Civil Code of Georgia — General provisions

LAW OF GEORGIA

CIVIL CODE OF GEORGIA

Book One

General Provisions of the Civil Code

Introductory Provisions

Article 1 – Concept; scope of application

This Code regulates property, family and personal relations of a private nature based on the equality of persons.

Article 2 – Civil legislation

1. The Civil Code, other acts of private law and their interpretations shall conform to the Constitution of Georgia.

2. If legal norms of the same rank are in conflict, the special and the most recent law shall apply. If general norms

provided for in this Code are in conflict with special norms, special norms shall be applied.

3. Subordinate normative acts shall be applied to regulate civil relations only if they supplement the norms of a

law. If such acts contravene the law, the law shall prevail.

4. Customary norms shall be applied only if they do not contravene universally accepted principles of justice and

morality or public order.

Article 3 – Entry into force of a civil law

1. A law and subordinate normative acts shall take effect only after they are published in an official journal for

general knowledge according to established rules.

2. Ignorance or misunderstanding of the law shall not serve as an excuse for not applying the law or for release

from liability stipulated by law.

3. A law shall lose force if so expressly indicated by a new law, or if any former law contravenes a new law, or if a

new law encompasses the relations regulated by the former law, or if the relations regulated by the former law no

longer exist.

4. A law of a general nature shall not repeal a special law unless such repeal was the direct intention of the

legislator.

5. Repeal of a law that repeals a former law shall not reinstate the former law.

Article 4 – Inadmissibility of denying justice in civil proceedings

1. A court may not refuse to administer justice in civil cases even if no legal norm exists or the legal norm is vague.

2. A court may not refuse to apply a law on the grounds that in its opinion a norm of the law is unjust or immoral.

Article 5 – Analogy of law and justice

1. To regulate a relationship that is not expressly provided by law the legal norm that regulates the most similar

circumstance (analogy of law) shall be applied.

2. If an analogy of law cannot be used, then the relationship shall be regulated by the general principles of justice

and the requirements of fairness, good faith and morality (analogy of justice).

3. Norms regulating special relationships (norms on exceptions) may not be applied by analogy.

Article 6 – Retroactive force of civil laws

Laws and subordinate normative acts shall not be retroactive except as expressly provided for in law. A law may

not be given retroactive force if it is prejudicial to or disadvantages a person.

Article 7 – Objects of private law

An object of private legal relations may be a tangible or intangible good having tangible or intangible value, which

has not been removed from circulation by law.

Article 8 – Subjects of private law

1. Any natural or legal person may be a subject of private law. This rule shall apply to both entrepreneurial and

non-entrepreneurial persons of Georgia and of other countries.

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2. Private law relationships between state bodies and legal entities under public law, on the one hand, and other

persons on the other hand, shall likewise be regulated by civil laws, unless these relationships, in the interests of

the state or the public, are to be regulated by public law.

3. Participants in a legal relationship shall exercise their rights and duties in good faith.

Article 9 – Purpose of civil laws

Civil laws ensure the freedom of civil circulation in the territory of Georgia, unless the exercise of such freedom

prejudices the rights of third parties.

Article 10 – Independence of civil rights from political rights; imperative norms of civil law

1. The exercise of civil rights shall not depend on political rights regulated by the Constitution or by other laws of

public law.

2. Participants in a civil relationship may exercise any action not prohibited by law, including any action not

expressly provided by law.

3. Imperative norms of civil laws protect the freedom of others from the abuse of rights. Actions that contravene

these norms shall be void except where the law explicitly defines other effects. Individual interventions through

administrative acts shall be prohibited, unless such acts are applied on the grounds of a specific law.

Section One

Persons

Chapter One

Natural Persons

Article 11 – Capacity for rights

1. The capacity for rights of a natural person is the ability to have civil rights and duties that arise from the

moment of the person’s birth.

2. The right to inherit shall arise upon conception; the exercise of this right shall depend on birth.

3. The capacity for rights of a natural person shall be terminated by his/her death. The moment of death shall be

the moment in which the brain ceases to function.

4. A natural person may not be deprived of his/her capacity for rights.

Article 12 – Legal capacity

1. Legal capacity or the ability of a natural person to fully acquire and exercise civil rights and duties of his/her

own will and with his/her action shall arise upon attainment of the age of majority.

2. A person who has attained the age of eighteen years shall be a person of the age of majority.

3. A person who has entered into marriage before attainment of the age of eighteen years shall be deemed to have

legal capacity.

4. A person with legal capacity is deemed to be a person in need of psychosocial support (the ‘beneficiary of

support’), or a person who has a fixed psychological, mental/intellectual disorders which, when interrelating with

other impediments, may prevent him/her from participating in public life fully and effectively on equal terms

with others if such a person meets the conditions under paragraphs 2 and 3 of this article; furthermore, these

impediments, without appropriate advice and aid, significantly make it harder for the person to freely express

his/her own will and to make an informed and conscious choice in an area defined by the court.

5. The court may also recognise a minor as a beneficiary of support within the limits when, under the legislation

of Georgia, the consent of his/her legal representative is not required while the minor exercises his/her rights and

duties.

6. A minor under the age of seven years (an underage) shall be a person with legal capacity.

Decision No 2/4/532,533 of the Constitutional Court of Georgia of 8 October 2014 – website, 28.10.2014

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 13 – Inadmissibility of limiting legal capacity by an agreement

Legal capacity may be limited only where so provided by law. Legal capacity may not be limited by an agreement.

Article 14 – Limited legal capacity

1. A minor from the age of seven to eighteen years shall have limited legal capacity.

2. An adult over whom a court has established a custodianship shall also be deemed to be a person with limited

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legal capacity. A person with limited legal capacity and a minor shall be equal in their legal capacities.

3. Limitation of legal capacity shall cease when the grounds for limitation of a person’s legal capacity no longer

exist.

Article 15 – Consent of a legal representative in cases of limited legal capacity

In order for the declaration of intent of a person with limited legal capacity to be valid the consent of his/her legal

representative shall be required, except when the person with limited legal capacity acquires a benefit from the

transaction.

Article 16 – Limitation of legal capacity by reason of use of alcohol or narcotic substances

1. A court may establish custodianship over an adult who abuses alcohol or narcotic substances and because of this

puts his/her family in material hardship. He/she may conduct transactions to administer property or wages,

pension or other income only with the consent of his/her custodian, except for minor everyday transactions.

2. Full restoration of limited legal capacity shall cause the cancellation of custodianship.

Article 17 – Right to a name

1. Every natural person shall have the right to a name that includes a given name and a surname.

2. Change of name shall be allowed. Change of name shall require the person’s application stating the grounds for

change. An appropriate body shall consider the application according to established rules.

3. Change of name shall not serve as the basis to terminate or alter the rights and obligations acquired or assumed

under the former name. The person shall be bound to undertake all necessary actions to notify his/her creditors

and debtors of the change of his/her name.

Article 18 – Personal non-property rights

1. A person whose right to a name is contested or whose interests are prejudiced as a result of an unauthorised use

of his/her name may demand that the wrongdoer cease or refrain from such action.

2. A person may protect in court, according to the procedures laid down by law, his/her honour, dignity, privacy,

personal inviolability or business reputation from defamation.

3. If information defaming the honour, dignity, business reputation or privacy of a person has been disseminated

in the mass media, then it shall be retracted in the same media. If such information is contained in a document

issued by an organisation, then this document shall be corrected and the parties concerned shall be informed of

the correction.

4. A person whose honour and dignity has been defamed by information disseminated in the mass media may

disseminate information in answer to the defamation through the same media.

