Week 3&4 Flashcards
If a party or the person to whom it was entrusted does not perform
the other party must launch an (judicial) action to obtain a forced performance of the obligation
Can the non-performance be excused?
E.g. force majeure, creditor’s own fault
Often preference is given to
performance in natura
Otherwise: termination, collection of damages…
Defence /remedy which can be raised in a reciprocal agreement
(Exeptio non adempleti contractus)
The party who has to perform after the first party…
…may not perform
if the first party does not perform its obligations under the contract
- Assurance for the aggrevied party
Termination of a contract?
In general, only in case of a fundamental breach
When is non-performance fundamental?
Strict compliance with the obligation is of the essence of the contract; or duty to achieve a specific result
Non-performance substantially deprives the aggrieved party of what it was entitled to expect under the contract, unless the other party did not foresee and could not reasonably have foreseen that result
Non-performance is intentional and gives the aggrieved party reason to believe that it cannot rely on the other party’s future performance
English Private Law
If there is a breach - for the future there is no contract
Victim released from obligations not yet accrued, but not from obligations which had already accrued
The guilty party from primary obligation not yet due; no release from primary obligations already then due
Civil law (Continental)
If breach - no contract in the future nor in the past
Price reduction
A party who accepts a tender of performance not conforming to the contract may reduce the price.
Proportionate decrease: to the decrease in the value of the performance at the time this was tendered compared to the value which a conforming tender would have had at that time
If choosen: no extra damages for the reduction of value
Repair or replacement of defective goods / services
When?
In case of defective performance
E.g. the delivery of a car was not in conformity with the contract
What’s the difference between claiming performance & damages?
Aggrieved party is entitled to damages for loss caused by the other party’s non-performance which is not excused
Which losses?
- Non-pecuniary loss;
- Future loss which is likely to occur
Aggrieved party must mitigate its harm
The aggrieved party is entitled to recover any expenses reasonably incurred in attempting to reduce the harm.
If not incompatible, remedies can be culmulated
Late payment interest compensates the financial losses which are the result of the non-performance
Damages clause compensates the costs of administration linked to the non-performance
Time of performance
Time which is mentioned or determined in the contract
You immideately perform if its reasonable, unless its stated in the contract otherwise
Early performance
Can be refused, unless when it is not unreasonable / against his interest
Partial performance (refusal)
Partial performance can always be refused. If 5/10 laptops delivered, can be refused even if some are delivered
Good faith
implementation of fairness in the law.
Dura lex sed lex
Law is not always fair. The system needs to work
Principles of good faith
- Duty to be loyal
- Sense of responsibility
- Duty to inform & if necessary, to advice
- Duty to cooperate & re-negotiate
- Duty to provide evidence
Supplementing effect
Even if you are not obliged to do something you must still make sure to do what is reasonable to perform the contract as smoothly as possible
Good faith under civil law
Under Civil law you have more access to court
English law
Implied terms in English law are limited to specific transactions.
There is no implied term to perform a contract in good faith
Methods of interpretation
Subjective (will theory) - It is important to go through draft contracts, emails to understand intentions
Objective - Interpret words as they are, textual interpretation
In case of doubt about certain term provided by one party
an interpretation against that party is preferred
