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Armenia Notary Qualification study materials
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Armenia Notary Qualification practice questions

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Question 1Constitutional and Administrative Law Foundations of Notarial Activity

Under the Armenian Constitution, which body is the highest guarantor of the Constitution's supremacy and the protector of constitutional rights and freedoms?

  1. The Prosecutor General's Office
  2. The Supreme Judicial Council
  3. The Constitutional Court Correct answer.
  4. The National Assembly

Explanation

The Constitution entrusts constitutional review to the Constitutional Court, which is charged with ensuring the supremacy of the Constitution and protecting fundamental rights and freedoms through constitutional review. The other bodies exercise legislative, prosecutorial, or judicial-governance functions rather than constitutional review.

Question 2Constitutional and Administrative Law Foundations of Notarial Activity

In the Armenian constitutional order, sovereignty belongs to which of the following?

  1. The people Correct answer.
  2. The National Assembly
  3. The President of the Republic
  4. The Government

Explanation

The Constitution declares that sovereignty in Armenia belongs to the people, who exercise it directly through referenda and indirectly through state bodies elected by them. State organs merely exercise powers derived from the people.

Question 3Constitutional and Administrative Law Foundations of Notarial Activity

A notary is asked to certify a transaction involving immovable property. Which constitutional principle most directly supports the requirement that the notary act strictly within powers conferred by law?

  1. The principle of legality Correct answer.
  2. The principle of separation of powers
  3. The principle of social solidarity
  4. The principle of free economic activity

Explanation

The principle of legality requires that state bodies and officials, including notaries performing public functions, act only on the basis and within the limits of the law. This grounds the rule that notarial competence must have an express legal basis.

Question 4Constitutional and Administrative Law Foundations of Notarial Activity

Which type of legal act in Armenia is adopted by the National Assembly and holds the highest position among normative acts after the Constitution?

  1. Government decision
  2. Presidential decree
  3. Constitutional law Correct answer.
  4. Ministerial order

Explanation

Constitutional laws are adopted by the National Assembly on matters enumerated in the Constitution and rank above ordinary laws and subordinate normative acts. Decrees, decisions, and orders are subordinate instruments.

Question 5Constitutional and Administrative Law Foundations of Notarial Activity

A citizen claims that a provision of an ordinary law contradicts the Constitution. Which body has jurisdiction to decide that question?

  1. The Constitutional Court Correct answer.
  2. The Court of Cassation
  3. The National Assembly's standing committee
  4. The Administrative Court

Explanation

Review of the constitutionality of laws falls within the exclusive jurisdiction of the Constitutional Court. Ordinary courts apply laws and cannot annul them on constitutional grounds.

Question 6Constitutional and Administrative Law Foundations of Notarial Activity

Which of the following best describes the status of a notary in Armenia?

  1. A private businessperson acting without public authority
  2. A state official employed by the Ministry of Justice
  3. An officer of the court subordinate to the prosecutor
  4. A person exercising a public function within the framework of the law Correct answer.

Explanation

Notarial activity is a public function entrusted by the state to persons admitted to the profession, who perform it within the framework of the law while not being ordinary civil servants. This hybrid status explains both state oversight and professional independence.

Question 7Constitutional and Administrative Law Foundations of Notarial Activity

The Constitution of Armenia guarantees the right to judicial protection. For a notarial dispute, this primarily means which of the following?

  1. A person may appeal only to the notary's professional association
  2. A person may request review by the National Assembly
  3. A person may challenge a notarial act or refusal before a court Correct answer.
  4. A person may petition the President for relief

Explanation

The constitutional right to judicial protection ensures that acts and refusals of bodies and officials exercising public functions, including notaries, can be reviewed by a court. Internal professional or political channels do not substitute for judicial review.

Question 8Constitutional and Administrative Law Foundations of Notarial Activity

Which principle requires that administrative decisions affecting a person's rights be based on law and pursue a legitimate aim?

  1. The principle of legality of administrative action Correct answer.
  2. The principle of proportionality
  3. The principle of publicity
  4. The principle of collegiality

Explanation

The legality of administrative action demands that administrative bodies act on a legal basis and for a legitimate purpose. Proportionality then governs the manner and extent of the interference once legality is established.

Question 9Constitutional and Administrative Law Foundations of Notarial Activity

A licensing authority revokes a notary's license. Applying the principle of proportionality, which approach is required?

