The Civil Code of Japan/Book 3

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The subject of an obligation may be something not capable of being estimated in money.

If the subject of the obligation is the delivery of a specific thing, the debtor^[2] must, until the time of delivery, use in the keeping of the thing the care of a good manager.

When the thing which forms the subject of the obligation is described only in kind, if the quality ​cannot be determined by the nature of the juristic act or the intention of the parties, the debtor must make prestation^[3] of a thing of medium quality.

In such case if the debtor has completed all acts necessary for the prestation of a thing, or if he with the consent of the creditor has selected a thing for the prestation, such thing becomes from that time the subject of the obligation.

If the thing forming the subject of the obligation is money, the debtor may at his option perform in any kind of currency, unless the subject of the obligation is prestation of some particular kind of money.

If at the time of maturity of the obligation the particular kind of currency which forms its subject has lost its legal tender quality, the debtor may perform in any other currency.

These provisions apply correspondingly, if the subject of the obligation is prestation of foreign currency.

If the amount of an obligation is expressed in foreign currency, the debtor may perform in Japanese currency at the rate of exchange prevailing at the place of performance.

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If an obligation bears interest and there is no different intention expressed, the rate of interest is five per cent per annum.

If the interest is in arrear for one year or more, and the debtor does not pay upon the creditor’s demand, the latter may add such interest to the principal.

If the subject of the obligation is to be selected from among several prestations, the right of selection belongs to the debtor.

The right of selection mentioned in the preceding article is exercised by an expression of intention made to the other party.

Such expression of intention can be rescinded only with the assent of the other party.

When the obligation comes due, if the party having the right of selection on being called upon by the other party to select within a reasonable time, does not do so within such time, the right of selection passes to the other party.

If a third person is to make the selection, it is done by an expression of intention made either to the creditor or to the debtor.

​If such third person cannot make the selection or is unwilling to do so, the right of selection passes to the debtor.

If among the prestations which form the subject of the obligation one is from the beginning or afterwards becomes impossible, the obligation remains in existence as to the others.

If a prestation becomes impossible by the fault of the party who has not the right of selection, the foregoing provisions do not apply.

The effect of the selection relates back to the time when the obligation came into existence; but the rights of third persons cannot be impaired thereby.

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If a certain time is designated for the performance of the obligation, the debtor is in mora^[4] from such time.

​If a time which is uncertain has been designated for the performance of the obligation, the debtor is in mora after he has notice that such time has arrived.

If no time has been designated for the performance of the obligation, the debtor is in mora after a demand for performance has been made upon him.

If the creditor refuses to accept or cannot accept the performance of the obligation, he is in mora from the time when a tender of performance is made to him.

If the debtor wilfully fails to perform his obligation, the creditor may apply to the court for compulsory performance; except where the nature of the obligation does not admit of it.

When the nature of the obligation does not admit of compulsory performance, if the subject of the obligation is the doing of an act, the creditor may apply to the court to have it done by a third person at the debtor’s expense; but if the subject of the obligation is the doing of a juristic act, the decree of the court stands in the place of an expression of intention by the debtor.

As to an obligation whose subject is the forbearance from an act, the creditor may apply to the court to have such acts as have been done undone and proper measures taken for the future.

These provisions do not affect the right to claim damages.

If the debtor does not perform the obligation according to its terms, the creditor may claim damages.

​The same is the case, if the debtor becomes unable to perform for any cause attributable to him.

The claim for damages is for compensation for all such damage as is the natural consequence of non-performance.

The creditor may demand compensation even for such damage as has arisen from special circumstances, if the party concerned foresaw or ought to have foreseen such circumstances.

Unless a different intention has been expressed, the amount of the damages is to be assessed in money.

If the fault of the creditor has contributed to the non-performance of the obligation, the court may take that into consideration in determining the liability for damages or their amount.

On an obligation whose subject is money the amount of damages is fixed according to the legal rate of interest; but if a higher rate of interest has been agreed upon, that is to govern.

The creditor is not bound to prove the amount of such damages, nor can the debtor set up the defence of vis major as to them.

The persons concerned may fix beforehand the ​amount of damages for non-performance of an obligation. In such case the court may tot increase or reduce such amount.

Such a previous fixing of the amount of damages does not affect the right to claim the performance or rescission of the obligation.

A penalty is presumed to be a previously fixed amount of damages.

The provisions of the preceding article apply correspondingly, where the parties have agreed beforehand that compensation shall be made in something other than money.

If the creditor receives as damages the full value of the thing or right which forms the subject of the obligation, the debtor is subrogated by operation of law into the position of the creditor as to such thing or right.

In order to protect his obligation, the creditor may exercise the rights of the debtor, except such as are merely personal to the debtor.

So long as the obligation is not yet due, the creditor can exercise the rights of his debtor only by virtue of a judicial subrogation; but this does not apply to acts of preservation.

The creditor may apply to the court for the rescission of any juristic act done by the debtor ​with knowledge that it would prejudice the creditor. This does not apply, if the person enriched by such juristic act or a subsequent acquirer did not know, at the time of the act or of the acquisition, of the facts which would make it prejudicial to the creditor.

This does not apply to a juristic act whose subject is not a property right.

A rescisssion made according to the provisions of the preceding article avails for the benefit of all the creditors.

The right of rescission mentioned in Art. 424 is extinguished by prescription, if the creditor does not exercise it for two years from the time when he had notice of the cause of rescission. The same applies, if twenty years have elapsed since the time of the act.

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If there are several creditors or several debtors, and no different intention is expressed, each creditor and each debtor has equal rights or duties.

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When the subject of the obligation is by nature or by the expressed intention of the parties indivisible, if there are several creditors, each creditor may demand performance on behalf of all the creditors, or the debtor may perform to one creditor on behalf of all the creditors.

Even though an agreement of novation^[5] or release ​has been made between one creditor on an indivisible obligation and the debtor, the other creditors may demand performance of the entire obligation; but so much as would have come to such creditor, if he had not lost his right, must be restored to the debtor.

Except as aforesaid, the acts of one creditor on an indivisible obligation or facts occurring in respect to such one creditor have no effect as against the other creditors.

If an indivisible obligation rests upon several persons, the provisions of the preceding article and those relating to joint obligations apply correspondingly, except the provisions of Arts. 434–440.

If an indivisible obligation is changed into a divisible one, each creditor can demand performance, and each debtor is bound to perform only as to his share.

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If several persons are bound by a joint obligation, the creditor may demand performance wholly or partly against any one of the debtors or against all the debtors at the same time or successively.

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If a cause of invalidity or rescission of the juristic act exists as to one of the joint debtors, the effect of the obligation as to the other debtors is not impaired thereby.

A demand for performance made to one of the joint debtors is effective against all the debtors.

If a novation is made between one of the joint debtors and the creditor, the obligation is extinguished as to all of the joint debtors.

If an obligation exists in favour of one of the joint debtors against the creditor, and such debtor makes a set off, the joint obligation is extinguished as to all the debtors.

So long as the joint debtor in whose favour the obligation exists, does not make a set off, the other joint debtors can make it only in respect to such debtor’s share.

A release made to one of the joint debtors avails in favour of the other debtors only in respect to such debtor’s share.

If confusion^[6] takes place between one joint debtor ​and the creditor, it is deemed that such debtor has performed the obligation.

If prescription has been completed in favour of one joint debtor, the other debtors are freed from their liability to the extent of such debtor’s share.

With the exception of the facts mentioned in the preceding six articles, facts which arise with respect to one joint debtor have no effect as to the other debtors.

If all of the joint debtors or several of them are adjudged bankrupt, the creditor may intervene in the distribution of the assets of each for the full amount of the obligation.

If one joint debtor performs or otherwise at his own expense obtains the discharge of all the debtors from the obligation, he has a right to contribution from the other joint debtors up to the amount of their respective shares.

