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Development of private (civil) law in Central and Eastern Europe after World War II.

TABLE OF CONTENTS

I. Introduction
II. Socialist Law as a Separate Legal Family
   A. Introduction
   B. States with a Strong Romano-Byzantine Legal Tradition
   C. States with the Roman (Civil) Law Tradition
III. Codification of Private/Civil Law in Western Europe
     and Its Influence on Central and Eastern Europe
IV. The Process of Codification in Soviet Russia and the Soviet Union
V. Characteristics of Private/Civil Law
VI. Various Types of Private/Civil Law Codifications
    in Former Socialist Countries
VII. Property Rights
VIII. Codification of Economic Law
IX. The Main Characteristics of the Hungarian Civil Code of 1959
X. Economic Contracts
XI. Conclusion
Bibliography


I. INTRODUCTION

In the countries of Central and Eastern Europe, legal traditions that are based in substance either on Roman law or Pandectist school have to be taken into consideration. It should be emphasised that in legal literature this aspect has been largely neglected until recently. Koschaker in his work Europa und das romische Recht (Europe and the Roman Law) and Franz Wieacker in his Privatrechtsgeschichte der Neuzeit (History of Private Law in Europe) completely omitted the development of private/civil law in Central and Eastern Europe. They did not relate this part to Europe.

This approach is even more troubling since a Roman-law tradition of the mentioned countries used to be and is still presented at both legislative and theoretical level. This observation is particularly true in relation to the period after political and economic changes, which took place in 1989/1990. One could consider, for instance, Russian Civil Code of 1922 similar--in various respects--to the draft of Russian Civil Code promulgated prior to an outbreak of World War I based on both German Civil Code (BGB) of 1896 and Swiss Code of Obligations of 1881.

Romanist (Pandectist) influence is also observed in civil codes of other countries of Central and Eastern Europe. The countries of this region can be basically divided into three main groups according to their legal traditions. Group "A" comprises countries of former Soviet Union (USSR), former Czechoslovakia (currently Czech Republic and Slovakia), Poland and Hungary, which are characterised by adoption of socialist civil codes. Group "B" is characterised--like Bulgaria and Albania (until a promulgation of the Civil Code in 1981)--by having adopted special laws relating for instance to the law of property, law of obligations, law of succession, etc. Group "C" (e.g. Romania) is characterised by conserving its former "bourgeois" (i.e. non-socialist) Civil Code.

A major contribution to the continuity of private/civil law is an ongoing process of harmonisation of law in the countries of Central and Eastern Europe that became member states of the European Union on May 1, 2004. The harmonisation process started in the early 1990s. Special attention must be paid to the Maastricht Treaty on European Union which was signed on February 7, 1992 and entered into force on November 1, 1993. It significantly extended the competences of the European Union in the field of legal harmonisation. Like environmental, labour and tax law, so-called Community Private Law is increasingly coming to the fore in the harmonisation of law in the countries of Central and Eastern Europe. Today the most 'europeanised' area of private law is company law. Even in this field, however, several elements of continuity may be observed. In Hungary, for instance, the Commercial Code of 1875--which became largely inefficient in the aftermath of World War II--still governs some legal institutions. Another important example is the reimplementation of the Company Law Act of 1934 in Poland after 1990. As to the other aspects of private/civil law, a wide range of European Communities directives cover, for instance, product liability, law of agency (commercial law) and software copyright law. In the field of labour law the relevant directives concern employer insolvency, equal employment opportunities and transfer of undertakings. All these regulations and directives have a binding effect on legal systems of Central and Eastern European countries.

According to articles 67 and 68 of the Europe Agreement (Association Agreement) signed by the European Communities and eight new member states from Central Europe, those states have to bring their legal systems into compliance with the European Communities/European Union law (acquis communautaire).

In most countries of Central and Eastern Europe, after the demise of the communist system, new civil codes were promulgated or are currently being drafted. The draft civil codes for Czech Republic, Hungary and Poland had both in their structure and legal regulations a return to Roman Law Tradition. In this process, a return to Pandectist legal traditions is of particular significance. The same applies to all four parts of the new Civil Code of the Russian Federation promulgated between 1995 and 2006.

II. SOCIALIST LAW AS A SEPARATE LEGAL FAMILY

A. INTRODUCTION

a) The well-known assertion of Petr Ivanovic Stuchka (1865-1932), the leading figure of Soviet legal philosophy in the early 1920s, influential President of the Supreme Court of the Russian Soviet Republic between 1923 and 1932 and also a co-founder and Director of the Institute of Law in the Academy of Sciences of the Soviet Union, deserves particular attention:

'Communism does not mean a victory of socialist law, but a victory of socialism over law, since law is dying together with the abolition of classes with their antagonistic interest.'

