Understanding Breach of Obligation and Remedies

Aug 30, 2024

Lecture on Breach of Obligation and Remedies

Understanding Breach

  • Definition: Breach is a failure to comply with obligations without legal reason.
  • General Remedy: Damages are the typical remedy.
    • Damage vs. Damages:
      • Damage: Physical injury or harm.
      • Damages: Monetary compensation for injury or harm.

Purpose of Damages

  • Aim to place the innocent party in the same position had the obligation been performed correctly.
  • Not intended to improve the party's position beyond the original terms.

Situations for Damages

  • Damages are applicable in cases involving:
    • Default
    • Fraud
    • Negligence
    • Contravention of obligation terms

Default

  • Definition: Also known as legal delay.
  • Conditions for Default:
    • An obligation exists.
    • Failure to perform on time.
    • Demand by creditor and subsequent failure to perform.

Types of Obligations

  1. Unilateral Obligations:
    • No default without demand unless specific conditions apply (stipulation, law provision, time is of the essence, or demand is useless).
  2. Reciprocal Obligations:
    • Delay occurs when one party is ready to perform and the other is not.

Types of Default

  1. Mora Solvendi: Debtor's delay or default.
    • Effects include breach, liability for interest and damages, and liability for loss due to fortuitous events in determinate things.
    • Demand is not always necessary.
  2. Mora Accipiendi: Creditor's delay in accepting performance.
    • Remedies include court consignment.
  3. Compensation Morae: Delay by both parties.
    • Results in cancellation of delays, no actionable default, tempered liability, or contract extinguishment.

Fraud

  • Types:
    1. Dolo Causante: Fraud inducing contract formation (grounds for annulment).
    2. Dolo Incidente: Fraud in performance (grounds for damages).
  • Waiver of Fraud:
    • Waivers for future fraud are void.
    • Waivers for past fraud are valid as acts of generosity.

Negligence

  • Definition: Failure to observe required diligence.
  • Remedy: Damages to restore the injured party.
  • Types:
    1. Culpa Aquiliana: Negligence as the source of obligation without a pre-existing contract.
    2. Culpa Criminal: Negligence leading to a criminal offense.
    3. Culpa Contractual: Negligence incidental to an existing contract.

Contravention of Obligation

  • Definition: Any illicit act preventing the performance of an obligation.
  • Results in claims for damages.