Our systems are now restored following recent technical disruption, and we’re working hard to catch up on publishing. We apologise for the inconvenience caused. Find out more: https://www.cambridge.org/universitypress/about-us/news-and-blogs/cambridge-university-press-publishing-update-following-technical-disruption
We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
To save content items to your account,
please confirm that you agree to abide by our usage policies.
If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account.
Find out more about saving content to .
To save content items to your Kindle, first ensure coreplatform@cambridge.org
is added to your Approved Personal Document E-mail List under your Personal Document Settings
on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part
of your Kindle email address below.
Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations.
‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi.
‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
This chapter draws a number of conclusions from the case studies and comparative remarks contained in Part II. Here, the subject matter of the comparative analysis changes. While the comparative remarks in Part II analysed and compared the 28 national answers to each case of the questionnaire, the present chapter analyses the 12 comparative remarks and compares them with each other. It aims at answering the central question of to what extent there is a common core intended as substantial convergences between the 28 jurisdictions as regards the operative rules found in each of the 12 case studies.
The degree of convergence between the national answers to the questionnaire's questions varies a lot from case to case. In some cases, the national answers only converge for what concerns the (in)validity or (un)enforceability of the contractual agreement, but not for what concerns the remedies ultimately available to the parties. Vice versa, in other cases, the national answers only converge to a certain extent for what concerns the remedies ultimately available, while no consensus can be found for what concerns the validity of the contractual agreement: half of the countries would consider the agreement valid and enforceable; the other half would deem it invalid and/or unenforceable. Furthermore, in some other cases, a convergence only concerns the main scenario, while the variation is characterised by great divergence.
This apparent inconsistency stems from the very nature of the operative rules that characterise the Common Core methodology. In this volume, the operative rules are determined by two factors: the validity or enforceability of the contractual agreement on the one hand, and the availability of the specific remedies asked for in the questionnaire's questions, on the other. The really decisive factor is the availability of the remedies, which could be not only contractual but also restitutionary, under the specific circumstances of the case. The restitutionary or unjust enrichment dimension often determines a practical convergence of the operative rules in two countries whose legal and meta- legal formants deeply diverge for what concerns the compatibility of a certain agreement with legislative provisions, public policy or good morals.
Contracts are illegal not only when they contravene specific legal rules, but also when they are considered immoral or contrary to public policy. In this way rules of contract law also influence the exceptional and sometimes fragile relationship between law and morality. They determine which issues can be made the subject of a legally valid and enforceable agreement according to the values underlying the legal order to which they pertain. But despite their geographic proximity, shared history and common aim of a strong EU internal market there are remarkable differences in the underlying values of many European legal systems. This book brings together a group of well renowned contract lawyers that analyse how their own legal systems deal with 12 interesting cases of morally dubious agreements, including for example suretyships, conditional contracts of succession, nuptial agreements, surrogacy agreements, contracts for sex work and, of course, usurious contracts. All inspired by real litigations adjudicated by courts and covering the questions of validity and enforceability, as well as the availability of remedies. To give a comprehensive picture of immoral contracts across Europe, the national perspectives are complemented by chapters providing historical insights as well as an EU perspective. Throughout the book comprehensive analysis of the findings offers crucial insights into divergences and convergences and the decisive factors driving European thinking. With contributions by Susana Almeida, Paulius Astromskis, Marko Baretic, Valentina Bineva, Milan Budjac, Florin Ciutacu, Aurelia Colombi Ciacchi, Eugenia Dacoronia, Julie del Corral, Róbert Dobrovodský, Wolfgang Faber, Nuno Ferreira, Francesca Fiorentini, Morten M. Fogt, Kestutis Gusevicius, Nikitas Hatzimihail, Torbjörn Ingvarsson, Monika Jurčová, Lorenz Kähler, Julija Kiršienė, Theis Klauberg, Ivana Klorusová, Julija Kolomijceva, Irene Kull, Laura Macgregor, Chantal Mak, Zeeshan Mansoor, Luboš Maxina, Adam McCann, Peter Mészáros, Špelca Mežnar, Tuulikki Mikkola, Zuzana Nevolná, Zdeněk Nový, Zsolt Zdeněk Nový, Barbara Pasa, Charlotte Pavillon, Annina H. Persson, Katarína Procházková, Teresa Rodríguez de las Heras Ballell, Vincent Sagaert, Angel Shopov, Karolina Sikorska, Jozef Štefanko, Lyn K. L. Tjon Soei Len, Martina Uhliarová, Kurt Xerri, David E. Zammit and Jozef Zámožík. PROF. DR. AURELIA COLOMBI CIACCHI is a Professor of Law and Governance at the Law Faculty of the University of Groningen. She was previously a Marie Curie Fellow at the University of Oxford. PROF. DR. CHANTAL MAK is a Professor of Private law, in particular fundamental rights and private law, at the Amsterdam Centre for Transformative Private Law (ACT) of the University of Amsterdam. DR. ZEESHAN MANSOOR is an Assistant Professor at the Hazelhoff Centre for Financial Law of the University of Leiden. He is also a Director at the consultancy firm Alvarez & Marsal, focusing on Financial Industry Advisory Services (FIAS).