Such a right to contribution includes the right to legal interest from the day of performance or of the discharge and to compensation for necessary expenses and for damage.

If one joint debtor performs or otherwise at his own expense obtains the discharge of all the debtors from the obligation, without having informed the other ​debtors of the demand of the creditor, and any othe debtor had a defence which he could have made against the creditor, he may make it against the former debtor as to his share; but if he does so by way of set off, the debtor in fault may demand against the creditor the performance of the obligation which might have been extinguished by set off.

If one joint debtor omits to inform the other debtors that he has performed or otherwise at his own expense has obtained the discharge of all the joint debtors, and in consequence thereof another joint debtor in good faith performs or otherwise for a consideration obtains a discharge from the obligation, such latter debtor may consider his performance or other act of discharge as valid.

If one of the joint debtors has not the means to make contribution, the amount which he is unable to contribute is to be apportioned among the person entitled to contribution and the other joint debtors who are solvent according to their respective shares; but if the party entitled to contribution is in fault, he cannot claim contribution against the other joint debtors.

If one of the joint debtors has been released from the obligation, and one of the remaining debtors has not the means to perform, the creditor takes upon himself that share which the debtor released by him ought to have borne in respect to the share which the debtor without means could not perform.

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If the principal debtor does not perform his obligation, the surety must perform it.

The suretyship covers interest, penalty and damages on the principal obligation and all other charges accessory to it.

A surety may stipulate that he shall be liable for a penalty of damages only in respect of his own obligation as surety.

If the liability of the surety is more onerous than the principal obligation as to its subject or its modality, it is to be reduced to the extent of the principal obligation.

If a person with knowledge of the ground of rescission becomes surety for an obligation which may be rescinded because of incapacity, he is presumed to have entered into an independent obligation having the same subject, conditioned upon the non-performance or rescission of the principal obligation.

When a debtor is bound to furnish a surety, the latter must have the following qualifications:—

1. He must be a person of full capacity; ​
2. He must have the means to perform;
3. He must have his domicile within the jurisdiction of the court of appeal which has jurisdiction over the place of performance, or he must establish a special domicile there.

If the qualifications mentioned under Nos. 2 and 3 cease to exist, the creditor may demand that another person having those qualifications be substituted for the surety.

These provisions do not apply, if the surety has been designated by the creditor.

If the debtor cannot furnish a surety having the qualifications mentioned in the preceding article, he may instead thereof give some other kind of security.

If the creditor demands performance of the obligation from the surety, the latter may require that the principal debtor be first called upon to perform; unless the principal debtor has been adjudged bankrupt, or his whereabouts is unknown.

Even after the principal debtor has been called upon as provided in the preceding article, if the surety can prove that the principal debtor has the means to perform, and that enforcement against him would not be difficult, the creditor must first enforce his obligation against the property of the principal debtor.

If the surety becomes bound jointly with the principal ​debtor, he has not the rights mentioned in the preceding two articles.

If the creditor, disregarding a demand made by the surety according to the provisions of Arts. 452 and 453, has not called upon or enforced his obligation against the principal debtor, and cannot afterwards obtain full performance from him, the obligation of the surety is discharged to the extent to which the creditor would have received performance, if he had at once made such call or enforcement.

When there are several sureties, the provisions of Art. 427 apply, even though they have assumed their obligations by separate acts.

A demand for performance made upon the principal debtor or an interruption of the prescription as against the principal debtor has effect also against a surety.

A surety may avail himself against the creditor by way of set off of any obligation which exists in favour of the principal debtor against the creditor.

If the principal debtor is bound jointly with the surety, the provisions of Arts. 434–440 apply.

A surety who has become such at the request of the principal debtor, if without his own fault he has been adjudged to perform the obligation, or if in place of ​the principal debtor he has performed or otherwise has extinguished the obligation at his own expense, has a right of recourse against the principal debtor.

The provisions of Art. 442, 2 apply correspondingly to the foregoing case.

A surety who has become such at the request of the principal debtor may exercise beforehand his right of recourse against the principal debtor in the following cases:—

1. If the principal debtor has been adjudged bankrupt, and the creditor does not intervene in the distribution of his assets;
2. After the obligation has become due; if, however, since the making of the contract of suretyship the creditor has given time to the principal debtor, that cannot be set up against the surety;
3. When the time of performance of the obligation is uncertain, and even the maximum time cannot be known, after ten years have elapsed from the making of the contract of suretyship.

A principal debtor who has according to the provisions of the preceding two articles indemnified the surety, may, so long as the creditor has not received full performance, require the surety to give him security or to procure his discharge from the obligation.

In the foregoing cases the principal debtor may free himself from his obligation to indemnify the surety by ​making a deposit, by giving security or by procuring the discharge of the surety.

If a person who has become surety without the request of the principal debtor performs the obligation or otherwise at his own expense obtains the discharge of the principal debtor from his obligation, the latter is bound to indemnify him only to the extent to which he was enriched thereby at that time.

A person who has become surety against the will of the principal debtor has a right of recourse only to the extent to which the principal debtor is presently enriched; but if the principal debtor sets up the fact that before the time of the recourse he had a right of set off against the creditor, the surety may demand against the creditor performance of the obligation which would have been extinguished by the set off.

The provisions of Art. 443 apply correspondingly to a surety.

If a surity who has become such at the request of the principal debtor has in good faith made performance or incurred other expenses for the sake of discharge, the provisions of Art. 443 apply correspondingly to the principal debtor also.

A person who has become surety for a joint debtor or for a debtor on an indivisible obligation, has a right of recourse against the other debtors only to the extent of their respective shares.

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If, because the principal obligation was indivisible or because all the sureties have bound themselves by special agreement to perform the whole obligation, one of several sureties has performed the whole obligation or more than his proportional part thereof, the provisions of Arts. 442–444 apply correspondingly.

In a case other than the preceding case, if one of several sureties who are not jointly bound has performed the whole obligation or more than his proportional part thereof, the provisions of Art. 462 apply correspondingly.

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An obligation may be assigned, unless its nature does not admit of it.

This provision does not apply, if the parties have expressed a contrary intention. Such expression of intention, however, cannot be set up against a third person acting in good faith.

The assignment of an obligation in favour of a specific creditor can be set up against the debtor or another third person only if notice has been given to the debtor, or if the latter has assented to the assignment.

​Such notice or assent can be set up against a third person other than the debtor only if it is made by a document having an authenticated date.

If the debtor has given the assent mentioned in the preceding article without reservation, he cannot set up against the assignee a defence which he might have made against the assignor. If, however, in order to extinguish the obligation, the debtor has made any payment to the assignor, he may recover it, or if for such purpose he has assumed an obligation to the assignor, he may treat it as if it did not exist.

If the assignor has merely given notice of the assignment, the debtor may set up against the assignee any defence which he had against the assignor, before he received such notice.

The assignment of an obligation performable to order can be set up against the debtor or other third persons only if the assignment is endorsed on the instrument, and the instrument itself is delivered to the assignee.

The debtor on an obligation performable to order has the right, but is not bound, to verify the identity of the holder of the instrument or the genuineness of his signature or seal; but if the debtor acts in bad faith or with gross negligence, his performance is not valid.

The provisions of the preceding article apply ​correspondingly, if a specific creditor is designated, but it is added that the obligation shall be performable to the holder of the instrument.

The debtor on an obligation performable to order cannot set up against any assignee in good faith defences which he might have set up against the original creditor, except such as appear upon the face of the instrument or result naturally from its character.

The provisions of the preceding article apply correspondingly to obligations performable to bearer.

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Performance of an obligation may be made by any third person, unless its nature does not admit of it, or the parties concerned have expressed a contrary intention.

A person who has no interest in the performance, ​cannot make performance against the will of the debtor.

If a person has delivered by way of performance a thing belonging to another, he can reclaim it only on condition that he makes another and valid performance.

