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European contract law Right to performance.

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Presentation on theme: "European contract law Right to performance."— Presentation transcript:

1 European contract law Right to performance

2 Non- performance there is non- performance whenever a party does not perform any obligation under the contract The non-performance may consist in a defective performance or in a failure to perform at the time performance is due, be it a performance which is effected too early, too late or never. It includes a violation of an accessory duty such as the duty of a party not to disclose the other party's trade secrets. Where a party has a duty to receive or accept the other party's performance a failure to do so will also constitute a non-performance - delay of creditor This unitary concept of non-performance is found in some but not all of the legal systems. Article 8:101 PECL

3 Remedies for non-performance
Article 8:101: Remedies Available (1) Whenever a party does not perform an obligation under the contract and the non- performance is not excused under Article 8:108, the aggrieved party may resort to any of the remedies set out in Chapter 9. (2) Where a party's non-performance is excused under Article 8:108, the aggrieved party may resort to any of the remedies set out in Chapter 9 except claiming performance and damages. (3) A party may not resort to any of the remedies set out in Chapter 9 to the extent that its own act caused the other party's non-performance.

4 Remedies available Excused Not excused Right to Performance
Right to Performance exemption 9:102 non- monetary Withholding Performance Termination of the Contract with or without the additional period Price Reduction acceptance of non- conforming performance Interest Damages and Interest Delay in the payment of the monetary obligation

5 Literal enforcement – in natura
enforcement of claims in money other obligations, to give st, transfer property, to do st or refrain from doing st, Impossibility- moral, legal, practical

6 Right to Performance non-performance is not excused under Article 8:108 Article 8:108: Excuse Due to an Impediment (1) A party's non-performance is excused if it proves that it is due to an impediment beyond its control and that it could not reasonably have been expected to take the impediment into account at the time of the conclusion of the contract, or to have avoided or overcome the impediment or its consequences. Cf 374CommC

7 Article 9:101: Monetary Obligations
(1) The creditor is entitled to recover money which is due. (2) Where the creditor has not yet performed its obligation and it is clear that the debtor will be unwilling to receive performance, the creditor may nonetheless proceed with its performance and may recover any sum due under the contract unless: (a) it could have made a reasonable substitute transaction without significant effort or expense; or (b) performance would be unreasonable in the circumstances.

8 Continental European legal systems do not know the general restriction upon a claim for payment provided for in Article 9:101(2)(b).

9 Article 9:102: Non-monetary Obligations
(1) The aggrieved party is entitled to specific performance of an obligation other than one to pay money, including the remedying of a defective performance.

10 Exclusions of the right to performance
Specific performance cannot, however, be obtained where: (a) performance would be unlawful or impossible; or (b) performance would cause the debtor unreasonable effort or expense; or (c) the performance consists in the provision of services or work of a personal character or depends upon a personal relationship, or (d) the aggrieved party may reasonably obtain performance from another source.

11 (b) performance would cause the debtor unreasonable effort or expense;
A, who has sold his yacht "Eliza" to B, promised to deliver it at B's domicile. On the way "Eliza" is hit by a ship and is sunk in 200 metres of water. The costs of raising her would amount to forty times her value. The cost of forcing A to perform would be unreasonable.

12 (b) performance would cause the debtor unreasonable effort or expense
A leased his farm for five years to mining company B for strip mining. In addition to paying rent, B promised to restore the land after completing the mining operation. In the meantime, A decides to lease the land after its return from B to the army for use as a training area for tank crews. If B would have to spend $29,000 in order to restore the land and its value would thereby increase by only $300, the restoration would be unreasonable

13 c) the performance consists in the provision of services or work of a personal character or depends upon a personal relationship A, a famous artist, contracts with B, a wealthy merchant, to paint a picture for him. If A does not comply with her promise B cannot require performance, because performance of A's obligation requires individual scholars of an artistic nature and thus consists in work of a personal nature.

14 (d) the aggrieved party may reasonably obtain performance from another source.
A sells and delivers to B a television set. On delivery B discovers that the colour adjustment of the set is defective. The defect can easily be cured by fitting a spare part. If B can easily get someone else to fit the part she cannot require A to fit it.

15 Time - limit The aggrieved party will lose the right to specific performance if it fails to seek it within a reasonable time after it has or ought to have become aware of the non- performance.

16 Specific performance- common law
Exceptional remedy Applies mainly in contracts in land Upon discretion of judge provided that damages would not be adequate remedy It will not be ordered if it is impossible for the defendant (debtor) to perform

17 BGB Exclusion of the duty of performance*)
(1) A claim for performance is excluded to the extent that performance is impossible for the obligor or for any other person. (2) The obligor may refuse performance to the extent that performance requires expense and effort which, taking into account the subject matter of the obligation and the requirements of good faith, is grossly disproportionate to the interest in performance of the obligee. When it is determined what efforts may reasonably be required of the obligor, it must also be taken into account whether he is responsible for the obstacle to performance. (3) In addition, the obligor may refuse performance if he is to render the performance in person and, when the obstacle to the performance of the obligor is weighed against the interest of the obligee in performance, performance cannot be reasonably required of the obligor. (4) The rights of the obligee are governed by sections 280, 283 to 285, 311a and 326.

18 Reading Hugh Beale, Bénédicte Fauvarque-Cosson, Jacobien Rutgers, Denis Tallon, Stefan Vogenaue Ius Commune Casebooks for the Common Law of Europe, Contract Law Second Edition S


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