General Principles of the Civil Code Act (ELIT 1996/12)

General Principles of the Civil Code Act

Consolidated to 18 November 1996

Passed on 28 June 1994 (RT* I 1994, 53, 889), entered into force 1 September 1994, amended by the following Acts:

22.11.1994 (RT I 1994, 89, 1516) 1.09.1994;

15.02.1995 (RT I 1995, 26-28, 355) 1.09.1995;

4.05.1995 (RT I 1995, 49, 749) 3.06.1995;

9.11.1995 (RT I 1995, 87, 1540) 1.09.1996;

28.05.1996 (RT I 1996, 40, 773) 8.06.1996;

6.06.1996 (RT I 1996, 42, 811) 1.10.1996. ‡

Part I

General Provisions

§ 1. Purpose of Act

This Act provides for the general principles of civil law. This Act applies as the general principles of the Family Law Act, Law of Succession Act, Law of Obligations Act, Law of Property Act and the Commercial Code. [28.05.1996]

§ 2. Interpretation of Acts

(1) A provision of an Act shall be interpreted together with the other provisions of the Act based on the purpose of the Act.

(2) Interpretation of an Act shall be based on the ordinary meaning of words used in the Act unless a specific meaning of the words is expressly used in the Act.

(3) If a word has several ordinary meanings, the meaning which best conforms to the purpose of the Act being interpreted shall be used. [28.05.1996]

§ 3. General and specific provisions

If a provision of an Act qualifies another provision or establishes an exception thereto, the qualified provision shall be deemed a general provision and the qualifying provision a specific provision. In such case the specific provision applies.

§ 4. Analogy of Act and law

(1) In the absence of a provision regulating a legal relationship, a provision which regulates relationships similar to the legal relationship applies. In the absence of such provision, the general purpose of an Act shall be the basis.

(2) In the absence of an Act regulating a legal relationship, the general purpose of law shall be the basis.

Part II

Persons

Chapter 1

General Provisions

§ 5. Classification of persons

(1) A person is a natural person or a legal person.

(2) A natural person is a human being.

(3) A legal person is a subject of law created on the basis of law.

§ 6. Legal person in private law and legal person in public law

(1) A legal person in private law is a legal person which has been established in private interests. General partnerships, limited partnerships, private limited companies, public limited companies, co-operatives, foundations and non-profit associations are legal persons in private law. Other legal persons in private law may be prescribed by law.

(2) A legal person in public law is a legal person which has been established by an Act in the public interest.

(3) The state and local governments participate in civil law relationships as legal persons in public law. The state and local governments exercise the civil rights of a legal person and perform civil obligations through their agencies.

(4) Provisions concerning legal persons apply to the state and local governments in so far as these are not contrary to the nature of the state or local government. [28.05.1996; 06.06.1996]

§ 7. Passive civil legal capacity and active civil legal capacity

(1) Passive civil legal capacity (passive legal capacity) is the capacity of a person to have civil rights and civil obligations.

(2) Active civil legal capacity (active legal capacity) is the capacity of a person to acquire civil rights, assume civil obligations and alter or terminate them by the person’s acts.

(3) Passive legal capacity and active legal capacity may only be restricted on the bases of and pursuant to procedure provided by law. A transaction restricting passive legal capacity or active legal capacity is void.

Chapter 2

Natural Persons

Division 1

Passive Legal Capacity and Active Legal Capacity

§ 8. Passive legal capacity of natural persons

(1) Every natural person has passive legal capacity. Passive legal capacity begins with the live birth of a human being and ends with death.

(2) In the cases provided by law, a fœtus has passive legal capacity from conception if the child is born alive.

§ 9. Active legal capacity of natural persons

(1) An adult person has active legal capacity. A person who has attained eighteen years of age is an adult.

(2) If marriage before the attainment of eighteen years of age is permitted by law, a minor acquires active legal capacity as of the date of the contract of marriage. Upon termination or annulment of marriage due to reasons which are not associated with the marriage, a minor does not lose active legal capacity acquired by marriage.

§ 10. Active legal capacity of minors between seven and eighteen years of age

(1) A minor between seven and eighteen years of age has restricted active legal capacity. The minor has the right to enter into transactions with the consent of his or her legal representative.

(2) A transaction entered into by a minor between seven and eighteen years of age without the consent of his or her legal representative shall be deemed valid if the minor performs the transaction with means granted to him or her for this purpose or for free use by his or her legal representative or a third person with the consent of the legal representative.

(3) A supervisory guardian may grant a minor of at least fifteen years of age, with the consent of his or her legal representative, the right to engage in economic activity unless this is prohibited by law. A minor who has acquired the right to be a trader has active legal capacity to enter into transactions necessary therefor except transactions for which his or her legal representative requires the consent of a supervisory guardian.

(4) With good reason, a court may take away the right specified in subsection (3) of this section at the request of the legal representative. [28.05.1996]

§ 11. Minor without active legal capacity

(1) A minor under the age of seven is without active legal capacity. Transactions in the name of the minor shall be entered into by his or her legal representative.

(2) A minor under the age of seven may enter into petty transactions independently.

§ 12. Restriction of active legal capacity of person

(1) At the request of an interested person, a court may restrict the active legal capacity of a person who places his or her family in a difficult economic situation as a result of dissipation or the use of alcoholic beverages or narcotic substances. A person with restricted active legal capacity shall be placed under guardianship.

(2) Upon restriction of active legal capacity, a court shall decide which transactions a person with restricted active legal capacity may enter into only with the consent of his or her guardian. Other transactions are performed independently by the person with restricted active legal capacity.

§ 13. Declaration of incapacity of person

(1) At the request of an interested person, a court may declare a person to be without active legal capacity if due to mental illness or mental disability the person is persistently unable to understand the meaning of or to direct his or her actions. Such person shall be placed under guardianship.

(2) The guardian of a person who has been declared to be without active legal capacity shall enter into transactions in the name of the person. Upon declaration of incapacity, a court may decide which transactions the person declared to be without active legal capacity may enter into himself or herself.

§ 14. Restoration of active legal capacity of person

If the grounds for restriction of the active legal capacity or declaration of incapacity of a person cease to exist, a court shall declare the restriction of active legal capacity or declaration of incapacity invalid.

§ 15. Capacity of person to exercise will

(1) A person with capacity to exercise will may enter into a transaction within the limits of active legal capacity.

(2) A person who in entering into a transaction does not understand the meaning of or is unable to direct his or her action is without capacity to exercise will.

Division 2

Blood Relationship and Relationship by Marriage

§ 16. Direct blood relationship

If one person descends from another, they are direct blood relatives. Direct blood relatives are ascendants and descendants. Ascendants are parents and their ancestors, and descendants are children and their issue.

§ 17. Collateral blood relationship

If persons descend from the same person but are not direct blood relatives, they are collateral blood relatives.

§ 18. Blood relationship between children

(1) Children who have a common father and mother are brothers or sisters. Children who have a common father but different mothers or a common mother but different fathers are half-brothers or half-sisters.

(2) If children do not descend from a common father or mother, the children are not related to each other by blood even if their parents are married to each other.

§ 19. Blood relationship between adoptive parents and adopted children

Adopted children and their descendants shall be deemed equal to relatives with respect to their adoptive parents and their relatives, and adoptive parents and their relatives shall be deemed equal to relatives with respect to their adopted children and their descendants.

§ 20. Relationship by marriage

(1) Relatives of a spouse are relatives by marriage to the other spouse and his or her relatives.

(2) A relationship by marriage does not end with the termination of the marriage from which it arose.

Division 3

Residence

§ 21. Residence and change thereof

(1) The residence of a person is the place where the person lives permanently or primarily.

(2) If the place where a person lives permanently or primarily cannot be determined, the residence of the person is the place with which the person is most connected personally and economically.

(3) If several places may be deemed the residence of a person on the basis of the criteria specified in subsection (2), the person may designate which of these is his or her residence. If the person has not designated his or her residence, an interested person may choose which of these places shall be deemed the residence of the person.

(4) If several places in different states may be deemed the residence of a person on the basis of the criteria specified in subsections (1) and (2), the residence of the person is in the state of the person's citizenship.

(5) A residence shall be deemed changed if a person settles elsewhere with the wish to change his or her residence.

(6) If the residence of a person cannot be determined, the place where he or she is actually staying shall be deemed his or her residence.

§ 22. Residence of minor or adult without active legal capacity

(1) The residence of a minor is the residence of his or her parents or guardian. If the parents are living apart, the residence of the minor is the residence of the parent with whom he or she resides.

(2) The residence of a minor with active legal capacity (subsection 9 (2)) shall be determined pursuant to § 21.

(3) The residence of the guardian shall be deemed the residence of an adult without active legal capacity.

Division 4

Protection of Personal Rights

§ 23. Defamation

(1) A person has the right to demand termination of defamation, refutation of defamatory information concerning the person and compensation for moral and proprietary damage caused by the defamation by a court proceeding, unless the defamer proves the accuracy of the information.

(2) If inaccurate information is disseminated through a mass medium, it shall be refuted in the same mass medium.

(3) A document which contains inaccurate information shall be replaced.

(4) If defamatory information is disseminated in a manner different from that provided for in subsections (2) and (3), a court shall specify the manner in which the information is to be refuted.

§ 24. Protection of private life

(1) A person has the right to demand termination of a violation of the inviolability of his or her private life and to demand compensation for moral and proprietary damage caused thereby.