The case studies included in this volume have been prepared on the basis of a questionnaire, according to the consolidated methodology of the project “The Common Core of European Private Law”. In drafting most of the fictitious disputes, we have drawn inspiration from real litigations adjudicated by courts. We have not only simplified the facts of these real litigations, but also slightly changed them by adding several fictional elements. The names of the parties are purely the product of our fantasy. The questionnaire consists of the following cases.
CASE 1: SEX WORK CONTRACTS
Mr Bighead, a famous sportsman, agreed with Miss Butterfly, a known sex worker, that he would pay her €10,000 for her services. After the contract was performed, Mr Bighead declared that he is not going to pay her anything. Can Miss Butterfly recover the amount promised to her?
CASE 2: CONTRACTS PROMOTING SEX WORK
Mr Pioneer rented out his limousine to Miss Pearl, a known sex worker, on a month-to-month basis for €2,000. After the first month, Mr Pioneer's employees, who are responsible for the maintenance of the vehicle, informed him that they have come across evidence which suggests that the vehicle is being used for the purposes of Miss Pearl's profession. Six months have since lapsed and Miss Pearl failed to pay last month's rent for the use of the vehicle. Can Mr Pioneer recover the unpaid amount?
Variation: Would it make a difference if Mr Pioneer had raised the rent of the vehicle to €3,000 per month after confirming that the vehicle was being used for Miss Pearl's profession?
Case Reference: Pearce v. Brooks [1866] LR 1 Ex 213.
CASE 3: CONTRACTS PROMOTING TELEPHONE SEX
Wicked Ltd, a telephone sex service provider, concluded a contract with Fun Ltd for the marketing of telephone cards. In connection with this marketing contract, the two companies concluded a loan contract by which Wicked Ltd borrowed €50,000 from Fun Ltd. Wicked Ltd delivered to Fun Ltd telephone sex cards and other telephone sex-related services for a value of €80,000. Some months later, the business relationship between Wicked Ltd and Fun Ltd started to deteriorate until it was eventually terminated. Fun Ltd has claimed from Wicked Ltd the repayment of the €50,000 loan. Can Wicked Ltd set off the claim and counterclaim €30,000 from Fun Ltd as payment for the delivered services?
Mr Pioneer rented out his limousine to Miss Pearl, a known sex worker, on a month-to-month basis for €2,000. After the first month, Mr Pioneer's employees, who are responsible for the maintenance of the vehicle, informed him that they have come across evidence which suggests that the vehicle is being used for the purposes of Miss Pearl's profession. Six months have since lapsed and Miss Pearl failed to pay last month's rent for the use of the vehicle. Can Mr Pioneer recover the unpaid amount?
Variation: Would it make a difference if Mr Pioneer had raised the rent of the vehicle to €3,000 per month after confirming that the vehicle was being used for Miss Pearl's profession?
