Fundamentals: The Role of Contracts within the Legal System

The legal system of a country consists of three main components: the constitution, public law, and private law.

The constitution serves as the foundation of a country's legal framework, meaning that all laws must originate from and align with it. These laws, in turn, define two types of legal relationships:

·        Public law: Governs the rights and obligations between the state and its citizens.

·        Private law: Governs the rights and obligations between individuals (including companies, also known as "legal persons").

A crucial subset of private law is contract law.

Business partners enter into agreements that are documented in written contracts. A contract is an individual agreement defining the rights and obligations of the parties involved. If a contract is unclear, incomplete, or partially invalid, the deficiencies are addressed by the applicable private law. In simple terms, the function of dort verankert contract law is to answer legal questions that the parties have not adequately addressed in their contract.

The relationship between an individual contract and private law operates as follows: The contract defines the legal obligations between the parties, modifying and supplementing the general provisions of private law. Through the principle of contractual freedom, the contracting parties have significant flexibility to structure their contract according to their needs.

However, public law remains beyond the reach of contractual arrangements—meaning any contract that conflicts with public law is unenforceable or void. The rules of public law are mandatory and cannot be altered or excluded by contract.

A useful analogy illustrates these relationships:

Illustration

·        The foundation of the aquarium represents the constitution, supporting laws and contracts.

·        The glass walls symbolize public law, enclosing and defining the boundaries within which private law operates.

·        Private law is the water inside the aquarium, within which contracts exist.

·        A contract is like a fish swimming in the water—it is part of the system, displacing some private law based on its size but unable to alter the glass (public law) or the foundation (constitution).

·        Additional elements, such as stones in the aquarium, represent specific private law regulations that are beyond the discretion of the contracting parties (e.g., mandatory formal requirements for certain contracts or established case law).