5. A person may exercise the rights described in paragraphs 1 and 3 of this article also when his/her image

(photograph, film, video, etc.) has been disseminated without his/her consent. The consent of the person shall not

be required when photo-taking (video recording, etc.) is connected with his/her public recognition, the office

he/she holds, the requirements of justice or law enforcement, scientific, educational or cultural purposes, or when

the photo-taking (video recording etc.) has occurred in public circumstances, or when the person has received

compensation for posing.

6. The values referred to in this article shall be protected regardless of the culpability of the wrongdoer. And, if

the violation has been caused by culpable action, a person may claim damages. Damages may be claimed in the

form of the profit accrued to the wrongdoer. In the case of culpable violation, the injured person may also claim

compensation for non-property (moral) damages. Moral damages may be recovered independently from the

recovery of property damages.

Law of Georgia No 222 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 91

Article 18 1 – Right to obtain personal data

1. A person may have access to the personal data and records about him/her that are related to his/her

financial/material status or other private matters, and obtain copies of such data except as otherwise provided for

in the legislation of Georgia.

2. A person may not be denied information that includes personal data and records about him/her.

3. Any person, upon written request, shall transfer the personal data and records held by him/her to another

person if that person presents a written consent of the person whose personal data is requested. In that case, the

person shall protect the confidentiality of such data or information.

Law of Georgia No 5919 of 14 March 2008 – LHG I, No 7, 26.3.2008, Art. 39

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Article 19 – Protection of personal rights after death

The rights referred to in Article 18 may also be exercised by a person who, although not the bearer of the name or

the right to personal dignity himself/herself, nevertheless has an interest deserving protection. He/she may

exercise the right to demand such protection of his/her name and dignity which determines the essence of the

person and survives his/her death. It shall not be allowed to claim material compensation for moral damages for

defamation of the name, honour, dignity or business reputation of a person after his/her death.

Article 20 – Place of residence

1. The place where a natural person chooses his/her ordinary dwelling shall be deemed to be the place of

residence of the person. The person may have several places of residence.

2. The place of residence of a minor shall be the place of residence of parents having parental rights, and the place

of residence of a ward shall be the place of residence of his/her guardian.

3. The place of residence of a person shall not be cancelled if he/she leaves this place under compulsion or for

performance of a state duty for a certain period of time.

Article 21 – Declaring a person missing

1. Based on the application of an interested person, a court may declare a natural person missing if his/her

whereabouts are unknown and he/she has not appeared at his/her place of residence for two years. Upon the entry

into force of the court’s decision, the legal heirs of the missing person shall obtain the right to administer the

property of the missing person as property held in trust and the right to receive benefits from it. From this

property maintenance shall be paid to the missing person’s dependents and debts shall be paid.

2. If the missing person reappears or his/her whereabouts become known, the court decision on the

administration of his/her property shall be vacated. He/she may not demand compensation for the benefits

received by proper management of the property during his/her absence.

Article 22 – Declaring a person dead

1. A person may be declared dead by a decision of a court, if there has been no information at his/her place of

residence on his/her whereabouts for five years, also if he/she went missing under circumstances threatening

his/her life, or if his/her death may be presumed because of some unfortunate accident, and no such information

has been obtained for six months.

2. A member of the armed services or any other person who went missing in connection with wartime operations

may be declared dead by a decision of a court not earlier than two years after the day on which the wartime

operations ended.

3. The day of entry into legal force of a court decision declaring a person dead shall be considered to be the day of

his/her death.

4. In the cases referred to in paragraphs 1 and 2 of this article, a court may declare that the day of a person’s death

is the day of his/her presumed death.

Article 23 – Effect of reappearance of a person declared dead

1. If a person who has been declared dead reappears or if his/her whereabouts become known, the court shall

vacate its decision regarding the person’s death.

2. Regardless of the time of reappearance, the person may recover any remaining property that has been

gratuitously transferred to another person following the declaration of his/her death.

3. A person who paid to acquire the property of a person who was declared dead shall return the property to

him/her if it is proved that at the time of acquisition of the property the acquirer knew that the person declared

dead was alive.

4. If the property of the person declared dead was transferred to and subsequently sold by the state, then after the

vacation of the court decision declaring the person dead the proceeds of the sale of his/her property shall be

returned to the person.

Law of Georgia No 2239 of 9 December 2005 – LHG I, No 54, 20.12.2005, Art. 360

Chapter Two

Legal Persons

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

I – General Provisions

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Article 24 – Concept; types

1. A legal person is an organised entity created to accomplish a certain purpose that owns property, is

independently liable with its own property, acquires rights and duties in its own name, enters into transactions

and can sue or be sued.

2. A legal person may be organised as a corporation, based on membership, dependent or independent of the status

of its members, and engage or not engage in entrepreneurship.

3. Legal entities under public law participate in civil law relations in the same manner as legal entities under

private law. The procedures for their creation, organisation and operation shall be regulated by law.

4. The State and municipalities participate in civil law relations in the same manner as legal entities under private

law. In this respect, the powers of the state or of a municipality shall be exercised by its organs (departments,

institutions, etc.) without being legal persons.

5. A legal person whose purpose is entrepreneurial (commercial) activity or its branch shall be created according

to the Law of Georgia on Entrepreneurs.

6. A legal person whose purpose is non-entrepreneurial activity shall be registered according to the procedures

contained in this Code.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 6989 of 1 5 July 2020 – website, 28.7.2020

Article 25 – Capacity for rights of legal persons

1. A legal entity under public law may engage in an activity corresponding to the objectives provided for in law or

by its articles of association.

2. A legal entity under private law (entrepreneurial or non-entrepreneurial (non-commercial)) may engage in any

activity not prohibited by law, regardless of whether or not this activity is provided for in its articles of

association.

3. A legal person may engage in certain kinds of activities, the list of which is determined by law, only after

obtaining a special license/permit or authorisation. The right of a legal person to engage in such activity shall arise

from the moment the license/permit or authorisation is obtained.

4. The capacity for the rights of a legal person shall arise from the moment of its registration and shall cease to

exist from the moment that the completion of its liquidation is registered.

5. A non-entrepreneurial (non-commercial) legal person may engage in an entrepreneurial activity of an auxiliary

nature the profit from which shall be used for achieving the objectives of the non-entrepreneurial (non-

commercial) legal person. The profit made from such activity may not be distributed to the founders, members, or

donors of the non-entrepreneurial (non-commercial) legal person or to those having managerial and

representative powers in such non-entrepreneurial (non-commercial) legal person.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 3537 of 21 July 2010 – LHG I, No 47, 5.8.2010, Art. 304

Article 26 – Domicile of a legal person

1. The location of the administration of a legal person shall be deemed to be the domicile of the legal person. A

legal person may have only one domicile (legal address).

2. Any other residence of a legal person shall be deemed to be the domicile of its branch.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

II – Non-entrepreneurial (Non-commercial) Legal Persons

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 27 – Name of a non-entrepreneurial (non-commercial) legal person

1. A non-entrepreneurial (non-commercial) legal person shall have a name that includes the indication that it is a

non-entrepreneurial (non-commercial) legal person.

2. The name of non-entrepreneurial (non-commercial) legal person may not include any graphic symbols that do

not have any sound or verbal equivalent established by linguistic standards or the indications characteristic of the

legal person or legal entity under public law specified by the Law of Georgia on Entrepreneurs and the Organic

Law of Georgia on Political Associations of Citizens. The name may not include any addition that may mislead a

third person and/or cause a mistake and/or misunderstanding of the form or activity of the entity.

3. The name of a non-entrepreneurial (non-commercial) legal person must not be the same as that of an already

registered non-entrepreneurial (non-commercial) legal person.

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4. A person who unlawfully uses the name of another legal person shall cease such use at the demand of the

authorised person and compensate damages caused by such unlawful use.

4 1 . When determining the name of a non-entrepreneurial (non-commercial) legal person, the rules established for

company names by Article 16 of the Law of Georgia on Entrepreneurs shall additionally apply.