Case Reference: Pearce v. Brooks [1866] Lr 1 Ex 213.
AUSTRIA
OPERATIVE RULES
Mr Pioneer can recover the unpaid amount.
Variation: Mr Pioneer might not be able to recover the full amount.
DESCRIPTIVE FORMANTS
Recent Supreme Court decisions on a comparable issue do not exist. However, it is almost evident that the assessment would basically be analogous to that of Case 1. In its 1989 case on sex work contracts, the Supreme Court ruled that a contract for renting out sauna rooms to a nightclub client is void on the ground of “immorality” because this contract enabled the performance of sex work activities and generating profit therefrom. However, after changing its approach to sex work contracts in 2012, the Supreme Court would most certainly consider such a renting agreement valid, irrespective of whether it is entered by the client or – as in the case of Miss Pearl's limousine – by the sex worker herself. This assumption can be backed by the argumentation employed by the Supreme Court in its 2012 case, in which it concluded that if an enforceable claim for the payment of money arises from a sex work contract (which is the only relation where a person's dignity and sexual integrity is at stake), the same must apply to a contract between the client and the nightclub owner (who, in turn, pays the sex worker). Accordingly, renting out a limousine to a sex worker would be treated as any other leasing contract today.
Due to tight financial circumstances, Ms Moneypenny decided to conclude a credit agreement with Bond Bank for a sum of €5,000. According to the terms of the contract, she would pay back this sum in 30 monthly rates of €250. Moreover, the last rate would be equal to the loaned amount. This meant that in total Ms Moneypenny would have to pay a sum of about €12,000 to the Bank. After paying 19 monthly rates, Ms Moneypenny found herself in such debt that she was no longer able to continue paying back the loan to Bond Bank. The Bank is now suing for the remaining amount of the loan. Can Ms Moneypenny challenge this claim?
Case Reference: CJEU C-453/10, Pereničová and Perenič v. SOS finance spol. s.r.o., ECLI:EU:C:2012:144.
AUSTRIA
OPERATIVE RULES
Ms Moneypenny can challenge the claim.
DESCRIPTIVE FORMANTS
Art. 879(2)(4) CC and Art. 1 Usurious Contracts Act, using identical wording, declare usurious contracts void. The rule's requirements can be characterised as follows: first, there must be a clear disproportion between the values of performance and counter-performance, which is evidently fulfilled in the present case (€5,000 versus €12,500). Second, the disadvantaged party's free will must be in some way impaired upon the conclusion of the contract; the law mentions, as examples: plight (Zwangslage), a narrow mind (Verstandesschwäche), lack of experience, and emotional excitement. Ms Moneypenny's tight financial circumstances will fall within the first of these criteria. Third, as a subjective element on the creditor's side, the latter must take advantage of the disadvantaged party's situation. The statutory language, referring to “exploitation”, appears to be rather strict in this respect, but the commonly accepted interpretation mitigates this and holds that already negligent ignorance of the other party's situation and of the disproportion in value suffices. The facts of Case 11 do not provide much information in this respect, but it is rather obvious that no one would enter into a credit contract like this voluntarily without any impairment of free will, and that this must at least be assumed by the creditor.
Art. 7(2) Usurious Contracts Act provides a special rule on the consequences of usurious credit contracts: the disadvantaged party can use the full credit period for repaying its debt (i.e. the nominal credit amount of €5,000), and interest is reduced to the double “basic interest rate” (Basiszinssatz) applying at the time of the conclusion of the contract.
Mr Strict entered into a contract with his daughter, Clementine, to pay for her round-the-world trip in return for her promise to only marry a man belonging to Mr Strict's faith. During the trip, Clementine fell in love with Mr Dreamy, who belongs to a different faith from her father, and married him. Mr Strict has now brought an action for breach of contract and is consequently demanding repayment of the amount he spent on Clementine's trip. Is the contract between Mr Strict and his daughter valid? Can Clementine challenge the action brought forth by her father?
Variation: Would it make a difference if Clementine fell in love with Miss Dreamy, who belongs to the same faith as her father, and entered into a civil partnership with her?