As a consequence of this idea, which prevailed until the early 1920s, the Court system and the Bar were both immediately abolished in 1917. All the efforts were made in order to ruin Russia's legal past. The nihilistic attitude towards law was quite common after the Bolshevik Revolution. Codification changes began even prior to 1921. (1) In 1918 the Russian Socialist Federated Soviet Republic (RSFSR) Code of Laws on Acts of Civil Status, Marriage and Guardianship and its Labour Code were promulgated. In 1919 the RSFSR Principles of Criminal Law were adopted. Before that period Soviet Russia operated under a system of judge-made laws. Soviet law revised a legal tradition of pre-revolutionary Russia to the extent that it was compatible with the new traits of the Soviet society. The founders of the Soviet legal system were educated in the Romanist (Pandectist) or civil law tradition. As a result in devising a supposedly entirely new legal system they drew heavily upon the traditions of Roman (civil) law. (2)

b) The concept of civil law needs some clarification. From a historical point of view the term 'civil law' refers to the legal system of the Roman Republic and Empire. This term was enshrined in the Corpus Iuris Civilis essentially in the 6th century AD (528-534) by Emperor Justinian I who reigned from AD 527 to 565. He combined Emperors' constitutions (3) and the jurists' writings. (4) He also drafted a kind of text book on law for students. (5) All those efforts played a big role in preserving historical Roman law (6) and served as the basis for subsequent legal systems throughout all Europe. Later on the term 'civil law' became, more narrow in its meaning in terms of legal systems of the so-called civil law countries. And recently it has become even, more narrow according to the perception of European lawyers. Consequently 'civil law' is a more restricted concept than 'private law' and does not include an entire legal system of a country. Large parts of private law are regulated by other codes or compilations. Legal systems of Central and Eastern Europe have codes as main sources of civil law. (7) As a result of essential political and economic changes the importance of civil law in mentioned countries has considerably increased.

c) The Romano-Germanic legal tradition has undoubtedly influenced a lot the legal systems of Central and Eastern European countries. The early Soviet law was being formed mostly by the legislator, unlike in the countries governed by common-law traditions through many centuries. The legislative influence still remains strong although the role of the judiciary is constantly growing. The role of legal scholars has increased in recent years, contrary to the common-law tradition where the role of legal scholarship has been rather negligible. The wide-scale reception (8) of Roman law--called ratio scripta ('written method')--in many countries in Europe had an impact also on Russian law. A very important aspect of the reception of Roman law in Russia was a foundation of law schools.

d) Regarding continuity of law it should be noted that there is considerable autonomy in various legal phenomena, which are generally independent from the economic-political structure of society. This continuity manifests itself in two levels. The first level concerns certain legal terms (e.g. lease, property, contracts etc.), and the second one is about certain concepts, schemes and legal institutions (e.g. the concept and structure of ownership, methods of acquisition of ownership, the concept of possession, the concept of contract etc.)

According to their legal traditions countries of Central and Eastern Europe countries can be divided into two groups:

--States with a strong Romano-Byzantine legal tradition.

--States with the Roman (civil) law tradition.

B. States with a Strong Romano-Byzantine Legal Tradition (9)

The main characteristics of such legal systems are the following:

1. The State is strongly in favour of the reception of Roman public law (ius Romanum publicum).

2. The ideology of the Roman Empire (imperium Romanum) prevails. (10)

3. There is no clear separation between secular law and ecclesiastical law--thus, for example, the nomocanon that used to be the major source of law throughout centuries combines both ecclesiastical and secular law.

4. The language of legal acts is the national vernacular (the Slavic one); in the Danubian (Romanian) principalities (Moldavia and Valachia) many statutes (acts) were promulgated in Greek even during the first half of the 19th century.

5. During the 19th and 20th centuries civil codes patterned after the various Western European civil codes were promulgated. (11)

6. Promulgation of commercial codes in the 19th and 20th centuries followed the model of Western European commercial codes. (12)

7. There were no universities in the medieval period. (13) The University of Dorpat (Jurjev, currently Tartu, Estonia) was founded in 1632 by Swedish in a time when the Baltic territories were not part of the Russian Tzarist Empire. A number of universities were established during the first two decades of the 19th century on the territory of Russia.

C. States with the Roman (Civil) Law Tradition (14)

The most important characteristics of these legal systems are the following:

1. The State is basically against the reception of Roman public law (ius Romanum publicum).

2. The reception of Roman private law (ius Romanum privatum) is carried through many different areas of law.

3. The Roman Catholic Church is basically in favour of the reception of Roman private law.

4. Latin is the language of the legal sources, in particular of the legislation throughout many centuries.

5. Universities play a considerable role in legal development. (15)

6. There was a substantial reception in the 19th and 20th centuries of the civil codes of Western European countries. (16)

7. There was a substantial reception in the 19th and 20th centuries of the commercial codes of Western European countries. (17)

III. CODIFICATION OF PRIVATE/CIVIL LAW IN WESTERN EUROPE AND ITS INFLUENCE ON CENTRAL AND EASTERN EUROPE

Codification of law is one of the most important parts of the civil-law system, and one of the main differences from common-law jurisdictions. The codification of civil law in modern Europe began in the late 18th--early 19th centuries. The first modern civil code in Europe was the West Galician Code (18) adopted in 1797. It came into effect four months later also in Eastern Galicia under the name Civil Code of Eastern Galicia. (19)

The French Civil Code of 1804, le Code Napoleon, can be also regarded as the first modern civil code. It had a big influence both within the European Continent and outside Europe. In civil-law countries codes are undoubtedly shall be considered as primary piece of legislation. They have a unitary nature that differentiates them from so-called "codes" in the countries with common-law tradition, for example, the United States of America.

However, commercial law (mercantile law), which is a part of business law (law of corporations), was not included into the first civil codes. The first code straight mentioned business organizations (corporations), was the Civil Code of the Duchy of Parma, Piacenza and Guastalla (1820) in Italy. The existing forms of corporations were found as specific part of law of obligations under the title of Delle Societa. The Civil Code of Modena of 1851 in its last (fourth) part also specifies various forms of business organizations. Swiss Code of Obligations of 1881 includes regulations concerning business organizations and commercial contracts. The updated version of Swiss Code of Obligations was included (as Book Five) in Swiss Civil Code of 1907. Thus, Swiss Civil Code became fully 'commercialised' since Book Five of this Code unified the regulation of all activities and relations that generally fell under the headings of law of contract and business law, including negotiable instruments. The advantages of this solution are its simplicity and clarity. The disadvantage is a risk for internal imbalance or asymmetry in the integrated code.

