COMPARATIVE PRIVATE LAW

Week 1 - Introduction

24 October 2014Resit: 25 January 2015f.m.j.verstijlen@rug.nl050 363 5773

Comparative Private LawAn introduction to comparative law

Week 1Frank M.J. Verstijlen

ProgrammeStudy MaterialsI.The material in the syllabus: L.P.W. van Vliet, Transfer of movables in German, French, English and Dutch Law, Nijmegen 2000, pp. 31-71 and 91-132. K. Zweigert & H. Ktz, An Introduction to Comparative Private Law, Oxford 1998, pp. 180-204. L. Ho, Trusts: the essentials, in: L. Smith (ed.), The worlds of the trust, Cambridge 2013, pp. 1-20. M. Grimaldi and F. Barrire, Trust and Fiducie, in: A.S. Hartkamp et al. (eds.), Towards a European Civil Code, Fourth Revised and Expanded Edition, Alphen aan den Rijn/Nijmegen 2011, p. 1085-1100.

II.

Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] 2 All England Law Reports, pp. 961-1022 (available in library, text available via Nestor).

III.

Everything that is discussed during the classes.

IV.

Additional material to be announced and/or distributed during the classes and/or via Nestor.

Information on the CourseComparative law is...The comparison of the different legal systems of the world.MacrocomparisonSpirit and styleMicrocomparisonSpecific legal institutions or problems

The primary aim of comparative law is knowledge.Comparative law is an cole de vrit which extends and enriches the supply of solutions and offers the opportunity of finding the better solution for the comparatist's time and place.

Week 1 An introduction to comparative lawWeek 2 An overview of some legal systemsWeek 3 Transfer systems, in particular in respect of movablesWeek 4 Transfer of movables in France, England, Germany and the NetherlandsWeek 5 Security rightsWeek 6 Trusts, general characteristicsWeek 7 Trusts in civil law systemsCritical comparison and reinterpretation of own systemExamples:What techniques of legislation are used?With what techniques are statutes interpreted?Is there judicial review?How are disputes resolved?What is the authority of precedents?

Examples:What specific protection exists for victims of traffic accidents?Under what circumstances can an offer be withdrawn?What factors are relevant in determining which party has the onus of proof?What are the requirements for a transfer of property?Under what circumstances can a director of an insolvent company be held liable by the creditors of that company?But...What is comparative law?Why practice comparative law?Functions of comparative lawAid to the legislatorTool of constructionComponent of the curriculum of universitiesContribution to the systematic unification of lawhttp://hudoc.echr.coe.int/sites/eng/pages/search.aspx?i=001-82172

Examplehttp://ec.europa.eu/justice/contract/files/european-private-law_en.pdfDraft Common Frame of ReferenceDevelopment of a private law common to the whole of Europe

But... 15a InsO - Antragspflicht bei juristischen Personen und Gesellschaften ohne Rechtspersnlichkeit(1) Wird eine juristische Person zahlungsunfhig oder berschuldet, haben die Mitglieder des Vertretungsorgans oder die Abwickler ohne schuldhaftes Zgern, sptestens aber drei Wochen nach Eintritt der Zahlungsunfhigkeit oder berschuldung, einen Insolvenzantrag zu stellen. [...]

Artikel 6:162 BW1. Hij die jegens een ander een onrechtmatige daad pleegt, welke hem kan worden toegerekend, is verplicht de schade die de ander dientengevolge lijdt, te vergoeden.2. Als onrechtmatige daad worden aangemerkt een inbreuk op een recht en een doen of nalaten in strijd met een wettelijke plicht of met hetgeen volgens ongeschreven recht in het maatschappelijk verkeer betaamt, een en ander behoudens de aanwezigheid van een rechtvaardigingsgrond.3. Een onrechtmatige daad kan aan de dader worden toegerekend, indien zij te wijten is aan zijn schuld of aan een oorzaak welke krachtens de wet of de in het verkeer geldende opvattingen voor zijn rekening komt.

