This is Part III, finalised in 2001-2002, containing additional chapters to the 1999 version of PECL. Part III was published in 2002:2003 by Kluwer Law International (full text and comments). A ful French version was published in 2003.. Versions in other languages will follow.
© Commission on European contract law, København
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CHAPTER 10. Plurality of parties
Section 1: Plurality of debtors
ARTICLE 10:101: SOLIDARY, SEPARATE AND COMMUNAL OBLIGATIONS
(1) Obligations are solidary when all the debtors are bound
to render one and the same performance and the creditor may require
it from any one of them until full performance has been received.
(2) Obligations are separate when each debtor is bound to render
only part of the performance and the creditor may require from
each debtor only that debtor's part.
(3) An obligation is communal when all the debtors are bound to
render the performance together and the creditor may require it
only from all of them.
ARTICLE 10:102: WHEN SOLIDARY OBLIGATIONS ARISE
(1) If several debtors are bound to render one and the same
performance to a creditor under the same contract, they are solidarily
liable, unless the contract or the law provides otherwise.
(2) Solidary obligations also arise where several persons
are liable for the same damage.
(3) The fact that the debtors are not liable on the same
terms does not prevent their obligations from being solidary.
ARTICLE 10:103: LIABILITY UNDER SEPARATE OBLIGATIONS
Debtors bound by separate obligations are liable in equal shares unless the contract or the law provides otherwise.
ARTICLE 10:104: COMMUNAL OBLIGATIONS: SPECIAL RULE WHEN MONEY CLAIMED FOR NON-PERFORMANCE
Notwithstanding Article 10:101(3), when money is claimed for non-performance of a communal obligation, the debtors are solidarily liable for payment to the creditor.
ARTICLE 10:105: APPORTIONMENT BETWEEN SOLIDARY DEBTORS
(1) As between themselves, solidary debtors are liable
in equal shares unless the contract or the law provides otherwise.
(2) If two or more debtors are liable for the same damage under
Article 10:102(2), their share of liability as between themselves
is determined according to the law governing the event which gave
rise to the liability.
ARTICLE 10:106: RECOURSE BETWEEN SOLIDARY DEBTORS
(1) A solidary debtor who has performed more than that
debtor's share may claim the excess from any of the other debtors
to the extent of each debtor's unperformed share, together with
a share of any costs reasonably incurred.
(2) A solidary debtor to whom paragraph (1) applies
may also, subject to any prior right and interest of the creditor,
exercise the rights and actions of the creditor, including accessory
securities, to recover the excess from any of the other debtors
to the extent of each debtor's unperformed share.
(3) If a solidary debtor who has performed more than that
debtor's share is unable, despite all reasonable efforts, to recover
contribution from another solidary debtor, the share of the others,
including the one who has performed, is increased proportionally.
ARTICLE 10:107: PERFORMANCE, SET-OFF AND MERGER IN SOLIDARY OBLIGATIONS
(1) Performance or set-off by a solidary debtor or set-off
by the creditor against one solidary debtor discharges the other
debtors in relation to the creditor to the extent of the performance
or set--off.
(2) Merger of debts between a solidary debtor and the creditor
discharges the other debtors only for the share of the debtor
concerned.
ARTICLE 10:108: RELEASE OR SETTLEMENT IN SOLIDARY OBLIGATIONS
(1) When the creditor releases, or reaches a settlement
with, one solidary debtor, the other debtors are discharged of
liability for the share of that debtor.
(2) The debtors are totally discharged by the release or settlement
if it so provides.
(3) As between solidary debtors, the debtor who is discharged
from that debtor's share is discharged only to the extent of the
share at the time of the discharge and not from any supplementary
share for which that debtor may subsequently become liable under
Article 10:106(3).
ARTICLE 10:109: EFFECT OF JUDGMENT IN SOLIDARY OBLIGATIONS
A decision by a court as to the liability to the creditor of
one solidary debtor does not affect:
(a) the liability to the creditor of the other solidary debtors;
or
(b) the rights of recourse between the solidary debtors under
Article 10:106.
