SEMINAR 2.10: Modernization of Contract and Obligation Law

Date: : May 2023

Place: Ateneo de Manila AdMU and University of San Agustin, USA

Leader: José Manuel de Torres Perea

Proposal for a training course for Faculty Members, attorneys and judges on the modernization of the Philippine Law of Obligations and Contracts. This course is based on the recent European experience, especially after the reforms of the Civil Codes of Germany and France, as well as on the Proposal of the General Commission of Codification of Spain, for the modernization of the Spanish Civil Code in the field of obligations and contracts.

I. OVERVIEW, CONTEXT AND FOCUS OF ACTIVITIES 

This proposal is part of the current European context of modernising and updating the law of obligations and contracts contained in the civil codes that were adopted during the codification process of the 19th and early 20th centuries.

The starting point for this modernisation is undoubtedly the Law on the Modernisation of the Law of Obligations in Germany, which entered into force on 1 January 2002 and which has reaffirmed the central position of the German Civil Code (BGB), which has been in force since 1900, within German private law and has become a reference point in this process of updating at European level. A milestone of this 2002 Act was the integration of weak contract law and consumer contract law into the BGB itself.

On the other hand, Ordinance no. 2016-131 of the 10th of February 2016 has led to a similar process of reform to the French law of obligations and contracts and has been the most important reform made to the French Civil Code (Code) since its adoption in 1804. In this case and among other important aspects, efforts have been made to provide this sector of private law with greater contractual flexibility, while also incorporating the protection of the weak contractor into the Code.

In Spain there have also been important studies and advances for the modernization of our law of obligations and contracts contained in the Civil Code of 1889. The most important one, which will be the basis of the present collaboration proposal with Philippine universities, is the Draft Bill for the Modernization of the Law of Obligations and Contracts, from the Civil Law Section of the General Commission of Codification of Spain, which was submitted by this official Commission under the Spanish Ministry of Justice in 2009. Subsequently, in 2017, the Ministry of Justice appointed a small group of experts to review the 2009 Proposal.

In addition to the legislative initiative, there is another initiative which is more general and of a private nature, drawn up by the Association of Civil Law Professors of Spain, who are working on the drafting of a new Civil Code, and who presented a proposal in 2016 which included a new fifth book dedicated to obligations and contracts, and a new sixth book on prescription and expiry. A complete proposal for a new Code was presented in 2018, composed by a preliminary title and six books, which is also being discussed in the legal field.

Lastly, there are also various proposals in Spain, also made by the General Codification Commission, to modernize specific contracts, such as the contract of sale, work and services contracts, the mandate contract and the gratuitous bailment contract, as well as a specific proposal on limitation and lapse.

The common denominator of all these initiatives and efforts at a European level to modernise and update the law of obligations and contracts is that they have basically been carried out by university professors from law faculties and other legal professionals who have actively collaborated with the governments or ministries responsible for this task. Some of these initiatives have even been directly initiated by associations of university law professors and other legal practitioners.

Thus, professors from various German universities prepared opinions on a future reform of the law of obligations and contracts in Germany during 1981-1983, and when the Federal Government presented a Discussion Project in 2000, the collaboration and support for the work of law professors such as Professors Canaris, H. P. Westermann or Medicus, among others, was again decisive.

On the other hand in France, the reform began with two projects by university professors: the “Catalan project” of 2006 (within the prestigious Henri Capitant Association of friends of French culture) and the so-called “Terré projects” of 2009-2013, carried out by these professors and which were the basis for the projects presented later by the Government and which culminated in the reform of 2016.

The same can be said for the work carried out in Spain, which on the one hand has come from the General Codification Commission, essentially formed by university professors and other legal professionals and experts, and on the other from the Association of Civil Law Professors.

In conclusion, we believe that the study and discussion on the modernization of the law of obligations and contracts in the Philippines should be initiated in the university and judicial fields, and from there, studies, opinions or concrete proposals should later be extended to other fields. This is notwithstanding the collaboration that may be provided by other interested legal associations.

In this regard, we believe that a good initial point of reference can be the Draft Bill for the Modernization of the Law of Obligations and Contracts of 2009 of the General Commission of Codification of Spain, since this proposal refers to the Spanish Civil Code of 1889, which is not only similar but identical, article by article and for the most part, to Book IV of the Civil Code of the Philippines that entered into force in 1950.

II. OVERALL AIM AND OBJECTIVES

In line with the previous point, the main purpose and objective of this proposal is to initiate the study and discussion at the university level of the modernization and updating of Book No. IV of the Civil Code of the Philippines which has been in force since 1950 in the field of law of obligations and contracts, taking in this regard the Spanish experience as a basic reference in comparative law, but also taking into account the process carried out in other European countries, especially in Germany and France.

