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Invalidity of Legal Transaction That Is Contrary to the Act on Public Contracts

Publication at Faculty of Law |
2015

Abstract

According to the recent prevailing case law and academic literature the fact that the Act on Public Contracts (the APC) is special (lex specialis) to the Civil Code (the CC) implies that any transaction that is contrary to the APC cannot be subjected to general provisions on invalidity under the CC. In practice, many offences thus cannot be effectively sanctioned.

The authors therefore ask whether such an approach is legitimate. Based on detailed reasoning and interpretation of the European and Czech law they revise the prevailing view and show that, on the contrary, the general provisions of the CC on invalidity of legal transactions shall be applied in some cases (e.g. when granting a power contrary to the APC).

The common feature is that the Office for the Protection of Competition cannot impose the prohibition to perform the contract in these cases. The authors claim that the sanction of invalidity under the APC should be interpreted restrictively.