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COMMERCIAL CODE ART 801-900

Article 801

(Reservations)

1. A host is obliged to accept lodging reservations presented to him, unless he has no available accommodation on the proposed dates.

2. The acceptance or maintenance of a reservation can be conditional on the posting of a bail of an amount no higher than that due for the stay.

3. The guest is obliged to cancel the reservation as soon as he has knowledge of impossibility of using the accommodation, under penalty of liability for damage caused.

4. If no bail was posted, the reservation expires if, up to the agreed time, the guest neither presents himself at the hostelry nor communicates a temporary impediment.

5. If the host has no available accommodation in accordance with the reservation, he is obliged to ensure lodging in equivalent conditions of location and quality, notwithstanding the right of the guest to be compensated in accordance with general rules.

Article 802

(Duration of contract)

1. In the absence of stipulation, a lodging contract is considered as agreed for periods of 24 hours, which will always finish each day at 12h00, with the exception of the day of arrival.

2. If a guest does not vacate the premises until 12h00 on the departure day, or up to an agreed time, the contract shall be deemed to be renewed for one more day.

3. The host can, however, refuse renewal of the contract on the basis of previous reservations.

CHAPTER II

RIGHTS AND OBLIGATIONS OF PARTIES

Article 803

(Obligations of guest)

A guest has the following obligations, among others:

a) to identify himself to the host;

b) to post bail, if asked for it, of an amount not higher than that due for the duration of the stay;

c) to pay the price of the accommodation and of other services he may have enjoyed that are not included in such price;

d) not to make use of the accommodation for a purpose different than the agreed one;

e) not to use the accommodation in a way that is contrary to good mores;

f) not to sell any goods inside the hostelry and its annexes, if not authorized to do so;

g) not to consume food or drinks that are not supplied in the hostelry, unless the accommodation is provided with a place for cooking;

h) not to introduce furniture into the accommodation without authorization, or to make any repairs or changes to the accommodation;

i) not to accommodate more persons than the capacity of the accommodation, or than declared in the respective lodging contract;

j) not to introduce dangerous, explosive, inflammable, toxic, unhealthy, or bad smelling substances into the accommodation;

l) to return the accommodation, free and vacant of persons and goods, at the end of the contract.

Article 804

(Rights of guest)

A guest has the right to use:

a) the common facilities of the hostelry and its annexes without any additional price;

b) other services supplied by the host, not included in the performance of lodging, against the payment of the respective price.

Article 805

(Payment of price)

In the lack of an agreement or usage to the contrary, the price of lodging and any other debits related to the stay shall be paid on a daily basis, against presentation of a bill.

Article 806

(Responsibility for acts of companions)

A guest is responsible towards the host for damage negligently caused by his companions.

Article 807

(Obligations of host)

A host has the following obligations, among others:

a) to supply to the guest premises with the amenity and comfort necessary for the stay;

b) to ensure him the exclusive use and privacy of the premises;

c) to ensure him the cleanliness and tidying up of the premises;

d) not to disclose to third parties, without the consent of the guest, the identification of his premises;

e) not to give the key of the guest's premises to third parties, without his consent;

f) to promptly receive and deliver all correspondence addressed to him.

Article 808

(Entry into premises)

A host has the right to enter the premises allocated to a guest in order to clean and tidy it up, and whenever there are circumstances that, given their urgent character, so justify.

Article 809

(Responsibility for death or bodily injury)

1. A host is liable for death or bodily injuries suffered by a guest or by his companions, during the period of their stay at the hostelry and its annexes, except if they result from a cause not imputable to him.

2. If the host provides transportation between the hostelry and an arrival or departure place, the liability mentioned in the previous paragraph includes the period of transportation.

Article 810

(Liability for goods brought to hostelry)

1. A host is responsible for deterioration, destruction, or disappearance of goods that a guest brings to the hostelry.

2. The following goods are considered as brought to the hostelry:

a) goods that are in the hostelry during the period of the guest's stay;

b) goods for which the host assumes custody, outside the hostelry, during the period of the guest's stay;

c) goods for which the host has assumed custody, either inside or outside the hostelry, for a reasonable period of time, prior or subsequent to the stay of the guest.

Article 811

(Limits of liability)

1. The liability mentioned in the previous article is limited to the value of the deteriorated, destroyed, or disappeared goods, with the maximum limit of a value equivalent to the price of 100 days lodging.

2. The limits mentioned in the previous paragraph do not apply if deterioration, destruction, or disappearance of goods brought by the guest into the hostelry are due to negligence by the host or his assistants.