Article L653-3 Code de CommerceI.-Le tribunal peut prononcer la faillite personnelle de toute personne mentionne au 1 du I de l'article L. 653-1, sous rserve des exceptions prvues au dernier alina du I du mme article, contre laquelle a t relev l'un des faits ci-aprs :1 Avoir poursuivi abusivement une exploitation dficitaire qui ne pouvait conduire qu' la cessation des paiements ;2 Abrog.3 Avoir dtourn ou dissimul tout ou partie de son actif ou frauduleusement augment son passif.

s 214 Insolvency Act 1986 - Wrongful trading.(1) Subject to subsection (3) below, if in the course of the winding up of a company it appears that subsection (2) of this section applies in relation to a person who is or has been a director of the company, the court, on the application of the liquidator, may declare that that person is to be liable to make such contribution (if any) to the company's assets as the court thinks proper.(2) This subsection applies in relation to a person if--(a) the company has gone into insolvent liquidation,(b) at some time before the commencement of the winding up of the company, that person knew or ought to have concluded that there was no reasonable prospect that the company would avoid going into insolvent liquidation, and(c) that person was a director of the company at that time;but the court shall not make a declaration under this section in any case where the time mentioned in paragraph (b) above was before 28th April 1986.

How to practice comparative law?Functional approachQuestion not posed in terms of national legal concepts but in functional terms

Legal FamiliesRomanistic legal family (France and all the systems which adopted the French Civil Code, along with Spain, Portugal and South America);Germanic legal family (Germany, Austria, Switzerland and a few affiliated systems);Anglo-American legal family;Nordic legal family;Law in the Far East (China, Japan);Religious legal systems (Islamic law, Hindu law).Categorization of systemsHistorical developmentMode of legal thinkingLegal institutionsSources of lawIdeologyChoosing legal systems to compare...The functional method is not without theoretical problems (R. Michaels, The Functional Method of Comparative Law, SSRN-id839826)It is doubtful whether it can provide a 'blueprint for just law'It takes a reductionist approach of legal cultureBut it can provide a tool for interpretation and improvement of lawSee however the criticism ofR. Michaels, The Functional Method of Comparative Law, SSRN-id839826It is a poor instrument for evaluationIt is designed to 'look behind the rules' and not suited to build a system of rulesIt focuses on the functional equivalence of legal institutions and therefore unification of the law has little to add

Claudias notes below.

Comparative Private Law

Manual: check Nestor: An introduction to comparative law (in syllabus)

Ppt: Nestor

Study material: check syllabus

Exam: 24 oct 2014

Resit: 25 jan 2015

Lecture 1

What is comparative law?It is the comparison of the different legal systems of the world. Critical comparison and reinterpretation of own system.

It can be divided in two:

macrocomparison (spirit and style of one legal system; look at the whole system --> questions: what tehniques of legislation are used? are there laws for these techniques? with what techniques are statutes interpreted?Most countries also allow to look at the intent of the legislator, but others say that you must abide by the law and not look at the intent of the legislator. Is there judicial review? How are disputes resolved (jury/proffesional judges; do you need a leave to take someone to court)? What is the authority of precedents? what courts are bound by previous decisions? can courts do as they please?) and

microcomparison (you look at specific institutions, not the whole system. Questions> Is there any specific protection for victims of traffic accidents? Some participats in traffic are more vulnerable. Under what circumstances can an offer be withdraw? What factors are relevant in determining which party has the onus of proof? What are the requirements for a transfer of property? Under what circumstances can a director of an insolvent company be held liable by the creditors of that company?).

Ecole de verite = school of truth. Comparative law enriches and extends the supply of solutions and offers the oportunity of finding the better solution for the comparatist's time and place. you have a wider range of solutions to choose from. See in advance how a certain solution workss, plays in practice.

Why practice comparative law?