Case Reference: Lowe v. Peers [1768] 4 Burr 2225.
AUSTRIA
OPERATIVE RULES
At least the obligation incurred by Clementine is not valid. Clementine can challenge the action brought forth by her father.
Variation: There would be no difference.
DESCRIPTIVE FORMANTS
Austrian law provides explicit regulations for comparable, though not fully identical, stipulations in the law of successions, which are made applicable to bilateral contracts by way of reference. The following discussion will first deal with these statutory provisions, which concern benefits granted under a condition of not getting married, in order to reveal the relevant values and policies pursued by Austrian law in this area, and then turn towards the contractual arrangement at hand in Case 8, i.e. a bilateral contract under which both parties oblige themselves to some performance, here, in Clementine's case, an obligation not to marry a man of a different faith than her father’s.
Until a recent reform of the law of successions, which entered into force on 1 January 2017, Art. 700 CC explicitly provided that a condition stipulated in a will, according to which an (adult) heir or legatee may not marry, is to be treated as if it were “not included” in the will. The heir or legatee may thus receive the benefit without any condition. As for the policy pursued by former Art. 700 CC, see section 1.3 below.
It is a special pleasure to welcome the 19th book in the series The Common Core of European Private Law, the second published by Intersentia. This book is edited by three scholars, who together represent four different legal cultures: the Dutch, the English, the German, and the Italian. Their works are already renowned and appreciated well beyond the ‘Common Core’ circles.
The Common Core project was launched in 1993 at the University of Trento under the auspices of the late Professor Rudolf B. Schlesinger. The methodology used in the Common Core project, then novel, is now a classic. By making use of case studies, it goes beyond mere description to detailed inquiry into how most European Union legal systems resolve specific legal questions in practice, and thorough to comparisons between those systems. It is our hope that these volumes will provide scholars with a valuable tool for research in comparative law and in their own national legal systems. The collection of materials that the Common Core project is offering to the scholarly community is already quite extensive and will become even more so as more volumes are published. The availability of materials attempting a genuine analysis of how things seem to be is, in our opinion, a prerequisite for an intelligent and critical discussion on how they should be. Perhaps in the future European private law will be authoritatively restated or even codified. As of today, the Common Core project is the longest-running scholarly enterprise in the field. The analytical work carried out by the more than 300 scholars that have so far joined us in the Common Core project is also a precious asset of knowledge and legitimisation for any such a normative enterprise.
We must thank the editors and contributors for their work. With a sense of deep gratitude, we also wish to recall our late Honorary Editor, Professor Rudolf B. Schlesinger. We are sad that we have not been able to present him with the results of a project in which he believed so firmly.
No scholarly project can survive without committed sponsors. The International University College of Turin allows us to organise the General Meetings together with the Centro Studi di Diritto Comparato of Trieste. The European Commission has partially sponsored some of our past General Meetings, having included them in their High Level Conferences Program.
The present chapter starts from the assumption that the Roman law rules on the invalidity of contractual agreements contra bonos mores constitute a first, historical, common core of the current legal formants concerning immoral contracts in a number of European countries. The central question it aims to answer is to what extent this first common core has influenced the current legal formants of the national laws specifically considered in this volume.
The first section briefly outlines the development of these Roman law rules from the 2nd century until Justinian's codification. It then acknowledges the substantive influence of the latter on the continental European civil codes on the one hand, and Scottish law on the other.
The second section, starting from the impact of Roman law on what Zweigert and Kötz call the “Romanist” and “German” legal families, takes position in the general comparative law debate on legal families. On this basis, the third section proposes a tailor-made taxonomy. It identifies five models of legal formants concerning the (in)validity of immoral contracts in Europe, corresponding to three groups of countries plus two individual mixed legal systems. For each model, the extent of the Roman law influence on the current legal formants is summarised. The models are discussed in a logical order, starting with the one most strongly influenced by Roman law, and ending with the one where such an influence can hardly be seen.
