Legal transactions
17 May, 2012
Legal transactions


Judge  Lasha  Kalandadze continues answering our questions on the types, facets and specificities of legal transactions in civil law.

NBR – What are legal grounds of violability of transactions?
L.K. – According to our civil legislation in force, the legal grounds of violability of transactions are error (mistake) in transaction – transaction made in error (transaction made by mistake), deceit and duress (in undertaking transactions).
NBR – Could you provide us at least with brief information about the abovementioned

grounds and specificities in more details?
L.K. – I will try to explain clearly and simply the differences and meanings of the legal grounds of violability of transactions. A person, who made mistake about the contents of a transaction or had no intention to make a declaration with this content, may avoid the declaration if it is to be assumed that with the knowledge of the factual position and with a sensible understanding of the case, he would not make the declaration. Error in (mistake about) content of the declaration includes (covers, involves, means) error in characteristics of a person or a thing. It should be noted that incorrect transmission of a declaration of intent by the person or facilities used for its transmission is also deemed as the legal ground of its violability. For a transaction to be voidable on the ground of a mistake three conditions are required – both parties must be under mistake, mistake must be of (about) a fact and fact must be essential to the transaction (agreement).
NBR – Which facts are essential to the transaction?
L.K. – This depends on the nature of the promise in each case. Something that is remotely linked to the transaction is not an essential fact. For example, A agrees to hire B for taking his goods to a city. Later they came to know (realized) that there is no electricity. This fact is not essential to the transaction but if they got to know later that all transporters were on strike, this would be a fact essential to the transaction. I would here add that there are three types of things that are essential facts to the transaction – identity of the parties, identity and nature of the subject matter of the contract, and nature and content of the promise itself.
NBR – How about period for avoidance about transactions made by mistake?
L.K. – The avoidance of a declaration of intent will be affected only within one month. In case of mistake, the period commences at the time when the person, entitled to avoid, discovers the mistake. It should be said that if a mistake is caused by the person entitled to void, he must pay damages to the other party, but a duty to pay damages does not arise if the injured person knew the reason for the voidances or the violability or did not know about it due to his negligence.
NBR – What do you say about violability of transaction on the grounds of deceit or duress?
L.K. – Making a declaration of intent by deceit or by duress is a legal ground to avoid that declaration. For avoiding transaction, it is not important whether intension is to gain some advantage or make injury to the other party. Interesting regulation is that if both parties acted deceitfully, neither of them are entitled to avoid transaction or demand payment for damages on grounds of deceit. As for the violability of transaction on grounds of duress, it occurs if by its nature it (duress) may influence a person or inspire fear of real injury to his personality or property. Period for avoidance of the transaction on grounds of deceit and duress is one year. In case of deceit, the period commences at the time when the person, entitled to void, discovers the deceit, and in case of duress, from the time when the duress stops. Finally, I wanted to emphasize that everyone must take into account subject-matter of limitation, legally determined for transactions because only this time-period is possible to observe and realize rights and legal interests because the civil rights to demand that another person does or refrains from an act (claim) is subject to limitation.


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