Civil Code > TITLE XV CONTRACTS RELATING TO THE ASSIGNMENT OF RIGHTS 5

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Chapter 5. Contract for periodical payments

Art. 2490 – Definition.

(1) The contract for periodical payments is a contract whereby a party confers on the other the right to demand the periodical payment of a certain sum of money or of a certain quantity of fungible things in exchange for the alienation of a thing or the assignment of capital.

(2) The stipulation for such payments may also be agreed on as counter-part of a liberality.

Art. 2491 – Title evidencing the debt.

(1) The creditor may compel the debtor to supply him with a new title where nine years have elapsed since the date of the title which he possesses.

(2) The new title shall be established at the expense of the creditor.

Art. 2492 – Perpetual annuity and life annuity.

The annuity may be set up in perpetuity or as a life annuity.

Art. 2493 – Payment of arrears.

(1) Unless otherwise agreed, the arrears of annuities shall be paid at the end of each year calculated from the conclusion of the contract.

(2) The parties may not agree in advance that unpaid arrears shall themselves bear interest.

Art. 2494 – Reference to rules governing loans.

The provisions of Chapter 4. of this Title shall in addition app0ly to the contract for periodical payments.

Art. 2495 – Saving clause.

Nothing shall affect the rules concerning Government loans or loans issued by other public collectivities.

Section 1. Perpetual Annuity

Art. 2496 – Power of redemption. – 1. Principle.

The annuity set up in perpetuity may be redeemed by the debtor notwithstanding any contrary stipulation.

Art. 2497 – 2. Possible limitations.

(1) The parties may however agree that the redemption shall not take place before the death of the creditor or the expiration of a period not to exceed ten years.

(2) They may also agree that the redemption shall only take place after notice of one year given to the creditor.

(3) Where longer periods of time have been agreed, the maximum periods provided in sub-art (1) and (2) shall be substituted therefore.

Art. 2498 – Obligation of redemption.

The debtor of an annuity set up in perpetuity may be compelled to redeem it where:

(a) he ceases to fulfill his obligations for two years; or

(b) he fails to furnish the lender with the sureties promised by the contract or new sureties equivalent to those which have failed; or

Art. 2499 – Capital due in case of redemption.

(1) In the case of redemption of the annuity, the debtor shall pay the creditor a sum corresponding to the capitalization of the annuity effected on the basis of the rate of the legal interest.

(2) Any stipulation increasing the liability of the debtor in this respect shall be of no effect.

Section 2. Life Annuity

Art. 2500. – Duration of the annuity. – 1. Life of a person.

(1) The life annuity may be set up on the life of the creditor, of the debtor or of a third party.

(2) Unless otherwise agreed, it shall be deemed to be set up on the life of the creditor.

Art. 2501- 2. Lives of several persons.

(1) The life annuity may be set up on the lives of several persons.

(2) It may also be stipulated to be revertible, on the death of the creditor, on to the life of another person.

Art. 2502 – Case of nullity.

(1) The contract setting up a life annuity shall be of no effect where none of the persons on whose lives the annuity is set up is alive on the day of the making of the contract.

(2) The revertibility clause shall be of no effect unless the person on whose life the annuity is stipulated to be revertible is alive on the day of the making of the contract creating the annuity.

Art. 2503 – Transmissibility.

Unless otherwise agreed, the annuity set up on the life of the debtor or of a third party shall pass to the heirs of the creditor.

Art. 2504 – Usurious rate of arrears.

(1) Where the life annuity is set up in exchange for payment of a capital sum, the arrears due by the debtor shall not exceed twenty percent of this capital.

(2) They shall be at the rate of twelve percent where a higher rate has not been fixed in writing or a rate exceeding twenty percent has been fixed.

Art. 2505 – Cancellation of contract.

The person fro whose benefit the life annuity has been set up may require the cancellation of the contract where the settler does not give him the sureties stipulated for its performance.

Art. 2506 – Non-payment of arrears.

(1) Mere failure in the payment of arrears of the annuity shall be no ground for the person in whose favour it has been set up to require the repayment of the capital or to re-enter into the goods alienated by him.

(2) He may only seize and cause to be sold the goods of this debtor and to have ordered or agreed to the setting aside, out of the proceeds of sale, of a sum sufficient to secure the payment of the arrears.

Art. 2507 – Absence of power of redemption.

(1) The debtor may not free himself of payment of the annuity by offering to repay the capital and by renouncing to claim the recovery of the arrears paid.

(2) He shall pay the annuity during the whole life of the person or of the persons on whose life or lives the annuity has been set up whatever the length of the life of these persons and however onerous the payment of the annuity may become.

Art. 2508 – Risks.

(1) The life annuity shall accrue to the creditor in proportion to the number of days that the person on whose life it is set up has lived.

(2) Where it has been agreed that it will be paid in advance, the arrears shall accrue from the day when the payment was to be made.

Art. 2509 – Assignment and attachment.

(1) Unless otherwise agreed, the creditor may assign his rights.

(2) He who sets up an annuity gratuitously in favour of a third party may stipulate at the time when he sets up the annuity that it cannot be seized by the creditors of such third party.

Art. 2510 – Proof of claim.

The creditor of a life annuity may only demand the arrears by proving his existence or that of the person on whose life it has been set up.

Art. 2511 – Annuity due by virtue of insurance.

Nothing shall affect the rules governing the contract of insurance, where the life annuity is due by virtue of a contract of insurance.

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