Law of Obligations - The Civil Law of Latvia

PART FOUR Obligations Law (Sections 1401-1402) ............................................. 289

CHAPTER 1 Lawful Transactions in General (Sections 1403-1404) ........................................ 291

SUB-CHAPTER 1 Parties to a Transaction (Sections 1405-1411) ............................................ 291

SUB-CHAPTER 2 Subject-matter of Lawful Transactions (Sections 1412-1426) ................... 292

SUB-CHAPTER 3 Expression and Authenticity of Intent ........................................................ 294

I. Expression of Intent (Sections 1427-1439) ....................................................................... 294

II. Authenticity of Intent (Section 1440) ............................................................................... 296

1. Mistake (Sections 1441-1458) ..................................................................................... 296

2. Fraud (Sections 1459-1462) ........................................................................................ 299

3. Duress (Sections 1463-1468) ...................................................................................... 299

SUB-CHAPTER 4 Elements of Lawful Transactions (Sections 1469-1472) ............................ 300

SUB-CHAPTER 5 Form of Lawful Transactions ...................................................................... 301

I. General Provisions (Sections 1473-1481) ......................................................................... 301

II. Written Form of Lawful Transactions (Sections 1482-1494) .......................................... 303

SUB-CHAPTER 6 Time and Place in Lawful Transactions (Sections 1495-1503) .................. 305 SUB-CHAPTER 7 Interpretation of Lawful Transactions (Sections 1504-1510) ..................... 306

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CHAPTER 2 Contracts (Sections 1511-1513) .............................................................................. 308 SUB-CHAPTER 1 Contracting Parties (Sections 1514-1532) .................................................. 308 SUB-CHAPTER 2 Agreement between the Contracting Parties (Sections 1533-1541) ........... 311 SUB-CHAPTER 3 Subject-matter of Contracts (Sections 1542-1547) ..................................... 312

SUB-CHAPTER 4 Ancillary Provisions of Contracts (Section 1548) ...................................... 314 I. Conditions .......................................................................................................................... 314 1. Types of Conditions (Sections 1549-1554) ................................................................. 314 2. Legal Consequences of Conditions (Sections 1555-1571) ......................................... 315 3. Performance of Conditions (Sections 1572-1578) ...................................................... 317 II. Terms (Sections 1579-1586) ............................................................................................. 318

SUB-CHAPTER 5 Consequences of a Contract (Sections 1587-1592) .................................... 319

SUB-CHAPTER 6 Duty of Liability .......................................................................................... 320 I. General provisions (Sections 1593-1597) ......................................................................... 320 II. Recovery Liability ............................................................................................................ 321

1. Liability Conditions for Recovery Proceedings (Sections 1598-1602) ...................... 321 2. Cases when the alienor shall not be subject

to the duty of liability (Sections 1603-1604) .............................................................. 322 3. Scope of an Alienor's Duty of Liability (Sections 1605-1611) .................................. 323 III. Liability for Defects and Characteristics ........................................................................ 324 1. Alienor's General Liability (Sections 1612-1618) ...................................................... 324

2. Scope of the Alienor's Liability
and Means of Defence for the Acquirer (Sections 1619-1634) .................................... 325

CHAPTER 3 Obligations and Claims arising from Wrongful Acts .......................................... 328

SUB-CHAPTER 1 Wrongful Acts and Degrees of Fault (Sections 1635-1650) ....................... 328

SUB-CHAPTER 2 Default ......................................................................................................... 330 I. Types of Default (Section 1651) ........................................................................................ 330 1. Default of the Debtor (Sections 1652-1657) ............................................................... 330 2. Default of the Creditor (Sections 1658-1660) ............................................................. 331 II. Consequences of Default (Sections 1661-1664) .............................................................. 331 III. Prevention of the Consequences of Default (Sections 1665-1668) ................................ 332

CHAPTER 4 Mutual Relations of Joint Obligors ...................................................................... 334 SUB-CHAPTER 1 General Provisions (Sections 1669-1671) .................................................. 334 SUB-CHAPTER 2 Establishment of Solidary Obligations (Sections 1672-1676) ................... 334 SUB-CHAPTER 3 Consequences of Solidary Obligations (Sections 1677-1690) ................... 335

CHAPTER 5 Reinforcement of Obligations Rights (Section 1691) ........................................... 337

SUB-CHAPTER 1 Guarantee .................................................................................................... 337 I. General Provisions (Sections 1692-1695) ......................................................................... 337 II. Consequences of a Guarantee .......................................................................................... 337

1. Duties of a Guarantor (Sections 1696-1700) .............................................................. 337 2. Rights of a Guarantor .................................................................................................. 338 A. Guarantor's Rights against a Creditor (Sections 1701-1703) .............................. 338

