Problems of error or deception as a basis for evasion from the legal effects of a will declaration by a guarantor

The problem of disadvantages in declarations of will as a basis for apostasy of the legal effects of a complex declarationis one of the most difficult in civil law. It seems that understandable regulations often raise interpretation doubts.

The investigation of the case-law leads to the conclusion that proving the existence of an error (or of its particular variation in the form of deception) justifying evasion from the effects of the declaration of will is extremely difficult and in practice is relatively rare.

Especially interested in error and deception are the guarantors of loans or loans, including those characterized by adequate education and life experience to identify whether the error they cite has legal significance or not.

The purpose of this Article is to identify the most common errors in this respect and to identify the errors which are legally relevant and allow the guarantor to waive the legal effects of a declaration of will.

1. Legal grounds for the materiality of the error

first a practical problem arising from the intention to apply the institutions in the form of an abrogation from the legal effects of a declaration of will, is the lack of a definition of an error in the law with 23 April 1964 - Civil Code 1 (Next: k.c.).

In order to explain exactly what is meant by the defect of a statement of will in the form of an error, reference should be made to the common understanding of that word. Interestingly, the doctrine predominates the belief that the definition of error in k.c.

would be superfluous and that there is a consensus that this word should be used in the common sense[2].

According to the Polish dictionary, PWN means "false thinking of something". In the legal doctrine, it is widely accepted that "mistake" means a misconception of the surrounding reality or of the content of a declaration of will (mistake)[3].

However, this “false thinking” or “misconception” must meet certain conditions, mentioned expressis verbis under Article 84 k.c., namely: 1) concerns the content of the legal act, 2) the error is significant, i.e.

justifying the presumption that if the applicant had not acted under the influence of an error and judged the case reasonably, he would not have made a statement of that content and, moreover, when it comes to declarations of intent the other party to the payment, 3) the person who caused the error (although without fault) knew of the error or could easily have noticed it[4].

Now. first There is an interpretational difficulty in these indications, for the question of what is to be understood by misconception of the content of the legal act? It might seem that a judicature comes to the aid, which answers to the above question, for example, as follows: “...

a mistake is a defect of the declaration of will, namely that the making of the will acts under the influence of an untrue idea of reality or its element or the absence of such an idea.

[...] The legal basis for the importance of error is defined by the doctrine and jurisprudence in which it is indicated that there must be a perception error.

It is distinguished from the error of prediction and claim, belonging to the motivational sphere and consisting of a motive under which a statement of will was expressed, subsequently regarded by the declareor as having been affected by the error, when it was found that it would not achieve the intended and envisaged objective’ 5 .

In a slightly older case-law, the Supreme Administrative Court in Warsaw expressed the same opinion, which stated explicitly that "The error of motive does not concern the content of the legal act and is therefore not protected on the basis of Article 84 k.c.’ 6 .

It is not irrelevant that in the case of second It was the administrative court who raised the question of civil law. For it is widely known that k.c. broke up with error as to the content of the declaration of will and error in motivation.

The impracticability of this division, which was used by the Code of Obligations 7 , was indicated before the entry into force of k.c. 8 . It entailed the need to consider the issue on a psychological level, which in turn caused real problems, as the boundaries between the two forms of error proved to be extremely smooth[9].

For this reason, k.c. introduced a division into a mistake as to the content of the legal act and an error not concerning the content of the legal act, denying the latter legal meaning.

The purpose of this procedure was, among other things, to separate itself from psychological considerations, and in particular to study the phase of the mental process in which the error occurred.[10].

The doctrine emphasizes that the scope of the error as to the content of the legal act is wider than the error as to the content of the declaration of will. In view of the above, it must be concluded that the very occurrence of an error in the motivational sphere cannot automatically prejudge its classification as devoid of legal significance[11].

At this point, it must be reiterated in favour of the Supreme Court that “the passage of an acute boundary between the content of a legal act and the error of motive is impossible, since the limits of both errors are blurry and in many cases there are more or less both. ‘However, if motivation is included in the content of a legal act, the error in the motive becomes an error relevant to the content of a legal act’ 12 .

Another legal basis for the seriousness of the error is its relevance. A material error has already been defined by the legislator himself under Article 84(2) k.c.

as an error justifying the presumption that if the applicant had not acted under the influence of an error and assessed the case reasonably, he would not have made a statement of that content.

As an example of the subsumption of this provision, the ruling of the Court of Appeal in Warsaw, in which the Court of First Instance stated that "the substance of the error must be objective, which means that no reasonable man (not a plaintiff) who knows the true state of affairs would make a statement of the content in question.

It is impossible for him [the court] to consider that no reasonable man would make a statement of the granting of the guarantee merely because it would correspond to all the property, for it is the essence of the guarantee institution.” 13 .

Much more problematic is the last legal rationale for the substance of the error mentioned under Article 84(1) dd. 2 k.c., which boils down to the fact that the error was caused by the person to whom the declaration of will was made, even without its fault, or when it knew of the error or could easily be noticed (in the case of legal acts for payment). This issue is particularly relevant in the context of the guarantee agreement.