(2) The following shall be deemed a violation of the inviolability of private life if performed without legal basis or against a person’s will:

1) entry into the dwelling or onto the immovable of a person;

2) search of a person or of things in his or her possession;

3) violation of the confidentiality of messages sent or received by a person by post, telegraph, telephone or other commonly used means, and use of a person’s manuscripts, correspondence, notes or other personal documents or information;

4) receipt of information through a person’s means of communication or disruption of its functioning;

5) surveillance of the private life of a person;

6) collection of information concerning the private life of a person.

(3) A court may also declare an act not specified in subsection (2) which damages the private life of a person without legal basis or against the person’s will to be a violation of the inviolability of private life.

§ 25. Protection of person’s name

(1) A person whose interests are damaged by use of his or her name may demand termination of the unauthorised use of the name and compensation for moral and proprietary damage caused to him or her thereby.

(2) The provisions of subsection (1) also apply to a publicly used pseudonym.

§ 26. Protection of other personal rights

In the cases provided by law, a person may also demand termination of the violation of his or her personal rights not specified in §§ 23–25 and compensation for moral and proprietary damage caused thereby.

Division 5

Declaration of Person as Missing and Declaration of Death

Subdivision 1

Declaration of person as missing

§ 27. Basis for declaration of person as missing

(1) At the request of an interested person, a court may declare a person missing if during one year there is no information concerning his or her whereabouts.

(2) If the date of receipt of last information concerning an absent person cannot be determined, the first day of the month following the month that last information was received shall be deemed the beginning of absence but if the month cannot be determined, the first day of the following year.

(3) A person whose residence is or whose property is located in Estonia may be declared missing.

§ 28. Administration of property of missing person

(1) A court shall appoint a curator to administer the property of a person declared missing. A curator is required to administer property prudently and ensure its preservation, to pay maintenance from the property to a person whom the person declared missing is required by law to maintain and to pay the debts of the missing person.

(2) At the request of an interested person, a court may also appoint a curator to administer the property of an absent person before the person is declared missing.

(3) A curator shall not transfer immovable property belonging to a missing person. A curator may only transfer movable property belonging to a person declared missing for performance of the obligations specified in subsection (1).

(4) A person declared missing retains the right to enter into transactions with the property transferred to a curator to administer.

§ 29. Recall of declaration of person as missing

Upon reappearance or determination of the whereabouts of a person declared missing, a court shall recall the declaration of the person as missing at the request of the person himself or herself or of an interested person.

§ 30. Release of property from administration

(1) Upon recall of a declaration of a person as missing or upon the death or declaration of death of a missing person, a court shall release the person’s property from administration by a curator.

(2) A curator is required to report on the administration of property to the person who was declared missing and reappeared or, in the case of a person’s death or declaration of death, to the person’s successor.

Subdivision 2

Declaration of death

§ 31. Bases for and consequences of declaration of death

(1) At the request of an interested person, a court may declare a person whose residence is or whose property is located in Estonia dead if during five years there is no information that the person is alive. If the date of receipt of last information concerning the person cannot be determined, the provisions of subsection 27 (2) apply.

(2) If a person goes missing in a situation which is dangerous to life or gives reason to presume that the person perished in an accident, a court may declare the person dead after the person has been missing for six months.

(3) In the absence of the bases specified in subsection (2), a person who goes missing due to warfare may be declared dead if during two years after termination of the warfare there is no information about the person being alive.

(4) The declaration of death of a person has the same legal consequences as his or her actual death unless otherwise provided by law.

§ 32. Procedure for declaration of death

(1) After receipt of an application for declaration of death, a court shall publish a notice in a national daily newspaper calling on all persons to provide information concerning the person whose declaration of death is applied for.

(2) A court shall not declare a person dead if within six months after publication of the notice information is received which proves that the person is alive.

§ 33. Date of death

(1) The date of receipt of last information concerning a person shall be deemed the date of death of the person declared dead. If the date cannot be determined, the provisions of subsection 27 (2) apply.

(2) If a person who went missing in a situation which was dangerous to his or her life or gives reason to presume that the person perished in an accident is declared dead, a court may declare the presumed date of his or her having perished as the date of death of the person.

(3) If as the result of an accident specified in subsection (2) several persons went missing and their actual date of death cannot be determined, they shall be deemed to have died on the same date.

§ 34. Reappearance of person declared dead

(1) Upon reappearance of a person declared dead, all the rights and obligations of the person are restored unless this is contrary to law or the nature of the rights and obligations or violates the rights of third persons acquired in good faith.

(2) Upon reappearance of a person declared dead or upon ascertainment that he or she is alive, a court shall recall the declaration of death of the person on the basis of the application of the person himself or herself or of an interested person.

(3) After recall of a declaration of death, a reappeared person may reclaim property that was transferred to his or her successor after the declaration of death. If the property is missing, compensation for its value may be demanded under the unjust enrichment provisions.

(4) After recall of a declaration of death, a reappeared person may demand return of property or, if the property is missing, compensation for its value from the person to whom his or her property transferred after the declaration of death if that person knew or should have known that the person declared dead was alive.

§ 35. Change of date of death

(1) At the request of an interested person, a court may change the date of death of a person declared dead if the actual date of death of the person becomes known after the declaration of death of the person.

(2) If a court establishes that a person declared dead died on a date other than that indicated in the declaration of death order, persons who are successors on the person’s actual date of death may demand return of the person’s property or compensation for its value pursuant to the provisions of subsections 34 (3) and (4).

Chapter 3

Legal Persons

§ 36. Legal basis of legal person

A legal person in private law may be founded pursuant to the Act concerning the corresponding category of legal persons, and a legal person in public law may be founded pursuant to the Act directly concerning that legal person. [28.05.1996]

§ 37. Passive legal capacity of legal person

(1) [repealed]

(2) The passive legal capacity of a legal person in private law is created as of entry in the register prescribed by law unless otherwise provided by law.

(3) The passive legal capacity of a legal person in public law and, in the cases provided by law, of a legal person in private law is created as of the date provided by its Act.

(4) A legal person being founded whose objective is contrary to law, the constitutional order or good morals shall not be entered in the register.

(5) A legal person may have all civil rights and civil obligations, except those intrinsically human. The passive legal capacity of a legal person may be restricted by law.

(6) A legal person in public law shall not have civil rights and civil obligations which are contrary to its objective. [15.02.1995]

§ 38. Active legal capacity of legal person

The active legal capacity of a legal person is the capacity to acquire civil rights, assume civil obligations and alter or terminate them within the limits of passive legal capacity by the acts of its agent.

§ 39. Articles of association of legal person

(1) A legal person in private law has articles of association or, in the cases provided by law, a partnership agreement.

(2) A legal person in public law has articles of association if so provided for in the Act concerning the legal person. [28.05.1996]

§ 40. Location of legal person

The location of a legal person is the place where its management board or a substituting body thereof is located unless otherwise provided by law.

§ 41. Name of legal person

(1) A legal person shall have a name which must distinguish it from other persons.

(2) A legal person whose interests are damaged by use of its name may demand termination of the unauthorised use of the name and compensation for proprietary damage caused thereby.

§ 42. Defamation

(1) A legal person has the right to demand termination of defamation, refutation of defamatory information concerning the person and compensation for proprietary damage caused by the defamation by a court proceeding, unless the defamer proves the accuracy of the information.

(2) Defamatory information shall be refuted pursuant to the procedure provided for in subsections 23 (2)–(4).

(3) The provisions of subsection (1) do not apply to the state or local governments or in other cases prescribed by law.

§ 43. Legal representation of legal person

(1) The legal representative of a legal person is its management board or a substituting body thereof unless otherwise provided by law.

(2) A legal person may be represented in all legal acts by every member of its management board unless the law or the articles of association prescribe that all or some of the members of the management board may represent the legal person jointly. [4.05.1995]

§ 44. Bodies of legal person

(1) The bodies of a legal person in private law are the general meeting and the management board unless otherwise provided by law.

(2) The bodies of a legal person in public law and their competence shall be provided for in its Act.

(3) The competence of a body of a legal person in private law shall be specified by law, the articles of association or the partnership agreement. The competence of a body of a legal person may be transferred to other bodies of the legal person only in the cases provided by law.

(4) Only a natural person with active legal capacity may be a member of a management board or a substituting body thereof of a legal person unless otherwise provided by law.

(5) At the request of an interested person, a court may declare a resolution of a body of a legal person which is contrary to law or the articles of association invalid if the request is filed within three months after adoption of the resolution. [15.02.1995; 28.05.1996; 6.06.1996]

§ 45. Liability of legal person

(1) A legal person is liable for its obligations with its assets.

(2) In the cases provided by law, the members or shareholders of a legal person are liable for the obligations of the legal person additionally with their assets.

§ 46. Liability of body of legal person

(1) The members of a management board or a substituting body thereof who wrongfully cause damage to the legal person by failure to perform their obligations or to perform their obligations in the manner required are solidarily liable to the legal person.

(2) The members of a management board or a substituting body thereof who wrongfully cause damage to a creditor of the legal person by failure to perform their obligations or to perform their obligations in the manner required are solidarily liable to the creditor if the assets of the legal person are not sufficient to satisfy the claim of the creditor.

§ 47. Duration of legal person

(1) A legal person is founded for an unspecified term unless otherwise provided by law.

(2) A legal person is dissolved voluntarily or by a court order (compulsory dissolution).

