Abstract:
This article examines the nature of the legal effects of termination of contracts under the Moldovan Civil Code: (i) is it retrospective (ex tunc), and the contract is deemed never to have existed as in case of nullity, or (ii) whether the contracts per se remains unaffected but the parties enter into a liquidation relationship (ex nunc). In doing so, we examine the classical theory of retrospective effective endorsed by the French and Romanian legal systems and legal doctrine. Originating in the idea that termination is a condition subsequent, it treats the terminated contract as non-existent and, similar to nullity, the rules of unjustified enrichment apply in the restitution of past performances. Its weaknesses are the poor protection of third party rights and the inappropriateness of the rules of unjustified enrichment for the disassembly of the terminated contractual relationship. After reviewing the German doctrine of liquidation relationship, we arrive at the conclusion that the Moldovan Civil Code, giving its deep inspiration of the provisions of the German Civil Code (BGB), took over the said theory. Under this theory, all obligations of the parties end and a new, inversed relationship arises, third party rights are protected such that if the received performance cannot be returned or was encumbered, then a duty to pay damages will step in in lieu of in-kind restitution. This theory also better explains the foundation of the entitled party’s right to seek damages for breach of contract from the party at guilt.
