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Contract and Tort Act impacts on banking sector

08.11.2001

On September 26 2001 the Parliament (Riigikogu) passed the Contract and Tort Act. The act is expected to take effect between July 1 2002 and January 1 2003.

The act repeals the only part of the Soviet-imposed Civil Code that remains in force. It is expected to be enacted simultaneously with the General Part of the Civil Code Act and the Private International Law Act. The enactment of these three pieces of legislation will necessitate changes to other acts.

The Contract and Tort Act aims to improve the protection of consumer rights in relation to credit institutions, and harmonizes domestic law with over 20 EU directives. Although many types of contracts exist for banking services, no clear and comprehensible regulation previously existed.

The act introduces detailed regulations on consumer credit, brokerage, agency and commission, payment authorization, money transmission, electronic payments, credit clearing, drafts and cheques, among other issues.

The act contains 1,068 sections, the learning of which represents a huge challenge for Estonian lawyers.

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