LAW OF OBLIGATION ACT, CHAPTER 9, DIVISION 3

Division 3

Assumption of Contract

  • 179. Definition of assumption of contract

(1) A party to a contract may, with the consent of the other party, transfer the party’s rights and obligations arising from the contract to a third party on the basis of a contract entered into with the third party unless otherwise provided by law.

(2) Upon assumption of a contract, all rights and obligations arising from the contract are deemed to have transferred to the transferee of the contract.

(3) The provisions of §§ 167, 168, 171, 176 and 177 of this Act apply mutatis mutandis to the assumption of contracts.

Division 4

Transfer of enterprise

  • 180. Transfer of enterprise

(1) The transferor of an enterprise may undertake to transfer the enterprise to the transferee on the basis of a contract entered into with the transferee. An enterprise may also be transferred to a transferee pursuant to law.

(2) An enterprise comprises the things, rights and obligations relating to and in the service of the management of the enterprise, including contracts relating to the enterprise.

  • 181. Restrictions on application

The provisions of this Division do not apply to the transfer of an enterprise in the event of the merger, division or transformation of legal persons or if an enterprise is taken over pursuant to law, in particular in the case of compulsory execution or bankruptcy proceeding.

  • 182. Acquisition of enterprise

(1) Things belonging to an enterprise are transferred to the transferee pursuant to the provisions concerning the transfer of such things, the rights pursuant to the provisions concerning the transfer of such rights and contracts pursuant to the provisions concerning the transfer of such contracts. The transferor of an enterprise is required to transfer possession of things to the transferee and, in the case of property subject to registration, to ensure that the corresponding entries are made in the registers.

(2) By taking over the things and rights belonging to an enterprise, the transferee takes over all of the transferor’s obligations related to the enterprise, including obligations with regard to the employees of the enterprise which arise from employment contracts, unless otherwise provided by law. The consent of the obligee or the other party is not required for the assumption of an obligation or the transfer of the contract unless otherwise provided by law.

(3) Agreements derogating from the provisions of subsection (2) of this section have no effect against third parties. Such agreements apply to obligees who have consented to the agreements in a format which can be reproduced in writing.

(4) The transferee of an enterprise shall promptly notify the obligees of the acquisition of obligations and the transferor of the enterprise shall promptly notify obligors of the assignment of the claims to the transferee.

(5) The provisions of this section apply mutatis mutandis to the grant of the use of an enterprise.

[RT I 2002, 53, 336 – entry into force 01.07.2002]

  • 183. Liability of transferor of enterprise

(1) A transferor and the transferee shall be jointly and severally liable to the obligee for obligations which have arisen before the transfer of the enterprise and which, by the time of the transfer, have fallen due or will fall due within five years after the transfer. It is presumed that, in relations with the transferor, the transferee of the enterprise is the obligated person.

(2) Agreements derogating from the provisions of subsection (1) of this section have no effect against third parties, except to obligees who have consented to such agreements in a format which can be reproduced in writing.

(3) The limitation period for claims arising from obligations specified in subsection (1) of this section shall be five years as of the transfer of the enterprise unless a shorter limitation period applies to some of the claims.

(4) The provisions of this section apply mutatis mutandis to the grant of the use of an enterprise.

[RT I 2002, 53, 336 – entry into force 01.07.2002]

  • 184. Right to business name

(1) The right to use the existing business name of an enterprise subject to transfer transfers to the transferee unless this is contrary to law, the rights of a third party or an agreement between the parties. The fact that the activities of the transferee continue in a legal form other than that of the transferor shall not hinder the transfer of the business name if the transferee adheres to the requirements for business names provided by law.

(2) If the transferor of an enterprise is a natural person, the right to use the existing business name transfers to the transferee with the written consent of the transferor of the enterprise.

  • 185. Transfer of part of enterprise

The provisions of this Division also apply to contracts under which a part of an enterprise which is an organisational whole (an installation) is transferred.

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