LAW OF OBLIGATION ACT, PART 10, CHAPTER 52, DIVISION 3

Division 3

Compensation in Event of Violation of Right 

  • 1037. Requirement to compensate value in event of violation of right

(1) A person who violates the right of ownership, another right or the possession of an entitled person by disposal, use, consumption, accession, confusion or specification thereof without the consent of the entitled person or in any other manner (a violator) shall compensate the usual value of anything received by the violation to the entitled person.

(2) If the violation of the right of ownership or another right of an entitled person consists of the disposal thereof by the violator, the entitled person may, if the disposal is void, demand compensation of the usual value of that which is received from the violator if the entitled person, pursuant to the provisions of subsection 114 (2) of the General Part of the Civil Code, approves of the disposal.

(3) The usual value specified in subsections (1) and (2) of this section shall be assessed as at the time of the violation. In the case of disposal for a charge, the agreed charge shall be deemed to be the usual value unless the entitled person proves that the value of the object is higher or unless the violator proves that the value of the object is lower than the agreed charge.

(4) Upon the performance of an obligation in favour of a person not entitled to accept performance, a person entitled to accept performance may demand the transfer of that which is received from the person not entitled to accept performance if the performance is valid with respect to the entitled person or if the entitled person approves thereof pursuant to the provisions of subsection 114 (2) of the General Part of the Civil Code.

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

  • 1038. Restrictions on obligation of compensation of value

A violator who is not or ought not to be aware of the lack of justification for the violation does not have the obligations provided for in subsections 1037 (1) and (4) of this Act in so far the violator ceases to receive gain through enrichment to the extent of the value of that which is received as of the time when the violator becomes or should become aware of the filing of a claim against the violator. Costs incurred in acquiring that which is received shall not be taken into consideration upon the determination of the extent of enrichment.

  • 1039. Liability of violator in bad faith

The entitled person may demand that a violator who is or should be aware of the lack of justification for the violation transfer any revenue received as a result of the violation in addition to the usual value of that which is received. The violator shall inform the entitled person of the nature of revenue received by the violation.

  • 1040. Reclamation of that which is received on basis of disposal without charge

Upon disposal without charge of an object by an unentitled person, the person who acquires the right to the object on the basis of a right of disposal shall transfer that which is received to the entitled person even if the right of disposal is valid. The provisions of §§ 1038 and 1039 of this Act apply correspondingly.

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