CAROLINE NAJJAR

1

CIVIL LAW
CASE STUDY (1)
APPLICATION OF LAW:
RATIONE TEMPORIS

An agency agreement was concluded between Company A and Company B on December 8 1958.
Company B being a car factory gave Company A an exclusive right over marketing its cars in
Lebanon. On July 5/1967 Company B rescinded the contract with Company A on the basis of a clause
that allows one company to terminate the contract by a simple letter sent to the other party without
any previous notice or any payment of damages. On August 5/1967 decree law 34/67 was issued, the
article 6 of which states that: this decree law shall be published in the official journal, and shall apply
to agency agreements taking place before its entry into force.
Company A pledged an action against Company B before the Lebanese courts, demanding, in
accordance with decree law 34/67 damages for rescinding the contract on the ground that decree
law 34/67 has a retroactive effect in terms of its article 6.
On the other hand, Company B alleged that decree law 34/67 does not have any retroactive effect,
rather an immediate effect, and therefore does not apply to the contract of December 8/1958 at
hand, which was rescinded one month before the decree law was issued.
1) Relevant facts:
- July 5/1967, Company B rescinds contract.
- August 5/1967 decree law was issued, under the circumstance that it be applied before its entry
into force.
- Company A pledged that it must receive damages.
- Company B alleged that the decree law has no retroactive effect.
CAROLINE NAJJAR

2

- The decree law was issued one month after the contract was rescinded; yet the law specifies its
effectiveness ahead of time.

2) Legal issue: is decree law 34/67 applied with retroactivity on a case, when the contract
between 2 parties is rescinded one month prior to the issuance of the decree law?

3) Theoretical elements of the solution:
An Ex Post Facto Law or retroactive law, is a law that retroactively changes the legal consequences
(or status) of actions committed or relationships that existed prior to the enactment of the law.
Conversely, a form of Ex Post Facto law commonly known as an amnesty law may decriminalize
certain acts or alleviate possible punishments (for example by replacing the death sentence with life-
long imprisonment) retroactively.
A law may have an Ex Post Facto effect without being technically Ex Post Facto. For example, when
a law repeals a previous law, the repealed legislation no longer applies to the situations it once did,
even if such situations arose before the law was repealed.
The principle of prohibiting the continued application of these kinds of laws is also known as Nullum
crimen, nulla poena sine praevia lege poenali, particularly in European continental systems.
Generally speaking, Ex Post Facto penal laws are seen as a violation of the rule of law as it applies in
a free and democratic society. Most common law jurisdictions do not permit retroactive legislation,
though new precedent generally applies to events that occurred prior to the judicial decision. Ex Post
Facto laws are expressly forbidden by the United States Constitution. In some nations that follow the
Westminster system of government, such as the United Kingdom, Ex Post Facto laws are technically
possible as the doctrine of parliamentary supremacy allows Parliament to pass any law it wishes.
However, in a nation with an entrenched bill of rights or a written constitution, Ex Post Facto
legislation may be prohibited.
*How is retroactive used?
Having reference to things that happened in the past, prior to the occurrence of the act in question.
Common-law principles do not favor the retroactive effect of laws in the majority of cases, and
CAROLINE NAJJAR

3

canons of legislative construction presume that legislation is not intended as retroactive unless its
language expressly makes it retroactive.
*What does a retroactive law involve?
A retroactive or retrospective law is one that takes away or impairs vested rights acquired under
existing laws, creates new obligations, imposes new duties, or attaches a new and different legal effect
to transactions or considerations already past.
*How to determine whether effect could be applied?
To determine when justice required that a rule have retroactive effect, the Court resolves to "weigh
the merits and demerits in each case by looking to the prior history of the rule in question, its purpose
and effect, and whether retrospective operation will further or retard its operation." (34)
*Exceptions where retroactive effect could be applied:
In the event of a temporal limitation of the rulings effect to a however natured ex nunc-effect
the citizens rights to judicial relief would be disappointed, since for a certain period in the past a status
of illegality would be perpetuated.
The relationship between the conclusion that a new rule is retroactive and the holdings that make
this rule retroactive, however, must be strictly logical. The Supreme Court does not make a rule
retroactive when it merely establishes principles of retroactivity and leaves the application of those
principles to lower courts. The Court instead can be said to have made a rule retroactive within the
meaning, only where the Courts holdings logically permit no other conclusion than that the rule is
retroactive.
It is relatively easy to demonstrate the required logical relationship with respect to the first
exception. Under this exception, a new rule should be applied retroactively if it places certain kinds
of primary, private individual conduct beyond the power of the criminal law-making authority to
proscribe. When the Court holds as a new rule in a subsequent case that a particular species of
primary, private individual conduct is beyond the power of the criminal law making authority to
proscribe, it necessarily follows that this Court has made that new rule retroactive to cases on
collateral review. The Court has done so through its holdings alone, without resort to dicta and
without any application of principles by lower courts.

The matter is less straightforward with respect to the second exception, which is reserved for
watershed rules of criminal procedure. A case announcing a new rule could conceivably hold that
CAROLINE NAJJAR

4

infringement of the rule seriously diminishes the likelihood of obtaining an accurate conviction, and
that the rule alters our understanding of the bedrock procedural elements essential to the fairness of a
proceeding, without holding in so many words that the rule applies retroactively and without actually
applying that rule retroactively to a case on collateral review. The precise contours of this exception
may be difficult to discern, and the judgment involved in our making a new rule retroactive under
this exception is likely to be more subjective and self-conscious than is the case with the first exception.
But the relevant inquiry is not whether the new rule comes within the exception at all, but the
narrower and manageable inquiry of whether this Courts holdings, by strict logical necessity, make
the new rule retroactive. Such logical necessity does not obtain in this particular case this Court could
make a new rule retroactive under the second exception in this manner.
*Non-retroactive effect:
Article 11: Unless otherwise provided in the treaty itself, a treaty which comes into
force subsequently to the time of signature shall not be deemed to have effect as from
the time of signature.

4) Confrontation with the facts of the case:
In this case, according to the facts Company B rescinded the agreement 1 month prior to the
publication of the decree law. Company A though pledged that it must receive damages for
rescinding the contract. Yet retroactive effect does not apply to a decree law unless the case is an
exception (as listed above). The case at hand is not an exception, and even thought the decree law
mentioned retroactive effect, the contracted between the 2 parties was already rescinded and
abolished ahead of issuing the decree law.
5) Solution:
For a law to have retroactive effect;
a. Contain an article that expressively states in a way which doesnt create any controversy, that
this law has retroactive effcet and;
b. Cover retroactively a specific period of time and/ or a specific event.
The issue in the case at hand lies in the interpretation of the words took place, and still in force in
article 6 of decree law 34/67. If we interpret the article as giving the law a retroactive character then
article 6 should have stated the specific date back to which the law goes. But article 6 didnt
CAROLINE NAJJAR

5

expressively state such a date, therefore; article 6 must be interpreted as governing only those
contracts which were still in force at the time of the issuance of the law.
As such, the new law has, by virtue of its article 6, rather an immediate effect according to the case
at hand, it is clear that the contract was rescinded one month before the new law was issued. Thus,
there is no way possible to stretch the provisions of this law which has an immediate effect character
to a contract which was terminated one month before it was issued.
Accordingly there is no conflict case here.
As a conclusion the Lebanese party has no case here and therefore; Company A cannot claim
damages from Company B. That because the new law doesnt apply neither from the point of
retroactivity, nor from that of immediate effect.