Tema 13 - Termination Flashcards
What is termination?
a remedy that allows the creditor to finish the contract prematurely if the other party does not perform
Parties’ agreement on termination?
- parties may add clauses in their contract which specifies under what circumstances a contract may be terminated
- indicates can terminate the contract if the other party does not perform , and the termination process
What are the default rules on termination?
If the contract does not include termination provisions, default rules are applied
Explain the degree of non - performance?
only can be terminated if the debtor’s nonperformance attains a degree of seriousness. it must be serious enough.
FRANCE - the creditor can terminate the contract if it is ‘sufficiently serious’ - if the debtor not accept then sent to court to examine
GER - only granted if the debtor fails to fulfill the contract on time - requires that the breach is not ‘trivial’
Explain the no need for judicial declarations?
A creditor may terminate the contract unilaterally if the non- performance warrants termination. BUT court may examine the request
Prior notice and additional time to perform? default rule.
in most legal systems, the creditor can’t terminate the contract immediately. It has to give the debtor more reasonable time to fulfill its obligations with a specified deadline and must warn him that if he does not fulfill the contract on the deadline, the contract will terminate
Prior notice and additional time to perform. The differences between FR, ENG, GER
France - termination is only possible after additional time is given and the contract is not fulfilled and must be written. UNLESS they agree that the non - non-performance leads to the termination of the contract
ENG - creditor must communicate to the debtor - BUT no form is needed
GERMANY - the creditor can terminate the contract for nay breach that is ‘not trivial’ but firstly has to give Nachfrist.
When is NACHFRIST and when is it not needed?
is another chance to perform given by the debtor.
When not needed:
1. It is impossible to perform
2. Essential performance
3. The debtor refuses to continue with the contract
4. ‘Special circumstances’ - the creditor is no longer interested in the performance.
Default rules in common law
Termination is only allowed when the breach is sufficiently serious and causes the innocent party to suffer.
Difference between conditions, warranties, and immediate terms. (default rules under common law)
-Conditions - principal part of the contract. if the party does not fulfill conditions, the other party can claim performance and damages
- Warranties - a provision that is not essential. if the party breaches, the innocent party can claim damages, BUT not terminate the contract
- Immediate terms - these depend on specific circumstances and how much it affects the purpose of the contract. if turns out to cause limited harm - innocent party can be entitled to damages
what is categorization?
parties can decide wether certain promises are really important (conditions) or not so crucial (warranties)
What is the anticipatory breach?
if there is clear evidence that the debtor will not be performing, the creditor may terminate the contract before the performance is due, if the debtor serious and clearly states that it has no intention to perform its obligations.
What are effects of termination
normally when the contract is terminated prematurely, the duty to perform ends, and each party must return to the other whatever they supplied under the contract. if services al ready provided or goods cannot be returned in their original condition the other party can claim back the value of the performance.
What happens when the buyer used the goods in the time between delivery and return? what has the buyer have to do?
will have to pay the value of any benefits derived from their use
What are contracts providing for continuos performance?
termination can’t result in the whole contract being unwounded back. Only allowed for the performance in the future - ongoing obligation.
