Obligations and Contracts: Key Principles

Posted on Dec 5, 2024 in Law & Jurisprudence

Effects of an Unfulfilled Condition Precedent

The effects of an unfulfilled condition precedent are:

  1. No claim arises
  2. Conservative measures are extinguished
  3. The creditor’s conditional expectation ends

Effects of a Fulfilled Condition Precedent

  1. The creditor can enforce the obligation.
  2. The obligation becomes pure and simple.
  3. Repetition is not possible if payment was made pending the condition.
  4. Prescription begins to run.
  5. Paulian action is possible.
  6. Compensation is possible.
  7. The debtor can be put in arrears.
  8. The condition operates retroactively.

Condition Subsequent

A condition subsequent is one whose fulfillment extinguishes an existing obligation. Its fulfillment depends on an uncertain future event.

Classifying Condition Subsequent

  1. Ordinary Resolutory Condition: An uncertain future event, other than default, that extinguishes an obligation.
  2. Tacit Resolutory Condition: Implied in bilateral contracts, allowing resolution if the agreement is not fulfilled.
  3. Pacto Commissory: Implied precedent conditions in sales contracts, which can be simple or qualified.

Requirements for a Tacit Condition Subsequent

  1. A bilateral obligation
  2. Attributable default
  3. A request by a party willing to fulfill or who has fulfilled their obligation
  4. Judicial declaration

Creditor’s Rights After a Tacit Condition Subsequent

After a tacit condition subsequent is fulfilled, the creditor can demand forced compliance or resolution, with damages in both cases.

Resolutory Action

Resolutory action allows a party who has fulfilled or is ready to fulfill an obligation to declare the contract void due to the counterparty’s non-compliance.

Prescription of Resolutory Action

Resolutory action from a tacit condition subsequent prescribes in five years. A pacto commissory has a shorter prescription of four years, which is not suspended.

Term

A term is a future event upon which the enforceability or loss of a right or obligation depends.

Classifying Terms

  1. Suspensive or Extinctive
  2. Express or Tacit
  3. Fatal or Non-fatal
  4. Definite or Indefinite
  5. Conventional, Legal, or Judicial

Effects of a Suspensive Term

  1. The right is created.
  2. Compliance cannot be demanded.
  3. Limitation does not operate.
  4. Conservative measures can be implored.
  5. Novation is possible.
  6. Resignation by the beneficiary is possible.

How a Term Ends

  1. Compliance
  2. Resignation
  3. Expiration
  4. Legal lapse
  5. Notorious bankruptcy or insolvency
  6. Considerable decrease in guarantees due to the debtor’s actions or fault
  7. Conventional lapse with an acceleration clause

Prescription is computed from when the obligation becomes due, potentially because of an acceleration clause.

Obligations of a Certain Body

Obligations of a certain body involve a unique thing of a particular class or type.

Characteristics of Obligations of a Certain Body

  1. The debtor must preserve the thing until delivery.
  2. Due care must be used in preservation.
  3. Accidental loss extinguishes the obligation.
  4. The obligation is fulfilled by delivering the specific thing.

Obligations of Gender

Obligations of gender involve a thing indefinitely of a particular type.

Effects of Obligations of Gender

  1. No duty to conserve the thing, as gender does not perish.
  2. The thing due must be determined by quantity or a method to determine it.
  3. Fulfilled by paying with the agreed quality, or at least medium quality if not specified.
  4. Not extinguished by loss of the thing.
  5. Conservative measures cannot be implored.
  6. Individuals to be paid are determined at the time of fulfillment by the debtor.

Obligations with Plurality of Objects

These obligations involve multiple things, where all are due (joint), one or the other is due (alternative), or one is due but another can be substituted (optional).

These obligations can be:

  1. Simple multiple object
  2. Alternative
  3. Optional

Characteristics of Simple Multiple Object Obligations

  1. All things are due together.
  2. Partial payment is not allowed.
  3. Single execution in fulfilling the obligation.

Characteristics of Alternative Obligations

  1. The debtor usually chooses, but the creditor may have the right.
  2. Objects are conditional until selected for payment.
  3. The chosen object is due as movable or immovable property.
  4. The debtor must pay entirely with one of the things.
  5. Things due need not be equivalent.

Effects of Alternative Obligations

  1. The creditor cannot claim a specific thing, but can demand fulfillment in the order specified.
  2. If the debtor chooses, they can destroy or dispose of things due, leaving one for fulfillment, unless the creditor cannot dispose of or destroy any of them.
  3. If one thing is destroyed, the obligation remains on the other(s).
  4. If all things perish without the debtor’s fault, the obligation is extinguished.

Optional Obligations

One thing is due, but the debtor can pay with another. The creditor can only demand the original thing. If it perishes accidentally before default, the obligation is extinguished. In case of doubt, the obligation is considered alternative.

Obligations with Plurality of Subjects

These obligations involve multiple creditors or debtors. They include:

  1. Simply joint or joint
  2. Joint and several (solidary)
  3. Indivisible

Simply Joint or Joint Obligations

Each debtor owes their share, and each creditor can only claim their share.

Effects of Simply Joint or Joint Obligations

  1. Each creditor can only demand their share.
  2. Each debtor is only liable for their share.
  3. Interruption of limitation for one does not affect others.
  4. Default by one does not affect others.
  5. Insolvency of one does not affect others.

Unequal Contribution in Joint Obligations

Contribution to the debt is unequal if agreed upon or in estate divisions, where it’s proportional to shares.

Joint and Several (Solidary) Obligations

With a divisible thing and multiple subjects, each debtor can be compelled to pay the full debt (passive solidarity), or each creditor can collect the full credit (active solidarity).

Characteristics of Joint and Several Obligations

  1. Plurality of subjects
  2. Divisible thing due
  3. Unity in providing the thing due
  4. Personal surety
  5. Fiction where each is considered debtor/creditor of the total
  6. Exception, not presumed
  7. The payer is subrogated to the creditor’s rights, but can only collect their share from co-debtors if disinterested. If interested, they are subrogated and collect their share plus interest from interested co-debtors, excluding sureties unless they had an interest.

