1. Contractual Relationship and Alteration of Private Rights

2. Core Subject of Civil Relationship

3. The Concept of Private Rights
Meaning of legal relationship or privities
Concept of private rights
German scholar V. Tuhr said: A right is the core concept of private law and the ultimate abstract expression for diversified life.
A right is a legal power entitled by law to protect a specific interest.
The function of private rights
The function of rights is to protect the extent of individual freedom and to allow individual to organize or create its social life, especially to achieve autonomy in private life.
A right is a subjective law and a law is an objectified right. Enjoying a right is the struggle for the law. (Rudolf von Jhering)

4. Classification and System of Private Rights
Categorized by their contents or interests protected
Personality rights
the right to life
the right to the inviolability and integrity of his person
the right to the respect of his name, reputation and privacy
Rights arising from obligation
The right to claim prestation
Rights in rem (rights of thing)
Intellectual property rights
Other rights

5. Classification and System of Private Rights
Categorized by their power or function entitled by law
The right of claim
The right of defense
The right to form a legal relationship
The right to control or to manage

6. The right of claim Definition:
A right of claim is a right entitled a specific person (claimant) to carry out a specific act (including to do or to refrain from doing) .
Subject to extinctive prescription
A legal ground to launch a litigation.
Developed by German scholar Winscheid based on the concept of Actio under Roman Law.
The buyer’s right to claim the seller deliver the goods sold and the title of goods sold. (ROC Civil Code§348I, Korea Civil Code§568I, Japan Civil Code§560, and China Contract Law§135)

7. The right to defense Concept of defense Category of defense
Defense can be defined as an opposing or denial from a party against the other party when the other party exercises its right.
Category of defense
Defense in narrow meaning
Proposing inexistence of the right of claim
Contract is never formed.
Contract is valid.
Impossibility
Failure to acknowledge indeterminate contract.

8. The right to defense Proposing extinction of the right of claim
Compensation (set off)
Where two persons are reciprocally debtor and creditor of each other, the debts for which they are liable are extinguished by compensation, up to the amount of the lesser debt
confusion
Where the qualities of creditor and debtor are united in the same person, confusion is effected, extinguishing the obligation. Nevertheless, in certain cases where confusion ceases to exist, the effects cease also.
Release
Release takes place where the creditor releases his debtor from his obligation.
Invalid of right (Verwirkung)

9. The right to defense The right to defense Concept Category
A private right which owns by a individual, not the State.
Category
The eternal right to defense
A defense right arising from extinctive prescription.
The provisional right to defense
A defense right on reciprocal performance
ROC Civil Code Article 264: A party to a mutual contract may refuse to perform his part until the counter-prestation has been performed by the other party, except he is bound to perform first.
A defense right on beneficium excussionis
ROC Civil Code Article 745: A guarantor may refuse performance to the creditor, so long as the creditor has not filed proceedings for compulsory execution, against the property of the principal debtor, without results.
Japan Civil Code 453, Korea Civil Code China Contract Law, German Civil Code , French Civil Code , Swiss Obligation Code 495

10. The right to form a legal relationship
Definition:
A right to create, alter, or extinguish a legal relationship upon exercising such a right.
Category:
The right to rescind a contract
The right to annul a declaration of intention
The right to recognize a declaration of intention
The right to deny a declaration of intention
The right to choose a subject matter under selective obligations.

11. Effect of a valid contract
Concept of the rights arising from a contract (Obligation-right?)
the prestation: the right entitle to enjoy the interest of prestation
contractual duty: obligation
Main obligation
The seller of a thing is bound to deliver the thing to the buyer and to make him acquire its ownership. The seller of a right is bound to make the buyer acquire the right sold. If, by virtue of such right, the seller can possess a certain thing, he is also bound to deliver the thing.
The buyer is bound to pay to the seller the agreed price and to accept delivery of the object sold.
Incidental obligation
If performed, contractual duty discharged;
if in default or breach, it gives rise to a right to claim damages or the right of rescission

12. Questions
Why is is so important to learn the concept and system of private rights before we get into the rules of contract in civil law countries?
What relationship between variations of private rights and the structure in the Civil Code?

13. Rights arising from obligation
Obligation (zhai)
A legal relationship that one party can claim the other party to do or not to do specific behavior.
Parties:
Obligor (debtor): the person who has engaged to perform some obligation.
Obligee (creditor): the person in favor of whom some obligation is contracted, whether such obligation be pay money or to do or not to do something.

