Introduction to Law

Law= 1. All legal rules adopted by the state authorities in order to regulate human behavior
within the society. In this case the term law refers to its object meaning the social relations that
are regulated by the legal rules. Within this meaning the law is composed by all legal rules
included in normative acts.
Normative acts ex: the Constitution, the Civil Code, the Penal Code, other normative acts
adopted by the Government (ordinances). Within this meaning we are defining the objective
law and therefore this meaning is the objective meaning of the term law (it takes into account
the object of the legal rules)
2. within this meaning law means the normative act which is adopted by the legislative
power of the state (the Parliament), following special procedures.
3. Law means a social science which studies the rules of human behavior, the
development of the system of law, the political and juridical institutions as well as mutual
relations between the different parts of the social system.
The system of law
All legal rules enforced within the territory of the state are linked together in a system of rules
named the system of law. This system is composed from branches of law.
A branch of law includes all legal rules connected by the following two elements:
1. The object under settlement meaning the social relations regulated by the legal rules
of the branch in question;
2. The method of regulating the social relations under settlement. Ex. The Civil Law,
the Penal Law, the Constitutional Law
Within a branch of law the legal rules are linked together, according to their content into
juridical institutions. Therefore a juridical institution consists of legal rules which regulate
certain categories of social relations creating specific juridical relations. Ex. The legal rules
that regulate marriage compose the juridical institution of marriage
The division of law
Firstly the law is divided into international and national law.
International law is mainly divided into public law and private law:
1. International public law that regulates the relations between states or between states
and international organizations.
2. International private law which regulates the relations between natural or legal
persons who belong to legal states or have goods or interests in different states. Therefore each
time a legal relation has in its structure a foreign element such as the different citizenship of the
parties, the location of the object of the contract in another country, the performance of the
contract in another country and so on, the legal rules of international private law must be
applied.
National law is mainly divided into public law and private law:
1. Public law consists of legal rules related to the organization of the state. The public
authorities and the relations established between the state of the public authorities and the
citizens or the individuals.
2. Private law consists of legal rules regulating the private relations between individuals
belonging to the same state.
The difference between these two divisions of the national system of law is made taking
into account two criteria:

1. The nature of interests protected by legal rules. Therefore the legal rules of public
law protect public general interests meaning the interest of the entire community. In the same
time the legal rules of private law protect private individual interests meaning the interest of
the parties to juridical relations.
2. The nature of the social relations regulated by the legal rules. Within public law the
social relations under settlement are mainly subordination relations established between the
state and the individuals. Within private law the social relations under settlement are mainly
equality relations established between natural or legal persons. The parties to such juridical
relations are considered equal from a juridical point of view.
The public law includes the following branches of law:
1. Constitutional law which regulates the organization, the structure, the powers of state
authorities, the electoral system, the right and the duties of the citizens. The main source of
Constitutional law is the Constitution, the fundamental law of a country.
2. Administrative law which contains legal rules referring to the organization and the
functioning of administrative bodies of the state and public goods/deeds.
3. The Fiscal Financial law which regulates the relations concerning the establishment,
the approval and the execution of the state budget as well as taxes and other charges imposed
by the state.
4. The Criminal law which includes all legal rules regulating the anti-social behaviors,
mainly the crimes and criminal offences and the sanctions applied to the persons that commit
them.
5. The law of Civil Procedure which regulates the juridical activity, the activity of
justice performed by the judges in civil disputes and the execution of the judgments
pronounced in such cases.
6. The law of Penal/Criminal Procedure which contains all legal rules regulating the
proceedings within criminal cases.
The private law includes the following branches of law:
1. The Civil law which contains all the legal rules that regulate the patrimonial and nonpatrimonial relations between the natural and legal persons between the professions as well as
the family relations deriving from marriage, adoptions, affiliations, etc.
2. The Labor and Social Security law which regulates the labor relations between the
employers and the employees as well as the social relations of the public law concerning the
employees protection.
The legal rule
Like moral or religious rules, the legal rules are also rules of social behavior. All social
rules are compulsory because otherwise they would not be qualifies as rules but as simple
recommendations. However the sanctions for the non-observers of each category of social rules
are different, meaning that the sanction has the same nature as the rule to which it is attached.
Unlike all other social rules the legal rule has a legal juridical sanction. It means that this
sanction is applied within the framework of the society which is organized as a state and its
application implies in all cases the intervention of the competent bodies of the state. As a
consequence the legal rules are different in relation to all the other categories of social rules
because they may be applied and imposed through the power of the state.

As a definition, the legal rule is general, impersonal and a compulsory rule of behavior which
may be imposed and applied if necessary by the powers of the state. From this definition we
may emphasize the following essential features of the legal rule:
1. The legal rule is general, which means that it provides a typical behavior, a model of
behavior which is addressed to every person.
2. The legal rule is impersonal which means that the legal rule is not directly addressed
to a specific person. Actually the legal rule represents a unique standard of behavior which
offers to an undetermined number of persons. For example, article 84, paragraph 1 from the
Romanian Constitution provides: The President of Romania cannot be member of any
political party and he cannot hold any other private or public office.
3. The legal rule is compulsory which means that its provisions may be imposed by
different state means.
The structure of the legal rule
1. The hypothesis which is the part of the legal rule that describes the concrete
circumstances when a certain behavior is requested, meaning the circumstances when the legal
rule is to be applied.
2. The provision/command which is the most important element of the legal rule. It
provides the behavior imposed to the subjects of law under the circumstances described in the
hypothesis. Thus the command may provide what the subject of law shall do, what he shall not
do or what he is allowed to do.
3. The sanction provides which are the consequences of the non-observers of the legal
rule and the penalties that may be applied by the competent bodies of the state to those who do
not comply with the rules command.
It should be mentioned that it is not necessary to have all these three elements of the
legal rule in the same article of law. Sometimes the hypothesis or the sanction of the legal rule
may be included in another article or in another normative act, but the legal rule can never be
deprived of its command, even though the command of some legal rule may be implied. Ex.
Article 6, paragraph 9, Governmental ordinance no. 26/2000 provides: In order to get the legal
personality, the members of the association should conclude the constitutive act and written
form attested by a lawyer under the sanction of absolute nullity.
Ex. Article 179, Criminal Code The murder of a person is punished with prison between 10
and 20 years and withdrawal of rights.
The sanction of the legal rule may be classified in accordance with several criteria:
1. According to the degree of determination the sanction may be:
a. Absolutely determined, when it cannot be modified by the state body which applies
it. Ex: The nullity of a contract
b. Relatively determined when the law provides the limits of the penalty and the
application body must choose the concrete sanction for each specific case taking into account.
Ex: The penalty of a crime which is between two and five years of prison
2. According to the way they are provided and applied the sanctions may be:
a. Alternative sanctions when the application body must choose between two or more
different penalties. Ex. Prison OR paying a certain fine
b. Cumulated sanctions when the law provides two or more different penalties which
must be applied at the same time. Ex. Prison AND the withdrawal of certain rights
The legal rule
Hypothesis (the circumstances)