The codes in the states with common-law jurisdiction generally do not have organic unity. They do not contain generally-binding legal principles either. These legislative acts are rather a compilation of separately enacted statutes.

Austrian General Civil Code (20) was a project of the School of Natural Law (ius naturale or ius naturae) and deserves a special attention. The Saxon Civil Code, which came into effect in 1865, was the first Code included general provisions (Allgemeiner Teil). It was also the first one that followed the Pandectist system.

The civil-law systems of the countries of continental Europe are usually divided into four main groups: Codes patterned after French and Spanish Civil Codes; Codes following Swiss Code of Obligations of 1881/188321 and Swiss Civil Code of 1907/1912; Codes patterned after either the drafts or the final version of German Civil Code of 1896/1900; and Codes drawing upon Italian Civil Code of 1865 and Italian Civil Code of 1942.

The impact of Austrian General Civil Code was generally limited by the territory of the Austrian Empire and later on--after the Austro-Hungarian 'Compromise' (Ausgleich) (22)--by Austro-Hungarian Empire (Dual Monarchy). Austrian Civil Code includes 1502 sections (paragraphs) and is divided into three parts: I Personal Rights; II Rights arising from property and obligations (contracts and torts); III Common provisions related to both kinds of rights. Austrian General Civil Code has also a short introduction part, consisting of fourteen sections. It was substantially modified by means of regulations (Notverordnungen) during World War I. Austrian General Civil Code had a big influence on Serbian Civil Code of 1844 that included only 950 sections. Serbian Civil Code of 1844 demonstrated several divergences from Austrian General Civil Code, mainly in family law and the law of succession.

Each of the codes mentioned above has its distinctive features. French Civil Code (23) can be described as episodic one, containing solutions for some important issues. Swiss Code of Obligations and Civil Code are characterised by their simple language. German Civil Code is--in many aspects--a philosophical system with its general and special parts. Book One of German Civil Code under the title "General Part" (General Provisions) follows mainly the General Part of Saxon Civil Code. Provisions contained in the General Part are applied to all other parts of the Code. Book 1 of German Civil Code is preceded by the Introductory Act to the Civil Code. (24) This book is followed by books on obligations, property, family law and succession.

However, it is worth mentioning that no lawyer relies exclusively on civil code since it may not cover all the subjects to be regulated by civil law. In some countries civil law has not even been codified. There are plenty of other sources of civil law. The principal sources are adopted by a legislature. However, decrees of government may also contain regulations concerning civil law. The same refers to custom and usage. Legal doctrines and commentaries are common as well. The judiciary may be also considered although a role of courts as law making institutions is the subject for discussion. It is generally accepted that court decisions cannot be regarded as a formal source of law. As a result case law generally does not have a binding force. But there must be a distinction made between de jure and de facto influence of court decisions i.e. sentences. All mentioned above apply to law systems of Central and Eastern European countries as well.

IV. THE PROCESS OF CODIFICATION IN SOVIET RUSSIA AND THE SOVIET UNION

The process of codification of law in the Soviet Union went through several steps. The first stage started in 1917 with the capture of power by the Bolsheviks (Bolshevik Revolution) and includes New Economic Policy period (1921-1928). The second stage was mainly about the first Five-Year Plan in 1929/1930 and lasted until the mid-50s. The third period began in 1957-1958 with the enactment of a number of federal (for the whole union) principles of legislation.

a) Codification in Soviet Russia and Soviet Union:

1. The first two Soviet codes were adopted in 1918. The introduction of New Economic Policy in 1921 used to be a major stimulant for codification in the RSFSR. It resulted in the enactment of five codes in 1922. (25) The Civil Code of 1922 was mostly based on German Civil Code and to some extent on Swiss Civil Code of 1912--particularly on the updated version of Swiss Code of Obligations.

Following the tradition of the Western European civil-law countries, Soviet codes included General Part that contained general provisions and a Special or Specific Part. A particular feature of Soviet legislation was the fact that in some cases general provisions were adopted separately. Principles of Criminal Law and Principles of Civil Procedure of RSFSR enacted in 1919 both contained only general principles of a relevant branch of law. The first Soviet Constitution of Soviet Russia, RSFSR Constitution, was adopted on July 10, 1918.

The first Constitution of the Soviet Union (26) was adopted on January 30, 1924 and established a division of competence between federal and republics governments in regards to legislation process. The federal government was authorised to enact general principles of legislation valid throughout a territory of all Soviet Union. Each republic being a part of Soviet Union was empowered to adopt acts for itself in accordance with the general principles adopted by federal government.

2. As a result of the New Economic Policy and the first year of Five-Year Plan, command economy was introduced into Soviet Union. It seemed very logical to expect that the introduction of the centrally planned and commanded economic system would result in the enactment of new codes in the country. However, no new civil code was enacted. The most important legislative act was the second Constitution (so-called Stalin Constitution) of the Soviet Union adopted on December 5, 1936. In the meantime new Land Code and Water Code of the RSFSR were drafted. Furthermore, several drafts of federal civil and criminal codes were circulated. In 1938 the Act on Court Organization was promulgated at all-Union level. However, no further acts were adopted in the meantime.