5. In the case of defamation of the business reputation of a legal person, the rules of Article 18 of this Code shall

apply.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Law of Georgia No 887 of 2 August 2021 – website, 4.8.2021

Article 28 – Procedure for the registration of non-entrepreneurial (non-commercial) legal persons and branches

(representative offices) of foreign non-entrepreneurial (non-commercial) legal persons

1. Non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-

entrepreneurial (non-commercial) legal persons shall be registered in the Register of Non-entrepreneurial (Non-

commercial) Legal Entities.

2. The Register of Non-entrepreneurial (Non-commercial) Legal Entities is maintained by the Legal Entity under

Public Law (LEPL) – National Agency of Public Registry of the Ministry of Justice of Georgia.

3. Non-entrepreneurial (non-commercial) legal persons and branches (representative offices) of foreign non-

entrepreneurial (non-commercial) legal persons shall be registered according to the procedures contained in this

Code as well as by the legislation of Georgia for registration of entrepreneurial entities and branches

(representative offices) of foreign entrepreneurial legal persons.

Law of Georgia No 1902 of 28 December 2002 – LHG I, No 4, 22.1.2003, Art. 20

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Article 29 – Conditions for registration of non-entrepreneurial (non-commercial) legal persons

1. If the registration of a non-entrepreneurial (non-commercial) legal person is requested, the interested person

shall submit to the registration authority the partners’ agreement and an application. The application shall contain

the necessary details required under paragraph 2 of this article and under the Law of Georgia on Entrepreneurs for

the registration of entrepreneurial legal persons.

2. If the registration of a non-entrepreneurial (non-commercial) legal person is requested, in addition to the data

required by paragraph 1 of this article, its articles of association shall contain:

a) the object of the activity of the non-entrepreneurial (non-commercial) legal person;

b) the procedures for admitting, withdrawing and excluding members of the non-entrepreneurial (non-

commercial) legal person if it is a non-entrepreneurial (non-commercial) legal person based on membership;

c) name of the body (person) making a decision on reorganisation or liquidation and the decision-making

procedure;

d) the procedures for creating (electing) and the tenure of the management body (managing person) of the non-

entrepreneurial (non-commercial) legal person.

2 1 . The registration authority shall, in addition to the registration of a non-entrepreneurial (non-commercial)

legal person, create within a single electronic portal an electronic address of a non-entrepreneurial (non-

commercial) legal entity to which the procedures established by Article 18 of the Law of Georgia on

Entrepreneurs shall apply.

2 2 . A non-commercial (non-commercial) legal person may have a registered telephone number and/or e-mail

address to which electronic messages can be sent. Sending an electronic message to a registered phone number

and/or e-mail address shall be deemed as serving such message on a person concerned.

3. Other procedures for registration of non-entrepreneurial (non-commercial) legal persons shall be defined by

the Law of Georgia on Entrepreneurs, the Law of Georgia on Creative Workers and Creative Unions, the Law of

Georgia on Copyright and Related Rights, and the Organic Law of Georgia on Trade Unions.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Law of Georgia No 3827 of 30 November 2018 – website, 14.12.2018

Law of Georgia No 887 of 2 August 2021 – website, 4.8.2021

Law of Georgia No 3451 of 3 July 2023 – website, 25.7.2023

Article 30 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Article 31 – Registration of changes made by non-entrepreneurial (non-commercial) legal persons and branches

(representative offices) of foreign non-entrepreneurial (non-commercial) legal persons

1. The decision of an authorised person/body duly made and certified or the transaction made by authorised

persons according to the procedures laid down by the legislation of Georgia shall serve as the basis for changing

the registered records.

2. The changes made by non-entrepreneurial (non-commercial) legal persons and branches (representative offices)

of foreign non-entrepreneurial (non-commercial) legal persons, which cause a change in their registration

documents, shall require registration. A change shall be deemed to have been made from the moment the change

is registered in the Register of Non-entrepreneurial (Non-commercial) Legal Entities.

3. Changes made in the registered records of non-entrepreneurial (non-commercial) legal persons/branches

(representative offices) of foreign non-entrepreneurial (non-commercial) legal persons shall be registered

according to the procedure laid down for the registration of entrepreneurial legal persons/branches (representative

offices).

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Article 32 – Procedure for making decisions on the registration of non-entrepreneurial (non-commercial) legal

persons and branches (representative offices) of foreign non-entrepreneurial (non-commercial) legal persons

1. On the matters defined by this chapter and the matters falling within the scope of its authority, the registration

authority shall make decisions required by the Law of Georgia on Public Registry and the Law of Georgia on

Entrepreneurs for registration and access to information.

2. Non-entrepreneurial (non-commercial) legal persons shall be dissolved in the accordance with the general rule

established by the Law of Georgia on Entrepreneurs.

2 1 . The procedure for dissolving non-commercial (non-commercial) legal persons that are established by the State

or a municipality shall be approved by the Minister of Economy and Sustainable Development of Georgia.

3. If the registration of a non-entrepreneurial (non-commercial) legal person or of the branch (representative

office) of a foreign non-entrepreneurial (non-commercial) legal person is requested, or when the alteration of the

registered records is requested, the registration authority, except for the grounds defined by the legislation of

Georgia for an entrepreneurial entity, shall make a decision on suspending the registration proceedings if:

a) the objectives of the non-entrepreneurial (non-commercial) legal person or of the branch (representative office)

of the foreign non-entrepreneurial (non-commercial) legal person the registration of which is sought, contradict

the applicable laws, recognised moral standards or the constitutional and legal principles of Georgia;

b) there are conditions provided for in Article 26(3) of the Constitution of Georgia.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2458 of 25 December 2009 – LHG I, No 49, 30.12.2009, Art. 370

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

http://www.matsne.gov.ge 040.000.000.05.001.000.223

Law of Georgia No 887 of 2 August 2021 – website, 4.8.2021

Article 33 – State control over the activities of non-entrepreneurial (non-commercial) legal persons

1. A decision to suspend or prohibit the activity of non-entrepreneurial (non-commercial) legal persons shall be

made by a court in the cases and in the manner provided by an organic law of Georgia.

2. If a non-entrepreneurial (non-commercial) legal person has substantively engaged in entrepreneurial activity, a

court, based on the application from the registration authority and/or the interested person, shall consider and

make a decision to suspend or prohibit the activity of the non-entrepreneurial (non-commercial) legal person.

3. After the court makes a decision to prohibit the activity of a non-entrepreneurial (non-commercial) legal

person, the registration authority shall revoke the registration of the non-entrepreneurial (non-commercial) legal

person.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Article 33 1 – (Deleted)

Law of Georgia No 5282 of 11 July 2007 – LHG I, No 30, 30.7.2007, Art. 346

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Article 34 – (Deleted)

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Article 35 – Management and representation of non-entrepreneurial (non-commercial) legal persons

1. A founder/member of a non-entrepreneurial (non-commercial) legal person may grant exclusive right to one

person to manage the activities of a non-entrepreneurial (non-commercial) legal person and/or may establish joint

management and/or representation by two or more persons.

2. Managerial authority means making decisions on behalf of a non-entrepreneurial (non-commercial) legal

person within the scope of its authority, and representative authority means acting on behalf of a non-

entrepreneurial (non-commercial) legal person in relations with third parties. Unless otherwise determined by the

registration documents, a managerial authority shall include representative authority.

3. The organisational structure of a non-entrepreneurial (non-commercial) legal person shall be regulated by its

charter (founders’/members’ agreement) that shall be duly certified.

4. The general rules established by the Law of Georgia on Entrepreneurs for persons authorised to represent

entrepreneurs shall apply to the origination and termination of managerial and representative powers of a non-

entrepreneurial (non-commercial) legal person.