If the owner of a thing who has not capacity to assign it delivers it in performance, and the performance is afterwards rescinded, he can reclaim the thing only on condition that he makes another and valid performance.

If in the cases mentioned in the preceding two articles the creditor has in good faith consumed or assigned the thing delivered in performance, such performance is valid; but this does not impair the creditor’s right of recourse against the person performing, if a third person has claimed damages from him.

If performance is made to the quasi-possessor of an obligation, it is valid only if the person making performance acted in good faith.

Except in the case mentioned in the preceding article, a performance made to a person who is not entitled to receive it, is valid only to the extent to which the creditor has been enriched thereby.

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A person who produces a receipt is deemed to have a right to receive performance; but this does not apply, if the person making performance knows that such right does not exist or is ignorant thereof by reason of his negligence.

If a garnishee who has been forbidden by the court to do so nevertheless performs to his immediate creditor, the garnishor may still demand performance to the extent to which he has been damaged.

This provision does not impair the right of the garnishee to exercise his right of recourse against his immediate creditor.

if the debtor with the consent of the creditor makes some prestation other than that which he is bound to make, such prestation has the same effect as performance.

If the subject of the obligation is the delivery of a specific thing, the person making performance must deliver the thing in the condition in which it is at the time when delivery is to be made.

When there is no special expression of intention as to the place of performance, if a specific thing is to be delivered, the delivery is to be made at the place where the thing was at the time when the obligation ​arose; other kinds of performance are to be made at the place of the creditor’s present domicile.

If there is no special expression of intention as to the expenses of performance, such expenses are to be borne by the debtor; if, however, because of the creditor’s changing his domicile or any other act of his, the expenses are increased, such increase must be borne by the creditor.

The person making performance may require the recipient of the performance to give him a receipt.

If there are documents evidencing the obligation, a person who has fully performed the obligation can require the surrender of such documents.

When a debtor owes several obligations of the same kind to the same creditor, if the prestation tendered as performance is not sufficient to extinguish them, the person performing may at the time of the prestation designate the obligation to which such performance shall be appropriated.

If the person performing does not make such designation, the person receiving the performance may at the time of reception appropriate such performance; unless the person performing at once objects thereto.

The appropriation of a performance is made by an expression of intention to the other party.

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If the parties do not appropriate the performance, the appropriation of it is to be made according to the following rules:—

1. If some of the different obligations are due and some are not due, those which are due have precedence;
2. If all the obligations are due or all are not due, those have precedence, whose performance is more advantageous to the debtor;
3. If the advantage is equal, those have precedence, which first came due or will first become due;
4. If the obligations are equal in the respects mentioned under Nos. 2 and 3, the performance is to be appropriated among them in proportion to their respective amounts.

When for the performance of a single obligation several prestations are to be made, if the person performing makes a prestation not sufficient to extinguish the obligation, the provisions of the preceding two articles apply correspondingly.

In case a debtor is bound in regard to one or several obligations to pay, besides the principal, interest and expenses, and the person performing makes a prestation not sufficient to extinguish the whole obligation, it is to be appropiated in the following order: first expenses, then interest and lastly principal.

In this case the provisions of Art. 489 apply correspondingly.

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By a tender of performance a discharge is effected, from the time of the tender, from all liabilities arising out of non-performance.

A tender of performance must be according to the terms of the obligation, and must be actual; but if the creditor refuses beforehand to accept performance, or if it is necessary for the creditor to do any act in respect to the performance, it is sufficient to give notice that all preparations for performance have been made, and to notify the creditor to accept performance.

If the creditor refuses or is unable to accept performance, the person performing may discharge the obligation by depositing for the creditor’s benefit the thing forming the subject of the obligation. The same applies, if the person performing, without fault on his part, cannot ascertain who is the creditor.

A deposit must be made at the deposit office of the place where the obligation is to be performed.

If there are no special provisions by law or regulations as to the deposit office, the court must on the application of the person performing designate a deposit office and appoint a keeper of the thing deposited.

The depositor must at once give notice of the deposit to the creditor.

So long as the creditor has not signified his ​acceptance of the deposit, or the judgment of the court declaring the deposit valid has not become finally binding, the person performing may take back the thing deposited. In that case the deposit is deemed not to have been made.

This does not apply, if by the deposit a pledge or a mortgage has been extinguished.

If the thing forming the subject of performance is not suitable for deposit, or if it is perishable or liable to injury, the person performing may with the permission of the court sell it at auction and deposit the proceeds. The same applies, if the keeping would be unreasonably expensive.

If the debtor is to perform upon a prestation being made by the creditor, the latter can receive the thing deposited only on condition that he makes such prestation.

A person who has performed on behalf of a debtor is subrogated into the rights of the creditor on obtaining his consent thereto at the time of performance.

In such cases the provisions of Art. 467 apply correspondingly.

A person who has a rightful interest in performance is subrogated into the position of the creditor by operation of law.

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A person who according to the provisions of Arts. 499 and 500 is subrogated into the position of the creditor can, to the extent to which he might have recourse on the ground of his own right, exercise all the rights which the creditor had in respect to the effects of the obligation or to any security for it; but in such case the following rules are to be observed:—

1. A surety is not subrogated into the position of the creditor as against a purchaser of an immovable which is the subject of a preferential right, pledge or mortgage, unless a note of the subrogation is added beforehand to the registry of such right.
2. A purchaser is not subrogated into the position of the creditor against a surety;
3. One of several purchasers is subrogated into the position of the creditor as against the other purchasers only in proportion to the value of each immovable.
4. The provisions mentioned under No. 3 apply correspondingly among persons who from their own property have given security for the obligation of another.
5. As between sureties and a person who from his own property has given security for the obligation of another, subrogation into the position of the creditor takes place only proportionally to the number of the persons. If, however, there are several persons who from their own property have given security for the obligation of another, as against them subrogation can take place only in respect to the amount which remains after deducting the ​share to be borne by the sureties, and in proportion to the value of the respective properties given as security.

If in such case the property is an immovable thing, the provisions of No. 1 apply correspondingly.

If subrogation takes place upon a part performance, the person performing exercises the right together with the creditor in proportion to the value given by him.

In such case the creditor only is entitled to rescind the contract for non-performance; but he must restore to the party making part performance the value given by the latter with interest.

A creditor who has received performance from a person who is thereupon subrogated into his position must deliver to such person the documents relating to the obligation and all things which he held as security.

If subrogation takes place upon a part performance, the creditor must note such subrogation upon the documents relating to the obligation, and must permit the party performing to see to the preservation of the things which he holds as security.

If a third person is according to Art. 500 to be subrogated into the position of the creditor, and the latter intentionally or by omission has destroyed or diminished the security, such third person is discharged from his liability to the extent to which he is thereby prevented from getting reimbursement.

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If two persons are bound to each other by obligations whose subjects are of the same nature and both of which are due, either debtor may discharge his obligation by set off to the extent to which the amounts of the obligations correspond, unless the nature of one of the obligations does not admit of it.

The foregoing provisions do not apply, if the parties have expressed a contrary intention; but such intention cannot be set up against a third person acting in good faith.

Set off is made by an expression of intention by one party to the other. A condition or time of commencement or ending cannot be annexed.

Such an expression of intention relates back in its effect to the time when both obligations could first have been set off.

A set off can be made, though the place of performance of the two obligations is different; but the party who makes the set off must indemnify the other party for any damage caused thereby.

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A creditor may set off an obligation which is extinguished by prescription, if it could have been set off before its extinction.

If an obligation arises from an unlawful act, the debtor cannot avail himself of a set off against the creditor.

If the obligation is one that cannot be seized under legal process, the debtor cannot avail himself of a set off against the creditor.

A garnishee who has been forbidden by the court to perform cannot set off against the garnishor an obligation subsequently acquired by him.

The provisions of Arts. 488–491 apply correspondingly to set off.

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If the parties make a contract by which any material ​element of an obligation is changed, such obligation is extinguished by novation.