The last section concludes that Roman law can be considered a historical common core of almost all legal formants discussed in the national responses to the hypothetical cases in this volume, with one important exception: the Nordic countries.
IMMORAL AGREEMENTS AND CONDITIONS UNDER ROMAN LAW
The legal concept of immorality of a contractual agreement, which can be found in all continental European civil codes, stems from Roman law. The most ancient known sources mentioning this concept go back to the 2nd century Roman jurists Gaius and Julianus. These jurists formulate specific examples of agreements that do not create obligations because their object or purpose is contrary to good morals (contra bonos mores):
- a mandate to steal something or insult somebody;
- a stipulation to commit a murder or steal an object used for divine service; or
- a stipulation of a penalty for failing to institute a certain person as heir.
Mr Hazard, a businessman, needed a loan of €50,000. Bossy Bank agreed to this on the condition that Mr Hazard's daughter, Miss Penny, secured it for its full amount through a suretyship. The 19-year-old Miss Penny owned no assets and had no experience in business. As a worker in a fish factory, she only earned €600/month (after tax). The suretyship contract was concluded when Bossy Bank's employee handed out a standard form contract to Miss Penny and said, without further explanation: “Could you please sign this, Miss? We need it for our files”. Four years and €2,000,000 in debts later, Mr Hazard has gone bankrupt. Bossy Bank now claims the €50,000 from Miss Penny. Can Miss Penny challenge this?
Variation: Would it make a difference if the suretyship was concluded by Mr Hazard's wife, Mrs Hazard, who worked as a customer service employee in Mr Hazard's business and earned €2,000/month after tax?
Case Reference: BVerfG, 19.10.1993, 1 BvR 567 u. 1044/89.
AUSTRIA
OPERATIVE RULES
Miss Penny can challenge the claim.
Variation: Mrs Hazard could most likely challenge the bank's claim to some extent.
DESCRIPTIVE FORMANTS
Austrian law provides two rather similar regimes for combating unfair suretyships. Under the more general approach, developed by the Supreme Court by applying the “immoral contracts” rule in Art. 879(1) CC, a suretyship is void based on three groups of criteria. The first requirement is a “disapproval of the suretyship as to its content” (inhaltliche Missbilligung) which, in the first place, means that there must be a “gross disparity” between the surety's financial assets and the amount guaranteed under the suretyship. In addition, further aspects may be relevant within this first criterion. For instance, where the surety has a personal economic interest in the credit, this will speak against an “immoral” character of the guarantee (but it has been accepted that, where such personal interest results from maintenance rights vis-à-vis the debtor, for example where the debtor's wife stood surety, this personal interest will usually be outweighed by a considerable degree of dependence on the principal debtor). As a second requirement for nullity, the suretyship must be disapproved as to the circumstances of the conclusion of the security agreement, due to a factual limitation of the surety's free will.
Mr Lonely entered into a contract with Forever Happy Marriage Bureau whereby the agency promised to use its best efforts to find him a suitable wife. He paid an initial deposit of €7,000 for this service, with the remaining amount of €2,000 to be paid once he was married to someone introduced by the agency. After several unsuccessful introductions, he asked Forever Happy to return his deposit. According to the terms of the brokerage contract, the deposit is non-refundable. Is this contract valid? Can Mr Lonely still recover his deposit?
Variation: Mr Settled entered into a contract with Forever Happy Marriage Bureau whereby the agency promised to use its best efforts to find him a suitable wife. He paid an initial deposit of €2,000 for this service, with the remaining amount of €7,000 to be paid once he was married to someone introduced by the agency. He met Miss Lonely through the service, who had concluded a similar contract with Forever Happy. The couple decided to get married and agreed that they would not inform the agency about this. Forever Happy is now suing for the remaining amount. Are the respective contracts of Mr and Mrs Settled with the agency valid? Can Mr and Mrs Settled challenge the claim brought forth by the agency?
Case Reference: Hermann v. Charlesworth [1905] 2 KB 1 23.
AUSTRIA
OPERATIVE RULES
The contract is valid. Most likely, Mr Lonely cannot recover even a minimal proportion of the deposit.
