Argentina: Bill To Reform The Civil And Commercial Codes

Last Updated: 12 December 2012

The effect of the Civil and Commercial Codes, which have been in force in Argentina for more than one and a half centuries, appears to be coming to an end.

For more than eighty years there have been attempts to implement a comprehensive reform encompassing in the main the Civil Code, and in the latest drafts a unification of civil and commercial obligations. But in practice in all these years only partial legislative reforms have been implemented – which are undoubtedly important to update legislation – that have, however, maintained the original roots of both Codes, adopted in the second half of the 19th century.

The latest attempt, lead by the Chairman of the Supreme Court of Justice, Dr. Ricardo Lorenzetti, accompanied by more than one hundred specialists and university professors, has resulted in the preparation of a single body of rules regulating the principal institutions of private law.

Is this an innovational reform? In some aspects, the answer could be yes if we consider that several important aspects of civil and commercial law could now have legal ranking. However, a significant part of the proposed amendments has already been received in prior drafts and in the contributions of case law, which has had to respond to a variety of new problems and conflicts, and also in the debates and conclusions of congresses and seminars where the principal specialists in private law have gathered.

The preliminary draft of reforms is currently being considered by both Chambers of Congress. This will first be carried out by means of the intervention of a bicameral commission which will collect all comments and remarks from a range of sectors of civil society; and later by consideration of representatives and senators, who shall have to approve the final text.

Although different sectors have opposed the preliminary draft because it has not been sufficiently circulated for consideration by academic and university sectors and in general among lawyers. The truth is that rarely has there been so much interest and repercussion from specialized magazines. On a daily basis it is possible to read one or several works from specialists commenting on and analyzing various subjects relating to the proposed reform in the principal legal publications.

Such interest in the preliminary draft is justified. Were it to be enacted into law (it seems that this will be its fate in the short term), thee two codes most extensively applied in Argentina, with a total of approximately five thousand sections currently regulating on a separate basis civil and commercial matters (including their amendments), will be replaced by a single code containing 2,671 sections. Moreover, the new Code applies a different methodology, which is closer to the one that has been used for many years at universities.

If we focus on the contents of the preliminary draft, even at a first glance we will notice that there has been an attempt to give legal coverage to principles that have constitutional hierarchy: the rights of children, disabled persons, consumers, women and environmental property.

The aspects that have been subject to further debate relate to family law. Although some of the proposals are already in effect by means of the same-sex marriage law, progress has been made in the regulation of concubinage relationships and in new provisions relating to filiation derived from assisted human reproduction techniques. Adoption is also subject to a new analysis, together with procedural rules that seek to facilitate the process.

Many of the proposed reforms will undoubtedly have an impact on different economic activities, including as a result of regulation of assets in marriage, which will confer different perquisites on spouses in connection with the management of their property and the right to choose between the community property regime, which is currently in force, or the separate property regime, which is incorporated as an innovative alternative.

In the field of property law, which has a particular impact on the business world, the proposed reforms regulate the abusive exercise of rights (including abuse of dominant position) and a special point is made of good faith as a necessary condition for the valid invocation of rights.

Clearly priority is given to general and community interest by means of the protection of collective incidence rights, public order rules within the framework of contracts and consumer rights, and the restrictive interpretation of adhesion contracts.

General rules applicable to all private legal persons have been proposed, where the responsibility of those administering them is regulated. By means of a supplementary law, reforms to the business companies' law have been projected, and the distinction between civil and commercial companies has been eliminated.

Regarding contracts, contractual negotiations are regulated, as well as the responsibilities derived therefrom, preliminary contracts and letters of intent, establishing a distinction between private instruments – signed by the parties – and the so-called "particular" instruments that are not signed but that in certain circumstances may be used as evidence.

As well as the classical contracts which are regulated by the legislation in force others have been incorporated such as supply, agency, concession and franchise, factoring and association contracts (sharing agreements, collaboration groups, joint ventures and cooperation consortia), and several forms of bank contracts, assignment of a contractual position and arbitration.

A noteworthy reform is projected in connection with civil liability. The distinction between contractual and tort liability is eliminated and stress is made not only on damage compensation but on the prevention thereof. For this purpose judges are empowered to issue preventive measures and also dissuasive penalties where collective incidence rights are at stake.

It is also acknowledged that liability for property risk includes those who obtain a profit therefrom and whether the activity generating the damages may have been recognized by the administrative authority is irrelevant.

The volume dedicated to in rem rights incorporates new categories, such as surface rights, indigenous community property and real estate developments (country clubs, cemeteries, etc.), and also updates regulations on condominium ownership.

Probate has also been reviewed, by acknowledging wider rights to dispose of property where there are forced heirs (descendants, ancestors and spouse). In this case, the reform seeks to give more certainty to the rights acquired from third parties on a gratuitous basis.

The last volume of the draft regulates the expiry of obligations upon the running of a statute of limitations, setting forth as a general rule a shorter period (five years), and considers the forfeiture of rights on a separate basis.

The draft ends with the incorporation of general and special rules on private international law, which deal not only with the law applicable in situations relating to several legal systems, but also with the international jurisdiction for the settlement of conflicts relating to the main subjects comprising the draft of the reform.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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