Article 6.1.1
Place of performance
1. If the contract does not determine the place of performance of a contractual obligation, this place shall be:
- In the case of pecuniary obligations, the place of business or, failing that, the habitual residence of the obligee at the time of the conclusion of the contract.
- In other cases, the place of business or, failing that, the habitual residence of the obligor at the time of conclusion of the contract.
2. If there is more than one place of business, the place of business shall be the one that is most closely connected with the contract at the time of its conclusion.
3. However, if a party has changed its place of business after the conclusion of the contract, that party may request or deliver the performance in the new place of business, providing that it gives sufficient notice to the other party. In that case, the party that has changed its place of business or residence shall bear the expenses and costs resulting from the change of the place of performance.
Article 6.1.2
Time of performance
1. The obligor has to perform its obligations:
- At the time agreed, when the contract states a determined or determinable time.
- When the contract states a determined or determinable period, at any time within that period, unless it is interpreted that the choice of the time of performance is to the obligee.
- In other cases, within a reasonable time after the conclusion of the contract.
2. The obligor must perform its obligation completely in one time as far as possible, unless otherwise indicated by the circumstances.
Article 6.1.3
Early performance
1. The obligee may not refuse the early performance of the obligation unless it has a legitimate interest in doing so.
2. Additional expenses derived from an early performance must be borne by the obligor, without detriment to any other remedy of the obligee.
3. The acceptance of an early performance by the obligee does not modify the time of performance of its obligation.
Article 6.1.4
Order of performance
1. In the absence of agreement, obligations of the parties must be performed simultaneously unless otherwise indicated by circumstances.
2. Notwithstanding, where the performance of only one party requires a period of time, in the absence of agreement, this performance should be performed at an earlier time unless otherwise indicated by circumstances.
Article 6.1.5
Partial performance
1. The obligee may not refuse a partial performance, whether performance has been guaranteed or not, unless it has a legitimate interest in doing so.
2. Additional expenses derived from a partial performance must be borne by the obligor, without detriment to any other remedy of the obligee.
3. Where the obligation is severable, the obligee that accepts a partial performance may for its part perform its obligation partially or proportionally.
Article 6.1.6
Performance by a third person
Unless the contract requires a personal performance, the obligee may not refuse the performance by a third person acting with the obligor's consent.
Article 6.1.7
Forms of payment
1. A pecuniary obligation may be paid by any form used in the ordinary course of business.
2. Where the creditor accepts a negotiable instrument, order or promise to pay, it is presumed to do so only on condition that it will be honoured.
Article 6.1.8
Currency of payment
1. The parties may agree that payment shall be made in a specified currency. If the payment in the agreed currency is impossible or the currency of payment is not agreed, the payment shall be made in the currency of the place where the payment is due.
2. In the absence of agreement, a pecuniary obligation expressed in a currency other than that of the place of payment may be paid in the currency where payment is due providing that it is a freely convertible currency.
3. Payment in the currency where payment is due shall be made according to the exchange rate applicable in the place where payment is due at the time when payment is due. If the debtor has not paid at the agreed time, the creditor may opt to require the payment according to the exchange rate applicable there at the time when payment was due or at the time of actual payment.
Article 6.1.9
Imputation of payment
1. In the absence of an agreement, an obligor owing several pecuniary obligations to the same obligee may specify, at the time of payment, the obligation to which it intends the payment to be applied, providing that it put due obligations before those not yet due. However, the payment shall first discharge expenses, then due interests and finally the principal.
2. If the obligor makes no such specification, the obligee may, within a reasonable time after payment, declare to the obligor the obligation to which it imputes the payment, provided that the obligation is due and undisputed.
3. In the absence of imputation under the preceding paragraphs, payment shall be imputed to the obligation which meets one of the following criteria in the order indicated:
- the obligation which is due or is the first to fall due;
- the obligation for which the obligee has no security or the least security;
- the obligation which is the most burdensome for the obligor;
- the obligation which has arisen first.
4. If none of the preceding criteria applies, payment shall be imputed to all obligations proportionally.
5. The preceding rules shall be applied by analogy to non-pecuniary obligations of the same nature.
Article 6.1.10
Refusal of performance
1. The obligee cannot refuse the performance by the obligor under the contract terms and, failing which, under the rules of these Principles.
2. If the creditor refuses the payment of a pecuniary obligation by the debtor, the debtor may pay by depositing, if possible, under the law of the place of payment.