Variation: It is likely that the contracts are valid, and that Mr and Mrs Settled cannot challenge the claim for the remaining price.
DESCRIPTIVE FORMANTS
The validity of marriage brokerage contracts and comparable agreements is primarily determined by a specific provision in Art. 879(2)(1) CC, which states that “if a price is agreed for negotiating a marriage agreement”, that contract is void. At least since the 1970s, the Supreme Court has promoted a narrow interpretation of this rule. Today, it is generally accepted that contracts by which the brokerage agency only undertakes to provide the client with addresses of, and other personal information about, potential partners, and the client in turn agrees to pay a price for this service, do not fall within that provision and can be validly concluded.
In 1930, the noble family Stern regulated the conditions for succession within the family through a succession contract. This contract states that the family property shall always pass to the eldest male successor who is not unequally married or born of an unequal marriage. According to the terms of the contract, a successor is unequally married if he is not married to a woman belonging to another noble family which follows the same religion as the heads of the Stern family. The last head of the family, Lord Stern, died in 2012 and is survived by his four sons. The eldest is in a civil partnership with a man. The second-born is married to a commoner who follows the same religion as the heads of the Stern family. The third-born is married to a woman belonging to a noble family which does not follow this religion. The youngest son is married to a woman belonging to a noble family which follows this religion. The estate executor has now transferred the property to the youngest son. Can the other brothers challenge their exclusion?
Case Reference: BVerfG, 22.03.2004, 1 BvR 2248/01; Egerton v. Brownlow [1853]
4 HLC 1.
AUSTRIA
OPERATIVE RULES
The other brothers could challenge their exclusion to a certain extent (provided Lord Stern has executed a will with the same content as the succession contract).
DESCRIPTIVE FORMANTS
Austrian law is particularly restrictive regarding succession contracts. They can only be concluded between spouses (and registered partners); it is only possible that the spouses appoint each other as their mutual heirs, and the contract can only be effective with regards to three quarters of each spouse's assets. The succession contract in the present case, which provides that the property shall pass to a son, and apparently intends to be binding on future generations as well, would have no effect on Lord Stern's four sons under Austrian law.
Miss Money, a successful business woman, realising the considerable difference in wealth between herself and her future husband Mr Doe, an electrician by trade, entered into a pre-nuptial contract which provided that neither party was to acquire any benefit from the property of the other during the marriage or on its termination. Six years and two children later, the marriage broke down. Mr Doe has now applied for financial relief. Can Miss Money use the pre-nuptial contract to protect her assets?
Variation: Miss Cinderella, who was pregnant, wanted to marry the father of her unborn child. The father, Mr Money, agreed to do so only on the condition that the parties conclude a pre-nuptial agreement. This agreement provided that neither party was to acquire any benefit from the property of the other during the marriage or on its termination. Six years and two children later, the marriage broke down. Miss Cinderella has now applied for financial relief. Can Mr Money use the pre-nuptial contract to protect his assets?
Case References: Radmacher (formerly Granatino) v. Granatino [2010] UKSC 42; BVerfG, 29.03.2001, 1 BvR 1766/92, BVerfGE 103, 89, 101.
AUSTRIA
OPERATIVE RULES
Regarding the matrimonial property regime, Miss Money can use the pre-nuptial contract to defend her assets as long as the marriage subsists. Depending on further facts, she will not be able to protect all of her assets upon divorce. Regarding alimony, Miss Money will not be able to fully protect her assets during marriage. Depending on further facts, she may or may not be able to fully protect her assets upon divorce.
Variation: In principle, the same rules would apply. Depending on further facts, the extent to which Mr Money can protect his assets regarding matrimonial property may be somewhat less after divorce than in the previous situation, and even rather small regarding alimony both during marriage and after divorce.
DESCRIPTIVE FORMANTS
The agreement concluded between the parties apparently has a twofold purpose, namely to arrange the matrimonial property regime between the future spouses in terms of a strict separation of assets, and to exclude any alimony obligations between the partners to the utmost extent possible.