It is deemed a change of a material element, if a conditional obligation is made unconditional, if a condition is added to an unconditional obligation, or if a condition is changed. The same is the case, if a bill of exchange is issued instead of performance.

A novation by a change of the debtor may be accomplished by a contract between the creditor and the new debtor, but not against the will of the original debtor.

A novation by a change of the creditor can be set up against a third person only if made in a document having an authenticated date.

The provisions of Art. 468, 1 apply correspondingly to a novation by a change of the creditor.

If the obligation arising from the novation, because of an illegality in its ground or because of some reason which was unknown to the parties, does not definitely come into existence or is rescinded, the original obligation is not extinguished.

The parties to a novation may, to the extent of the subject of the original obligation, transfer a right of ​pledge or mortgage given as security for it to the new obligation; but if such security was given by a third person, his consent is necessary.

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If the creditor expresses to the debtor an intention to release the obligation, it is extinguished.

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If the obligation right and duty become vested in the same person, the obligation is extinguished. But this does not apply, if such obligation forms the subject of the right of a third person.

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An offer to make a contract in which a time for acceptance is specified, cannot be withdrawn.

If the offerer does not receive notice of acceptance within the time specified, the offer loses its effect.

If the notice of acceptance arrives only after the time specified, but it is apparent that it was sent in such time that in the ordinary course of things it ought to have arrived before, the offerer, unless he has already given notice of the delay, must immediately give notice to the other party of the delayed arrival.

If the offerer fails to give such notice, the notice of the acceptance is deemed not to have been delayed.

The offerer may treat an acceptance which comes too late as a new offer.

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A person who, without specifying a time for acceptance, makes an offer to another at a distance cannot withdraw his offer within the time within which notice of acceptance might reasonably be expected.

The provisions of Art. 97, 2 do not apply, if the offerer has expressed a contrary intention, or if the other party had notice of the death or loss of capacity.

A contract between persons at a distance comes into existence at the time when the notice of acceptance is sent.

If according to the expressed intention of the offerer or to a prevailing custom no notice of acceptance is necessary, the contract is deemed to come into existence at the time of the occurrence of the fact which is to be considered as an expression of intention to accept.

If notice of the withdrawal of an offer arrives after notice of acceptance has been sent, but it is apparent that the former was sent in such time that in the ordinary course of things it ought to have arrived before, the acceptor must immediately give notice to the offerer of such delayed arrival.

If the acceptor fails to give such notice, the contract is deemed not to have come into existence.

If a person accepts an offer, but adds a condition to it or changes it, he is deemed to have refused ​the offer, and at the same time to have made a new offer.

A person who advertises that he will give a certain reward to whoever shall do a certain act is bound to give such reward to any person who does the act.

The advertiser may at any time before the specified act has been completed, withdraw his advertisement by the same means which he used for advertising, unless he has declared therein that he would not withdraw it.

If the advertisement cannot be withdrawn by the means aforesaid, withdrawal may be made by other means, but in such case it is valid only as against those persons who know of it.

If the advertiser has fixed a time within which the specified act must be done, he is presumed to have renounced his right of withdrawal.

If several persons do the act specified in the advertisement, only that one who does it first has a right to receive the reward.

If several persons do such act at the same time, each one has a right to receive an equal share of the reward. But if the reward is by its nature unsuited to be divided, or if according to the advertisement only one person can receive it, the person to receive it is determined by lot.

The foregoing provisions do not apply, if in the advertisement a different intention is expressed.

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If there are several persons who have done the act specified in the advertisement, but only the one who has done it best is to receive the reward, such advertisement is valid only if a time is fixed therein within which the invitation must be acted upon.

The decision which of the persons who have acted upon the invitation has done so the best is to be made by the person designated in the advertisement. If no person is designated, it is to be decided by the advertiser.

The persons who have acted upon the invitation have no right to contest such decision.

If it is decided that several persons have done the act equally well, the provisions of Art. 531, 2 apply correspondingly.

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A party to a bilateral contract may refuse performance of his obligation until the other party tenders performance of his obligation. But this does not apply, if the other party’s obligation is not yet due.

If the subject of a bilateral contract is the creation ​or transfer of a real right in a specific thing, and such thing is lost or damaged by a cause which is not attributable to the debtor, the loss or damage falls upon the creditor.

When the subject of the contract is a non-specific thing, the foregoing provisions apply from the time when the thing has become specific in accordance with the provisions of Art. 401, 2.

The provisions of the preceding article do not apply, if the thing which forms the subject of a bilateral contract depending upon a condition precedent is lost while the condition is pending.

If the thing is injured by a cause not attributable to the debtor, the damage falls upon the creditor.

If the thing is injured by a cause attributable to the debtor, the creditor, when the condition happens, may at his option either require performance of the contract or rescind it. But the right to damages is not affected thereby.

Except in the cases mentioned in the two preceding articles, if an obligation becomes impossible of performance by a cause not attributable to either party, the debtor has no right to receive the counter-prestation.

If performance becomes impossible by a cause attributable to the creditor, the debtor does not lose his right to the counter-prestation; but if he has received any benefit from being discharged from his obligation, he must surrender it to the creditor.

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If a party by a contract has agreed to make a prestation to a third person, the latter has a right to claim such prestation directly from the debtor.

In such case the right of the third person comes into existence at the time when he expresses to the debtor his intention to take the benefit of the contract.

After the right of the third person has come into existence in accordance with the provisions of the preceding article, if cannot be changed or extinguished by the parties to the contract.

Defences based upon the contract mentioned in Art. 537 can be set up by the debtor against the third person in whose favour the contract is made.

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If by the terms of the contract or by law one party is entitled to rescind the contract, that is done by an expression of intention to the other party.

Such expression of intention cannot be revoked.

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If one party does not perform the contract, the other party may fix a reasonable time and notify him to perform within that time. If he does not perform within that time, the other party may rescind the contract.

If the object of the contract according to its nature or to an intention expressed by the parties can be accomplished only by performance at or within a specified time, and such time has expired without one of the parties having performed, the other party may rescind the contract without the notification mentioned in the preceding article.

If performance becomes wholly or partly impossible by a cause attributable to the debtor, the creditor may rescind the contract.

If one party consists of several persons, rescission of the contract can be made only by or against all of them.

If in such case the right of rescission is extinguished as to one of them, it is extinguished also as to the others.

If one party has exercised his right of rescission, each party must restore the other to his former condition; but this cannot impair any right of a third person.

To money which is to be repaid in the foregoing case ​interest is to be added from the time when it was received.

The exercise of the right of rescission does not affect a claim for damages.

The provisions of Art. 533 apply correspondingly to the case mentioned in the preceding article.

If no period is fixed for the exercise of the right of rescission, the other party may fix a period and notify the party entitled to rescind to declare within such period whether he will rescind or not. If notice of rescission is not received within such period, his right of rescission is extinguished.

If by his own act or fault the person entitled to rescind materially injures the thing forming the subject of the contract or becomes unable to restore it, or if by specification or making over he changes it into a thing of a different kind, his right of rescission is extinguished.

If without the act or fault of the person entitled to rescind, the thing forming the subject of the contract is lost or injured, the right to rescind is not extinguished.

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A gift is where one party expresses his intention to give property of his own to the other party without consideration, and the other party expresses his acceptance.

A gift not expressed in writing can be rescinded by either party, except so far as performance has already been made.

The donor is not liable for defects or deficiencies in the thing or right forming the subject of the gift, unless he knew of such defect or deficiency and did not inform the donee thereof.

In case of a gift subject to a charge the donor is to the extent of the charge liable as if he were a seller.

A gift to be made by instalments ceases to have effect on the death of either the donor or the donee.

To a gift subject to a charge the provisions relating to bilateral contracts apply in addition to those of this Section.

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A gift to take effect at the death of the donor is governed by the provisions relating to legacies.