Requirements for Joint and Several Obligations

  1. Plurality of subjects (creditors, debtors, or both)
  2. Divisible object
  3. Express agreement or legal provision
  4. Unity of service, with multiple legal relationships but the same benefit

Theories Explaining Solidarity

  1. Roman: Solidarity is a fiction where each creditor owns the full credit or each debtor owes the full debt.
  2. French: The creditor who collects or the debtor who pays acts under a tacit and reciprocal mandate.

Bello follows Roman law, while jurisprudence follows the French theory of tacit mandate.

Sources of Solidarity

Active solidarity arises from voluntary agreement. Passive solidarity can arise from convention, will, or law.

Legal sources of solidarity include:

  1. Tort liability between partners for the same damage
  2. Commodatum given to multiple parties
  3. Car owner liability for driver damage with knowledge/permission
  4. Partnership members
  5. Bill of exchange drawers, acceptors, or endorsers

Types of Solidarity

  • Active: Multiple creditors, each can recover the full debt. One creditor can novate, submit, cancel, etc. Compensation by one affects all. The receiving creditor must pay other creditors their share.
  • Passive: Multiple debtors, each owes the full amount. Payment benefits all. Each debtor can raise real, personal, and mixed defenses. Not transferable to heirs. The paying debtor is subrogated, collecting shares from co-debtors if disinterested. If interested, they collect shares plus interest from interested co-debtors, excluding sureties unless they had an interest.

End of Solidarity

Solidarity ends by agreement to make it joint, creditor’s resignation by acknowledging or demanding a debtor’s share without reserving solidarity, or the debtor’s death.

Indivisible Obligations

With multiple subjects, the provision cannot be partially fulfilled, so each debtor/creditor can demand/owe the whole.

Classifying Indivisible Obligations

  1. Absolute Indivisibility: The provision is naturally indivisible (e.g., a horse).
  2. Relative or Obligational Indivisibility: Materially or legally indivisible due to the obligation (e.g., a collection or building).
  3. Indivisibility of Payment: Divisible obligation stipulated to be paid at once (e.g., a sum of money).

Article 1526 refers to these as exceptions to divisibility.

Divisibility of Obligations

Obligations can be divisible materially/physically or legally/by quota.

Exceptions to Divisibility (Article 1526)

  1. Mortgage action
  2. Debt involving a certain body
  3. Co-debtor whose fault made fulfillment impossible
  4. Heirs bound to the total debt by will or convention
  5. Indivisible land or things
  6. Choice in alternative obligations

Effects of Indivisible Obligations

Active Indivisibility (Creditor):

  1. Each creditor can demand the total, and each debtor owes the total.
  2. Compliance by one extinguishes the obligation for all. No creditor can refer the debt or receive payment without others’ consent.
  3. Active indivisibility passes to heirs.
  4. The paying creditor must liquidate shares to others.

Passive Indivisibility (Debtor):

  1. Each debtor owes the whole.
  2. Indivisibility is inherited.
  3. Prescription for one affects all.
  4. Fulfillment by one extinguishes the obligation for all.
  5. The sued debtor can raise a dilatory exception to join the others.
  6. The action for damages is divisible.

Effects of Obligations

The effects of obligations are the rights granted to the creditor for timely, accurate, and complete fulfillment. These include:

  1. Compliance
  2. Rights to enforce compliance (forced compliance, equivalent performance/damages)
  3. Ancillary creditor rights (conservative measures, oblique/subrogation action, Paulian/revocation action, benefit of asset separation)

General Creditor’s Right of Pledge

The creditor can demand fulfillment from all the debtor’s assets, except those exempt from seizure (Article 2465).

Right of Pledge vs. Security Interest

Unlike a security interest (e.g., pledge, mortgage), the general right of pledge is not a real right, does not allow pursuit against third parties, and does not grant a privilege for payment.

Forced Compliance for Obligations to Give

Forced compliance aims to obtain the thing due, or its equivalent if impossible. Requirements:

  1. Enforceable obligation
  2. Undisputed obligation
  3. Currently due (no term or condition)
  4. Liquidated (value clearly determined or determinable)

Forced Compliance for Obligations to Do

The creditor can:

  1. Demand performance
  2. Authorize a third party to perform at the debtor’s expense
  3. Claim damages

Requirements:

  1. Enforceable obligation
  2. Determined obligation
  3. Currently due
  4. Not prescribed

Forced Compliance for Obligations Not to Do

The creditor can:

  1. Destroy or undo what was done, or
  2. Claim damages

If destruction/undoing is possible, the debtor must do it or authorize the creditor to have it done at the debtor’s expense. Alternatives may be proposed to fully satisfy the obligation and leave the creditor unharmed.

Equivalent Performance/Damages

Equivalent performance is the monetary equivalent of proper performance, aiming to compensate the creditor for attributable default.

Legal Nature of Damages

Damages are considered equivalent performance of the obligation.

Types of Damages

  • Compensatory: Monetary equivalent of full and accurate performance.
  • Moratorium: Compensation for damages caused by delay.

Requirements for Damages

  1. Attributable default
  2. Creditor’s loss
  3. Causal link between default and loss
  4. Debtor in arrears

Default

Default is the attributable delay in performance after a demand by the creditor.

Types of Default

Default can be voluntary (intentional or negligent) or involuntary (beyond control, e.g., force majeure).

Voluntary default:

  1. Attributable to the debtor, creating liability.
  2. Agreed upon with the creditor, without further liability.
  3. Justified by the creditor’s actions, except for non-fulfillment or legal right of retention.
  4. Due to an extinguishing mode, like compensation or novation.

Proof of Default and Liability

The party alleging default must prove it. If default is attributed to a fortuitous event, the debtor must prove due diligence.

Effects of Intentional Default

Intentional default (requiring proof of malice) aggravates liability, making the debtor liable for all loss contingencies and creating joint liability for multiple debtors.

Proof of Damage

The damaged party must prove the damage, except when a penalty clause specifies the amount or when the obligation involves money and interest only.

Exemptions from Liability for Default

  1. Force majeure
  2. Absence of necessary requirements
  3. Creditor’s act or fault (creditor’s arrears)
  4. Theory of unpredictability
  5. Act of a third party

Force Majeure (Article 45)

Force majeure is an unexpected event that cannot be resisted (e.g., shipwreck, earthquake, capture by enemies, acts of public officials).

Elements of Force Majeure

  1. Unattributable event: Outside the debtor’s fault or intention.
  2. Unforeseen: Not expected by an average person.
  3. Irresistible: Prevents performance, not just making it more costly or difficult.

