Finance:Laesio enormis

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Short description: Legal doctrine


History

Early modern period

In their discussions relative on the respect of commutative justice in contractual relations, the members of the School of Salamanca cogitated a lot about laesio following Juan de Medina,[1] Martín de Azpilcueta,[2] Diego de Covarruvias y Leyva[3] or Arias Piñel's[4] example. They preserved it as a way to void a contract, but they didn't considered it as a vice of consent.[5]

Modern law

The Louisiana Civil Code article 2589 permits rescission for lesion beyond moiety (Fr: lésion outre moitié; Lat: laesio ultra dimidium). It states that the seller may rescind the sale of an immovable when the price, or the property it is exchanged for, is less than one half of the fair market value. Special rules apply to exchanges that have one party exchanging immovable property for a mixture of immovable or movable property, and cash—the party exchanging the mixture of property has the right to rescind the exchange, not the party exchanging the immovable.

The Austrian Civil Code §934 also allows the lesioned party (laedus) to rescind for lesion beyond moiety (Germ: Verkürzung über die Hälfte; Lat: laesio ultra dimidium) if the lesioned party receives less than half of the fair value of the consideration. The other party (laedens) may avert rescission by agreeing to pay the difference to full value. Lesion beyond moiety has been criticized from a legal and economics perspective for its inefficient incentives. In many cases it is impossible to profit from gathering information because profits above the mentioned threshold are prohibited by the law. [6]

See also

Notes

  1. ↑ Decock 2013, p. 536-545.
  2. ↑ Decock 2013, p. 545-533.
  3. ↑ Decock 2013, p. 553-566.
  4. ↑ Decock 2013, p. 566-589.
  5. ↑ Decock 2013, p. 602.
  6. ↑ Grechenig, Kristoffel R., "The Economics of the Rule of Laesio Enormis (Die laesio enormis als enorme Laesion der sozialen Wohlfahrt?)", Journal für Rechtspolitik, No. 1, 2006.

References

  • H Grotius, De Jure Belli ac Pacis (1964) ch XI, trans FW Kelsey
  • M Weber, Economy and Society (1978) 578, 583, 589 and 1198
  • RH Tawney, Religion and the Rise of Capitalism (1922) 40–44, on Aquinas and just price
  • Dawson, 'Economic Duress and Fair Exchange in French and German Law' (1937) 11 Tulane Law Review 345, 365
  • Holstein, 'Vices of Consent in the Law of Contracts' (1939) 13 Tulane Law Review 560, 569
  • WJ Ashley, An Introduction to English Economic History and Theory (1920) 126, on just price
  • M Wolf, Rechtsgeschäftliche Entscheidungsfreiheit und vertraglicher Interessenausgleich (1971)
  • AT Mehren and J Gordley, The Civil Law System (1977) 926
  • J Gordley, 'Equality in Exchange' (1981) 69 Calif LR 1387
  • Decock, Wim (2013). Theologians and Contract Law : The Moral Transformation of the Ius commune (ca. 1500-1650). Leiden/Boston: Martinus Nijhoff Publishers. pp. 723. ISBN 978-90-04-23285-3. https://brill.com/display/title/21931. 




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