable
If one party does not have contractual capacity
agent’s authority cannot be granted via authority
but can be established by operation of law
Employment contract:
Agent is employee
Principal is employer
Normal employee acts merely in his capacity as employee
If agent is not subject to control of employer, but can act
independently, he is an agent/ not employee
Ratification:
Express/ tacit approval after agent already acted
principal gives permission after the act was performed validly
Juristic act will be full legal force
Will bind the principal to its terms (from date when agent
performed act) with retrospective effect
4
Commercial Law
Contents
PART 3: AGENCY.............................................................................................................. 3
Chapter 10: Introduction to the law of agency ........................................................... 3
1. Introduction and basic concepts .......................................................................... 3
2. Act of Agency ......................................................................................................... 3
3. Authority ................................................................................................................... 4
Chapter 11: Relationship between parties to agency ................................................ 8
1. Relationship between principal and agent .......................................................... 8
2. Miscellaneous aspects of tripartite relationship .................................................... 9
Chapter 12: Special types of principals and agents .................................................. 11
1. Special types of principals .................................................................................... 11
2. Special types of agents ......................................................................................... 11
PART 4: PURCHASE AND SALE ....................................................................................... 15
Chapter 13: General Introduction to the law of purchase and sale ........................ 15
1. Introduction ............................................................................................................ 15
2. Essentialia of the contract of Sale ........................................................................ 16
3. Formalities ............................................................................................................... 19
Chapter 14: Duties of the seller .................................................................................... 21
1. Safe-keeping of object sold ................................................................................. 21
2. Passing of ownership ............................................................................................. 22
3. Warranty against eviction ..................................................................................... 24
4. Warranty against latent defects .......................................................................... 26
Chapter 15: Duties of the buyer................................................................................... 29
1. Payment of purchase price .................................................................................. 29
2. Receipt of thing sold ............................................................................................. 29
3. Miscellaneous duties ............................................................................................. 29
Part 5: Letting and Hiring .............................................................................................. 30
Chapter 16: Formation of contract of lease ............................................................... 30
1. Introduction ............................................................................................................ 30
2. Definitions ............................................................................................................... 31
3. General requirements for conclusion of lease .................................................... 32
4. Essentialia of contract of lease............................................................................. 33
5. Incidentalia of contract of lease.......................................................................... 33
1
,Chapter 17: Duties of lessor and lessee....................................................................... 34
1. Duties of lessor ........................................................................................................ 34
2. Duties of lessee ...................................................................................................... 36
Chapter 18: Miscellaneous aspects of law of lease................................................... 39
1. Sub-lease, Cession, Delegation and Assignment ............................................... 39
2. Termination of lease .............................................................................................. 39
PART 8 – SECURITY.......................................................................................................... 42
Chapter 27 General Introduction and Suretyship ...................................................... 42
1. Security ................................................................................................................... 42
2. Suretyships .............................................................................................................. 42
Chapter 28: Mortgage, Pledge and Cession in Security: .......................................... 46
1. Introduction ............................................................................................................ 46
2. General Characteristics and requirements ......................................................... 46
3. Pledge .................................................................................................................... 47
4. Mortgage ............................................................................................................... 49
Chapter 29: Hypothecs and Liens ............................................................................... 50
1. Introduction ............................................................................................................ 50
2. Tacit hypothecs ..................................................................................................... 50
3. Liens ........................................................................................................................ 50
4. Execution and hypothecs by order of court ....................................................... 52
Business Law text book ................................................................................................. 53
Chapter 12: General Introduction to credit agreements .......................................... 53
1. Introduction ............................................................................................................ 53
2. Parties ..................................................................................................................... 53
3. Field of application of national credit act .......................................................... 53
4. Consumer credit institutions .................................................................................. 55
Chapter 13: Rights and duties of parties ..................................................................... 56
Chapter 14: Alteration and termination of credit agreements, repayment, debt
enforcement, dispute settlement and miscellaneous matters ................................. 58
1. Rescission and termination of credit agreements .............................................. 58
2. Repayment and debt enforcement .................................................................... 58
3. Dispute settlement other than debt enforcement ............................................. 59
2
,PART 3: AGENCY
Chapter 10: Introduction to the law of agency
1. INTRODUCTION AND BASIC CONCEPTS
Agency Also called representation
Legal phenomenon where authorized person (agent)
performs juristic act on behalf of another (principal)
Occurs in circumstances
o where inconvenient for principal to act in person
o where principal is incapable of concluding own
contracts
Examples:
o Natural person acting on behalf of company (juristic
person)
o Curators/ guardians act on behalf of mentally
incapacitated persons/ infants/ minors
o Estate agents
Tripartite relationship between
o Principal
o Agent
o 3rd party
To be an agent needs to have proper permission and act
within its confines
Authority can originate:
o via contract (mandate/ employment contract)
o by operation of law
o ratification
o estoppel
Agent will not be a party to legal relationship
Definitions Agent:
person who has authority to represent another
Principal:
person who authorizes someone else to act on his behalf
will acquire rights/ duties under the act performed on his
behalf
Authority:
Power of consent
given to agent
to act in a way that binds the principal
2. ACT OF AGENCY
Act Refers to juristic act that agent performs on behalf of principal
Legal consequences will be attributed to principal and not
agent
Provided agent was properly authorized
and to do so within confines of authority granted
3
, In concluding a contract:
o All requirements for contractual liability must be fulfilled
by agent
Requirements
o Consensus
o Contractual capacity
o Contract must be legal
o Performance must be possible
o Formalities must be fulfilled
Acts that Where act is of personal nature
must be Marriage
performed If there are statutory rules requiring someone to perform the
by act himself
principal in
person
3. AUTHORITY
General Agent might incur personal liability if:
o He did not have proper authority
o He acted outside of his authority
Sources Contractual authority:
Can be granted:
o Orally
o In writing
Usually takes form of mandate
1. The mandator instructs the mandatary to do something on his
behalf (offer)
2. which the agent can then accept/ reject
3. Once he accepts, there is consensus
4. And thus, necessary authority
5. Naturalia will also be applicable
If one party does not have contractual capacity
agent’s authority cannot be granted via authority
but can be established by operation of law
Employment contract:
Agent is employee
Principal is employer
Normal employee acts merely in his capacity as employee
If agent is not subject to control of employer, but can act
independently, he is an agent/ not employee
Ratification:
Express/ tacit approval after agent already acted
principal gives permission after the act was performed validly
Juristic act will be full legal force
Will bind the principal to its terms (from date when agent
performed act) with retrospective effect
4