ARTICLE 10:110: PRESCRIPTION IN SOLIDARY OBLIGATIONS
Prescription of the creditor's right to performance ("claim")
against one solidary debtor does not affect:
(a) the liability to the creditor of the other solidary debtors;
or
(b) the rights of recourse between the solidary debtors under
Article 10:106.
ARTICLE 10:111: OPPOSABILITY OF OTHER DEFENCES IN SOLIDARY OBLIGATIONS
(1) A solidary debtor may invoke against the creditor any defence
which another solidary debtor can invoke, other than a defence
personal to that other debtor. Invoking the defence has no effect
with regard to the other solidary debtors.
(2) A debtor from whom contribution is claimed may invoke against
the claimant any personal defence that that debtor could have
invoked against the creditor.
Section 2 : Plurality of creditors
ARTICLE 10:201: SOLIDARY, SEPARATE AND COMMUNAL CLAIMS
(1) Claims are solidary when any of the creditors may require
full performance from the debtor and when the debtor may render
performance to any of the creditors.
(2) Claims are separate when the debtor owes each creditor only
that creditor's share of the claim and each creditor may require
performance only of that creditor's share.
(3) A claim is communal when the debtor must perform to all the
creditors and any creditor may require performance only for the
benefit of all.
ARTICLE 10:202: APPORTIONMENT OF SEPARATE CLAIMS
Separate creditors are entitled to equal shares unless the contract or the law provides otherwise.
ARTICLE 10:203: DIFFICULTIES OF EXECUTING A COMMUNAL CLAIM
If one of the creditors in a communal claim refuses, or is unable to receive, the performance, the debtor may discharge the obligation to perform by depositing the property or money with a third party according to Articles 7:110 or 7:111 of the Principles.
ARTICLE 10:204: APPORTIONMENT OF SOLIDARY CLAIMS
(1) Solidary creditors are entitled to equal shares
unless the contract or the law provides otherwise.
(2) A creditor who has received more than that creditor's
share must transfer the excess to the other creditors to the extent
of their respective shares.
ARTICLE 10:205: REGIME OF SOLIDARY CLAIMS
(1) A release granted to the debtor by one of
the solidary creditors has no effect on the other solidary creditors
(2) The rules of Articles 10:107, 10:109, 10:110 and 10:111(1)
apply, with appropriate adaptations, to solidary claims.
CHAPTER 11. Assignment of Claims
Section 1: General Principles
ARTICLE 11:101: SCOPE OF CHAPTER
(1) This Chapter applies to the assignment by agreement of
a right to performance ("claim") under an existing or
future contract.
(2) Except where otherwise stated or the context otherwise requires,
this Chapter also applies to the assignment by agreement of other
transferable claims.
(3) This Chapter does not apply:
(a) to the transfer of a financial instrument or investment security
where, under the law otherwise applicable, such transfer must
be by entry in a register maintained by or for the issuer;
or
(b) to the transfer of a bill of exchange or other negotiable
instrument or of a negotiable security or a document of title
to goods where, under the law otherwise applicable, such transfer
must be by delivery (with any necessary indorsement).
(4) In this Chapter "assignment" includes an assignment
by way of security.
(5) This Chapter also applies, with appropriate adaptations, to
the granting by agreement of a right in security over a claim
otherwise than by assignment.
ARTICLE 11:102: CONTRACTUAL CLAIMS GENERALLY ASSIGNABLE
(1) Subject to Articles 11:301 and 11:302, a party to a contract
may assign a claim under it.
(2) A future claim arising under an existing or future contract
may be assigned if at the time when it comes into existence, or
at such other time as the parties agree, it can be identified
as the claim to which the assignment relates.
ARTICLE 11:103: PARTIAL ASSIGNMENT
A claim which is divisible may be assigned in part, but the assignor is liable to the debtor for any increased costs which the debtor thereby incurs.
ARTICLE 11:104: FORM OF ASSIGNMENT
An assignment need not be in writing and is not subject to any other requirement as to form. It may be proved by any means, including witnesses.