5. The rules established by Article 17 of the Law of Georgia on Entrepreneurs for business letters and websites

shall apply to non-entrepreneurial (non-commercial) legal persons. Law of Georgia No 179 of 24 June 2004 – LHG

I, No 19, 15.7.2004, Art. 79

Law of Georgia No 617 of 26 November 2004 – LHG I, No 36, 8.12.2004, Art. 168

Law of Georgia No 1051 of 25 February 2005 – LHG I, No 9, 17.3.2005, Art. 59

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Law of Georgia No 887 of 2 August 2021 – website, 4.8.2021

Article 36 – Transfer of assets owned by non-entrepreneurial (non-commercial) legal persons

The assets owned by a non-entrepreneurial (non-commercial) legal person may be transferred if the transfer

serves the activity of the non-entrepreneurial (non-commercial) legal person, its organisational development,

promotes the achievement of its objectives or serves charitable purposes.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

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Article 37 – Compensation for damage

1. A non-entrepreneurial (non-commercial) legal person shall be liable for damages incurred to third parties as a

result of an action performed by a person(s) with managerial and representative authorities in the course of

his/her duties, which gives rise to the obligation to pay damages.

2. The person(s) vested with managerial and representative authority shall run the affairs in good faith. In case of

nonfulfillment of the duties, he/she shall be accountable to the non-entrepreneurial (non-commercial) legal

person for damages incurred. Waiver of a claim for damages shall be void if it is necessary to satisfy the claims of

third parties.

3. A non-entrepreneurial (non-commercial) legal person shall be independent from the status of its member(s) or

from that of its manager(s) and representative(s). The liability of the non-entrepreneurial (non-commercial) legal

person shall be limited to its property. The members of a non-entrepreneurial (non-commercial) legal person or

its manager(s) and representative(s) shall not be liable for the obligations of the non-entrepreneurial (non-

commercial) legal person. Nor shall the non-entrepreneurial (non-commercial) legal person be liable for the

obligations of its members or person(s) with managerial and representative authorities.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 38 – Reorganisation of non-entrepreneurial (non-commercial) legal persons

1. The legal form of a non-entrepreneurial (non-commercial) legal person may not be changed, except when a

change in its legal form transforms the non-entrepreneurial (non-commercial) legal person into a legal entity

under public law.

1 1 . A non-entrepreneurial (non-commercial) legal person shall be divided (by demerger, separation), combined

(by merger, acquisition) and liquidated according to the procedures contained in the legislation of Georgia for

liquidation/reorganisation of entrepreneurial entities.

2. Founders/members of a non-entrepreneurial (non-commercial) legal person shall determine the person entitled

to receive the assets remaining after the liquidation of a non-entrepreneurial (non-commercial) legal person in the

application for registration. When the non-entrepreneurial (non-commercial) legal person is liquidated, its assets

may be transferred if:

a) the transfer promotes the achievement of its objectives;

b) the transfer serves charitable purposes;

c) the property is transferred to another non-entrepreneurial (non-commercial) legal person.

3. The assets remaining after the liquidation of a non-entrepreneurial (non-commercial) legal person may not be

distributed to its founders/members or persons with managerial and representative authorities.

4. If the founders/members of a non-entrepreneurial (non-commercial) legal person do not identify the person

entitled to receive the assets remaining after its liquidation, a court shall transfer the assets remaining after the

liquidation of the non-entrepreneurial (non-commercial) legal person to one or several non-entrepreneurial (non-

commercial) legal entities with the same or similar objectives as those of the liquidated non-entrepreneurial (non-

commercial) legal person. If no such legal persons exist or can be found, a decision may be made on transferring

the assets to the State. The court may distribute the assets after six months from the registration of the

commencement of the liquidation proceedings.

5. Based on a final judgment of conviction in a criminal case, the liquidator(s) appointed by the court shall carry

out the liquidation of a non-entrepreneurial (non-commercial) legal person. Liquidation and reorganisation

procedures may not be initiated against a non-entrepreneurial (non-commercial) legal person from the moment of

initiation of criminal proceedings until the entry into force of a judgment of conviction or until the termination of

criminal proceedings.

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

Law of Georgia No 651 of 30 May 2013 – website, 12.6.2013

Article 38 1 – (Deleted)

Law of Georgia No 1964 of 3 November 2009 – LHG I, No 35, 19.11.2009, Art. 253

Law of Georgia No 2978 of 27 April 2010 – LHG I, No 24, 10.5.2010, Art. 144

Law of Georgia No 5017 of 1 July 2011 – website, 14.7.2011

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Article 39 – Non-registered unions (associations)

1. The matters related to the organisation and structure of a non-registered union (association) shall be

determined by a mutual agreement of its members. A non-registered union (association) shall not be considered a

legal person.

2. The membership dues paid by members and the assets acquired with those dues make up the common property

of a non-registered union (association).

3. A non-registered union (association) may be represented by its members or duly authorised persons in court or

in out-of-court relations.

4. Creditors’ claims may be fulfilled from the common property of a non-registered union (association). At the

same time, the persons who acted on behalf of the non-registered union (association) shall also be liable as debtors

both individually and jointly.

Law of Georgia No 179 of 24 June 2004 – LHG I, No 19, 15.7.2004, Art. 79

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3536 of 25 July 2006 – LHG I, No 37, 7.8.2006, Art. 277

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 40 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 41 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 42 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 43 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 44 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 45 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 46 – (Deleted)

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 47 – (Deleted)

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 48 – (Deleted)

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.05.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

Article 49 – (Deleted)

Law of Georgia No 3140 of 25 May 2006 – LHG I, No 18, 31.5.2006, Art. 134

Law of Georgia No 3967 of 14 December 2006 – LHG I, No 48, 22.12.2006, Art. 336

III – Collective Investment Funds, Sub-funds of Investment Funds

Law of Georgia No 6814 of 14 July 2020 – website, 22.7.2020

Article 49 1 – Collective investment funds

1. The issues of organisation and structure of collective investment funds shall be determined by the Law of

Georgia on Collective Investment Undertakings. A collective investment fund shall be an organisational formation

that is not a legal person.

2. A collective investment fund shall be represented in court or out-of-court relations by a company managing its

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assets.

Law of Georgia No 6814 of 14 July 2020 – website, 22.7.2020

Article 49 2 – Sub-funds of investment funds (sub-funds)

1. An umbrella fund is an independent part of an umbrella fund (investment company or collective investment

fund), the organisation and structure of which are determined by the Law of Georgia on Collective Investment

Undertakings. A sub-fund of an investment fund shall not be a legal person.

2. A sub-fund of a collective investment fund shall be represented in court or out-of-court relations by a company

managing the assets of the collective investment fund.

3. A sub-fund of an investment company shall be represented in court or out-of-court relations by a person

authorised to represent the investment company or by an asset management company, provided he/she/it was

appointed by the investment company.

Law of Georgia No 6814 of 14 July 2020 – website, 22.7.2020

IV – Securitisation Fund; Securitisation Division

Law of Georgia No 3942 of 15 December 2023 – website, 27.12.2023

Article 49 3 – Securitisation Fund

1. The issues regarding the organisation and set-up of the securitisation fund shall be defined by the Law of

Georgia on Transformation into Securities. The securitisation fund shall be an organisational unit which is not a

legal entity.

2. The securitisation fund shall be represented in court or non-judicial relations by its asset management company.

Law of Georgia No 3942 of 15 December 2023 – website, 27.12.2023

Article 49 4 – Securitisation division

1. A securitisation division shall be an independent part of a special target unit of securitisation (the securitisation

fund or securitisation company), the issues regarding the organisation and structure of which shall be defined by

the Law of Georgia on Transformation into Securities. A securitisation division shall not be a legal entity.

2. A division of the securitisation fund shall be represented in court or non-judicial relations by the asset

management company of the collective investment fund.