(3) In the case of bankruptcy of a legal person, the legal person shall be dissolved pursuant to the procedure provided for in the Bankruptcy Act.

§ 48. Bases for voluntary dissolution

A legal person is dissolved:

1) by a resolution of the general meeting or other competent body;

2) by a resolution of the person or of the agency who by its Act is granted the right to dissolve a legal person in public law;

3) upon achievement of an objective prescribed by law, the articles of association or the partnership agreement;

4) upon expiry of the term if the legal person is founded for a specified term;

5) on another basis prescribed by law, the articles of association or the partnership agreement.

§ 49. Bases for compulsory dissolution

(1) A legal person is dissolved by a court order at the request of the Minister of Internal Affairs, another person or agency so entitled by law or another interested person:

1) if the objective or activities of the legal person are contrary to the constitutional order, law or good morals;

2) if the law was violated upon the foundation of the legal person;

3) if the articles of association of the legal person are contrary to law to a significant extent;

4) if the legal person does not comply with the requirements established by law for the legal person;

5) on another basis provided by law.

(11) A court may set a deadline for elimination of the deficiencies specified in clauses (1) 1), 3) and 4).

(2) In the case of compulsory dissolution of a legal person on the ground that its objective or activities are contrary to the Criminal Code, the constitutional order or good morals, the assets of the legal person remaining after satisfaction of the claims of creditors shall transfer to the state. [15.02.1995; 6.06.1996]

§ 50. Liquidation

(1) A legal person shall be liquidated (liquidation proceeding) upon dissolution unless otherwise provided by law.

(2) Liquidation shall be organised by liquidators. In the case of voluntary liquidation, the members of the management board or of its substituting body shall be the liquidators unless otherwise provided by law, the articles of association or the partnership agreement. In the case of compulsory dissolution, the liquidators shall be appointed by a court.

(3) The liquidators have the rights and obligations of the management board or of its substituting body which are not contrary to the objective of the liquidation.

(4) The liquidators shall terminate the activities of a legal person, collect debts, sell assets and satisfy the claims of creditors and shall transfer the assets remaining after satisfaction of the claims of creditors to persons so entitled by law, the articles of association or the partnership agreement.

(5) The liquidators may only perform transactions which are necessary for liquidation of the legal person.

(6) In a liquidation proceeding, the notation “likvideerimisel” [in liquidation] shall be appended to the name of the legal person.

§ 51. Notice of liquidation and submission of claims

(1) The liquidators shall promptly publish a notice of the liquidation proceeding of a legal person in a newspaper and the Riigi Teataja Lisa ** .

(2) The liquidators shall send a notice of liquidation to the known creditors.

(3) A notice of liquidation shall indicate that creditors are to submit their claims within four months after publication of the last notice. [15.02.1995]

§ 52. Satisfaction of claims

(1) If a known creditor does not submit a claim, the money belonging to the creditor shall be deposited.

(2) If the term for performance of the claim of a creditor has not arrived and the creditor does not accept performance, the money belonging to the creditor shall be deposited.

(3) After satisfaction of the claims of creditors and the deposit of money, the remaining assets may be distributed to entitled persons after six months after publication of the liquidation notice.

(4) If in the case of liquidation of a legal person no persons are entitled to the assets of the legal person, the assets remaining after satisfaction of the claims of creditors and the deposit of money are retained by the state which shall use these assets according to their current purpose to the greatest possible extent. [15.02.1995; 6.06.1996]

§ 53. Submission of bankruptcy petition

If the assets of a legal person being liquidated are insufficient for satisfaction of all claims of creditors, the liquidators shall submit a bankruptcy petition.

§ 54. Dissolution of legal person

(1) After satisfaction of the claims of creditors, the deposit of money and distribution of remaining assets to entitled persons, the liquidators shall submit an application for deletion of a legal person in private law from the register.

(2) Upon deletion of a legal person in private law from the register, the legal person is dissolved.

(3) A legal person in public law is dissolved at the time provided for in its Act.

§ 55. Preservation of documents

(1) The documents of a dissolved legal person shall be deposited with the liquidator or a third person. The documents shall be preserved for ten years unless otherwise provided by law.

(2) If a legal person was entered in the register, the name and residence or location of the depositary of documents shall be entered in the register.

§ 56. Merger, division and transformation

(1) The merger and division of legal persons is only permitted in the cases provided by law.

(2) A legal person may only be transformed into a legal person of a different category in the cases provided by law.

§ 57. Application of Acts

If the Acts specified in § 36 establish provisions for legal persons which are different from those in Chapter 3 of Part II, the provisions of the Acts apply.

Part III

Creation, Alteration and Extinguishment of Civil Rights and Civil Obligations

Chapter 4

General Provisions

§ 58. Bases for creation of civil rights and civil obligations

(1) Civil rights and civil obligations are created by events, transactions and other legal acts provided by law or by unlawful actions. Civil rights and civil obligations are also created by legal acts which, although not provided by law, are not contrary to the content and purpose of civil law.

(2) A legal act is a lawful action with legal meaning.

§ 59. Legal succession

(1) Civil rights and civil obligations may transfer from one person to another (legal succession) if these are not inseparably bound to the person by law or their nature.

(2) Rights which are inseparably bound to a person may transfer from the person to another in the cases provided by law.

(3) A transaction, law or other legislation is the basis for legal succession.

Chapter 5

Transactions

Division 1

General Provisions

§ 60. Definition of transaction

(1) A transaction is a legal act which is directed at the creation, alteration or extinguishment of civil rights and civil obligations.

(2) Transactions are unilateral, bilateral or multilateral (contracts).

§ 61. Intention and declaration of intention

(1) The intention of a person which is expressed in a declaration of intention is essential to a transaction.

(2) Intention must be formed with knowledge and a correct perception of the actual circumstances.

(3) A declaration of intention must correspond to the freely formed actual intention of a person. The correspondence of the declaration of intention to the intention is presumed.

(4) A declaration of intention shall not be deemed contrary to the intention of a person if the person did not actually desire what he or she declared having knowingly left actual intention undeclared.

§ 62. Direct and indirect declaration of intention

(1) A declaration of intention may be expressed directly or indirectly.

(2) Intention to enter into a transaction which is directly declared, expressed in speech, in writing or by symbols which have the meaning of words is a direct declaration of intention.

(3) Intention expressed by an act from which the intention to enter into a transaction may be assumed is an indirect declaration of intention.

§ 63. Silence as declaration of intention

Silence shall be deemed a declaration of intention if so prescribed by law or an agreement of the parties.

§ 64. Interpretation of transaction

(1) Interpretation of a transaction shall be based on the actual intention of the persons party to the transaction unless otherwise provided by the content of the transaction.

(2) In interpreting a transaction, the interpretation whereby the transaction continues to be valid to as great an extent as possible shall be preferred.

(3) In the case of doubt, a transaction shall be interpreted to the benefit of an obligated person.

§ 65. Other legal acts

The provisions concerning transactions also apply to legal acts which are not transactions, unless otherwise provided by law.

Division 2

Invalidity of Transaction

§ 66. Void transaction

(1) A transaction which is contrary to the constitutional order or good morals is void.

(2) A transaction which is contrary to law is void except if the law is not significantly violated.

(3) A void transaction is invalid from inception.

(4) A void transaction need not be performed.

(5) The parties shall return that which was received by a void transaction, or if this is not possible, shall compensate for it in money.

§ 67. Voidable transaction

(1) A transaction which a court may declare invalid at the request of an interested person on the bases provided by law is a voidable transaction. A party may demand performance of a voidable transaction until the transaction is declared invalid.

(2) If a court declares a voidable transaction invalid, it shall be deemed invalid from inception. The parties shall return that which was received by the transaction declared invalid, or if this is not possible, shall compensate for it in money.

(3) The declaration of invalidity of a voidable transaction shall not be demanded if the person entitled to contest the transaction has ratified the transaction.

§ 68. Partial invalidity of transaction

The invalidity of a part of a transaction shall not result in the invalidity of the other parts if it may be presumed that the transaction would also have been entered into without the invalid part.

§ 69. Ostensible transaction

(1) A transaction which the parties enter into without intending to create legal consequences is an ostensible transaction.

(2) An ostensible transaction is void.

(3) Upon transfer of property acquired by an ostensible transaction to an acquirer in good faith, the property shall be deemed transferred on a legal basis.

§ 70. Sham transaction

(1) A transaction which the parties enter into in order to conceal another transaction which was actually intended is a sham transaction. The transaction which was actually intended to be entered into is a concealed transaction.

(2) A sham transaction is void.

(3) A concealed transaction is subject to the provisions applicable to such transactions.

§ 71. Error

(1) Error is ignorance or an incorrect perception of the actual circumstances.

(2) A transaction is entered into under essential error if, with knowledge or a correct perception of the actual circumstances, the transaction would not have been entered into or would have been entered into under different conditions.

(3) Ignorance of the law or an incorrect perception of future circumstances does not constitute essential error.

(4) A transaction entered into under essential error shall be declared invalid by a court at the request of the person in error. The limitation period of an action to declare a transaction invalid is six months after the date a person became or should have become aware of the error but not longer than five years after the transaction was entered into.

(5) A transaction entered into under essential error shall not be declared invalid by a court if the other party agrees to understand the transaction in the same manner as the party in error.

