05 Form of contracts

Question 1

Declarations of intent and legal transactions are….

Answer 1

binding without fulfilling any requirements as to the form.
Aim: Facilitate legal transactions

Question 2

What are the formal requirements by law?

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Answer 2

• e-g- written form, text form, notorial recording
• no waiver by the parties allowed
• in case of violation: transaction is void (§125)

Question 3

Formal requirements by the parties

Answer 3

• e.g. written form or text for
• parties free to agree on any form they want
• violation: transaction doubted to be void (§125)

Question 4

What are the functions of form?

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Answer 4

• warning function
• evidentary function
• advisory function
• control function

Question 5

What is the warning function?

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Answer 5

• parties involved are to be prevented from entering certain risky legal transactions without sufficient consideration
• written document needed
• being aware of consequences and terms of condition
• e.g. health insurance, rent contract, credit, warranties

Question 6

What is the evidentiary function?

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Answer 6

• clear proof of the legal transaction should be possible
• written - if not then you need witness
• e.g. lease contract

Question 7

What is the advisory function?

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Answer 7

• ability to re-read the contract
• details and specific parts
• a third person, legal expert is included who can get legal advice, e.g. notarial certfification
• warning function sometimes not enough -> advisory
• e.g. contract where party from another state in included, like on international contract base, e.g. 2: marriage contract or domestic labor contract

Question 8

What is the control funcntion?

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Answer 8

• rare (usually in anti-trust and competition law)
• legal experts/ state authority who controls and gives consent to the contract
• e.g. tax law, when selling a company control is needed

Question 9

What limits the freedom of contract most?

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Answer 9

• control function, although not always happening
• then: advisory function (needing third person in order to conclude a contract…. time and cost expensive - but not that often needed)

Question 10

Definition Written Form

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Answer 10

• document must be signed by issuer with name and own hand, or by notirially certified initials (otherwise void by §125)
• in case of a contract: both parties must sign on SAME document
• NOT: telegram, email, fax, …
• e.g. suretyship, termination of lease contract