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BOOK IV. OBLIGATIONS

TITLE XII. CONTRACTS IN GENERAL

Art. 1675. Contract defined.

A contract is an agreement whereby two or more persons as between themselves create, vary or extinguish obligations of a proprietary nature.

Art. 1676. Provisions applicable to contracts.

(1) The general provisions of this Title shall apply to contracts regardless of the nature thereof and the parties thereto.

(2) Nothing in this Title shall affect such special provisions applicable to certain contracts as are laid down in Book. V of this Code and in the Commercial Code.

Art. 1677. Scope of application of this Title.

(1) The relevant provisions of this Title shall apply to obligations notwithstanding that they do not arise out of a contract.

(2) Nothing in this Title shall affect the special provisions applicable to certain obligations by reason of their origin or nature.

Chapter 1. Formation of contracts

Art. 1678. Elements of contract.

No valid contract shall exist unless:

(a) the parties are capable of contracting and give their consent sustain. able at law;

(b) the object of the contract is sufficiently defined and is possible, and lawful;

Section 1. Consent

Paragraph 1. Elements of consent

Art 1679. Consent necessary.

A contract shall depend on the consent of the parties who define the object of their undertakings and agree to be bound thereby.

Art. 1680. Agreement of the parties.

(1) A contract shall be completed where the parties have expressed their agreement thereto.

(2) Reserves or restrictions intended by one party shall not affect his agreement as expressed where the other party was not informed of such reserves or restrictions.

Art. 1681. Form of offer and acceptance.

(1) Offer or acceptance may be made orally or in writing or by signs normally in use or by a conduct such that, in the circumstances of the case, there is no doubt as to the party's agreement.

(2) The party who makes an offer may stipulate a special form of acceptance

Art. 1682. Silence. 1. Principle.

Silence where an offer is made shall not amount to acceptance.

Art. 1683. 2. Duty to accept.

(1) No acceptance shall be required where a party is bound by law or by a concession granted by the authorities to enter into a contract on terms stipulated in advance.

(2) In such a case, the contract shall he completed upon receipt of the Offer.

Art. 1684. 3. Pre-existing business relations.

(1) An offer to continue or vary an existing contract or to enter into a subsidiary or complementary contract may be accepted by silence.

(2) Such shall be the case where the offer is made in a special document informing the other party that the offer shall be regarded as accepted if no reply is given within a reasonable period of time.

Art. 1685. 4. Invoices.

Particulars entered by a party in an invoice shall not bind the other party unless they conform to a prior agreement or have been expressly accepted by the other party.

Art. 1686. 5. General terms of business.

General terms of business applied by a party shall not bind the other party unless he knew and accepted them or they were prescribed or approved by the authorities.

Art. 1687. Declaration of intention.

No person shall be deemed to make an offer where:

(a) he declares his intention to give, to do or not to do something but does not make his intention known to the beneficiary of the declaration; or

(b) he sends to another or posts up in a public place tariffs, pricelist or catalogues or displays goods for sale to the public.

Art. 1688. Sale by auction..

(1) Whosoever offers a thing for sale by auction shall be deemed to make, a declaration of intention and not an offer.

(2) In such a case, the contract shall be completed only where the thing is knocked down upon the last bid being made.

Art. 1689. Public promise of a reward.

(1) A promise published by posters or in any other manner to reward the person who will find an object which has been lost or who will perform a certain act shall be deemed to be accepted where a person brings the object back or performs the act, notwithstanding that he did not know of the promise.

(2) The promisor shall give the promised reward.

Art. 1690. Offer with time limit for acceptance.

(1) Whosoever offers to another to enter into a contract and fixes a time limit for acceptance shall be bound by his offer until the time limit fixed expires.

(2) He shall not be bound where his offer is rejected before the expiry of the time limit fixed.

Art. 1691. Offer without time limit.

(1) Whosoever offers to another to enter into a contract and does not fix any 'time limit shall be bound by his offer until the time when he can reasonably expect the other party to decide on the offer.

(2) Where acceptance is late, the offer or shall forthwith inform the other party where he does not intend to be bound.

Art 1692. Contract between absent parties.

(1) A contract made between absent parties shall be deemed to be made at the place where and time when the acceptance was sent to the offer or.

(2) A contract made by telephone shall be deemed to be made at the place where the party was called.

(3) Nothing in this Article shall affect contrary stipulations made by the parties.

Art. 1693. Withdrawal of offer and acceptance,

(1) An offer shall he deemed not to have been made where the offeree knows that it is withdrawn before he knew or at the time when he knows of the offer.

