[Music] in this video we're going to take a look at the civil law jurisdictions and the possibility to terminate a contract for breach under German French and Dutch law so turning them to German law and the core provision that we need to take a look at is paragraph 323 of the German civil code and in that provision we see that a creditor is able to terminate the contract if there has been a late or a defective performance by the debtor in a similar grammatical bilateral contract and what we are essentially talking about there is a
contract where there are counter performances by the creditor and the debtor so where the debtor performs late or weathers where there is a defective performance the creditor will have the possibility to terminate the contract provided that he sets an additional period of time for the data to performance obligation and that there is still no performance or satisfactory performance rendered after that after that's a second chance has been given to the debtor now in paragraph one our subparagraph one of paragraph 323 it only talks about the creditor withdrawing in case of a late or a defective
performance it doesn't classify or qualify the nature of the bridge however we do see in subparagraph 5 that the possibility to terminate the contract does not arise if the breach is a trivial one so this means that under German law it's not necessary to classify the breach as being one that is sufficiently serious or a fundamental breach that goes to the core of the contract to the root of the contract but it is necessary to ensure that the creditor is not terminating for what is simply a trivial breach on the part of the debtor so
the creditor has the possibility to terminate the contract in case of breach provided that a second chance is given to the data to perform the contract now the second chance is not necessary in a number of situations that are further developed in subparagraph 2 of paragraphs 323 and it tells us that the creditor does not have to provide an additional period of time and that a notice suffices if the debtor refuses to perform if there it was a date specified in the contract before the performance or where there are special circumstances that justify the immediate
termination of the contract paragraph 324 gives an alternative grounds for terminating a contract and this is where the debtor violates a duty under paragraph 241 subparagraph 2 of the German Civil Code in such a case where there is a breach of an in sell and an ancillary duty the creditor can terminate the contract if it can no longer be expected that the creditor except performance from the debtor finally under paragraph 326 of the German Civil Code we see that there is also the possibility to terminate the contract where the data is no longer required to
perform the contract on the basis of paragraph 279 sub paragraphs 1 2 3 and this is the situation where performance has become impossible or where the debtor has a right to refuse performance under paragraph 275 so in those situations impossibility or the debtors right to refuse performance then it becomes possible for the creditor to terminate the contract under French law we see that there are three general possibilities to be able to terminate the contract and we see this laid down in article 1224 of the french Civil Code tells us that it is possible to terminate
the contract where the contract has a termination clause or in case of a sufficiently severe non performance or where the creditor has where the creditor has obtained a court decision that will allow the termination of the contract so we see that these three possibilities are further developed in the provisions the further provisions in the Civil Code for instance article 1225 tells us more about the termination clause and this is essentially where the contract itself contains a clause stipulating when it is possible to terminate the contract for a breach of that contract so it's essentially the
party autonomy or the contractual freedom of the parties to establish the situations or the conditions under which termination can take place now in article 1226 we see a second possibility for the creditor to terminate the contract and this can be done by means of a unilateral notice or notice from the creditor to the debtor that they are terminating the contract in case there is a sufficiently serious breach so we see that the threshold here for terminating is establishing that the breach is a sufficiently serious one so it's not possible to unilaterally terminate the contract for
the breach of any term in the contract the breach itself has to be a sufficiently serious one looking at the consequences of the bridge or the nature of the breach to establish whether it is sufficiently serious what we do see is that the creditor has to provide the data with a second chance to perform so an additional period of time to still render performance except in those cases of urgency so where is an urgent need to bring an end to the contract for there having been a sufficiently serious breach then this need to provide a
second chance to the debtor is not it's not required it's not laid down thirdly we see that article 1227 tells us that the termination of the contract can all be also be requested to the court so these other termination possibilities that on the basis of a termination clause in the contract or where there is a unilateral notice from the creditor to the debtor in case of a sufficiently serious breach it's not necessary for the court to intervene it is however possible to also obtain a judgment or a decision from the court that will terminate the
contract and in that case it will be up to the courts to establish whether there are good reasons for allowing such a remedy for allowing the creditor to terminate the contract and then finally turning to the Netherlands and here the court provision that we need to take a look at is article 265 of book 6 of the Dutch Civil Code and there it tells us that every deficiency in the performance of one of the party's obligations gives the other party the right to terminate the contract in full or in part unless the non-performance given its
specific nature or trivial importance does not justify the termination and its consequences so here we see that there is a broad possibility under Dutch law to terminate the contract if we're just simply looking at the nature of the breach it tells us that every breach of the contract can lead to a termination of the contract unless it is too trivial so unless it's at the bottom end of seriousness with regard to the nature of the breach or with regard to its consequences however Dutch law does attach certain conditions to the exercise of the right to
terminate and so that means that if performance is permanently or temporarily impossible then the possibility to terminate the contract arises unless it's not justified unless it's trivial however if performance remains possible then the debtor first needs to be put in default and we see this an article 265 of book 6 in paragraph 2 and this means that we have to turn back to the provisions concerning default just like we did with respect to the claim to damages and so if performance remains possible for the debtor then the debtor has to be put in default which
means that there needs to be a notice provided to the debtor that he is in default and he also needs to be given a second chance to perform the contract so we see this an article 82 of book 6 paragraph 1 so a second chance in principle needs to be offered to the debtor before it's possible to be able to terminate the contract where performance is still possible however article 82 of book 6 paragraph 2 tells us that the second chance is not necessary if it appears from the conduct of the debtor that this would
be a useless exercise and in such a case a simple notice is sufficient in order to terminate the contract there are also some situations in which default is is required but it's not necessary for the debtor to be put on notice of the fact that he's in default house so the debtor is in default without a notice and we see this in article 83 of book 6 where it tells us that if the contract contains a fatal time period for performance and that time period has passed then the debtor is automatically in default without there
needing to be a notice and without there also needing to be a second chance for performance and we also see that if it's clear from the debtors statement that he will not perform then it is also not necessary to provide a notice or a second chance to the debtor in order for him to be in default that will occur automatically on the basis of article 83 of book 6 and then give rise to the possibility to terminate the contract so in a look when we're looking at termination under Dutch law it's important to consider or
as important to recognize that termination is essentially always available where there is a breach of the contract except where the breach is trivial and then it becomes necessary to classify whether or not performance is still possible or whether it has become permanently or temporarily impossible in the case of impossibility then we can move straight into termination by means of a notice how sort of a notification of termination to the debtor however if performance remains possible then the debtor will need to be put into default and that will either require the second chance to perform or
it will require simply a notice of default and in some situations we see that the debtor is automatically in default the consequence of termination we see laid down in article 271 of book 6 and it tells us essentially that the contracting parties are really from their obligations and where performance has taken place or has taken place in part then it becomes necessary to undo those performances when comparing our legal systems that therefore becomes necessary to see whether or not the law requires the breach to be sufficiently serious to be fundamental or to go to the
root of the contract in order to justify termination we see that some jurisdictions do attach a high threshold to the possibility to be able to terminate the contract and in other jurisdictions we see that it is essentially possible to terminate for any breach provided it is not trivial but we see in those jurisdictions where it's possible to terminate for any breach provided that it's not trivial or immaterial that additional requirements may be added with respect to the possibility to terminate the contract so it may be necessary to provide the data with the second chance and
in any case to notify them of the fact that he is in default [Music] [Applause] [Music]