Classifying Damages

Damages can be direct or indirect, and foreseen or unforeseen.

Theory of Risk

Force majeure extinguishes obligations involving a certain body. However, the theory of risk addresses who bears the loss when the thing perishes due to force majeure before performance. Generally, things perish for their owner, but Article 1550 and 1820 state the creditor bears the risk for a certain body to be delivered. This is mitigated by:

  1. Debtor’s delay transfers the risk.
  2. Debtor agreeing to deliver the same thing to multiple parties.
  3. Party agreement.

Other Code provisions offer different solutions:

  1. Destruction ends lease agreements for both parties.
  2. The debtor bears the risk while the thing is in their possession.
  3. The creditor bears the risk for material works after acceptance.

Absence of Fault and Liability

The Supreme Court has held that proving due diligence can exempt a debtor from liability, even without force majeure. Doctrine is divided, with some arguing force majeure is required for exemption.

Necessity and Liability

Necessity (acting to avoid a greater evil) can exempt from liability if it constitutes force majeure. The Code addresses necessity in loans, holding the borrower liable for ordinary negligence as they can choose to save the borrowed thing or their own.

Creditor’s Act/Fault and Liability

While not explicitly addressed, the rules governing delay apply. If the creditor is in default, the debtor’s liability is reduced to gross negligence and force majeure. Creditor’s default also allows the debtor to invoke the exception of non-fulfillment.

Theory of Unforeseeability

This theory addresses significant imbalance in bilateral contracts due to supervening events, potentially justifying action by the debtor.

Requirements for Unforeseeability

  1. Bilateral, commutative contract
  2. Successive or delayed execution
  3. Supervening, unintended circumstances creating significant imbalance
  4. Extraordinary and severe events beyond reasonable foresight

Theories Explaining Unforeseeability

  1. Pacta sunt servanda: Agreements must be honored, and contracts cannot be challenged except for legal reasons.
  2. Rebus sic stantibus: Contracts are understood in light of the circumstances at formation, and changes justify amendments.

Unforeseeability in Chilean Law

Article 1545 generally upholds pacta sunt servanda. Exceptions where unforeseeability applies include:

  1. Construction contracts, allowing owner authorization or judicial intervention for unforeseen expenses (e.g., latent soil defects).
  2. Supervening cause for term expiration (Article 1463).
  3. Untimely and urgent need for early delivery in commodatum (Article 2180).
  4. Anticipated delivery in deposit if the thing is endangered (Article 2227).
  5. Creditor requiring surety if the debtor leaves the country without sufficient assets (Article 2348).

Cases rejecting unforeseeability:

  1. Manufacturer price increase due to higher wages or material costs (Article 2003/1).
  2. Tenant seeking price reduction due to extraordinary events affecting harvest (Article 1983).

Act of a Third Party and Liability

An act of a third party exempts from liability if it constitutes force majeure.

Arrears

Arrears is the attributable delay in performance after a demand by the creditor, required for damages.

Requirements for Arrears

  1. Delay in performance
  2. Attributable delay (fraud or negligence)
  3. Creditor’s demand
  4. Complete default, or creditor willing to perform

Creditor’s Demand in Arrears (Article 1551)

  1. Contractual: Failure to perform within the agreed time.
  2. Implied Contractual: When performance is only possible within a certain time.
  3. Judicial: Judicial demand by the creditor.

Effects of Debtor’s Arrears

  1. Creditor can demand damages.
  2. Debtor is liable for accidents, unless proving force majeure would have prevented performance even if timely.
  3. Debtor bears the risk.

Effects of Creditor’s Arrears

  1. Debtor’s liability is reduced to gross negligence.
  2. Creditor compensates damages caused by the delay.
  3. Creditor pays costs of consignment if applicable.

Damages

Damages are pecuniary losses caused by breach of contract, crime, or quasi-delict.

Classifying Damages

Damages can be direct or indirect, and foreseen or unforeseen.

Valuing Damages

Damages can be valued legally, conventionally, or judicially.

Legal Valuation of Damages

Legal valuation applies to monetary obligations, where damages are calculated as interest. This applies if no other valuation method is agreed upon and only interest is demanded.

Types of Interest

  1. Legal: Equivalent to current interest.
  2. Current: Average bank interest rate determined by the superintendent.
  3. Conventional: Agreed upon by the parties, limited to 50% above legal/current interest. Excess is reduced to the legal rate.

Judicial Valuation of Damages

Judicial valuation applies when parties haven’t agreed on an amount and the law doesn’t provide one.

Penalty Clause

An ancillary provision ensuring performance by imposing a penalty (giving, doing, not doing something, or delaying performance).

Surety

A surety is an obligation securing another obligation (e.g., guarantee, mortgage, pledge).

Types of Sureties

  • Real: Movable or immovable property securing performance, pursuable against third parties (e.g., pledge, mortgage).
  • Personal: A person’s assets guarantee performance (e.g., guarantee, active solidarity).

Characteristics of a Penalty Clause

  1. Early valuation of damages
  2. Genuine compensation for damages
  3. Conventional
  4. Acts as surety
  5. Accessory
  6. Conditional on breach

Creditor’s Options with a Penalty Clause

The creditor can demand performance, the penalty, or ordinary damages.

Lesion in Penalty Clause

A penalty clause is excessive:

  1. In commutative contracts with a certain amount, if it exceeds twice the obligation’s value.
  2. In mutual contracts, if stipulated interest exceeds the allowed amount.
  3. In obligations with negligible or indeterminate value, to be determined by the judge.

Partial Noncompliance and Penalty Clause

Partial performance allows proportional reduction of the penalty.

Creditor’s Options with a Secured Obligation

The creditor can demand forced execution, the penalty, or ordinary damages.

Accumulating Penalty and Damages (Article 1537)

Accumulation is allowed if:

  1. The penalty is for delay (moratorium).
  2. Agreed upon by the parties.
  3. In a transaction (Article 2463).

Ancillary Creditor Rights

These rights maintain the integrity of the debtor’s assets to ensure the general right of pledge. They include:

  1. Conservative measures
  2. Paulian/revocation action
  3. Oblique/subrogation action
  4. Benefit of asset separation

Conservative Measures

These measures preserve the debtor’s assets (e.g., inventory, seals, safeguards).