More specifically, the following main objectives can be identified:

a)To identify those areas of Philippine contract and obligation law that need to be updated and modernized in order to adapt to the new needs of today’s society.

b) A comparison with the Spanish law of obligations and contracts that is currently being updated and revised.

c) Analysis of the suitability and ways of incorporating consumer law and the protection of the weaker party in the field of the law of obligations and contracts: is it within or outside the Civil Code?

d) Analysis of the main institutions that a modern law of obligations and contracts should contain.

e) Analysis of the updating of the law of obligations and contracts through the codification of jurisprudential figures.

f) Presentation and study of the 2009 Draft Bill for the Modernization of the Law of Obligations and Contracts of Spain, with special emphasis on the solutions provided to the matters that need to be updated in Philippine Law.

g) A more general study of the solutions provided to these matters in the reforms carried out in France and Germany.

h) Analysis of the adequacy of future incorporation of the above solutions into Philippine law through a comparative study of legal institutions.

i) Initiation of a new subject, or modification of an existing one in the curriculum of the Bachelor or Master of Laws degree in one or more universities in the Philippines that addresses the modernization of the law of obligations and contracts in the Philippines.

(j) To initiate a debate within the Philippine judiciary and university that may serve as a seed for future reform and updating of its law of obligations and contracts, as a starting point for a comprehensive revision of the Philippine Civil Code which has been in force since 1950  

The introduction of a new subject or modification of an existing one in the curriculum of the Bachelor or Master of Law in one or more universities in the Philippines that will address the modernization of the law of obligations and contracts in this country, constitutes a central objective of this proposal, as well as one of its key outcomes.

In this regard, we believe that the most viable way to do so would be to modify the content of some of the existing undergraduate or graduate law courses to include the study of contract and liability law, or it could be offered as a specific course (cognatecourse) or seminar (seminary). 

As a subject, it could be included in one of the following

– Ateneo de Manila University, subject “Obligations and Contracts”, from the Law Degree (first course, second semester, 5 credits).

– University of the Philippines, subject “Law of Contract”, Bachelor of Laws (year 1, semester 1)

III. WORK PLAN AND WORK TEAM 

WORK PLAN:

The above objectives determine the work plan to be fulfilled during the 5 days of implementation of this proposal, as follows:

FIRST DAY: GENERAL ASPECTS

1. Brief statement of the purpose and objectives of this proposal: the need to modernise and update the law of obligations and contracts in the current social context

2. Statement of the principles that modern contract and obligation law should meet in order to adapt to a changing and competitive modern society: the experience of Spain, Germany and France in this regard.

3. Presentation of the main legal institutions that serve as a basis for a modern law of obligations and contracts: protection of the weak contracting party and consumer protection; unification and simplification of the regime of contractual non-compliance and remedies for non-compliance; unification of the regime of limitation; codification of jurisprudential figures; updating of certain specific contracts and regulation of other new ones.

4. The steps and main paths for the successful implementation of the reforms needed to modernise the law of obligations and contracts

SECOND DAY: STUDY AND DETAILED ANALYSIS OF THE PROPOSAL FOR THE MODERNISATION OF SPANISH LAW OF OBLIGATIONS AND CONTRACTS: OBLIGATIONS

1. General provisions on obligations and types of obligations

2. Performance of obligations, breach of obligations and remedies for breach.

3. The assignment of claims, the assumption of debt and the assignment of the contractual position.

4. Causes for extinction of obligations. 

THIRD AND FOURTH DAYS: STUDY AND DETAILED ANALYSIS OF THE PROPOSAL FOR THE MODERNISATION OF SPANISH LAW OF OBLIGATIONS AND CONTRACTS: THE CONTRACTS OTHER LEGAL INSTITUTIONS

1. General provisions. The formation of the contract by means of negotiation.

2. The formation of the contract by accession and the general conditions of contract.

3. The integration of consumer law into the Civil Code: contracts concluded away from business premises, distance contracts and electronic contracts

4. The content of contracts and the interpretation of contracts.

5. Representation in contracts.

6. The contract in favour of a third party and the contract for a person to be appointed.

7. The nullity and voidability of contracts.

8. Cancellation of the contract.

9. The specific proposal on prescription and expiry.

FIFTH DAY: POSSIBLE PRIVATE CONTRACTS SUBJECT TO REFORM. FINAL ASSESSMENT

1. The specific proposal on the sales contract.

2. The specific proposal on works and service contracts.

3. The specific proposal on the mandate contract.

4. The specific proposal on the gratuitous bailment contract.

5. Final assessment of the suitability of incorporating into the Philippine Civil Code the solutions provided by the Spanish proposals and the appropriate ways to carry them out.

6. Final evaluation on the implementation of a new subject or modification of an existing one in the curricula of the law degree or postgraduate course in one or several universities in the Philippines, which addresses the modernization of the law of obligations and contracts in this country.