Article 812

(Liability for goods delivered and obligations of host)

1. The liability of a host is unlimited:

a) if goods are entrusted to his custody, inside the lodge, during the guest's stay;

b) if he has refused to provide custody of goods that he is obliged to accept in safekeeping.

2. A host is obliged to accept custody of documents, money, and valuable objects brought by the guest; he can refuse to provide for their custody only in case of dangerous objects or objects that, considering the dimension and the conditions of management of the lodge, have an excessive value or an obstructive nature.

3. A host can examine goods that are entrusted to his custody and demand that they be contained in a closed or sealed pack.

4. If the guest's accommodation is equipped with a safe-deposit box, goods deposited there are not considered as entrusted to the custody of the host.

Article 813

(Exclusion of liability)

A host is not responsible if deterioration, destruction, or disappearance is due to:

a) the guest, his companions, persons at his service, or his visitors;

b) force majeure;

c) the nature of the good itself.

Article 814

(Obligation to denounce damage)

With the exception of the cases mentioned in paragraph 2 of article 811, a guest cannot take advantage of the provisions of articles 810 and 812 if, after noticing deterioration, destruction, or disappearance of goods, he denounces such fact to the host with unjustified delay.

Article 815

(Nullity)

Clauses intended to exclude or limit the liability of the host besides the cases referred to in the law, shall be void.

Article 816

(Limits of application)

The provisions of the previous articles do not apply to vehicles or to goods left inside them, or to animals.

Article 817

(Return of premises)

1. At the end of the contract, the guest is obliged to return the premises free and vacant of persons and goods.

2. If the guest does not return the accommodation in accordance with the previous paragraph, the host can, accompanied by an agent of the public authority, enter the premises occupied by the guest and vacate them of persons and goods.

3. The host is not responsible for providing custody to goods removed from the guest's accommodation in accordance with the previous paragraph.

Article 818

(Right of retention)

For the credit of lodging, a host enjoys a right of retention over goods that the guest has brought to the hostelry or its annexes.

Article 819

(Responsibility for providing custody of goods in other places)

The provisions of this Chapter concerning the liability of the host for providing custody of a guest's belongings also apply to all cases in which there is a practical impossibility for a client to provide custody for his belongings or if, due to the nature of the service, he cannot have them with him or if, in accordance with usage, it is common practice to entrust them to the assistants of the entrepreneur.

TITLE XIV

CURRENT ACCOUNT CONTRACT

Article 820

(Concept)

1. A current account contract is that by which the parties undertake to make debit and credit entries of any amounts deriving from reciprocal deliveries, considering these not collectable and not disposable until the closure of the account.

2. The balance of the account shall be payable within an agreed time limit.

3. If, by the end of the agreed time limit, payment has not been demanded, the contract shall be deemed to be renewed for an undetermined period of time, and the balance shall be regarded as the first delivery of the new account.

Article 821

(Credits excluded from current account)

1. Credits not subject to compensation are excluded from a current account.

2. If a contract is agreed between commercial entrepreneurs, credits outside the scope of the respective enterprises shall be deemed to be excluded.

Article 822

(Interest)

Deliveries bear interest at the rate stated in the contract or, in the absence of stipulation, in accordance with usage or, in lack of either, at the default rate.

Article 823

(Expenses and right to commission)

1. The existence of a current account does not exclude the right to commissions and to reimbursement of expenses for operations arising from deliveries.

2. Unless there is an agreement to the contrary, the rights mentioned in the previous paragraph shall be entered in the account.

Article 824

(Effect of entry into account)

1. The entry of a credit in a current account does not exclude the possibility to invoke defenses, or the exercise of claims regarding the act from which the credit arises.

2. If such act is declared void, is voided or rescinded, the respective entry shall be removed from the account.

Article 825

(Effect of guarantee of credits entered)

1. If a credit entered in an account is secured by a real or personal guarantee, the party has the right to make use of such guarantee, for the balance existing in his favor at the closing of the account, up to the limit of the guaranteed credit.

2. The previous paragraph applies to credits in relation to which there is a joint and several co-debtor.

Article 826

(Credits against third parties)

1. Unless otherwise arising from the will of the parties, the inclusion in the account of a credit against a third party is deemed to be made with the clause 'subject to collection'.

2. If the credit is not paid, the counterpart has, alternatively, the right to take action against the third party, or to eliminate the entry from the account, reinstating accordingly any delivery made.