  1. The measure must be the most severe available to deter others
  2. The measure must be applied without any hearing to ensure speed
  3. The measure must be suitable, necessary, and not exceed what is needed to achieve the legitimate aim Correct answer.
  4. The measure must be approved by the National Assembly

Explanation

Proportionality requires that an interference be suitable for a legitimate aim, necessary because no less restrictive means suffices, and balanced against the affected rights. The most severe sanction is not automatically proportionate.

Question 10Constitutional and Administrative Law Foundations of Notarial Activity

Which body in Armenia is responsible for the organizational and material support of notarial activity and for maintaining the register of notarial offices?

  1. The Supreme Judicial Council
  2. The Ministry of Justice Correct answer.
  3. The Central Bank
  4. The Chamber of Advocates

Explanation

The Ministry of Justice exercises state oversight and organizational support functions relating to notarial activity, including registration and control matters. Other listed bodies have unrelated mandates.

Question 11Constitutional and Administrative Law Foundations of Notarial Activity

An administrative act is issued by a body lacking competence over the matter. What is the primary legal consequence?

  1. The act is valid until repealed by the same body
  2. The act is automatically converted into a judicial decision
  3. The act becomes valid after publication in the official gazette
  4. The act is void or subject to annulment for lack of competence Correct answer.

Explanation

Competence is a precondition for a valid administrative act; an act adopted outside the body's competence is unlawful and liable to annulment or treated as void. Publication cannot cure a fundamental lack of authority.

Question 12Constitutional and Administrative Law Foundations of Notarial Activity

The right to property is constitutionally protected in Armenia. How does this right most directly relate to notarial certification of transactions?

  1. Notaries may transfer ownership without any legal formality
  2. Notarial certification replaces the need for state registration of immovable property
  3. Notaries may disregard the owner's consent when the transaction benefits the state
  4. Notarial certification supports legal certainty and protection of property rights in transactions Correct answer.

Explanation

Constitutional protection of property relies on reliable legal forms; notarial certification provides certainty about the parties' declarations and lawfulness of the transaction. It complements, rather than replaces, registration and consent requirements.

Question 13Constitutional and Administrative Law Foundations of Notarial Activity

Which of the following is a constitutional duty of the state that underlies the notarial system's obligation to keep information confidential?

  1. The duty to set prices for services
  2. The duty to promote foreign trade
  3. The duty to ensure the protection of private and family life Correct answer.
  4. The duty to conduct census regularly

Explanation

The constitutional protection of private and family life grounds confidentiality in notarial practice, since notarial files contain personal and family information. The other options are not constitutional duties connected to confidentiality.

Question 14Constitutional and Administrative Law Foundations of Notarial Activity

A law grants a minister power to adopt normative acts. Which condition must such acts satisfy to be lawful?

  1. They must be ratified by an international treaty
  2. They must be adopted unanimously by the Government
  3. They must be published and must not contradict higher-ranking normative acts Correct answer.
  4. They must be approved by the Constitutional Court before adoption

Explanation

Subordinate normative acts must conform to the Constitution and higher-ranking norms and must be published to be enforceable. Prior constitutional review and unanimity are not general conditions for their validity.

Question 15Constitutional and Administrative Law Foundations of Notarial Activity

Which statement about the relationship between the Constitution and ordinary legislation in Armenia is correct?

  1. Ordinary laws prevail over the Constitution if adopted later
  2. The Constitution applies only to state bodies, not to individuals
  3. The Constitution has supreme legal force and laws must conform to it Correct answer.
  4. Ordinary laws and the Constitution have equal force

Explanation

The Constitution has supreme legal force, and laws and other acts must conform to it. Later adoption cannot override the Constitution, and constitutional norms bind both state bodies and individuals.

Question 16Constitutional and Administrative Law Foundations of Notarial Activity

An administrative body refuses to provide a reasoned decision to a person affected by its act. Which principle of administrative law is most directly engaged?

  1. The principle of territorial organization
  2. The principle of the duty to give reasons Correct answer.
  3. The principle of judicial independence
  4. The principle of fiscal neutrality

Explanation

Administrative law requires that decisions affecting rights be reasoned so that the affected person can understand the basis and exercise review rights. The other principles concern territorial structure, taxation, or the judiciary.

Question 17Constitutional and Administrative Law Foundations of Notarial Activity

Which of the following best reflects the constitutional principle of equality before the law in the context of access to the notarial profession?

