European Contract Protocols Chapter 7

CHAPTER 7 - PERFORMANCE

Article 7.101 (ex art. 2.106) - Place of Performance

(1) If the place of performance of a contractual obligation is not fixed by or determinable from the contract it shall be:
(a) in the case of an obligation to pay money, the creditor's place of business at the time of the conclusion of the contract;
(b) in the case of an obligation other than to pay money, the obligor's place of business at the time of conclusion of the contract.
(2) If a party has more than one place of business, the place of business for the purpose of the preceding paragraph is that which has the closest relationship to the contract, having regard to the circumstances known to or contemplated by the parties at the time of conclusion of the contract.
(3) If a party does not have a place of business its habitual residence is to be treated as its place of business.

Article 7.102 (ex art. 2.107) - Time of Performance

A party has to effect its performance:
(1) if a time is fixed by or determinable from the contract, at that time;
(2) if a period of time is fixed by or determinable from the contract, at any time within that period unless the circumstances of the case indicate that the other party is to choose the time;
(3) in any other case, within a reasonable time after the conclusion of the contract.

Article 7.103 (ex art. 2.108) - Early Performance

(1) A party may decline a tender of performance made before it is due except where acceptance of the tender would not unreasonably prejudice its interests.
(2) A party's acceptance of early performance does not affect the time fixed for the performance of its own obligation.

Article 7.104 - Order of performance

To the extent that the performances of the parties can be rendered simultaneously, the parties are bound to render them simultaneously unless the circumstances indicate otherwise.

(1) Where an obligation may be discharged by one of alternative performances, the choice belongs to the party who is to perform, unless the circumstances indicate otherwise.
(2) If the party who is to make the choice fails to do so by the time required by the contract, then:
(a) if the delay in choosing is fundamental, the right to choose passes to the other party;
(b) if the delay is not fundamental, the other party may give a notice fixing an additional period of reasonable length in which the party to choose must do so. If the latter fails to do so, the right to choose passes to the other party.

Article 7.106 (ex art. 2.116) - Performance by a Third Person

(1) Except where the contract requires personal performance the obligee cannot refuse performance by a third person if:
(a) the third person acts with the assent of the obligor; or
(b) the third person has a legitimate interest in performance and the obligor has failed to perform or it is clear that it will not perform at the time performance is due.
(2) Performance by the third person in accordance with paragraph (1) discharges the obligor.

Article 7.107 (ex art. 2.110) - Form of Payment

(1) Payment of money due may be made in any form used in the ordinary course of business.
(2) A creditor who, pursuant to the contract or voluntarily, accepts a cheque or other order to pay or a promise to pay is presumed to do so only on condition that it will be honoured. The creditor may not enforce the original obligation to pay unless the order or promise is not honoured.

Article 7.108 (ex art. 2.111) - Currency of Payment

(1) The parties may agree that payment shall be made only in a specified currency.
(2) In the absence of such agreement, a sum of money expressed in a currency other than that of the place where payment is due may be paid in the currency of that place according to the rate of exchange prevailing there at the time when payment is due.
(3) If, in a case falling within the preceding paragraph, the debtor has not paid at the time when payment is due, the creditor may require payment in the currency of the place where payment is due according to the rate of exchange prevailing there either at the time when payment is due or at the time of actual payment.

Article 7.109 (ex art. 2.112) - Appropriation of Performance

(1) Where a party has to perform several obligations of the same nature and the performance tendered does not suffice to discharge all of the obligations, then subject to paragraph 4 the party may at the time of its performance declare to which obligation the performance is to be appropriated.
(2) If the performing party does not make such a declaration, the other party may within a reasonable time appropriate the performance to such obligation as it chooses. It shall inform the performing party of the choice. However, any such appropriation to an obligation which:
(a) is not yet due, or
(b) is illegal, or
(c) is disputed,
is invalid.
(3) In the absence of an appropriation by either party, and subject to paragraph 4, the performance is appropriated to that obligation which satisfies one of the following criteria in the sequence indicated:
(a) the obligation which is due or is the first to fall due;
(b) the obligation for which the obligee has the least security;
(c) the obligation which is the most burdensome for the obligor,
(d) the obligation which has arisen first.
If none of the preceding criteria applies, the performance is appropriated proportionately to all obligations.
(4) In the case of a monetary obligation, a payment by the debtor is to be appropriated, first, to expenses, secondly, to interest, and thirdly, to principal, unless the creditor makes a different appropriation.

Article 7.110 (ex art. 2.113) - Property Not Accepted

(1) A party who is left in possession of tangible property other than money because of the other party's failure to accept or retake the property must take reasonable steps to protect and preserve the property.
(2) The party left in possession may discharge its duty to deliver or return:
(a) by depositing the property on reasonable terms with a third person to be held to the order of the other party, and notifying the other party of this; or
(b) by selling the property on reasonable terms after notice to the other party, and paying the net proceeds to that party.
(3) Where, however, the property is liable to rapid deterioration or its preservation is unreasonably expensive, the party must take reasonable steps to dispose of it. It may discharge its duty to deliver or return by paying the net proceeds to the other party.
(4) The party left in possession is entitled to be reimbursed or to retain out of the proceeds of sale any expenses reasonably incurred.

Article 7.111 (ex art. 2.114) - Money not Accepted

Where a party fails to accept money properly tendered by the other party, that party may after notice to the first party discharge its obligation to pay by depositing the money to the order of the first party in accordance with the law of the place where payment is due

Article 7.112 - Costs of performance

Each party shall bear the costs of performance of its obligations.