(6) Upon the declaration of invalidity of a transaction entered into under essential error, the provisions of subsection 67 (2) apply.

(7) A person at whose request a transaction entered into under essential error is declared invalid is required to compensate the other party for damage. Damage need not be compensated for if the other party knew or should have known of the error.

(8) A person at whose request a transaction entered into under essential error is declared invalid may demand compensation for damage from the other party if the person proves that the error occurred by the fault of the other party. A person also has this right if the person does not demand that the transaction be declared invalid.

§ 72. Misrepresentation

(1) Misrepresentation is the intentional misleading or keeping in error of a person by another person in order to induce the person to enter into a transaction.

(2) A transaction entered into due to a misrepresentation shall be declared invalid by a court at the request of the person under the misrepresentation. The limitation period of an action to declare a transaction invalid is one year after the date a person became or should have become aware of the misrepresentation but not longer than ten years after the transaction was entered into.

(3) If a third person is responsible for a misrepresentation, a party who enters into a transaction due to the misrepresentation may demand that the transaction be declared invalid if the other party knew or should have known of the misrepresentation. If the other party did not know or need not have known of the misrepresentation, the party who entered into the transaction due to the misrepresentation may demand that the transaction be declared invalid pursuant to § 71.

(4) Upon the declaration of invalidity of a transaction entered into due to a misrepresentation, the provisions of subsection 67 (2) apply.

(5) A person at whose request a transaction entered into due to a misrepresentation is declared invalid may demand compensation for damage from the misrepresentor. The person also has this right if the person does not demand that the transaction be declared invalid. If a third person is the misrepresentor and the other party to the transaction knew or should have known of the misrepresentation, they are solidarily liable.

§ 73. Duress

(1) Duress is the use of force, the deprivation of liberty or an actual threat to use force, to deprive of liberty, to destroy property or to publish embarrassing information in order to induce a person to enter into a transaction.

(2) A threat is legally significant if it appears sufficiently founded considering the characteristics of the threatened person and the threatener, and the circumstances.

(3) A transaction entered into under duress shall be declared invalid by a court at the request of the injured party. The limitation period of an action to declare such transaction invalid is five years after cessation of the duress.

(4) Upon the declaration of invalidity of a transaction entered into under duress, the provisions of subsection 67 (2) apply.

(5) A person at whose request a transaction entered into under duress is declared invalid may demand compensation for damage from the duressor. The person also has this right if the person does not demand that the transaction be declared invalid. If a third person is the duressor and the other party to the transaction knew or should have known of the duress, they are solidarily liable.

§ 74. Concurrence of difficult circumstances

(1) A transaction in which one party uses to their advantage the fact that a natural person was induced to enter into a transaction under conditions extremely unfavourable to him or her due to a concurrence of difficult circumstances shall be declared invalid by a court at the request of the injured party.

(2) Upon the declaration of invalidity of a transaction entered into due to a concurrence of difficult circumstances, the provisions of subsection 67 (2) apply.

(3) A person at whose request a transaction entered into due to a concurrence of difficult circumstances is declared invalid may demand compensation for damage from the other party. The person also has this right if the person does not demand that the transaction be declared invalid.

§ 75. Transaction by minor without active legal capacity

(1) A transaction entered into by a minor under the age of seven himself or herself is void except a petty transaction.

(2) The provisions of subsections 66 (4) and (5) apply to a void transaction entered into by a minor without active legal capacity.

(3) The party to a transaction who has active legal capacity is required to compensate the other party for damage if the party knew or should have known that the other party was without active legal capacity.

(4) At the request of an interested person, a court shall declare invalid a transaction which the legal representative of a minor without active legal capacity entered into in the name of the minor without the prior consent of the supervisory guardian if pursuant to law the transaction may only have been entered into with the consent of the supervisory guardian.

(5) A supervisory guardian may ratify the transaction specified in subsection (4) pursuant to the procedure provided for in subsection 76 (6) if so requested by the legal representative or the other party to the transaction.

§ 76. Transaction by person with restricted active legal capacity

(1) At the request of an interested person, a court shall declare invalid a transaction entered into by a minor with restricted active legal capacity which pursuant to law may only have been entered into with the consent of the legal representative if the other party knew or should have known that the other party entered into a transaction with a minor.

(2) At the request of an interested person, a court shall declare invalid a transaction entered into by an adult with restricted active legal capacity without the consent of his or her guardian if pursuant to a court order (subsection 12 (2)) the transaction may only have been entered into with the consent of his or her guardian if the other party to the transaction knew or should have known that the person with restricted active legal capacity did not have the right to enter into the transaction independently.

(3) At the request of an interested person, a court shall declare invalid a transaction entered into by a person with restricted active legal capacity without the prior consent of a supervisory guardian if pursuant to law the transaction may only have been entered into with the consent of the supervisory guardian.

(4) A legal representative may ratify a transaction entered into by a person with restricted active legal capacity without his or her consent.

(5) A supervisory guardian may ratify a transaction entered into by a person with restricted active legal capacity without the prior consent of the supervisory guardian, pursuant to the procedure provided for in subsection (6), if so requested by the legal representative or the other party to the transaction.

(6) If the other party to a transaction applies for ratification, the legal representative shall decide within two weeks whether the legal representative will ratify the transaction. If the legal representative does not ratify the transaction within two weeks, the transaction shall be deemed entered into without the consent of the legal representative. Written ratification substitutes for the consent of the legal representative for entry into the transaction.

(7) If upon acquiring active legal capacity a minor ratifies a transaction specified in subsection (1), this substitutes for the consent of the legal representative.

(8) Upon the declaration of invalidity of a transaction entered into by a person with restricted active legal capacity, the provisions of subsection 67 (2) apply.

(9) An interested person at whose request a transaction entered into by a person with restricted active legal capacity is declared invalid may demand compensation for damage from a party with active legal capacity. The interested person also has this right if the interested person does not demand that the transaction be declared invalid.

§ 77. Transaction by person declared without active legal capacity

(1) A transaction entered into by a person declared to be without active legal capacity is void, except a transaction which a court has permitted the person to enter into.

(2) The provisions of subsections 66 (4) and (5) apply to a transaction entered into by a person declared to be without active legal capacity.

(3) The party to the transaction with active legal capacity is required to compensate the other party for damage if the party knew or should have known that the other party was without active legal capacity.

§ 78. Prohibited transaction of legal representative

A transaction which a legal representative is prohibited by law from entering into is void.

§ 79. Transaction by person without capacity to exercise will

(1) A transaction entered into by a person without capacity to exercise will shall be declared invalid by a court at the request of the person or the other party to the transaction if the request is submitted within three years after the transaction is entered into.

(2) A person with capacity to exercise will may ratify a transaction which he or she entered into without capacity to exercise will.

(3) If the other party to a transaction applies for ratification, the person who entered into the transaction without capacity to exercise will shall decide within two weeks whether he or she will ratify the transaction. The transaction shall not be declared invalid due to incapacity to exercise will if ratification is granted within two weeks. A later ratification does not create legal consequences.

(4) Upon the declaration of invalidity of a transaction entered into by a person without capacity to exercise will, the provisions of subsection 67 (2) apply.

(5) Upon the declaration of invalidity of a transaction, the party with capacity to exercise will is required to compensate the party without capacity to exercise will for damage if the party with capacity to exercise will knew or should have known that the other party was without capacity to exercise will at the time the transaction was entered into.

§ 80. Transaction exceeding passive legal capacity of legal person

(1) At the request of an interested party, a court shall declare invalid a transaction entered into by a legal person exceeding passive legal capacity.

(2) If a transaction specified in subsection (1) is declared invalid, the provisions of subsection 67 (2) apply.

(3) A person at whose request a transaction specified in subsection (1) is declared invalid may demand compensation for damage from the legal person who exceeded passive legal capacity.

Division 3

Conditional Transactions

§ 81. Transaction with suspensive or resolutive condition

(1) A transaction which is entered into with a suspensive or resolutive condition is a conditional transaction.

(2) A transaction is entered into with a suspensive condition if the creation of the rights and obligations specified by the transaction is contingent upon an uncertain event.

(3) A transaction is entered into with a resolutive condition if the extinguishment of the rights and obligations specified by the transaction is contingent upon an uncertain event.

§ 82. Transaction with several suspensive or resolutive conditions

If several mutually dependent suspensive or resolutive conditions are specified by a transaction, the fulfilment of all conditions is necessary for the creation or extinguishment of the rights and obligations specified by the transaction. If the conditions are specified as disjunctive, the fulfilment of at least one condition is necessary.

§ 83. Hindrance or promotion of fulfilment of condition

(1) If fulfilment of a condition is hindered in bad faith by a party to whose disadvantage the fulfilment of the condition is, the condition shall be deemed fulfilled.

(2) If fulfilment of a condition is promoted in bad faith by a party to whose advantage the fulfilment of the condition is, the condition shall be deemed not fulfilled.

§ 84. Time for creation and extinguishment of rights and obligations

(1) The rights and obligations specified by a transaction are created for a transaction entered into with a suspensive condition and extinguish for a transaction entered into with a resolutive condition upon fulfilment of the condition unless otherwise prescribed by the transaction.

(2) If a transaction prescribes that upon fulfilment of a condition the rights and obligations specified in the transaction are created or extinguish at a specified time before fulfilment of the condition, the parties shall, upon fulfilment of the condition, perform the obligations arising from the agreement as of the time specified by the transaction.