3. Due to an outbreak of World War II the codification process came to a standstill. Codification was further delayed in the immediate aftermath of World War II. New Federal Principles also called Fundamentals were promulgated only in 1958. The Federal Principles were legal rules meant to be directly applied by the courts.

The USSR Principles of Criminal Legislation and Criminal Procedure as well as Principles of Court Organization were adopted in the meantime. What's more, the USSR Principles of Civil Legislation and Civil Procedure were promulgated in 1961. A thirty-year gap had to be bridged. The codification continued also during the 1960s and 1970s. In 1977 a new Constitution, the so-called Brezhnev Constitution, was adopted. And the following year each republic being a part of the Soviet Union drafted its own constitution.

b) Constitutional regulations concerning codification in Soviet Russia and Soviet Union:

1. The Constitution of 1918 (subsection 49/n) granted the legislation power, including enactment of judicial, civil and criminal laws, to a Parliament.

2. The Constitution of 1924 introduced the Soviet-style federal system of government and clarified the division of competence between the federal government and member republics in terms of legislation. According to article 1 of the Constitution the federal (central) government was empowered to issue guiding principles of legislation containing the general basis and provisions relating to a particular branch of law (civil law, criminal law, law of civil procedure, law of criminal procedure). On the basis of these principles government of every union republic was able to draft various codes for its republic.

A number of areas of legal regulation remained the exclusive competence of the federal (central) government. For instance, all union republics codes regulated commons, concerning customs, merchant shipping, benefit for servicemen and air. Exclusive federal legislative authority was about foreign trade, transport and the armed forces.

Constitution of 1936 widened the exclusive competence of the federal government to adopt all union civil and criminal codes. (27) This provision, however, did not have any practical effect. No any union republic drafted a code in question after the terms of the Constitution of 1936 were adopted. (28)

c) Similarities between Western European countries and Soviet Union in terms of codification:

1. A division between the General Part and the Special Part of the codes (technical similarity).

2. Some areas of law remained uncodified (e.g. most areas of administrative law).

3. Existence of supplementary legislation (special acts, statutes concerning fields not covered by the codes).

d) Differences of the Soviet Union codification from the one existed in Western European countries:

1. The absence of any commercial code in the Soviet Union, although the idea of a two-sectorial law (29) prevailed since 1927.

2. In spite of existing of various law branches (30) the traditional separation of public (ius publicum) and private law (ius privatum) was ignored in Soviet Union. (31) Thus, that division was quite relative in the Soviet Union.

3. Decisions of the Supreme Court of Soviet Union were obligatory for all lower courts. There were also 'guiding explanations'32 for them.

4. According to the Constitution, the Supreme Court was empowered to initiate legislation process in the Supreme Council of the USSR.

5. Social content of the codes. For example, Article 16 of the Criminal Code of the RSFSR invalidated any transactions made against socialist state and public interests.

6. The preambles of the Soviet Union codes had a decidedly ideological flavour. For example, the Code on Marriage and Family of the RSFSR included a provision--referring to the basic concept of the Code--'to strengthen the Soviet family based on the principles of communist morality and make children ready to actively participate in the construction of a communist society'.

e) Reasons for similarities existence between Western European countries and Soviet Union in terms of codification:

1. The legal tradition of pre-revolutionary Russia was basically part of the Western European legal tradition. That is why there are some similarities that can be found also in Soviet law.

2. Russian Code of Criminal Procedure of 1864 was mostly an imitation of French and English criminal procedural law.

3. The Judicial Reform of 1864 established new legal basics in Russia. The professional judiciary became independent from the executive branch of power. A professional Bar and a modern system of judicial procedure, including trial by jury, were established.

4. Some Russian lawyers were getting their degrees at western universities, for example, Law Schools of Edinburgh and Glasgow Universities in Scotland, which legal system is based on civil law traditions. During the 19th century a number of outstanding young Russian lawyers were studying also at German universities, in particular in Berlin, Heidelberg and Leipzig.

V. CHARACTERISTICS OF PRIVATE/CIVIL LAW

a) On the one hand, continuation of legal tradition is observed in soviet legislature--at least along general lines of several legal institutions (e.g. the concept of property). The Civil Code of RFSFR (33) defines, for example, an owner's rights as follows: 'An owner may be in possession of a thing and make use of it and dispose of it within the limits specified by the law'. The same definition relating to owner's rights can be found both in Article 19 of the General Principles of the Civil (Law) Legislation of the Soviet Union adopted in 1961 and Article 480 of the new Civil Code of the Russian Federation. The similarities of socialist and Ulpian (Roman jurist) concepts in terms of property are obvious. (34)

b) On the other hand, socialist civil law was substantially based on commodity-money relations. Personal property was more about satisfying personal and family needs of the citizens.

c) It is important to take into consideration legal traditions of the countries of Central and Eastern Europe based on Roman law. In legal literature the development of law in mentioned regions was unreasonably neglected. This opinion was shared by Paul Koschaker in his work Europa und das romische Recht, (35) Francesco Calasso (Medio Evo del diritto (36)) and Franz Wieacker in Privatrechtgeschichte der Neuzeit. (37) However, as we could understand from the mentioned above, Roman law traditions had a big influence on both doctrine and legal practice of former socialist countries.

d) It is worth mentioning that from a dogmatic point of view, socialist-type RSFSR Civil Code (38), in various aspects, is similar to the draft of Russian Civil Code of 1913. (39) It should be noted that it strongly resembles both German Civil Code of 1896 (40) and Swiss Code of Obligations of 1911 (updated version). One of the reasons for that influence is the fact that a significant number of outstanding Russian legal experts were studying in Berlin University where the Russian Imperial Seminar of Roman Law (41) was established in 1887 and existed until 1896.

e) The Civil Code of the Soviet Union was established on December 30, 1922 and came into effect on January 1, 1923, i.e. during the era of the New Economic Policy (NEP). Alexej Grigorievich Gojkhbarg (1883-1962) was the chief complier of the first socialist Civil Code. A new draft (project) of the Civil Code was prepared by A.G. Gojkhbarg two years later, in 1924.