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A sale is where one party promises to transfer a property right to the other party, and the other party promises to pay him a price for it.

A promise to buy or sell made by one party has the effect of a sale, as soon as the other party expresses his intention to complete the sale.

If no time is fixed for such expression of intention, the promissor may fix a reasonable time and notify the other party to give a definite answer within that time whether he will complete the sale or not. If ​within that time he does not give any definite answer, the promise loses its effect.

If the buyer has given bargain money to the seller, either party may, before the performance of the contract has begun, rescind it; the buyer on condition that he forfeits the bargain money, the seller on condition that he repays twice its amount.

In such case the provisions of Art. 545, 3 do not apply.

The expenses of the contract of sale are to be borne by both parties equally.

The provisions of this Section apply to contracts other than sales, made upon a consideration, unless the nature of such contract does not admit of it.

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If a right of another person is made the subject of a sale, the seller is bound to acquire such right and transfer it to the buyer.

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If in the case falling under the preceding article the seller is not able to acquire the right which he has sold and to transfer it to the buyer, the latter may rescind the contract; but if he knew at the time of the contract that the right did not belong to the seller, he cannot claim damages.

If a seller who at the time of the contract did not know that the right which he sold was not his, is not able to acquire it and transfer it to the buyer, he may rescind the contract on making compensation for damage.

If in such case the buyer knew at the time of the sale that the right which he bought did not belong to the seller, the latter may rescind the contract by merely informing the buyer that he is unable to transfer the right sold.

If because a part of the right which is the subject of the sale belongs to another, the seller is not able to transfer it to the buyer, the latter may claim a reduction from the price in proportion to the part that is lacking.

If in such case the buyer would not have bought the remaining part alone, he may rescind the contract, provided he acted in good faith.

A demand for a reduction from the price or a rescission of the contract does not affect the claim for damages of a buyer acting in good faith.

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The rights mentioned in the preceding article must be exercised within one year, which is computed, if the buyer acted in good faith, from the time when he first had notice of the facts, if he acted in bad faith from the time of the contract.

The provisions of the preceding two articles apply correspondingly, where a thing was sold with a specification of its quantity, or where a part of the thing sold had already been lost at the time of the contract, and the buyer had no notice thereof.

If the thing sold is subject to a superficies, emphyteusis, servitude, lien or pledge, of which the buyer did not have notice, he may rescind the contract, provided that because of such incumbrance he is unable to accomplish the object for which he made the contract. In other cases he can only claim damages.

The provisions of the foregoing paragraph apply correspondingly, if a servitude which is represented to exist in favour of an immovable does not exist, or a registered lease of such immovable exists.

In the preceding cases the rescission of the contract or the claim for damages must be made within one year from the time when the buyer has notice of the facts.

If the buyer loses the ownership of an immovable sold by reason of the exercise of a preferential right or a mortgage which existed in such immovable, he may rescind the contract.

​If the buyer has preserved his ownership by expenditures from his own resources, he may claim reimbursement for such expenditures against the seller.

If in either case the buyer has suffered damage, he may claim compensation.

The buyer at an execution sale may in accordance with the provisions of the preceding seven articles rescind the contract or claim reduction from the price against the debtor.

If the debtor is insolvent, the buyer at such sale may demand from the creditors to whom the proceeds have been distributed the restoration of the whole or a part of such proceeds.

If in these cases the debtor knew of the deficiency in the thing or right, and did not give notice thereof, or if the creditor who demanded the execution sale knew of such deficiency, the buyer may claim damages from the person in fault.

If the seller of an obligation warrants the solvency of the debtor, it is presumed that the warranty is of such solvency at the time of the contract.

If the seller of an obligation not yet due warrants the future solvency of the debtor, it is presumed that the warranty is of such solvency at the time of the maturity of the obligation.

If the thing sold has a latent defect, the provisions of Art. 566 apply correspondingly; but not, if the thing is bought at an execution sale.

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The provisions of Art. 533 apply correspondingly to the cases mentioned in Arts. 563–566 and 570.

Even though the seller has specially stipulated that he shall not be liable in the cases mentioned in the preceding twelve articles, he is not exempted from liability for facts which he knew of and concealed, or for rights which he himself has created in favour of or has assigned to a third person.

If a time is fixed for the delivery of the thing sold, it is presumed that the same time is fixed for the payment of the price.

If the price is payable at the same time as the delivery of the thing, it is to be paid at the place of the delivery.

The fruits of a thing sold but not yet delivered belong to the seller.

The buyer is bound to pay interest on the price from the day of delivery; but if a time is fixed for the payment of the price, he is not bound to pay interest before such time.

If a third person asserts a right to the thing sold, and there is danger that the buyer may lose wholly or partly the right which he has bought, he may refuse to ​pay the price wholly or partly according to the extent of the threatened loss; unless the seller gives proper security.

If a preferential right, pledge or mortgage exists in an immovable sold, the buyer may refuse to pay the price, until the proceedings for the removal^[12] of the encumbrance are finished; but the seller may require the buyer to proceed with such removal without delay.

In the cases mentioned in the preceding two articles the seller may require the buyer to deposit the price.

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The seller of an immovable may in pursuance of a special agreement for repurchase made at the time of the sale rescind the sale on repaying the price paid by the buyer together with the expenses of the sale. Unless the parties have expressed a contrary intention, the fruits of the immovable and the interest on the purchase price are deemed to have been set off against each other.

The duration of a right to repurchase cannot exceed ​ten years. If a longer period is fixed, it is to be reduced to ten years.

If a period for the repurchase has been fixed, it cannot be afterwards extended.

If no period is fixed, the repurchase must be made within five years.

A right of repurchase which has been registered together with the contract of sale is valid even against third persons.

The registered right of a lessee can be set up against the original seller only for one year of its remaining duration, and not even for that, if it was registered for the purpose of injuring the seller.

If a creditor of an original seller proceeds to make the repurchase in his place under the provisions of Art. 423, the buyer may extinguish the right of repurchase by performing the obligation of the seller up to such amount as remains after deducting the amount to be repaid by the seller from the actual value of the immovable as assessed by an expert appointed by the court, and by repaying the surplus, if any, to the original seller.

If the seller does not tender the price and the expenses of the sale within the period of repurchase, he cannot afterwards repurchase.

If the buyer or a subsequent acquirer has made expenditures upon the immovable, the original seller must make reimbursement for them according to the ​provisions of Art. 196. In the case of beneficial expenditures the court may on the application of the original seller allow him a reasonable time for reimbursement.

If a co-owner of an immovable has sold his share with a special agreement for repurchase, and afterwards the immovable is partitioned or sold at auction, the original seller may exercise his right of repurchase against the share or price which the buyer has received or is to receive. If partition or auction has taken place without notice being given to the original seller, such fact cannot be set up against him.

If in the case mentioned in the preceding article the original buyer has bought the property at the auction, the original seller may exercise his right of repurchase on repaying the auction price and the expenses mentioned in Art. 583. In such case the original seller acquires the ownership of the whole of the immovable.

If the other co-owners have demanded partition, and thereupon the original buyer has bought the thing at the auction, the original seller cannot exercise his right of repurchase as to the buyer’s share only.

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Exchange is where the parties agree to transfer to each other property rights other than the ownership of money.

If one party agrees to transfer, in addition to another right, also the ownership of money, as to such money the provisions relating to a price apply correspondingly.

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A lean for consumption is where one person receives from the other money or other things, and agrees to return things of the same kind, quality and quantity.

When a person otherwise than by a loan is bound to make a prestation in money or other things, and the ​parties agree that such things shall be the subject of a loan for consumption, such a loan is deemed to arise.

An agreement to make a loan ceases to be binding, if either party is adjudged bankrupt.

If in the case of a loan upon interest the thing lent has a latent defect, the lender is bound to furnish in its place a thing free from defects. A claim for damages, however, is not affected thereby.