14. Owner of Right Occurrence, Juristic Facts change, (Juristische
The facts caused
legal effect
Legal effect
Occurrence,
change,
and extinguish
of right
Juristic Facts
(Juristische
Tatsache)
Exercise of
Right
Private Rights
Object
(subject matter)
of Right
Legal relationship

15. Juristic Facts
Human conduct
others
Illegitimate act
Legitimate act
Torts
Default
Expressive act
Non-expressive
Act
Qusai Juristic
Act
Juristic Act
Management of
affairs
without
mandate
Contract

16. Public right Rights Freedom of assembly, Freedom of speech
Freedom of religion
Public right
Rights
Private rights
Classified by its contents
Classified by its function
Property right
Non-property right
Right to claim
Right arising from
obligation
Right of personality
Right to defense
Right in rem
Right of family Status
Right to form
a legal relationship
Intellectual property
right
Right to control
Other property rights

17. Juristic Act (Rechtsgeschäft)
Definition
An act by which the party or parties declare their intention of effecting changes in legal relations and to which the law attaches the power of producing such changes.
A lawful act composed of a declaration of intention by which a legal effect in private law arises.

18. Category of Juristic Act
Unilateral Juristic Act
Property Act
Obligatory act:
Definition: A juristic act that create an obligation in personam between the parties whereby one party is entitled to demand the other party to perform a particular act.
Examples: the establishment of a foundation, the promise of a reward, the issuance of a instrument payable to the bearer
Dispositive Act
Definition: A juristic act that creates or alters a right in rem that is effective not merely between the parties but also against the world at large.
Examples: Relinquishment of a property right
Status Act: making a will, bequeathment
Act to form legal relationships: rescission of a contract, a notice to quit given to a tenant, a notice to recognize juristic act, a promise to offset payment. annulment of a juristic act

19. Category of Juristic Act
Multilateral Juristic Act
Bilateral Juristic Act (contract; agreement)
Property Act
Obligatory act (Obligatory contract)
Sale, Lease, Gift, Mandate, Loan…
Dispositive Act (Contract regarding the right in rem)
Conveyance of the right in rem, create a lien, create an easement, create a hypothecary right.
Assignment of the right arising from obligation or intellectual property right.
Status Act: engagement, marriage, divorce, adoption
Common Juristic Act: Vote of stock holder in share holder’s meeting, establishment of an association.

20. Questions
Are there any similarities and differences between a promise and a declaration of intention?
Could you describe the relationship between a contract and a declaration of intention or a contract and a juristic act?

21. Constituent elements of formation of Juristic Act
General requisites for formation
The Parties
Declarant (offeror as to offer, offeree as to acceptance)
Subject Matter
Declaration of intention
offer and acceptance; mutual assent.
Special requisites for formation
Delivery of object (real contract), written formation (formal contract)

22. Questions
What are the differences between “formation of contract” and “effectiveness of contract”?
What is the reasons behind the dichotomy of “formation ”and ”effectiveness ” of contract ?
If a contract without any consideration has been formed, is it an enforceable contact in Civil Law countries?
Where the contract is formed but not effect, can the party claim the other party to carry out the prerequisite elements to effect the contract?
If the contract is formed but not effect, is this contract a preliminary contract? What is the effect of a preliminary contract? Can you distinguish a main contract from a preliminary contract?

23. Case Study
X promised to lend $10,000 for six month with interest to Y on Jan 1. At the same time, X promised to transmit the said amount of money to Y’s account at the date of Jan 10. However, X didn’t honor his promise due to economic hardship?

24. Rules regarding formation of loan for consumption
Japan Civil Code 587
A loan for consumption becomes effective when one of the parties receives from the other party money or other things and agrees to return things of the same kind, quality, and quantity.
ROC Civil Code Article 474
A contract of loan for consumption is a contract whereby one of the parties shall transfer to the other the ownership of money or other fungible things, and the parties agree that the latter shall return things of the same kind, quality and quantity.
PRC Contract Law
Article 196: A contract for loan of money is a contract whereby the borrower borrows a sum of money from the lender, and returns the sum borrowed and pays interest thereon at the prescribed time.
Article 197: A contract for loan of money shall be in writing, except where the loan is between natural persons who have agreed otherwise. A contract for loan of money includes terms such as the loan's type, currency, purpose, amount, interest rate, term and method of repayment, etc.
Article 210 : A contract for loan of money between natural persons becomes effective at the time the lender tenders the amount of loan to the borrower.

25. Rules regarding preliminary contract of loan
Japan Civil Code art. 589
A preliminary contract to make a loan for consumption shall cease to be effective if one of the parties has subsequently been adjudged bankrupt.
ROC Civil Code Article 475-1
Under a preliminary contract to make a loan for consumption, if interest or other remuneration has been agreed upon for a loan for consumption and one of the parties becomes incapability to pay after the preliminary agreement constituted, the lender of the agreement may revoke such agreement.
Under a preliminary contract to make a loan for consumption, if it is without remuneration, the provisions of Article shall be mutatis mutandis applied.