It is worth mentioning that Stuchka and Amfiteatrov also prepared their drafts of Civil Code in 1931. Both drafts aimed to make a recodification of civil law at federal level. All the republics were supposed to have their own civil codes since their competence to codify had been transferred to the federal level by virtue of the Constitution of 1924 as one of the Basic Principles of Legislation. It has to be outlined that the Soviet Union at federal level had no civil code. The Civil Code of Soviet Russia served as a model code for all union republics.

The first draft of the Civil Code after World War II was supposed to reflect the civil law of victorious socialism and also serve as an example for the democratic countries propagandizing socialism instead of capitalism.

The Civil Code of 1922 had a big influence on the Principles (Fundamentals) of Civil Legislation of the Soviet Union (1961) and later, on various codes of the fifteen constituent Republics (for example, Civil Code of the RSFSR of 1964). The Civil Code of 1922 which contained 435 sections (articles or paragraphs) was prepared in a record period of time for less than four months. The Code was divided into four parts. The General Part (General Provisions) of the Code included provisions concerning legal capacity, individuals, legal entities (corporations), legal acts (transactions), and the statute of limitations. Part Two (Real Rights) dealt with ownership, mortgage and other iura in re aliena. Part Three regulated obligations issues (contracts and torts). Part Four contained succession (inheritance) provisions. A separate statute enacting the Code contained transitory provisions in nine sections.

f) The Fundamentals were adopted at federal level in 1961. These Fundamentals had a normative character since they were implemented by courts.

g) The RSFSR Civil Code of 1964 consisted of 569 articles, which following substantially Pandectist system were united in eight parts: General Principles, Law of Property, Law of Obligations (including general principles of obligations and specific types of obligations), Copyright Law, Right to Discoveries, Law of Inventions, Law of Succession, and, finally, Legal Capacity of Aliens and Stateless Individuals. Romanist influence was also very important in relation to civil codes of the other European former socialist countries.

VI. VARIOUS TYPES OF PRIVATE/CIVIL LAW CODIFICATIONS IN FORMER SOCIALIST COUNTRIES

In this section the author is going to point out, in a more or less schematic way, the variety of codification efforts regarding the civil law in former socialist countries. Civil legislation can be divided into four main groups:

a) Socialist civil codes: USSR, Czechoslovakia (1950 and 1964), Poland (1964), Hungary (1959) and Albania (1981). The promulgation of the Czechoslovak Civil Code (1950) was necessary because of the existence of different legal systems and traditions within Czechoslovakia. For many centuries the Czech (and Moravian) legislature was under the influence of the Austrian General Civil Code of 1811, whereas Slovakia, being a part of Hungary until 1918/1919, was dominated by Hungarian customary law (ius consuetudinarium or consuetudines). However, commercial (mercantile) law became codified in 1875. Substantial parts of civil law were the matters, concerning tutorship and curatorship, as well as some marital and intellectual property provisions.

b) Special laws. Bulgaria where no comprehensive Civil Code existed prior to the World War II, had the following special laws: Law of Succession (1949), Law of Persons and the Family (1949), Law of Obligations and Contracts (1950), Law of Property (1951), Law of Economic Organizations (1970) and Law of Citizens' Property (1973).

c) Old 'bourgeois' codes: Romanian Civil Code of 1864, patterned after the French Civil Code (1804), and the Draft of the Italian Civil Code of 1865 that was in force with various modifications throughout the entire socialist political and economic period, at least in theory. Taking into account that obviously the Romanian Commercial Code of 1887 was drafted to regulate the commerce of a capitalist state, it would have been impossible to regulate the planned economy and legal relations, arising between socialist economic organizations (mainly state enterprises). Thus, the Code was unsuited to state and cooperative trading, since its aim was to satisfy the needs of workers and raise their standard of living. During the socialist period such trading was consequently regulated by civil law since its basic principle of state ownership in terms of production was to appropriate it in full.

Nevertheless, certain provisions of the Commercial Code were still applicable even though their socio-economic content had been changed. It related, for example, to the provisions concerning transport contracts, maritime trade and navigation.

In the German Democratic Republic (GDR) the German Civil Code (BGB) was partly in effect until January 1, 1976. In 1965 a new socialist Family Code was adopted. It should be noted that the Vertragsgesetz (Law on Contracts) of 1965, which was replaced by a revised Act of Contracts in 1982, regulated the socialist economic relations. In this respect it is worth mentioning that outside Europe, in Cuba, a new socialist Civil Code came into force on April 12, 1988 which is still in force. It contains 547 articles.

d) Particular legal systems. In Yugoslavia, for historical reasons, there was no civil code both at the federal and national republics level. It should be taken into consideration that in Croatia and Slovenia the Austrian General Civil Code was applicable. In Serbia Austrian Civil Code of Inspiration (1844) was applied. In Montenegro the General Code of Property (1888) consisted of 1031 articles also assumed the function of a Civil Code.