In the case of a loan without interest, the borrower may return the value of the defective thing. If, however, the lender knew of the defect and concealed it from the borrower, the provisions of the preceding paragraph apply correspondingly.

If the time for the return has not been fixed by the parties, the lender may fix a reasonable time and require the borrower to return within that time.

The borrower may return at any time.

If the borrower cannot return according to the provisions of Art. 587, he must pay as compensation the actual value of the thing; but this does not apply to the case mentioned in Art. 402, 2.

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A loan for use is where one party receives a thing without consideration from the other, agreeing to restore it after having used and taken the profits of it.

The borrower must use and take the profits of the thing according to the contract or to the nature of the thing lent.

The borrower cannot without the consent of the lender have a third person use or take the profits of the thing lent.

If the borrower acts contrary to the foregoing provisions, the lender may rescind the contract.

The borrower must bear the ordinary necessary expenses in regard to the thing lent. As to other expenses the provisions of Art. 583, 2 apply correspondingly.

The provisions of Art. 551 apply correspondingly to loans for use.

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The borrower must restore the thing at the time fixed by the contract.

If the parties have not fixed a time for the restoration, the borrower must restore the thing after he has finished using and taking the profits of it for the purpose specified in the contract; but even before that time the lender may claim restoration as soon as a time reasonably sufficient for such use and taking profits of the thing has elapsed.

If the parties have not fixed a time for restoration or specified the purpose of the use and taking profits, the lender may claim restoration at any time.

The borrower may put the thing lent back into its former condition, and take away any thing which he has annexed to it.

A loan for use loses its effect by the death of the borrower.

Compensation for damage arising from any use or taking profits of the thing contrary to the terms of the contract, and reimbursement for expenses incurred by the borrower, must be claimed within one year from the time when the thing was restored to the lender.

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The hiring of a thing is where one party agrees to have the other use and take profits of a thing, and the other party agrees to pay a rent^[18] therefor.

If a person who has not disposing capacity or authority to do so, makes a contract of hiring, such hiring cannot be for longer than the following periods:—

1. In case of the hiring of mountain or wood land for the purpose of planting or cutting trees, ten years;
2. In case of the hiring of other land, five years;
3. In case of the hiring of buildings, three years;
4. In case of the hiring of movables, six months.

The periods mentioned in the preceding article can be extended; but such extention must be made as to land within one year, as to buildings within three months, as to movables within one month before the termination of the period.

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The period of duration of a hiring cannot exceed twenty years. If a hiring is made for a longer period, such period is to be reduced to twenty years.

The aforesaid period may be extended; but it must not exceed twenty years from the time of the extention.

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If the hiring of an immovable is registered, it is valid against any person who afterwards acquires a real right in the immovable.

The letter is bound to make all repairs necessary for the use and taking profits of the thing hired.

The hirer cannot refuse permission to the letter to do any act necessary to the preservation of the thing hired.

If the letter desires to do, against the will of the hirer, an act of preservation by reason of which it would be impossible for the hirer to accomplish the object of the hiring, the hirer may rescind the contract.

If the hirer has incurred necessary expenses in respect to the thing hired, which ought to have been borne by ​the letter, he may claim reimbursement for them at once.

If the hirer has incurred beneficial expenses, the letter must make reimbursement after the hiring has ended in accordance with the provisions of Art. 196, 2; but the court may on the application of the letter allow a reasonable time to do so.

If in the case of the hiring of land for the purpose of taking the profits of it, the hirer because of vis major obtains from it less profits than the amount of the rent, he may claim to have the rent reduced to the amount of the profits which he has made; but this does not apply to residential land.

If in the case mentioned in the preceding article the hirer because of vis major obtains from the land for two consecutive years or longer less than the amount of the tent, he may rescind the contract.

If a part of the thing hired is lost without the fault of the hirer, he may claim a proportional reduction from the rent.

If in such case the hirer cannot with the remaining part accomplish the purpose for which he entered into the contract of hiring, he may rescind it.

A hirer can assign his right or sublet the thing hired only with the assent of the letter.

If the hirer contrary to this provision has a third ​person use or take the profits of the thing, the letter may rescind the contract.

If the hirer rightfully sublets the thing hired, the sub-hirer is directly responsible to the original letter. In such case a payment of the rent made in advance cannot be set up against the original letter.

This does not prevent the original letter from exercising his right against the original hirer.

The rent is to be paid, as to movables, buildings and residential land at the end of each month, as to other land at the end of each year; for things, however, for which there is a certain time for the yielding of their fruits, it must be paid immediately after such time.

If the thing hired needs to be repaired, or if another person asserts a right to it, the hirer must at once give notice thereof to the letter, unless the latter already has knowledge thereof.

The provisions of Arts. 594, 1, 597, 1 and 598 apply correspondingly to the hiring of things.

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If the parties have not fixed a period of duration for ​the contract of hiring, either party may at any time give notice to terminate it, in which case the contract terminates after the following periods have elapsed from the day of the giving of such notice:—

1. As to land, one year;
2. As to buildings, three months;
3. As to separate rooms or movables, one day.

In the case of land for which there is a certain time for the yielding of its fruits, a notice to terminate the contract must be given after such time and before the commencement of the next period of cultivation.

The provisions of the preceding article apply correspondingly, when the parties have fixed a period of duration for the contract of hiring, but one or both of the parties have reserved the right to terminate it within that period.

If after the time of hiring has elapsed, the hirer continues to use or take the profits of the thing hired, and the letter knowing thereof does not object, it is presumed that the parties have made a new contract of hiring on the same terms; but either party may give notice to terminate it in accordance with the provisions of Art. 617.

If security has been given upon the former contract, such security is released at the time when such contract terminates; but this does not apply to money deposited as security for the payment of rent.

The rescission of a contract of hiring takes effect ​only as to the future; but this docs not affect a claim for damages, where one of the parties has been in fault.

If the hirer is adjudged bankrupt, the letter or the administrator in bankruptcy may, even though the duration of the hiring was fixed, give notice according to Art. 617 to terminate the contract. In that case neither party can claim compensation for damage arising from such termination.

The provisions of Art. 600 apply correspondingly to the hiring of things.

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A hiring of services is where one party agrees to render services to the other party, and the latter agrees to pay him a compensation therefor.

The person hired can claim the compensation only after he has rendered the agreed services.

Compensation determined by periods can be demanded at the end of each period.

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The hirer can assign his right to a third person only with the assent of the person hired.

The person hired can have a third person render the services in his place only with the consent of the hirer.

If the person hired has a third person render the services contrary to the foregoing provisions, the hirer may rescind the contract.

If the duration of the contract of hiring is for more than five years or for the life time of one of the parties or of a third person, either party may at any time after the expiration of five years rescind the contract; but as to apprentices in a commercial or industrial business such term is ten years.

A person who desires to rescind such a contract according to the foregoing provisions must give notice three months beforehand.

If the parties have not fixed the duration of the contract of hiring, either party may at any time give notice to terminate it, in which case it will terminate two weeks after such notice.

If the compensation is determined by periods, notice to terminate the contract may be given for the next time of payment, but not later than the end of the first half of the current period.

If the compensation is determined by periods of six months or longer, notice must be given three months beforehand.

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Even though the duration of the hiring has been fixed by the parties, either party may rescind it immediately for any unavoidable necessity.

If, however, such necessity has arisen by the fault of the party concerned, he is liable for damages to the other party.

If after the period of duration of the contract has elapsed, the person hired continues to render services, and the hirer knowing thereof does not object, it is presumed that the parties have made a new contract of hiring on the same terms; but either party may give notice to terminate the contract in accordance with the provisions of Art. 627.

If security has been given upon the former contract, it is released upon its termination; but this does not apply to money deposited as security for good behaviour.

The provisions of Art. 620. apply correspondingly to a contract for the hiring of services.

