The Newest Civil Code in Europe

General

Up until 1st July 2002, the Netherlands held the position of having the most modern Civil Code in Europe. On 1st July 2002 the last ingredients of the Civil Code in Estonia entered into force - the General Principles of Civil Code Act ("GPCCA") and the Law on Obligations Act ("LOA"). The Civil Code of Estonia consists of 5 parts all grouped in different acts: general principles, property law, obligation law, inheritance law and family law. In this article we are going to touch upon the general principles and obligations law.

Freedom of contract

The most basic amendment to the principles in force until the enforcement of the LOA is the adoption of freedom of contract principle. So far Estonia acted on the basis of Civil Code that was in force also during the Soviet times when there was little private property. Under the old Civil Code basic rule was that the parties could not agree otherwise if the law provided regulations for that kind of civil relationships. Since 1991 Estonia has moved towards privatising most of the state and municipal assets and therefore we have interpreted the old Civil Code accordingly.

The new LOA is a dispositve law which means that parties can agree otherwise than the law has provided if the law does not specifically state or it does not derive from the essence of the law provision that parties are not allowed to agree otherwise or if different agreement would be in conflict with the public order or good manners or if such different agreement would violate the basic rights of a person. It could be rather complicated sometimes to understand whether the agreement could be in conflict of the essence of the provision or public order. As long as parties do not challenge the agreement, the agreement would be in force. Eventually, it all comes down to the court to decide, but currently the LOA has not been in force enough for the Supreme Court to render any rulings. Although the Supreme Court followed the principles of the new laws even when they were not adopted yet.

Freedom of contract principle also includes the freedom to conclude the agreements in any possible form unless specific form is required by the law, freedom to conclude agreements voluntarily, freedom to name the agreement as desired etc.

Good faith

In contractual relationships also the principle of good faith should be kept in mind. The good faith principle is not a new one in Estonian laws and legal practice as it was before the enforcement of the...

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