Oblique/Subrogation Action

Creditors exercise the debtor’s neglected rights to protect their assets and the general right of pledge. Requirements:

  1. Creditor’s real interest
  2. Currently due claim
  3. Debtor’s negligence or dereliction
  4. Legally permissible

Paulian/Revocation Action

Creditors rescind the debtor’s detrimental acts. Family acts and necessary things are exempt.

Requirements for Paulian/Revocation Action

Creditor:

  1. Pure and simple debt existing before the act

Debtor:

  1. Fraudulent debtor
  2. Insufficient assets after the act to satisfy the general right of pledge

Paulian Fraud

Debtor’s awareness of their poor financial state.

Legal Nature of Paulian/Revocation Action

Debated, with theories including invalidity, unenforceability for fraud, and a tort action for damages.

Benefit of Asset Separation

Prevents confusion of the heir’s and deceased’s estates, ensuring creditors are paid from the deceased’s assets before the heir’s creditors.

Extinguishing Obligations (Article 1567)

Acts or facts releasing the debtor from performance. These include:

  1. Mutual consent/rescission
  2. Actual payment/performance
  3. Novation
  4. Transaction
  5. Remission
  6. Compensation
  7. Confusion
  8. Loss of the thing due
  9. Revocation/termination
  10. Condition subsequent
  11. Prescription
  12. Payment in kind (doctrine)
  13. Term expiration (doctrine)
  14. Death of creditor/debtor (doctrine)

Mutual Consent/Rescission

Agreement to terminate the obligation. Requires:

  1. Requirements for legal acts
  2. Formalities of the original act
  3. Unfulfilled obligations

Actual Payment/Performance

Providing what is owed.

Forms of Payment

  1. Cash/performance
  2. Consignment
  3. Subrogation
  4. Transfer of assets
  5. Competition with benefit

Characteristics of Payment

  1. Identity: What is paid must be what is owed.
  2. Integrity: Full payment, including interest and damages.
  3. Indivisibility: Debtor cannot force partial payment (except bills of exchange).

Who Can Pay

  1. Debtor: Personally, agents/representatives, heirs
  2. Third Party (Subrogated): Joint debtors, guarantor, owner of secured property
  3. Disinterested Third Party: With consent/acquiescence (subrogated), without debtor’s knowledge (reimbursement and subrogation if creditor assigns rights), against debtor’s will (no recourse unless creditor assigns rights; reimbursement possible if payment was helpful)

To Whom Payment is Made

  1. Creditor: Heirs or assigns. Exceptions: creditor lacking capacity, attached debt, bankrupt creditor
  2. Agent/Representative: Legal, judicial, conventional (for payment)
  3. Holder of the credit

Place of Payment

  1. Agreed upon place
  2. If not agreed: certain body – where it was at contract formation; gender – debtor’s address at contract formation

Payment Expenses

Debtor pays unless agreed otherwise. Creditor pays for consignment.

Allocation of Payment

When multiple debts exist, the debtor allocates payment. Otherwise, the creditor allocates. By law, interest is paid before principal. Capital payment presumes interest paid, as do three regular payments.

Payment by Consignment

Depositing the thing due with the court, treasurer, bank, etc., when the creditor refuses or is uncertain (Articles 1599, 1601).

Stages of Consignment

  1. Offer by recipient or notary
  2. Consignment
  3. Notification and declaration of sufficiency

Expenses of Consignment

The creditor pays.

Payment with Subrogation (Article 1608)

Transfer of creditor’s rights to the paying third party. Criticized definition, but effectively creates a new creditor.

Types of Subrogation

Legal or conventional. Some add personal and real (e.g., spouse buying property with own funds).

Legal Subrogation (Article 1610): Operates by law, even against the debtor’s will.

  1. Creditor paid by another with a better title (privilege or mortgage)
  2. Buyer of mortgaged property paying the creditor (doctrine adds third-party owner)
  3. Party paying a debt they are bound to subsidiarily
  4. Heir paying inheritance debts with own funds
  5. Party paying another’s debt with express or implied consent
  6. Party lending money for debt payment, stated in writing, and used for that purpose

Conventional Subrogation: Agreement between creditor and third party. Requires:

  1. Disinterested third party
  2. Payment without debtor’s consent
  3. Creditor’s consent
  4. Explicit subrogation
  5. Included in the receipt
  6. Subject to rules of rights transfer

Payment by Transfer of Assets (Article 1614)

Debtor relinquishes assets to creditors when unable to pay debts due to unavoidable circumstances.

Characteristics of Transfer of Assets

  1. Personal right of the debtor
  2. Undeniable benefit
  3. Universal, including all assets and rights, excluding those exempt from seizure

Requirements for Transfer of Assets

  1. Non-trader debtor
  2. Not a bankruptcy case (Article 43 of Bankruptcy Act)
  3. Insolvent debtor
  4. Poor financial state due to the debtor’s actions

Benefit of Competition

Certain debtors avoid paying more than they can afford, preserving a modest livelihood. Applicable to descendants, ascendants, spouse (not at fault in divorce), siblings (unless deserving disinheritance), associates, donors, and good faith debtors who disposed of property and are pursued for the remaining balance.

Payment in Kind

Extinguishing debt with something other than the thing due. Possible legal classifications include dation in payment, novation, payment modality, and an autonomous figure.

Novation (Article 1628)

Substituting a new obligation for a previous one, extinguishing the latter.

Requirements for Novation

  1. Extinguished previous obligation
  2. New, superseding obligation
  3. Essential difference between obligations
  4. Party capacity
  5. Intention to novate (animus novandi)

Types of Novation

  • Objective: Change in the thing due or the cause of the obligation.
  • Subjective: Change of creditor or debtor. Change of debtor requires: original creditor’s consent (implied in payment), original debtor’s consent (delegation), or without consent (expromission). Without consent of creditor or original debtor (adpromission – no novation).

Compensation

Extinguishes mutual debts up to the lower amount. Can be legal, conventional, or judicial.