  1. Access must be based on objective and non-discriminatory criteria set by law Correct answer.
  2. Access may be restricted by any criterion chosen by existing notaries
  3. Access must be limited to persons with prior state employment
  4. Access must favor candidates from the capital region

Explanation

Equality before the law requires that admission to professions exercising public functions rest on objective, law-based, and non-discriminatory criteria. Criteria chosen by incumbents or favoring particular groups violate this principle.

Question 18Constitutional and Administrative Law Foundations of Notarial Activity

A notary must refuse to perform an act that would violate the law. Which source of law primarily defines the notary's powers and the procedure for notarial acts?

  1. Only internal rules of the notarial chamber
  2. The Civil Code alone
  3. Only international treaties
  4. The law on notarial activity together with related legislation Correct answer.

Explanation

The powers and procedures of notaries are governed principally by the law on notarial activity and related legislation, which set competence, formalities, and oversight. Internal chamber rules and treaties operate within, not instead of, that legal framework.

Question 19Constitutional and Administrative Law Foundations of Notarial Activity

Which principle governs the allocation of powers among the legislative, executive, and judicial branches in Armenia?

  1. The principle of subsidiarity
  2. The principle of centralization
  3. The principle of separation of powers Correct answer.
  4. The principle of professional autonomy

Explanation

The Constitution establishes the separation of legislative, executive, and judicial powers, with each branch acting within its own competence. This principle underpins limits on interference between branches.

Question 20Constitutional and Administrative Law Foundations of Notarial Activity

An individual wishes to challenge the legality of a normative administrative act of general application. What is the appropriate legal avenue?

  1. Seeking administrative or judicial review of the normative act in accordance with the procedure established by law Correct answer.
  2. Requesting the notary to annul the act
  3. Filing a cassation appeal against the act
  4. Petitioning the Central Bank

Explanation

Challenges to normative administrative acts proceed through the review procedures established by administrative law, including judicial review where provided. Notaries and the Central Bank have no power to annul such acts, and cassation review applies to court judgments.

Question 21Civil Law: Persons, Transactions, Representation, and Obligations

Under Armenian civil law, legal capacity (the ability to have civil rights and duties) arises for a natural person at which moment?

  1. At registration of birth with the civil registry
  2. At reaching majority
  3. At reaching the age of 14
  4. At birth Correct answer.

Explanation

Legal capacity (rights and duties capacity) is recognized for every natural person from the moment of birth and ends with death. Majority affects the separate concept of full dispositive capacity, not the existence of legal capacity.

Question 22Civil Law: Persons, Transactions, Representation, and Obligations

At what age does a natural person in Armenia ordinarily acquire full dispositive capacity (the ability to exercise rights and duties independently)?

  1. 18 Correct answer.
  2. 14
  3. 16
  4. 21

Explanation

Full dispositive capacity generally arises on reaching the age of majority, which is 18. Before that, persons have partial capacity subject to specific rules.

Question 23Civil Law: Persons, Transactions, Representation, and Obligations

A 15-year-old, without the consent of a parent, spends his savings to buy an expensive bicycle. How is this transaction generally characterized?

  1. Valid only if later approved by a court
  2. Fully valid because minors may freely dispose of their earnings
  3. Voidable at the request of the minor's legal representative Correct answer.
  4. Void from the outset because a minor lacks any capacity

Explanation

Minors between 14 and 18 have partial capacity; transactions they make beyond their permitted scope without consent of legal representatives are voidable at the instance of the representative. They are not automatically void.

Question 24Civil Law: Persons, Transactions, Representation, and Obligations

A person who, due to a mental disorder, cannot understand the meaning of his actions may be declared fully incapable by which procedure?

  1. By an administrative act of the local municipality
  2. By a joint application of relatives to the notary
  3. By a court decision following a forensic psychiatric examination Correct answer.
  4. By a decision of the guardianship authority alone

Explanation

Deprivation of full dispositive capacity is a judicial matter, decided by a court on the basis of a forensic psychiatric examination. Guardianship is then established over the person.

Question 25Civil Law: Persons, Transactions, Representation, and Obligations

Which of the following is a defining feature of a legal entity (juristic person) under Armenian civil law?

  1. It must always be owned by the state
  2. It can only be created by a notarial deed
  3. It has no capacity to be a plaintiff in court
  4. It holds separate property and answers for its obligations with that property Correct answer.

Explanation

A legal entity is an organization that owns or holds separate property and is liable for its obligations with that property. It may acquire and exercise rights and appear in court in its own name.

Question 26Civil Law: Persons, Transactions, Representation, and Obligations

When does a legal entity's civil capacity arise under Armenian law?