3. The entry can be eliminated even after the counterpart has unsuccessfully taken action against the debtor.

Article 827

(Judicial seizure [penhora] of balance)

1. If a creditor of one of the parties has judicially seized any balance of an account related to his debtor, the other party cannot prejudice the creditor by means of new deliveries.

2. For the purpose of the previous paragraph, deliveries made pursuant to rights that have arisen before the judicial seizure are not considered as new deliveries.

3. The party against whom judicial seizure is made shall give notice of it to the other party; either of them can rescind the contract.

Article 828

(Closure of current account)

Closure of a current account, with liquidation of the balance, shall be made within the time limit set in the contract, or by usage, and, in the lack of both, at the end of each semester, counted from the beginning of the application of the contract.

Article 829

(Approval of account)

1. A statement of account sent by one of the contracting parties to the other shall be deemed approved if it is not contested within the usual or agreed time limits, or by the end of a time limit resulting from the circumstances.

2. The approval of the account does not exclude the right to contest it on the basis of writing or calculation errors, omissions, or duplications.

3. Proceedings shall be initiated, under penalty of lapse, within six months from the date of receipt of a statement of account of the closure liquidation, which must be sent by means of a registered letter with notice of receipt.

Article 830

(Termination of contract)

1. If the contract is agreed for an undetermined period of time, any of the parties can denounce it for any closure of the account, by giving at least 10 days advance notice.

2. In case of interdiction, inability, bankruptcy, or death of one of the parties, any of them or their heirs has the right to revoke the contract.

3. The extinction of the contract bars the inclusion of new entries in the account, but payment can only be demanded at the end of the time limit stated in article 828.

TITLE XV

SECURITIES LENDING CONTRACT [REPORTE]

Article 831

(Concept)

Securities lending is a contract by which the lender transfers to the borrower the ownership of negotiable instruments of a certain kind, for a specified price, and the borrower undertakes the obligation to transfer to the lender, at the end of the agreed time limit, the ownership of an equal quantity of instruments of the same type, against reimbursement of the price, which can be increased or decreased by an agreed amount.

Article 832

(Conclusion of the contract)

A contract for lending of securities is concluded by the delivery of the instruments.

Article 833

(Accessory rights and duties inherent to instruments)

Accessory rights and obligations inherent to instruments that are the object of lending belong to the lender, in accordance with the following articles.

Article 834

(Interest, dividends and right to vote)

1. Interest and dividends maturing after the conclusion of the contract and before the agreed time limit, if collected by the borrower, shall be credited to the lender.

2. Unless there is an agreement to the contrary, voting rights belong to the borrower.

Article 835

(Right of option)

1. A right of option attached to instruments that are the object of lending belongs to the lender.

2. The borrower, provided that the lender informs him in a timely manner, must take the necessary steps to enable the lender to exercise his right of option, or exercise it in the name of the lender, if the latter has provided him with the necessary funds.

3. In the absence of instructions from the lender, the borrower shall sell the rights of option, for the account of the lender, through a bank.

Article 836

(Lotteries for prizes or refund)

If the instruments that are the object of lending are subject to lotteries for prizes or refund, the rights and duties deriving from lotteries belong to the lender, provided that the contract was concluded before the date of the beginning of the lottery.

Article 837

(Payments of instruments not liberated)

A lender must deliver to the borrower, up to two days before maturity, any amounts necessary to effect payments relating to instruments not liberated.

Article 838

(Extension of time limit and renewal of contract)

1. The parties can extend the time limit of lending by one or more successive periods.

2. Once the period of lending has expired, if the parties liquidate the differences, to make separate payments of it, and renew the lending regarding different amounts or types of instruments or for a different price, such renewal shall be considered a new contract.

Article 839

(Non-performance)

In case of non-performance by one of the parties, the counterpart has a right to effect a compensatory sale or a purchase for substitution, depending on the case; articles 576 and 577 shall apply, with the necessary adaptations.

TITLE XVI

BANKING CONTRACTS

CHAPTER I

BANK DEPOSIT

Article 840

(Concept)

Bank deposit is a contract by which a person hands to a bank an amount of money or movable valuables, for the latter to provide custody and return them when requested to do so.

Article 841

(Deposit of money)

The effects of the deposit of an amount of money in a bank are the acquisition of ownership of the respective amount by the bank, and the obligation of the bank to return it in currency of the same kind, in accordance with the agreement by the parties, or with usage.

