In a civil relationship, when a party breaches an obligation, civil liability will arise. In that case, the breaching party will have to bear civil liability as an adverse legal consequence to compensate and apply other remedies for the losses and damages suffered by the breached party due to the breach of obligation. In this article, lawyer’s TNTP will analyze the legal provisions on Civil liability for breach of obligation under the Civil Code 2015.
1. Civil liability and cases of exclusion of civil liability
Pursuant to Article 351 of the Civil Code 2015, the obligor who breaches the obligation must bear civil liability for the party with the right. In particular, according to the provisions of the Civil Code 2015, breach of obligation is the obligor’s violation of obligations in one of 03 forms: (1) failure to perform obligations on time, (2) incompletely performs an obligation, or improperly performs an obligation or (3) improperly performs an obligation.
Cases of exclusion of civil liability due to breach of obligations include:
- Firstly, in case the obligor improperly performs an obligation due to a force majeureevent, it is not liable for civil liability, unless otherwise agreed upon or otherwise prescribed by law.
Pursuant to Clause 1, Article 156, An event is considered a force majeure event when there are factors: (1) the event occurs objectively and unpredictably and (2) it cannot be overcome although all necessary measures have been applied and all the permitted capability has been used.
Accordingly, in case there is no otherwise agreed upon or otherwise prescribed by law, the obligor fails to performs an obligation due to a force majeure event, the obligor will not be liable for civil liability.
- Secondly, the obligor is not liable for civil liability if the obligor can prove that his/her/its failure to perform the obligation is entirely due to the fault of the party with the right.
This provision ensures the legitimate interests of the obligor when the fault of the party with the right to cause the obligor to breach the obligations. At that time, in order to be excluded from civil liability, the obligor is obliged to prove that the fault completely belongs to the party with the right.
2. Civil liability in specific cases
Pursuant to the provisions from Articles 356 to Articles 364 of the Civil Code 2015, in specific cases, the obligor will have to bear different civil liabilities when breaching the obligation. Concrete:
(1) Liability for failure to perform the obligation to deliver an object
For the obligation to deliver a distinctive object: In case the obligation to deliver a distinctive object is not performed, the breached party has the right to request the breaching party to deliver such objects. If the object is no longer exists or damaged, the breaching party shall pay the value of the object.
For the obligation to deliver a fungible object: In case the obligation to deliver a fungible object is not performed, the breached party has the right to request the breaching party to deliver another fungible object. If there is no another fungible object to replace, the breaching party shall pay the value of the object.
Simultaneously, the obligor fails to perform the obligation to deliver an object, if it causes damage, the obligor shall compensate for such damage.
(2) Liability for late performance of the obligation to pay money
The obligor that is late in the payment of money shall pay interest on the late-paid amount corresponding to the late payment period.
Regarding the interest rate, according to the provisions of the Civil Code 2015, the late-payment interest rate shall be determined according to the agreement of the parties but must not exceed the interest rate of 20%/year. In case the parties do not have an agreement, the interest rate shall be 10%/year.
(3) Liability for not performing or not being able to perform a task
In case the obligor fails to perform a task that the obligor must perform, the party with the right may: (i) Request the obligor to continue to perform; or (ii) Do such task by himself/herself; or (iii) Assign another person to perform such task.
In case the party with the right to perform the task himself/herself or assign another person to perform such task, the party with the right has the right to request the obligor to pay reasonable expenses and compensate for damage (if any).
In case the obligor is not allowed to perform a task but performs that task, the party with the right has the right to request the obligor to terminate the performance, restore the original state and compensate for damage.
(4) Liability for late acceptance of fulfillment of an obligation
The concept of late acceptance of fulfillment of an obligation is specified in the Civil Code 2015, whereby, late acceptance of fulfillment of an obligation is an act of the party with rights that when the obligor has performed the obligation but the party with the right not to accept the performance of such obligation.
Regarding legal consequences, unless otherwise provided for by law, in case the party with the right is late in the acceptance of the fulfillment of an obligation, thus causing damage to the obligor, the party with the right shall compensate for the damage and bear all risks and expenses arising.
(5) Liability to compensate for damage caused by breach of obligations
In principle, when the parties do not agree otherwise, in case of damage caused by a breach of obligation, the obligor must compensate for all damages.
Regarding the determination of damage, damage caused by breach of obligation includes: (1) Material damage: means actual material loss that can be determined, including loss of property, reasonable expenses to prevent, limit and remedy damage, actual loss or reduction of income. (2) Spiritual damage: means the spiritual loss caused by infringing upon the life, health, honor, dignity, reputation and other personal interests of a subject.
Thus, it can be seen that the breaching party has to compensate the breached party for both material damage and spiritual damage if these damages are caused by violation acts.
However, in case the breached party is at fault, the breaching party must only compensate for damage corresponding to the extent of its fault. At that time, the breaching party will not be responsible for compensating for all damages caused by violation acts. Instead, the breached party will be responsible for not receiving compensation for damages from the breaching party.
Above is the content of the article “Civil liability for breach of obligation” that TNTP sends to readers. TNTP hopes the article is useful to readers.
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