B. Guarantor's Rights against the Principal Debtor (Sections 1704-1709) .............. 339 III. Termination of Guarantee (Sections 1710-1715) ............................................................ 340

SUB-CHAPTER 2 Contractual penalties (Sections 1716-1724) ............................................... 340 SUB-CHAPTER 3 Earnest money (Sections 1725-1731) ......................................................... 341

CHAPTER 6 Protection of Obligations Rights (Sections 1732-1733) ....................................... 343 SUB-CHAPTER 1 Detainer Rights (Sections 1734-1740) ........................................................ 343 SUB-CHAPTER 2 Distress ........................................................................................................ 344

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I. Purpose of Distress (Sections 1741-1742) ........................................................................ 344 II. Terms of Distress (Sections 1743-1747) .......................................................................... 345 III. Consequences of Distress (Sections 1748-1752) ............................................................ 346

CHAPTER 7 Interest (Sections 1753-1755) ................................................................................. 347 SUB-CHAPTER 1 Creation of Interest Obligations (Sections 1756-1760) .............................. 347 SUB-CHAPTER 2 Termination of Interest Obligation (Sections 1761-1763) .......................... 348 SUB-CHAPTER 3 Restrictions regarding Interest (Sections 1764-1769) ................................ 349

CHAPTER 8 Losses and their Compensation ............................................................................. 350 SUB-CHAPTER 1 Types of Losses (Sections 1770-1775) ....................................................... 350 SUB-CHAPTER 2 Right to Claim Compensation (Sections 1776-1778) ................................. 351 SUB-CHAPTER 3 Duty to Compensate for Losses (Sections 1779-1785) .............................. 351 SUB-CHAPTER 4 Valuation of Losses (Sections 1786-1792) ................................................. 352

CHAPTER 9 Cession of Right to Claim ...................................................................................... 354 SUB-CHAPTER 1 Legal Basis for Cession (Sections 1793-1797) ........................................... 354 SUB-CHAPTER 2 Subject-matter of Cession (Sections 1798-1800) ....................................... 354 SUB-CHAPTER 3 Form of Cession (Sections 1801-1803) ...................................................... 355 SUB-CHAPTER 4 Consequences of Cession (Sections 1804-1810) ........................................ 355

CHAPTER 10 Termination of Obligations Rights ...................................................................... 357

SUB-CHAPTER 1 Performance ................................................................................................ 357 I. General Provisions (Sections 1811-1812) ......................................................................... 357 1. Persons who Provide and Receive Performance (Payment) (Sections 1813-1819) ... 357 2. Place of Performance (Sections 1820-1827) ............................................................... 358 3. Time of Performance (Sections 1828-1831) ............................................................... 359 4. Manner of Performance (Sections 1832-1837) ........................................................... 360 II. Proof of Payment (Sections 1838-1841) .......................................................................... 361 III. Consequences of Payment (Sections 1842-1845) ........................................................... 361

SUB-CHAPTER 2 Set-off .......................................................................................................... 362 I. General Provisions (Sections 1846-1851) ......................................................................... 362 II. Due Course and Consequences of Set-off (Sections 1852-1856) .................................... 363

SUB-CHAPTER 3 Confusion of Claim and Debt (Sections 1857-1861) ................................. 364 SUB-CHAPTER 4 Revocation Contract (Sections 1862-1866) ................................................ 365 SUB-CHAPTER 5 Novation (Sections 1867-1880) .................................................................. 365 SUB-CHAPTER 6 Settlement (Sections 1881-1891) ................................................................ 368 SUB-CHAPTER 7 Judgment of a Court (Section 1892) ........................................................... 369

SUB-CHAPTER 8 Prescription .................................................................................................. 369 I. General Provisions (Sections 1893-1895) ......................................................................... 369 II. Commencement of the Prescriptive Period (Sections 1896-1901) .................................. 370 III. Interruption of Prescription (Sections 1902-1906) ......................................................... 371 IV. Rights not Subject to Prescription (Sections 1907-1909) ............................................... 371 V. Consequences of Prescription (Sections 1910-1911) ....................................................... 372

CHAPTER 11 Gifts ........................................................................................................................ 373

SUB-CHAPTER 1 Gifts in General ........................................................................................... 373 I. General Provisions (Sections 1912-1914) ......................................................................... 373 II. Consequences of Gifts (Sections 1915-1918) .................................................................. 373 III. Revocation of Gifts (Sections 1919-1924) ..................................................................... 374

SUB-CHAPTER 2 Special Types of Gifts ................................................................................ 375

