To what extent is the ‘Promessa de rato’ still relevant?

Abstract

While the principle of relativity of contracts provides that contracts are only binding between the contracting parties, Article 999(2) of the Civil Code provides that one can bind himself to the performance of an act by a third party. This principle of law is commonly known as the “promessa de rato”. The principle found wide application in the transfer of co-owned immovable property, in which one or more of the co-owners were unknown or untraceable. However, it might no longer seem as an attractive option in such situations following the introduction of Article 495A in the Civil Code and Article 45B in The Notarial Profession and Notarial Archives Act. Nevertheless, it is still applied in other jurisdictions and finds application in other areas such as those of patronage between a parent company and its subsidiaries as well as business/economic transactions in which a promise is made to make the transaction look more lucrative. In France the principle is known as the “porte-fort” and “la promessa del fatto del terzo” in Italy. In 2016 following extensive changes to the French Civil Code, the French adopted text to reflect emerging doctrine and jurisprudence. The Germans too recognise the principle through what is known as the “Garantieverträge” and its applicability can also be observed in common law jurisdictions, such as England, in what are known as “contracts of indemnity”. The doctrine and jurisprudence of the latter jurisdictions elaborate on the nature and form of the principle, identifying that the object of the agreement is “the promise made” and the obligations it creates are two, to “do” and to “give”. In this context, it is not a matter of the extent to which the principle is still relevant but how it can be made more relevant today; changes to local legislation are proposed to enable this.