§ 85. Pendency period

(1) A pendency period is the period of time between entry into a transaction and fulfilment of a suspensive condition. During a pendency period:

1) the entitled person shall not demand performance of an obligation;

2) the obligated person shall not do anything which may hinder performance of an obligation upon fulfilment of the condition;

3) the entitled person may demand security from the obligated person if there is reason to believe that the latter is not capable of performing the obligation arising from the transaction.

(2) The provisions of subsection (1) apply even if a transaction is not entered into with a suspensive condition but the time of creation of the rights and obligations arising from the transaction is different from the time of entry into the transaction.

§ 86. Compensation for damage

After fulfilment of a resolutive condition, an entitled person may demand compensation from the obligated person for damage arising by the fault of the latter during the pendency period.

§ 87. Non-fulfilment of condition

(1) If a suspensive condition is not fulfilled, a conditional transaction shall be deemed not entered into. In such case an entitled person is required to return the security provided pursuant to clause 85 (1) 3).

(2) If a resolutive condition is not fulfilled, the rights and obligations arising from a transaction remain valid as though the transaction is entered into without a resolutive condition.

§ 88. Impossible condition

(1) A condition is impossible if upon entering into a transaction it is known that the condition will definitely not be fulfilled.

(2) If parties make the creation of the rights or obligations specified by a transaction dependent on an impossible condition, the transaction is void.

(3) If parties make the extinguishment of the rights and obligations specified by a transaction dependent on an impossible condition, the transaction shall be deemed entered into without a resolutive condition.

§ 89. Unlawful condition

(1) If a suspensive condition of a transaction is contrary to law, good morals or the constitutional order, the transaction is void.

(2) If parties make the extinguishment of the rights and obligations specified by a transaction dependent on a condition which is contrary to law, the constitutional order or good morals, the transaction shall be deemed entered into without a resolutive condition.

§ 90. Inevitable condition

(1) A condition is inevitable if it is known for certain that it will be fulfilled.

(2) A transaction entered into with an inevitable condition shall not be deemed conditional.

Division 4

Form of Transaction

§ 91. Choice of form of transaction

(1) Parties may enter into a transaction in any form or may agree on the form of transaction unless a mandatory form of transaction is provided by law.

(2) Parties may enter into a transaction in notarised form even if the law provides that the transaction must be in unattested written form or a required form of the transaction is not provided by law.

(3) If parties have entered into a transaction in a particular form or have agreed on the form of transaction, the requirements provided by law for that form apply.

(4) A transaction may be amended in the same form in which the transaction was entered into. A transaction entered into orally may also be amended in writing, and a transaction entered into in unattested written form may also be amended in notarised form.

§ 92. Written form

(1) A written transaction is unattested or notarised.

(2) A transaction entered into in writing shall be signed by the persons entering into the transaction. In the cases prescribed by law, the signatures shall be notarised.

(3) An exchange of letters signed by the parties is equal to a transaction in unattested written form.

§ 93. Failure to comply with form of transaction

(1) Upon failure to comply with a required unattested written form provided by law or a requirement for notarisation of signatures, a transaction is void unless otherwise provided by law.

(2) Upon failure to comply with the form agreed by a transaction, the transaction is void if such consequence is prescribed by the transaction.

(3) Upon failure to comply with a notarisation requirement prescribed by law or agreement of the parties, the transaction is void.

(4) Upon failure to comply with a required written form provided by law, a transaction is valid to the extent to which the law does not provide for a required written form.

Chapter 6

Agency

§ 94. Entry into transaction through agent

(1) A natural person may enter into a transaction in person or through an agent. A transaction which pursuant to law or an agreement must be entered into in person shall not be entered into through an agent.

(2) A legal person shall enter into a transaction through an agent.

§ 95. Transaction entered into by agent

(1) A transaction entered into by an agent in the name of the principal within the limits of the mandate creates, alters or extinguishes civil rights and civil obligations directly for the principal. The agent is required to deliver that which is acquired by the transaction to the principal.

(2) An agent may enter into a transaction in the name of the principal with themself or with a person whose agent he or she simultaneously is only if so provided by law or the mandate granted by the principal.

§ 96. Forms of agency

(1) Agency is based on law (agency by law) or a transaction (agency by transaction).

(2) In the case of agency by law, the mandate of the agent shall be specified pursuant to law.

(3) In the case of agency by transaction, the mandate of the agent shall be specified by the principal.

§ 97. Agent

(1) A natural person with active legal capacity may be an agent. In the cases provided by law, certain natural persons with active legal capacity shall not be agents. A person with restricted active legal capacity may be an agent if so provided by law.

(2) A legal person may be an agent unless this is contrary to the legal person’s passive legal capacity.

(3) An agent shall themself enter into a transaction for which the agent is authorised unless the mandate grants the agent the right to delegate the mandate. In the case of a delegated mandate, the agent and the person to whom the agent delegates the mandate are solidarily liable.

(4) If a mandate is granted to several agents jointly (joint mandate), the agents are solidarily liable to the principal.

§ 98. Mandate

(1) A mandate is a collection of rights within the limits of which an agent may act in the name of the principal.

(2) If a required form of mandate is not provided by law, a principal may grant a mandate in any form.

(3) If a person sells goods or provides services at the request of another person, the person shall be deemed to have a mandate to enter into transactions arising therefrom.

(4) If unattested written form is required by law for a transaction, a mandate granted to enter into such transaction must be in unattested written or notarised form. If notarisation of a transaction is required by law, a mandate granted to enter into such transaction must be notarised.

(5) A person may demand that an agent with whom the person enters into a transaction prove the agent's mandate. If a person specified in subsection (3) acts in a situation from which it may be concluded that the person is acting at the request of another person, the person’s mandate shall be deemed proved.

§ 99. Authorisation

(1) Authorisation is a written document granted by a principal to an agent which expresses the mandate of the agent.

(2) An agent shall present authorisation if this requirement is provided by law or if so demanded by a person with whom the agent enters into a transaction.

§ 100. Term of mandate

(1) A mandate may be granted for a specified term or an unspecified term.

(2) A mandate is valid as of its granting unless otherwise specified by the principal.

§ 101. Grounds for termination of mandate

(1) In the case of agency by transaction, a mandate terminates if:

1) the agent performs the transaction for which the mandate was granted;

2) the term of the mandate expires;

3) the principal cancels the mandate;

4) the agent surrenders the mandate;

5) the legal person who is the principal or the agent is dissolved;

6) the bankruptcy of the principal or the agent is declared;

7) the principal dies, is declared to be without active legal capacity or is declared missing;

8) the agent dies, is declared to be without active legal capacity, is declared missing, or the agent's active legal capacity is restricted.

(2) In the case of agency by transaction, a principal may cancel a mandate at any time. An agent may surrender a mandate except if surrender is not permitted by law. An agreement whereby a principal waives the right to cancel a mandate or an agent waives the right to surrender a mandate is void.

(3) In the case of agency by law, a mandate terminates on the bases prescribed by law.

§ 102. Procedure for termination of mandate

(1) A principal is required to notify promptly the agent and the third persons known to the principal with whom a mandate to enter into a transaction was granted of cancellation of the mandate. If a mandate terminates on the bases provided for in clauses 105 (1) 5), 6) and 7), a management board, its substituting body, a trustee in bankruptcy or a successor has the duty to notify.

(2) If a mandate is granted by authorisation, the authorisation shall be reclaimed or a notice concerning cancellation of the mandate shall be published in a national newspaper in order to cancel the mandate before the end of term of the mandate.

(3) If a principal cancels a mandate, the mandate shall be deemed terminated as of the date the agent became or should have become aware of cancellation of the mandate but not later than the publication of a notice in a newspaper.

(4) After termination of a mandate, the agent or the agent's successor is required to return the authorisation to the principal promptly.

(5) The rights and obligations arising from a transaction which the agent entered into before the agent became or should have become aware of the termination of the mandate remain valid if the other party to the transaction did not know or need not have known that the mandate had terminated.

§ 103. Agency without mandate

(1) A transaction which is entered into in the name of another person by a person who has no mandate or who exceeds the limits of a mandate is void. If a person enters into a transaction in the name of another person and exceeds the limits of a mandate, the part of the transaction for which the agent had the mandate is valid.

(2) If a person in whose name the transaction specified in subsection (1) was entered into later ratifies it, the transaction is valid from inception. If the other party to the transaction applies for ratification, the person in whose name the transaction was entered into shall decide within two weeks whether or not to ratify the transaction. If the person does not ratify the transaction within two weeks, the transaction shall be deemed entered into without a mandate.

(3) A person who enters into a transaction with a person who has no mandate or who exceeds the limits of a mandate has the right to demand compensation for damage from that person if the person did not know or need not have known that the person had no mandate or exceeded the limits of a mandate.

Chapter 7

Term and Due Date

§ 104. Definition of term

(1) A term is a specified period of time to which legal consequences are bound.

(2) A term shall be specified in years, months, weeks, days, hours or shorter units of time or by an event which will definitely occur.

§ 105. Beginning of term

(1) A term begins to run on the day following the calendar day or the occurrence of the event by which the beginning of the term is specified unless otherwise provided by law or agreement.

(2) A term ends on the due date.

(3) The due date shall be specified by a term or a particular event.

§ 106. Due date

(1) If a due date is specified by a term calculated in years, the due date is the corresponding day and month of the last year.