Aim: knowledge --> what is comparative law? (use comparative law to improve your own law) more practical reason: legislators and courts use it< if you dont know it, you shut yourself out of your own system.Functions of comparative law (how to reach the aim) aid to the legislator: when the legislator decides there should be some law for a certain area of society more strategic or technical reasons: in some areas of law there is sort of competition between legislator (ex. competition law, company law, property law) tool of construction: you already have a rule, a law, but it is unclear; you use comparative law to find the actual meaning of that rule; example> http://hudoc.echr.coe.int/sites/eng --> J.A. Pye (Oxford) Land Ltd v. United Kingdom, The European Court of Human Rights, Grand Chamber (2007?) chapter 4 point 70,71, 72 component of the curriculum of universities contribution to the systematic unification of law --> development of private law common to the whole Europe -- > example Draft Common Frame of Reference (DCFR)How to practice comparative law?Functional approach --> the most common method.

There are other techniques, but they are not practiced very often: historical approach, comparison of legal transplants, comparative study of legal studies, etc.

Question not posed in terms of national legal concepts, but in functional terms. The legal systems may not have the same use for the same terms, or the same terms for the legal concepts (e.g. in German law some concepts like possession have a different meaning than in the Dutch/French legal system; trust).

Under what circumstances can a director of an insolvent company be held liable by the creditors of that company? if a German lawyer asks this question in his national concepts, he misses a lot of concepts, case law that are not included in those German concepts, but are included in them in other countries. there are different concepts, but they all deal with the question how do you protect the creditors that deal with this issues.

The functional method is not without theoretical problems (R. Michales -- Nestor).

It is doubtful whether it can provide a 'blue print for a (the right) law'. the fact that it is applied in 10 countries, does not mean that is perfect.

It takes a reductionist approach of legal culture. Law is not only rules, but also culture. Taking a rule from one country ant applying it in another it's bound to go wrong. (e.g. the European Civil Code)

Critics by R. Michales:

it is a poor instrument for evaluation. The advantage as an instrument of evaluation is that you not only see the rule, but also how it works in practice.

it is designed to 'look behind the rules' and not suited to build a system of rules. It is not designed to draw up new rules.

it focuses on the functional equivalence of legal institutions and therefore unification the law has little to add.

Advantage: But it can provide a tool for interpretation and improvement of law.Choosing legal systems to compare...Week 2

8th Sept, 2014

9h-11h

Mr. Dr. Rosalie Koolhoven

R.koolhovel@rug.nl

The Legal Families - "the world's law"

How do we divide these systems into families? There are only 6 or 7. Or maybe not? In the end of the course we will discuss that specifically - "C. Relativity of all this" (not compulsory, however).

A. An overview of some legal families

1. Legal system vs. Legal family

4 main legal systems:

- Common Law system (we don't have a codification as the main source of law, but yes the judge's decisions)

- Civil Law system (somewhat roman frame)

- Religious legal system

- Combined legal system

"Legal system": System for interpreting and enforcing law - there as many as there are countries

"Legal family": a group of systems that are somehow comparable or similar. Zweigert and Kotz went back to the first main civil codes, like for instance the German Code or the Napoleon Code, and tried to understand the changes. They looked a lot at the influence of Roman law.

But... How do we distinguish it or classify?

2. Distinction through taxonomyLook at the sources? Look at legal institutions or the way the court system is built? The historical development?

B. The six families, according to K. Zweigert & H. Kotz

I. Romanistic legal family

II. Germanic legal family

III. Nordic legal family

IV. Law in the Far East

Civil Law

V. Anglo-American legal family

VI. Religious legal family

Common Law

VII. Hybrid legal system as a group (not a family but they share the fact that they are a mixture)

- Common + civil

- Common + religious

- Civil + religious

I. Romanistic legal family1. Historical development and mode of legal thinking & ideology

- Droit crit + Roman law of the South

- Droit coutumier (customary law) + Germanic influence of the North

After 1400, French kings started writing down the laws that were applied. They sent people to report the laws and found over 300 different systems of only one area in between French frontiers. And, of course, legal diversity equals legal uncertainty.

2.

Code civil: "Esprit of Revolution"

With the Revolution, Feudal institutions were abolished - people wanted more freedom. With this intellectual revolution as well, a civil code was not as traditional but a marking point for a change of society as well.

Napoleon already had his Constitution approved and what he did was he tried to make it closer to people, with non-lawyerish words.

He was a military man and wasn't a lawyer. His personal interest was to be able to divorce and adopt children. That was his closer-to-people Napoleonic Constitution.

