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THE NOTIONS OF PARTIES, THIRD PARTIES AND SUCCESSORS IN TITLE IN CONTRACTUAL RELATIONS

M. Cazanel, S. Calafus
Thursday 8 November 2018 by Libadmin2018

ABSTRACT

The exception to contractual non-performance is perceived in the doctrine as a defense or remedy available to a contracting party which, by simply invoking this exception, may block the claim brought by the other party (which has not executed its own obligations), in order to oblige the party that invokes the exception to perform its own contractual obligations.
With respect to third parties, the exception to non-performance may be invoked against them, where the claim results from the contract (when the third party performs the derivative action in its debtor’s place). The exception may also be invoked against the contractant’s unsecured creditors who have failed to fulfill their own obligations when, by invoking their general pledge right, they wish to seize an asset held by the other party under the contract. In such a situation, it may refuse to surrender the asset until the payment of its claim.
On the other hand, the exception to non-performance cannot be invoked against third parties claiming their own rights, totally distinct from the contract.
The legal literature has shown that the exception to non-performance arises and dissapears together with the contract that has generated it; when the contract is transferred to a third party, through contract assignment, it undergoes transformations that will be passed on to the exception to non-performance. This view is justified by the function of the exception to non-performance as a means of guaranteeing the performance of obligations. Thus, the exception to contractual non-performance will be invoked against all persons who originally had the capacity of third parties to the contract and who, after being assigned, become parties. Therefore, as we have shown, it is important to determine the moment when the exception becomes opposable (i.e. when it can be invoked).

Keywords: contract, exception, obligation, non-performance, third parties


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