GENERAL PRINCIPLES OF THE GREEK CONTRACT LAW
Greece follows the legal tradition developed in continental Europe (jus romano-germanicum) and has adopted a Civil Law legal system. The sources of statutory law (jus positivus) are laws promulgated by the legislature in the form of codes, acts etc. Therefore, the sources of Greek Contract Law are:
- The Greek Civil Code (Art. 127-946),
- Law Nr. 2251/1994, Consumers’ Protection Law, regarding several aspects of business to consumer contracts and
- Other Laws on specific contract types e.g. Law 1652/1986 on Financial Leasing, Presidential Degree 34/1995 on commercial Lease etc.
Of course, being a member of the European Union, Greece is also governed by the EU Law. The EU is preparing the unification of Contract Law for a several number of years; even though a Common Code of European Contract Law is not yet promulgated, the Greek Contract Law is significantly influenced by various EU legal acts, mainly in the form of directives (e.g. Directive 1999/44/EC on Consumer Sales, Council Directive 93/13/EEC on Unfair Terms in Consumer Contracts as was amended with Directive 2011/83/EE on Consumers Rights etc).
The Greek Civil Law is developed around several main pillars or else general principles that color the provisions.
PRIVATE AUTONOMY
The general principle of private autonomy is the cornerstone of the Greek Contract Law. “Private autonomy” provides the parties with the right to freely negotiate formulate and conclude a contract to their best interests by giving them numerous possibilities. The general principle of private autonomy is expressed in several aspects of the Greek Civil Code concerning contracts, for example:
- Informality of juridical acts
The parties are free to decide the most suitable and preferable means to conduct their contractual agreement, in other words a contract may be concluded by any means of expression. “Compliance with form for a juridical act shall be required only when the law so provides” (Art. 158 Greek CC).
- Capacity
Every individual is deemed as a “competent person” upon his age of majority. The Greek Civil Code (Art. 127) establishes the general rule of age and sets as a starting point for the acquirement of full (unlimited) legal capacity the completion of the eighteenth (18th) year. The Greek Civil Code also divides minors in age classes and provides certain possibilities (limited legal capacity), depending on their age class. Legal capacity is also provided to juristic persons (legal entities) as long as their juristic acts are performed by their legal representatives within the scope of their powers (Art 70 Greek CC).
- Conditions
A party’s contractual duty can be agreed to be dependent on the occurrence of an indicated condition. A conditional promise is not effective until the occurrence of some external event that the parties have specified. It is a prerequisite placed upon an obligation. Conditions may be suspensive (a condition depending upon an uncertain event which must be fulfilled before an obligation arises) or resolutive (a condition that upon fulfillment terminates an already enforceable obligation) (Art. 201-209 Greek CC)
- Options to a fully binding contract
If parties are not certain about their intention to create definitive legal relations as they have not yet reached a satisfactory agreement concerning their contract, the Greek Civil Code provides alternative possibilities to a definitive contract so that the parties can decide according to their best interests (Memorandum of understanding preliminary contract or an option contract).
BONA FIDE
On the other hand, the Greek Civil Code prescribes the implied covenant of good faith and fair dealing as a general principle and binds the parties to deal with each other honestly and fairly, so as not to destroy the right of the other party or parties to receive the benefits of the contract. The legislature hence sets the boundaries of private autonomy in order to protect the parties from any abuse. Conduct in good faith is a qualification required at all stages of a contract (from negotiation to conclusion). “At the stage of contract negotiations the parties have to act in good faith and in accordance with commercial practice” (Art. 197 Greek CC) and also “contracts are interpreted according to good faith and commercial practice” (Art. 200 Greek CC).
PACTA SUNT SERVANDA
A general principle of fundamental importance in Greek Contract Law that defines all the contract provisions is that “agreements must be kept” (Latin: pacta sunt servanda). This principle is mainly interpreted as a general commitment on behalf of the parties to honor their mutual covenant; nonfulfillment of respective obligations is a breach of the agreement. As a result, the Greek Civil Code comprehends several provisions that cover failure to perform on behalf of one of the parties and provide alternative possibilities to the other party. For instance, in case of delayed performance that is still possible and of interest for the creditor, he has the following options: i) suspension of performance on his behalf until the debtor performs (Art. 374 Greek CC), ii) claim for performance (Art. 343 Greek CC) and iii) claim for damages due to the delay if the debtor is at fault (Art. 343-345 Greek CC). Among others the Greek Civil Code also covers intentional breach of a contract or a breach of contract due to negligence (Art 330 Greek CC).