If the hirer is adjudged bankrupt, the person hired or the administrator in bankruptcy may, even though the period of the hiring has been fixed, give notice to terminate the contract in accordance with the provisions of Art. 627. In that case neither party can claim compensation for damage arising from the termination of the hiring.

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A contract for contract work is where one party agrees to accomplish a work, and the other party agrees to pay him a compensation for the result of the work.

The compensation is payable at the time of the delivery of the thing contracted for. If a delivery is not necessary, the provisions of Art. 624, 1 apply correspondingly.

If there is a defect in the thing contracted for, the employer must fix a reasonable time and notify the contractor to make good the defect; but this does not apply, if the defect is not material, and the making it good would be excessively expensive.

The employer may in place of or in addition to the making good of the defect claim damages, in which case the provisions of Art. 533 apply correspondingly.

If, because of a defect in the thing contracted for, the object of the contract cannot be accomplished, the employer may rescind the contract; but this does not apply to buildings and other structures upon land.

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The provisions of the preceding two articles do not apply, if the defect arises from the nature of the materials supplied by the employer or from an order given by him, unless the contractor knew of the unfitness of the materials or the impropriety of the order, and did not give notice of it.

A claim for making good a defect, for damages or for the rescission of the contract as provided in the preceding three articles must be made within one year from the delivery of the work contracted for. If delivery is not necessary, the above mentioned period is computed from the time of the completion of the work.

A contractor for a structure to be erected on land is liable for defects in such structure or in the ground for five years from the time of delivery. For structures of stone, earth, brick or metal the period is ten years.

If the structure is injured or destroyed by reason of one of the above mentioned defects, the employer must exercise the right mentioned in Art. 634 within one year from the time of the destruction or injury.

The periods mentioned in Arts. 637 and 638, 1 can be extended by agreement only within the limits of the ordinary period of prescription.

Even though a contractor has expressly stipulated that he should not be liable as provided in Arts. 634 and ​635, he is not exempted from liability arising from facts which he knew, but of which he omitted to give notice.

So long as the contractor has not completed the work, the employer may at any time rescind the contract on paying compensation for damage.

If the employer is adjudged bankrupt, the contractor or the administrator in bankruptcy may rescind the contract, in which case the contractor may intervene in the distribution of the assets as to his compensation for work already done and for expenses not included in such compensation.

In that case neither party can claim compensation for damage arising from such rescission.

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A mandate is where one party directs the other to do a juristic act, and the other agrees to do so.

A mandatary is bound to execute the business entrusted to him according to the terms of the mandate, and to use the care of a good manager.

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If required, the mandatary must at all times give the mandator information as to the condition of the business to be executed by him, and after the termination of the mandate must make at once a full report.

The mandatary must hand over to the mandator all money and other things which he receives in the execution of the business entrusted to him. This applies to fruits taken by him.

Rights which the mandatary has acquired in his own name on behalf of the mandator, must be transferred by him to the mandator.

If a mandatary spends for his own benefit money which he ought to deliver to the mandator or to use for him, he must pay interest thereon from the day when he spent it. If any further damage arises, he is liable to make compensation for that.

A mandatary is entitled to compensation only by virtue of a special agreement.

If a mandatary is to receive compensation, he can claim it only after the mandate is performed; but if compensation is determined by periods, the provisions of Art. 624, 2 apply correspondingly.

If the mandate terminates for some cause not attributable to the mandatary, before it is completely ​performed, the mandatary may claim compensation in proportion to what has been done.

If expenses will have to be incurred in the execution of the mandate, the mandator must on the demand of the mandatary furnish the amount of them in advance.

If the mandatary in the execution of the business entrusted to him, has incurred expenses which could reasonably be regarded as necessary, he may claim as against the mandator reimbursement for such expenses together with interest on them from the day when they were incurred.

If the mandatary in executing the business entrusted to him has assumed an obligation which could reasonably be regarded as necessary, he may require the mandator to perform it in his place or, if its time of maturity has not yet arrived, to give proper security.

If the mandatary by reason of the execution of the business entrusted to him has suffered damage without fault on his part, he may claim compensation from the mandator.

A mandate may be terminated at any time by either party.

If one party terminates the contract at a time which is disadvantageous to the other party, he must make compensation for any damage caused thereby, unless the termination was made for some unavoidable necessity.

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The provisions of Art. 620 apply correspondingly to a mandate.

A mandate is terminated by the death or bankruptcy of the mandator or the mandatary, or by the mandatary’s being adjudged incompetent.

If even after a mandate has terminated any pressing emergency arises, the mandatary or his heir or legal representative must take all necessary measures, until the mandator, his heir or legal representative can himself take charge of the business.

No cause for the termination of the mandate on the part of the mandator or of the mandatary can be set up against the other party, until he has been notified or had knowledge of it.

The provisions of this Section apply correspondingly to a mandate whose subject is other than the doing of a juristic act.

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A deposit is where one party receives a thing and agrees to keep it for the other party.

A depositary is not allowed without the assent of the depositor to use the thing or to have a third person keep it.

When the depositary is permitted to have a third person keep the thing, the provisions of Arts. 105 and 107, 2 apply.

A person who receives a deposit without consideration is bound to take the same care of it as he does of his own property.

If a third person who asserts a right to the thing deposited sues the depositary or seizes it under legal process against him, the depositary must without delay give notice thereof to the depositor.

The depositor must compensate the depositary for ​any damage arising from the nature of or any defect in the thing deposited, unless the depositor without fault on his part was ignorant of such nature or defect, or the depositary knew of it.

Even though the parties have fixed a time for the return of the thing deposited, the depositor may demand its return at any time.

If the parties have not fixed a time for the return of the thing deposited, the depositor may return it at any time.

If the time for return is fixed, the depositary may return it before such time only in case of unavoidable necessity.

The return of the thing deposited is to be made at the place where it was to be kept; but if the depositary has for any good reason removed it to another place, it is to be returned at the place where it actually is.

The provisions of Arts. 646–649 and 650, 1 apply correspondingly to deposits.

If the depositary has a right by the terms of the contract to consume the thing deposited, the provisions as to loans for consumption apply correspondingly; ​provided that, if the time for return is not fixed by the contract, the depositor may claim return at any time.

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A contract of association is where each party agrees to join in a common undertaking and make a contribution thereto.

The contribution may consist of services.

All contributions of the members and the other property of the association belong to all its members in common.

If a contribution is to be made in money, and the member fails to make such contribution, he must pay damages in addition to interest.

The management of the affairs of the association is decided by a majority vote of the members.

If such management is by the contract of association ​committed to several members, the majority of those decide.

The ordinary business of the association may, notwithstanding the provisions of the foregoing two paragraphs, be transacted by any member or by any managing member, as the case may be; unless another member or another managing member objects thereto.

The provisions of Arts. 644–650 apply correspondingly to managing members.

If the management of the business of the association is committed to one or several members, such member or members may not, except for a just cause, resign or be removed from their positions.

For their removal from their positions for a just cause the consent of all the other members is necessary.

Each of the members, even though not a managing member, may examine into the management of the business and the condition of the property of the association.

When the parties have not fixed the proportion in which profits and losses are to be divided, it is fixed according to the respective amounts of their contributions.

If the proportion of the division is fixed only as to profits or only as to losses, the proportion is presumed to be the same for profits and losses.

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A creditor of an association, who at the time of the arising of his obligation did not know of the proportion of the division of losses, may exercise his right against each member for an equal part.

A member who has disposed of his share in the property of the association cannot set up such disposition against the association or a third person who has entered into any transaction with it.

Before liquidation a member of the association cannot demand partition of its property.

A debtor of an association cannot set off against his obligation an obligation existing in his favour against a member of the association.

If the duration of an association is not fixed by the contract, or if it is specified that it shall be for the life time of a certain member, any member may at any time withdraw; but, except for some unavoidable necessity, not at a time which would be disadvantageous to the association.