(2) The provisions of sub art. (1) Shall apply 'where acceptance is withdrawn.

Art. 1694. Defective acceptance.

The offer &hall he deemed to be rejected and a new offer shall be deemed to be made where the acceptance is made with a reservation or does not exactly conform to the terms of the offer.

Art.1695. Completion of contract.

(1) A contract &hall not be deemed to be completed unless the parties have expressed their agreement to all the terms of the negotiation.

(2) A contract shall be deemed to be completed where the parties show that they intend to be bound notwithstanding that they have not expressed their agreement to all the terms of the negotiation.

(3) In such a case, the law shall remedy any deficiency in the agreement of the parties.

Paragraph 2. Defects in consent

Art. 1696. Invalidation of contract.

A contract may be invalidated where a party gave his consent by mistake or under deceit or duress.

Art. 1697. Mistake must be decisive.

The party who invokes his mistake shall establish that he would not have entered into the contract, had he known the truth.

Art. 1698. Mistake must be fundamental.

A contract may be invalidated on the ground of mistake as defined in Art. 1697 where such mistake relates to an element of the contract which the parties deem to be fundamental or which is fundamental, having regard to good faith and to the circumstances in which the contract was made.

Art. 1699. Mistake as to the nature or object of the contract.

A contract may be invalidated on the ground of mistake where:

(a) the mistake relates to the nature of the contract; or

(b) the mistaken party has undertaken to make a performance substantially greater or to receive a consideration substantially smaller than he intended

Art. 1700. Mistake as to the person.

A contract may be invalidated 'on the ground of mistake where such mistake relates to the identity or qualifications of the other party and such identity or qualifications are a fundamental element of the contract in the general opinion or having regard to the circumstances of the.

Art. 1701. Non fundamental mistakes.

(1) A contract may not be invalidated on the ground of mistake where, such mistake only relates to the motives which led to the making of the contract.

(2) Arithmetical mistakes in a contract shall not affect its validity and shall he corrected.

Art. 1702, Good faith of mistaken party.

(1) The mistaken party may not invoke his mistake in a manner contrary to good faith.

(2) He shall be bound by the contract he intended to make where the other party agrees to perform such contract.

Art. 1703. Reparation of damage.

Whosoever invokes his mistake to avoid the effect of a contract shall make good the damage arising out of the invalidation of the contract unless the other party knew or should have known of the mistake.

Art. 1704. Fraud.

(1) A contract may be invalidated on the ground of fraud where a party resorts to deceitful practices so that the other party would not have entered into the contract, had he not been deceived.

(2) A contracting party who has been deceived by a third party shall be bound by the contract unless the other contracting party knew or should have known of the fraud on the making of the contract and took advantage thereof.

Art. 1705. False statements.

(1) A contract way be invalidated where a party in bad faith or by negligence made false statements and a relationship giving rise to a special confidence and commanding particular loyalty existed between the contracting panics.

(2) The provisions of sub art. (1) shall apply where a party, by his silence., caused the other party to believe a fact which was untrue.

Art. 1706. Duress.

(1) A contract may be invalidated on the ground of duress where the acts of duress led a party to believe that he, one of his ascendants or de. ascendants, or his spouse, were threatened with a serious and imminent danger to the life, person, honour or property.

(2) Duren must be such as to impress a reasonable person.

(3) The nature of duress shall be determined having regard to the age, sex and position of the parties concerned.

Art. 1707. Duress by third party.

(1) A contract may be invalidated on the ground of duress notwithstanding that duress was exercised by a person other than the party who benefited by the contract.

(2) The party who invokes duress to avoid the effect of a contract shall make good the damage arising out of the invalidation of the contract, where duress was exercised by a third party and the other contracting party did not and should not have known thereof.

Art. 1708. Threat to exercise a right.

A threat to exercise a right shall he no ground for invalidating a contract unless such threat was used with a view to obtaining an excessive advantage.

Art. 1709. Reverential fear.

(1) Fear of an ascendant or a superior shall be no ground for invalidating a contract where no duress was exercised.

(2) The provisions of sub art. (1) shall not apply where the contract was made with the person inspiring the fear and such person derived an excessive., advantage from the contract.

Art. 1710. Unconscionable contract.

(1) A contract may not be invalidated on the sole ground that its terms are substantially more favourable to one party than to the other party.