3. A division of a securitisation company shall be represented in court or non-judicial relations by a person with

the representative powers of the securitisation company or by an asset management company if it has been

appointed by the securitisation company.

Law of Georgia No 3942 of 15 December 2023 – website, 27.12.2023

Section Two

Transactions

Chapter One

General Provisions

Article 50 – Concept

A transaction is a unilateral, bilateral or multilateral declaration of intent aimed at creating, changing or

terminating a legal relation.

Article 51 – Validity of a unilateral declaration of intent

1. The declaration of intent that requires acceptance by another party shall be considered valid from the moment

it reaches the other party.

2. The declaration of intent shall not be considered valid if the other party rejects it in advance or

contemporaneously.

3. The validity of the declaration of intent may remain unaffected by the death of the party to the transaction, or

in a case provided for under Article 1293(4) of this Code, if this event occurred after the declaration of intent.

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 52 – Interpretation of a declaration of intent

In interpreting the declaration of intent, the intention shall be determined by a reasonable deliberation, and not

only from the literal meaning of the wording.

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Article 53 – Non-existence of a transactions when its content cannot be ascertained

A transaction shall not exist when its content cannot be ascertained from its form of expression or from other

circumstances.

Article 54 – Unlawful and immoral transactions

A transaction that violates the rules and prohibitions laid down by law or that contravenes the public order or

principles of morality shall be void.

Article 55 – Invalidity of a transaction by reason of abuse of influence

A transaction that has been made by one party’s undue influence over the other party when their relationship is

based on exceptional confidence shall be void.

Law of Georgia No 6151 of 8 May 2012 – website, 25.5.2012

Article 56 – Sham and fraudulent transactions

1. A transaction that has been made only for the sake of appearances, without intent to create legal implications

(sham transaction), shall be void.

2. If, by making a sham transaction, the parties intended to hide another transaction, then the rules applicable to

hidden transactions shall apply (fraudulent transactions).

Article 57 – Invalidity of a transaction when the declaration of intent lacks seriousness

1. The declaration of intent that has been made not seriously (humorously), under the presumption that the lack

of seriousness of the declaration would be understood, shall be void.

2. A recipient of the declaration of intent shall be paid damages resulting from the fact that he/she trusted the

seriousness of the declaration, provided he/she did not know and could not have known of its lack of seriousness.

Article 58 – Voidance of a transaction due to minority or mental disorder

1. The declaration of intent made by a minor shall be void.

2. The declaration of intent made by a person during loss of consciousness or temporary mental disorder may be

deemed void.

3. The declaration of intent made by a person with mental disorder while concluding a transaction shall be void

when it is inconsistent with the correct perception of reality if the person does not benefit from this transaction,

even if the court has not recognised him/her as a beneficiary of support.

Decision No 2/4/532,533 of the Constitutional Court of Georgia of 8 October 2014 – website, 28.10.2014

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 58 1 – Conclusion of a transaction by a beneficiary of support

1. If a beneficiary of support concludes a transaction without having received the support defined by the court

decision, the validity of the transaction shall depend on whether the supporter approves it or not, except when

the beneficiary of support benefits from the transaction.

2. The procedure established under Articles 64 and 66 of this Code shall apply to the conclusion of a transaction

by a beneficiary of support without having received the support defined by the court decision.

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 59 – Transaction made without observance of the form

1. A transaction shall be void if made without observance of the form provided by law or the contract, or without

permission, if permission is required for the transaction.

2. A voidable transaction shall be void from the moment of its execution if it is rescinded. Rescission shall be

declared to the other party to the contract.

3. An interested person shall have the right to rescind.

Article 60 – Conversion of transactions

If a void transaction meets the requirements established for another transaction, then the latter transaction shall

be applied, provided that the parties, upon detecting that the first transaction is void, wish the second transaction

to be valid.

Article 61 – Significance of confirmation when transactions are void

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1. An indisputably void (null and void) transaction shall be deemed void from the moment of its making.

2. If a person making an indisputably void transaction confirms it, then his/her action shall be considered as the

making of a new transaction.

3. If a person having a right to rescind confirms the transaction, by doing so he/she shall forfeit the right to

rescind.

4. If the parties confirm an indisputably void bilateral transaction, then they are bound, when in doubt, to transfer

to each other everything that would have accrued to them if the transaction had been valid initially.

5. The confirmation shall become valid only when the contract or the transaction does not contravene the

principles of morality and the requirements of public order.

Article 62 – Invalidity of parts of a transaction

Invalidity of part of a transaction shall not cause the invalidity of its other parts, if it can be presumed that the

transaction would have been made even without the void part.

Chapter Two

Legal Capacity as a Condition for Validity of Transactions

Article 63 – Transactions made by a minor

1. If a minor makes a bilateral transaction (contract) without the required consent of his/her legal representative,

then the validity of the transaction depends on whether the representative subsequently approves it or not, except

when the minor acquires a benefit by the transaction.

2. If a minor becomes a person with legal capacity, he/she may decide the validity of his/her own declaration of

intent.

Article 64 – Repudiation of a transaction made by a minor

1. Before a contract made by a minor is approved, the other party may repudiate the contract.

2. If the other party knew of the minority of the person, then he/she may repudiate the contract only if the minor

deceived him/her by claiming that consent from the legal representative had been obtained.

Article 65 – Emancipation of a minor

1. A contract made by a minor without the consent of his/her legal representative shall be deemed valid if the

minor has performed his/her part of the contract with the means transferred to him/her for this purpose or for

his/her free disposal by the legal representatives or with these representatives’ consent by third parties.

2. If a legal representative gives the right to independently manage an enterprise to a minor who has attained the

age of sixteen, then the minor shall acquire full legal capacity in the relations routine for this field. This rule shall

apply to the establishment and the liquidation of an enterprise as well as to the commencement and completion of

labour relations.

3. The permission to manage an enterprise requires the legal representative’s consent with the approval of the

guardianship and custodianship authority.

Article 66 – Invalidity of transactions made without the required consent of the representative

A unilateral transaction made by a minor without the necessary consent of the legal representative shall be void.

Such a transaction shall be void also if the legal representative gave his/her consent but the minor failed to present

a written document confirming it, and for this reason the other party repudiates the transaction without delay.

Such repudiation shall not be allowed if the other party has been informed of the consent of the legal

representative.

Article 67 – Obligation of permission before the limitation of legal capacity

A transaction made before the limitation of legal capacity shall require permission if it is established that the

grounds for which the legal capacity has been limited obviously existed at the time of making of the transaction.

Chapter Three

Form of a Transaction

Article 68 – Significance of form for the validity of a transaction

For a transaction to be valid the form of the transaction prescribed by law shall be observed. If no such form is

prescribed, the parties may determine it themselves.

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Article 69 – Form of a transaction

1. A transaction may be made verbally or in writing.

2. A transaction may be made in writing if so provided for in law or by agreement of the parties.

3. If the transaction is in written form, the signatures of the parties to the transaction shall be sufficient.

3 1 . When a beneficiary of support concludes a written transaction, in addition to the parties involved, it shall be

signed by a supporter. By signing it, the supporter confirms that he/she will provide the support defined by the

court decision at the time of concluding the transaction by the beneficiary of support.

4. Restoration, reproduction or imprinting of a signature by mechanical means shall be allowed where this

practice is customary, inter alia, when signing securities issued in large numbers.

5. When a transaction is in a written form the genuineness of the signatures of the parties to the transaction shall

be certified by a notary or any other person determined by law in cases provided by law or by agreement of the

parties.