Even though the duration of an association is fixed, a member may withdraw at any time for an unavoidable cause.

In addition to the cases mentioned in Art. 678, a member ceases to be such:— ​

1. By death;
2. By being adjudged bankrupt;
3. By being adjudged incompetent;
4. By expulsion.

A member can be expelled only for a just cause and with the consent of all the members. The expulsion can be set up against the member expelled only after notice of it has been given to him.

The account between a member whose membership has ceased and the other members must be made up according to the actual condition of the property of the association.

The share of such a member may be refunded in money, whatever may have been the nature of his contribution.

The account as to a matter not yet concluded at the time when the membership ceases, is to be made up after its conclusion.

An association is dissolved when its object has been accomplished, or its accomplishment has become impossible.

When an unavoidable necessity exists, any member may demand the dissolution of the association.

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The provisions of Art. 620 apply correspondingly to a contract of association.

When an association is dissolved, liquidation is carried out by all the members together or by persons appointed by them.

The appointment of liquidators is decided upon by a majority of all the members.

If there are several liquidators, the provisions of Art. 670 apply correspondingly.

If by the contract of association liquidators are to be appointed from among the members, the provisions of Art. 672 apply correspondingly.

As to the functions and powers of the liquidators the provisions of Art. 78 apply correspondingly.

The remaining assets are to be distributed among all the members in proportion to the amounts of their contributions.

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A contract of life annuity is where one party agrees to make prestations^[24] in money or other things to the other party or to a third person at fixed times, until his own death or that of the other party or of the third person.

Life annuities are apportionable by days.^[25]

If, when the debtor has received a capital sum, he fails to make prestation of the instalments or to perform any other of his obligations, the other party may claim the return of the capital; but he must repay to the debtor the surplus which remains after deducting the interest on the capital sum from the instalments already received.

This does not affect a claim for damages.

The provisions of Art. 533 apply correspondingly to the case mentioned in the preceding article.

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If the death happens from a cause attributable to the debtor, the court may on the application of the creditor or his heir order that the obligation continue for a reasonable time.

This does not affect the exercise of the right mentioned in Art. 691.

The provisions of this Section apply correspondingly to a legacy of a life annuity.

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A compromise is where parties agree to settle a dispute between them by mutual concessions.

If by the compromise it is admitted that one of the parties has the right which forms the subject of the dispute, or that the other has not that right, and it is afterwards established that the former party did not previously have such right, or that the other party had ​it, such right is by the compromise transferred to such person or extinguished.

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A person who, without being bound to do so, enters upon the management of any business of another must manage it according to its nature in such a manner as will be most to the advantage of the principal.

If the manager knows or ought to have known the wishes of the principal, he must manage the business according to such wishes.

A person who manages the business of another in order to protect the latter from an imminent peril to his person, reputation or property is liable for damage arising therefrom only in case he acted in bad faith or with gross negligence.

The manager must give notice to the principal at once of his having entered upon the management, unless the principal already knows of it.

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The manager must continue the management, until the principal, his heir or his legal representative is able to assume it in person, unless it is evident that such continuance would be against the wishes of the principal or prejudicial to his interests.

The provisions of Arts. 645–647 apply correspondingly to business management.

If the manager incurs beneficial expenses for his principal, he may claim reimbursement against the principal.

If he assumes beneficial obligations for his principal, the provisions of Art. 650, 2 apply correspondingly.

If the manager has managed the business of his principal against the latter’s wishes, the provisions of the preceding two paragraphs apply only so far as the principal is presently enriched thereby.

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A person who without any lawful reason has been ​enriched from another’s property or services, whereby the other has suffered a loss, is bound to make restitution to the extent to which the enrichment still exists.

If a person has been enriched in bad faith, he must make restitution with interest. If any farther damage has arisen, he must also make compensation for that.

If a person has made a prestation^[29] as in performance of an obligation, knowing at the time that no such obligation actually existed, he cannot claim restitution of the subject of the prestation.

When a debtor has made a prestation in performance of an obligation not yet due, he cannot claim restitution of the subject of the prestation. If, however, he made such prestation by mistake, the creditor must make restitution to the extent to which he is enriched thereby.

If a person who is not a debtor has performed an obligation by mistake, and the creditor in consequence thereof has in good faith destroyed the documentary evidence of the obligation or given up any security or lost his right by prescription, the person performing cannot claim restitution.

These provisions do not affect the right of recourse of the person performing against the debtor.

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A person who makes a prestation for an illegal cause cannot claim restitution of the subject of the prestation, unless the illegality is only on the part of the person who receives the prestation.

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A person who intentionally or negligently violates another’s right is bound to make compensation for damage arising therefrom.

Whether the injury was to the person, liberty or reputation of another or to his property, the party bound to make compensation under the preceding article must make compensation even for damage other than pecuniary damage.

A person who has wrongfully caused the death of another is bound to make compensation for damage to the parents, to the husband or wife and to the children of the person killed, even though no property right of theirs has been violated.

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A minor who has caused damage to another is bound to make compensation for his act, if he had sufficient mental capacity to understand his responsibility for his act.

If a person while in a condition of mental unsoundness causes damage to another, he is not bound to make compensation, unless by his own bad faith or fault he had put himself temporarily into such condition.

When in the cases mentioned in the preceding two articles the incapacitated person is not bound to make compensation, the person whose legal duty it was to control him is bound to make compensation for damage caused to a third person by him; but only in case he has failed to perform his duty of control.

The same responsibility rests upon a person who has exercised control over an incapacitated person in the place of the person legally bound to do so.

If a person has employed another for a certain business, and the latter causes damage to a third person in the course of the execution of such business, the employer is bound to make compensation, unless he has used due care in the selection of the person employed and in the control of the business, or unless the damage would have happened even though such care had been used.

​The same responsibility rests upon a person who has exercised control of the business in place of the employer.

These provisions do not affect the right of recourse of the employer or of the person who controlled the business against the person employed.

The employer of a contractor is not liable for damage done by the contractor to a third person in the course of the work, unless the employer was at fault in regard to the work ordered or to his directions to the contractor.

If damage is caused to a third person by a defect in the construction or maintenance of a structure erected on land, the possessor of such structure is bound to make compensation for the damage to the person injured; but if the possessor has used due care to prevent the happening of the damage, the owner is bound to make compensation.

These provisions apply correspondingly to defects in respect to the planting or propping up of bamboos or trees.

If in those cases there is also some other person who is responsibbe in respect to the cause of the damage, the possessor or owner has a right of recourse against such person.

The possessor of an animal is bound to make compensation for any damage caused by the animal to ​another person, unless he has kept it with due care according to its species and disposition.

The some responsibility rests on a person who keeps the animal in place of the possessor.

If several persons by a joint wrongful act cause damage to another person, they are jointly and severally bound to make compensation for the damage. The same applies, if among several joint doers of an act the one who caused the damage cannot be ascertained.

Persons who instigated or assisted in the act are deemed to have joined in it.

A person who, in order to protect his own rights or those of another against the wrongful act of a third person, unavoidably commits a harmful act is not bound to make compensation for damage. This does not affect a claim for damages by the injured person against the person who did the wrongful act.

The foregoing provisions apply where a person injures a thing belonging to another in order to avert danger imminent from it.

A child in the womb is deemed to be born in respect to his right to claim damages.

The provisions of Art. 417 apply correspondingly to compensation for damage from wrongful acts.

If the injured person is himself in fault, the court ​may take that fact into consideration in determining the amount of damages.

Against a person who has injured the reputation of another, the court may on the latter’s application order, instead of or together with damages, proper measures to be taken for the rehabilitation of the other’s reputation.

The right to claim compensation for damage from a wrongful act is extinguished by prescription, if it is not exercised for three years from the time when the injured person or his legal representative had knowledge of the damage and the person who caused it. The same applies when twenty years have elapsed since the time when the wrongful act was committed.

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