(2) Where justice requires, any such contract may be invalidated as un conscionable where the consent of the injured party was obtained by taking advantage of his want, simplicity of mind, senility or manifest business inexperience.

Section 2. Object of contracts

Art. 1711. Determination of object.

The object of a contract shall be freely determined by the parties subject to such restrictions and prohibitions as are provided by law.

Art. 1712. Obligation to give, to do or not to do.

(1) A party may undertake to procure to the other party a right on a thing or to do or not to do something.

(2) The party who undertakes to do something may undertake to procure to the other party a specified advantage or to do his best to procure such advantage.

Art. 1713. Contents of contract.

The parties shall he bound by the terms of the contract and by such incidental effects as are attached to the obligations concerned by custom. equity and good faith, having regard to the nature of the contract. Art.

1714. Object must be defined.

(1) A contract shall be of no effect where the obligations of the parties or of one of them cannot he ascertained with sufficient precision.

(2) The court may not make a contract for the parties under the guise of interpretation.

Art. 1715. Object must be possible.

(1) The object of a contract must be possible.

(2) A contract shall be of no effect where the obligations of the parties or of one of them relate to a thing or fact which is impossible and such impossibility is absolute and insuperable.

Art. 1716. Unlawful or immoral object.

(1) A contract shall he of no effect where the obligations of the parties or of one of them are unlawful or immoral.

(2) A contract shall be of no effect where it appears to be unlawful or immoral that the obligations assumed by one party be related to the obligations of the other party.

Art. 1717. Motive. 1. Principle.

The motive for which the parties entered into a contract Shan not be taken into account in determining the unlawful or immoral nature of their obligations.

Art. 1718. 2. Exception.

The court shall not order a contract to he performed where:

(a) the terms of the contract denote that the parties or one of them have an unlawful or immoral purpose in view; or

(b) the party Who requires the performance of a contract produces a document denoting such purpose.

Section 3. Form of contracts

Art. 1719. Form of contracts.

(1) Unless otherwise provided, no special form shall be required and a contract shall be valid where the parties agree.

(2) Where a special form is expressly prescribed by law such form shall be observed.

(3) The parties may stipulate that tire contract shall he made in a special form.

Art. 1720. Effect of provisions as to form.

(1) Where a special form is prescribed by law and not observed there shall be no contract but a mere draft of a contract.

(2) A contract shall be valid notwithstanding that fiscal provisions, such as provisions relating to stamp duty or registration fee, have not been complied with.

(3) Unless otherwise provided, a contract shall he valid notwithstanding that prescribed measures of publication have not been complied with.

Art. 1721. Preliminary contracts.

Preliminary contracts shall be made in the form prescribed in respect of final contracts.

Art. 1722. Variations.

A contract made in a special form shall be varied in the same form.

Art. 1723. Contracts relating to immovables.

(1) A contract creating or assigning rights in ownership or hare owner. ship on an immovable or an usufruct, servitude or mortgage of an immovable shall be in writing and registered with a court or notary,

(2) Any contract by which an immovable is divided and any compromise relating to an immovable shall be in writing and registered with a court or notary.

Art. 1724. Contracts made with a public administration.

Any contract binding the Government or a public administration shall be in writing and registered with a court, public administration or notary.

Art. 1725. Contracts for a long period of time.

The following contracts shall be in writing:

(a) contracts of guarantee; and

(b) insurance contracts; and

(e) any other contract in respect of which such form is required by law.

Art. 1726. Agreed form.

A contract which the parties agree to make in a special form not required by law shall not be deemed to be completed until it is made in the agreed form.

Art. 1727. Written form.

(1) Any contract required to be in writing shall be supported by a special document signed by all the parties bound by the contract.

(2) It shall he of no effect unless it is attested by two witnesses.

Art. 1728. Signature.

(1) Any party bound by a contract shall affix his handwritten signature thereto.

(2) Where a party cannot write, he may affix his thumb mark.

(3) The signature or thumb mark of a blind or illiterate person shall not bind him unless it is authenticated by a notary, registrar or judge acting in the discharge of his duties.

Art. 1729. Witnesses. 1. Capacity.

(1) Where witnesses are required by law or agreement, they shall he of age and not judicially interdicted, unless otherwise expressly provided.

(2) Sex or nationality shall not be considered in determining the capacity to act as a witness.

Art. 1730. 2. Duties.

(1) Where necessary, the witnesses shall certify that a contract was made

and the terms thereof.

(2) Unless they act expressly as guarantors, the witnesses shall not guarantee the performance of the contract.

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