Donation contract: conclusion and termination

[М. Cvetković]

XVIII, 365 str.

Biografija autora: str. 365 Napomene i bibliografske reference uz tekst

Civil law: persons, family, marriage contracts, inheritance, gifts, property, obligations, guarantees

Donation (donatio) is a common and important human relationship, a delicate social phenomenon affecting an individual and the society, interpersonal relations, economic status of the family and community (considering that gifts accompany all important life events). In different eras and societies, the object, legal form and purpose of donation have changed but it has always been a common legal transaction. The diverse living circumstances testify that relations arising from gifts are not as simple as they may seem at first. There is a dark side of gratuitousness. Jurisprudence has been studying it with more or less success for centuries. Contract law has developed an advanced legal system and a solid theoretical basis for trade relations but it is rather incomprehensive in terms of relations beyond the business sphere. Although legal norms on gifts are part of classic contract law, they are not static. Legal history has kept reaffirming this standpoint since Lex Cincia to the contemporary Draft Common Frame of Reference (DCFR). The theoretical significance of this research stems from the fact that comparative law includes a vast number of diverse definitions and conceptions on the institute of donation, which necessarily imply significant legal implications and call for reconsideration of the initial axioms. As a social phenomenon of legal significance, donation has to be observed in the historical, social and economic context, and considered from the aspect of philosophy of law. There are many dilemmas and conflicting theories in the legal doctrine on an array of donation-related issues, starting from the basic features to the legal nature of donation. If donation is really just an instrument for "enrichment and impoverishment," money would be an ideal gift for every occasion, which is certainly far-fetched. The subjective element of donation, as its principal feature, is multifaceted and ambiguous. It is described as the animus donandi, the causa, as well as the mutual consent of the contracting parties. The complexity of this institute is further illustrated by specific problems concerning the mere quantity of different types of donation (9 modalities). The practical significance of this study is related to a number of controversial and contemporary questions on the conclusion and termination of donation contract. The particular features governing the conclusion of a donation contract necessarily entail a specific legal regime in terms of its termination. Compared to other contracts, donation is more "vulnerable" in terms of extinction. In comparative law, there is a vast variety of divergent solutions regarding the termination grounds. Revocation of gifts is a perpetual source of controversy because this concept is inconsistent with the pacta sunt servanda principle. Apart from the donor, donation may be challenged by third parties in case their interests are threatened by the donor’s disposition. Moreover, donation is frequently a result of extortion under undue influence and pressure, or taking advantage of one's weakness, incapacity or age, usually by the least expected persons close to the donor. Nullity of a donation contract is always based on the lack of some essential element required for its creation: an absolute or relative incapacity of a contracting party; the impossible, illicit or imprecise gift object; the unauthorized or false causa; a failure to observe the legal form, etc. Donation is may also be fictional, simulated or dissimulated. The aim of this research is to examine, classify and analyze the problems and dilemmas related to the formation and termination of the donation contract, as well as to identify the dominant tendencies and key standpoints, and provide a detailed insight into the comparative legal solutions and case law. It is intriguing that the regulation of such a common and universal social phenomenon (as donation) is so different in various legal systems. The results of this research are: 1) identification of the most important similarities and differences between the concepts of donation in comparative law; 2) clarification of the many dilemmas, disputes and uncertainties (about 120) related to the formation and termination of the donation contract; 3) constructive proposals inspired by effective comparative solutions; 4) suggestions for the modernization of domestic contract law. The regulation of donation contracts in Serbia is not satisfactorily because the Obligation Relations Act (ORA) is primarily intended for contracts predominantly oriented towards the “open market”. This study focuses on the civil law developments, the legislative trickery (formalism, bans), the resourcefulness of legal professionals (resorting to manual gifts) and creativity of lay people (resorting to simulation and indirect gifts). The conservative schools of law and economics cannot comprehensively explain the concept of gift. Contract law is essentially property-related whereas donation may entail some non-material goals or purposes. Given that donation is inseparable from personal relations and ties, the legal framework which ignores this fact is inefficient. The current tendency towards establishing more flexible norms and broadening the discretionary authority of the judiciary ultimately imposes the need for a superior general legal education. The nemesis of donation is the legislative framework rather than legal practitioners. The traditional approach gives priority to material assets whereas the more recent approach supports the exchange of non-material assets. However, if donation were truly a hybrid between the onerous and gratuitous contracts, there is no example for the latter. The objective element of donation is best explained cumulatively: the gratuitousness is a prerequisite; the correlative pair (enrichment and impoverishment) is the result. Even though contract law generally excludes emotions due to their disruptive impact on free will, they are an inseparable part of donation contacts, clearly distinguishing them from other contracts. An appropriate legal solution is practically inconceivable without taking into account the personal and psychological effects of gifts. The legal relationship between the donee and the donor is not universally regulated as a contractual relation in all legal systems. The basic contract law concepts (obligations, debt, party autonomy, negotiations) are not compatible with donation as a social phenomenon. Domestic literature ignores arguments against obsolete formalism of donation. The legislator has always used the legal form to block the expansion of donation, as well as to accomplish his own goals. The legal nature of donation has largely been determined by the evolution of its legal form. The legal form should be an instrument of justice rather than a fetish. The legal standard of "excessive ingratitude" illustrates that the lack of definition may sometimes be quite convenient. Impoverishment is a positive example how local legal practitioners supplemented the domestic regulations by using comparative solutions. Residual revocation envisaged in the DCFR shows how an institute which is typical for mutually binding contracts may be adapted to fit donation contracts. In case of mistake (flaw), donation is easier to cancel than other contracts because it is considered that gratuitous acquirer does not need special protection. Yet, mistake is not a legitimate instrument for the donor who regrets his donation. Due to the disproportion between the donor’s mental capacity and the likelihood of fraud, there is a special focus on the the gift-giving capacity. In case of fraud, it is easier to cancel a gift than an onerous contract. In such cases, sometimes the contract annulment is favourable to the donor even though he is an "accessory" rather than a victim. Certain problems are universal in donation contracts. Lawyers have always tried to prevent gift extortion, which is particularly unfortunate when the donor is blackmailed by a member of the political elite. Lex Cincia, the first measure against the power abuse, had the same goal as the domestic Act on the Restitution of Land adopted 2,200 years later. The impact of emotions in contract law is most prominent in cases where the donation contract is terminated due to the dissolution of marriage. The end of romance between the spouses regularly affects the third party donation (a wedding present) although it is an external circumstance which is beyond the contracting parties’ relationship. The difference between the letter of law and its actual application is clearly evident when donation is revoked by the donor’s creditors.

poklon, ugovor, forma, predmet, sposobnost, opozivanje, pobijanje, ništavost, raskid

donation (donatio), contract, legal form, gift object, capacity, revocation, actio pauliana, nullity, termination

347.472(043.3)

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