Damages for non-performance
TYPES OF NON-PERFORMANCE..................................................................................................................... 2
COMMON REQUIREMENTS TO CLAIM DAMAGES.......................................................................................... 2
A. ATTRIBUTABILITY OF THE NON-PERFORMANCE......................................................................................... 2
MUST THE NON-PERFORMANCE BE ATTRIBUTABLE TO THE DEBTOR?............................................................2
THE CIVIL LAW APPROACH............................................................................................................................ 3
FRENCH LAW................................................................................................................................................ 3
GERMAN LAW, DUTCH LAW.......................................................................................................................... 5
ENGLISH LAW................................................................................................................................................ 6
B. TYPES OF DAMAGES AND THE MECHANICS OF DAMAGE CLAIMS...............................................................8
1. DELAY (CATEGORY OF LOSS)...................................................................................................................... 8
2. DAMAGES IN LIEU (CATEGORY OF LOSS).................................................................................................... 8
3. COLLATERAL DAMAGE/ CONSEQUENTIAL LOSS.......................................................................................... 8
AT WHICH POINT IN TIME A CLAIM FOR DAMAGES CAN BE BROUGHT?.........................................................9
FRENCH LAW................................................................................................................................................ 9
GERMAN LAW............................................................................................................................................... 9
DUTCH LAW................................................................................................................................................ 12
GOING TO COURT OR NOT? RELATIONAL CONTRACTS.................................................................................12
ENGLISH LAW.............................................................................................................................................. 13
C. LIMITATIONS OF CLAIMING DAMAGES.................................................................................................... 13
1. EXPECTATION AND RELIANCE INTEREST................................................................................................... 14
2. CAUSATION............................................................................................................................................. 16
3. NON-PECUNIARY LOSSES......................................................................................................................... 18
1. PLEASURE CONTRACTS............................................................................................................................ 18
2. SPOILED HOLIDAYS.................................................................................................................................. 19
D. DAMAGES CLAUSES................................................................................................................................ 20
1. LIQUIDATED DAMAGES CLAUSE (AGREED DAMAGES CLAUSE)..................................................................20
2. PENALTY CLAUSE..................................................................................................................................... 20
ENGLISH LAW.............................................................................................................................................. 22
FRENCH, GERMAN, DUTCH LAW.................................................................................................................. 22
COMMON RULE (ART. 9:509 PECL).............................................................................................................. 22
,Types of Pathology of contract law
non- It is not normal that contracts are not (properly) performed, but if it
performanc happens the law must provide a set of default rules that balances
e the interest of creditor and debtor in a fair way
the creditor has a clear
interest in obtaining
dam ages to put him in
the same position he
would have been
properly performed
It m ay be that the
debtor could not
help his non-
performance
Types of non-performance
on the basis of on the basis of the on the basis of the
type of non- reason for non- seriousness of the
performance performance non-performance
If someone is to deliver 300
criteria: party does not perform at all, laptop computers and delivers
performs defectively, performs too late non-performance is the debtor's only five, the breach is obviously
fault vs force majeure more serious than in case 299
laptops are delivered (relevant for
termination)
performance takes place in a correct way,
but collateral damage is caused in the
course of performing the contract the debtor cannot be blamed for non-
performance, but must still bear the risk
(debtor's diligently selected employee turns out
to have lied about his diplomas and work
experience
Common requirements to claim damages
1. breach
2. loss
3. causation
4. attributability (civil law)
5. default- send debtor a notice that there was a breach of contract (civil
law)
A. Attributability of the non-performance
Must the Attributability
, non- The debtor is held liable for non-performance, either because he is to
performanc blame for it or because he must bear the risk even if he was not at
e be fault (the performance must be non-exhausted/ no force majeure)
attributable
English law: highlights the
to the interest of the creditor who
counts on obtaining what was
debtor? promised to him
Civil law: emphasises that a debtor
is freed from his obligations if he
cannot help his failure to perform
The Civil Non-performance must be attributable to the debtor in order for him to
law claim damages
approach What counts as an excusable obstacle to performance? (Art. 9:501- non-
performance that is ‘not excused’)
French law
General rule
Exception: definition of force majeure
Force majeure requires two conditions to be satisfied
The obstacle must be ‘imprévisible and inévitable’
The event must have been unforeseeable at the time of concluding
the contract and must pose an irresistible obstacle for performance (a
lot of discretionary power for courts)
La Concorde v. Montagnani (1994)
Facts of the case
Mr. Montagnani had checked into the Hotel des Lices in Saint-Tropez
where he had deposited £17,000 in the hotel safe
The hotel was robbed by four thieves who forced the hotel staff to
open the safe
Mr. Montagnani claimed damages on the basis of non-performance by
the hotel
Holding
The court did not find this a case of force majeure
Rationale
Armed robbery in a luxury hotel is not unforeseeable and, even if it
was impossible for the hotel stuff to resist opening the safe (thereby
