A contract for the future transfer of the right of ownership of immovable property may be concluded orally by the Supreme Court

The new Civil Code which came in force since 2014 has significantly expanded the number of informal legal negotiations. With some statutory exceptions, it is up to the contracting parties to decide whether to conclude, for example, an oral contract instead of a written contract. Since the choice of any form of legal negotiation also applies to a contract for a future contract, there is some uncertainty as to whether the principle of formless legal negotiations also applies to situations where the law requires a special form for a subsequent implementation contract, in this case a written form for the transfer of the right of ownership of immovable property.

 

The prevailing opinions of judges and the professional community leaned towards the variant that required a written form also for the contract on the future transfer of the ownership right to immovable property, pointing in particular to the protective function of the mandatory written form, which is necessary for the transfer of the immovable property itself. The protective function was seen mainly in the fact that the negotiators give more weight and attention to written expressions. The compulsory written form was therefore intended to protect those acting from frivolity and to make them consider the consequences of their intended actions. 

 

However, to no small surprise, the Supreme Court sided with the minority view. The dissenting and minority views are based primarily on the linguistic interpretation of the provisions in question in the Civil Code, which the Supreme Court then also applied to the so-called principle of legal licence ("Anyone may do what is not prohibited by law, and no one may be compelled to do what the law does not require") as set out in the Constitution of the Czech Republic. If neither the Civil Code nor any other law expressly requires us to conclude a contract on the future transfer of ownership in writing, the Supreme Court held that the addressees cannot be required to comply with it. Moreover, according to the Supreme Court, in view of the principle of the legal licence, it is not possible to derive this obligation by analogy or in any other way. 

 

Here, however, the Supreme Court finds itself in a very likely conflict with certain decisions of the Civil and Commercial Chamber of the Supreme Court, according to which a mandatory legal form can be inferred for certain legal acts. Moreover, in view of the divergent legal opinion, it is likely that the Chamber should have referred the case to the Grand Chamber for consideration when making its decision. Both the process and the reasoning of the decision itself raise an important question, namely whether we may soon see a new decision, this time with the opposite conclusion.