DELICT (or TORT LAW)
THE PREREQUISITES OF COMPENSATION
“Delict” (or “tort” in common law) is a civil wrong that unfairly causes someone else to suffer loss or harm and triggers legal liability for the person who commits the wrongful act. The cornerstone of delictual liability is enclosed in Art. 914 of the Greek Civil Code: “Any person who intentionally (by negligence or at fault) and against the law causes harm or loss to another person is liable to his compensation”. In summary, the essential elements required for someone to be deemed as liable for delict are: a) an anlawful act or omission, b) fault or negligence on behalf of the wrongdoer, c) harm or loss to the claimant and d) legally recognizable cause between the anlawful act and the harm caused. All the above prerequisites must be fulfilled at the same so that a claim for damages is born. The Greek Civil Code provides to the injured party the right to raise this claim within a time limitation; according to Art. 937 GCC “any claim for damages resulting from delictual liability is considered time-barred after lapse of five (5) years from the moment the delict was made known to the injured party. In any case the claim is time-barred after the lapse of twenty (20) years from the occurrence of the malfeasance”.
It is possible that an anlawful/delictual act or omission constitutes simultaneously contractual non-performance. In this particular case the Greek Civil Code provides concurrence of contractual and delictual liability and two individual claims for the same damage are born; one that derives from the delictual act and one from the violation of contractual obligations. The Greek Civil Code provides to the injured party the option to decide between these claims as best serves the party’ s interests. Of course, once a claim is exercised and the claimant is compensated the claim based on the other (not chosen) legal basis is extinct (free concurrence of claims).
Delictual remedy/compensation covers both pecuniary and non-pecuniary damages.
- Pecuniary damages: damages estimated in money, or in other words any damage, loss or personal injury that can suggest the subject of calculation and of recompense in money. Pecuniary damages involve compensation for any damage that the injured party already sustained and/or will sustain in the future as an outcome of the malfeasance, for example reduction/loss of his income due to the party’s inability to work. It may also cover medical expenses (e.g. in case of personal injury Art 929 Greek CC) as well as the loss of the so called in the Greek Civil Code “third parties” who sustain damage because the injured party is no longer in a position to be of service to them, although he had such obligation.
- Non-Pecuniary damages: moral damages viz. psychological and physical suffering caused from the harm of the injured party’s health, freedom, and personality (dignity, integrity, honor, reputation etc), that may be recovered once proven that they are the proximate result of the defendant’s wrongful act. Given the obvious difficulty, it is at the discretion of the Court to ascertain one’s psychological and physical suffering as case may be, taking into consideration various factors such as the severeness of the wrongdoer’s fault or negligence, the actual distress caused to the injured party or the financial status of both parties. The remedy provided for moral damages is called a solatum.
Liable to recompense for the damage, either pecuniary or non-pecuniary, is in most cases the same person that caused the damage to the injured party (the wrongdoer). However, the Greek Civil Code under certain circumstances widens the circle of liability. Namely, a master or an employer is deemed as liable for the malfeasance of his servant/employee during his service or employment as case may be (vicarious liability Art. 922 Greek CC). In cases where more than one person is responsible for the delictual act or omission the Greek Civil Code prescribes joint liability. This means that all persons are liable to recover the damages of the injured party, but the latter can only once be fully compensated (Art. 926, 927 Greek CC).
In the Greek Civil Code provision has also been made for the possibility that someone’s malfeasance should result in a fatality (Art. 932 Greek CC). In cases of fatal accidents due to a delictual act or omission the Greek Civil Code prescribes both compensation which usually covers all damages (e.g. maintenance) and expenses (e.g. funeral expenses) caused by the decease and also solatium to the victim’s family as a consolation for their grief and sorrow.
Of course, except for the general provisions of the Greek Civil Code there is abundant legislation to cover various specific cases of delict/malfeasance, as complementary to the general provisions or by excluding them where applicable. The Greek legislature differentiates certain legal relations in particular concerning delictual liability in order to emphasize the “legal depreciation” of a specific social behavior or to protect the parties that are deemed as weakest in the circumstances. Viz.: Legislation on Labor Accidents (Law 551/1915), Legislation on Defective Products (Law 2251/1994), Legislation on Road Traffic Accidents (Law ΓΝ/1911), Legislation on Carrier’s Liability in Railway, Sea and Aviation Accidents etc.
