28 May Sixth book of the Catalan Civil Code on contracts and obligations – a brief overview!
At the beginning of 2018, the sixth book of the Catalan Civil Code came into force, which generally completes the codification process of civil law in Catalonia. The new book contains a large number of relevant novelties and differences to the general Spanish Civil Code and must be given priority when signing contracts in Catalonia. The long-term validity of the sixth book, however, depends on a case currently pending before the Spanish Constitutional Court.
On 15.02.2017, the Catalan Parliament adopted the so-called Law 3/2017 from February 15th, of the sixth book of the Catalan Civil Code concerning obligations and contracts, as well as amendments to the first, second, third, fourth and fifth books of the Catalan Civil Code („Ley 3/2017, de 15 de febrero, del libro sexto del Código civil de Cataluña, relativo a las obligaciones y los contratos, y de modificación de los libros primero, segundo, tercero, cuarto y quinto“).
This law came into force on 01.01.2018, thus affecting those contracts that have since been signed.
The sixth book is divided into three main sections: (i) general terms, (ii) types of contracts and (iii) non-contractual obligations.
However, the law referred to above only covers the section on contract types. The other sections concerning the general regulations and non-contractual obligations, as well as a part of the types of contracts, shall be dealt with in a later law, which would then definitively complete the codification process.
Constitutional complaint and suspension of effectiveness
On 22.05.2017, the Spanish Public Prosecutor’s Office (“Abogado del Estado”) filed a constitutional complaint with the Spanish Constitutional Court concerning various articles of the Law and demanded the immediate suspension of the effectiveness of the contested articles. Both applications were initially granted by the Constitutional Court. Shortly before the deadline for the suspension of the validity of the contested articles expired, the Constitutional Court summoned all parties once again to decide on the further suspension. The public prosecutor’s office demanded the extension of the suspension and argued for the necessary preservation of the principle of legal certainty as well as the good faith of the Spanish land register.
However, in its decision from 3 October 2017, the Constitutional Court decided to lift the suspension of the validity of the challenged articles, since neither the principle of legal certainty nor the principle of good faith was infringed. As a result, the Act entered into force on 01.01.2018, as described above, initially without restrictions.
Special characteristics of the new legislation
The main novelties of this law are that a large number of contracts in Catalonia are no longer regulated by the Spanish Civil Code (“Código Civil”). Nevertheless, all aspects not covered by the new rules will continue to be regulated by the Spanish Civil Code.
Another distinctive feature is that the Act entails rules both on general sales contracts and on consumers’ sales contracts, but does not regulate these separately in separate subsections, but rather covering specific protective consumer regulations in both respective articles. Additionally, the general consumer-protective laws existing in conjunction with the sixth book must be observed.
As follows, several particularities regarding real estate sales contracts:
The non-determination of a purchase price is not a reason for the invalidity of the contract. The purchase price then amounts to what would be calculated in comparable circumstances.
Concept of “unfair advantage”: the right to terminate the contract if one of the parties is dependent on the other, has a special affinity of trust with the other or is in an unstable economic situation or urgent need and the other party exploits that situation.
Right of withdrawal of the buyer, should they not receive the necessary total or partial financing, unless otherwise agreed between the parties.
Agreement of a condition subsequent to the suspension in the event of non-payment of all or part of the deferred purchase price.
The entry into force of this new law generally completes the codification process of Catalan law, resulting in a Catalan Civil Code of six books in total. The aim of the law is to provide a more up-to-date and timely regulation of the contractual relations and of the non-contractual obligations between the parties.
However, it should be noted that the Spanish Constitutional Court has not yet ruled on the constitutional complaint. The law which has entered into force is fully applicable and must be upheld. Nevertheless, the Constitutional Court’s ultimate decision remains to be seen