After 1946 the following basic laws, which had the significance also in the field of Private/Civil law, were adopted:

1. The Constitution of 1974 (included 406 articles).

2. The Law on Associated Labour of 1976 also called 'Code of Self-management' (included 671 articles).

3. The Law of Obligations of 1978. This law was based on the Draft Law of Obligations and Contracts published in 1969 drafted by the well-known legal scholar, Mihailo Konstantinovich. The draft was drawn, in particular, upon the Swiss Law of Obligations and Book IV (On Contracts) of the Italian Civil Code of 1942.

4. The Law of Basic Property Law Relations of 1980.

5. Legislation regarding family law and law of succession was adopted within the authority of six republics.

6. The Act on Economic Relations of 1988 was the first attempt to introduce a market-oriented economy.

It is worth mentioning that in a real sense Yugoslavia became a federal state in 1974. However, the previous Constitution of 1963 contained legal bases of the federal government. So, Yugoslavia tried to decentralise its legal system. As a result it became necessary to establish a set of inter local norms of conflict of law (conflictus legum) within the country.

e) Socialist civil codes did not include the provisions concerning family law, labour law, land law and cooperative agricultural law. None of them regulated the relations regarding incorporeal goods. However, a great part of the so-called economic relations were regulated by Civil Codes, with the exception of the Czechoslovak Civil Code of 1964 and the Civil Code of the German Democratic Republic of 1975.

VII. PROPERTY RIGHTS

a) The success of privatisation depends, to a considerable extent, on the reform of property rights in the countries of Central and Eastern Europe. The difficulties related to joint ventures with the participation of western countries were linked to the absence of clear concept of property rights in the countries of former Soviet Union. In some countries of the Commonwealth of Independent States (CIS) there was a real resistance to adopt private property (42) as the most important form of ownership.

b) The reform of property rights in Central and Eastern Europe includes the following steps: (1) regulation relating to the ownership system in a normative way (adoption of declarations is not acceptable); (2) recognition of the idea of pluralism of various forms of ownership, including equal protection for all forms of property; (3) introduction of substantial guarantees for the protection of property rights against state interference.

c) The comprehensive reform of property rights is an essential part of the general overhaul of the legal system in the countries of Central and Eastern Europe. The relationship between public (ius publicum) and private law (ius privatum) has to be an object for comprehensive reconsideration. A special attention in this point should be paid on German experience (State Treaty). The origin of the restriction, concerning property rights in the Soviet Union (Soviet Russia), dates back to the instruction of Lenin and Civil Code of 1922. (43) This tainted approach, leading to the victory of totalitarian ideas over law (44), must be avoided in any modern country.

d) Property rights need an appropriate environment, enabling owners to dispose their property. The process of transformation from a command to a market-oriented economy is possible when certain requirements are observed. Thus the concept of ownership--known in Roman law--with all its elements of ownership (possession, disposal, etc.) must be reintroduced to replace the traditional concept and structure of property.

VIII. CODIFICATION OF ECONOMIC LAW

a) In the Soviet Union the idea of having separate economic code appeared in 1927 after the New Economic Policy had not work out. President of the Supreme Court of the RSFSR, Petr Stuchka, was the first who launched the idea of creation of a two-sectorial law system. (45) In terms of this concept an independent economic law (i.e. economic-administrative law) (46) was to be created in order to emphasise the contrast between the 'old', 'bourgeois, 'abstract and unequal' civil law and the new 'concrete and equal' socialist law. The idea of the promulgation of an autonomous economic code was definitively rejected in 1961 when the Fundamentals of Civil Legislation were promulgated. The prevailing concept was to adopt civil norms, regulating every kind of ownership relationships. Those norms were supposed to concern property relationships between citizens as well as the relationships between citizens and different types of economic organizations. The state escaped most of them. Nonetheless economic contracts (47) were often applied. Economic contract can be defined as a contact concluded by soviet organizations in order to achieve a certain economic goal.

b) An Economic Code in its proper sense came into force on July 1, 1964 in Czechoslovakia. Czechoslovakia was the only socialist country where the idea of adopting an economic code as a separate document prevailed. Thus, International Trade Code of 1964 regulated foreign commerce-related economic relations. Czechoslovak Civil Code (48) regulated 'economic contracts' in a general way. According to this Code provisions a special act was to regulate the legal aspects of relations between socialist economic units (mostly state enterprises). A distinct codification regarding the economic law was foreseen by the Constitution of 1960, providing the constitutional framework for this particular type of regulation.

c) It is worth mentioning that in German Democratic Republic (GDR), for instance, the situation in this domain was completely different. From 1969 to 1970 the East German legal doctrine abandoned the idea of giving life to an independent economic code. It is, however, obvious that there was some autonomy existing in this sector of legal system. There were also some doctrinal views which used to have an official character. (49) The Vertragsgesetz (50) of Heinz Such was, in practice, an Economic Code. Later on the Vertragsgesetz was replaced by a new revised act. As a result, in the German Democratic Republic, commodity exchange (Warenverkehr) between citizens (Burger) and between state enterprises and foreign trade (51) were regulated separately.