 Command (the action itself)

Sanction (what happens if the rule is not applied)
The legal rule may be classified in accordance to several criteria:
1. according to their object under settlement:
constitutional
criminal
civil
2. according to their juridical force: the legal rule may be included in Constitution,
in laws, Government ordinances, Gov decisions, orders and instruction of
ministers. The classification takes into account the position and the nature of the
state, which has adopted l.r. Therefore, the hierarchy of the l.r corresponds to the
hierarchy of the state bodies and authorities. Is this very important because in
case of conflict between l.r adopted by different parties, the l.r adopted by the
superior party has priority to apply. However, as far as the individuals are
concerned, all normative acts have the same juridical force because they are
compulsory.
3. according to the character of the behavior:
Imperative l.r: must be applied exactly as they are provided without any
exception. At their turn, the imperative l.r may be divided into:
i. Imposed: provides expressly the obligation to do something meaning
they impose to the subject of law certain actions
ii. Prohibited: forbid a certain action/behavior
Disposal l.r: are legal rules that allow the subject of law to choose his own
behavior. It may be divided into:
i. Permissive: provides certain rights or possibilities for the subject of law,
natural or legal persons
ii. Suppletive: allows the subject of law to choose the behavior in certain
circumstances. Otherwise, meaning of the subject of law do not choose
their own behavior, the provisions of the suppletive l.r are to be applied.
Therefore, the suppletive l.r replaces the will of the parties whenever this
has not been expressed.
4. according to the extent of their application, l.r may be:
General l.r: applies within an entire field of activity within an entire branch
of law.
Special l.r: refers to a limited branch of social relations taking into account
specific criteria, circumstances of qualities pf the party. The special l.r have
a special character, mainly to derogate for the general rules. To derogate= to
deviate, to regulate certain issues in a different manner, as compared to the
general regulation, to provide exceptions to the general regulation
Exception l.r: also provide derogations to the behavior described by the
general or special l.r. They must be strictly interpreted and should be applied
under the circumstances described in the hypothesis.
The classification is very important in accordance to the application of l.r. If two l.r may be
applied in the same time, the derogative l.r, meaning the special l.r, has the priority to apply
according to the principle of special rules that derogate form the general rules.

5. according to their structure:

Complete l.r: are those that contains all 3 elements (hypothesis, command,
sanction)
Reference l.r: do not contain all the 3 elements of structure in order to find
the missing elements of the reference rules sent to another l.r in the same
normative act.
Blank l.r: are also incomplete l.r but the missing elements will be completed
in the future by another normative act which is not yet adopted.
The 3 powers in state:
Judicial
Executive
Legislative
In relation to the app of law, we should take into account into account 3 coordinates:
1. the application al law in time
2. the application of law in territory
3. the application of law to persons
The application of law in time
During the years, the existing laws are replaced by others because the state is interested
to regulate in a different manner certain social relations in order to take into account the
economic and social realities. Therefore it is very important to establish the period of time
during which a law must be applied (the moment when the law begins its application as well as
the end of its application). The law begins its application from the moment of its entering into
force. As a consequence, the law becomes compulsory and it must be applied and observed by
everybody, starting from its entering into force. According to the Romanian Constitution, the
law enters into force 3 days after its publication in the Official Monitor of Romania, or on a
different date expressly mentioned within the law itself. Starting from the moment of its
entering into force, the law is supposed to be known by everybody. Therefore, nobody can
invoke his ignorance of the law in front of the court of law.
The final moment of the application of law is the moment of its abrogation. The
abrogation may be expressed or tacit.
1. Expressed abrogation: happens when a legislator expressly provide that a certain law is
abrogated or replaced. It may be:
Direct: when the new law mentions directly the abrogated law or the abrogated
articles of law
Indirect: when it is provided that the laws or the articles of law which are
contrary of the new law, are abrogated. Generally, the legislator uses the
expression All conflicted legal provisions are abrogation
2. Tacit abrogation: happens when the new law contains legal provisions which are
incompatible with the previous law without mentioning expressively that the previous
law is abrogated.
The principles and the exceptions concerning the application of law in time
Generally, the law must be applied between of its entering into force until the moment of its
abrogation. However, the juridical relations may produce their effects during periods of time
when different laws apply especially because of the existing laws may be replaced by new

legal provisions. As a consequence, we should determine the applicable law to a particular