3. If the obligee refuses the performance of a non-pecuniary obligation by the obligor, the obligor shall adopt all reasonable measures to mitigate the consequences of the refusal, including the preservation of the goods concerned if appropriated. Particularly, where the obligee refuses the delivery of goods by the obligor, the obligor may perform by depositing goods, if possible, under the law of the place of payment.
Article 6.1.11
Public licences
1. The party obliged to apply for and manage public licences and authorisations required as a condition for the validity or the performance of the contract or of its obligations shall be determined according to the mandatory rules of the country concerned and, failing that, in accordance with the agreements by the parties.
2. In the absence of agreement, it is presumed that the obligation to apply and manage public permissions and authorisations is the obligation of the party which has its place of business in the country concerned, unless this is considered unreasonable in the light of the circumstances. Failing that, the obligation is on the party obliged to perform the obligation for which the licence or authorisation is required.
3. The obligation to apply for and manage the licences and authorisations mentioned in preceding paragraphs requires that the obligor act with reasonable diligence, bear the resultant expenses and notify the other party about the grant or refusal without undue delay.
Article 6.1.12
Costs of performance
Unless otherwise specified, each party shall bear the costs arising from the performance of its obligations.
Downloads
OHADAC principles on international commercial contracts.pdf
The place of performance of the obligation will be that expressly agreed by the parties in the contract. Even if such a circumstance is not expressly provided, rules on contract interpretation, including commercial usages, lead very often to conclude an implied term of performance in a determined place. Thus, in relation with a pecuniary obligation, “cash clear”, “cash against invoice“ and “cash before delivery” clauses usually imply that payment must be made at the seller's place of business. Likewise, when payment must be made against delivery of goods or documents in international sales, the place of payment shall be the place of delivery [Section 28 of the Sales of Goods Act of 1979; Section 29 of the Sale of Goods Act of Antigua and Barbuda; Section 29 of the Sale of Goods Act of Montserrat; Section 29 of the Sale of Goods Act of Bahamas; Section 29 of the Sale of Goods Act of Trinidad and Tobago; Section 30 of the Sale of Goods Act of Belize; Section 28 of the Sale of Goods Act of Jamaica; Article 1.929 of the Colombian Civil Code; Article 1.087 of the Costa Rican Civil Code; Article 352 (a) of the Cuban Civil Code; Article 1.651 of the French and Dominican Civil Code; Article 1.825.2 of the Guatemalan Civil Code; Article 1.426 of the Haitian Civil Code; Article 7:26 of the Dutch and Suriname Civil Code; Article 1.436 of the Honduran Civil Code; Articles 2.084 and 2.294 of the Mexican Civil Code; Article 2.661 of the Nicaraguan Civil Code; Article 360 of the Nicaraguan Commercial Code; Article 1.271 of the Panamanian Civil Code; Article 773 of the Panamanian Commercial Code; Article 1.389 of the Puerto Rican Civil Code; Article 1.443 of the Saint Lucian Civil Code; Article 299 of the Saint Lucian Commercial Code; Article 1.528 of the Venezuelan Civil Code; Article 57.1 (b) CISG].
If the contract does not specify or give any indication as to the place of performance, a subsidiary rule, acting as an interpretative or integration rule to fill in the gap seems appropriate. The first paragraph of Article 6.1.1 of the OHADAC Principles makes the distinction, on this subject, between pecuniary and non-pecuniary obligations.
There is a wide diversity of solutions in Caribbean legal systems for pecuniary obligations. On the one hand, most of them provide that pecuniary obligations must be performed in the creditor's place of business [e.g. Article 1.083 of the Saint Lucian Civil Code; Article 57.1 (a) CISG; Article 6.1.6 (1) (a) UP; Article III-2:101 (1) (a) DCFR], determined in some cases at the time of conclusion of the contract [Article 7:101 (1) (b) PECL; Article 125.1 CESL. This rule is also usual in common law countries] and in other cases at the time of payment (e.g. Article 236.1 of the Cuban Civil Code). On the other hand, most civil law systems prefer the opposite rule, inspired by the favor debitoris principle, which leads to the debtor's place of business (Article 778 of the Costa Rican Civil Code; Article 451 of the Costa Rican Commercial Code; Article 1.646 of the Colombian Civil Code; Article 1.247 of the French and Dominican Civil Code, maintained in Article 191 of the Proposals for the Reform of French Law on Obligations of 2013; Article 1.398 of the Guatemalan Civil Code; Article 1.033 of the Haitian Civil Code; Article 1.436 of the Honduran Civil Code; Article 2.082 of the Mexican Civil Code; 2.031 of the Nicaraguan Civil Code; Article 1.058 of the Panamanian Civil Code; Article 1.125 of the Puerto Rican Civil Code; Article 1.295 of the Venezuelan Civil Code).
