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Chapter IV: Obligations
Article 20
(1) The applicable law regarding the formation and effect of a juridical act which results in a relationship of obligation is determined by the intention of the parties.
(2) Where there is no express intention of the parties or their express intention is void under the applicable law determined by them, the formation and effect of the juridical act are governed by the law which is most closely connected with the juridical act.
(3) Where among the obligations resulting from a juridical act there is a characteristic one, the law of the domicile of the party obligated under the characteristic obligation at the time he /she undertook the juridical act is presumed to be the most closely connected law. However, where a juridical act concerns immovable property, the law of the place where the immovable property is located is presumed to be the most closely connected law.
Article 21
(1) Where a juridical act results in the creation of rights on a negotiable instrument, the formation and effect of the act are governed by the law determined by the intention of the parties.
(2) However, where there is no express intention of the parties or their express intention is void under the applicable law determined by them, the law of the place where the juridical act was undertaken governs; where the place of the juridical act is unclear, the law of the place of payment governs.
(3) Formal requisites of a juridical act undertaken for the purpose of exercising or preserving a right on a negotiable instrument are governed by the law of the place of the act.
Article 22
Where a juridical act results in an obligation on a security made payable to order or to bearer, and is not governed by Article 21, the formation and effect of the act are governed by the law of the place where the act was performed; where the place of the act is unclear, by the law of the place of payment.
Article 23
An obligation arising from a management of the affairs of another without mandate (“negotiorum gestio”) is governed by the law of the place where the management was undertaken.
Article 24
An obligation arising from an unjust enrichment is governed by the law of the place where the enrichment was received. However, if the unjust enrichment arises from an intended performance of an obligation, the obligation of the enriched party is governed by the law applicable to the legal relationship which gave rise to the intended performance.
Article 25
An obligation arising from a tort is governed by the law of the place where the tort was committed. However, if another law is the law most closely connected with the tort, it governs.
Article 26
Where an injury has resulted from an ordinary use or consumption of an article of commerce, the legal relationship between the injured person and the manufacturer is governed by the national law of the latter. However, where the manufacturer has agreed in advance or where the manufacturer could have foreseen that the article would be sold in a place whose law is one of the three mentioned below, the law of that place is applied, if the injured person chooses that law as the applicable law:
a. The law of the place of injury;
b. The law of the place where the injured person purchased the article; and
c. The national law of the injured person.
Article 27
Where an obligation has resulted from a disruption of the order of a market by an act of unfair competition or of restriction of competition, the obligation is governed by the law of the place where the market is located. However, where the unfair competition or restriction of competition is produced by a juridical act, and where the law governing the juridical act is more beneficial to the injured person, that law is applied.
Article 28
(1) An obligation arising from a tort which was committed by means of publication, radio, television, internet publication or other medium of communication is governed by the law mentioned below which is the most closely connected with the tort:
a. The law of the place where the tort was committed; if the place of the tort is unclear, the law of the tortfeasor’s domicile;
b. The law of the place where the injury occurred, if such place could have been foreseen by the tortfeasor; and
c. The national law of the injured person, if the injury was done to his non-property individual rights.
(2) Where the tortfeasor referred to in the preceding paragraph is in the business of publication, radio, television, internet publication, or other medium of communication, then the law of the place of his/her business governs.
Article 29
The existence of a direct claim of an injured person against the insurer of the person liable for the tort is governed by the law applicable to the insurance contract. However, the injured person also may assert a direct claim if the law applicable to the obligation permits its assertion.
Article 30
An obligation arising from a legal fact other than those referred to in Articles 20-29 is governed by the law of the place where the fact occurred.
Article 31
Where the parties with respect to an obligation which arises otherwise than from a juridical act agree to the application of the law of the Republic of China after a suit has been brought on the obligation in a court of the Republic of China, the law of the Republic of China is applied.
Article 32
(1) Where a claim has been transferred, the effect of the transfer on the debtor is determined by the law governing the formation and effect of the transferred claim.
(2) Where a third person has provided security for a claim, the effect on the third person of a transfer of the claim is determined by the law governing the formation and effect of the security.
Article 33
(1) Where a contract of assumption is concluded between an assuming person and the debtor, the effect of the assumption on the creditor is governed by the law applicable to the formation and effect of the original obligation.
(2) Where a third person has provided security for the performance of an obligation to a creditor, the effect on the third person of an assumption of the obligation is governed by the law applicable to the formation and effect of the security.
Article 34
Where a third person satisfies an obligation on behalf of a debtor by reason of a particular legal relationship existing between them, the right of reimbursement of the third person against the debtor is governed by the law applicable to the legal relationship.
Article 35
Where an obligation borne by multiple persons has been performed in whole by some of them, the right to reimbursement of those who performed against the others is governed by the law applicable to the legal relationship between all of them.
Article 36
The time limitation of action for a claim is governed by the law applicable to the legal relationship from which the claim arose.
Article 37
The extinction of an obligation is governed by the law applicable to the formation and effect of the obligation.