IX. THE MAIN CHARACTERISTICS OF THE HUNGARIAN CIVIL CODE OF 1959

Hungarian civil law was not codified, and consequently court practice played very important role. Judges often took into consideration foreign, in particular Austrian, rules while taking decisions.

The Hungarian Civil Code (52) of 1959 came into force on May 1, 1960 and was characterised by:

a) Unified concept of civil law;

b) Detailed regulation of socialist property;

c) Containing less definitions and programmatic, aspirational norms, or in other words policy declarations, in comparison with the Civil Code of the German Democratic Republic;

d) Detailed regulation of all legal relations by operative norms;

e) Non-adopting the notion of the juridical act (Rechtsgeschaft) which is one of the basic notions German Civil Code contains. The Hungarian Civil Code also disregarded the General Part of the Pandectist model considering it to be too abstract one;

f) Including the category of "real rights" (iura in rem) and a separate chapter devoted the rights of utilisation. This chapter used to regulate the classic real rights of enjoyment, use and servitude as well as the new forms of use.

The Hungarian Civil Code underwent various modifications (53) due to the economic reforms initiated on January 1, 1968. The Code was "depoliticised" after far-reaching political and economic changes started in 1990. (54)

X. ECONOMIC CONTRACTS

The union of the countries of Central and Eastern Europe was achieved by means of economic contracts (in German: Planvertrage) concluded by socialist economic organizations (predominantly state enterprises)--mostly in order to implement five year plan--imposed on them by a state.

If a duty to enter into a contract, its term and a particular task to be accomplished was imposed on organizations, it was called a 'planned contract'. If the parties decided themselves a task to be accomplished in the light of the relevant part of the state plan, which determined just general provisions, such as the value or the quantity of goods or services to be produced, the contract freely entered into was known as a 'regulated contract'.

The principal aim of economic contracts was to provide a detailed and concrete means for the plan implementation considering specific needs and capabilities of the parties. Thus, the plan was being carried out through these contracts with the help of their parties.

Prior to 1968 the economic plan used to be a fundamental and obligatory law. Socialist economic organs had to regulate themselves strictly according to the plan and directives issued by superior state authorities. After the introduction of the new system of economic direction, called the 'New Economic Mechanism', the State Economic Plan became practically a general and comprehensive directive. State enterprises gained more independence.

Hungarian socialist civil law knew the following types of contracts: supply contracts, contracts for acquisition of warehouses, project contracts, enterprise contracts, construction contracts and contracts for development.

After 1977 contracts were no longer related to a particular form of property. State enterprises relations had a mercantile character.

The most important consequences of economic reform in the legal field were the establishment of legal equality between contracting parties and granting a freedom and autonomy for the enterprises. It must be stressed that the economic contract, the most common legal institution of the command economy, was not a contract in its proper sense, giving the lack of consent (consensus) between the contracting parties. The economic contract was rather an administrative act.

XI. CONCLUSION

One of the most important tasks of European Union today is the harmonisation of law within the member states. The Maastricht Treaty on European Union considerably extends the competences of the European Union in the field of legal harmonisation. Like environmental, labour and tax law, the so-called community private law is becoming increasingly to the important. The most Europeanised area of private law is company law. As to other aspects of private law a wide range of European Communities directives cover, for instance, product liability, commercial agent law and software copyright law. In the field of labour law the relevant directives concern employer-insolvency, equal employment opportunities and transfer of undertakings.

In compliance with Articles 67 and 68 of the Europe Agreement signed by the European Communities and new member states located in Central and Eastern Europe, these countries had to bring their legal systems into compliance with the European Union Law (acquis communautaire). What's more, in the beginning of the 1990's most Central and Eastern European countries started a process of civil/ private law harmonisation.

A resolution (55) of the Parliament of European Communities requires member states to take steps in order to develop European private law. Being sponsored by European Council, the Commission on European Contract Law has formed the principles of European contract law. The Accademia dei Giusprivatisti Europei in Pavia is currently drafting the Code of European Contract Law. This Code is being modelled after Italian Codice Civile and Contract Codes drafted in the 1960s and 1970s in the United Kingdom.

These long-term efforts of harmonisation are not going to be completed in the nearest future. Some countries are still insisting to maintain their autonomy in the field of legal traditions.

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Gabor Hamza (Hungary)

Author

LLD, Hungarian Academy of Sciences, 1983

Chair Professor of Law, Eotvos Lorand University, Budapest

Ordinary member of the Hungarian Academy of Sciences

E-mail: gabor.hamza@ajk.elte.hu

(1) The beginning of the New Economic Policy (Novaja Ekonomiceskaja Politika).

(2) The well-known assertion of Johann Wolfgang Goethe regarding Roman law deserves mentioning in this regard. He speaks of Roman law "as something continuously living that, like a duck diving under water, is hidden from time to time but is never completely lost and reemerges again and again alive" (Entengleichniss). In: J. P. Eckermann: Gesprache mit Goethe in Den Letzten Jahren Seines Lebens, I-II. Teil Leipzig, 1836, III. Teil Leipzig, 1848.

(3) The Codex Iustinianus.

(4) The Digesta or Pandectae.

(5) The Institutiones.

(6) Ius Romanum or ius Romanorum.

(7) Code of Family Law, Code of Labour Law, Code of Farmers' Cooperatives Law etc.

(8) Receptio in complexu.or receptio in globo.

(9) Tzarist Russia, Soviet Union, after the dissolution of the Soviet Union in 1991, Russia, Ukraine, Belarus, Moldova, Romania, Yugoslavia (Serbia and Montenegro), Macedonia, Bulgaria and Albania.

