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Competition and Abuse of Association Membership
By Prof. Ivo Telec *
I. Introduction
Association law is a diverse type of law. This becomes apparent when we take into consideration all
possible legal relations and implications. [1] The relatively neglected aspects of this type of law include
questions of membership competition that are often linked with the possible abuse of membership at
the expense of an ass ociation. One of the important questions concerns the relationship between the
constitutionally guaranteed political right to associate and the competition created by the membership
of an individual in several associations with identical or similar purpose or activities.
There have been cases in the Czech Republic where some associations have begun to react to an
ever -increasing competition of membership by issuing bans on double or multiple membership in
associations with similar or identical purpose or ac tivities. It is necessary to point out that there is no
law banning competition of membership or membership in more than one association. However,
banning decisions or other provisions of the statutory bodies of associations have been made, and
these are c onsidered to be binding on any member of an association on the basis of its articles. In
practice, such decisions are made after the association has come into existence. I do not know of any
case of association articles including such a provision. If the re were such a provision, the Ministry of
Interior would have to react when registering the association, and this issue seems not to have come
up.
There may be various reasons for associations to have felt it necessary to issue a ban on competitive
members hip. It may be the result of a mechanical, or even thoughtless, application of the prohibition
of competition taken over from commercial law into the civil law and association law. In my view, such
a prohibition has no place in those two fields, or, if it has application, it must be in a different sense
than in commercial law. Despite the corporate nature of these two legal frameworks, they have
completely different purposes, and this is what matters most when one considers the issue of
competitive members hip. While the purpose of commercial associations is to apply their constitutional
economic right to carry out business activity or to be engaged in any other commercial activity, the
field of association law is an application of the constitutional politic al right to associate.
In fact, however, it may be necessary for an association to carry out business or other economic
activities and most associations in the Czech Republic do so. This then brings into question whether
the commercial law doctrine of com petition should apply to such associations without regard to their
inherently different nature from commercial entities.
II. The political right to associate
Let us consider first the political right to associate (Article 20, Section 1 of the Bill of Right s). This
public subjective right guaranteed by the Constitution is the basis of association activities. Economic
activities of associations are only auxiliary to this right, and they usually follow from the nature of the
activities of a particular associat ion. There can theoretically be an association that has no property,
does not collect membership fees and is only engaged in an activity the expenses of which are paid
out -of-pocket by individual members. It may be, for example, engaged in activities which are limited
to organising outdoors trips or discussions of members and which bring incur expenses or which are
paid out -of-pocket by individual members.
The exercise of the political right to associate may be constrained under Article 20, Section 3 of the
Bill of Rights only in cases determined by the law, if it is necessary in a democratic society for state
security, protection of public security and order, the prevention of crime or the protection of rights and
liberties of other persons. From the consti tutional nature of the right to associate it follows that this
right may be exercised simultaneously in several associations including those which have similar or
identical purposes or activities. Were this not the case, it would be a restriction of a poli tical right

