Undue Influence, Formalities and Simulation in Civil Law

Injury (Undue Influence)

Injury.

The Law 17.711 added to Article 954 of the Civil Code a provision through which revocation or modification of a legal act may also be requested when one party, exploiting the need, lightness, or inexperience of the other, obtained a patrimonial advantage that is clearly disproportionate and unjustified. In such cases, the vices of consent listed above are presumed.

In determining the existence of such a situation, the patrimonial advantage should be assessed in relation to the values existing at the time of conclusion.

Form of Legal Acts

Form of legal acts.

A legal act is any lawful voluntary act intended to immediately establish legal relationships between persons, creating, modifying, transferring, preserving, or extinguishing rights. For certain acts, the act must assume a form — that is, a set of formalities prescribed by law to be observed at the time of its conclusion.

Among the methods provided by law are:

• written form of the act;
• the presence of witnesses;
• that the act is done before a notary public or another public official;
• or with the assistance of the court of the place.

Parties involved in a legal act may choose any of the forms they deem appropriate, except where the law expressly requires a special form. Thus, legal acts are distinguished as non-formal and formal.

For the latter (formal acts), the validity or existence of the act depends on compliance with the form required by law; otherwise the act is void. These essential formal requirements are called ad solemnitatem.

Examples include marriage, which must be celebrated before a public official and in the presence of witnesses, and the donation of immovable property, which must be executed by deed.

However, if the form of the legal act is required only as evidence and not to determine validity, the act is not solemn; this form requirement is called ad probationem.

Simulation or Fraud

Simulation or fraud.

Simulation occurs when the legal nature of an act is disguised as another, when the act contains insincere clauses or false dates, or when the rights constituted or conveyed to intermediaries are not those of the ultimate beneficiaries.

One form of simulation and fraud occurs when a debtor sells assets to avoid execution by creditors for prior debts. In this case, creditors may take legal action to seek revocation or the annulment of such sales.