26. Rules regarding formation of loan for use
ROC Civil Code
Article 464: A contract of loan for use is a contract whereby one of parties shall deliver a thing to the other, and agrees that the latter shall return the thing after gratuitously using it.
Article 465-1: After a preliminary contract to make a loan for use is constituted, the lender of the agreement may revoke such an agreement.　Unless otherwise the borrower of the agreement has demanded to perform the agreement and the lender of the agreement hasn’t revoked immediately.
Japan Civil Code
Article 593: A loan for use becomes effective when one part receives a thing from the other party and agrees to return it after gratuitously using and taking profits therefrom.

27. The institute to balance the interest between contractual parties in non-onerous Contract
Gift in ROC Civil Code
Article 406: A gift is a contract whereby the parties agree that one of the parties delivers his property gratuitously to the other party and the other party agrees to accept it.
Article 408: So long as the right of the gift has not been transferred to the donee, the donor may revoke the gift.　If the thing given has been partially transferred, the donor may revoke the gift for the portion has not been transferred. The provision of the preceding paragraph shall not apply to gifts notarized or to gifts made for the discharge of a moral obligation.

28. Gift in PRC Contract Code
Article 185: A gift contract is a contract whereby the donor conveys his property to the donee without reward and the donee manifests his acceptance of the gift.
Article 186: Prior to the transfer of rights to the gift property, the donor may revoke the gift. The previous paragraph does not apply to any gift contract the nature of which serves public interests or fulfills a moral obligation, such as disaster relief, poverty relief, etc., or any gift contract which has been notarized.

29. Gift in Japan Civil Code
Article 549: A contract of gift becomes effective when one party declares his intention gratuitously to transfer property of his own to the other party and the other party agrees to accept it.
Article 550: A contract of gift which is not in writing may be revoked by either party; however, this shall not apply with regard to any part as to which performance has been accepted.

30. Mutual Assent
Delivery
Loan
for Consu-
Mption
Japan
&
ROC
Preliminary agreement (revocable)
Executed and cannot be revoked
Formed, effective, and executed
PRC
Written Contract required (formed and effective)
Executed
Within Natural person (Formed, effective, and executed)
for
use
gift
ROC & PRC
Formed and Effective (revocable)
If notarized or made for the discharge moral obligation (irrevocable)
In writing, formed and effective
Not in Writing, formed and effective (revocable)

31. Prerequisites to Validate a Juristic Act
The validity of Juristic act
Valid, Void, Avoidable (voidable), Indefinite (uncertain)
General requisites for validity
The Parties shall have the appropriate capacity to form (enter into) a juristic act (contract).
Subject Matter shall be lawful (illegality), certain (uncertainty), possible (impossibility), and proper (violate public policy and good moral)
Declaration of intention shall be without any defects.
Variances between declaration and intention: mental reservation, malicious collusion, mistake
Involuntary declaration of intention: fraud & duress
Special requisites for validation
Register required. A contract subject to a condition precedent or a time limit for its effective.

32. Void
ROC Civil Code Article71 A juridical act which violates an imperative or prohibitive provision of the act is void except voidance is not implied in the provision.
ROC Civil Code Article72 A juridical act which is against public policy or morals is void.
ROC Civil Code Article73 A juridical act which does not follow the formality required by the act is void unless otherwise provided by the act.

33. Void
ROC Civil Code Article86 An expression of intent shall not be void for the expresser did not intend to be bound by it, except the fact was known to the other party.
ROC Civil Code Article87 A fictitious expression of intent made by the expresser in collusion with other party is void, but the voidance can not be a valid defense against any bona fide third party.

34. Avoidable (revoke)
ROC Civil Code Article88 If the expression was acting under a mistake as to the contents of his expression of intent, or had known the situation of affairs, he would not make the expression; he may revoke the expression; provided that the mistake or the ignorance of the affairs was not due to his own fault.
ROC Civil Code Article92 An expression of intent which is procured by fraud or by duress may be revoked by the expresser.　If the fraud was done by a third party, the expression may be revoked only under the circumstances that the other party knew, or might know the affairs.

35. Indefinite Incapacity and without approval of guardian
Contract made by a person limited in capacity to make juridical acts without the approval of his guardian is valid upon the acknowledgement of the guardian (ROC Civil Code Article79)
Disposing other’s property without authority
The disposition of any object which is made by a person without title is effective only upon the acknowledgement of the person entitled. (ROC Civil Code Article 118)
Agency without authority
A juridical act made in the name of an agent by a person of no authority of agency shall not be effective to the principal except it is acknowledged by the principal. (ROC Civil Code Article 170)

36. Valid
Avoidable
Indefinite
Void