14. Discharge of Obligations
Performance
- Discharge of performance is natural way by which obligation is extinguished.
- Debtor does what he has agreed to do, namely to perform.
- Third party may perform on behalf of debtor, but only if performance by other
parties will also constitute proper performance.
- If still proper performance creditor may not object.
- Whether third party has claim for recourse against debtor depends on
relationship between debtor & third party.
- If there is contract, it will be in terms of contract.
- If there is no contract to that effect, on grounds of unjustified enrichment.
- Requirements:
o Performance must be in accordance w/contract but possible for creditor
to accept performance other than which was agreed to so there must
be agreement
o If substitute performance is defective creditor will have election
between claiming proper performance/insisting original obligation.
o Creditor may reject piecemeal performance where contract doesn’t
provide for it
o Performance must take place at time agreed to; if no agreement rules
of mora apply.
o Place of performance is place agreed to & if there was no agreement
then it is place where agreement was concluded.
- Other features:
o Where debtor chooses method of performance, he bears risk
o Where creditor insists on certain manner of performance, he will have
to bear risk if something goes wrong
o Sometimes performance will be unilateral, depending on contract, but
mostly performance will be bilateral.
o One party agree to receive performance & other agree to perform it.
o Intention of debtor will be conclusive, where declares certain debt
should be discharged.
o If debtor doesn’t specify then one should look at whether creditor
specified anything.
o Complex rules apply when none of parties have specified any
sequence.
- Rules for payment of money:
o Creditor may refuse to accept money in another currency unless
contract determines differently.
Performance
- Discharge of performance is natural way by which obligation is extinguished.
- Debtor does what he has agreed to do, namely to perform.
- Third party may perform on behalf of debtor, but only if performance by other
parties will also constitute proper performance.
- If still proper performance creditor may not object.
- Whether third party has claim for recourse against debtor depends on
relationship between debtor & third party.
- If there is contract, it will be in terms of contract.
- If there is no contract to that effect, on grounds of unjustified enrichment.
- Requirements:
o Performance must be in accordance w/contract but possible for creditor
to accept performance other than which was agreed to so there must
be agreement
o If substitute performance is defective creditor will have election
between claiming proper performance/insisting original obligation.
o Creditor may reject piecemeal performance where contract doesn’t
provide for it
o Performance must take place at time agreed to; if no agreement rules
of mora apply.
o Place of performance is place agreed to & if there was no agreement
then it is place where agreement was concluded.
- Other features:
o Where debtor chooses method of performance, he bears risk
o Where creditor insists on certain manner of performance, he will have
to bear risk if something goes wrong
o Sometimes performance will be unilateral, depending on contract, but
mostly performance will be bilateral.
o One party agree to receive performance & other agree to perform it.
o Intention of debtor will be conclusive, where declares certain debt
should be discharged.
o If debtor doesn’t specify then one should look at whether creditor
specified anything.
o Complex rules apply when none of parties have specified any
sequence.
- Rules for payment of money:
o Creditor may refuse to accept money in another currency unless
contract determines differently.