Section 2: Effects of Assignment As Between Assignor and
Assignee
ARTICLE 11:201: RIGHTS TRANSFERRED TO ASSIGNEE
(1) The assignment of a claim transfers to the assignee:
(a) all the assignor's rights to performance in respect of the
claim assigned; and
(b) all accessory rights securing such performance.
(2) Where the assignment of a claim under a contract is associated
with the substitution of the assignee as debtor in respect of
any obligation owed by the assignor under the same contract, this
Article takes effect subject to Article 12:201.
ARTICLE 11:202: WHEN ASSIGNMENT TAKES EFFECT
(1) An assignment of an existing claim takes effect at the
time of the agreement to assign or such later time as the assignor
and assignee agree.
(2) An assignment of a future claim is dependent upon the assigned
claim coming into existence but thereupon takes effect from the
time of the agreement to assign or such later time as the assignor
and assignee agree.
ARTICLE 11:203: PRESERVATION OF ASSIGNEE'S RIGHTS AGAINST ASSIGNOR
An assignment is effective as between the assignor and assignee,
and entitles the assignee to whatever the assignor receives from
the debtor, even if it is ineffective against the debtor under
Article 11:301 or 11:302.
ARTICLE 11:204: UNDERTAKINGS BY ASSIGNOR
By assigning or purporting to assign a claim the assignor undertakes
to the assignee that:
(a) at the time when the assignment is to take effect the following
conditions will be satisfied except as otherwise disclosed to
the assignee:
(i) the assignor has the right to assign the claim;
(ii) the claim exists and the assignee's rights are not affected
by any defences or rights (including any right of set-off) which
the debtor might have against the assignor; and
(iii) the claim is not subject to any prior assignment or right
in security in favour of any other party or to any other incumbrance;
(b) the claim and any contract under which it arises will not
be modified without the consent of the assignee unless the modification
is provided for in the assignment agreement or is one which is
made in good faith and is of a nature to which the assignee could
not reasonably object; and
(c) the assignor will transfer to the assignee all transferable
rights intended to secure performance which are not accessory
rights.
Section 3: Effects of Assignment As Between Assignee and
Debtor
ARTICLE 11:301: CONTRACTUAL PROHIBITION OF ASSIGNMENT
(1) An assignment which is prohibited by or is otherwise not
in conformity with the contract under which the assigned claim
arises is not effective against the debtor unless:
(a) the debtor has consented to it; or
(b) the assignee neither knew nor ought to have known of the non-conformity;
or
(c) the assignment is made under a contract for the assignment
of future rights to payment of money.
(2) Nothing in the preceding paragraph affects the assignor's
liability for the non-conformity.
ARTICLE 11:302: OTHER INEFFECTIVE ASSIGNMENTS
An assignment to which the debtor has not consented is ineffective against the debtor so far as it relates to a performance which the debtor, by reason of the nature of the performance or the relationship of the debtor and the assignor, could not reasonably be required to render to anyone except the assignor.
ARTICLE 11:303: EFFECT ON DEBTOR'S OBLIGATION
(1) Subject to Articles 11:301, 11:302, 11:307 and 11:308,
the debtor is bound to perform in favour of the assignee if and
only if the debtor has received a notice in writing from the assignor
or the assignee which reasonably identifies the claim which has
been assigned and requires the debtor to give performance to the
assignee.
(2) However, if such notice is given by the assignee, the debtor
may within a reasonable time request the assignee to provide reliable
evidence of the assignment, pending which the debtor may withhold
performance.
(3) Where the debtor has acquired knowledge of the assignment
otherwise than by a notice conforming to paragraph (1), the debtor
may either withhold performance from or give performance to the
assignee.
(4) Where the debtor gives performance to the assignor, the debtor
is discharged if and only if the performance is given without
knowledge of the assignment.
ARTICLE 11:304: PROTECTION OF DEBTOR
A debtor who performs in favour of a person identified as assignee in a notice of assignment under Article 11:303 is discharged unless the debtor could not have been unaware that such person was not the person entitled to performance.