Requirements for Legal Compensation

  1. Mutual debtors and creditors
  2. Debts of money or fungible things of like kind and quality
  3. Liquid debts
  4. Currently due debts
  5. Payable in the same place
  6. Both debts are subject to seizure
  7. No third-party rights involved

Effects of Legal Compensation

  1. Full operation
  2. Must be claimed
  3. Extinguishes obligations up to the lower amount

Remission

Creditor waives their rights. Can be inter vivos or testamentary, express or implied, total or partial.

Confusion (Article 1665)

Creditor and debtor become the same person, extinguishing the debt. Can be inter vivos or by death, total or partial. Exceptions preventing confusion: benefit of inventory, benefit of asset separation.

Loss of the Thing Due

for unforeseeable circumstances must be borne by the counterparty.
So to be on the problem posed by the theory of risk requires:
1.De a bilateral obligation
2.Perdida the thing to unforeseeable circumstances or force majeure
3.What is the pending loss compliance
At first things die for their owner, but Article 1550 states that the risk of a certain body is scheduled for delivery must be provided by the creditor, the same effect is manifested in Article 1820 which states that loss and improvements are sold thing borne by the buyer from the contract is perfected. even when delivery is due.
This rule is obviously unfair attenuated by:
1.La debtor’s delay puts the risk of office
2.If the debtor has agreed to deliver the same thing to two or more persons other than
3.When and the parties so agree, a clause is lawful.
In other cases the code gives different solutions
1.La destruction of the thing puts an end to the lease agreement for both parties
2.mientras status thing depends on the debtor dies
3.The making material works, the creditor bears the risks from their acceptance
The absence of guilt not be liable for failure to
It has been noted by the Supreme Court that the debtor can prove sufficient due diligence to escape the liability for breach, without requiring the unforeseeable circumstances or force majeure. He had previously failed in different case.
The doctrine also appears divided, so Abeliuk argues that the insanity and Somarriva just means that failure is legally immune when it comes from a fortuitous event.
Necessity disclaims liability for failure to
In this sense, the doctrine has been divided, we can define the state of necessity as the failure that comes from the necessity which is the debtor to avoid a greater evil.
In this regard it has noted that this exemption from liability to the extent that you configure unforeseeable circumstances.
The legislature plays the state of necessity in relation to the loan, dismissing it, pointing out that since the borrower in the position to save the thing to own or opt for the latter case it is justified to be a bailment contract is in their exclusive benefit, is responsible for ordinary negligence.
Disclaims responsibility for the failure of the act or fault of the creditor
Our legislation has not addressed the issue of exemption from liability of the debtor for breach attributable to maker a bit, but it follows the rules that govern the delay, that overdue when the creditor to receive the thing, the responsibility for caring for this is limited to gross negligence and takes care of unforeseen circumstances.
Failure also enables the creditor to the debtor with the exception of the contract unfulfilled.
What the theory postulates foresight
The theory deals with the improvidence changes may equivalence of benefits in a successive chain of bilateral contract by supervening cause.
Thus, there would be action by the debtor to supervening causes, beyond its control, has seen a considerable increase in performance of the contract onerous.
What are the requirements that the doctrine has given for us to meet face to the case of improvident
The doctrine stated that we find ourselves in front of the case posited by the theory of foresight is required:
1.A bilateral contract, commutative
2.The successive chain execution is execution, or at least delayed
3.What supervening circumstances, outside parties and not intended to produce a significant imbalance in benefits
4.What the facts are so extraordinary and severe than would have foreseen that various terms employed.
What theories have explained the unpredictability
The theory explained the lack of foresight from two theories:
1.All contract law to the parties and may not be questioned but for legal reasons, pacta sunt servanda.
2.The canon law and the facts of the Second World War gave rise to another theory opposing the principle of pacta sunt servanda, another Roman principle: rebuc sic stanctibus by which all contracts including conditions would be understood in the light were taken when contract, so a change in them, would also allow an amendment to the contract.
Chile is home to the theory of improvident
In principle we must say that the general rule is that because Article 1545 welcomes the principle that the agreement requires, noting that a contract is legally held law for contracting parties, and can not be invalidated except by mutual consent or legal reasons.
Exceptionally found some cases where the theory would unpredictability, thus:
1.In the case of building construction contract, which allows to ask the owner to authorize expenditures, or the judge found benefit when compared to unknown circumstances, as a latent defect in the soil. (2003 / 2)
2.Other example that the doctrine is stated expiration of the term in 1463 supervening cause
3.La untimely and urgent need as a reason for requesting early delivery of the thing in bailment (2180)
4.La anticipated delivery that can be done in the tank if the thing is in danger or cause damage of 2227
5.The 2348 which authorizes the creditor to require the debtor Fiaz when it leaves the country and lacks sufficient property for the safety of the obligation.
In other cases rejected directly:
1.In the 2003 / 1 that prohibits a manufacturer price increase request by higher wages or materials
2.Y 1983 which states that the tenant may not seek a price reduction for extraordinary events that would destroy the harvest.

The fact of others is a defense to liability for breach
Generally we can say that will exempt from vicarious liability for breach to the extent that confers a fortuitous event or force majeure is eligible for impresibilidad and irresistibility.
What is the default
Blackberry is one of the requirements to operate the compensation of damages which, like the fact of failure, damage and causal link between them.
Is defined by saying that the delay is the delay attributable to the performance of an obligation attached by the order or summons to the creditor for the payment made.
What are the requirements of the delay
For the debtor is in default is required:
1.Del delay in the fulfillment of an obligation
2.The delay is attributable, ie, for fraud or negligence
Interpellation of the creditor 3.La
4.It is complete or the creditor is also willing to meet.
How can the questioning of the creditor in delinquency
Interpellation, under Article 1551 may be:
1.For failure to comply with the requirement within the time stated for this (contractual stated):
op just because of compliance with the three events occur within the enforceability, the delay and arrears, unless the law requires that court reconvenga, as in the case of the lease.
2.When the thing could not be given or executed only within a certain period of time (implied contract)
OACA we are faced with a tacit term.
3.The other cases where the debtor has been reprimanded in court for the creditor. (Judicial)
What are the effects of default of the debtor
The delay of the debtor produces the following effects:
1.The creditor may demand compensation for damages
2.The debtor responsible for the accident, except to prove that the fortuitous event had occurred also has been timely fulfilled the obligation.
3.The debtor bears the risk.
What are the effects of the delay of the creditor
Delinquency or default of the creditor received, generate the following effects:
1.The debtor reduces his liability to gross negligence
2.The creditor must compensate the damage that has generated the thing in the length of their delay
3.Si appropriation is paid for, must pay the costs of supply.
What is damage
The damages are all assets or property damage caused by the breach of an obligation or making a crime or quasi delict.
How to classify the damage
The damages are classified as
And indirect 1.Directos
Unforeseen 2.Previstos
How damages are valued
APPRAISAL of the damage can be:
· Legal,
· Conventional
· Court:
When the law evaluates the damage
The law evaluates the damages in the case of obligations to pay a sum of money, in which case they are called interest.
The law evaluates the interest in case that was not agreed upon a different way of EVALUATION and demand only these.
In what may be the interests
Interest can be:
1.Legales: equivalent to current interest
2.Corrientes: the average interest rate charged by banks in a square and determined by the superintendent
3.Convencionales: those established by the parties, with the limit to 50% of excess over legal interest or current, in case of excess injury occurs and the punishment corresponds to the reduction of interest to the law.

