Academic journal article Contemporary Readings in Law and Social Justice

Considerations on Classification of Good in Fungible and Non-Fungible

Academic journal article Contemporary Readings in Law and Social Justice

Considerations on Classification of Good in Fungible and Non-Fungible

Article excerpt

ABSTRACT.

Article 543 (1) of the New Civil Code states that goods are classified in fungible and non-fungible. Fungible goods are determined by numbering, measuring or weighing, so that they can be replaced by other goods in performing an obligation [Article 543 (2)]. Based on a legal act a fungible good by its own nature can be considered non-fiingible (3). This statement is welcome in the textbook of goods despite the fact that some authors consider that it should be placed in the law of obligations. From this point of view the Code followed on the special manuals and courses as well. The certain things or goods (individual) are in antithesis with things or goods of kind. Those things certain or determined by individual characters are not fungible with any other category of goods. Fungibility is constantly missing in real estate because even if they were alike they could not occupy the same place in space. For movable goods - it has been said - that if there are enough characteristics so that our senses may not make mistakes their fungibility seems a priori excluded. However the law remodeled the nature by human being's utility and use or by the contractor's intent more than by the physical fact given; therefore in distinguishing between fungibility and non-fiingibility the commercial prevails and not the natural.

Keywords: New Civil Code, res genera, res certa, the consumer goods, real subrogation, commercial and natural.

1. Definition. Distinction criteria

Fungible goods1 are those that can substitute each other in performing an obligation; they can substitute each other in payments and reimbursements (money, cigarettes, food, etc). Non-fungible goods are those that cannot substitute each other in order to absolve the debtor; in other words, these are the ones considered in their individuality and cannot substitute each other (a race horse, an old gold coin, a painting, reproduction furniture, a numbered copy of a limited edition, etc).2

2. The practical interest of classification

First, this interest lies in the institution of compensation (article 1143 of the Civil Code) that assumes the existence of the fungibility as an object between the two compensated obligations.3 The compensation is fully enforceable - as provided by article 1617 paragraph 1 of the New Civil Code - as soon as there are two certain debts, liquid and due, irrespective of their origin, having as object an amount of money or a quantity of fungible goods of the same nature. Indeed in case two persons are mutually debtor and creditor to each other it becomes useless to perform an obligation with the same object as the other one's obligation. This object identity is conceivable only if each of the two parties have no advantage in performing by the other party of its obligation; this is the case when the goods that represent the object of the two obligations are fungible.

Second, the sale has different effects as regards the fungible or nonfungible goods. Thus the seller of a non-fungible good (certain, determined) must deliver to the buyer that particular good without having the possibility to substitute it with an equivalent one; on the contrary, the seller of a fungible good has the possibility to make that replacement since his commitment does not refer to a determined copy of it.4 However based on a legal document the parties may convene that a good fungible by its nature may be considered non-fungible; the other way round the parties have the possibility to convene that an obligation having a specific object may be also valid by execution of another good than the contracted one. After that the buyer of a non-fungible good (hypothetically a certain, determined good) immediately becomes the owner (article 1674 New Civil Code).5 It is a different case with a buyer of general goods as long as they have not been individualized; until they are individualized the seller remains the owner and bears the risk of losing them for causes of force majeure. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.