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Option Agreement and the Promise to Contract As Established in the New

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Option Agreement and the Promise to Contract As Established in the New Revista de Derecho de la Pontificia Universidad Católica de Valparaíso XL (Valparaíso, Chile, 2013, 1er Semestre) [pp. 101 - 120] Option Agreement and the Promise to Contract as Established in the New Romanian Civil Code [La regulación del contrato de opción y de la promesa de contrato en el nuevo ‘Código Civil’ rumano] Urs Ilie* “Dimitrie Cantemir” Christian University, Bucharest, Romania Abstract Resumen In the Romanian private law, the op- En el Derecho privado rumano, el tion agreement is not a unilateral promise contrato de opción no es una promesa to sell, neither a variety of the unilateral unilateral de venta, ni una variedad de promise to sell, but a contract with an la promesa unilateral de venta, sino un option right. The option agreement is contrato con un derecho de opción. El a contract with an option right, under contrato de opción es un contrato con which one of the parties shall undertake un derecho de opción, en virtud del cual to stick to its offer to enter into a given una de las partes se compromete a adhe- contract, as he has already consented to rirse a su oferta de celebrar un contrato that, whereas the other party, the benefi- determinado, para el que ya ha dado su ciary, shall be entitled to accept or refuse consentimiento, mientras que la otra the offer; the use of the acceptance right parte, el beneficiario, tendrá derecho para is enough to enter into that contract. This aceptar o rechazar la oferta; el ejercicio article examines the status to which the del derecho de aceptación es suficiente Recibido el 29 de noviembre de 2012 y aceptado el 22 de abril de 2013 * Professor at Faculty of Law Cluj-Napoca, “Dimitrie Cantemir” Christian Uni- versity. Adress: Str. Calea Dorobantilor Nr. 74, bloc Y9, scara 2, ap. 27, postal code 400609, Cluj-Napoca, Romania. E-mail: [email protected] 102 Revista de Derecho, XL (1er Semestre de 2013) Urs Ilie contract is subject jn the new Romanian para perfeccionar el contrato. En este Civil Code. trabajo se estudia el estatuto al que se sujeta dicho contrato en el nuevo Código Keywords Civil rumano. Option agreement – Promise to con- tract – New Romanian Civil Code. Palabras clave Acuerdo de opción – Promesa de con- trato – Nuevo Código Civil rumano. 1. Introduction. As of 2004 and after the accession of Romania to the European Union (January 1st 2007), a new Civil Code started to be drafted in order to meet current social and legal requirements in Romania1. Consequently, the new Romanian Civil Code, in force since October 1st 2011, was adopted by the Statute Nr. 287 of July 17th 20092. Among the novelties existing in the new Civil Code, we mention the regulation of the “the option agreement” and of “the promise to contract”. As far as the option agreement is concerned, there are contradictory points of view regarding its legal nature: according to some authors, the option agreement is a unilateral promise to sell or a type of the promise to sell; according to other authors, the option agreement is different from the promise to contract. That is why we shall try to study the institutions in question. 2. Regulation. Notion Within the meaning of article 1278 Rom.CC.: “(1) When two parties agree that one of the parties should stick to its own declaration of will, whereas the other party should have the right to accept or revoke it, that declaration is considered to be an irrevocable offer and produces the effects stipulated under article 1191./ (2) In case the parties have not agreed upon a time for acceptance, this shall be established by the Court via interlocu- 1 In order to elaborate the new Romanian Civil Code, a number of templates have been used, taking into account especially the Civil Code of the province of Quebec, Canada, in force since 1994. Further sources of inspiration were the civil codes from France, Italy, Spain, Switzerland, Germany and Brazil. A large part of the provisions of the old 1864 Romanian Civil Code are also to be found in the new Civil Code. 2 Published in the “Official Gazette of Romania” Nr. 511 of July 24th 2009, amen- ded by the implementation Statute Nr. 71/2011, published in the “Official Gazette of Romania” Nr. 696 of September 30 2011. Option agreement and the promise to contract as established 103 tory order, by citing the parties./ (3) The option agreement must contain all the elements of the contract the parties are about to conclude, so that this contract can be concluded by acceptance on the part of the beneficiary of the option./ (4) The contract shall be concluded when the option is put into practice, that is when the beneficiary accepts the declaration of will of the other party, under the conditions agreed upon under the agreement./ (5) Both the option agreement and the declaration of acceptance shall be concluded in the legally stipulated form for the contract the parties are about to enter into”. Based on the above mentioned legal provisions, we consider that the option agreement is a “contract with an option right”, under which one of the parties shall undertake to stick to its offer to enter into a given contract, as he has already consented to that, whereas the other party, the beneficiary, shall be entitled to accept or refuse the offer; the use of the acceptance right is enough to enter into that contract. 