At this point it should be recalled that according to Article 876(1) k.c. through the guarantee agreement, the guarantor undertakes to execute the obligation to the creditor in case the debtor fails to comply. According to Article 881 k.c. in the absence of a different reservation, the guarantor shall be liable as a joint debtor.

The guarantee agreement shall therefore be concluded only between the guarantor and the creditor and the debtor shall be a person in respect of the parties to the guarantee agreement third. In the judgment cited above, the Court of Appeal in Warsaw indicated that ‘the settlement belongs to causal legal acts.

The concept of causa (causa) means the reason for the legal act. In the case of a legal guarantee operation, this will result in the securing of an existing liability (Article 876(1) (c) or future debt (Article 878(1) k.c.).

In contrast, no provision of law requires that the guarantee be part of a legal act constituting a cause or although it is mentioned in a document which governs that act. Furthermore, the guarantee may also be subject to an obligation arising from an oral contract or even from legal provisions.’ 14 .

1. Guarantee – legal action paid or free of charge?

The question is whether the guarantee is to be qualified as a legal act for consideration or free of charge. Additional sharpening envisaged under Article 84(1) dd. 2 (c) as referred to above, it concerns only legal acts for consideration.

The basic criterion for distinguishing the legal act paid from the legal act free of charge is the criterion for the benefit of both parties to the legal relationship.

There is no doubt that a legal act is free of charge if the benefit is obtained only one of the parties to the legal relationship (a standard example is the donation agreement).

Apart from the fact that a guarantee can be provided for remuneration, it is important to focus on the case of a guarantee granted without any remuneration and, therefore, to appear free of charge. However, this problem needs to be looked at from a broader perspective.

After first, The Polish legislator assumes that in the event of a conflict of interest between the rightholder and the person who has received the free assignment, the interest of the latter should cease.[15]. After second, the guarantee agreement has a guarantee function in economic trade, i.e. ensures that the debtor is satisfied.

We are therefore faced with a conflict of interest in the form of an individual interest of the guarantor, who often fulfils his darmy performance and ultimately bears the consequences of the default of the principal debtor.

On the other hand, the interests of the guarantor are opposed to the interests of the creditor and, more broadly, to the certainty of trade.

For if you accept, for the needs of Article 84 k.c. that the guarantee is a free of charge legal act, it would be disproportionately easier for the guarantor to waive the legal effects of the guarantee agreement. It seems that it was for this reason that the Polish judicature accepted this neckless theory, without getting into deeper divisions about the nature of the guarantee agreement.

The origins of this theory should be viewed in a widely commented resolution 7 Supreme Court judges from 30 September 1996 16 . It is significant that the questions raised by the Supreme Court to settle the composition seven the SN judges concerned, inter alia, the unpaid nature of the guarantee and were as follows:

„1. Is the appointment of a guarantor to the debtor’s trickery a reason for evasion from the legal effects of the guarantee agreement?

1. In the event of a positive reply, whether the unpaid guarantee confers the effect of the unpaid legal action in question under Article 86(2) in fine k.c.?’

Unfortunately, the answer to such a question was highly laconic and reads as follows: “The guarantor must not deviate from the legal effects of his declaration of will due to an error made insidiously by the debtor as to his solvency on the date of the guarantee”.

The Supreme Court therefore only replied to first the question, stating implicitly that the guarantee is not of a free legal nature within the meaning of Article 86(2) in fine k.c. (and therefore per analogy also Article 84(1) in fine k.c.).

Even in the statement of reasons for the resolution cited, it is vain to seek even to define the legal nature of the guarantee in the context of its payment. Resolution on reference no. III CZP 85/96 However, it was widely commented on in the doctrine and the issue of pay (or lack of it) the guarantee was developed by the voters.

Interestingly, the judicature still avoids the answer to this question, although since the adoption of the resolution, a line of case law has established itself that the guarantor cannot rely on the creditor for error (or deception) caused by the debtor as to his solvency on the date of the guarantee.

Thus stated, among others, the Supreme Court, ruling in judgment of 18 February 2005 17 , that ‘The guarantor cannot deviate from the legal effects of his declaration of will due to an error swindled by the debtor as to his solvency on the date of the guarantee.

The liability of the guarantor shall be objective and shall be based on the principle of risk.

The guarantor shall guarantee, in particular, the borrower, by his own assets, the solvency of the borrower.’ In that judgment, SN not only referred directly to the quoted compositional resolution seven Judges from 30 September 1996, but also stressed the guarantee nature of the guarantee agreement.

Professor B. Lewaszkiewicz-Petrykowska in his voice to the Supreme Court resolution from 30 September 1996, proving that the guarantee is such a specific legal activity that it does not fall within the category of legal acts which are either paid or unpaid.