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I. Gifts of Entire Property (Sections 1925-1927) ................................................................... 375 II. Gifts with Binding Directions (Sections 1928-1932) ...................................................... 376 III. Gifts as Remuneration (Section 1933) ............................................................................ 376

CHAPTER 12 Claims regarding Contracts Requiring Return of Property ............................ 377

SUB-CHAPTER 1 Loan Agreements ........................................................................................ 377 I. General Provisions (Sections 1934-1942) ......................................................................... 377 II. Repayment of Loans (Sections 1943-1946) ..................................................................... 378

SUB-CHAPTER 2 Lending Contracts ....................................................................................... 379 I. General provisions (Sections 1947-1951) ......................................................................... 379 II. Legal Relationship Arising from Lending Contract ........................................................ 379

1. Duties of the Borrower (Sections 1952-1962) ............................................................ 379 2. Duties of a Lender (Sections 1963-1967) ................................................................... 381

SUB-CHAPTER 3 Contract of Bailment ................................................................................... 382 I. General provisions (Sections 1968-1971) ......................................................................... 382 II. Lawful relationship Arising from Contract of Bailment .................................................. 382

1. Duties of Bailees (Sections 1972-1983) ...................................................................... 382 2. Duties of Bailors (Sections 1984-1988) ...................................................................... 384 3. Mutual Relationship of Several Joint Bailors and Bailees (Sections 1989-1991) ..... 385

III. Conversion of Bailment into a Loan Agreement (Sections 1992-1994) ........................ 385 SUB-CHAPTER 4 Innkeeper's Bailment (Sections 1995-2001) .............................................. 386

CHAPTER 13 Claims Arising from Alienation Contracts ......................................................... 388

SUB-CHAPTER 1 Purchase Contracts ...................................................................................... 388 I. General Provisions ............................................................................................................. 388

1. Definition of the Contract and Personal
Capacity of Contracting Parties (Sections 2002-2004) ............................................... 388

2. Subject-matter of Purchase Contracts (Sections 2005-2011) ...................................... 388

3. Purchase Price(Sections 2012-2020) ........................................................................... 390 II. Lawful Relations Arising from Purchase Contract .......................................................... 391 1. General Provisions (Sections 2021-2026) ................................................................... 391 2. Duties of the Seller (Sections 2027-2032) .................................................................. 392 3. Duties of the Purchaser (Sections 2033-2038) ............................................................ 393 III. Setting Aside of Purchase Contracts ............................................................................... 394 1. General Provisions (Sections 2039-2041) ................................................................... 394

2. Setting Aside of Purchase Contracts
Due to Excessive Loss (Sections 2042-2046) ............................................................. 394

IV. Ancillary Contracts in regard to a Purchase .................................................................... 395 1. Right of Withdrawal for Reason

of Non-payment of the Purchase Price (Sections 2047-2053) .................................... 395

Repurchase and Resale (Sections 2054-2059) ............................................................ 396
Right of First Refusal (Sections 2060-2063) .............................................................. 397
Purchase with Examination or Inspection (Sections 2064-2068) ............................... 398
Instalments Purchase (Sections 2069-2071) ............................................................... 398

6. Other Ancillary Contracts (Section 2072) ................................................................... 399

V. Sale by Auction (Sections 2073-2090) ............................................................................. 399

SUB-CHAPTER 2 Barter Contracts (Sections 2091-2095) ....................................................... 402

SUB-CHAPTER 3 Maintenance Contracts ................................................................................ 403 I. General Provisions (Sections 2096-2098) ......................................................................... 403 II. Legal Relations Arising from Maintenance Contracts (Sections 2099-2102) ................. 403 III. Termination of Maintenance Contracts (Sections 2103-2106) ....................................... 404

SUB-CHAPTER 4 Supply Contracts (Sections 2107-2111) ...................................................... 405 CHAPTER 14 Lease and Rental Contracts (Section 2112) ........................................................ 406

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SUB-CHAPTER 1 Provisions of Lease and Rental Contract (Sections 2113-2127) ................ 406

SUB-CHAPTER 2 Legal Relations Arising from Leases and Rental Contracts ....................... 408 I. General Provisions (Sections 2128-2129) ......................................................................... 408 II. Duties of a Lessor or Renter (Sections 2130-2140) ......................................................... 408 III. Duties of Lessees or Tenants (Sections 2141-2156) ....................................................... 410 IV. Specific Duties of Lessees of Rural Farms (Sections 2157-2164) ................................. 413

SUB-CHAPTER 3 Termination of Leases and Rental Contracts (Sections 2165-2177) .......... 414 CHAPTER 15 Claims Arising from Employment Relations ..................................................... 418