WORK TEAM:

-Prof. Dr. José Manuel De Torres Perea (University of Malaga)

-Prfra. D.ª Isabel Martens Jiménez (University of Malaga)

-Profa.Dª Beatriz García Fueyo (University of Málaga)

-Prof. D. Ignacio García Taboada (University of Málaga)

– Jesús Martin Fuster (University of Málaga)

IV. EXPECTED OUTCOME

There are two main results expected to be achieved through the implementation of this proposal, these being:

  1. The launching of a new subject or modification of an existing one in the curricula, undergraduate or graduate in law in one or several universities in the Philippines, which addresses the modernization of the law of obligations and contracts in this country.
  2. To initiate a debate in the university and in the Philippine judicial system that may serve as a seed for a future reform and updating of its law of obligations and contracts, as a starting point for a general revision of the Philippine Civil Code in force since 1950.

Alongside these main results, we believe that this proposal can achieve others inherent in or derived from its own implementation, which would be the following:

  1. To help improve the legal system of the Philippines in the field of private law and private contracting, and thereby improve the legal security of individuals.
  2. To contribute to the improvement of the legal protection of consumers and users of goods and services in the Philippines
  3. To serve as a link between Spanish private law and Philippine private law in the field of obligations and contracts for a legal exchange of comparative law
  4. Anticipate legal conflicts and possible solutions in the field of obligation and contract law, taking as a reference the Spanish legislative experience.
  5. Collaborate with the Supreme Court of the Philippines in the training courses of the Philippine Judicial Academy

SIDE SEMINARS:

  1. Evidence-based Policy Cycle: The Experience of Better Regulation

Fabrizio Esposito UNL

The course explains how Better Regulation works and how it is expected to improve the quality of legislation by introduction a policy cycle evaluation which involves stakeholders and academics. The course offers an overview of the Better Regulation Toolkit and discusses some examples of its application.

10.2 Introduction to the Secondary Law of the Internal Market

Fabrizio Esposito UNL

The law of the Internal Market of the European Union is quickly becoming a dense network of general and sector-specific legislation which is expanding beyond the realm of consumer transactions. The course intends to map this legislative network. Attention is also paid to the different institutional designs that distinguish different sectors and the types of hard and soft law instruments one can find.

V. LITERATURE

– AlbiezDohrmann, KlausJohen (2011). “La necesaria influencia del Derecho privado europeo en la propuesta”. En Klaus JohenAlbiezDohrmann, María Luisa Palazón Garrido y María del Mar Méndez Serrano (Coord.). Derecho privado europeo y modernización del Derecho contractual en España. Barcelona: Atelier. Pp.15-25

– AlbiezDohrmann, KlausJohen (2016). “Los modelos europeos en las proyectadas reformas de la compraventa en el Código Civil”. En A. Ortí Vallejo y M. Jiménez Horwitz (dir.). Estudios sobre el Contrato de Compraventa. Pamplona: Thomson Reuters Aranzadi. Pp. 57-102

– Arroyo Amayuelas, E. (2016). “La Propuesta de directiva relativa a determinados aspectos de los contratos de compraventa en línea y otras ventas de bienes a distancia”. Revista para el Análisis del Derecho, (3),InDret3/2016 pp 1-33. 

– Ataz López, Joaquín; García Pérez, Carmen, Estudios sobre la modernización del Derecho de obligaciones y contratos. Ed. Aranzadi, Thomson-Reuters. Navarra, 2019.

– Damián Moreno, Juan, “El impacto en el proceso de las modernas orientaciones en materia de incumplimiento contractual”RJUAM, nº 32, 2015-II, pp. 15-48 

– Diez-Picazo, Luis, “Propuesta para la modernización del Derecho de obligaciones y contratos”. Ed: Ministerio de Justicia. Madrid. 2009.

– García Rubio, Mari Paz, “La responsabilidad precontractual en la propuesta de modernización del Derecho de Obligaciones y Contratos.” Boletín del Ministerio de Justicia, año 65, nº 2130, 2011.

– Gómez Calle, Esther, “Los remedios ante el incumplimiento del contrato: Análisis de la propuesta de modernización del Código civil en materia de obligaciones y contratos y comparación con el borrador del marco común de referencia”ADC, tomo LXV, 2012, fasc. I pp.29-102.

– Klaus JohenAlbiezDohrmann, María Luisa Palazón Garrido y María del Mar Méndez Serrano (Coord.). Derecho privado europeo y modernización del Derecho contractual en España. Ed. Atelier ebooks. 2011

– Morales Moreno, Antonio Manuel, “Reflexiones sobre la causa del contrato en la propuesta para la modernización del derecho de obligaciones y contratos”,  Anales de la Real Academia de jurisprudencia y legislación, nº2011, pp.455-476

– Roca i Trías, Encarna, “El incumplimiento de los contratos en la propuesta de modernización del Derecho de Obligaciones y Contratos”,Boletín del Ministerio de Justicia , año 65, nº2132, 2011. 

– Salas Carceller, Antonio, “Aportación de la jurisprudencia a la modernización del Derecho de contratos”, en Estudios sobre la modernización del Derecho de obligaciones y contratos. Ed. Aranzadi, Thomson-Reuters. Navarra, 2019, coord.. Ataz López, Joaquín; García Pérez, Carmen. , págs. 413-428