ARTICLE 11:305: COMPETING DEMANDS
A debtor who has received notice of two or more competing demands for performance may discharge liability by conforming to the law of the due place of performance, or, if the performances are due in different places, the law applicable to the claim.
ARTICLE 11:306: PLACE OF PERFORMANCE
(1) Where the assigned claim relates to an obligation to pay
money at a particular place, the assignee may require payment
at any place within the same country or, if that country is a
Member State of the European Union, at any place within the European
Union, but the assignor is liable to the debtor for any increased
costs which the debtor incurs by reason of any change in the place
of performance.
(2) Where the assigned claim relates to a non-monetary obligation
to be performed at a particular place, the assignee may not require
performance at any other place.
ARTICLE 11:307: DEFENCES AND RIGHTS OF SET-OFF
(1) The debtor may set up against the assignee all substantive
and procedural defences to the assigned claim which the debtor
could have used against the assignor.
(2) The debtor may also assert against the assignee all rights
of set-off which would have been available against the assignor
under Chapter 13 in respect of any claim against the assignor:
(a) existing at the time when a notice of assignment, whether
or not conforming to Article 11:303(1), reaches the debtor; or
(b) closely connected with the assigned claim.
ARTICLE 11:308: UNAUTHORISED MODIFICATION NOT BINDING ON ASSIGNEE
A modification of the claim made by agreement between the assignor and the debtor, without the consent of the assignee, after a notice of assignment, whether or not conforming to Article 11:303(1), reaches the debtor does not affect the rights of the assignee against the debtor unless the modification is provided for in the assignment agreement or is one which is made in good faith and is of a nature to which the assignee could not reasonably object.
Section 4: Order of Priority between Assignee and Competing
Claimants
ARTICLE 11:401: PRIORITIES
(1) Where there are successive assignments of the same claim,
the assignee whose assignment is first notified to the debtor
has priority over any earlier assignee if at the time of the later
assignment the assignee under that assignment neither knew nor
ought to have known of the earlier assignment.
(2) Subject to paragraph (1), the priority of successive assignments,
whether of existing or future claims, is determined by the order
in which they are made.
(3) The assignee's interest in the assigned claim has priority
over the interest of a creditor of the assignor who attaches that
claim, whether by judicial process or otherwise, after the time
the assignment has taken effect under Article 11:202.
(4) In the event of the assignor's bankruptcy, the assignee's
interest in the assigned claim has priority over the interest
of the assignor's insolvency administrator and creditors, subject
to any rules of the law applicable to the bankruptcy relating
to:
(a) publicity required as a condition of such priority;
(b) the ranking of claims; or
(c) the avoidance or ineffectiveness of transactions in the bankruptcy
proceedings.
CHAPTER 12. Substitution of New Debtor: Transfer of Contract
Section 1: Substitution of New Debtor
ARTICLE 12:101: SUBSTITUTION: GENERAL RULES
(1) A third person may undertake with the agreement of the
debtor and the creditor to be sub-sti-tuted as debtor, with the
effect that the original debtor is discharged.
(2) A creditor may agree in advance to a future substitution.
In such a case the substitution takes effect only when the creditor
is given notice by the new debtor of the agreement between the
new and the original debtor.
ARTICLE 12:102: EFFECTS OF SUBSTITUTION ON DEFENCES AND SECURITIES
(1) The new debtor cannot invoke against the creditor any rights
or defences arising from the relationship between the new debtor
and the original debtor.
(2) The discharge of the original debtor also extends to any security
of the original debtor given to the creditor for the performance
of the obli-ga-tion, unless the security is over an asset which
is transferred to the new debtor as part of a transaction between
the original and the new debtor.
(3) Upon discharge of the original debtor, a security granted
by any person other than the new debtor for the per-formance of
the obli-ga-tion is released, unless that other person agrees
that it should continue to be available to the creditor.
(4) The new debtor may invoke against the creditor all de--fences
which the original debtor could have invoked against the creditor.