juridical relation on a certain moment in time taking into account the following principles:
1. the principle of non-retoactivity of law
2. the principle of immediate application of law
1. the principle of non-retroactivity
This principle states that the law regulates only the circumstances, the situation which had
happened after its entering into force. The new law cannot regulate the past situations meaning
these which had happened before entering into force. In the same way, the Romanian
Constitution states the law provides only for the future except for the more favorable criminal
law. As a consequence, the following rules must be observed:
The new law does not regulate the juridical relations which were created, modified
or terminated before its entering into force.
The new law regulates the juridical relations which are created, modified or
terminated after its entering into force as well as the future effects of juridical
relations created before its entering into force.
Exception to the principle of non-retroactivity of the law, provided by the Romanian
Constitution, the most favorable criminal law has retroactive power.
2. the principle of immediate application of law
A prior normative act cannot regulate the situations which happened after its abrogation
because the new law must be applied immediate after its entering into force,
Consequence: The future situations will be regulated by the new law.
Exception: called the ultra-activity of the law. According to it, even after entering into
force of the new law, the old law may be applied to certain juridical situations which are
expressly provided by the new law.
The application of law in the territory
-is regulated by the principle of territory as provided by art.7 of the Civil Code. According to
this principle, the term of law is applied on the Romania territory. However, the applicability of
this principle depends on the following 2 elements:
1. the extent of the competence of the state bodies which had adopted the legal provisions
2. the existence of juridical relations having a foreign element
Taking into account the extent of the state bodies which had adopted legal provisions, the
normative acts adopted by the Parliament, the Government and the authorities of a central
public administration are to be applied on the entire territory of Romania. The normative acts
adopted by the local administrated authorities such as the local council and the counting
council are to be applied only on the territory of a country. The juridical relations having a
foreign element create a conflict between different laws belonging to different states. This
problem of conflict of laws is to be solved by the legal rules belonging to international private
law. Therefore, according to this l.r, the Romanian law may be applied outside the territory of
Romania, or a foreign law may be applied outside its territory meaning in Romania. In such
case, the applicability of a foreign law of the Romanian territory is possible in accordance to
the Romania legal provisions of international private law.
The application of law to persons
The beneficiary to a l.r are natural or legal persons. The law applies equally to all its
beneficiaries regarding the sex, nationality or race. Therefore, all persons are equal in front of
the law. However, it does not mean that any law applies in the same way and limits to all
persons. From this point of view, there are laws with general application such as the

Constitution and laws which apply only to some category of persons (such as la 31/1991,
republished and completed)
The application of law is also national because the law applies on the national territory and
is to be applied on national territory to all persons who are within the borders of the state at a
particular moment. As a consequence, the Romanian law applies not only to the Romanian
citizens but also to the foreigners during their state in Romania.
Business law contains all legal rules that belong to different branches of law or private law
which are applicable within business relations that regulate mainly the following relations
concerning the performance of economic activity:
Legal relations of public law established between the state or public authorities on
one hand and the participants to business relations on the other, concerning the
Authorization of functioning, taxes and other charges, the crimes, the performance
of economic activity
Legal relations of private law established between the participation of business
relations or arising under the performance of economic activity such as the different
contracts or juridical acts, the ownership wide, the goods, legal relations, and so on
Juridical relation =the social relation regulated by a legal rule
Private law =any juridical relation which is defined by the juridical equality of the parties
Each juridical relation has 3 elements of structure:
1. the parties (the subjects) of the juridical relations: the national and legal versions as
holders of rights and obligations
2. the juridical content of the juridical relations: the rights and relations of the juridical
parties
3. the object of the juridical relation: the behavior of the parties, the actions or inactions
that a party must exercise, must do or are not allowed to do
The parties to the juridical relations
-are the subjects of law meaning the owners of rights and obligations
-may be: natural or legal persons
Natural person
=individual subject of law (any human being as owner of rights and obligations)
The participation of the natural persons to juridical relation depends on the legal capacity
of the person in question. The civil legal capacity includes:
1. the abstract capacity
2. the concrete capacity
1. the abstract capacity =the possibility to the natural persons to have rights and
obligations. It fallows the existence of any human being because it expresses the quality of the
subjects of law and it allows the participation of the individuals to juridical relations
The abstract capacity of any natural persons begins from the moment at the birth until the
death. Concerning the starting moment, the general rule is the date of birth. Exception: The
Civil Code recognizes and anticipates abstract capacity to the conceived child under the
condition to be born alive.
Concerning the final moment, it is the moment of the death of natural person. As a
consequence, if the death is physical, the extra capacity ends on the day of death according to
the death certificate. If the death is not physical (the person ha disappeared) then is applied a

special procedure called The procedure for the juridical declaration of death. This procedure
is necessary in order to clarify the legal situation of the person who has disappeared during a
long period of time because its impossible to know anymore if the person still alive. This
clarification is necessary for the family of the missing person but also to other persons as its
creditors. Generally, following the application brought by any interested person, the missing
person may be declared by judgment of the court of law after 2 years from the date of the last
news of the person in question. Exception: The persons who had disappeared during wars or
car accidents or other circumstances, who lead to the conclusion that they are dead, may be
declared dead after 6 months after disappearance. The judgment must mention the date of death
which is also the date when the abstract capacity ends.
2. the concrete capacity =the possibility on natural person to actually exercise his rights
and to assume the obligations by concluding juridical acts in his own name
Any natural person has extra capacity the content of the abstract capacity is the same for
all natural persons. Nevertheless, concerning the concrete capacity, certain categories of natural
persons have no concrete capacity at all or they have limited concrete capacity. Actually, it
supposes the existence of an intentional and free will or understanding (the discernment) in
order to be able to evaluate correctly the juridical consequence of his actions or his acts.
The discernment of the natural person depends on the age of the individual but also on his
mental health. As a consequence, the concrete capacity may be:
i. the lack of concrete capacity
ii. the limited concrete capacity
iii.
the full concrete capacity
i. The lack of concrete capacity: according to the law, the minors under 14 years old and
the persons put under juridical interdiction. A person is put under juridical interdiction due to a
state of mental illness which prevents from understanding the consequences of his acts.
Therefore, following the application brought by any interested person in question and
pronounces the judgment which declares the lack of concrete capacity of the person in question
ii. The limited concrete capacity: the minors between 14 and 18 years old, means that the
juridical acts of him are concluded by himself, but he needs the prior approval of his legal
representative and sometimes, when expressly requested by the law, the authorization of the
judge. Exception: The minor (14-18) does not need the approval for concluding ordinary and
unimportant juridical acts. In addition, they are allowed to conclude without any approval
conservation and administration juridical acts.
The conservative juridical acts =acts meant to avoid the laws of a subjective white
The administration juridical acts =acts meant to ensure the normal use of the goods
belonging to the person and the increase of the value of his patrimony (ex: renting contract)
The law forbids the minors to conclude certain categories of juridical acts even if he had
obtained the approval of the legal representative or judge (ex: the donation contract)
iii. The full concrete capacity =the possibility of natural persons to exercise all his
subjective rights and assume all his obligations by concluding by himself without any
authorization to all the juridical acts allowed by the law.
Is the rule meaning is the usual situation in the field of the concrete capacity. According to
the law, the full concrete capacity is beginning when the natural person reaches the age of 18.
Exception: the marriage. The minors get full concrete capacity (16 years)
Legal person