When courts can appraise the damage
Whenever the parties have not agreed on the amount of compensation and the law does not appraise the damage.
What is the penalty clause
Provision is ancillary to a contract whereby the parties to ensure fulfillment of an obligation, holding that a penalty, which can be give, do or not do something, or delay the fulfillment of the principal obligation.
What is a bond
Bonding is generally contracted any obligation to the safety of another or self-employment obligation, are species of the bail bond, mortgage, and the garment.
How can be the bonds
The bonds may be real or personal:
Are real ones in that to ensure compliance is an obligation has been given a movable or immovable property to which paid in case of default, and may be prosecuted even in the hands of third parties, are the pledge and mortgage.
They are personal ones in which has been offered a heritage to ensure the fulfillment of an obligation, as in the bond, the active solidarity
What are the characteristics of the penalty clause
The penalty clause has the following characteristics:
1.Es an early EVALUATION
2.Constituye, in one respect, genuine compensation for damages
Conventional 3.Es
4.Hace act as surety
5.Es accessory
6.Es a conditional obligation, the breach depends on the fact
Can the creditor ask for compensation or punishment
Yes, the creditor may choose to ask for regular compensation or penalty.


Is injured in the penalty clause http://catedra.org/hay-lesion-en-la-clausula-penal.html>
Yes, we distinguish three situations that we face the huge penalty clause:
1.In the commutative contracts, in which there is a certain amount, the injury clause generated when more than twice the value of the obligation, including the obligation is this.
2.In the mutual, when it has been stipulated that the interest allowed more
3.Es negligible or indeterminate obligations are to be specified by the judge.
What is the effect of partial noncompliance on the penalty clause
Where the debtor has served a part of the obligation, accepting the partial payment by the creditor is entitled to proportional reduction is punishment
What are the alternatives enjoyed by the creditor before the breach of an obligation secured by a penalty clause
Fail to comply, the creditor can:
1.Demandar forced execution
2.Demandar penalty
3.Demandar ordinary compensation for damages.
When can collect the penalty and ordinary damages
It can accumulate when (1537):
1.Se been stipulated as a penalty moratorium is due to the delay in fulfilling the obligation
2.When and agreed to by the parties
3.The transaction. (2463).
What are the ancillary rights of the creditor
Ancillary rights of the creditor is the set of measures aimed at maintaining the integrity of the debtor’s assets so that you can effectively exercise their right of pledge general.
They are:
Conservative 1.Measures
2.La pauliana or revocation action
Oblique or subrogation action 3.La
4.The benefit of separation of estates.

What are conservative measures http://catedra.org/que-son-las-medidas-conservativas.html>
Are those that are intended to maintain the integrity of the debtor’s assets, preventing it works out.
The Code refers to them repeatedly but does not define them.
Among these measures we can mention the feature inventory, stamp affixing, saves, etc..
What is oblique or subrogation action
It is the action with creditors to bring actions and rights of the debtor that it has not exercised by malice or negligence, in order to protect the integrity of their heritage and thus ensure their right to pledge general.
What are the requirements to operate the oblique or subrogation action
To operate this action is required:
1.Containing the creditor has a real interest
2.The creditor’s claim is currently required
3.What the debtor has acted with negligence or dereliction of their rights
4.It is permitted by law.
Which is pauliana or revocation action
It is the action given to creditors to request it rescind the acts which the debtor has made to the detriment of its creditors.
Which acts are not subject to revocation
The family acts and things which come about But this action is to maintain the integrity of the debtor’s assets.
What are the requirements to operate pauliana or revocation action
Must be distinguished:
Requirements to be met by the creditor:
1.deb pure and simple, since before the implementation of the act which seeks to annul
Requirements to be met in the debtor that is running the event
1.deb be a fraudulent debtor
2.What after the act, are not enough assets to meet its general right of pledge
What is fraud paulienne
In the consciousness that is the debtor of the poor state of their business
What is the legal nature of the action or revocation pauliana
The legal nature of this action has been discussed, which postulates:
1.What one is dealing with an action for invalidity, because the legislature said that the faculty is to be terminated transactions and contracts. (Alessandri)
2.What we are facing an unenforceable for fraud (Somarriva – Abeliuk)
3.What we found an action for damages for a wrongful act (Planiol)
What is the benefit of separation of assets
It is the right which the law grants the creditor estate or probate, which aims to prevent confusion the heir and the estates of deceased to ensure that their rights will be paid on the assets of deceased in preference to the heir’s creditors against who wins.
What are the modes of extinguishing obligations
The modes of extinguishing obligations can be defined as acts or facts to which the law attributes to them the effect of releasing the debtor from the obligation to comply with the provision.
What are the modes of extinguishing obligations
The modes of extinguishing obligations are enumerated in Article 1567 which states in its number ten modes, plus one that includes in its first paragraph, adds to these three other doctrine.
1.The mutual consent or resciliación also
2.The actual payment or settlement
Novation 3.la
4.la transaction
Reference 5.la
6.la compensation
7.la confusion
8.La loss of the thing that should be
9.La revocation or termination
10.The condition subsequent event
11.La prescription
12.La doctrine adds, payment in kind
13.The term discontinuance
14.la death of the creditor or debtor.
What is mutual consent and what are its requirements as a way to extinguish the obligations
Resciliación mutual consent or agreement is terminating the effects of an obligation.
Requires:
1.The requirements of legal acts
2.The same formalities required by the act whose obligations are rescinded
3.What obligations are not fully satisfied.
What is the actual payment or settlement
The actual payment or settlement is a way to extinguish the obligations for the provision of what is owed.
What forms can take payment
Payment can be:
Cash or settlement 1.Pago
2.Pago by appropriation
3.Pago with subrogation
4.Pago by transfer of assets
Competition with profit 5.Pago
What are the characteristics of payment
The characteristics of payment are:
1.La identity of payment: what you pay should be exactly what should be
2.La integrity of the payment: the payer must pay what is due to their interests and compensation
Payment 3.Indivisibilidad: the debtor can not force the creditor to receive bias (bills of exchange)
Who can afford
They can pay:
1.The debtor includes:
1.The debtor personally
Agents or representatives 2.Sus
3.Sus heirs
2.The third party (subrogated)
1.The joint and several debtors
2.The guarantor
3.The owner of the mortgaged property, chattel or thing
3.Tercero uninteresting
1.For the consent or acquiescence (subrogated)
2.Without knowledge of the debtor (reimbursement and subrogation action if the creditor voluntarily gave him his rights)
3.Contra the debtor’s will (there is no right of recourse unless the creditor assigns its right, in relation to informal agency is empowered to repeat the payment that was helpful)
To whom should payment be made
Payment must be made to:
1.The creditor, his heirs or assigns
oExcepciones:
1.Al is not free to manage their property
2.When is attached debt
3.If the creditor is declared bankrupt
2.Su agent or representative
Legal 1.representante
2.judicial
3.convencional MP (for payment)
3.The credit holder
Where should I pay
Payment must be made:
1.Donde convention notes
There is no provision 2.Si distinguish:
1.Species intimately or certain body: where was this when you hire
2.Si is gender: the address of the debtor, and if it has changed in the household who was at the time of contract
Who should pay the expenses of the
If none have provided the parties otherwise, the debtor. With the exception of payment for appropriation by the creditor is.
Who made the complaint to pay
The allocation to pay is the situation that occurs when between one creditor and debtor, there are several obligations, or one consisting of capital plus interest.
The complaint is for it to the debtor, failing to creditor and it is done by the law, shall first cover the interest and then to the capital.
The payment of the capital letter is presumed interest paid, as the last three letters of regular payment of an obligation, to presume that the foregoing is paid.