TYPES OF NON-PERFORMANCE..................................................................................................................... 2
COMMON REQUIREMENTS TO CLAIM DAMAGES.......................................................................................... 2
A. ATTRIBUTABILITY OF THE NON-PERFORMANCE......................................................................................... 2
MUST THE NON-PERFORMANCE BE ATTRIBUTABLE TO THE DEBTOR?............................................................2
THE CIVIL LAW APPROACH............................................................................................................................ 3
FRENCH LAW................................................................................................................................................ 3
GERMAN LAW, DUTCH LAW.......................................................................................................................... 5
ENGLISH LAW................................................................................................................................................ 6
B. TYPES OF DAMAGES AND THE MECHANICS OF DAMAGE CLAIMS...............................................................8
1. DELAY (CATEGORY OF LOSS)...................................................................................................................... 8
2. DAMAGES IN LIEU (CATEGORY OF LOSS).................................................................................................... 8
3. COLLATERAL DAMAGE/ CONSEQUENTIAL LOSS.......................................................................................... 8
AT WHICH POINT IN TIME A CLAIM FOR DAMAGES CAN BE BROUGHT?.........................................................9
FRENCH LAW................................................................................................................................................ 9
GERMAN LAW............................................................................................................................................... 9
DUTCH LAW................................................................................................................................................ 12
GOING TO COURT OR NOT? RELATIONAL CONTRACTS.................................................................................12
ENGLISH LAW.............................................................................................................................................. 13
C. LIMITATIONS OF CLAIMING DAMAGES.................................................................................................... 13
1. EXPECTATION AND RELIANCE INTEREST................................................................................................... 14
2. CAUSATION............................................................................................................................................. 16
3. NON-PECUNIARY LOSSES......................................................................................................................... 18
1. PLEASURE CONTRACTS............................................................................................................................ 18
2. SPOILED HOLIDAYS.................................................................................................................................. 19
D. DAMAGES CLAUSES................................................................................................................................ 20
1. LIQUIDATED DAMAGES CLAUSE (AGREED DAMAGES CLAUSE)..................................................................20
2. PENALTY CLAUSE..................................................................................................................................... 20
ENGLISH LAW.............................................................................................................................................. 22
FRENCH, GERMAN, DUTCH LAW.................................................................................................................. 22
COMMON RULE (ART. 9:509 PECL).............................................................................................................. 22
,Types of Pathology of contract law
non- It is not normal that contracts are not (properly) performed, but if it
performanc happens the law must provide a set of default rules that balances
e the interest of creditor and debtor in a fair way
the creditor has a clear
interest in obtaining
dam ages to put him in
the same position he
would have been
properly performed
It m ay be that the
debtor could not
help his non-
performance
Types of non-performance
on the basis of on the basis of the on the basis of the
type of non- reason for non- seriousness of the
performance performance non-performance
If someone is to deliver 300
criteria: party does not perform at all, laptop computers and delivers
performs defectively, performs too late non-performance is the debtor's only five, the breach is obviously
fault vs force majeure more serious than in case 299
laptops are delivered (relevant for
termination)
performance takes place in a correct way,
but collateral damage is caused in the
course of performing the contract the debtor cannot be blamed for non-
performance, but must still bear the risk
(debtor's diligently selected employee turns out
to have lied about his diplomas and work
experience
Common requirements to claim damages
1. breach
2. loss
3. causation
4. attributability (civil law)
5. default- send debtor a notice that there was a breach of contract (civil
law)
A. Attributability of the non-performance
Must the Attributability
, non- The debtor is held liable for non-performance, either because he is to
performanc blame for it or because he must bear the risk even if he was not at
e be fault (the performance must be non-exhausted/ no force majeure)
attributable
English law: highlights the
to the interest of the creditor who
counts on obtaining what was
debtor? promised to him
Civil law: emphasises that a debtor
is freed from his obligations if he
cannot help his failure to perform
The Civil Non-performance must be attributable to the debtor in order for him to
law claim damages
approach What counts as an excusable obstacle to performance? (Art. 9:501- non-
performance that is ‘not excused’)
French law
General rule
Exception: definition of force majeure
Force majeure requires two conditions to be satisfied
The obstacle must be ‘imprévisible and inévitable’
The event must have been unforeseeable at the time of concluding
the contract and must pose an irresistible obstacle for performance (a
lot of discretionary power for courts)
La Concorde v. Montagnani (1994)
Facts of the case
Mr. Montagnani had checked into the Hotel des Lices in Saint-Tropez
where he had deposited £17,000 in the hotel safe
The hotel was robbed by four thieves who forced the hotel staff to
open the safe
Mr. Montagnani claimed damages on the basis of non-performance by
the hotel
Holding
The court did not find this a case of force majeure
Rationale
Armed robbery in a luxury hotel is not unforeseeable and, even if it
was impossible for the hotel stuff to resist opening the safe (thereby