This position must be accepted, but it cannot be accepted that, in the event that the guarantor fulfils the debtor’s benefit, it is by force Article 518(1)(1) k.c. will enter into the rights of the satisfied creditor and thus acquire a debt (defined asset) in relation to the debtor[18].

The acquisition of a debt to the debtor cannot be considered without a broader context, and thus without the fact that, in order to enter into the rights of the satisfied creditor, the guarantor must first meet the debtor's own performance and therefore, at best, the guarantor will not lose anything.

Any claim against the debtor for outstanding interest may not constitute an equivalent remuneration either, since if the guarantor were able to hold the capital that he lost when he met the creditor’s benefit, he could also make tangible profits from it.

In this context, the justification proposed by another speaker of the Supreme Court resolution from 30 September 1996, adjw. dr. Rafał Kaspak, who highlighted the guarantee function of the guarantee, while pointing out the objectivised liability of the guarantor on a risk basis[19].

3. Disadvantage of a will in the form of deceit

Attention should also be paid to the problem of flaws in the declaration of will in the form of deception. The question of deception was raised, among others, in the judgment of the Court of Appeal in Warsaw from 12 February 2013 20 as follows: ‘k.c.

does not contain the definition of ruse referred to under Article 86, Therefore, the common meaning of this concept should be guided. It is widely assumed that insidious action is based on conscious inducing second a person's misconception of the real state of things in order to induce him to perform a specific legal act.

Insidious action is always reprehensible from the point of view of ethical assessments, as it interferes in an unacceptable way with the decision-making process of another person, leading that person on the basis of his suggested false reasoning grounds for a specific legal act.’ In the judgment cited above, the Court of Appeal in Warsaw also drew attention to an important issue which distinguishes the legal validity of the flaws of the declaration of will in the form of deception from error, namely the fact that deception does not have to concern the content of the legal act.

In particular, the Court of Appeal in Warsaw indicated that an error caused by deception may also concern the motivational sphere, which was the reason for the declaration of will[21].

The Supreme Court states: ‘To avoid the legal effects of a declaration of will made under the influence of an error induced by a deceitful error, it is sufficient that the error concerns the motivational sphere, which is the reason for the declaration of will (Article 86 (c)’ 22 .

Moreover, the error caused by deception does not have to be significant, which is clear from the recipe Article 86(1) k.c.

4. Summary

It should be pointed out that the analysis of the practical attempts made by the guarantor to make a defect in the declaration of will in the form of error or deception leads to the conclusion that the common understanding of the concept of error or deception differs significantly from the interpretation of these concepts on the ground Article 84(86)(88) k.c.

In this respect, it is important to bear in mind the still important role played by the guarantee institution in the economic trade and, in particular, the fundamental function of this legal relationship, which is the function of securing the fulfilment of the benefit.

Business participants often tend to attribute an error or deception in a subjective or factually inappropriate manner. The most common irregularity is to rely on a trickery (and therefore to mislead) of the debtor in relation to the guarantor – the creditor.

Equally often, guarantors cite a mistake in the solvency of the debtor in the hope of waiving the legal effects of the guarantee agreement. It is not possible to determine whether such frequent errors are due to ambiguities arising from existing rules or to a desperate attempt to avoid liability for someone else's debt.

At this point, it should be reiterated in favour of the Court of Appeal in Szczecin that ‘It does not constitute an error in the content of the legal act a misassessment of both current and future circumstances not covered by the activity carried out (e.g.

the debtor's payment capacity, the projected increase in the value of the purchased item, etc.)’ 23 .

For the liability of the guarantor, the condition of the debt resulting from the guarantee is conclusive. A guarantor error shall not include the probable state of affairs that may (or may not) occur in the future.

The application for the solvency of the debtor in the future can only be achieved by an approximate picture, given the future unpredictability of any debtor’s assets.

Otherwise, the accumulation of risks would take place on the part of the creditor and the protection of the guarantor would go so far as to render the guarantee at all meaningless[24].

As an excellent synthesis of all the above considerations it is worth to cite the judgment of the Court of Appeal in Kraków 25 , who indicated that ‘After first, there must be an error in the content of the legal act, after second, it must be a material error.

There is also no mistake if the declarer knew the surrounding reality and understood the circumstances of the contract, for example, but drew wrong conclusions from them and made an unfair or unfavourable decision.

The error is a lack of vision and not a lack of ability to predict and conclude.” The Court of Appeal in Krakow then referred to the Supreme Court's ruling, according to which ‘Not meeting the expectations of the party to the contract as to how it was executed by the other party and the related claim that there has been no proper performance of the contract in any case constitutes no basis for accepting that the contract was concluded under conditions of error as to the content of the legal act.

A mistake means a misconception of the existing state of affairs or a misconception of the content of the declaration of will made, does not refer to the motivational sphere; the error must also concern the state existing at the time of the conclusion of the contract, not the circumstances which occurred in the course of the performance of the contract, leading the party to believe that the decision to conclude it was incorrect.’ 26 .

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[1] i.e. Journal of Laws of 2019, item 1145 as amended