Of course, if we look at it now, men and women were not equals at all. And the style of the Statutes - it should have been easily accessible - but overtime Doctrine has become more and more important and Case Laws as well. In the style of the Court decisions, there aren't many references to Case Laws and prior decisions.

3. Style of statutesHe wanted it to be near to the reality of life and nothing like the German Code. This is mainly why it is considered a legal family.

II. Germanic legal family

1. Historical development and mode of legal thinking & ideology

Whereas in France we had several kings searching for people to write down all of the decisions, in the Germanic legal system we had very diverse customary legal systems and all of these were governed by few little Barons (not kings) - Feudals but just not Kings. There was no central authority.

The Germanic laws that were in use were very diverse like in France but very much not a result of reason but more of intuition or practical wisdom.

2. BGB

With the wish for a Civil Code spreading through Europe, also the Germans wanted one. Instead of writing down every decisions, they felt that if you'd write Roman law in a very structured way, it would be a written down conceptual world that you could use to always find la.

They studied law not from a historical perspective but they took the Roman law and organized it a very structured way and adopted it as a whole.

That created a logical Code, result of wisdom and not chance. This way it was the most certain Code.

What's very important to distinguish: it was imperial and not grown into the society.

Why was it not adopted by other countries? If it was newer? Because lots of countries that had the belief that they needed a civil code, they just adopted the French code - but why?

The French imperial power was much accelerated, and the Germans didn't have many colonies. And for instance, regarding Holland, the French code was simply enforced.

3. Style of Statutes

Characteristics: Very abstract concepts; categorizing Roman law form a non-historical way; whereas the Napoleon Code was very close to people, the German law is very professional and exact/accurate/precise.

For example: In German law we need to know when to use a certain claim, whereas in Holland we can vindicate something but at the same time can ask for damages. If something doesn't work, make other claims until something works.

In Germany, if something doesn't work, it doesn't.

III. Nordic legal family

1. The laws of Sweden, Norway, Denmark, Finland and Iceland: one family through political and cultural ties

They are put into one group due to a geographical reason.

Special note: There are no foreign elements. The basis is all German laws.

There is a very strong emphasis on Case Law. They have some codifications but not one civil ode like BGB or the Napoleon Code.

They do however, work with a lot of analogies: if we have a sails contract and need to know something about damages, they would apply analogies. They don't have a more abstract Civil Code, they just use analogies and focus on Case Law.

2. Background of tiny bit of Roman law and customary law together with partial codification

3. Emphasis on judicial decisions

IV. Law in the Far East

Eventhough the laws are different, they adopted the German Code. There is a tendency to solve disputes through settlements, rather than going to Court. Usually, if you go to Court, then you will stay anonymous and the judge won't make a decision like winning and losing - they send it to be negotiated so that "no one loses their face", they try to solve it in a more gentlemanly kind of way, maintaining the relationship that is already there.

1. China & Japan

2. Connected through tendency to resolve disputes otherwise than by courts

3. Mediation / their focus is to maintain a balance

4. Arbitral committee

5. Legal transplants from other systems

V. Anglo-American family

1. Historical developmentIt's the only Common Law Family - that's what makes it different.

It's an action based family. They have no civil codes, just the decisions/case laws.

It has no Roman influences because, in the Middle Ages, by the time that the Roman law was rediscovered, the English already had their understanding of what was The Law.

"The binding force of precedent" - that's the distinctive characteristic.

Besides the long tradition, there is something else that is special:

2. Common law & equity

They are merged into one united Court, the claims are united.

It was to fill a gap - in England, the common law claims were very rigid, and there was no flexibility, like in Germany.

3. Judgments: stare decisis - 1966 declaration

The system became too rigid - you had to be very specific on what you wanted. If you didn't get it totally right, you'd be lost. Then people started petitioning the King himself. All of those who didn't get justice would petition him and he would decide in Equity - a different Court from the Common Law Court.

Also, there were too few remedies.

