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WITHDRAWAL FROM CONTRACT DUE TO FAILURE TO PAY PURCHASE PRICE

S. Ficova, R. Hnilica
Thursday 8 November 2018 by Libadmin2018

ABSTRACT

According to § 48 of Civil Code (Act No. 40/1964 Coll.), as effective in the Slovak Republic, contractual party may withdraw from contract if such withdrawal is granted by the law or if the contractual parties have so agreed. Accordingly, there are two rights, the statutory right and the contractual right to withdraw from contract. Both rights can be exercised in diverse situations; as a rule, however, they are exercisable as a result of a breach of contract. The remaining question is, specifically, by what time can the non-breaching party withdraw from contract, or, for that matter, whether a contractual party may withdraw from contract at any time following its breach by the other party, regardless of whether the other (obligated) party, which was in default of its obligation has met its obligation, albeit at a later point of time. Is this right of contractual party unlimited in time or is it time-limited, in that it must be exercised before the defaulting party has met its obligation? Based on the analysis of relevant legal regulations and case-law it can be concluded that the entitled party (creditor) may exercise its right to withdraw from contract due to the other party (debtor) being in default on its obligation before such right becomes statute-barred, however, in any event, before the defaulted obligation is met. As soon as the defaulted obligation is met, the creditor’s right to withdraw from contract is discharged and extinguished. This is irrespective of whether the right to withdraw from contract is granted by a statute or agreed in a contract.

Keywords: Contract of Purchase, Debtor’s Default, Withdrawal from Contract


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