Article 842

(Modalities)

1. The deposit of sums of money in a bank can be made under one of the following modalities:

a) order deposit;

b) advance notice deposit;

c) time deposit;

d) deposit created under special rules.

2. An order deposit can be demanded at any time.

3. An advance notice deposit can only be demanded after the depositary has been given notice, in writing, with the advance stated in the contract.

4. A time deposit can be demanded at the end of the time limit for which it was created; however, under agreed conditions, banks can grant early withdrawal to their depositors.

5. Deposits other than those mentioned in subparagraphs a) to c) of paragraph 1 are considered as created under special rules.

Article 843

(Deposit of securities for administration)

1. A bank that accepts a deposit of securities for administration shall provide custody for such securities, collect the respective interest or dividends, verify lotteries for prizes or reimbursement of capital, make collections for the account of the depositor, and generally provide protection for rights inherent to such securities.

2. If it becomes necessary to pay any taxes or to exercise an option right regarding the securities deposited, the bank shall timely request instructions from the depositor, and shall carry them out, provided that it has received the funds necessary for such purpose; in the absence of instructions, the bank shall act as a manager of affairs of another [gestor de negócios].

3. A bank is entitled to compensation, calculated in accordance with stipulations made, or with usage, as well as to reimbursement for expenses advanced.

4. Any stipulation according to which the bank is exonerated from using normal diligence in administering the securities shall be void.

5. The deposit of securities does not imply a transfer of their ownership to the bank, nor is the bank allowed to use such securities for purposes different from those arising from the deposit contract.

CHAPTER II

RENTAL OF SAFE-DEPOSIT BOXES

Article 844

(Liability of bank)

In rental of safe-deposit boxes, a bank is liable towards the renter for the fitness and custody of the premises, and for the integrity of the safe, except in case of force majeure.

Article 845

(Obligations of renter)

A renter is obliged namely to:

a) pay rent for the safe;

b) not introduce into the safe substances that are illegal or that may in any way damage the safe or pose a danger to the premises or to third parties;

c) return the keys at the end of the contract;

d) immediately inform the bank in case of loss of the keys to the safe.

Article 846

(Use of safe by third parties)

1. A renter cannot grant use of the safe to a third party without the permission of the bank.

2. However, the renter can allow access to the safe by a third party, by means of a written authorization.

Article 847

(Access to safe)

A bank cannot refuse access to the safe by the renter during normal business days and hours, except:

a) if it has serious grounds to doubt the identification of the renter, or the fitness of the person authorized by the renter;

b) if the renter is in delay;

c) for security reasons.

Article 848

(Opening of safe)

1. If a safe is in the name of several persons, each one is entitled to open it, unless there is an agreement to the contrary.

2. In case of death of the person or of one of the persons entitled, a bank which has received notice of it cannot permit the opening of the safe except by agreement of all those entitled and the administrator of the deceased's estate or in accordance with the determinations of the court.

Article 849

(Forcible opening of safe)

1. If the contract lapses, the bank can forcibly open the safe six months after the lapse of the contract, after giving advance notice to the renter.

2. The opening of the safe shall be done in the presence of two witnesses, one of which shall be a representative of the banking supervision authority of the Territory, and with the necessary precautions.

3. The bank shall take the measures necessary to preserve the objects taken from the safe, and can sell a part as necessary to pay the remuneration owed to the bank for rent and expenses incurred.

CHAPTER III

OPENING OF BANK CREDIT

Article 850

(Concept)

The opening of bank credit is a contract by which a bank undertakes to keep a sum of money at the disposal of the other party for a certain period of time, the latter having the obligation to pay the agreed commissions and, in accordance with the actual use of the credit, to reimburse the bank and to pay the respective interest.

Article 851

(Use of credit)

Unless otherwise agreed, the credit can be used in fractions, and payments made by the credited party replenish his right of draw, within the limits of the sum made available to him.

Article 852

(Guarantee)

1. If, for the opening of a credit, a personal or real guarantee has been provided, it is not extinguished before the expiry of the contractual time limit, as a result of the fact that the credited party ceased to be a debtor of the bank, unless there is an agreement to the contrary.

2. If the guarantee becomes insufficient, the bank can require its reinforcement.

3. If the credited party fails to reinforce the guarantee, the bank can reduce the credit in proportion to the diminished value of the guarantee, or rescind the contract.

Article 853

(Rescission)

1. Unless otherwise agreed, a bank can only rescind the contract for just cause.

2. Rescission of the contract immediately suspends use of the credit, but the bank must grant a period of no less than thirty days for restitution of the amounts used and respective accessories.