Law of Georgia No 3879 of 8 December 2006 – LHG I, No 48, 22.12.2006, Art. 321

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 70 – Entrusting the signature of a transaction to another person

A person who cannot sign a transaction due to illiteracy or long-term or permanent physical, mental, intellectual

or sensory impairment, or in other cases provided for in law may entrust the signature of the transaction to

another person. The signature of that person shall be officially authenticated. At the same time, the reason for

which the person making the transaction was unable to sign the transaction shall be indicated.

Law of Georgia No 3709 of 15 October 2010 – LHG I, No 57, 25.10.2010, Art. 366

Law of Georgia No 1982 of 02 November 2022 – website, 11.11.2022

Article 70 1 – Concluding a transaction by a literate blind person

1. If a transaction is concluded in writing by a literate blind person, such person shall sign the transaction by

himself/herself, without entrusting the signature of a transaction to another person, or shall entrust the signature

of a transaction to another person in accordance with the procedure established by Article 70 of this Code.

2. In cases provided for by this article, a literate blind person shall sign a transaction by himself/herself, using a

mechanical signature, facsimile or other appropriate technical means established by the legislation of Georgia.

When a literate blind person signs a transaction using a facsimile, such person shall also present an identity

document and a document on the validity of the facsimile, certified by a notary.

3. If a transaction involving a blind literate person is concluded in Braille, by agreement of the parties, the

transaction concluded in Braille shall be attached to a transaction in large print.

Law of Georgia No 1982 of 02 November 2022 – website, 11.11.2022

Article 71 – Making a transaction by drawing up several documents

If a transaction is made by drawing up several documents of the same content, it shall be sufficient that each party

sign a copy of the document that is intended for the other relevant party.

Chapter Four

Voidable Transactions

I – Transactions Made by Mistake

Article 72 – Concept

A transaction may become voidable if the declaration of intent has been made on the basis of a substantial

mistake.

Article 73 – Types of substantial mistakes

A mistake shall be deemed substantial when:

a) a person intended to make a different transaction than that to which he/she expressed his/her consent;

b) a person was mistaken about the content of the transaction that he/she intended to make;

c) the circumstances, which the parties consider to be the grounds for the transaction under the principles of good

faith, do not exist.

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Article 74 – Mistake with respect to the identity of a contracting party

1. A mistake with respect to the identity of a contracting party shall be deemed substantial only when the identity

of the contracting party itself or the consideration of his/her personal characteristics is the principal basis for

making the transaction.

2. A mistake with respect to basic characteristics of an object shall be deemed substantial only when these features

are significant in determining the value of the object.

Article 75 – Mistake with respect to a right

A mistake with respect to a right shall be deemed substantial only if the right was the sole or principal basis for

making the transaction.

Article 76 – Mistake with respect to the grounds of a transaction

A mistake with respect to the grounds of a transaction shall not be deemed substantial, except when the grounds

were the subject of the agreement.

Article 77 – Consent of a contracting party in transactions made by mistake

The declaration of intent made by mistake shall not become voidable if the other party agrees to perform the

transaction according to the wish of the party that intends to make the transaction voidable.

Article 78 – Petty mistakes

Petty mistakes in computations or in a written declaration of intent shall give rise to the right only to correct the

mistake, not to rescind the transaction.

Article 79 – Validity of rescission

1. Rescission shall be declared within one month after the moment at which the grounds for rescission were

detected.

2. If a transaction has become voidable and a mistake has been caused by the negligence of the person entitled to

rescind, then he/she shall compensate the other party for damages caused as a result of the invalidity of the

transaction. The obligation to compensate shall not arise if the other party knew of the mistake or it was unknown

to him/her due to his/her negligence.

Article 80 – Mistakes caused by an intermediary

The declaration of intent that has been incorrectly communicated by an intermediary may become voidable under

the same conditions that apply to the transactions made by mistake under Article 73.

II – Transactions Made by Deceit

Article 81 – Concept

1. If a person has been deceived into making a transaction, then he/she may demand avoidance of the transaction.

Avoidance shall occur when it is evident that the transaction would not have been made without the deception.

2. If one party keeps silent with respect to the circumstances in the case of disclosure of which the other party

would not have declared his/her intent, then the deceived party may demand avoidance of the transaction. The

obligation to disclose shall exist only when the other party expected it in good faith.

Article 82 – Transaction rendered void by reason of deceit

When rendering a transaction void, it makes no difference whether by communicating wrong information the

party intended to gain some advantage or to inflict harm on the other party.

Article 83 – Deceit by a third person

1. In the case of a deception by a third party, the demand for avoidance of the transaction may be made if the

person benefiting from the transaction knew or ought to have known of the deception.

2. If both parties to the transaction have acted deceitfully, then neither of them may demand avoidance of the

transaction or compensation for damages on the grounds of deception.

Article 84 – Limitation period for rescission

A transaction made by deceit may be rescinded within one year. The period shall be computed from the moment

at which the party rightful to rescind becomes aware of the existence of the grounds for rescission.

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III – Transactions Made by Duress

Article 85 – Concept

The use of duress (violence or threat) for the purpose of making a transaction shall entitle the person subjected to

the duress to demand avoidance of the transaction even when the duress is exercised by a third person.

Article 86 – Nature of duress

1. Avoidance of a transaction shall be justified because of duress that by its nature may influence a person and

inspire a fear of real injury to his/her person or property.

2. In assessing the nature of duress, the age, sex and life circumstances of persons shall be taken into consideration.

Article 87 – Duress against near relatives of a person

Duress serves as the basis for voiding a transaction also when it is directed against the spouse, other family

members or near relatives of one of the parties to the transaction.

Article 88 – Duress by lawful means

Actions exercised neither for illegal purposes nor by using illegal means shall not constitute duress under Articles

85-87, except when the means and purpose do not coincide.

Article 89 – Period for rescission

A transaction made by duress may be rescinded within one year after the moment in which the duress ends.

Chapter Five

Conditional Transactions

Article 90 – Concept

A transaction shall be deemed conditional when it is contingent upon a future or uncertain event so that the

performance of the transaction is either postponed until the occurrence of the contingency, or the termination of

the transaction is timed to coincide with the occurrence of the contingency.

Article 91 – Invalidity of unlawful and/or immoral conditions

A condition that contravenes the provisions of law or the principles of morality, or the performance of which is

impossible, shall be void. A transaction that depends upon such a condition shall be void in full.

Article 92 – Condition dependent upon will

A condition shall be deemed to be dependent upon will when its occurrence or non-occurrence depends only on

the will of the parties to a transaction. A transaction made with such a condition shall be void.

Article 93 – Positive condition precedent

1. If a transaction is made on the condition that some event will occur within a certain period of time, then the

condition shall be deemed legally ineffective if this period of time has elapsed and the event has not occurred.

2. If no period of time is fixed, then the condition may be fulfilled at any time. The condition may be considered

invalid when it is obvious that the occurrence of the event is already impossible.

Article 94 – Negative condition precedent

1. If a transaction is made on the condition that some event will not occur within a certain period of time, then

the condition shall be deemed fulfilled if this period of time has elapsed without the occurrence of the event. The

condition shall be deemed fulfilled also when before the complete lapse of the period it is obvious that that the

occurrence of the event is impossible.

2. If no period of time is fixed, then the condition shall be deemed fulfilled only when it is obvious that the event

will not occur.

Article 95 – Inadmissibility of influencing the occurrence of a condition

1. A person who has made a transaction contingent upon a certain condition may not perform, before the

occurrence of the condition, any action that may hinder the performance of his/her obligation.

2. If the condition occurs at a certain time and the person has already performed such action, then he/she shall

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compensate the other party for damages caused by such action.

Article 96 – Transactions with a condition of postponement

A transaction shall be deemed to be made with the condition of postponement if the creation of rights and duties

stipulated by the transaction depends on a future or uncertain event or on an event that has already occurred but

is yet unknown to the parties.

