Deficiency and default

Default and default are common topics in civil law. The two concepts are closely related and to understand one, there must also be an understanding of the other. The law regulates much about deficiency and default because they are important elements of contract law. But what is default? What is default? What can you do if there is a default? 

Failure to perform

The law states that your counterparty must compensate your damages if those damages were suffered because your counterparty failed to fulfill its obligation to you. Then there is a breach of contract. This duty to compensate you does not apply if the default cannot be attributed to the other party. The breach of contract can be attributed if it is due to the fault of the other party or to circumstances for his account. For example, if the debtor is unable to deliver due to a warehouse fire, he can invoke force majeure. This is because that circumstance is not for his account and (usually) cannot be imputed to him. 

What is absenteeism? 

Thus, if a debtor defaults, he is obliged to pay damages. The creditor can claim damages if performance is permanently impossible. To the extent that this is not the case and performance can still be achieved, the creditor can only damages claim If the debtor is in default. Default occurs when, although performance can still be achieved, it does not happen and the delay can be attributed to the other party. Default occurs if performance is not forthcoming after a formal notice has been sent. In it, a reasonable deadline for performance must be set. Default may also occur without formal notice occur. This is the case if the agreed period for performance has expired and performance is not forthcoming, if the obligation arises in tort or seeks damages, or if the debtor has made it clear that he will default. 

What can you do in the event of default? 

If default occurs, you often have a choice to:

• dissolve the agreement;
• demand compliance;
• damages claim;
• or a combination thereof.

When a party to a contract fails to perform its obligations, you can first demand compliance. If this is not a suitable option, you can choose to use the dissolve the agreement. Subsequently, the party whose breach has provided a ground for rescission is obliged to compensate its counterparty for damages. It is also important to note that different rules apply to specific types of contracts. The contract may deviate from the statutory regime. For example, for the purchase of homes, both the NVM model contract of sale and the Amsterdam model contract of sale include specific rules on dissolution and compensation, which deviate from the statutory system. 

Lawyer for deficiency and default

Deficiencies in performance of obligations are common in practice. It is important to know what the possibilities and requirements are if you are faced with them. The contract law attorney at Lexys Lawyers can tell you more about breach of contract, default and the steps to take to claim damages or to terminate the contract.