=the collective subject of law, meaning a group of natural or legal persons which participates to
juridical relations and is the owner of rights and obligations. According to the law, the legal
person mean an entity having its own organization and its own patrimony that gives to the
natural person the possibility of achieving a certain legal goal which is the conformity with the
general interest of the society. Therefore, the main constitutive elements of any legal persons
are the following:
1. Its own organization: this refers at least to the existence of an item structure of the legal
person and its own management bodies
2. Its own patrimony: different from its patrimony of its members. The patrimony consists
of all rights and obligations having an economic monetary value that belong to the legal
person. Actually, the participation of legal person to juridical relations as a separate
subject of law which has the capacity of exercising the rights and assuming the
obligations depends on the existence of its own patrimony. Thus, as a rule, the legal
persons ladle for each obligation with its own patrimony.
3. Its own goal ha to be determined lawful and corresponding to the general interest of the
society. Actually, the good justifies the existence of the legal person; it is the object of
activity.
The classification of the legal person:
1) according to the branch of law which they belong to the legal person
legal persons of public law: the state, the local administrative units (country, town,
village, them Parliament), the bodies of the executive power (ministries, Government,
the president of Romania), the bodies of the judicial power (local council), and the
political parties
legal persons of private law: private companies, labor unions, the associations and
foundations, the religious churches and cult
2) according to their nationality:
Romanian legal persons have the main headquarters in Romania
Foreign legal persons have the main headquarters located in another country
3) According to their goal:
Legal persons having a patrimonial goal such as companies
Legal persons having a non patrimonial goal such as institutions, associations and
foundations, religious churches and cults
The setting up of legal person
According to the law, the legal persons may be set up:
a) Trough the constitutive act adopted by the Government or a decision adopted by the
local council or the council of a country. The way of setting up a legal person refers
mainly to state legal person, meaning the bodies of legislative power, the bodies of
executive powers, of juridical power, the local administrative units, the public
institutions and the companies belonging to the state
b) Trough the constitutional act concluded by the members of the legal person which must
be authorized by the competent body of the state. This way of setting up legal person
refers mainly to political parties, private companies, associations and foundations and
so on. The authorization for the set up of a legal person in this way is provided by a
juridical authority or a body of the executive power. In order to set up completely and
validly a legal person in this way, the law also request, in certain cases the
incorporation or registration of legal persons in different registers established by the

state authorities. Its a general rule, through this formality of registration or

incorporation, the legal person gets full concrete capacity.
c) By other ways provided by the law, for example the Romanian state which is declared a
legal person by law.
The legal capacity of a legal person
Abstract capacity
Concrete capacity
-Concerning the abstract capacity of the legal person, we should make a difference between
legal persons having a patrimonial goal and the legal persons having a non patrimonial goal.
Thus, the legal person with a patrimonial goal may have all the rights and obligations except
those that refer to the natural person. Nevertheless, the abstract capacity of a legal person with
a non patrimonial goal is special. They are allowed to have only the rights and obligations that
correspond to their goal. This rule is known as the principle of specialty of the abstract
capacity. According to the law, the abstract capacity of a legal person is obtained on the date of
its registration or incorporation, the abstract capacity begin on the date of the juridical act
trough which
they are validly set up. However, even before the date of incorporation or registration, the
legal person has a limited or anticipated abstract capacity starting form the date of conclusion
of the constitutive act. It means that during this period, the legal person may have the rights
and obligations that are necessary for its valid setting up. The abstract capacity of the legal
person ends on the date of ending its legal personality meaning the moment of its dissolution.
-Concerning the concrete capacity of the legal person, we should mention firstly that the
legal person, meaning the group of persons, cant have its own will different than the one of its
members. However, the legal person must participate to juridical relations by concluding just
acts, meaning acts which imply the rule and discernment. Therefore, the law has adopted the
solution to consider the will of one or several persons from the group as being the actual will of
the collective subjects of law, meaning, a legal person. This rule is known as a legal
representative of the legal person by its management bodies. Therefore, according to the law,
the legal person exercises its rights and assumes its obligations trough its management bodies.
The juridical acts concluded by the management bodies of the legal persons within the limits of
the power given to them, are acts of legal person itself. These rules are the general rules
concerning the legal representative of the legal person. In addition, the law also provides
special rules concerning certain categories of legal persons.