  1. From the moment of its state registration Correct answer.
  2. From the moment it opens a bank account
  3. From the moment its founders agree on the charter
  4. From the moment it receives its first property contribution

Explanation

The capacity of a legal entity arises at the moment of state registration and terminates upon completion of liquidation. Founders' agreements and internal acts do not by themselves confer capacity.

Question 27Civil Law: Persons, Transactions, Representation, and Obligations

Which body is competent to decide on reorganization of a legal entity?

  1. The founders or the authorized body of the entity, as provided by its charter and law Correct answer.
  2. The court that registered its charter
  3. The notary who certified its charter
  4. The tax inspectorate at the place of registration

Explanation

Reorganization is decided by the founders or the competent body of the entity in accordance with its charter and the law. The decision is then reflected in registration records.

Question 28Civil Law: Persons, Transactions, Representation, and Obligations

A transaction in which the parties express their will through conduct that clearly indicates intent (for example, handing over goods and paying) is called:

  1. A fictitious transaction
  2. A notarized transaction
  3. A written transaction
  4. A verbal transaction concluded by conclusive actions Correct answer.

Explanation

A transaction may be concluded orally, in writing, or by conclusive actions where conduct manifests the will. Such conduct-based transactions are valid where the law does not require a specific form.

Question 29Civil Law: Persons, Transactions, Representation, and Obligations

Which transactions must, under Armenian civil law, be concluded in notarial form to be valid?

  1. All transactions involving real estate
  2. All transactions between relatives
  3. All transactions above a certain monetary threshold
  4. Transactions for which notarial form is expressly required by law or by agreement of the parties Correct answer.

Explanation

Notarial form is required where the law mandates it or where the parties have agreed to it. Failure to comply makes the transaction void where notarization is legally required.

Question 30Civil Law: Persons, Transactions, Representation, and Obligations

A transaction concluded under the influence of a material mistake concerning the identity of the other party is generally:

  1. Voidable at the request of the party acting under the mistake Correct answer.
  2. Void from the outset
  3. Valid and not subject to challenge
  4. Valid only after notarization

Explanation

A transaction made under a material mistake may be challenged by the mistaken party and declared void by a court. It is voidable, not automatically void.

Question 31Civil Law: Persons, Transactions, Representation, and Obligations

A transaction concluded with the intent to cause harm to another person without intending to create the stated legal effects is:

  1. A transaction against the foundations of law and order Correct answer.
  2. A sham transaction
  3. A fictitious transaction
  4. A conditional transaction

Explanation

A transaction whose purpose is contrary to the foundations of law and order (including intentionally harmful transactions) is void. This differs from sham and fictitious transactions, which concern the parties' actual intent to create effects.

Question 32Civil Law: Persons, Transactions, Representation, and Obligations

A power of attorney (representation authorization) granted by a natural person generally must be executed in which form to be valid?

  1. Only by electronic signature
  2. Written, and notarized where required by law Correct answer.
  3. Always by court order
  4. Oral, if the principal is present

Explanation

A power of attorney must be in writing, and notarization is required for certain categories (such as powers relating to real estate or to receive property). Oral authorization is insufficient.

Question 33Civil Law: Persons, Transactions, Representation, and Obligations

A representative who concludes a transaction on behalf of the principal, acting within the scope of the power of attorney, creates rights and duties for:

  1. The principal Correct answer.
  2. The representative personally
  3. The notary who certified the power of attorney
  4. Both the principal and the representative jointly

Explanation

A representative acts in the name of the principal, so the transaction creates, changes, or terminates the principal's civil rights and duties. The representative is not a party to the transaction.

Question 34Civil Law: Persons, Transactions, Representation, and Obligations

A representative concludes a transaction with himself in his own interest on behalf of the principal. This is generally:

  1. Permitted only for movable property
  2. Permitted if the transaction benefits the principal
  3. Prohibited unless the law provides otherwise or the principal consents Correct answer.
  4. Permitted only if the transaction is notarized

Explanation

A representative may not conclude transactions with himself, or with another person he also represents, on behalf of the principal, unless the law or the principal's consent permits it. Such self-dealing is restricted to protect the principal.

Question 35Civil Law: Persons, Transactions, Representation, and Obligations

A power of attorney that does not specify its duration remains valid for:

  1. One year from the date of execution unless a shorter term is stated Correct answer.
  2. Six months
  3. Three years
  4. Indefinitely until revoked

Explanation

Where no term is stated, a power of attorney is valid for one year from the date it is executed. A specific term may be stated but cannot exceed the statutory maximum where one is set.

