Legal Blog

Monday, July 01, 2013

Breach of contract in the Dutch Caribbean (IV)

Non-performance as a response to non-performance

Whenever a party to a contract is faced with non–performance by the other party, the party’s first reaction might well be to suspend its part of the contract. In the legal sense of the word, suspending or withholding performance may be described as both a defense and a self help remedy, which a party can use when the other party does not perform its obligations under the contract. By its very nature it is a temporary remedy. As long as one party is in breach and the other is withholding its performance, the contract may be said to exist in a state of suspended animation.

Under the Civil Codes of the Dutch Caribbean (Aruba, Bonaire, Curacao, St. Maarten, St. Eustatius and Saba), withholding performance – either as a defense or as a remedy – is accepted as a reaction to the non–performance of the other party (Articles 6:52 and 6:262 CC). 

However, the principle of proportionality is applied to determine whether and to what extent withholding performance is a justifiable reaction to the non–performance by the other party. Closely connected to this is the issue of whether or not there is sufficient connection between the obligation(s) which is(are) are not performed by the one party and the obligation(s) which the other party wishes to withhold performance on.

The differing basic attitude towards specific performance constitutes a well known divide between civil law and common law. On the one hand, according to civil law systems such as the Civil Codes in the Dutch Caribbean, specific performance is the essence of what the contract is all about. On the other hand, in common law, damages are the regular remedy in case of breach while specific performance is a (more exceptional) discretionary remedy. (To be continued)

Filed under: Commercial by Karel Frielink.



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