In the end, the Courts merged. Also, this doctrine of Precedent was somehow more flexible over the years. In 1966, all the Law Lords concluded that it should be possible, in some cases, when Judges were sitting all together, there could be a different decisions - more just. That was a necessary development! Because if you're too strict, you might not find justice after all.

4. Countries?

USA, Canada, New Zealand, UK.

VI. Religious legal systems

Law revealed by God

1. Halakha - the Jewish path of life

2. Canon law (Christian): codification of Catholic and Orthodox law, comparable to civil law.

3. Sharia (Islamic law): path to be followed, to the source

4. Hindu law

VII. Hybrid legal systems

Created to do justice to all of those systems that aren't just one type. Everything is temporary, in life.

C. Relativity: legal transplants

Legal transplants:

The transplanting of law and legal institutions from one system to another, Alan Watson

Relativity of legal families in a stricter sense:

Belgian and French law have separated developments whereas Dutch law is no longer as different from German law as under the old Code NapoleonWeek 3

15th Sept

9-11h

Frank. M. J. Verstijlen

Transfer systems, in particular in respect of movablesThis week we'll analyse the different systems of transfer of movables within part of Europe and then next week we'll be comparing those systems.

We will focus on 3 systems:

Romanistic legal family - France

Germanic legal family - Germany

Anglo-American legal family - England

For instance, about The Netherlands: Originally they belonged to the Romanistic legal Family because France ruled TN for a while. After that, when they had their own Civil Code, it was kind of a translation of the French civil code still.

However, when you look at it, it looks like the Germanic system had much more influence. Now, it's sort of a mixture between Romanistic and Germanic.

It's important to keep in mind that transferal of movables is in the middle of Property Law. It's a certain part of law in which the position of 3rd parties are very important - it describes the rights that a person has towards a certain thing: I own this book. And this right of ownership can be enforced towards the whole world!

This means that my right of ownership is important, eventhough we have no contract. It's an absolute right and therefore we need to keep in mind 3rd parties.

Concepts and principles of the law of property

Law of property: concerned with legal relationships between a person and an asset; concerned with legal relationships between persons with respect to assets.

The position of third parties must be kept in mind vs. Absolute rightsIf you wanted that book, what would you do?

If there is no delivery required, it is a consensual system. Ex: Poland, Portugal

The conclusion of the contract grants you ownership.

However, in Germany, this would not be enough. We need a "real agreement".

We can make 2 types of distinctions:

Tradition system vs. Consensual system

Ex. Germany vs Poland

Abstract systems vs. Causal system

How do we distinct?

Well, according to Roman Law, the requirements for transfer are:

Causa: e.g. contract of sale and purchase

A reason, a cause, it has to be based on something. Usually one person sells the thing to another person

Traditio: transfer of possession

Delivery - the thing needs to be handed over in order to have the transfer taking place.

Entitlement transferor

If I do not own this book, I cannot transfer it to you. This is basically common to all systems, at least as a primary point - there are exceptions to this rule.

When it is not necessary to have a legal reason - causa - to have a transfer, in those systems, we speak of an abstract system, because the transfer is seen abstractly, separately, from the underlying contract.

The consensual system

You don't need a delivery - it's very easy to transfer it. We only need to conclude a contract. In those systems, the transferal is complete the moment the contract is concluded. It happens immediately.

"Solo consensu rule" - Ownership in principle passes the moment the contract of sale is made.Which problems can arise?

Imagine that the buyer is insolvent. The ownership has already been transferred...

Usually there is a remedy for this kind of problems: probably in most systems I will be able to invoke a right of protection - I'm obliged to hand over the book because I do not own it anymore, but I can postpone my obligation until the buyer fulfils his part of the bargain.

"Retention of title" - you can agree that ownership will only pass upon payment of the price. And this is part of an European directive - in every member state you should have such a protection of title clause.

Actually, the differences are mitigated. You get ownership immediately but it doesn't mean you can enforce your right until you yourself fulfil your end of the bargain. The end result will be nearer the delivery system.

Tradition system

The transfer of ownership in principle requires traditio, transfer of the possession of the thing.