Companies regulated by law no 31/1990 republished

-are most important category of professional legal persons which participates to juridical
relations of business law.
In accordance to Romanian law, this company is a group of persons set up by a company
contract and having legal personality in which the associates agree to put together some roots
in order to perform common economic activities for the purpose of obtaining and sharing the
profit. The juridical forms of companies regulated by the same law according to the provisions
of the law, these companies can only be set up in one of the following juridical force:
1) General partnership
2) Limited (sleepy) partnership

3) Company by shares
4) Limited (sleeping) partnership by shares
5) Limited liability company
It is not possible to set up a company in other juridical form than those provided by the la
31/1990 republished. The differences between these forces of companies are determined by the
extent of liability of the associates for the debts of the companies.
1) General partnership
-its obligations are secured with its patrimony and the unlimited and joint liability of all the
associates for the debts of the company
Unlimited company regarded of its contribution to the registered capital of the company
is liable for the debts of companies with its own patrimony.
Joint liability in case a company doesnt pay a debt, any part may be obliged to pay the
whole amount regardless of its amount of the contribution in the capital of the company
2) Limited (sleepy) partnership
this company has 2 categories of partners: active partners and sleepy partners
The obligations of the limited partnership are secured by the obligation of each partner and the
unlimited and joint liability of active partners. The sleeping partners are liable, only within a
limit of their contribution to the capital of the company
3) Company by shares
-its registrar is divided into shares and obligations secured by its patrimony. The shareholders
are liable only in the limit of their contribution to the registrar of their company.
4) Limited (sleeping) partnership by shares
-2 categories of partners: active and sleeping
-its a registrar capital divided into shares and its obligations are secured by its patrimony and
the unlimited joint liability of active partners. The sleeping partners are liable only with their
limited of their contribution.
5) Limited liability Company
-obligations are secured by its patrimony and the associates are liable only with the limits of
their contribution to the capital of the company.
The persons who want to set up a company are free to choose between the 5 forms provided
by the law. The juridical form chosen by the associates must be mentioned in the constitutive
act of the company. After choosing the juridical force of the company, the associates are
obliged to comply with only the provisions that regulate the set up of that company.
Classification of companies:
-in the Romanian law the most important criteria of their nature and of the importance of the
personal or material element. According to it, the companies are divided into:
a) Companies of persons
b) Companies of capitals
Companies of persons are those companies set up by a small number of associates taking
into account the mutual trust between the partners and the personal qualities (intuitum
personale) the personal element is more important than the material one. The general and
limited partnerships are companies of persons.
Companies of capitals are those companies that are set up by a great number of associates
taking into account only the actual contribution of the associates to the capital of the company
the personal qualities of the associates are not important. The company by shares and the
limited partnership by shares are companies by capital.

The limited liability company cannot be concluded in one of these two categories. Like the
companies of persons, the setting up of the limited liability company is based on trust and
personal qualities of the associates. However, the liability of the associates is limited by their
contribution to the capital of the company as for the companies of capitals.
The criterion of the structure of the registered capital
-the companies may be divided into:
1) Companies in which the registered capital is divided into part of interest such as the general
partnership, limited partnership and limited company. According to the provisions of the
law, the part of interest of the limited liability company is known as the social parts.
2) Companies in which the registered capital is divided into company by shares and limited
partnership by shares.
3) Number of associates the companies may be divided into:
companies with sole associates (ex: the limited liability company)
companies with 2 or more associates (ex: all the others)
The Romanian law recognizes the company with sole associates but only in the juridical
form of limited liability with sole associates. Sole associate may be natural or legal persons.
A natural or legal person can be the sole associate of a single limited liability company. A
limited liability company with sole associates is not allowed to be the sole associate of another
limited liability company with sole associates. The sole associate exercises the power of the
general meeting that exists in the companies with 2 or more associates.
The advantages and disadvantages of companies of persons
i) Advantages
(1) The contribution of the associates to the setting up of the company may be in
money, in kind, in receivable, and in industry
(2) The law does not require a main amount for the registered capital in order to set
up a company
(3) The control of the company operations is performed by the partners because it is
not compulsory to point internal auditors
ii) Disadvantages
(1) The liability of the associates in joined and unlimited
(2) The parts of interest are not negotiable and they cannot be transmitted freely
(3) The third parties (persons outside the company) are not allowed to become
partners unless provided other in the constitutive act oh company.
The advantages and disadvantages of companies of capital
i) Advantages
(1) The liability is limited to their contribution to the registered capital
(2) The shares are negotiable and can be transmitted freely
ii) Disadvantages
(1) The law requires the minimum amount for the registered capital of the company
naming 90.000 lei or 25.000
The advantages and disadvantages of a limited liability company
i) Advantages
(1) The associates are reliable only within the limits of their contribution
(2) The control of the company operations is usually performed by the associates
its not compulsory to appoint internal auditors (more than 15 associates which
are obliged to appoint to act at least 1 auditor)

(3) Third parties are allowed to become associates of the company by contributing
to its registered capital
ii) Disadvantages
(1) The social parts may be transmitted under restricted conditions
(2) The contribution to setting up the company may be in money or in kind
(3) The contract in receivable in industry is not allowed
The content of the juridical relations
-includes the subjective rights and the obligations of the parties. The party of the juridical
relation who is the owner of subjective rights is called the active subject. The party who
assumes obligations in called the passive subject. Within a content of the juridical relations, the
subjective rights and the obligations are independent. The active party corresponds to the right
of the active parties.
The subjective right =a juridical possibility or prerogative recognized by law to a
natural or legal person as an active subject to act like a certain behavior or to impose to other
persons as the passive subjects, a corresponding behavior meaning to give, to do or not to do
something.
Classification of the subjective rights:
1) Taking into account their opposability:
a) Absolute rights
b) Relative rights
Absolute rights: according to its owner has the possibility to exercise by himself and all the
other persons have the general an negative obligation not to do anything that may impede the
owner to exercise his right (the absolute right is opposable to all persons).
The specific feature of the absolute rights:
(1) The juridical relations that contains an absolute right is established between its
owner as a determined active subject and all the other persons as undetermined
passive subjects
(2) The undetermined passive subjects, always have the same obligation (not to do
anything that could damage the exercise of the right by its owner)
(3) The absolute rights are opposable to all persons except for the owner because
everyone is obliged to observe prerogatives held by the owner for such rights.
Relative right is the subjective right according to which its owner as the active subject or
the owner has the possibility to ask the passive subject or the debtor to give, to do or not to do
something.
The specific features are:
1. both the active and the passive subjects are determined from the beginning of
the juridical relation
2. the passive subject has the obligation to give, to do or not to do something.
Therefore, the content of the obligation of the passive subject is not always the
same. This obligation may be either an action or inaction. The relative right is
opposable only to a determined person which is the debtor.
2) according to their content:

i) Patrimonial =the subjective right that has an economic content or, in other words it
might be evaluated in money. The patrimonial rights together with their correlated
obligations compose the patrimony of the natural or legal person
ii) Non-patrimonial =the subjective right that has no economic content and it is related
to the individual, to the human being. Ex: the right to have a name
All non patrimonial rights are absolute rights opposable to everybody.
On the other hand, patrimonial rights may be classified as:
(1) Real rights
(2) Debt rights
Real rights = the subjective right which is exercised directly toward a thing. (its owner may
exercise directly the prerogatives of his right towards a thing without the intervention of
another person)
Debt right =the subjective right according to which the active subject or creditor may ask the
passive subject or debtor for an action or inaction namely to do or not to do something. The
debt right is always exercised with the intervention of another person.
Differences between the debt rights and the debt rights
1) In case of real rights, only the active subject is determined while in case of the debt rights,
both subjects are determined.
2) In case of the real rights, the content of the obligation is always not to do anything that may
impede the exercise of the right. In case of the debt rights, the debt of the corresponding
obligation may be to give, to do or not to do something. Concerning the negative obligation
not to do something that corresponds to a debt right, its content is different from one
juridical relation to another meaning not to do something that the debtor was allowed to do
in the absence of obligations. The debtor by his own will reframes from an action which is
not forbidden by law.
3) Real rights are limited in number and they are expressly provided to the law. The debt
rights are unlimited in number. The owner of the debt right needs the action or inaction of
the other person in order to exercise that right
4) Real rights are absolute rights, debt rights are relative rights.
Further more real rights may be divided into:
a) Principle real rights
b) Accessory real rights
Principle real rights have an independent existence. They are limited in Romania and
expressly provided by the civil code and other normative acts.
Accessory real rights cannot exist by themselves. Their existence depends on the existence
of another debt right that they secure. The most important accessory real acts are real securities
meaning mainly the mortgage, either movable or immovable. Therefore, according to art.2343
from the Civil Code, the mortgage is a real right having as object movable or immovable goods
which are delivered as security for the fulfillment of the obligation.
The corresponding of the active subject:
Obligation =the duty imposed upon a passive subject to have a certain behavior which
corresponds to the requirement of the active subject.
The behavior of the passive subject may consist in giving, doing or not doing something.
As consequence the obligation may be divided into:

i) The obligation to give to constitute other transfer a real right

ii) The obligation to do to perform an action on behalf of the active party a positive
action of every nature such as the delivery of other goods or the performance of
other services
iii) The obligation not to do the duty of the passive to reframe from any action that
may damage the exercise of an absolute right or to reframe from something that he
would be in title to do in the absence of the obligation. Ex: the promise to sell a
good to a person at an establish day, obliges the party who has made the promises
not to sell the good to another person until that particular deadline.
The object of the juridical relation
-is composed by the conduct of the parties established trough that juridical relation, mainly the
action or the inaction that the active subject has the right to perform.
Generally, the conduct of the parties (actions or inactions) is related to goods.
Therefore, the goods must be considered as derived objects of the juridical relation.
Nevertheless, the goods cannot be conceived as the object of the juridical relation unless they
are attached to certain rights or obligations because juridical relations are always established
between persons.
The goods
-according to the law, the goods are tangible or intangible goods that may constitute the object
of patrimony right
Classification of goods:
1) Taking into consideration the nature and the qualification of the law the goods are
a) Immovable
b) Movable
Immovable goods according to the law, there are 3 categories of immovable goods:
Immovable goods by their nature: the things that cannot be transported either by
their own energy, or by a foreign energy meaning the land and anything that is built
or incorporated on the ground or underground such as buildings, trees, rivers. It
should be mentioned that all the parts of a building such as windows or doors are
considered immovable goods since they are permanently incorporated in the
building.
Immovable goods by their object they apply to: namely the real rights over
immovable goods
Immovable goods by destination: the parts or matter which are temporary separated
from an immovable thing if they are designated to be used again in relation with
another immovable good
Movable goods
i) according to the law there are 3 categories of movable goods:
movable goods by their nature: those goods which can be transported from one
place to another either those that are moving by themselves (animals) or those
that can be moved by a foreign force (chair, table)
movable goods as provided by the law: all patrimonial rights are movable over
movable or immovable goods except the real rights over immovable goods

movable goods by anticipation: there are included immovable goods by their

nature which are considered by the parties of a contract as movable goods for
anticipation (because it will become movable soon). Ex: a fruit on a harvest.
ii) following the regime of their legal circulation
goods ON the civil circuit: are those that may be the object of a contract (those
that may be sold or bought for juridical acts). In this respect, all the goods are in
the civil circuit if the law does not expressly forbid their free circulation
goods OF the civil circuit: those goods that cannot be the object of the civil
juridical acts meaning those that cannot be sold and bought freely. Within this
category, there are included goods belonging to the public property of the state
and the administrative territory units
iii) according to the way they are determine or individualized:
individual undetermined goods: those that are individualized by specific
elements (ex: a car, a house)
generally determined goods: those that are individualized by common qualities
or features corresponding to a class or category of goods they belong to.
Therefore, these goods belong to a larger class or category of goods and their
specific individualization can be made by number, size, weight (ex: milk, fruits)
iv) as far as the use of the goods implies or not their consumption, the goods are:
consumable goods: those movable goods whos normal utilization implies the
consumption of their substance or their alienations (ex: fruits, money)
no consumable goods: those that may be used repetitively without consuming
their substance or alienating them (ex: a house, a book)
v) taking into account the possibility to replace him in the performance of the
obligation, the goods may be:
fungible goods: those that are considered identical for a juridical point of view.
As a consequence, they may be replaced in a performance of an obligation.
According to the law the general determined goods are fungible.
No fungible: those that have an individuality which does not allow their
replacement in the performance of an obligation.
vi) according to their possibility to produce other goods called fruits:
producing goods: those goods that are periodically produce other goods (fruits)
without consuming themselves
non-producing goods: those that are not able to produce other goods without
consuming their substance. In this respect, for the juridical point of view, as far
as the goods produced by the other goods are concerned, we should make the
difference between fruit and product. Thus the fruits are produced by other
goods are concerned, we should make the difference between fruit and product.
Thus, the goods are produced by other goods without consuming their substance
(ex: apples, chairs produced by tree). The products are the objects which are the
result of the material consumption of other goods (wood produced by a tree)
The fruit may be classified as:
1. natural fruit: goods that are produced without human intervention (ex: grass, leaves,
trees)
2. industrial fruit: goods that are the result of human activity