Section 2: Transfer of Contract
ARTICLE 12:201: TRANSFER OF CONTRACT
(1) A party to a contract may agree with a third person that
that person is to be sub-sti-tu-ted as the contracting party.
In such a case the substitution takes effect only where, as a
result of the other party's assent, the first party is discharged.
(2) To the extent that the substitution of the third person as
a contracting party involves a transfer of rights to performance
("claims"), the provisions of Chapter 11 apply; to the
extent that obligations are transferred, the provisions of Section
1 of this Chapter apply.
CHAPTER 13. Set-Off
ARTICLE 13:101: REQUIREMENTS FOR SET-OFF
If two parties owe each other obligations of the same kind,
either party may set off that party's right to performance ("claim")
against the other party's claim, if and to the extent that, at
the time of set-off, the first party:
(a) is entitled to effect performance; and
(b) may demand the other party's performance.
ARTICLE 13:102: UNASCERTAINED CLAIMS
(1) A debtor may not set off a claim which is unascertained
as to its existence or value unless the set-off will not prejudice
the interests of the other party.
(2) Where the claims of both parties arise from the same legal
relationship it is presumed that the other party's interests will
not be prejudiced.
ARTICLE 13:103: FOREIGN CURRENCY SET-OFF
Where parties owe each other money in different currencies, each party may set off that party's claim against the other party's claim, unless the parties have agreed that the party declaring set-off is to pay exclusively in a specified currency.
ARTICLE 13:104: NOTICE OF SET-OFF
The right of set-off is exercised by notice to the other party.
ARTICLE 13:105: PLURALITY OF CLAIMS AND OBLIGATIONS
(1) Where the party giving notice of set-off has two or more
claims against the other party, the notice is effective only if
it identifies the claim to which it relates.
(2) Where the party giving notice of set-off has to perform two
or more obligations towards the other party, the rules in Article
7:109 apply with appropriate adaptations.
ARTICLE 13:106: EFFECT OF SET-OFF
Set-off discharges the obligations, as far as they are coextensive, as from the time of notice.
ARTICLE 13:107: EXCLUSION OF RIGHT OF SET-OFF
Set-off cannot be effected:
(a) where it is excluded by agreement;
(b) against a claim to the extent that that claim is not capable
of attachment; and
(c) against a claim arising from a deliberate wrongful act.
CHAPTER 14. Prescription
Section 1: General Provision
ARTICLE 14:101: CLAIMS SUBJECT TO PRESCRIPTION
A right to performance of an obligation ("claim") is subject to prescription by the expiry of a period of time in accordance with these Principles.
Section 2: Periods of Prescription and their Commencement
ARTICLE 14:201: GENERAL PERIOD
The general period of prescription is three years.
ARTICLE 14:202: PERIOD FOR A CLAIM ESTABLISHED BY LEGAL PROCEEDINGS
(1) The period of prescription for a claim established by judgment
is ten years.
(2) The same applies to a claim established by an arbitral award
or other instrument which is enforceable as if it were a judgment.
ARTICLE 14:203: COMMENCEMENT
(1) The general period of prescription begins to run from the
time when the debtor has to effect performance or, in the case
of a right to damages, from the time of the act which gives rise
to the claim.
(2) Where the debtor is under a continuing obligation to do or
refrain from doing something, the general period of prescription
begins to run with each breach of the obligation.
(3) The period of prescription set out in Article 14:202 begins
to run from the time when the judgment or arbitral award obtains
the effect of res judicata, or the other instrument becomes enforceable,
though not before the debtor has to effect performance.
Section 3: Extension of Period
ARTICLE 14:301: SUSPENSION IN CASE OF IGNORANCE
The running of the period of prescription is suspended as long
as the creditor does not know of, and could not reasonably know
of:
(a) the identity of the debtor; or
(b) the facts giving rise to the claim including, in the case
of a right to damages, the type of damage.