SUB-CHAPTER 1 Employment Contracts ................................................................................ 418 I. General Provisions (Sections 2178-2181) ......................................................................... 418 II. Lawful Relations in Employment Contracts (Sections 2182-2191) ................................ 419 III. Termination of Employment Contracts (Sections 2192-2195) ....................................... 420

SUB-CHAPTER 2 Sharecropping Contracts ............................................................................. 421 I. General Provisions (Sections 2196-2203) ......................................................................... 421 II. Lawful Relations Arising from Sharecropping Contracts (Sections 2204-2209) ............ 422 III. Termination of Sharecropping Contracts (Sections 2210-2211) .................................... 423

SUB-CHAPTER 3 Contracts for Work-performance (Section 2212) ........................................ 423 I. Lawful Relations Arising from Contracts for Work-performance .................................... 424 1. Duties of the Contractor (Sections 2213-2221) .......................................................... 424 2. Duties of the Commissioning Party (Sections 2222-2228) ........................................ 425 II. Termination of Contracts for Work-performance (Section 2229) .................................... 427

SUB-CHAPTER 4 Carriage Contracts (Sections 2230-2240) .................................................. 427

CHAPTER 16 Partnership Contracts .......................................................................................... 430 SUB-CHAPTER 1 General Provisions (Sections 2241-2242) .................................................. 430

SUB-CHAPTER 2 Mutual Relations
between Partnership Members (Sections 2243-2256) ................................................................ 430

SUB-CHAPTER 3 Relations with Third Persons (Sections 2257-2261) .................................. 433 SUB-CHAPTER 4 Termination of a Partnership (Sections 2262-2268) ................................... 434 SUB-CHAPTER 5 Liquidation of a Partnership (Sections 2269-2280) .................................... 436

CHAPTER 17 Contracts regarding Games of Chance .............................................................. 439 SUB-CHAPTER 1 Gambling and Wagers (Sections 2281-2284) ............................................. 439 SUB-CHAPTER 2 Lottery (Sections 2285-2288) ..................................................................... 439

CHAPTER 18 Claims arising from Management of the Property of Other Persons ............. 441

SUB-CHAPTER 1 Authorisation Contracts ............................................................................... 441 I. General Provisions (Sections 2289-2294) ......................................................................... 441 II. Legal Relations Arising from an Authorisation Contract ................................................ 442

1. Duties of an Authorised Person (Sections 2295-2306) ............................................... 442

2. Duties of an Authorising Person (Sections 2307-2311) .............................................. 444 III. Termination of an authorisation contract (Sections 2312-2317) .................................... 445

SUB-CHAPTER 2 Advice and Recommendation (Sections 2318-2320) .................................. 447

SUB-CHAPTER 3 Commission Contracts (Sections 2321-2324) ............................................ 447

SUB-CHAPTER 4 Unauthorised Management ......................................................................... 448 I. General Provisions (Sections 2325-2331) ......................................................................... 448 II. Legal Relations Arising from Unauthorised Management .............................................. 449

1. Duties of a Manager (Sections 2332-2338) ................................................................ 449 2. Duties of the Represented Person (Sections 2339-2342) ............................................ 450

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SUB-CHAPTER 5 Duty to Account (Sections 2343-2346) ....................................................... 451

27 Contents CHAPTER 19 Claims on Various Grounds ................................................................................. 453

SUB-CHAPTER 1 Claims Due to Private Delicts ..................................................................... 453 I. Compensation for Bodily Injuries (Sections 2347-2351) ................................................. 453 II. Right to Compensation for Offences against Personal Freedom,

Reputation, Dignity and Chastity of Women (Sections 2352-2353) ............................... 454 SUB-CHAPTER 2 Claims Due to Unlawful Damage of Property (Sections 2354-2357) ......... 455

SUB-CHAPTER 3 Compensation for Losses Caused
by Throwing, Pouring or Falling (Sections 2358-2362) ............................................................ 455

SUB-CHAPTER 4 Compensation for Losses Caused by Animals (Sections 2363-2368) ........ 456

SUB-CHAPTER 5 Claims Arising from Unjust Enrichment .................................................... 457 I. Reclaim of Satisfaction of Non-existent Debt (Sections 2369-2383) ............................... 457 II. Reclaiming of Performance in Anticipation of a Future Event (Sections 2384-2386) ... 459 III. Reclaim on Grounds of Immorality or Unlawfulness (Sections 2387-2388) ................ 459 IV. Reclaim on the Grounds of Absence of Any Basis (Sections 2389-2390) ..................... 460 V. A General Reclaim on Grounds of Enrichment (Sections 2391-2392) ............................ 460

CHAPTER 20 Right to Request Showing of Property (Sections 2393-2400) ........................... 462

Civil Law of the Republic of Latvia

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