Article 97 – Transactions on a condition subsequent

A transaction shall be deemed to be made on a condition subsequent when the occurrence of this condition causes

termination of the transaction and reinstates the state of affairs existing before the making of the transaction.

Article 98 – Significance of good faith with respect to the occurrence of a condition

1. If the party for whom the occurrence of the condition is unfavourable delays its occurrence in bad faith, the

condition shall be deemed to have occurred.

2. If the party for whom the occurrence of the condition is favourable promotes its occurrence in bad faith, then

the condition shall not be deemed to have occurred.

Chapter Six

Consent in Transactions

Article 99 – Concept

1. If the validity of a transaction depends upon the consent of a third party, both the consent and the refusal of it

may be declared to either party to the transaction.

2. The consent need not be in a form that is prescribed for a transaction.

3. If a transaction, the validity of which depends upon the consent of a third party, has been made with the

consent of that person, then the second and third sentences of Article 66 shall apply accordingly.

Article 100 – Consent granted in advance (permission)

Consent granted in advance (permission) may be revoked before making a transaction, unless otherwise agreed by

the parties. Both parties shall be notified of the revocation of the consent (permission).

Article 101 – Subsequent consent (approval)

Subsequent consent (approval) shall be retroactive from the moment at which a transaction is made, unless

otherwise established.

Article 102 – Administration of property by an unauthorised person

1. Administration of property by an unauthorised person shall be valid if it is done with the prior consent of the

authorised person.

2. The administration shall become valid if approved by the authorised person.

Chapter Seven

Agency in Transactions

Article 103 – Concept

1. A transaction may be made through an agent as well. The power of an agent may arise either by operation of

law or out of a mandate (power of attorney).

2. This rule shall not apply when, in view of the nature of a transaction, it is to be made by a particular person, or

when the law prohibits the making of a transaction through an agent.

Article 104 – Agency and the effects of a transaction on an addressee

1. A transaction made by an agent within the scope of his/her authority, and on behalf of the person represented

by him/her shall give rise only to the rights and obligations of the principal.

2. If a transaction is made on behalf of another person, then the other party to the transaction may not use the

absence of the agent’s authority, if the principal has created the circumstances that led the other party to the

transaction to believe in the existence of such authority in good faith.

3. If when making a transaction an agent fails to indicate his authority of agency, then the transaction shall have

legal consequences for the principal only if the other party ought to have presumed the existence of the agency.

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The same rule shall apply when it does not matter for the other party with whom he/she makes the transaction.

Article 105 – Limited legal capacity of an agent

A transaction made by an agent shall be valid even if the agent had limited legal capacity.

Article 106 – Defect of the declaration of intent in agency

1. When a transaction is voidable by reason of a defect in the declaration of intent, the declaration of intent of the

principal shall prevail.

2. If the defect in the declaration of intent relates to the circumstances determined by the principal in advance,

then this defect may give rise to the right to rescind only if the defect was caused by the principal.

Article 107 – Power of agency

1. Authority (power of attorney) shall be conferred by the declaration of intent made with respect to the person

who is given the power of attorney or a third person with whom the agency is to be exercised.

2. The declaration of intent need not be in the form prescribed for making the transaction for which the power of

attorney has been granted. This rule shall not apply when a special form is prescribed.

Article 108 – Obligation of notification upon changing the authority

Third persons shall be notified of alterations in or revocation of authority. If this requirement is not fulfilled, such

alterations and revocation of authority shall not be valid with respect to third parties, except when the parties

knew or should have known about it when making the transaction.

Article 109 – Grounds for termination of power of agency

A power of agency shall be extinguished by:

a) expiration of the term for which the authority was granted;

b) renunciation by the authorised person;

c) revocation of the authority by the grantor of the authority;

d) the death of the grantor of the authority;

e) performance;

f) recognition of a grantor of the authority as a beneficiary of support if the support was assigned to him/her to

exercise representative authority or property disposal rights.

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 110 – Obligation of agent upon extinguishment of authority

Upon extinguishment of his/her authority, an agent shall return the instrument of authority to the grantor. The

agent may not retain the instrument.

Article 111 – Entering into a transaction without a power of agency

1. If a person enters into a transaction on behalf of another person without the power of agency, the validity of

the transaction shall depend on the ratification of the principal.

2. If the other party demands ratification from the principal, then only he/she shall be notified of the ratification.

The ratification may be given within two weeks after a demand; otherwise the demand for ratification shall be

deemed to have been rejected.

Article 112 – Right to repudiate a contract

Before a contract is ratified, the other party may repudiate the contract, except when this party knew of the defect

in the power of agency at the time the contract was entered into. Repudiation of the contract may be declared also

to the agent.

Article 113 – Agent’s obligation when there is a defect in the power of agency

1. If a person who makes a transaction as an agent fails to prove his/her power of agency, then he/she shall, at the

option of the other party, either perform the obligation assumed or pay damages, if the principal refuses to ratify

the contract.

2. If the agent did not know of the defect in his/her authority, then he/she shall be bound to compensate only

those damages that the other party sustained in relying upon the authority.

3. The agent shall not be liable if the other party knew or should have known of the defect in his/her power of

agency. Likewise, the agent shall not be liable if his/her legal capacity was limited, except when he/she acted with

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the consent of his/her legal representative.

Article 114 – Inadmissibility of entering into a transaction with oneself

Unless otherwise provided by the consent an agent may not make a transaction on behalf of the principal and

with himself/herself, either in his own name or as an agent of a third party, except when the transaction already

exists for the performance of certain obligations.

Section Three

Exercise of Rights

Article 115 – Inadmissibility of abusing rights

A civil right shall be exercised lawfully. A right may not be exercised with a sole intention to inflict damages on

another person.

Article 116 – Damage inflicted within the limits of necessary self-defence

1. An action exercised within the limits of necessary self-defence shall not be unlawful and the damages caused by

it shall not be recovered.

2. Self-defence shall be deemed necessary if it is required to ward off a present unlawful assault on oneself or

others.

Article 117 – Damage caused by extreme necessity

1. Any damages caused to ward off a danger that in the given circumstances could not be warded off by other

means, provided that the damage inflicted is less significant than the damage avoided, shall be compensated by the

one who inflicted the damage (extreme necessity).

2. In view of the factual circumstances under which damages have been inflicted, the liability to pay damages may

be imposed on a third party in whose interests the one who inflicted the damages acted, or both the third party

and the one who inflicted the damages be released from liability in whole or in part.

Article 118 – Self-help

If help from authorities cannot be obtained in good time, and without immediate intervention there is a danger

that the realisation of the claim will be prevented or be considerably more difficult, then the action of a person

who for the purpose of self-help removes, destroys or damages a thing, or who for the same purpose restrains the

liberty of a responsible person who may escape, or overcomes the resistance to an action of a responsible person

who has a duty to perform that action shall not be deemed unlawful.

Article 119 – Limits of self-help

1. Self-help may not extend further than is necessary to ward off danger.

2. If property is removed, it is necessary to immediately make a declaration on the attachment of the property.

3. If the liberty of a responsible person is restrained, he/she shall be taken before the relevant authorities without

undue delay.

Article 120 – Obligation to pay damages

A person who does the actions provided for in Article 118 under the mistaken assumption that it was necessary to

ward off an unlawful action, shall reimburse the other party damages caused at that time.

Section Four

Periods of Time

Chapter One

Computation of Periods of Time

Article 121 – Scope of the rules for computing periods of time

The rules prescribed in this chapter shall apply to the fixing of periods of time contained in laws, court decisions

and transactions.

Article 122 – Beginning of a period of time

If a period commences on the occurrence of an event or at a point of time falling in the course of a day, then the

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day on which the event or point of time occurs shall not be included in the computation of the period.