Usually because the thing is actually handed over. At least in some systems - the German system, for instance - just handing over the thing is not enough, you need an additional agreement aimed at ownership actually passing // "the real agreement"

You have 2 forms of contract:

Frist step: contract of sale, on the basis of which the other party is obliged to transfer ownership Second step: to actually transfer ownership you need too actually hand over the thing. Or, in addition: there has to be a meeting of the wills and at that moment, ownership is to pass.

Whereas in a consensual system the contract, that is, consensus between the parties suffices, in a tradition system the contract merely creates an obligation to transfer the thing. In the latter system ownership will pass only after the legal act of transfer/traditio has taken place.Second distinction:

Abstract and Consensual system

The cause for the transfer, the underlying reason for the transfer to take place - usually a contract of sale - needs to be valid.

Also, a trade or a gift. It is not necessary to have a quid pro quo - there's nothing wrong with a person actually donating a thing without requiring a purchasing price.

The distinction is: The existence of this cause is crucial for the transfer. In an abstract system, it isn't. If there is something wrong with the underlying contract, it means that the transferal doesn't take place / on the other hand, in an abstract system, the transferal remains valid, when it comes to the abstract system.

A causal transfer system demands that the transfer be based on a valid legal ground, a valid causa traditionis.

In a consensual system, where the contract of sale itself is said to pass ownership, it is obvious that avoidance of the contract will lead to ownership reverting to the seller with retroactive effect.

In a consensual system the transfer of ownership depends on the validity of the contract.

A consensual system therefore is a causal system.There are cases in which something different than a contract can function as a valid legal basis:

For instance, based on a wrongful act - person A concludes a contract of sale with person B, they sell a house or 100.000. And person C is willing to pay more than that and puts pressure on A to sell it to him, instead of transferring it to B. The fact that C is provoking, forcing A to commit breach of contract can be an unlawful act. Eventhough A has transferred ownership to C, the Court will decide that it has to go to B, because the original contract is valid and has to be enforced.

In a consensual system, the transfer of ownership depends on the validity of the contract.

A consensual system therefore is a causal system.

In a tradition system the act of transfer is considered as a distinct legal act.

Having made the distinction between the underlying contract, which serves as causa traditionis, and the transfer, a legal system is confronted with the question how the latter act relates to the former one.

Does invalidity of the underlying contract affect the validity of the transfer?

Because in a tradition system, the second stage - traditio - is a different act; therefore, there can be something wrong with the underlying relationship. But if the second step has been taken, there are 2 solutions:

When the delivery has been made and the object has been handed over, the fact that the delivery has taken place is decisive. We speak of abstract systems, if it transfer is still valid. If eventhough delivery has taken place, the fact that the underlying relationship is flawed or even has never existed, in that case, that means that the transfer becomes invalid, then we speak of causal systems.

So... does the invalidity of the underlying relationship affects the contract? If the answer is no, we have an abstract system. If yes, we have a causal system.

Legal systems in which the validity of the transfer does depend on a valid causa traditionis, for example the Dutch system, are called causal tradition systems.

If in such a system the contract is avoided with retroactive effect - the transfer is invalid and ownership is deemed never to have passed to the buyer.SoExample of the causal system: Dutch system

If the underlying contract has been avoided, then there is no transfer. And eventhough if the thing has been delivered, no transfer has taken place and I will remain the owner eventhough the thing is actually in your possession.

In an abstract system, this is different. The underlying contract does not actually affect the transfer once there has been a valid traditio.

Ex: the German system

But what happens if the transfer has taken place, remains valid and the underlying contract is invalid?

The end result is not very appealing because, for instance: if I traded a book (10) for a computer (300; 290 difference) - it could be a valid contract, there is no reason for it not to be; however, if I told you it was a very expensive book, very special book, and it is not true, if I've lead you to believe in something false, then according to Dutch law, I would be able to do something about it - I could invalidate this contract.

But how would it be in the abstract system?

In Germany, there is an institute which in this case would help transfer the object back. To put it simple: you have something you're not supposed to have. Basically what we have is that from the view of property law, the acquirer remains the owner but there is unjustified enrichment. He should transfer the thing because eventhough he has ownership, there is no justification for this transferee to remain the owner. So, therefore, by law, he needs to retransfer it. However, until this retransfer takes place, he will still be the owner.