The OHADAC Principles have opted, in letter (a) of paragraph 1, for the rule that considers that the place of performance of pecuniary obligations is that of the creditor's place of business at the time the contract is concluded. This choice is more in line with international trade practices and the more common means of payment. Moreover, the determination of this place at the time of conclusion of the contract meets the need for predictability as well as the contractual equilibrium that recommends that the obligor be able to anticipate expenses inherent to the payment. Although this rule does not converge with contrary presumptions in most civil law systems, its application is not controversial, given the non-mandatory character of this question. The choice of the OHADAC Principles by the parties shall imply the inclusion of this rule in the contract, being a purely factual circumstance that does not entail interpretative difficulties.
There is a greater unanimity in determining the place of performance of non-pecuniary obligations where this place cannot be inferred from the contract. It is presumed to be the place where the party obliged to perform has its place of business (Article 1.646 of the Colombian Civil Code; Article 778 of the Costa Rican Civil Code; Article 451 of the Costa Rican Commercial Code; Article 1.247 of the French and Dominican Civil Code, maintained in Article 191 of the Proposals for the Reform of the French Law on Obligations of 2013; Article 1.398 of the Guatemalan Civil Code; Article 1.033 of the Haitian Civil Code; Article 6:41 of the Dutch and Suriname Civil Code; Article 1.436 of the Honduran Civil Code; Article 2.082 of the Mexican Civil Code; Article 2.031 of the Nicaraguan Civil Code; Article 1.058 of the Panamanian Civil Code; Article 1.125 of the Puerto Rican Civil Code; Article 1.083 of the Saint Lucian Civil Code; Article 1.295 of the Venezuelan Civil Code; Article 31 (c) CISG; Article 6.1.6 (1) (b) UP; Article 7:101 (b) PECL; Article III-2:101 (1) (b) DCFR]. Letter (b) of paragraph 1 of this Article follows this rule generally accepted and fully consistent with the contract equilibrium. In civil law systems, however, there are some special rules about obligations on specific goods, which point to the place of situation, production or delivery of the goods to the bearer [Article 1.646 of the Colombian Civil Code, Article 778 of the Costa Rican Civil Code; Article 1.247 of the French and Dominican Civil Code Article 236 of the Cuban Civil Code; Article 1.398 of the Guatemalan Civil Code; Article 1.033 of the Haitian Civil Code; Article 6:41 of the Dutch and Suriname Civil Code; Article 1.436 of the Honduran Civil Code; Article 2.083 of the Mexican Civil Code; Article 2.031 of the Nicaraguan Civil Code; Article 1.050 of the Panamanian Civil Code; Article 758 of the Panamanian Commercial Code; Article 1.125 of the Puerto Rican Civil Code; Article 1.083 of the Saint Lucian Civil Code; Article 1.295 of the Venezuelan Civil Code; Articles 31 CISG]. In any case, these special rules do not question the general rule, because to a large extent, as stated in Article 6.1.1, the subsidiary rules are only applicable where the place of performance cannot be inferred from the rules on contract construction or from trade practices.
Paragraph 2 states an interpretative rule in cases where the current place of business or residence cannot be determined because the party has several places of business or residences. The place of business or the residence most closely connected at the time of conclusion of the contract will be applied [Articles 7:101 (2) PECL; III-2:101 (2) (a) DCFR; and 125.2 CESL].
If a party changes its place of business, for economic reasons, performance should be at the new place of business, providing that that party gives sufficient notice to the other party and assumes the expenses deriving from that change, which may be justified by many reasons, including banking negotiation costs. Hence the rule stated in paragraph 3 [also included in Article 2.032 and 2.033 of the Nicaraguan Civil Code; Article 1.400 of the Guatemalan Civil Code; Article 6.1.6 (2) UP; Article III-2:101 (1) (a) DCFR].
Commentary