3. civil fruit: the sums of money resulting from the use of goods by another person based
in a juridical act (ex: rent interest)
vii) taking into account their perception:
tangible goods: those that have a material existence and may be perceived by
the individual using human senses
intangible goods: those that have an abstract existence (ex: rights, actions in
justice)
The source of juridical relations
The juridical relations may have as source human actions or events, meaning juridical acts
lato sensu
Juridical facts lato sensu =human actions of natural events to which the law connects
the creation of the modification of juridical relations. The juridical facts lato sensu contains
the following 2 categories:
1) juridical facts lato sensu which are natural events that do not depend on human
actions as well as human actions that are committed without the intention to produce
juridical effects (natural events & human actions person commits a crime killing).
Beside the punishment, there are also juridical relations of private law which are
created by this crime such as the person in question must be for instance pay to the
children of the victim if only a monthly sum in order to compensate their lost
2) juridical acts which are human actions performed with the intention to produce
juridical effects (human actions are intended to create juridical relations because
always the parties intend to conclude them and therefore juridical relations) Ex: death
of a person creates juridical relations to that patrimony of that person (that patrimony
should be transferred to another person)
Juridical act =an expression of one or more persons made with the intention to create,
modify or end a juridical relation. According to the number of wills expressed in the act, the
juridical relation may be:
1) Unilateral juridical acts involves the expression of a single person. Ex: the offer to
conclude the contract (because it is expressed by only one person)
2) Bilateral juridical acts is an agreement between 2 or more persons with different
interests. A bilateral juridical act is also known as a contract. Ex: a sale-purchase
contract (because it is the expression of 2 persons)
It should be mentioned that in accordance to the provision of the law, the contracts
are the most important juridical relations.
Classification of contracts:
1) Based on daily effects:
a. Unilateral contracts: those contracts in which only one contract in party assume
obligations towards the other parts. Ex: in donation contract, one of the parties
assumes the obligation to transfer to the other the property of a thing while the
other party has no juridical obligation. Unilateral contracts the results of one
will
b. Bilateral contracts: those in which both parties have mutual obligations. Each of
them is at the same time debtor and creditor of the other. Ex: a sale-purchase
contract is a bilateral contract (both contractors have mutual obligations)

2) According to the interest of the party:

a. Onerous title: a contract in which each party promises an economic benefit to
the other meaning each party receives a promises having economic value the
sale-purchase contract (each party obtain an economic benefit)
b. Gracious title: a contract in which only one party promises to the other
economic benefit without expecting in exchange any promise(donation contract)
Further more, the contract made with onerous title may be divide into:
i. Commutative contract: a contract in which both parties know from the
very moment of concluding the contract the existence and the extent of
every mutual obligation. Ex: sale-purchase contract (every party
knows their own obligations)
ii. Aleatory contract: a contract in which the performance of the
obligations assumed by the parties depends on certain events. Actually,
an aleatory contract is concluded without knowing the extent of their
mutual obligations. Ex: the insurance contract.
3) According to the legal formalities imposed by the law for their very conclusion:
a. Consensual contract: is concluded by the simple agreement of the parties and
the law does not request any additional former condition for its validity. In the
Romanian system of law, most contracts are consensual. Ex: sale-purchase
contract is a movable good is usually a consensual contract may be formal
sometimes.
b. Formal contract: is validly concluded only if they are observed some additional
former conditions other than the simple consent of the parties. Generally, the
form required by the law for concluding such contracts is a written document.
For ex: the law requires a written form and even an authentic form for
concluding contracts such as donation, sale-purchase contract of immovable
goods, mortgage.
Authentic form =a written document drawn up by a notary
c. Real contract: is concluded only after the delivery of a thing which is the object
of a contract for one party to the other. Therefore, in this case, the delivery of
the thing is requested in order to conclude the real contract in addition to the
agreement of the parties. (In order to conclude this type of contract, the law
requires the fulfillment of the 2 conditions after that, we can consider that the
contract is concluded) Ex: the loan contract, the deposit contract
4) Based on the way contracts are performed:
a. Contracts with instant execution: involves a single performance (ex: purchase
contract, the seller delivers once the product and the buyer delivers once the
money)
b. Contracts with successive execution: involves multiple performances at the
same kind of obligation over and over again until the expiry of the contract
duration (the life insurance contract, the rent contract, and so on). In the case of
rent contract, the tenant has to pay monthly, yearly, a sum.