(2) If a due date is specified by a term calculated in months, the due date is the corresponding day of the last month.

(3) If a due date specified pursuant to the procedure provided for in subsections (1) or (2) falls on a month which does not have a corresponding date, the due date shall be deemed to be the last day of the month.

(4) If a due date is specified by a period of time calculated in weeks, the due date is the corresponding day of the last week of the period of time.

(5) If a due date is specified by a period of time calculated in days, the due date is the last day of the period of time.

(6) If a due date is specified by a particular date, time or by the occurrence of an event, the due date arrives on such date, at such time or upon the occurrence of such event.

(7) If a due date falls on a public holiday or any other rest day, the due date shall be deemed to be the working day following the rest day.

(8) In the specification of a term, the period of time from midnight to midnight shall be deemed a day.

(9) If a due date is specified by a term calculated in a unit of time shorter than a day, such unit of time is the due date.

(10) If a due date is specified by the beginning, middle or end of a month, the due date is the first, fifteenth or last day of the month, respectively.

§ 107. Expiry of term

(1) If a due date is specified in days or by a term calculated in longer units of time, the term expires at 24.00 on the due date.

(2) A written document shall be deemed submitted by the due date if it is delivered to a post office for dispatch before 24.00 on the due date. Transmission of the text of a document by teletype, facsimile telegraphy or by other means of communication is equivalent to delivery of the document to a post office.

Part IV

Exercise and Protection of Civil Rights

Chapter 8

Exercise of and Measures for Protection of Civil Rights

§ 108. Exercise of civil rights

(1) Civil rights shall be exercised and civil obligations shall be performed in good faith.

(2) A right shall not be exercised in an unlawful manner or if the objective of exercising a right is to cause damage to another person.

§ 109. Presumption of good faith

If legal consequences are bound to good faith by law, the existence of good faith shall be presumed unless otherwise provided by law.

§ 110. Self-defence and emergency situation

(1) An act performed in self-defence is not unlawful if it does not exceed the limits of self-defence.

(2) An act performed in an emergency situation is not unlawful if it is directed at prevention of danger and the damage caused is less than the damage prevented.

§ 111. Defence of rights

(1) Civil rights may be defended in a court.

(2) Civil rights may be defended in a court of arbitration if so agreed by the parties.

§ 112. Measures for protection of civil rights

(1) Civil rights are protected by a court or court of arbitration.

(2) Measures for protecting civil rights are:

1) recognition of rights;

2) elimination of violations and prevention of further violations;

3) restoration of the situation that existed prior to violation;

4) compensation for damage;

5) compulsory performance of obligations;

6) other measures provided by law.

Chapter 9

Limitation

§ 113. Limitation period

(1) The general limitation period for protection of rights by an action is ten years, except claims for which a shorter limitation period is provided by law or to which limitation does not apply.

(2) A limitation period shall not be altered by agreement of the parties unless otherwise provided by law. A waiver of the right to demand application of limitation is void.

§ 114. Application of limitation

(1) A person has the right of recourse to a court for the protection of the person's violated or contested rights regardless of limitation.

(2) A court shall apply limitation only at the request of an interested party. If an action is brought after expiry of the limitation period (lapse of an action) and an interested party requests the application of lapse of an action, a court shall deny the action.

§ 115. Inapplicability of limitation

Limitation does not apply:

1) to a claim arising from a real right entered in the land register except a collateral claim arising from a real right;

2) to a claim to determine the boundaries of an immovable;

3) to a claim to reclaim a movable from a possessor in bad faith;

4) to a claim arising from family relationships unless otherwise provided by the Family Law Act;

5) in other cases provided by law.

§ 116. Beginning of limitation

A limitation period begins to run on the day a person became or should have become aware of the violation of the person's right. Another period for the creation of the right of action may be provided by law.

§ 117. Expiry of collateral claim

A collateral claim expires with expiry of the principal claim even if the limitation period of the collateral claim has not elapsed.

§ 118. Expiry of part of obligation

If an obligation is to be performed in parts, the claim for performance of each part expires separately.

§ 119. Limitation in case of legal succession

Legal succession does not affect the running of a limitation period.

§ 120. Suspension of limitation

(1) A period of time during which the running of a limitation period is suspended shall not be included in the limitation period.

(2) The running of a limitation period is suspended for the period of time:

1) during which a person without active legal capacity does not have a legal representative;

2) during which the bringing of an action is prevented by a fortuitous event;

3) during which a state of emergency or an emergency situation is in effect;

4) during which a moratorium is declared on a claim submitted against a debtor;

5) from the death of a bequeather until acceptance of succession or appointment of the administrator of the estate with respect to a claim in respect of the estate;

6) during which a plaintiff or defendant is in active service in the Defence Forces during a state of war.

(3) The running of a limitation period is suspended if the circumstances specified in subsection (2) arise or continue during the last six months of the limitation period or, if the limitation period is shorter than six months, during the limitation period.

(4) The running of a limitation period shall resume from the day the circumstance that caused suspension of the limitation period ends. The remaining limitation period shall extend up to six months or, if the limitation period is shorter than six months, by the limitation period.

§ 121. Interruption of limitation period

(1) The running of a limitation period is interrupted:

1) by filing an action;

2) by submission of a claim in a bankruptcy proceeding;

3) by submission of a claim to a court of arbitration;

4) if an obligated person performs an act whereby the person acknowledges the obligation.

(2) The running of an interrupted limitation period begins again upon:

1) refusal by a court to hear an action;

2) termination of a bankruptcy proceeding;

3) refusal by a court of arbitration to hear a claim;

4) performance of an act by an obligated person which proves acknowledgment of the obligation.

(3) The period of time that has expired until interruption of a limitation period is not included in the limitation period that begins again.

§ 122. Performance of obligation after limitation period

(1) If a debtor performs an obligation after the lapse of an action, the debtor shall not demand the return of that which was delivered.

(2) Expiry of a claim secured by a pledge does not deprive the pledgee of the right of satisfaction of the claim out of the pledged property.

(3) Expiry of a claim does not take away the right to set off the claim or to apply the right of retention if the right to set off the claim or to apply the right of retention is created before expiry of the limitation period.

§ 123. Expiry of claim recognised by court judgment

(1) The limitation period of a claim recognised by a court judgment is ten years. The running of such limitation period begins with the entry into force of the court judgment.

(2) The running of a limitation period is interrupted upon initiation of an enforcement procedure. The running of the limitation period begins again upon suspension of the enforcement procedure by the fault of the claimant. The period of time that has expired until the interruption of the limitation period is not included in the limitation period.

(3) The provisions of subsections (1) and (2) are not valid with respect to a claim to which limitation does not apply.

Part V

Private International Law Provisions

Chapter 10

General Provisions

§ 124. Definition of conflict of laws rules

(1) Conflict of laws rules provide which country's legislation applies if:

1) even only one party in a legal relationship is a foreign person (§ 130);

2) a thing connected with a legal relationship is situated outside the territory of the Republic of Estonia;

3) a legal relationship is created, altered or terminated outside the territory of the Republic of Estonia.

(2) For the purpose of this Act, a country is a territory in which an independent legal system is in force. For the purpose of this Act, conflict of laws rules shall not be deemed to be part of a legal system unless otherwise provided by the General Principles of the Civil Code Act.

§ 125. Bases for application of foreign law

Foreign law applies to a legal relationship if so prescribed by this Act, another Estonian law, an international treaty of Estonia, an international custom recognised in Estonia, or by a transaction which is not contrary to law, an international treaty or custom.

§ 126. Renvoi

(1) If this Act or another Estonian law prescribes the application of foreign law and the law of that country prescribes the application of Estonian law, Estonian law applies.

(2) If this Act or another Estonian law prescribes the application of foreign law and the law of that country prescribes the application of the law of a third country, Estonian law applies.

§ 127. Interpretation of foreign law

(1) Interpretation of a foreign law in Estonia shall be based on the interpretation and application practice of the law in the corresponding country.

(2) A person whose claim relies on a foreign law may be requested to supply the text of or other information concerning the law which is adequate for application of the law.

(3) A court, a court of arbitration or a state or local government agency may have recourse to the Ministry of Justice or the Ministry of Foreign Affairs or use experts for the interpretation of a foreign law.

(4) If the content of a foreign law cannot be clarified, Estonian law applies.

§ 128. Restrictions on application of foreign law

Foreign law does not apply and the rights and obligations arising therefrom shall not be deemed valid in Estonia if these are contrary to Estonian law, the constitutional order or good morals. In such case, Estonian law applies.

§ 129. Application of international treaty

If an international treaty of Estonia contains provisions which are different from the provisions of the General Principles of the Civil Code Act, the provisions of the international treaty apply.

Chapter 11

Persons and Transactions

Division 1

Persons

§ 130. Foreign persons

For the purposes of this Act, a foreign person is a natural person whose residence is outside Estonia (§ 21) or a legal person whose location (§ 40) is outside Estonia.

§ 131. Law applicable to passive legal capacity and active legal capacity of natural person

(1) The passive legal capacity (subsection 7 (1)) and active legal capacity (subsection 7 (2)) of a foreign natural person shall be determined by the law of his or her country of residence.

(2) A foreign natural person in Estonia has passive legal capacity and active legal capacity equal to that of a person whose residence is in Estonia unless otherwise provided by law.

(3) The active legal capacity of a foreign natural person concerning a transaction entered into in Estonia and concerning damage caused in Estonia shall be determined by Estonian law.

