Civil Transactions Law (9): Contractual Effects

As a general rule, a contract produces effects between the contracting parties and their universal successors. However, if transferred to a particular successor, and the contract involves personal obligations tied to a specific object, those obligations transfer with the object if they are essential and the successor is aware of them.

If exceptional and unforeseen circumstances make the obligation excessively burdensome for the debtor and may lead to serious loss, the other party may be invited to renegotiate. If no agreement is reached, the court may adjust the obligation to a reasonable level based on the debtor’s capacity.

The Civil Transactions Law allows a party to stipulate a benefit for a third party if the stipulating party has an interest in the obligation, whether personal, material, or moral. Only the stipulating party may revoke, change the beneficiary, or assign the benefit to himself unless the beneficiary or the promisor has been notified of acceptance or if revocation harms the promisor. The beneficiary may also be a future or unidentified person.

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