CHAPTER IV

BANK ADVANCE

Article 854

(Concept)

Bank advance is a contract by which a bank undertakes to keep available for the counterpart, for a certain period of time, a sum of money proportional to the value of a pledge, made in its favor either by the party or by a third party.

Article 855

(Disposability of goods pledged)

1. On a bank advance against a pledge of securities or merchandise, the bank cannot dispose of the goods received in pledge if it has issued a document in which they are specified.

2. An agreement to the contrary can only be evidenced in writing.

Article 856

(Insurance of goods and safekeeping expenses)

1. A bank shall arrange, for the account of the counterpart, insurance of merchandise pledged if, due to its nature, value, or location, insurance is usually appropriate.

2. In addition to compensation due, the bank has a right to be reimbursed for expenses incurred for safekeeping of the merchandise or securities, unless it has the right to dispose of them.

Article 857

(Withdrawal of merchandise or securities)

The contracting party, even during the application of the contract, can partly withdraw pledged securities or merchandise, subject to the proportional reimbursement both of the sums advanced and the other sums to which the bank is entitled in accordance with the previous article, unless the balance of the credit becomes insufficiently secured.

Article 858

(Decrease of guarantee)

1. If the value of the guarantee decreases by at least one tenth in relation to its value at the time of the conclusion of the contract, the bank can request the debtor to provide a reinforcement of the guarantee, in accordance with general rules, with the express warning that, in its absence, the pledged securities or merchandise will be sold.

2. If the debtor fails to reinforce the guarantee, the bank can resort to a judicial sale, or to an extrajudicial sale if it has been so stipulated.

3. The bank has a right to immediate repayment of the balance of the debt not satisfied out of the proceeds of the sale.

Article 859

(Pledge and guarantee of anticipation)

1. If one or more credits are guaranteed by unspecified deposits of money, merchandise, or securities or for which a bank was given a power of disposal, the bank must return only the sum or the amount of merchandise or securities that exceed the amount of the guaranteed credits.

2. The excess shall be determined taking into account the value of the merchandise or securities at the moment of maturity of the credits.

CHAPTER V

BANKING TRANSACTIONS IN CURRENT ACCOUNT

Article 860

(Disposal by client)

If a deposit, opening of credit, or other banking operation is made for a current account, the client can at any time dispose of the amounts credited to him, wholly or partly, subject to observance of any advance notice that may have been agreed.

Article 861

(Compensation between balances of various relations or accounts)

If more than one relationship or account exist between a bank and a client, even if denominated in different currencies, the balances of assets and liabilities shall be reciprocally compensated, unless there is an agreement to the contrary.

Article 862

(Current account in name of various persons)

If a current account is in the name of various persons, with the power to effect transactions, even separately, such persons shall be considered joint and several creditors or debtors of the balance of the account.

Article 863

(Operations for undetermined period of time)

If the operation regulated in a current account is for an undetermined period of time, either of the parties can denounce the contract, with the advance notice established by the parties or, in the absence of stipulation, by usage or, in the lack of both, 15 days.

Article 864

(Execution of instructions)

1. A bank is answerable according to the rules of the mandate, for the execution of the instructions received from the counterpart or from other clients.

2. If such instructions are to be executed in a place where the bank has no branch, it can entrust execution to another bank or to one of its correspondents.

Article 865

(Applicable rules)

The rules of articles 823, 826 and 829 apply to banking transactions for a current account.

CHAPTER VI

BANK DISCOUNT

Article 866

(Concept)

Discount is a contract by which a bank, after previous deduction of interest, advances to the client the amount of a non-matured credit over a third party, against the assignment of such credit to the bank, and subject to good collection.

Article 867

(Discount of bills of exchange, promissory notes and cheques)

1. If the discount is made through endorsement of a bill of exchange, a promissory note, or a cheque, the bank, in case of non-payment, in addition to the rights inherent to the instrument, has a right to restitution of the sum advanced.

2. The discount of a draw of a bill of exchange not yet accepted, or with a clause prohibiting presentation for acceptance, transfers to the bank the rights of the drawer arising from the underlying legal relation.

Article 868

(Discount of bills of exchange with documents attached)

A bank that has discounted bills of exchange accompanied by an instrument representing merchandise and other documents has privilege over the merchandise, while the said documents remain in its possession.

