Chapter VI
CIVIL TRANSACTIONS
Article 121.- Civil transactions
A civil transaction is a contract or unilateral legal act which gives rise to, changes or terminates civil rights and/or obligations.
Article 122.- Conditions for civil transactions to become effective
1. A civil transaction shall be effective when it meets all the following conditions:
a/ The persons participating in the transaction have the civil act capacity;
b/ The purpose and contents of the transaction do not violate prohibitory provisions of law and are not contrary to social ethics;
c/ The persons participating in the civil transaction act completely voluntarily;
2. The forms of civil transactions shall be the conditions for such transactions to be effective in cases where it is so provided for by law.
Article 123.- Objectives of civil transactions
The objectives of civil transactions are legitimate interests which the parties wish to obtain when establishing such transactions.
Article 124.- Forms of civil transactions
1. A civil transaction shall be expressed verbally, in writing, or through specific acts.
Civil transactions through electronic means in form of data messages shall be considered transactions in writing.
2. In cases where it is provided for by law that a civil transaction must be expressed in writing, notarized, authenticated, registered or permitted, such provisions must be complied with.
Article 125.- Conditional civil transactions
1. In cases where the parties have agreed on the conditions which shall give rise to or cancel a civil transaction, the civil transaction shall arise or be cancelled upon the occurrence of such conditions.
2. In cases where the conditions which give rise to or cancel a civil transaction cannot occur due to the act of intentional hindrance of one party or a third person, such conditions shall be considered having occurred; if one party or a third person exerts impacts to deliberately promote the occurrence of conditions so as to give rise to or cancel the civil transaction, such conditions shall be considered having not occurred.
Article 126.- Interpretation of civil transactions
1. In cases where a civil transaction may be understood in different ways, such transaction must be interpreted in the following order:
a/ According to the true aspirations of the parties when the transaction is established;
b/ According to the meaning consistent with the objective of the transaction;
c/ According to the practices of the locality where the transaction is established.
2. The interpretation of civil contracts shall comply with the provisions of Article 409 of this Code and the interpretation of the contents of testaments shall comply with the provisions of Article 673 of this Code.
Article 127.- Invalid civil transactions
Civil transactions which fail to satisfy one of the conditions specified in Article 122 of this Code shall be invalid.
Article 128.- Civil transactions which are invalid due to violation of prohibitory provisions of law or contravention of social ethics
Civil transactions with purposes and contents violating prohibitory provisions of law or contravening social ethics shall be invalid.
Prohibitory provisions of law mean the provisions of law which do not permit subjects to perform certain acts.
Social ethics are common standards of conduct among people in social life, which are recognized and respected by the community.
Article 129.- Civil transactions invalid due to falsity
When the parties falsely establish a civil transaction in order to conceal another transaction, the false transaction shall be invalid and the concealed transaction remains valid, except in cases where it is also invalid under the provisions of this Code;
In cases where a false transaction is established with a view to shirking the responsibility toward a third person, such transaction shall also be invalid.
Article 130.- Civil transactions invalid due to establishment or performance by minors or persons having lost their civil act capacity or having had their civil act capacity restricted
When a civil transaction is established or performed by a minor or by a person who has lost his/her civil act capacity or whose civil act capacity is restricted, the Court shall, at the request of the representative of that person, declare such transaction invalid, if it is provided for by law that such transaction must be established and performed by the representative of that person.
Article 131.- Civil transactions invalid due to mistakes
When a party has established a transaction due to its misunderstanding of the contents of the transaction due to unintentional mistakes made by the other party, it shall have the right to request the other party to change the contents of such transaction; if the other party does not accept such request, the mistaken party shall have the right to request the Court to declare the transaction invalid.
The cases where a party has intentionally made mistakes, thus making the other party misunderstand the contents of the transaction shall be settled in accordance with the provisions of Article 132 of this Code.
Article 132.- Civil transactions invalid due to deception or intimidation
When a party participates in a civil transaction due to being deceived or intimidated, it shall have the right to request the Court to declare such civil transaction invalid.
Deception in a civil transaction means an intentional act of a party or a third person, aiming to induce the other party to misunderstand the subject, the nature of the object or the content of the civil transaction and thus to agree to enter into such transaction.
Intimidation in a civil transaction means an intentional act of a party or a third person, thus compelling the other party to perform the civil transaction in order to avoid damage to the life, health, honor, reputation, dignity and/or property of his/her own or of his/her father, mother, wife, husband or children.
Article 133.- Civil transactions invalid due to establishment by persons incapable of being aware of and controlling their acts
A person who has the civil act capacity but established a civil transaction at a time he/she was incapable of being aware of and controlling his/her acts shall have the right to request the Court to declare such civil transaction invalid.
Article 134.- Civil transactions invalid due to non-compliance with the prescribed forms
In cases where it is provided for by law that the forms of civil transactions are conditions for civil transactions to be valid but the parties fail to comply therewith, the Court or another competent state agency shall, at the request of one or all of the parties, compel the parties to comply with the provisions on forms of transactions within a given period of time; past that time limit, if they still fail to comply with such provisions, the transactions shall be invalid.
Article 135.- Partially invalid civil transactions
A civil transaction shall be partially invalid when one part of the transaction is invalid, provided that such part does not affect the validity of the remaining parts of the transaction.
Article 136.- The statute of limitations for requesting the Court to declare a civil transaction invalid
1. The statute of limitations for requesting the Court to declare a civil transaction invalid as specified in Articles 130 thru 134 of this Code shall be two years, counting from the date the civil transaction is established.
2. For civil transactions specified in Articles 128 and 129 of this Code, the statute of limitations for requesting the Court to declare such civil transactions invalid shall not be restricted.
Article 137.- Legal consequences of invalid civil transactions
1. Invalid civil transactions shall not give rise to, change or terminate any civil rights and obligations of the parties from the time of establishment thereof.
2. When a civil transaction is invalid, the parties shall be restored to the original status and shall return to each other what they have received; if the return cannot be made in kind, it shall be made in money, except for cases where the transacted property, gained yields and/or profits are confiscated under the provisions of law. The party at fault, which caused damage, must compensate therefore.
Article 138.- Protection of the interests of a bona fide third party when a civil transaction is invalid
1. In cases where a civil transaction is invalid but the transacted property being a moveable not subject to ownership registration has already been transferred to a bona fide third party through another transaction, the transaction with the third party shall still be valid, except for the case specified in Article 257 of this Code.
2. In cases where the transacted property being an immoveable or a moveable subject to ownership registration has already been transferred to a bona fide third party through another transaction, the transaction with the third party shall be invalid, except for cases the bona fide third party receives such property through auction or transaction with a person who, under court judgment or decision of a competent state agency, was the owner of the property, but later is not the owner of the property as the court judgment or decision is cancelled or modified.
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