§ 132. Validity of declaration of incapacity and of restriction of active legal capacity

A declaration of incapacity of a foreign natural person or restriction of his or her active legal capacity in his or her country of residence shall be deemed valid in Estonia.

§ 133. Law applicable to foundation of legal person

Upon foundation of a legal person in Estonia, Estonian law applies.

§ 134. Law applicable to passive legal capacity and active legal capacity of foreign legal person

(1) The law of the country where the directing body of a foreign legal person is located applies to the passive legal capacity and active legal capacity of the foreign legal person.

(2) If the main activity of a foreign legal person is not conducted in the country where its directing body is located, the law of the country where the main activity of the legal person is conducted applies.

(3) The provisions of subsections (1) and (2) of this section apply to a branch of a foreign legal person.

§ 135. Recognition of foreign legal persons in Estonia

Foreign legal persons shall be recognised in Estonia and have passive legal capacity and active legal capacity equal to that of Estonian legal persons unless otherwise provided by law or an agreement.

§ 136. Retorsion

The government may impose retorsions on the passive legal capacity or active legal capacity of persons of countries in which restrictions have been imposed on the passive legal capacity or active legal capacity of the citizens, permanent residents or legal persons of the Republic of Estonia.

§ 137. Protection of personal rights

If personal rights are violated, the law of the country in which the act which is the basis for a claim was conducted or the law of the person’s country of permanent residence applies at the choice of the person whose personal rights are violated.

§ 138. Application of Estonian law by way of exception for protection of rights of person

A court may apply Estonian law for protection of the rights of a person if it finds that due to the circumstances immediate measures must be taken to protect these rights.

§ 139. Law applicable to intellectual property

Estonian law applies to intellectual property unless otherwise provided by law or an international treaty of Estonia.

Division 2

Transactions

§ 140. Validity in Estonia of transaction performed abroad

A transaction performed abroad shall not be deemed valid in Estonia if it is contrary to Estonian law, the constitutional order or good morals. In such case, Estonian law applies.

§ 141. Law applicable to content of transaction

(1) The law of the country which the parties to a transaction agree to have apply applies to the content of the transaction.

(2) Parties may agree on application of the law of a particular country either to a whole transaction or a part thereof.

(3) Failing agreement between parties, the law of the place of performance of a transaction applies.

(4) The place of performance of a transaction shall be determined by the law of the country with which an obligation arising from the transaction is most closely connected. An obligation shall be deemed most closely connected with the law of the country of residence or location of the performer of the obligation.

(5) The law of the country applicable to the content of a transaction applies to an agreement reached at a court of arbitration unless otherwise agreed by the parties.

§ 142. Law applicable to form of transaction

(1) The law of the country in which a transaction is entered into applies to the form of the transaction.

(2) Parties to a transaction may agree that the law of the country of performance of the transaction, the law of the country of residence or location of the parties or the law of the country where the property which is the object of the transaction is situated applies to the form of the transaction.

(3) If parties have not agreed on the law applicable to the form of a transaction and the transaction does not comply with the form specified in subsection (1), the transaction shall not be declared invalid only on the ground of failure to comply with the form if the transaction complies with Estonian law or with the requirements of the law applicable to the content of the transaction.

(4) Estonian law applies to the content of a transaction the object of which is an immovable situated in Estonia or a vessel or aircraft entered in a register in Estonia.

Chapter 12

Family Law

§ 143. Law applicable to contract of marriage

(1) The preconditions for a contract of marriage for either prospective spouse shall be determined by the law of the country of residence of the prospective spouse.

(2) The law of the country where marriage is contracted applies to the form of the contract of marriage.

(3) A marriage contracted abroad or at a foreign representation located in Estonia shall be deemed valid in Estonia if it complies with the requirements of subsections (1) and (2) or with the requirements of the law of the state of citizenship of the prospective spouse.

§ 144. Law applicable to divorce

(1) Upon divorce, the law of the country of joint residence of the spouses applies.

(2) If spouses reside in different countries, the law of the country of their last joint residence applies, but divorce is only possible if it is permitted by the laws of the countries of residence of both spouses. If the spouses did not have a joint residence, the law of the country where the body granting the divorce is situated applies.

(3) A divorce granted abroad shall be deemed valid in Estonia if it complies with the law of the country where the divorce was granted.

§ 145. Law applicable to annulment of marriage

Upon annulment of marriage, the law applicable to the contract of marriage (§ 143) applies.

§ 146. Law applicable to personal and proprietary rights of spouses

(1) The personal and proprietary rights of spouses shall be determined by the law of the country where the spouses have joint residence.

(2) If spouses reside in different countries but have the same citizenship, their personal and proprietary rights shall be determined by the law of their country of citizenship.

(3) If spouses reside in different countries and have different citizenship, their personal and proprietary rights shall be determined by the law of the country of their last joint residence. If the spouses did not have a joint residence, the law of the country where the marriage was contracted applies.

(3 1 ) If pursuant to this section the proprietary rights of spouses are determined by foreign law and one spouse resides in Estonia, the proprietary rights of the spouses determined by foreign law apply to a third person if a corresponding entry is made in the marital property register or if the third person knew or should have known of these rights.

(4) The law of the country where an immovable is situated applies to the proprietary rights of spouses in the immovable. [09.11.1995]

§ 147. Law determining relations between parents and children

(1) The mutual rights and obligations of parents and children shall be determined by the law of the country of joint residence of the parents and children.

(2) If parents and children reside in different countries, the law of the country of citizenship of the child applies.

(3) The law of the country of residence of the mother at the time of birth of the child applies to the rights of a child born out of wedlock.

§ 148. Law applicable to establishing and ascertaining filiation of child

The law of the country of residence or citizenship of a child or of one parent of the child at the time of birth of the child shall be the basis for establishing and ascertaining the filiation of the child depending on which is more beneficial for the child.

§ 149. Law applicable to adoption

(1) Upon adoption, the law of the country of residence of an adoptive parent or of the joint residence of adoptive parents applies. If adoptive parents are spouses who reside in different countries or are citizens of different countries, the adoption must comply with the law of the countries of residence or citizenship of both spouses.

(2) The law of the country of residence of a child being adopted and of his or her legal representative applies to the permissibility of adoption and to the consent of the child and his or her legal representative.

§ 150. Law applicable to duty of maintenance

(1) The duty to provide maintenance for a divorced spouse shall be determined by the law applicable to the divorce (§ 144).

(2) At the choice of a person submitting a claim, the law of his or her country of residence or of the country of residence of the person against whom the claim is submitted applies to the duty to provide maintenance for parents, children or other family members.

§ 151. Law applicable to guardianship and curatorship

The law of the country where guardianship or curatorship is established applies to the guardianship or curatorship.

§ 152. Law applicable to vital statistics registration

(1) The law of the country where a vital statistics registration is prepared applies to the vital statistics registration.

(2) A vital statistics registration prepared in a foreign state is valid in Estonia if it is prepared pursuant to the law of that state.

(3) A certificate concerning a vital statistics registration issued by an agency of a foreign state is valid in Estonia after consular legalisation.

Chapter 13

Law of Property

§ 153. Law applicable to real rights

(1) The law of the country where a thing is situated applies to the real rights.

(2) The law of the country where a thing is situated determines whether the thing is an immovable or movable.

(3) The law of the country of destination of a thing applies to a movable in transit outside Estonia unless otherwise agreed by the parties.

(4) The real rights in a vessel or aircraft subject to registration in a national register shall be determined by the law of the country where the vessel or aircraft is entered in the register.

§ 154. Law applicable to creation and extinguishment of real rights

The creation and extinguishment of real rights shall be determined by the law of the country where a thing was situated during the act or event which was the basis for the creation or extinguishment of the real rights.

§ 155. Law applicable to protection of real rights

(1) At the choice of the entitled person, the law of the country where a thing is situated or the law of the country of the location of the court which hears a claim with respect to a real right applies to the claim with respect to the real right.

(2) At the choice of the entitled person, the law of the country where a means of transport is registered in a national register may also apply to a claim relating to the means of transport.

§ 156. Law applicable to securities

(1) The law of the country where the securities are issued applies to registered and bearer securities unless otherwise agreed by the parties.

(2) In the transfer of securities:

1) the law of the country where the securities are issued applies to registered securities unless otherwise agreed by the parties;

2) the law of the country where bearer securities are located applies to bearer securities.

Chapter 14

Right of Succession

§ 157. Law applicable to succession

(1) Estonian law applies to the succession of an immovable situated in Estonia.

(2) The law of the country where an immovable is situated applies to the succession of an immovable situated abroad.

(3) The law of the country of a bequeather's last residence applies to the succession of movables.

(4) A person may designate in his or her will that the law of the country where his or her movables are situated or the law of the country of his or her citizenship applies to the succession of his or her movables.

§ 158. Law applicable to will

(1) The capacity of a person to make, alter or revoke a will shall be determined by the law of the country where a testator

resides during the making, alteration or revocation of the will.

(2) The form of a will and the meaning of the text of a will shall be determined by the law of the country where a person makes, alters or revokes the will.

(3) If the form of a will made abroad does not comply with the law of the country where it was made, it is valid in Estonia if such form complies with Estonian law.

(4) In order to bequeath an immovable situated in Estonia, the will and the forms of its alteration and revocation must comply with Estonian laws.

(5) The provisions of subsections (1)–(4) apply to a legacy.

