Legal Blog

Thursday, June 27, 2013

Breach of contract in the Dutch Caribbean (III)

Different cases of breach of contract

Any question of breach starts with an inquiry into the type of obligation at hand. It is necessary to know more about the type of obligation at hand in order to determine whether a party has failed to perform that obligation. When determining whether a party has failed to perform, it should be remembered that an obligation may carry with it a degree of ‘strictness’, ranging from a firm commitment, e.g. commitment to provide annual audited financial statements, to an obligation to use reasonable care and skill to achieve certain goals.

The Civil Codes in the Dutch Caribbean (Aruba, Bonaire, Curacao, St. Maarten, St. Eustatius and Saba) distinguishe between different cases of breach of contract, which is relevant for the availability of remedies or the requirements for particular remedies. 

Typical rules in this respect include rules on

  1. fault and force majeure (i.e. a claim for damages may not be available if fault is lacking or in case of force majeure or excused non–performance);
  2. default (in general a claim for damages or termination of a contract may only be possible in the case of default. Typically, default is considered to have occurred if the creditor has sent a notice of default to the other party fixing a date for performance and the debtor fails to perform within the stated period of time);
  3. specific performance (a claim for performance in kind may be restricted to certain cases); and
  4. fundamental/material breach (termination in case of breach of contract is available only if the breach concerns fundamental or material obligations).

If different remedies are available to the aggrieved party, he will, in principle, be allowed to choose between the remedies available to him. The non–performing party will often be allowed the opportunity to still remedy its defective performance. By effecting a cure, the non–performing party ‘chooses’ to remedy its original defective performance by tendering conforming performance. The other party may still have a claim for damages, but by effecting a cure the non–performing party has at least some certainty about how to proceed. The possibility of a cure takes the interests of the non-performing party into account. (To be continued)

Filed under: Commercial by Karel Frielink.



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