CHAPTER VII

FACTORING CONTRACT

SECTION I

GENERAL PROVISIONS

Article 869

(Concept)

Factoring is a contract by which one of the parties, against payment, undertakes an obligation to manage and collect credits, present or future, arising from the exercise of the enterprise of the other party, and, additionally, to anticipate payments or to undertake the risk, total or partial, of non-payment by the debtors.

Article 870

(Default rules)

The provisions of the Civil Code on assignment of credits shall apply to the factoring contract, to the extent that they do not contradict this Chapter.

Article 871

(Form)

1. A factoring contract shall always be agreed in writing, and shall cover the whole of the relations between the factor and the respective supplier.

2. Without prejudice to the following article, the assignment of credits under a factoring contract shall always be accompanied by the corresponding invoices or equivalent supporting documents, namely in electronic form, or negotiable instruments.

Article 872

(Assignment of future credits and block credits)

1. In the framework of a factoring contract, credits can be assigned in block even before the conclusion of the contracts from which they will emerge.

2. Block assignment of future credits is only allowed regarding credits on contracts to be agreed in a time framework not exceeding 24 months.

3. The block assignment of credits is fully valid and enforceable, even regarding future credits, provided that the contract indicates the elements necessary and sufficient to their automatic determination, without prejudice to the previous paragraph.

4. Assignment of future credits operates at the moment at which they emerge, without the need for a new act of transfer.

SECTION II

EXECUTION OF CONTRACT

Article 873

(General principle)

In the execution of a factoring contract, parties shall act in accordance with the rules of good faith, in order to fully achieve the contractual aim.

Article 874

(Global reach)

1. A supplier should submit for the acceptance of the factor the whole of the short-term credits arising from the exercise of his enterprise, save for any exclusions expressly stipulated.

2. The factor can only refuse assignment of credits presented by the supplier, in accordance with the previous subparagraph, in the cases mentioned in the contract, or if there is just cause.

3. The refusal shall be motivated, and communicated to the supplier within 48 hours, otherwise the respective credit is deemed as accepted by the factor.

Article 875

(Guarantee of solvency)

A supplier guarantees, within the limits of the consideration agreed, the solvency of the debtor, unless the factor renounces such guarantee, totally or partly.

Article 876

(Duty of information)

1. A supplier must inform the factor of all amendments that may later take place in the contracts underlying the assigned credits, namely returns, claims, and credit notes.

2. The factor must inform the supplier of all credit risks that may come to his knowledge.

Article 877

(Communication to debtor)

1. Unless there is an agreement to the contrary, the obligation to notify a debtor of the assignment of credits, in the framework of the factoring contract, is incumbent on the supplier.

2. The supplier is obliged to mention, in all documents certifying his credits, that the respective liquidation must be made to the factor.

Article 878

(Transfer of guarantees and other accessories, and of benefit of clause of reservation of title)

1. Subparagraph 1 of article 576 of the Civil Code shall apply to the factor.

2. Unless there is an agreement to the contrary, the factoring contract transfers to the factor the benefit of a clause of reservation of title imposed on sales made by the supplier.

SECTION III

EFFECTS REGARDING THIRD PARTIES

Article 879

(Agreement of non-assignment)

An agreement between the supplier and his debtor, in accordance with which the supplier is under an obligation not to assign his credits to a third party, can never be invoked against the factor, without prejudice to any civil liability which the supplier may incur.

Article 880

(Effect of assignment regarding third parties)

1. Whenever a factor has totally or partly paid the value of assigned credits, and the payment has a certain maturity date, such assignment can be invoked against:

a) whoever has acquired from the supplier any right over the respective credits, the acquisition of which has not become effective towards third parties before the date of payment;

b) creditors of the supplier who have judicially seized the credit after the date of payment;

c) the bankrupt estate of the supplier, if bankruptcy has occurred after the date of payment, except as provided in the following paragraph.

2. Assignment cannot be invoked against a bankrupt estate if its administrator proves that the factor knew of the state of insolvency of the supplier when he made payment, and also if such payment has been made within the year preceding the judicial decision that declared bankruptcy, but before the maturity of the credit assigned.

3. This article does not prejudice the effects of payment made to a third party, in accordance with the Civil Code, by the assigned debtor.

Article 881

(Defenses invokable by debtor)

1. A debtor can invoke against a factor all defenses that he could use against the assignor, in accordance with article 579 of the Civil Code.

2. The debtor can invoke against the factor a right of compensation existing at the moment at which the notification mentioned in subparagraph 1 of article 877 was made to him.