Chapter 15

Law of Obligations

Division 1

Contracts

§ 159. Purchase and sale contract

(1) If the parties to a contract for the purchase and sale of an immovable have not agreed on the country whose law applies to the content of the contract, the law of the country where the immovable is situated applies.

(2) If the parties to a contract for the purchase and sale of a movable have not agreed on the country whose law applies to the content of the contract, the law of the country of residence or location of the seller at the time the contract is entered into or the law of the country of residence or location of the purchaser at the time the contract is entered into applies if:

1) the contract was entered into in that country; or

2) the contract prescribes that the thing shall be delivered in that country.

(3) If a contract entered into at an auction, by competition or on the stock exchange does not specify the country whose law applies, the law of the country where the auction or competition was conducted or where the stock exchange is located applies.

§ 160. Contracts between consumer and seller

(1) If parties to a contract between a consumer and a seller have not agreed on the country whose law applies to the content and form of the contract, Estonian law applies.

(2) If a consumer and a seller have agreed on the applicable law, this shall not deprive the consumer of the rights prescribed by consumer protection law in Estonia.

§ 161. Agency

(1) The mandate of an agent and the mutual rights and obligations of the agent and the principal shall be determined by the law of the country which the principal or the principal's agent and a third party have agreed to apply.

(2) Failing agreement between the parties, the law of the country where an agent performs acts arising from a mandate applies if the residence or location of the principal or a third party is in that country.

(3) The form and term of authorisation shall be determined by the law of the country where the authorisation is issued.

(4) If the form of authorisation does not comply with the law of the country where the authorisation was issued, the authorisation is valid if it complies with Estonian law.

§ 162. Law applicable to specific types of contract

(1) If parties have not agreed on the country whose law applies, the law of the country of residence or location of a lender, commercial lessor, licensor, depositary, broker, transporter, freight forwarder, insurer or donor applies to the content of the corresponding contract.

(2) The law of the country of residence or location of the person the performance of whose obligation is determinative with respect to a contract applies to contracts not specified in subsection (1). The performance of an obligation specific to the given type of contract shall be deemed determinative.

(3) If a contracting party specified in subsections (1) and (2) is a legal person, the law of the country of location of the legal person applies in the case provided for in subsection 134 (2).

§ 163. Liability for breach of contract

Liability for failure to perform a contractual obligation or to perform a contractual obligation in the manner required shall be determined by the law of the country applicable to the content of the contract (§ 141).

Division 2

Tort and Unjust Enrichment

§ 164. Law applicable to claim for damages

(1) The law of the country where an act was performed or an event occurred which is the basis of a claim for damages applies to a claim for damages in tort.

(2) The law of the country where an act was performed or an event occurred determines whether the act or the event is the basis of a claim for damages.

(3) If an act or an event which is the basis for a claim for damages is performed or occurs in one country but the damage therefrom arises in another country, the law of the country where the damage arises may apply at the request of an injured party.

§ 165. Application of Estonian law to claim for damages

(1) At the request of an injured party, Estonian law may apply to a claim for compensation for damage caused abroad if the residence or location of the tort-feasor and of the injured party is in Estonia.

(2) If an Estonian court or court of arbitration applies foreign law to compensation for damage, the practice developed in Estonia shall be considered in the determination of the amount of damage.

§ 166. Liability for damage caused to consumer

In the case of a claim for compensation for damage caused to a consumer in the purchase of goods or provision of services, the following law applies at the request of the consumer:

1) the law of the country of residence of the consumer; or

2) the law of the country of residence or location of the producer or service provider; or

3) in the case provided for in subsection 134 (2), the law of the country of the legal person if the producer or service provider is a legal person; or

4) the law of the country where the consumer acquires the goods or receives the service.

§ 167. Liability for unfair competition

(1) If damage is caused by unfair competition or by any other unlawful restriction of competition, the law of the country where the damage arises applies.

(2) If a contractual relationship is damaged by unfair competition, the law applicable to the content of the contract (§ 141) may apply upon compensation for damage at the request of an injured party.

§ 168. Law applicable in case of unjust enrichment

In the case of unjust enrichment, the law of the country where the unjust enrichment occurs applies.

Part VI

Implementing Provisions

§ 169. Entry into force of Act

The General Principles of the Civil Code Act enters into force on 1 September 1994.

§ 170. Application of Act

(1) The General Principles of the Civil Code Act has no retroactive effect unless otherwise provided by the implementing provisions.

(2) The provisions of the General Principles of the Civil Code Act apply to legal relationships created before 1 September 1994 and in force on that date unless otherwise provided by the implementing provisions.

§ 171. Active legal capacity

(1) The active legal capacity of a person for a transaction shall be determined by the law in force at the time the transaction is entered into.

(2) If the active legal capacity of a person was restricted or he or she was declared to be without active legal capacity before 1 September 1994 a court shall, at the request of the guardian on the basis of subsections 12 (2) and 13 (2), decide on the person’s right to enter into transactions. The person designated to care for an adult with restricted active legal capacity or of a minor before the entry into force of this Act shall be deemed the guardian as of 1 September 1994.

§ 172. Protection of personal rights

(1) The provisions of §§ 23–26, 41 and 42 also apply if personal rights were violated before 1 September 1994.

(2) Moral damage caused to a person shall be compensated for by the person who caused the damage. A person who causes damage shall be released from an obligation to compensate for moral damage if the person proves that the person is not at fault for causing the damage.

(3) If personal rights are violated, a court shall decide on the basis of the circumstances whether moral damage was caused thereby.

(4) In determining the amount of compensation, a court shall consider the extent and nature of moral damage caused and the degree of fault of the person who caused the damage.

§ 173. Declaration of person as missing and declaration of death

The provisions of §§ 27–35 also apply to a person who went missing before 1 September 1994.

§ 173 1 . [repealed – 15.02.1995]

§ 174. Form of transaction

(1) The law in force at the time a transaction is entered into applies to the form of transaction.

(2) If a transaction requiring notarisation was entered into before 1 September 1994 without notarisation and one party has performed the transaction in full or in part before this date and the other party to the transaction avoids notarisation of the transaction, a court has the right to declare the transaction valid at the request of the party who has performed the transaction. In such case subsequent notarisation of the transaction is not required.

(3) If a transaction was entered into before 1 September 1994 without observing the unattested written form prescribed by law, this does not result in the invalidity of the transaction, but in the case of a dispute, parties do not have the right to refer to statements of witnesses to prove the existence of the transaction.

(4) The provisions of subsection (3) do not apply to a transaction entered into before 1 September 1994 if failure to observe the unattested written form resulted in invalidity pursuant to the law in force at the time the transaction was entered into.

§ 175. Invalidity of transaction

The provisions of §§ 69–74, 76, 79 and 80 also apply to transactions entered into before 1 September 1994.

§ 176. Agency

(1) The law in force at the time a mandate is granted applies to the form of the mandate.

(2) An authorisation which was issued before 1 September 1994 and which did not have a specified term shall be deemed valid for one year from the date of its issue.

§ 177. Term

A term shall be determined pursuant to the procedure provided for in §§ 91–94 even if the term was specified by a period of time which started before 1 September 1994.

§ 178. Lapse of action

(1) If the limitation period of an action valid before 1 September 1994 has expired by the date of entry into force of this Act, the previously valid limitation period applies.

(2) If the limitation period of an action valid before 1 September 1994 has not expired by the date of entry into force of this Act and a longer limitation period is provided for in the General Principles of the Civil Code Act, the longer limitation period applies.

(3) If lapse of an action was not applied pursuant to the law in force before 1 September 1994 but it is prescribed by the General Principles of the Civil Code Act, or the limitation period established by the General Principles of the Civil Code Act is shorter than the previous limitation period, the limitation period provided for in the General Principles of the Civil Code Act applies by calculating the beginning of the limitation period from the entry into force of this Act.

§ 179. Application of provisions of unjust acquisition and saving

The provisions of §§ 477 and 478 of the Estonian SSR Civil Code apply to the unjust enrichment provisions specified in §§ 34 and 168 of the General Principles of the Civil Code Act.

§ 180. Repealed legislation

(1) Sections 1–94 and 566–573 of the Estonian SSR Civil Code ( ENSV Teataja †† 1964, 25, 115; 1968, 46, 341; 1969, 30, 295; 1970, 37, 332; 1973, 9, 68; 1973, 44, 389; 1973, 53, 465; 1974, 28, 247; 1977, 6, 72; 1977, 37, 424; 1980, 31, 490; 1985, 27, 451; 1986, 19, 251; 1988, 6, 68; 1988, 25, 295;

1989, 17, 203; Eesti Vabariigi Teataja‡‡ 1990, 20, 300; RT 1990, 12, 128; 1992, 33, 418; 1992, 49, 615; RT I 1993, 72/73, 1021) are repealed.

(2) Sections 3 and 4 of the Law of Property Act Implementation Act (RT I 1993, 72/73, 1021) are repealed.

* RT = Riigi Teataja = State Gazette

‡ Any amendment to the Act contained herein is noted with its date of passage, Riigi Teataja citation and date of entry into force. If a whole or a part of a section has been amended, the date of passage of the amending Act appears in brackets at the end of the section.

** Riigi Teataja Lisa = Appendix to the Riigi Teataja

†† ENSV Teataja = ESSR Gazette

‡‡ Eesti Vabariigi Teataja = Republic of Estonia Gazette