Conclusion: In an abstract system, the position of the seller who sells with an invalid basis is much weaker than it is in a causal system. Because if the same thing happens in The Netherlands, the fact that the contract has been avoided, means that there is no underlying legal grounds. It has retroactive effects. The contract is deemed to never have happened.

So I can claim my computer and you can claim your book. I still own my computer and so I have a much stronger claim - I have an absolute right, whereas in Germany it's just a personal right.

Example: A contract of a sale of a bicycle between A (seller) and B (purchaser) is concluded on 1 January, the bicycle is delivered on 5 January, the contract is avoided on 10 January.

What are the consequences in the three systems?The 3 different systems we have discussed so far:

- Consensual system (always a causal system)

- Causal tradition system- Abstract tradition system

What are the consequences?

On the 1st January

1. Consensual system

B owns the bike. The contract itself transfers the ownership.

2. Causal tradition system

A owns the bike. Because it's a tradition system - it has happened. Delivery is required to have a transfer of property.

3. Abstract tradition system

A owns the bike

On the 5th January

1. Consensual systemB owns the bike2. Causal tradition systemB owns the bike3. Abstract tradition system

B owns the bike

On the 10th January

1. Consensual systemA owns the bike.

2. Causal tradition system

On the 10th of January, A owns the bike. The definition of causal is that the transfer DEPENDS on the underlying contract and it does not exist!3. Abstract tradition system

The transfer is completed - B will own the thing. But by January 10th, there is a retroactive effect - the contract is deemed to never have happened. There is no contract, there is no transfer.

German Law: Abstract tradition system

French Law: Causal consensual system

English Law:

Common Law: tradition system English Sale of Goods Act 1979: causal consensual system

Dutch Law: Causal tradition system

The requirement of power of disposal

It is required that the transferor has the actual power to dispose of it. I own this thing so I have the power to transfer ownership of this book.The main rule is: if I don't have ownership, I cannot transfer it - Principle of Disposal. Nemo plus iuris ad alium transferre potest, quam ipse habet nobody can transfer more right than he himself has.

Nemo dat quod non habet no one gives what he does not have

In order to transfer a thing the transferor must have the power to dispose of the thing in question.But it does not say that we have to own it - there are circumstances in which someone else is authorized to transfer ownership. The basic rule is that the one person to transfer ownership, is the owner himself.

The exception is that by law we can do almost anything - we can give someone else the power to transfer ownership. For example, the trustee in bankruptcy.Third party protection

An act of disposal executed by a person not having the power to dispose is invalid and the intended acquirer of the right does not acquire the right in question.

However, exceptions to the rule exist.

We have to put ourselves in the position of the person who thinks he his the owner upon concluding the contract.

Since it is very difficult to find out who actually owns the book, we need to protect 3rd parties somehow. Usually the law does this.

We put our trust in this person and then he turns out to be someone else? No. "Third party protection" is supposed to fight that.

E.g.: Transfer of movables in German law

> 929, 1st sentence BGB:

Zur bertragung des Eigentums an einer beweglichen Sache ist erforderlich, dass der Eigentmer die Sache dem Erwerber bergibt und beide darber einig sind, dass das Eigentum bergehen soll.

For the transfer of the ownership of a movable thing, it is necessary that the owner delivers the thing to the acquirer and both agree that ownership is to pass. (translation: Bundesministerium der Justiz)The German abstract system distinguishes between the contract obliging to make the transfer (Verpflichtungsgeschft) and the transfer itself (bereignung, Veruerung).

The transfer is valid even if the preceding contract is void or has been avoided with retroactive effect.If ownership has been transferred under a voidable contract avoidance will not automatically revert ownership to the transferor.The second stage is "both agree that ownership is to pass" - the real agreement

Exceptions to the abstraction

Fraud and duress will in principle affect the validity of both the contract and the transfer. Such a common defect is called Fehleridentitt (identity of defect).

The abstraction is ius dispositivum: the parties may make the transfer depend on the validity of the underlying contract.