A donation agreement is one of the forms of the gift contract defined by the Civil Code of Georgia and constitutes the legal foundation of grant and charitable funding. Under a gift contract, the donor gratuitously transfers property to the donee into the latter's ownership with the donee's consent. The particular character of grant relationships lies in the fact that the parties may stipulate that the validity of the gift contract depends on the performance of a certain condition or the achievement of a defined purpose, and that purpose may also be of common benefit — such a gift is precisely what is called a donation. For the recipient organisation this means that the property received is used for the restricted purpose, and for the donor — that the ways of refusing the contract and reclaiming the property are confined to the grounds established by the Code. Precise knowledge of these norms spares both the donor and the recipient organisation disputes over the designation and use of the funds.
Conditional purpose and the right to demand performance
In the donation model, the donor transfers the property within the framework of a defined purpose. Under the Code, performance of the condition may be demanded not only by the donor but also by the person in whose interest the condition was stipulated — which means that where a donation is designated for a specific beneficial purpose, a person acting in the interests of that purpose may also demand performance of the condition. If the donee fails to perform the stipulated condition, the donor may refuse the contract. When drafting a grant agreement, precise formulation of the purpose, the conditions and the performance mechanism, derived from these norms, is decisive.
Moment of conclusion and form of the contract
The moment at which a gift contract is concluded depends on the type of property: for a movable thing, the gift contract is considered concluded from the moment of transfer of the property, while for immovable property — from the moment of registration in the public registry of the right of ownership defined by the contract. A promise of a gift, in turn, gives rise to an obligation to give only if it is made in written form — an oral promise creates no legal obligation. Accordingly, every stage of granting a donation — the promise, the transfer and the registration — is linked to a different legal consequence, and ignoring this distinction often turns into a contested circumstance.
The donor's liability for defects
A gift generally carries no warranty as to the quality of the thing given, yet the Code contains a significant limitation of this rule: if the donor maliciously conceals a defect of the property given, the donor is obliged to compensate the donee for the damage caused thereby. Such is, for example, the case where a defect in the transferred asset is known to the donor but is not disclosed. The amount of compensation and the procedure for the claim are governed by the general norms, while the existence of malicious intent becomes the central contested fact of the dispute.
Cancellation of the gift for ingratitude
The Code also grants the donor special protection: a gift may be cancelled if the donee subjects the donor or a close relative of the donor to grave insult or displays gross ingratitude toward them. If the gift is cancelled, the property given may be reclaimed by the donor. The right of cancellation is limited in time: a gift may be cancelled within one year from the moment the donor learns of the circumstance that gives the right to cancel. Within this period, establishing the fact of ingratitude and fixing the demand for restitution in writing are decisive for the donor: after the period expires the right of cancellation disappears and the property remains the lawful property of the recipient.
Frequently Asked Questions
Questions about donations most often concern the form of the contract, non-performance of the condition and cancellation. Brief answers are given below.
When is a donation agreement considered concluded?
For a movable thing — from the moment of transfer of the property; for immovable property — from the moment of registration of the ownership right in the public registry.
What force does an oral promise of a gift have?
A promise of a gift gives rise to an obligation to give only if it is concluded in written form.
What happens if the condition is not performed?
If the donee fails to perform the stipulated condition, the donor may refuse the contract; besides the donor, the person in whose interest the condition was stipulated may also demand performance.
Within what period may a gift be cancelled for ingratitude?
Within one year from the moment the donor learns of the circumstance giving the right to cancel; upon cancellation, the property may be reclaimed by the donor.
What is the difference between a donation and an ordinary gift?
A donation is a gift transferred for a defined common-benefit purpose; an ordinary gift does not require such a stipulation. In a donation, a person acting in the interests of the purpose may also demand performance of the condition.
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