guaranteed by the Constitution. The law could impose such a restriction only on the basis of a reason
allowed by the Bill of Rights (see above), and none of those would appear to be applicable.
In my opinion, no law constrains the right to free dom of association in the sense that it would prohibit
simultaneous membership in more than one association with identical or similar objects. Such a law
could not be passed by Parliament, because it would in violation of the constitutional framework of
po ssible constraints. In other words, such a limitation would not be in keeping with the Constitution.
Let us consider again the practical life of an association. If it happened that an association adopted a
decision or any other provision of its body prohib iting its members to become members in another
association with identical or similar objects, then given the reasoning advanced above, such a decision
or a provision would be unconstitutional, because it would be in violation of Article 20, Sections 1 and
3 of the Bill or Rights. [2] Under Czech law, such a banning decision or another provision of an association body to similar effect
has the legal nature of private expression of will. From the viewpoint of private law, it is an invalid
legal act because of its violation of the Bill of Rights. Czech law goes further to provide that a private
legal act is invalid if its content or purpose is in violation of the law or if it evad es the law (§ 39 of the
Civil Code). By extending this rule by interpretation a minori as maius a private legal act is also invalid
when it is in violation of, or evades, a constitutional law. If invalidity applies for a violation of an
ordinary law (weak concept) the more it applies for a violation of a constitutional law (strong concept).
This is o ne of the arguments of formal legal logic whose application is not excluded by any other legal
logical argument.
In the case mentioned above, there would be absolute legal invalidity from the very inception, due to
power of the law ( ex tunc ). This result would binding for everyone, which means also for the court
called upon to deal with such a banning decision. If damages were to arise from its invalid act, an
association would be responsible for it under the Civil Code. It seems clear then that a member must
not observe such decisions or other provisions made by associations, because otherwise he/she would
be acting inconsistently with the Czech legal order. It also seems that an association must not pass
any legal or other sanctions against its members w ho would not respect a banning decision in
compliance with the rules of the Czech legal order. Such a sanction would be invalid from the very
beginning and the member would have the right to compensation for any damages suffered.
III. Abuse of membership a nd the question of unfair competition
The rationale for some associations having attempted to constrain simultaneous membership of their
members in other associations may be due to economic and competition issues. The associations are
trying in this way to protect themselves against possible abuse of membership. Abuse of membership
may consist in various types of behavior. It may be, for example, that there was an intentional
establishment of a new association aimed at a gradual ousting of the existing ass ociation from
competition for public grants or access to private sponsors. Another reason may be, for example,
enticing members, especially those with good experience or qualifications, etc. to join a new
association to the detriment of an older one. Howe ver, it need not be only the case of enticing
qualified members. Members can be enticed away from an association because another association
tries to increase its membership in order to claim larger public grants or private sponsorship
donations.
These and other cases show that unfair competition practices can be met found in all competition
fields, including the field of associations, where organizations may be competitors against one
another. Frequently, it is the case of an economic competition for “sour ce clientele” [3] . In such cases
the affected association has a number of claims at its disposal for protection against unfair competition
(§ 53 and the following ones of the Commercial Code). In such circumstances those infringing the
unfair competition rules may be not only the competing associations but also the members
themselves.

In general, abuse of membership can also be sanctioned in other ways. According to § 3, Para 1 of
the Commercial Code the exercise of members’ rights must be in compliance with good manners and
lawful claims of others. Otherwise, the exercise of members’ rights is absolutely legally invalid. Any
legal act against good manners is also invalid; inc luding, for example, a contract of sale against good
manners or an association membership against good manners.
These sanctions on their own do not conflict with the right of association. They merely sanction
conduct that violates other principles of Czec h law.
IV. Conclusion
The question of anti -competition provisions is considered in association law rather differently in
comparison with commercial law. The reason is that in association law it is primarily the application of
the political right to associa te and not of the economic rights which is in question. However, this does
not exclude the possibility of economic competition among individual associations. Therefore we
cannot ignore the possibility of abuse or unfair competition at the expense of anoth er competitor nor
possible abuse of membership outside a competition relationship.
In order to confront such situations associations can undoubtedly take precautionary measures.
However, it is not possible to mechanically apply anti -competition rules from commercial law in
association law. Association law has a completely different legal nature, especially as far as its
constitutional nature is concerned. Prevention of abuse consists primarily in lifelong moral education.
In my view, the Czech private law , namely civil law and unfair competition law, includes enough legal
sanctions that may be applied in cases of abuse of association membership or abuse of association
competition. Nearly all such cases are also moral not merely legal matters and morality a nd legality
overlap and support each other in their application to such situations.

* Associate Professor Ivo Telec teaches law at Masaryk University Law Faculty in Brno Czech
Republic.
[1] In general, compare e.g. Telec, I . : Spolkové právo (Association Law). 1. vyd. Praha: C. H. Beck
1998.
[2] Editor’s Note – This article does not address the issue of when an association may in its bylaws
have provisions for expulsion of members and under wha t circumstances such provisions are
appropriate. The Author will consider such issues in a subsequent paper.
[3] Compare Hajn, P .: Competition behaviour and right agai nst unfair competition. 1 vyd.
Brno: Masarykova univerzita 2000, p. 75.