Article 882

(Return by debtor)

Without prejudice to his rights against the supplier, a debtor cannot claim from a factor the return of amounts already paid, on the basis of non-performance, delay, or defective performance by the supplier of the contracts from which the assigned credits emerge, except:

a) if the factor has not yet paid to the supplier the amounts at issue;

b) if the factor has made payment while aware of the non-performance, delay, or defective performance of the contract from which the assigned credits arise.

Article 883

(Bankruptcy contestation of payments made by assigned debtor)

1. Payment made by the assigned debtor to a factor is not subject to contestation in case of bankruptcy of the debtor.

2. The action for contestation mentioned in the previous paragraph can be initiated against the supplier, if the administrator of the bankrupt estate demonstrates that he knew of, or could not ignore, the state of insolvency of the assigned debtor at the date of the payment to the factor.

3. A supplier who is made liable towards a bankrupt estate in accordance with the previous paragraph has a right of return against the factor, provided that the latter has renounced the guarantee mentioned in article 875.

SECTION IV

TERMINATION OF CONTRACT

Article 884

(Mutual agreement)

An agreement by which the parties decide to end their contractual relation shall be made in a written document.

Article 885

(Lapse)

1. A factoring contract lapses:

a) once the agreed time limit expires;

b) if a condition to which the parties have subordinated it occurs, or if it becomes certain that it cannot occur, depending on whether the condition is resolutory or suspensive;

c) in case of bankruptcy, judicial liquidation, dissolution, or termination of activity by one of the parties.

2. A contract that continues to be executed by the parties after the expiry of the time limit is deemed to be transformed into a contract for an undetermined period of time.

3. However, the parties can stipulate an automatic extension for successive periods of time; in this case, the time limits for advance warning stated in the following article shall apply.

Article 886

(Denunciation)

Denunciation is only permitted in factoring contracts concluded for an undetermined period of time, and if communicated in writing to the other party with the following minimum advance notice:

a) one month, if the contract has not lasted for more than one year;

b) two months, if the contract has not lasted for more than two years;

c) three months, in other cases.

Article 887

(Rescission)

A factoring contract can be rescinded by any of the parties if the other party does not fulfill his obligations, provided that, due to its seriousness or repetition, the continuation of the contractual link cannot be demanded.

Article 888

(Bankruptcy of supplier)

1. The administrator of the bankrupt estate of a supplier can rescind the assignment made by the supplier, in relation to credits not yet created by the date of the decision that declared bankruptcy.

2. In case of rescission, the administrator of the bankrupt estate is obliged to return to the factor the amounts paid to the supplier relating to the credits mentioned in the previous paragraph.

CHAPTER VIII

LEASING

SECTION I

GENERAL PROVISIONS

Article 889

(Concept)

Leasing is a contract by which one of the parties undertakes, against payment, to provide to the other the temporary enjoyment of a good, acquired either from the lessee himself or from a third party in accordance with his instructions, or built upon indication of the same lessee; the lessee can buy such good, after an agreed period of time, for a price determined in the contract, or determinable by means of simple application of criteria stated in it.

Article 890

(Object)

1. Leasing can have as object any goods that can be rented.

2. If a lessor builds, in accordance with a surface right, on land owned by a lessee, such right shall be deemed perpetual, without prejudice to the possibility of acquisition by the owner of the ground, under general rules.

SECTION II

CONCLUSION AND VALIDITY OF CONTRACT

Article 891

(Form and publicity)

1. A leasing contract must follow the form required by the nature of the goods being leased, unless another more solemn form is stipulated.

2. Lease of immovables or movables subject to registration shall be entered in the competent register.

3. A label or visible sign must be placed on movable goods not subject to registration, indicating the property right of the lessor institution.

Article 892

(Rents and residual value)

1. The total of the rents foreseen in a leasing contract must allow, within the period of validity of the contract, the recovery of more than half of the capital corresponding to the value of the leased good, and cover all charges and the profit margin of the lessor; the residual value of the good shall correspond to the sum not recovered.

2. The price of acquisition payable by a lessee at the end of the contract must correspond to the residual value of the leased good.

3. Unless there is a legal provision to the contrary, the residual value of a leased good cannot be less than 2% of the value of such leased good and, in relation to movable goods, cannot be higher than 25%.

4. The date of maturity of the first rent cannot take place more than one year after the date from which the contract takes effect.

5. The time elapsed between the maturity of each rent cannot be more than one year.

6. The value of each rent cannot be lower than the value of the interest corresponding to the period to which the rent applies.

