Protection of a Bona Fide Purchaser and Invalidity of a Transaction: In Search of Stability in Civil Legal Relations

Abstract

The paper examines the relationship between the institutions of protection of a bona fide purchaser and the invalidity of a transaction. The institution of protection of a bona fide purchaser, establishing the conditions under which the owner cannot reclaim their property, embodies the idea of finding a balance between the interests of the owner and the person who acquired the property in good faith and for compensation, and extends the corresponding idea also to other institutions of civil law. The institution of protection of a bona fide purchaser went beyond the boundaries of the institution of vindication action, acting as a measure of a fair resolution of a dispute, and acquired an inter-institutional character, influencing, in particular, the institution of invalidity of a transaction. Challenging a property transaction by the owner is one of the ways to protect the rights of the owner. However, the use of this method should only apply to exceptional situations due to the extraordinary nature of restitution; in any case, its application should not lead to a violation of the rights and interests of persons who are not parties to the transaction. To ensure the stability of rights to property, it is necessary that a voidable transaction declared invalid does not entail legal consequences from the moment it is recognized as such by the court, and not from the moment it is completed. It happens since, despite the restoration of rights by the owner through compensatory restitution, the retroactive nature of the invalidity of the transaction will affect the rights purchasers of property. This can be achieved by changing the legislative provisions on the invalidity of a voidable transaction and the perception of the classical pandect doctrine about the moment from which a voidable transaction declared invalid is considered invalid.