What is the payment for provision
The provision is that payment is made by the deposit of the thing to be in the current account of the court, before the municipal treasurer in a bank, fair, hammer or bailee of the place where payable, when the creditor refuses to receive the proper thing or is uncertain about yourself.
Article 1599 states the appropriation is the deposit of the thing to be ….
Article 1601 states turn If the creditor refuses to receive the thing offered, the debtor may enter it in the bank account of the court or in the communal treasury, or in a bank or the box office national savings, the agricultural credit union, fair, hammer or bailee of the place where payment must be made according to the nature of the thing offered.
What steps are in the pay-per-entry
In payment for entry are three stages:
1.La offer made by the recipient or notary.
Appropriation 2.La
3.Notificación and declaration of sufficiency. (Litigation management)
Who is responsible for the expenditure of the appropriation
In this case the law makes the payment of costs by the creditor.
What is the payment with subrogation
Article 1608 says that surrogacy is the transfer of the rights of the creditor to a third party that pays.
This definition is criticized because it does not give a complete picture of what is subrogation, and also for misusing the word transmission, itself acts upon death. Although it has been so bad that I would not be occupied because of the situation it creates is very similar to the effects of heredity.
The doctrine has defined subrogation payment saying Subrogation is the legal fiction under which a third party voluntarily and pay an obligation outside your own money, which is extinguished between creditor and debtor, but remains light on new creditor to who made the payment


Classes that may be the subrogation
Substitution may be legal or conventional, some also add the classification between personal and real, are real which subsequently assigned an object, as in the case of marriage when the woman buys a property or own property values.
Cases of legal subrogation: (1610) operates by the simple operation of law, even against the will of the debtor
1.acreedor paid to another better title because of a privilege or mortgage
2.The that the purchase of a mortgaged property, pay the buyer’s creditors.
1.se added here by the doctrine if the third owner of the mortgaged property
3.Del you pay a debt that is bound or subsidiary
4.del heir own money paid the debts of the inheritance
5.del paying the debt of another pampering debtor expressly or implicitly
6.del which lends money for the payment of a debt so stated in writing the loan, provided that the debt is paid these monies,
Subrogation: is an agreement between the creditor and the third payment, for which the creditor assigns its rights to it voluntarily. the following requirements:
1.tercero not interested
Without the will of the debtor 2.pague
Creditor 3.consentimiento
4.It is subrogation is made explicitly
5.Member of the letter of receipt
6.se subject to the rules of transfer of rights.
What is payment by transfer of assets
The transfer of assets is the left that a debtor makes of his property, when, inevitable consequences of accidents, not found in the state to pay its debts. (1614)
Payment characteristics of transfer of assets
1.Es very personal right of the debtor
2.Es an undeniable benefit
Universal 3.Es includes all assets, rights and excluding shares not subject to arrest.


What are the requirements for the transfer of assets
1.Containing the case of a debtor’s non-trader
2.No is in a case of art. 43 of the Bankruptcy Act, in which the bankruptcy case is
3.What is in insolvency
4.What the poor state of their business on his part.
What is the benefit of competition payment
The benefit of competition is to be granted to certain debtors to avoid being forced to pay more than they could properly, thus leaving them as indispensable to a modest livelihood, by class and by circumstances and best of luck back when .
Who can demand payment under the benefit of competition
1.The descendants or ascendants
2.The spouse who is not his fault divorce
3.The brothers, unless you have offended in such a way as disinheritance
4.The associates
Donor 5.al
6.y the debtor in good faith that has made disposal of property and is chased to complete the unpaid balance of your debts.
What is in lieu of payment
It is a way to extinguish those covered by the Code in 1567. But it can be defined as the possibility for contracting under the principle of autonomy, to provide for termination of the debt to a different object due to the thing.
It is said that its legal status might be:
1.1, followed by clearing sale
2.novación subject to change due to
Payment 3.modalidad
Figure 4.1 Autonomous
What is the conversion
Section 1628 define the conversion as the substitution of a new obligation to a previous one, which was thereby extinguished