3. The option agreement and the offer to enter into a contract. According to the above mentioned legal provisions, the option agreement has similarities with the “offer to enter into a contract”. Consequently, just like the offer to enter into a contract3, the option agreement shall contain all the elements required for the conclusion of the contract that the parties are about to enter into. Similarly, an option agreement shall be entered into by simply accepting the declaration of will of the other party, whereas that declaration is considered “[...] to be an irrevocable offer and produces the effects stipulated under article 1191”4. Although article 1278 (1) prescribes that: “[...] that declaration is con- sidered to be an irrevocable offer and produces the effects stipulated under article 1191”, the option agreement is not just a simple offer to enter into a contract. Consequently, the offer to enter into a contract is a unilateral expression of will that is a unilateral legal transaction, whereas the option agreement5 is 3 Within the meaning of Article 1188 (1) RomCC.: “A proposal becomes an offer to enter into a contract in case it consists of all the necessary elements for concluding the contract and expresses the intent of the offeree to undertake obligations in case such offer shall be accepted by the recipient”. 4 According to Article 1191 RomCC.: “(1) The offer is irrevocable for how long its author undertakes to keep it. It is also irrevocable every time it may be considered as such based on the agreement between the parties, the practices they are used to, the negotiations, the content of the offer or the customary practices. (2) The declaration to revoke an irrevo- cable offer produces no effect whatsoever”. 5 Etymologically, “pact/agreement” comes from Latin, from “pactum”, meaning (written) understanding between parties, accord, convention: see DEX (2nd edition, Bucharest, Univers Encyclopedic Publishing House, 1996), p. 738. 104 Revista de Derecho, XL (1er Semestre de 2013) Urs Ilie a bilateral contract6, legal transaction, as it is all about an agreement between parties. To this purpose, based on the provisions of article 1278 (1), “two parties agree”, meaning they come to an understanding or into accord (con- tract). The parties involved agree“ ” that one of them should stay obliged by his own declaration of will (irrevocable offer) and the other party should have the right to “accept” or “refuse” it. As a consequence, the option agreement is the consent of both parties. Secondly, the offer is made publicly, whereas the option agreement is only made to the benefit of a certain individual, the so called beneficiary, who agrees that the right (to accept or refuse the offer) should be made to his advantage7. Taking these arguments into consideration, it is unanimously agreed that the option agreement is a contract, not a simple offer to enter into a contract. The option agreement is a unilateral contract because only one of the contracting parties undertakes obligations, respectively the party agreeing to stay obliged his own declaration of will. The other contracting party (the beneficiary) undertakes no obligation when the agreement is entered into. He only accepts to be the recipient of the offer (the declaration of will of the other party); his acceptance should by no means be mistaken with the “application of the option” (to accept or refuse the offer). The beneficiary of the option may freely accept or refuse the offer. Only if he accepts the offer, the contract in question shall be entered into, thus deriving obligations on his part. 4. The content of the option agreement. According to article 1278 (3), the option agreement must contain all the elements of the contract the parties are about to conclude, so that this contract can be concluded by acceptance on the part of the beneficiary of the option. For example, the option agreement related to a sales contract shall make reference to the item to be sold and its price. Likewise, within the meaning of the provisions of article 1668 (1) of the new Civil Code, as far as the option agreement regarding a sales contract rela- ted to a given individual item is concerned, the item in question is not to be used between the date the agreement has been made and the date the option is put into practice or, as the case may be, the date of expiry of the option.
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