The validity conditions of a juridical act are those elements that must compose the
structure of the juridical act in order to be validly concluded. According to the provisions of the
law, the general validly conditions of the parties to conclude juridical acts are:
The capacity of the parties to conclude juridical acts
The consent
The object
The consideration
The capacity to conclude juridical acts =the aptitude of the subject of the law to become
an owner of rights and obligations by concluding juridical acts. The capacity of concluding
juridical acts is a part of the legal capacity of natural or legal persons because it includes within
its structure a part of the abstract capacity as well as the concrete capacity of the subjects of
law.
According to the law, in the Romanian legal system, the rule or the principle is the capacity
to conclude juridical acts. Only by exception, under certain circumstances, expressly provided
by law, certain subjects of law are not allowed to conclude certain categories of juridical acts.
Thus, for ex: the natural persons under juridical interdiction do not have the capacity to
conclude any juridical act. Another ex: legal person with non patrimonial goal which do not
have the capacity to conclude certain categories of juridical acts, meaning those that do not
correspond to their goal. The non observant of the legal provisions that regulate the capacity to
conclude juridical acts is sanctioned with the nullity of the juridical act in question.
The consent =that externalized decision or intent to conclude juridical act. In order to be
valid, the consent must fulfill several conditions:
1. to be expressed by person who is mentally capable to conclude the act. It means that the
parties must have judgment or discernment, must be able to understand the nature of the
act and its consequences. Generally, a person who has full concrete capacity is
presumed by law to have judgment or discernment. These legal presumptions may be
overruled by proving the temporary lack of judgment of the person in question as for
example in case of temporary mental illness or influence of drugs
2. to be expressed by a person who has the intention to produce legal intends. This
condition is not fulfilled when for ex: the person is always kidding, he has no intention
to conclude the contract or an informal bet.
3. to be externalized =the consent must resolve from the words or even the action of the
parties. In this respect, several problems arise in case of silent, meaning if the silence
has any juridical value. Generally, in our law, the consent cannot be implied and
therefore, the case of silence it is considered that there is no consent at all. The inaction
of the parties or the silence is not perceived as an expression of the inaction to conclude
that contract
Exceptions:
the law expressly provides in some cases that the silence for one of the parties
must be considered as consent. For ex: according to the law, the rent contract
continues to be enforced if after the duration of rent contract had expired, the
party silently continue to perform the contract
the initial agreement of the parties may constitute in some cases the basis for
regarding consent. It means that the parties by their will give a particular
juridical signification for silence.

To be genuine, this condition drives from the fact that the juridical act has an intentional
a free nature. Therefore, the consent to conduct a juridical act must be intentional and free or
genuine because otherwise, there is no juridical act between the parties. The lack of genuine
consent may arise from the following vices of consent:
-mistake or error
-fraud
-duress
-injury
The mistake or error is a false representation of the reality at the conclusion of a
juridical act. The mistake or error is induced by the person itself and not by the other party or
anyone else. According to its consequence, the error may be:
1. essential error: which leads to the relative nullity of the act because there is a
vice of consent may refer to the following issues:
a. the nature of the juridical act: error in negotiation only about the type
of contract, for ex: when one of the parties believes that it is a donation
contract and the other part believes it is a sale contract
b. the identity of the object of the juridical act (error in corporal) Ex: when
one of the party believes he sells a truck and the other party thinks the
contract refers to a plane
c. the quality of the object of the juridical act (error in substantial) Ex: the
buyer believes that the object of the contract is an apartment where the
walls are made of bricks and actually the walls are made of wood.
d. The identities and qualities of the contract in parties (error in personal),
this type of error applies only in cases of contracts concluded into
intuitum personale, meaning on the ground of one of the parties qualities
as for example the donation contract or a contract concluded with a
single and specific performance.
2. Unessential error: which refers to an unimportant element of the contract,
generally, this type of error does not produce any juridical consequences.
The fraud is a misrepresentation of the reality made with the intention to deceive the
other party and to determine him to conclude a juridical act. Therefore, the fraud is only the
result of another persons action, the other party of the contract or a third party. Thus, the law
provides that the fraud is a vice of consent even trough it is the result of the action of the third
party but the contract in party is aware of this action. According to the law, the fraud must be
always proved. The fraud, as a vice of consent leads to relative nullity of the juridical act. The
fraud has few elements as follows:
-the intentional element the will to deceive the other party
-the material element meaning the act performed in order to leave other party into
mistake. Ex: lie about hidden effects of the goods of falling to inform the other party about it.
The duress as a vice of consent is a state of mind induced by threats in order to
determine a person to conclude the contract. The duress leads to the relative nullity pf the
juridical act. The threats may be moral, when they refer to the physical integrity of the person
or physical when they refer to the physical integrity of the person or to his property.
Furthermore, the threats may be exercised not only against the contract in party but also against
a relative, a close friend or against the goods belonging to the contact in party. According to the

law, the duress as the vice of consent may arise from the wrongful activity of a third party. The
duress has a few elements as follows:
-the intentional elements =the intention to force the contact in party to conclude a
juridical act in a state of mind characterized by lack of free will.
-the material element =the means used in order to threat the contract in party. The
duress as a vice of consent must be considered as case to case, it means that, in each case, it is
necessary to determine whether the acts or threats and not the free will of the party have
induced the consent to conclude the contract.
The injury as a vice of consent is the disproportion between the mutual promises of the
party within a contract. Actually, in case of injury one of the parties takes advantage of the lack
of experience, the absence of knowledge or a specific state of the other party and provides the
contract in its benefit a promise even more valuable than its own promise. In addition,
according to the law, there is an injury if the minor assumes an excessive obligation taking into
account its patrimony, the advantages deriving from the contract or the circumstances under
which the contract had been concluded. The injury as a vice of consent may lead to the
following consequences:
-the relative nullity of the contract if the promise of the injured party is reduce with
more than half of its value of the moment of the conclusion of the contract.
-the reduction of the obligations assumed by the injured party, however, it should be
mentioned that the aleatory contracts cannot be cancelled or annulated of the ground of injury.
The object =to take exception to something, to declare or express the belief that
something is improper. The thing sought to be accomplished or attained, aim, purpose,
intention.
The consideration =something of value given by both parties to a contract that induces
them to enter into the agreement to exchange mutual performances.
Consideration is an essential element for the creation of a contract. It may consist of a
promise to perform a desire act that one is legally entitled to do. In a bilateral contract an
agreement by which both parties exchange mutual promises each promise is regarded as
sufficient consideration for the other. In a unilateral contract, a promise in exchange for the
others performance, the performance is consideration for the promise, while the promise is the
consideration for the performance. Consideration must have a value that can be objectively
determined. A promise, for example, to make a gift or a promise of love or affection is not
enforceable because the subjective nature of the promise.