Question 36Civil Law: Persons, Transactions, Representation, and Obligations

Which of the following terminates a power of attorney?

  1. Expiration of its term Correct answer.
  2. A change in the principal's place of residence
  3. The representative's promotion at work
  4. An increase in the value of the represented property

Explanation

A power of attorney terminates on expiration of its term, revocation by the principal, renunciation by the representative, death or incapacity of a party, and similar grounds. Irrelevant personal changes do not affect it.

Question 37Civil Law: Persons, Transactions, Representation, and Obligations

In a civil obligation, the debtor is generally required to perform the obligation:

  1. In accordance with the terms of the obligation and the requirements of law Correct answer.
  2. Only after a court judgment
  3. Only if the creditor reminds the debtor in writing
  4. In any manner the debtor chooses

Explanation

Obligations must be performed properly, in accordance with their terms and the requirements of law. Performance does not depend on a prior court judgment or reminder unless the parties so agreed.

Question 38Civil Law: Persons, Transactions, Representation, and Obligations

An obligation in which the debtor must transfer a specific individually defined item to the creditor is discharged by:

  1. Paying the item's market value
  2. Delivering any item of the same kind and quality
  3. Transferring an equivalent item chosen by the debtor
  4. Delivering that specific item Correct answer.

Explanation

Where the object of the obligation is an individually defined thing, the debtor must deliver that particular thing. Substitution with another item is not permissible absent agreement.

Question 39Civil Law: Persons, Transactions, Representation, and Obligations

Failure by a debtor to perform an obligation, where the debtor is at fault, generally gives rise to:

  1. Automatic criminal liability
  2. No consequences if the debtor apologizes
  3. Termination of the obligation without any remedy
  4. The debtor's liability to compensate the creditor for losses caused by the breach Correct answer.

Explanation

Breach of an obligation entails the debtor's civil liability, principally compensation for losses caused to the creditor. Fault is the general basis of such liability unless the law provides otherwise.

Question 40Civil Law: Persons, Transactions, Representation, and Obligations

A penalty (forfeit) stipulated in a contract for breach of an obligation serves primarily to:

  1. Replace the entire contract
  2. Terminate the creditor's obligations
  3. Secure performance by imposing a monetary consequence on the breaching party Correct answer.
  4. Transfer ownership of property to the creditor

Explanation

A contractual penalty is a security for performance: the breaching party must pay a stipulated sum or deliver property upon breach. It operates alongside other remedies subject to statutory rules.

Question 41Civil Law: Persons, Transactions, Representation, and Obligations

The creditor may refuse to accept performance that is offered:

  1. In full and on time by a capable debtor
  2. At the place agreed by the parties
  3. In the manner agreed by the parties
  4. In part, where partial performance is not permitted by law or the contract Correct answer.

Explanation

The creditor may reject partial performance where the law or the contract does not allow it. Proper, complete, and timely performance generally must be accepted.

Question 42Civil Law: Persons, Transactions, Representation, and Obligations

Which of the following best describes a public promise of reward?

  1. A unilateral announcement promising payment to whoever performs a specified act Correct answer.
  2. A bilateral contract requiring the offeree's prior acceptance
  3. A notarial certification of a debt
  4. A form of security interest in movable property

Explanation

A public promise of reward is a unilateral act by which a person promises a reward to anyone who performs a specified act. It creates an obligation once the act is performed, without prior bilateral agreement.

Question 43Civil Law: Persons, Transactions, Representation, and Obligations

A person who, without a mandate, reasonably acts in the interest of another to prevent loss to that other's property may generally:

  1. Recover necessary and reasonable expenses incurred, subject to statutory conditions Correct answer.
  2. Demand a reward equal to the value of the property saved
  3. Claim no reimbursement under any circumstance
  4. Acquire ownership of the saved property

Explanation

Under the rules on acting in another's interest without authority, the intervener may recover necessary and reasonable expenses where the action was justified and beneficial. He does not acquire the property or a reward.

Question 44Civil Law: Persons, Transactions, Representation, and Obligations

A person who has acquired property without a legal basis at the expense of another is generally obliged to:

  1. Retain the property if he acted in good faith
  2. Transfer the property to the notary
  3. Pay a fine to the state
  4. Return the unjustly acquired property or compensate its value Correct answer.