ARTICLE 14:302: SUSPENSION IN CASE OF JUDICIAL AND OTHER PROCEEDINGS
(1) The running of the period of prescription is suspended
from the time when judicial proceedings on the claim are begun.
(2) Suspension lasts until a decision has been made which has
the effect of res judicata, or until the case has been otherwise
disposed of.
(3) These provisions apply, with appropriate adaptations, to arbitration
proceedings and to all other proceedings initiated with the aim
of obtaining an instrument which is enforceable as if it were
a judgment.
ARTICLE 14:303: SUSPENSION IN CASE OF IMPEDIMENT BEYOND CREDITOR'S CONTROL
(1) The running of the period of prescription is suspended
as long as the creditor is prevented from pursuing the claim by
an impediment which is beyond the creditor's control and which
the creditor could not reasonably have been expected to avoid
or overcome.
(2) Paragraph (1) applies only if the impediment arises, or subsists,
within the last six months of the prescription period.
ARTICLE 14:304: POSTPONEMENT OF EXPIRY IN CASE OF NEGOTIATIONS
If the parties negotiate about the claim, or about circumstances from which a claim might arise, the period of prescription does not expire before one year has passed since the last communication made in the negotiations.
ARTICLE 14:305: POSTPONEMENT OF EXPIRY IN CASE OF INCAPACITY
(1) If a person subject to an incapacity is without a representative,
the period of prescription of a claim held by or against that
person does not expire before one year has passed after either
the incapacity has ended or a representative has been appointed.
(2) The period of prescription of claims between a person subject
to an incapacity and that person's representative does not expire
before one year has passed after either the incapacity has ended
or a new representative has been appointed.
ARTICLE 14:306: POSTPONEMENT OF EXPIRY: DECEASED'S ESTATE
Where the creditor or debtor has died, the period of prescription of a claim held by or against the deceased's estate does not expire before one year has passed after the claim can be enforced by or against an heir, or by or against a representative of the estate.
ARTICLE 14:307: MAXIMUM LENGTH OF PERIOD
The period of prescription cannot be extended, by suspension of its running or postponement of its expiry under these Principles, to more than ten years or, in case of claims for personal injuries, to more than thirty years. This does not apply to suspension under Article 14:302.
Section 4: Renewal of Periods
ARTICLE 14:401: RENEWAL BY ACKNOWLEDGEMENT
(1) If the debtor acknowledges the claim, vis-à-vis
the creditor, by part payment, payment of interest, giving of
security, or in any other manner, a new period of prescription
begins to run.
(2) The new period is the general period of prescription, regardless
of whether the claim was originally subject to the general period
of prescription or the ten year period under Article 14:202. In
the latter case, however, this Article does not operate so as
to shorten the ten year period.
ARTICLE 14:402: RENEWAL BY ATTEMPTED EXECUTION
The ten year period of prescription laid down in Article 14:202 begins to run again with each reasonable attempt at execution undertaken by the creditor.
Section 5: Effects of Prescription
ARTICLE 14:501: GENERAL EFFECT
(1) After expiry of the period of prescription the debtor is
entitled to refuse performance.
(2) Whatever has been performed in order to discharge a claim
may not be reclaimed merely because the period of prescription
had expired.
ARTICLE 14:502: EFFECT ON ANCILLARY CLAIMS
The period of prescription for a right to payment of interest, and other claims of an ancillary nature, expires not later than the period for the principal claim.
ARTICLE 14:503: EFFECT ON SET-OFF
A claim in relation to which the period of prescription has expired may nonetheless be set off, unless the debtor has invoked prescription previously or does so within two months of notification of set-off.
Section 6: Modification by Agreement
ARTICLE 14:601: AGREEMENTS CONCERNING PRESCRIPTION
(1) The requirements for prescription may be modified by agreement
between the parties, in particular by either shortening or lengthening
the periods of prescription.
(2) The period of prescription may not, however, be reduced to
less than one year or extended to more than thirty years after
the time of commencement set out in Article 14:203.