Article 893

(Reduction of rent)

If a reduction of the price of supplied or built goods takes place, in accordance with civil law, as a result of non-performance of time limits or any other contractual clauses by the supplier of such goods, or the builder, or because of defective functioning or of performance of the leased equipment inferior to that expected, the rent due from the lessee shall be proportionally reduced.

Article 894

(Time limit)

1. Leasing of movables cannot be agreed for less than one year; the minimum period for leasing of immovables is five years.

2. Leasing of movables cannot exceed the time limit corresponding to the presumed period of economic use of the good.

3. A leasing contract cannot have a duration longer than 20 years, being reduced to this limit if agreed for a longer period.

4. In the absence of stipulation of duration, the time limits mentioned in paragraph 1 shall apply.

Article 895

(Destination of good after expiry of contract)

If the contract expires for any reason, and the lessee does not exercise the purchase option, the lessor can dispose of the good, namely selling, renting, or leasing it to an ex-lessee or to a third party.

Article 896

(Application)

1. A leasing contract produces effect from the date of its conclusion.

2. However, the parties can condition the start of its application to the effective acquisition or building, if that is the case, of the leased goods, as well as to its delivery to the lessee, or to any other facts.

SECTION III

RIGHTS AND OBLIGATIONS OF PARTIES

Article 897

(Legal position of lessor)

1. A lessor namely is obliged:

a) to acquire or to order the building of the good that is to be leased;

b) to deliver the good in accordance with the terms and conditions agreed;

c) to allow enjoyment of the good for the purposes to which it is destined;

d) to sell the good to the lessee, at its residual value, after the expiry of the contract, if he wants it.

2. Besides the general rights and duties mentioned in the provisions of the rental contract which are not incompatible with the provisions of this Chapter, a lessor has, in special, the following rights:

a) to defend the integrity of the good, under general legal rules;

b) to examine the good, without prejudice to the normal activity of the lessee;

c) to take ownership, without compensation, of parts or other accessory elements incorporated in the good by the lessee.

Article 898

(Legal position of lessee)

1. A lessee namely is obliged:

a) to pay rent;

b) to pay, in case of leasing of an autonomous fraction, the ordinary expenses necessary to the functioning of the common parts of the building and to the services of common interest;

c) to allow the lessor to examine the leased good;

d) not to apply the good for a purpose different from that for which it is destined, or to move it to a place different from that contractually stipulated, unless there is authorization by the lessor;

e) to ensure conservation of the good, and to not make imprudent use of it;

f) to carry out urgent or necessary repairs, as well as any works imposed by public authority;

g) not to provide to others the total or partial enjoyment of the good by means of onerous or gratuitous assignment of his legal position, subletting, or borrowing, except if the law allows it or if the lessor so authorizes;

h) to communicate to the lessor, within 15 days, any transfer of the enjoyment of the good, if it is allowed or authorized in accordance with the previous subparagraph;

i) to immediately inform the lessor whenever he has knowledge of defects in the good, or has knowledge of any danger threatening it, or that a third party claims rights over it, if such fact is not known to the lessor;

j) to insure the leased good against risk of loss or deterioration, and of damage caused by it;

l) to return the leased good in good condition upon the expiry of the contract, with the exception of deteriorations inherent to normal use, if he does not opt for its acquisition.

2. Besides rights and general duties mentioned in the provisions of the rental contract which are not incompatible with the provisions of this Chapter, a lessee has, in special, the following rights:

a) to use and to enjoy the leased good;

b) to defend the integrity of the good and its enjoyment, in accordance with his right;

c) to take actions for the defense of possession, even against the lessor;

d) to create charges over his right, totally or partly, upon express authorization of the lessor;

e) in the leasing of autonomous fractions, to exercise the rights of the lessor, with the exception of those that, by their nature, can only be exercised by the lessor;

f) to acquire the leased good, once the contract has expired, under the terms initially stipulated.

Article 899

(Transfer of position of lessee)

1. In case of equipment, the inter vivos transfer of the position of lessee is allowed in case of transfer of the enterprise; transfer by reason of death, whether legal or testamentary succession, is allowed if the heir continues the professional activity of the deceased.

2. In any case, the lessor can oppose the transfer of the contractual position, proving that the assignee does not offer sufficient guarantees for the execution of the contract.

3. In cases other than equipment, the position of lessee can be transmitted under the terms applicable to a rental.

Article 900

(Defects of leased good)

A lessor is not liable for any defects of a leased good, or for its inadequacy for the purpose of the contract, except as provided in article 980 of the Civil Code.


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