Explanation

Unjust enrichment creates an obligation to return the property in kind or, where that is impossible, to compensate its value. Good faith may affect the scope of return but does not eliminate the obligation.

Question 45Civil Law: Persons, Transactions, Representation, and Obligations

A surety (guarantee) agreement under which a third person undertakes to answer to the creditor for the debtor's performance is generally required to be concluded:

  1. Orally
  2. By a court decision
  3. By conclusive actions
  4. In writing Correct answer.

Explanation

A suretyship must be concluded in writing; failure to comply with the written form renders it invalid. It is a contractual security accessory to the principal obligation.

Question 46Civil Law: Persons, Transactions, Representation, and Obligations

Which of the following is an essential characteristic of a legal entity's civil legal capacity under Armenian civil law?

  1. It is identical to the legal capacity of the natural persons who founded the entity.
  2. It arises only after the legal entity has obtained a license for its activities.
  3. It terminates automatically upon a change in the entity's director.
  4. It is limited to the purposes specified in the legal entity's charter. Correct answer.

Explanation

Under Armenian civil law, a legal entity's civil legal capacity is special: it may engage in activities that correspond to the purposes set out in its constituent documents. A legal entity may also engage in certain licensed activities only after obtaining a license, but the license does not create or define the scope of capacity. Changes in management do not affect legal capacity.

Question 47Civil Law: Persons, Transactions, Representation, and Obligations

A transaction is concluded in writing and signed by both parties. Which of the following is true regarding the requirement of notarial certification for this transaction?

  1. Notarial certification is required only if one of the parties is a natural person.
  2. Notarial certification is required only in cases expressly provided by law or by agreement of the parties. Correct answer.
  3. Notarial certification is required for all written transactions exceeding a certain value.
  4. Notarial certification is required only if the transaction involves real estate.

Explanation

Under Armenian civil law, notarial certification of a transaction is required only in cases directly established by law or by agreement of the parties. A simple written form is the general rule for many transactions, and notarization is an exception. Thus, not every written transaction requires notarization, regardless of value or the parties' status.

Question 48Civil Law: Persons, Transactions, Representation, and Obligations

A principal granted a power of attorney to an agent for the sale of a car. The power of attorney did not specify that the agent may conclude a subagency agreement. The agent, without the principal's consent, authorizes a third person to act as subagent. Which statement is correct?

  1. The subagency agreement is void and the third person has no authority to act for the principal.
  2. The subagency agreement is valid and binds the principal directly.
  3. The subagency agreement is valid, but the agent must notify the principal within three days.
  4. The agent remains liable for the actions of the subagent, and the principal may avoid the subagency agreement. Correct answer.

Explanation

Under Armenian civil law, an agent may delegate authority to a subagent only if the power of attorney expressly authorizes subagency or if the agent is compelled by circumstances to do so to protect the principal's interests. If the agent appoints a subagent without such authorization, the agent remains responsible for the subagent's actions, and the principal may challenge the subagency. The subagency is not automatically void, but it does not bind the principal without consent.

Question 49Civil Law: Persons, Transactions, Representation, and Obligations

An obligation is performable at a specified place. If the place of performance is not determined by the contract or by law, where must the obligation be performed?

  1. At the place where the contract was concluded.
  2. At the creditor's place of residence.
  3. At the debtor's place of residence. Correct answer.
  4. At the place where the subject matter of the obligation is located.

Explanation

Under Armenian civil law, if the place of performance is not determined, the obligation must be performed at the debtor's place of residence (or, for a legal entity, at its location). There are exceptions for obligations involving immovable property or monetary obligations, but the general rule is the debtor's residence.

Question 50Civil Law: Persons, Transactions, Representation, and Obligations

A debtor fails to perform a monetary obligation and the creditor suffers losses exceeding the stipulated penalty. Which statement best describes the creditor's ability to recover the excess?

  1. The creditor may recover the excess of losses over the penalty unless the contract provides otherwise. Correct answer.
  2. The creditor may recover the full amount of losses in addition to the penalty only if the contract expressly provides for it.
  3. The creditor may recover the excess only if the debtor acted intentionally.
  4. The creditor may recover only the penalty, as it is the exclusive remedy for breach.

Explanation

Under Armenian civil law, a penalty is generally a credit against losses: if the penalty is less than the losses, the creditor may recover the difference unless the contract or law provides otherwise. This is the compensatory function of the penalty. The creditor cannot recover both the full penalty and full losses if that would exceed actual losses, unless the contract provides for a punitive penalty.