(10) The idea of the so-called Third Rome = Moscow, in Russian: Tret'ij Rim.

(11) The French Civil Code (1804), the Austrian General Civil Code (1811), the Saxon Civil Code (1863), the Portuguese Civil Code (1867), the Swiss Code of Obligations (1881), the Swiss Civil Code (1907), the Italian Civil Code (1865), the Spanish Civil Code (1889) and the German Civil Code (1896).

(12) The French Commercial Code (1807), the Spanish Commercial Code (1829), the General German Commercial Code (Allgemeines Deutsches Handelsgesetzbuch) (1861), the Italian Commercial Code (1865), the Italian Commercial Code (1882), the Spanish Commercial Code (1885), the Portuguese Commercial Code (1888) and the German Commercial Code (1897).

(13) The first university in this geographical area was that of Moscow founded in 1755.

(14) Poland, Hungary, Czech Republic, Slovakia, Slovenia, Croatia, Estonia, Latvia and Lithuania.

(15) The first universities were those of Prague (1348), Cracow (1364) and Pecs (1367), founded by the middle of the 14th century. The Dorpat (Tartu) University founded by the Swedish in 1632 with German as language of instruction, must be mentioned here too.

(16) The French Civil Code, the Austrian General Civil Code, the Saxon Civil Code, the Italian Civil Code of 1865, the German Civil Code, the Swiss Code of Obligations and the Swiss Civil Code.

(17) The French Commercial Code, the Spanish Commercial Code, the General German Commercial Code, the Italian Commercial Code, the Spanish Commercial Code, the Portuguese Commercial Code and the German Commercial Code.

(18) Westgalizisches Gesetzbuch.

(19) Ostgalizisches Gesetzbuch.

(20) Allgemeines Burgerliches Gesetzbuch (ABGB) (1811).

(21) 25 Sachsisches Burgerliches Gesetzbuch or Burgerliches Gesetzbuch fur das Konigreich Sachsen (1863).

Revised substantially during the preparation of the Swiss Civil Code.

(22) Enacted in Hungary by Statute XII of 1867.

(23) From 1807 until 1815 and from 1852 till 1870 Code Napoleon.

(24) Einfuhrungsgesetz zum Burgerlichen Gesetzbuch (EGBGB).

(25) The RSFSR Criminal Code, the RSFSR Land Code, the RSFSR Labour Code, the RSFSR Statute on Court Organisation and the RSFSR Civil Code.

(26) Promulgated on 30 January, 1924.

(27) Art. 14 [m].

(28) Art. 19 of the Constitution of the RSFSR.

(29) Dvukhsektornoje pravo.

(30) Family law, labour law, law of the farmers' cooperatives etc.

(31) Regarding the classification of the legal systems: G Hamza: The Classification (divisio) into 'Branches' of Modern Legal Systems (Orders) and the Roman Law Tradition. European Journal of Law Reform 8 (2006) 361-382.

(32) Rukovodjashchije razjasnenjia.

(33) 1964 (a 92).

(34) Plena in repotestas--whose elements are as follows: uti (the use of, or extraction of all useful qualities from, the thing (res), frui (the collection of fruits, both natural and economic), habere (having the thing in patrimony), possidere (the possession of the thing, that is the actual or economic holding of a thing) and abuti (the capacity to sell, donate, consume, or destroy the thing).

(35) 1947.

(36) 1954.

(37) 1952 (2nd rev ed) 1967.

(38) Grazdanskij Kodeks. It was promulgated on 31 October 1922 and became effective on 31 January 1923.

(39) Grazdanskoje ulozenije--Proiekt.

(40) Effective 1 January 1900.

(41) Kaiserlich-Russisch Romanistisches Seminar.

(42) Castnaja sobstvennost.

(43) "We do not recognise any 'private' thing; with us, in the field of economics, there is only public, and no private law. The only capitalism we allow is that of the State.... For this reason, we have to widen the sphere of state interference with 'private' legal relations, and to enlarge the right of the State to abolish 'private' agreements. Not the corpus juris Romani, but our revolutionary consciousness of Justice ought to be applied to civil law Relations" (Letter written in 1918 by Lenin, addressed to Kursky, the then deputy people's commissar of justice of Soviet Russia).

(44) Cf Stuchka's widely known view according to which communism means not the victory of the socialist law but the victory of socialism over law.

(45) Dvukhsektornoje pravo.

(46) The term khozjajstvennoe pravo was in use after 1931.

(47) Khozjajstvenny dogovor.

(48) Obcansky zakonik.

(49) Eg, Walter Ulbricht's proclamation to the VIIth Congress of the East German Communist party (Sozialistische Einheitspartei Deutschlands) held in April 1967.

(50) Gesetz uber das Vertragssystem in der sozialistischen Wirtschaft (Law on Contracts, i. e. Law on Contractual System in the Socialist Economy).

(51) See the Gesetz uber internationale Wirtschaftsvertrage (Law on International Economic Contracts) of 1976.

(52) Polgari Torvenykonyv abridged Ptk.

(53) In 1967, 1977, 1981, 1984, 1985, 1986, 1987, 1988 and 1989.

(54) The most important changes took place by means of statutory modification of the Civil Code in 1990, 1991, 1992, 1993, 1994, 1995, 1996, 1997, 1998, 2000, 2001, 2002, 2003, 2004 and 2005.

(55) EC OJ C 158.400, 26 May 1989.
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