Time duration of a continuous obligation
1)Including the aspect of time in the construct of continuous obligation means that such obligations are not subject to the principle of expiry due to execution (the automatic principle of expiry of an obligation relationship). Determining a time limit for an obligation and consequently the limit of legal obligation of performance requires introducing a separate expiry mechanism.
2) Continuous obligation may expire due to the interplay of various mechanisms. Therefore, it is justifiable to distinguish a main mechanism, i.e. a mechanism that determines the basis of expiry of continuous obligation and also an auxiliary supporting mechanism. Reference to the basic (main) mechanism makes it possible to qualify continuous obligation according to the duration criterion and to verify the content of a legal act in terms of the principle of limited duration. On the other hand, the reference to the auxiliary mechanism makes it possible to consider the specifics of a given (type) of obligation relationship.
3) The determination of the time duration of continuous obligation can be conducted in two ways. Each of them entails a different balance of risk connected with the duration of obligation relationship. The first method is connected with using the construct of definite and indefinite time period, i.e. with determining a precise mechanism of expiry when the obligation is entered into. This method can be described as the method of direct determination. The other method involves determining the duration of continuous obligation in connection with the duration of a specific situation, including duration of another legal relationship or the occurrence of a contingency. In this case the specification of the expiry mechanism occurs during the duration of the continuous obligation. This method can be described as the method of indirect determination.
4) For continuous obligations resulting from a legal act the basic expiry mechanism is usually determined by using the method of direct determination. For continuous obligations entered into ex lege the basic expiry mechanism is usually determined by using the method of indirect determination. The same method determines also the main mechanism of expiry for continuous obligations of non-self-executing character.
5) Continuous obligation entered into for indefinite time means an obligation whose basic expiry mechanism is a termination, in general at each party’s discretion (Art. 3651 of the Civil Code). Continuous obligation entered into for definite time means an obligation whose basic expiry mechanism is connected with the occurrence of a defined legal act. An essential feature of this act is that the determination of its occurrence takes place when the legal act is executed according to certain objective criteria. This occurrence is essentially the lapse of the end-date.
6) When describing the duration of continuous obligation, the criterion of termination/non-termination plays a crucial role. However, using this criterion one should consider that legal system does not conduct a consequent division of continuous obligations into those concluded for indefinite time, which can be freely terminated, and those concluded for definite time. It should also be taken into consideration that the right to terminate a continuous obligation due to its breach does not provide a criterion allowing the description of continuous obligation at general level.
7) There are four subcategories of continuous obligations concluded for indefinite time (1) continuous obligations when both parties are entitled to the unlimited termination; (2) continuous obligations when the entitlement to termination is limited for one of the parties; (3) continuous obligations when the entitlement to termination is limited for both parties; (4) continuous obligations when neither party is entitled to the termination. First subcategory is of primary importance and corresponds to a traditionally distinguished model of continuous obligations for indefinite time. Second, third and forth subcategories include special cases which may be applicable only pertaining to the act of law.
8) Continuous obligations concluded for definite time can be divided into four subcategories, such as: (1) continuous obligations when neither party is entitled to the termination; (2) continuous obligations when the entitlement to termination is limited for one of the parties; (3) continuous obligations when the entitlement to termination is limited for both parties; (4) continuous obligations when at least one of the parties is entitled to unlimited (free) termination. The first subcategory is of primary importance and corresponds to the traditionally distinguished model of continuous obligations for definite time. Obligations which belong to the forth category lay basis for the assumption that the division of the term “continuous obligations whose duration is directly determined” into two parts: “obligations for indefinite time” and “obligations for definite time”, does not have to be an exhaustive and exclusive division.
9) The end-date which is subject to a continuous obligation for definite time does not constitute an essential aspect (accidentalia negotii). A similar qualification should be adopted in the case of terminating condition which determines the basic expiry mechanism.
10) The notion of termination is based on respect for the autonomy of will during the execution of a legal relationship and respect for the existing legal effects. These features cause that a termination can be applied for various legal relationships. However, this notion is adopted in particular to the termination of a continuous obligation.
11) Termination leads to the expiry of an obligation relationship effective only in the future (effect known as ex nunc; pro futuro). This feature distinguishes a termination from other one-sided legal acts which lead to ending of an obligation relationship, such as a waiver. The function of termination effective ex nunc is justified by the nature of a continuous obligation and by the rule of irrevocability of the declaration of intention (Art. 61 § 1 of the Civil Code).
12) The manner of constructing an entitlement for termination should reflect the balance of risk adopted in a given (type of) obligation relationship.
13) Constructing an obligation relationship by applying the notion of termination may occur only within the competence determined by the competence norm.
14) The provision of Art. 3651 of the Civil Code defines the basic (main) expiry mechanism for continuous obligations concluded for indefinite time which belong to the first subcategory (see item 7). This means in particular that this provision to all intents and purposes does not apply to continuous obligations concluded ex lege.
15) The principle of freedom justifies the statement that Art. 3651 of the Civil Code may lay basis for inference (by analogy in law) per analogiam legis.
16) The norm expressed in Art. 3651 of the Civil Code is of an arbitrarily binding character. Therefore, in the case of continuous obligations entered into for indefinite time, which belong to the first subcategory (item 7), the parties are not entitled to a competence to exclude the right to unlimited termination. This right can be limited only by changing the time period of the termination for each of the parties or adopting a waiver to the right to termination for a short period of time.
17) Legal act constructing an obligation relationship with the breach of the rule of limited duration is an act against the law (Art. 58 § 1 and 3 of the Civil Code). If the law does not provide for any other effect but nullity (Art. 58 § 1 in fine of the Civil Code and e.g. Art. 661, 695 § 1 and Art. 7646 § 2 of the Civil Code), it is a priority that a decision regarding nullity of part of the legal act be considered (preference for maintaining the legal act in force).
18) “Part of legal act” pertaining to Art. 58 § 3 of the Civil Code is one ideally separated element of the will. Such approach makes it possible to consider the distinguished clause null and void (or a group of connected agreement clauses) and also to reduce the content of the clause to the level regulated by the legal system.
19) The nature of a continuous obligation may cause a conflict between the legal act and the principle of limited duration also in the course of executing an obligation.
20) In the course of execution a continuous obligation continually expires part by part, unless the nature of a particular obligation excludes adopting such a construct.
21) After a continuous obligation expires, parties may still be bound by the obligation of liquidation. The function of such a relationship amounts to the settlement of the expired continuous obligation.