NOVE successfully represented a client at Supreme Court in a court action concerning acknowledgement of obligation

Arsi Pavelts, attorney-at-law and partner of NOVE, successfully represented a client at the Supreme Court in a court action concerning acknowledgement of obligation. The judgement has symbolic significance, for the whole Civil Chamber of the Supreme Court substantially developed the acknowledgement of obligation regulation. The complexity and gravity of the action is confirmed by the fact that the same case was being resolved at the Supreme Court for the third time already.

The action focused on the question, what meaning does written acknowledgement of an obligation by an obligor have to an obligee. Does the obligor have the opportunity to become exempt from an obligation later, regardless of the acknowledgement of obligation, and under which conditions? The Supreme Court explained that, in order to be exempt from obligations, the obligor has to prove that the obligation acknowledged does not actually exist. Thereat, the obligor cannot make these objections regarding an acknowledged obligation, the existence of which the obligor was aware or had to be aware during the acknowledgement of obligation. This means that if the obligor knew or had to know that the obligation acknowledged does not exist or that he or she has the right to refuse payment of the obligation (e.g., there is no fundamental breach of contract), the obligor cannot be exempt from performing his or her obligation. It is a supplement to the pacta sunt servanda principle. The Supreme Court noted that the meaning of acknowledgement of obligation depends on the circumstances of every single case. Thereat, the wording, reason for submitting and purpose of the acknowledgement of obligation play a central role.

Attorney-at-law Arsi Pavelts is the co-author of Law of Obligations Act I. Executive Edition (Võlaõigusseadus I. Kommenteeritud väljaanne, Juura 2016) and has compiled comments to the acknowledgement of obligation regulation (§ 30 of the Law of Obligations Act).