CONSUMER RIGHTS
CONSUMER PROTECTION LAW
LAW 2251/1994
The source of Consumer Protection in Greece is Law 2251/1994 (as amended by Ministerial Decision YA Z1629/2005, Law 3587/2007 and Ministerial Decision YA Z1-891/2013 and Law 4177/2013) which transposes into the domestic law Council Directive 93/13 EEC of April 1993 on Unfair Terms in Consumer Contracts and accordingly stipulates consumer rights and provides all the critical regulations on the Protection of Consumers. In addition, an abundant course of important acts complete the legislative framework of consumer protection. Namely, Joint Ministerial Decision Z3-2810/2004 for general product safety, Ministerial Decision Z1-798/2008 as amended-clarified by Ministerial Decisions Z121/17.01.2011 and Z1-74/2011 concerning the prohibition of General Terms and Conditions which have been held unfair by court decisions on consumer class actions, Directive 2008/48/EC on credit agreements for consumers, Law 3862/2010 as amended by Law 4002/2011 for the implementation of the Payments Service Directive and others.
First and foremost, Law 2251/1994 provides the definition of consumers based mainly on the definition provided by Council Directive 93/19 EEC. However the Greek Legislative decided to widen the definition and thus broaden the legislative framework. According to Council Directive 93/19 EEC “‘consumer’ means any natural person who, in contracts covered by this Directive, is acting for purposes which are outside his trade, business, craft or profession”. In contrast, Law 2251/1994 includes legal entities as well and abolishes the prerequisite of acting outside one’s trade, business, craft or profession; any natural person or legal entity is deemed as a consumer as long as one is the final recipient of the products or services offered in the market.
Law 2251/1994 provides among others regulations about the following critical legal issues for the Protection of Consumers:
- General Terms and Conditions (GTCs). The “GTCs” are terms set in advance by the supplier mostly included in standard pre-formulated contracts; consumers’ assent is concluded upon their purchase or use of service provided. Thus, “GTCs” are not part of individual negotiations between the supplier and the consumer resulting in unfair agreements in certain cases. According to Law 2251/1994, as a general rule, if the GTCs in a contract result in a severe imbalance to the detriment of the consumer, they are considered unfair and deemed automatically as void. Art. 2(6) details the main criteria to categorize GTCs and Art. 2(7) states an indicative list of specific GTCs rendered as unfair as case may be.
- Doorstep, distance selling and distant marketing of financial services. The supplier in such contracts has to comply with a number of obligations. Most importantly, there is a general pre-contractual information obligation. All suppliers have to provide the consumer with the essential information before the contract is concluded. Either in case of doorstep or distance selling, the supplier always has to inform the consumer; in the first case in writing and in distance selling in an appropriate way taking into account the communication means used. Moreover, it is necessary for the supplier to deliver a copy of the signed contract, or confirmation of it in case of a distance selling contract. There is also a provision that obligates all suppliers involved in distance selling to be registered in the General Commercial Register (GEMI).As for distant marketing of financial services, in cases where the financial services supplier and the consumer are arranging their agreement at distance the supplier is also obliged to provide all critical information concerning his identity, the financial service, the distance contract and the redress. There is also a provision that allows to the consumers to freely withdraw from the contract during a period of 14 calendar days in the case of any financial product (30 calendar days in life insurance).
- Credit agreements. Directive 2008/48/EC which was transposed into the domestic law with the Ministerial Decision Z1-699/2010 regulates credit agreements below 75.000€ for non-business purposes. It also involves information duties for both parties and various other regulations necessary for the contractual arrangements.
Law 2251/1994 also entails provisions in respect of defective products. Product liability issues are mainly regulated in the Greek Civil Code (Art. 534-552). These provisions settle in particular the legal relationship of the parties in a sales contract; the Greek Civil Code in accordance with Directive 44/1999/EC regulates the rights and obligations of the parties in general and specifically in case the product does not meet the “signed” qualifications. However, Law 2251/1994 specifically resolves product defect. Article 6 establishes general liability for the producer of a defective product should the consumer sustain any damage thereof. Especially, in case the producer is unknown the importer and the supplier of the product are also deemed as liable for the defect; the Law assimilates importers and suppliers to producers. Accordingly, the consumer is free to claim compensation following overall the basic principles of compensation as mentioned above (damages, defect of the product at the time of sale and legally recognizable cause between the defect and the harm caused) However, consumers are not burdened with proving negligence or fault on behalf of the producer (strict liability of the producer/importer/supplier).
Apart from compensation covering both pecuniary and moral damages, consumers are entitled to pursue the termination of any infringing commercial practice and also the publication of the Court Judgment ordering such termination, so that the general public is informed. Of course, consumers have always the option/right to address to Consumers Associations to file a class action according to Art.10 Law 2251/1994. Responsible body in Greece is the General Secretariat for Consumers.
MYKONOS LAWYERS FIRM can guide you through any legal issues that may arise with professionalism, loyalty and effectiveness. Our team of expert solicitors guarantees step by step legal assistance always with concern to your personal interests. From the stage of contract negotiations to α claim for damages and compensation or any judicial dispute in general, our team… can make it happen!