Employer’s Liability and Business in Marriage
Employer’s Liability
The liability of the employer can stem from two sources: contract or tort.
Contractual Liability
This arises from the breach of contractual obligations due to intentional fault or disservice to the counterparty. Exemption is possible only in cases of force majeure (unforeseeable event) or a fortuitous event (predictable but inevitable event). According to Article 1101 of the Civil Code (CC), compensation is due for damages incurred through fraud, negligence, or default in fulfilling obligations, especially when they violate the contract’s terms.
Tort Liability
Article 1902 of the CC states that any act or omission causing injury to another through fault or negligence obliges the liable party to repair the damage. Employers are also responsible for the actions of their staff if they act within the scope of their employment and with power of attorney.
Our legal system is based on the principle of fault, meaning liability arises when the action causing injury is performed with fault or negligence. However, in recent years, there’s been a trend towards objectification in employer liability. This means the employer can be held liable for damages even without negligence, based on the principle that their activity generates risk and they must be responsible for it.
The employer is liable with all present and future assets, including personal assets not directly related to the business (Article 1911 of the CC). This applies to both civil and commercial assets. Legal entities are also liable with all their assets. In some cases, partners may be personally liable for company debts, while in others, they are responsible for fulfilling social obligations (e.g., in corporations or limited liability companies).
The Married Business Person: Defining Responsible Heritage
Until the Act of May 2, 1975, which reformed the CC and the Commercial Code (BCC), the legal position of spouses regarding business activities was unequal. Married women needed their husband’s permission to start or continue a business. Following this reform, both spouses are equal in initiating or continuing business pursuits and acquiring merchant status.
Regarding capital and economic effects, a married or single entrepreneur doesn’t create separate corporate assets solely responsible for business debts. The entrepreneur is liable for these debts with all present and future assets, even those unrelated to the business (principle of universal liability: Article 1911 CC).
The question for married entrepreneurs is the extent of responsibility towards the common property and the other spouse’s assets. The legal regime for married business persons is outlined in Articles 6 to 11 of the BCC:
- The merchant’s goods and the spouse’s joint property acquired through trade are liable for business debts. Either spouse can alienate or mortgage these assets.
- Other common property and the other spouse’s assets are governed by a marital agreement, which should be registered in the Commercial Register (requiring prior registration of the business).
- If there’s no registered marital agreement, the BCC applies: affecting common property from the business requires both spouses’ consent, which can be express or constructive.
- The BCC presumes consent for affecting common goods when:
- The business is conducted with the knowledge and without the express opposition of the other spouse.
- One spouse starts a business during the marriage, and the other doesn’t oppose its continuation.
However, the merchant spouse cannot break these presumptions through simple opposition. Opposition must be explicit, formal, documented in writing, and registered in the Commercial Register to be enforceable against third parties.
Finally, affecting the non-dealer spouse’s private property requires express consent in each instance, documented in a deed and registered in the Commercial Register to be effective against third parties. These rules can be modified by agreements within a marital contract registered in the Commercial Register.