Requirements novation
The requirements to operate the conversion are:
1.A above obligation is extinguished
2.A new obligation that overrides
Essential 3.Diferencia between
4.Capacidad party
Novar 5.Intención, animus novani
That may be the conversion classes
Novation can be:
· Objective
· When you change the thing due
· When you change the cause of the obligation
Subjective ·
· For change of creditor
· In exchange for debtor
orequisitos
§ creditor consent vacated the original debtor, but one is understood to be a Member for payment.
§ consent of the original debtor
§ with consent: delegation
§ without consent: expromisión
§ without the consent of the creditor and the debtor or primitive ad promised (no renewal)
What is the compensation
It is the way to extinguish the obligations that operates when two persons are reciprocally debtor and creditor, and there are legal requirements, these obligations are extinguished until the concurrence of the lower value.
It may be legal, and judicial conventional
What are the requirements to operate the legal compensation
1.The parties must be personal and reciprocally debtors
2.What are both debts of money or fungible kind of like kind and quality
Debts are liquid 3.What
4.It is currently required
5.What are paid in the same place
Both are seizing 6.Que
7.Que compensation is not made on third parties

What are the effects of legal compensation
The effects produced are three:
Full 1.Opera
2.deb be claimed
3.Extingue appropriations to the amount of low value
What is the referral
The remission or cancellation of the debt, the creditor waiver of their rights makes it benefited the debtor:
It can be:
Vivos or testamentary 1.Entre
2.Expresa or implied
3.Total and partial
What is the confusion
Article 1665 states: when there are in the same person the status of creditor and debtor law is verified confusion that extinguishes the debt and produce the same effects as payment.
It can be:
1.entre alive and on death
2.Total and partial
There are some cases where, despite the uniqueness of the assets, it prevents confusion occurs:
· On the benefit of inventory
• In the interest of separation of estates
What is the loss of the thing to be as a way to extinguish

The loss of the thing to be is a way to extinguish the obligations when due unindictable the debtor, when following the completion of an obligation makes it impossible to supply that falls on a certain object or body.
Requires:
Absolute 1.Imposibilidad
2.What is fortuitous failure
3.What is after the birth of an obligation

What is the statute of limitations
The statute of limitations is a way to extinguish the shares or rights of others, for not having exercised such rights or shares for a certain period of time, attending other legal requirements.
What are the requirements of the statute of limitations Requires:
1.Containing prescriptive action is
Inactivity of the parties 2.La
3.Tiempo prescription
How the statute of limitations is interrupted>
Statute of limitations is interrupted:
· Natural: For the recognition that the debtor makes of his obligation
· Civilians: On the lawsuit by the creditor, duly notified and without the fact that none of the cases of article 2503
What are the deadlines to operate the statute of limitations
1.Prescripción longtime extinctive
1.Prescripción ordinary personal actions five years
2.Prescripción of executive actions, 3 years (and becomes ordinary)
3.Prescripción accessions and accessories, follow the fate of the principal
4.Prescripción of real actions, are lost through adverse possession
2.Prescripciones short time
1.3 years
§ In favor or against the tax authorities and municipalities from all taxation
§ The Tax Code and other special laws
2.2 years
§ Recovery of professional fees for professional services
3.1 years
1.de the merchants, suppliers and craftsmen for items shipped to retail
2.The price of the services provided periodically or accidentally, as innkeepers, porters, messengers.
Special 3.Prescripciones
1.The status derived from
2.The rescissory actions
3.The warranty
Possessory 4.Acciones
What is a contract
It is defined in Article 1438 which states that contract or agreement is an act by which one party agrees to another to give, do or not do something. Each part may be one or many people.
This definition was criticized as confusing convention and agreement, among them being that there is a genus-species relationship, and to confuse the contract for the purpose of the provision.
The doctrine has been defined as the expression of intent aimed at creating rights and obligations.
What are the unilateral and what bilateral contracts
Unilateral contracts are those in which only one party of obligations to another do not become an obligation. Bilateral are those in which the contracting parties mutually undertake.
This classification is important in bilateral as applicable:
1.La theory risks
2.procede resolutory action
3.procede the exception of the contract is not fulfilled
What is the importance of classification between free and expensive
The fundamental importance of this classification is that the way to graduate to blame, because the contracts are answered free of guilt faint if he gives the benefit of the debtor and negligence if he gives the exclusive benefit of the creditor.
What is the importance of distinguishing between commutative and random
Where the contract is purchased random chance, contingency uncertain gain or loss, so the injury is not necessary, the theory of risk, unpredictability, etc..
What is required for a valid contract
The requirements are the legal acts as well:
1.Capable party
Free from defects 2.Consentimiento
Lawful 3.Objeto
Lawful 4.Causa


Those involved in the provision for another

1.Estipulate
2.Promitente
Beneficiary 3.Tercero
What elements are in every contract

The contracts are, pursuant to Rule 1444:
1.Cosas of the essence: those without which the contract does not exist or degenerates into a different
2.Cosas of nature are those that not essential, means incorporated without any express provision
3.Meramente accidental: Those things, which are not essential or natural, intangible parties to the contract by special provisions.
How to interpret contracts
Our legislation acceding to subjective interpretation system, ie one in which raw will of the parties over the express provisions.
In general our system of contractual interpretation is defined in the art. 1560 which states: known clearly the intention of the parties, one must be to them rather than the literal words.
In determining the intent of the parties, the legislature delivers the following rules of interpretation:
1.The terms of the contract, no further than the material on which is
2.Se be interpreted as meaning that the terms produce effects
3.Se be interpreted according to the nature of the contract
waves commonly used terms are presumed but not stated (1563 / 2)
Harmonic 4.Interpretación contract clauses
5.Interpretación of a contract for another
6.Aplicación practice that the parties have given the contract
Special 7.Casos provided, do not limit their effects
8.When above rules do not apply, it will interpret ambiguous clauses against which dictated them, but if not imputable against any of the parties, shall be construed against the debtor.

What is the prescription interinversion
Caused the interruption of short-term prescription for intervening written note or obligation, term or provision of the creditor, or formal action, this happens to be a long time.
Some commentators believed that if the request is legal, runs the break and not interinversion, there are flaws in both directions.