Private Autonomy and Legal Business in Civil Law

The Concept of Private Autonomy

Private autonomy can be conceived as the sphere of power that the law confers on individuals to self-regulate their own interests, namely, the power each individual possesses to create, modify, or terminate legal relations.

Private autonomy is enshrined in Article 1255 of the Civil Code (CC), which states that:

Contracting parties may establish the covenants, terms, or conditions as they see fit, provided that they are not contrary to law, morals, and public order.

Furthermore, Article 1091 of the CC shows that:

The obligations arising from contracts have the force of law between the contracting parties and must be met in accordance with their terms.

Limits of Private Autonomy

The limits imposed upon private autonomy are:

• Law
• Morality
• Public Order

Manifestations of Private Autonomy

Private autonomy is manifested in three major ways:

1. Legal Business (Negocio Jurídico)
2. Property Rights
3. Personal Rights

Legal Business (Negocio Jurídico)

Individuals determine the most appropriate way to manage their private rights and regulate private relations between different subjects. Thus, the individual is given broad power to structure legal relations under their own volition in response to their declared will. Consequently, declarations of intent are attributed important legal effects.

Therefore, the center of the **legal business** is the declared will, for the simple reason that only the individual knows the scope of their intent. Consequently, a legal business is defined as the declaration of will of a person or persons by which legal relations are created, modified, or extinguished.

However, not all statements of will lead to a legal transaction, but only those that the legal system deems worthy of protection because the effects they pursue are worthy of being defended.

According to Professor Albaladejo:

The legal business is a legitimate legal act, which consists of one or more declarations of will and is protected by law, as it is likely to produce certain legal effects that match what was voluntarily declared.

Essential Elements of Legal Business

The essential elements of legal business are reflected in the Civil Code, which regulates the essential elements of contracts. Article 1261 of the CC states that a contract does not exist when the following factors are missing:

1. Consent of the contracting parties.
2. A definite subject matter of the contract.
3. The cause (purpose) of the obligation is established.

Therefore, these three elements are essential for a valid legal transaction. The Civil Code regulates contracts in Part II, Book IV, Sections 1253 and following.

Form of Agreement

Regarding the form of agreement, our legal system governs the principle of freedom. As stated in Article 1278 of the CC:

Contracts are valid and produce effect, whatever the form of their celebration.