CHAPTER 15. Illegality
ARTICLE 15:101: CONTRACTS CONTRARY TO FUNDAMENTAL PRINCIPLES
A contract is of no effect to the extent that it is contrary to principles recognised as fundamental in the laws of the Member States of the European Union.
ARTICLE 15:102: CONTRACTS INFRINGING MANDATORY RULES
(1) Where a contract infringes a mandatory rule of law applicable
under Article 1:103 of these Principles, the effects of that infringement
upon the contract are the effects, if any, expressly prescribed
by that mandatory rule.
(2) Where the mandatory rule does not expressly prescribe the
effects of an infringement upon a contract, the contract may be
declared to have full effect, to have some effect, to have no
effect, or to be subject to modification.
(3) A decision reached under paragraph (2) must be an appropriate
and proportional response to the infringement, having regard to
all relevant circumstances, including:
(a) the purpose of the rule which has been infringed;
(b) the category of persons for whose protection the rule exists;
(c) any sanction that may be imposed under the rule infringed;
(d) the seriousness of the infringement;
(e) whether the infringement was intentional; and
(f) the closeness of the relationship between the infringement
and the contract.
ARTICLE 15:103: PARTIAL INEFFECTIVENESS
(1) If only part of a contract is rendered ineffective under
Articles 15:101 or 15:102, the remaining part continues in effect
unless, giving due consideration to all the circumstances of the
case, it is unreasonable to uphold it.
(2) Articles 15:104 and 15:105 apply, with appropriate adaptations,
to a case of partial ineffectiveness.
ARTICLE 15:104: RESTITUTION
(1) When a contract is rendered ineffective under Articles
15:101 or 15:102, either party may claim restitution of whatever
that party has supplied under the contract, provided that, where
appropriate, concurrent restitution is made of whatever has been
received.
(2) When considering whether to grant restitution under paragraph
(1), and what concurrent restitution, if any, would be appropriate,
regard must be had to the factors referred to in Article 15:102(3).
(3) An award of restitution may be refused to a party who knew
or ought to have known of the reason for the ineffectiveness.
(4) If restitution cannot be made in kind for any reason, a reasonable
sum must be paid for what has been received.
ARTICLE 15:105: DAMAGES
(1) A party to a contract which is rendered ineffective under
Articles 15:101 or 15:102 may recover from the other party damages
putting the first party as nearly as possible into the same position
as if the contract had not been concluded, provided that
the other party knew or ought to have known of the reason for
the ineffectiveness.
(2) When considering whether to award damages under paragraph
(1), regard must be had to the factors referred to in Article
15:102(3).
(3) An award of damages may be refused where the first party knew
or ought to have known of the reason for the ineffectiveness.
CHAPTER 16. Conditions
ARTICLE 16:101: TYPES OF CONDITION
A contractual obligation may be made conditional upon the occurrence of an uncertain future event, so that the obligation takes effect only if the event occurs (suspensive condition) or comes to an end if the event occurs (resolutive condition).
ARTICLE 16:102: INTERFERENCE WITH CONDITIONS
(1) If fulfilment of a condition is prevented by a party, contrary
to duties of good faith and fair dealing or co-operation, and
if fulfilment would have operated to that party's disadvantage,
the condition is deemed to be fulfilled.
(2) If fulfilment of a condition is brought about by a party,
contrary to duties of good faith and fair dealing or co-operation,
and if fulfilment operates to that party's advantage, the condition
is deemed not to be fulfilled.
ARTICLE 16:103: EFFECT OF CONDITIONS
(1) Upon fulfilment of a suspensive condition, the relevant
obligation takes effect unless the parties otherwise agree.
(2) Upon fulfilment of a resolutive condition, the relevant obligation
comes to an end unless the parties otherwise agree.
CHAPTER 17. Capitalisation of Interest
ARTICLE 17:101: WHEN INTEREST TO BE ADDED TO CAPITAL
(1) Interest payable according to Article 9:508(1) is added
to the outstanding capital every 12 months.
(2) Paragraph (1) of this Article does not apply if the parties
have provided for interest upon delay in payment.