Article 123 – End of a period of time

1. A period of time specified by days shall end on the expiry of the last day of the period.

2. A period of time specified by weeks, by months or by a duration of time comprising more than one month –

year, half-year, quarter – ends on the expiry of the day of the last week or of the last month which corresponds to

the day on which the event or the point of time occurs.

3. If a period of time specified by months lacks a specific day on which the period is due to expire, then the period

ends on the expiry of the last day of that month.

Article 124 – Concepts

1. A half-year denotes a period of time of six months, a quarter year denotes a period of three months computed

from the beginning of a year, and a half-month is understood to mean a period of fifteen days.

2. If a period of time comprises one or more full months and a half-month, then the fifteen days shall be counted

last of all.

Article 125 – Computation of a period of time in the event of its extension

If a period of time is extended, the new period shall be computed from the expiry of the previous period.

Article 126 – Computation of a period of time by months

1. If a period of time is specified by months or years in such a manner that they need not run consecutively, a

month shall be computed as thirty days, and a year as three hundred and sixty-five days.

2. The first day of a month shall be deemed to be the beginning of the month, the fifteenth day of a month the

middle of the month, and the last day of a month the end of the month.

Article 127 – Days off and holidays

If an action is to be performed on a certain day and that day or the last day of the time period falls on a

non-business day or on a day declared to be an official holiday or on another non-business day at the place of

performance of the action, then the next business day shall be used instead of that day.

Chapter Two

Period of Limitation

Article 128 – Concept; Types

1. The right to demand that another person perform or refrain from a certain action shall be subject to a period of

limitation.

2. A period of limitation shall not apply to:

a) personal non-property rights, unless otherwise provided by law;

b) claims of depositors for deposits made with a bank or other credit institutions.

3. The standard period of limitation shall be ten years.

Article 129 – Period of limitation on contractual claims

1. The period of limitation on contractual claims shall be three years and on contractual claims relating to

immovable property six years.

2. The period of limitation on claims arising out of obligations subject to periodic performance shall be three years.

3. In individual cases, other periods of limitation may be fixed by law.

Article 130 – Commencement of the period of limitation

1. A period of limitation shall commence from the moment at which the claim arises. The claim shall be deemed

to have arisen from the moment at which the person became or ought to have become aware of the violation of

the right.

2. In the case of sexual, economic, domestic or other forms of violence against a minor, the period of limitation on

the right to file a claim for damages with a court shall be suspended until the minor attains the age of majority or

until the minor applies to a court during the period of his/her minority.

Law of Georgia No 5013 of 20 September 2019 – website, 27.9.2019

Law of Georgia No 5913 of 21 May 2020 – website, 25.5.2020

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Article 131 – Origination of a claim

If the origination of a claim depends upon an action of an obligee, then the period of limitation shall commence

from the moment at which the obligee could have taken this action.

Article 132 – Suspension of running of the period of limitation

The running of the period of limitation shall be suspended:

a) if performance of an obligation is postponed by executive authorities or by the National Bank of Georgia on the

basis of the Organic Law of Georgia on the National Bank of Georgia under the regime of a resolution of a

commercial bank (moratorium);

b) if filing of a claim is prevented by extraordinary and, under given circumstances, unavoidable force majeure;

c) if a creditor or a debtor is in a unit of the defence forces of Georgia that has been put in a state of war;

c 1 ) if private mediation provided for by the Law of Georgia on Mediation is initiated;

d) in other cases provided by law.

Law of Georgia No 3607 of 31 October 2018 – website, 21.11.2018

Law of Georgia No 4596 of 18 September 2019 – website, 27.9.2019

Law of Georgia No 5667 of 20 December 2019 – website, 31.12.2019

Article 133 – Suspension of the running of the period of limitation during marriage

The period of limitation for claims between spouses shall be suspended for as long as the marriage exists. The same

rule shall apply to claims between parents and children until the attainment of the age majority as well as to

claims between guardians (custodians) and their wards during the whole period of guardianship.

Article 134 – Suspending the running of the period of limitation for a person with limited legal capacity and a

beneficiary of support

If a claim has been brought by a person with limited legal capacity that has no legal representative, or a

beneficiary of support who has not been provided with an appropriate support, or the claim is directed against

such a person, then the period of limitation shall be deemed suspended until the person acquires full legal

capacity, or until a legal representative or a supporter is designated for him/her.

Law of Georgia No 3339 of 20 March 2015 – website, 31.3.2015

Article 135 – Time during which the running of the period of limitation is suspended

The time, during which the running of the period of limitation is suspended, shall not be counted in computing

the period of limitation.

Article 136 – The moment of suspending the running of the period of limitation

1. The period of limitation shall be suspended if the circumstances under Article 132 have arisen or continued to

exist in the last six months of the period of limitation. If this period is less than six months, then at any time

during the period of limitation.

2. From the day of eliminating the circumstances leading to the suspension of the period of limitation, the period

of limitation shall continue to run for another six months; and if the period of limitation itself is less than six

months, then until the period of limitation expires.

Article 137 – Interruption of the running of the period of limitation

The running of the period of limitation shall be interrupted if the obligor acknowledges the claim towards the

obligee by paying an advance or interest, by providing security, or otherwise.

Article 138 – Interruption of the running of the period of limitation by bringing an action

The running of the period of limitation shall be interrupted if the rightful person brings an action for satisfaction

of the claim or for its ascertainment, or tries to satisfy the claim by some other means such as by filing a

declaration of the existence of the claim with a state body or with a court, or by obtaining a writ of execution.

Articles 139 and 140 shall apply accordingly.

Article 139 – Duration of interruption of the period of limitation

1. Interruption of the running of the period of limitation on the grounds of bringing an action shall continue until

the court decision takes effect or until the litigation is otherwise completed.

2. If the litigation is interrupted by agreement between the parties or by reason of the impossibility of its further

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continuation, then the running of the period of limitation shall be interrupted along with the agreement between

the parties or upon completion of the last proceedings of the court. If one of the parties continues the proceedings,

then the new limitation period that has begun after the interruption of the legal proceedings shall be interrupted

again in the same manner as the running of the period of limitation is interrupted by the filing of a claim.

Article 140 – Renunciation of a claim

1. The filing of a claim shall not interrupt the running of the period of limitation if the claimant renounces the

claim or if a court dismisses the claim by a final decision.

2. If the rightful person files a new claim within six months, then the period of limitation shall be deemed

interrupted from the time of filing the first claim.

Article 141 – Computation of the running of limitation period anew

If the running of the period of limitation is interrupted, then the time elapsed before the termination shall not be

counted and the period shall begin to run anew.

Article 142 – Period of limitation on claims confirmed by a court decision

1. The period of limitation on a claim confirmed by a court decision that has entered into legal force shall be ten

years, even if the claim is subject to a lesser limitation.

2. If the court’s confirmation of the claim relates to periodically repeated actions to be performed in the future,

then the limitation under Article 129(2) shall apply to them.

143 – Period of limitation on real claims

If property with respect to which a real claim exists is transferred by succession of title to a third person, then the

period of limitation which elapsed during possession by the predecessor in title shall apply to the successor in title

also.

Article 144 – Rights of an obligor upon the lapse of the period of limitation

1. After the period of limitation expires, the obligor may refuse to perform an action.

2. If the obligor has performed the obligation after the lapse of the period of limitation, then he/she may not

revoke the performance, even if at the time of performance he/she did not know that the period of limitation had

elapsed.

3. The same rule shall apply to the acknowledgement and the security of an obligor.

Article 145 – Period of limitation on additional claims

The period of limitation on additional claims shall be deemed to expire simultaneously upon the lapse of the

period of limitation on the principal claim, even if the period of limitation on additional claims has not elapsed

yet.

Article 146 – Inadmissibility of altering the period of limitation by agreement of the parties

Periods of limitation and the rule of computing them may not be altered by agreement of the parties.