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문제는 여기

박명리의 채무 상환을 연대 보증한 이시중은 두나은행과의 관계에서 채무자라는 점은 의문이 없다. 그러나, 두나은행은 박명리에게 대출한 5억원 중 3억5천만원에 대하여는 박명리의 4억원 상당의 부동산에 설정받은 제1번 근저당권으로 담보되어 있으므로, 그 한도에서는 채권자 취소권을 두나은행에게 인정할 필요는 없다(박명리와의 관계에서건 이시중과의 관계에서건). 따라서 나머지 1억5천만원에 대한 채권자 취소권을 두나은행이 이시중의 재산처분 행위에 대하여 행사할 수 있는지 여부가 문제된다.

채무자(이시중)가 자신의 유일한 부동산을 대물변제로 어느 채권자에게 제공하는 행위는 나머지 채권자들을 해하는 행위(채권자 평등을 깨므로)라는 것이 대법원의 입장이다. 따라서 이시중의 대물변제는 저글(주)와의 관계에서 유리/불리 했는지를 따질 필요 없이 나머지 채권자에 대한 사해행위로 평가될 여지가 있다. 두나은행은 저글(주)를 상대로 사해행위 취소 소송을 제기하여 문제의 거래를 1억5천만원 한도에서 취소하고, 가액의 반환을 저글(주)로부터 구하는 동시에 이 액수를 이시중을 대위하여 수령함으로써 사실상 우선 변제를 받을 수 있을 것이다.

채권자가 보증인의 사해행위를 취소하지 않았다고 해서 주채무자가 이를 문제삼을 여지는 없다. 심지어 채권자가 보증인의 채무를 면제해 주더라도 주채무자는 자신의 채무 전액에 대하여 채권자에게 상환해야 한다. 따라서 박명리의 주장은 터무니 없다.

1. Providing additional security

• Creditor may agree to have additional debtors, who will jointly and severally be liable to perform the identical obligation.
• If, however, it is against the wish of the original debtor, a third party who has no interest to protect may not undertake to perform. Art. 453(2)
• Performance by a third party who has no interest to protect will extinguish the original debtor's obligation only when it is not against the wish of the original debtor. Art. 469(2)

2. Replacing the debtor (novatio)

• Replacement of the debtor may not be done without the creditor's consent. Art 453(1), Art 454.
• Once the creditor has given the consent, the replacement becomes irrevocable. Art 456.
• Security, surety and guarantees of a third party securing the original debtor's obligation shall extinguish unless providers of such security agree otherwise (agree to the replacement of the debtor). Art 459
• Security which was provided by the original debtor shall not extinguish. 96Da27476

1. Assignability of a contractual claim

• In principle, claims are assignable
• By nature, some claims are unassignable: claims from employment contract, mandate
• By statute, some claims are unassignable: child support claims, pension claims, accident compensation claims, wage 87Daka2803 (assignable, but not claimable?)
• By agreement, the parties may agree not to assign a contractual claim (however, assignees in good faith are protected) 99Da67482

2. Assignment notice

• Assignment notice must be given by the assigner to the debtor
• Once the notice is given, it may not be revoked without the consent of the assignee, Art. 452(2)
• Once the notice is given, the debtor's payment in good faith to the assignee will discharge the claim (even if the assignment was somehow ineffectual), Art. 452(1)
• Acquiescence by the debtor:
  • If the debtor acknowledges the assignment, assignment notice is unnecessary (provided that there is no other assignee)
  • If the debtor acknowledges the assignment in an unqualified manner, the debtor may not subsequently refuse to perform on the grounds which existed at the time of the unqualified acquiescence.

3. Priority among assignees and competing claimants

• competing claimants: several assignees of an identical claim; an assignee and a pledgee; an assignee and attachment creditor(s)
• the priority among competing claimants shall be determined by the priority of the date certified notice of assignment. Art 450(2), 93Da24223
• 71Da2048 (when none of the assignees could produce a date certified notice)

1. Agent's power

• to carry out a transaction in the name of the principal
• to attribute the legal effect of the transaction to the principal

2. Creation of agency

• By law or by appointment of the court
  • parent, guardian, husband and wife
  • court-appointed manager of an absentee, court-appointed receiver
• By contract (mandate, employment, partnership, etc. Art. 709: presumption of agency)
  • mandate may be terminated at any moment
  • termination of a mandate does not have retroactive effect on transactions entered into before the mandate is terminated
  • agent may resign at any moment
  • cf. Art. 689
  • death of the principal or the agent (exc. commercial contracts, legal representative, emergency, Art. 691)

3. Ostensible authority

• Art. 125
  • Principal's representation to the counterpart
  • handing over the documents showing the power of attorney to the 'agent' may also qualify as principal's representation (indirect representation) to the counterpart. 2000Da2566 (principal told the creditor that he would be the guarantor; but later realised that the debt was too much and told the debtor that he cannot be the guarantor; the debtor, however, acted as the 'agent' of the principal to conclude the guaranty contract using the principal's seal certificate and other documents)
  • principal will be bound by the transaction of the 'agent' as long as it falls within the 'represented' power
  • If the principal does not wish to be bound by the transaction, the burden of proof lies with the principal to show the counterpart's knowledge (of the lack of power of attorney) or negligence
• Art. 126
  • When agent's transaction falls outside his power of attorney
  • the 'power of attorney' for this purpose would include the 'ostensible power of attorney' as well; 69Da2149 (former agent overstepping his power)
  • power of attorney created by law (parent, guardian, lawful wife and husband, etc.) would also provide a basis for this purpose. 81Da524 (mistress purporting to represent her lover in borrowing money and offering security)
  • If the counterpart wishes to compel the principal to perform, the burden of proof lies with the counterpart to show that there was "justifiable ground" to believe that the transaction was within the agent's power of attorney.
  • 98Da18988 (Daehan Guarantee Insurance; wife purporting to represent husband to guarantee her brother's debt)
• Art. 129
  • Where the power of attorney has expired, the principal may be bound by the agent's transaction which was made after the expiry.
  • If the principal does not wish to be bound, the burden of proof lies with the principal to show the counterpart's knowledge (of the expiry of the power of attorney) or negligence.
  • 97Da55317 (Land Development Corp; KEB, who was the agent, appointed sub-agent after the death of the principal)

4. Liabilities of an "agent" who cannot prove power of attorney (Art. 135)

• Where the principal denies the validity of the transaction on the ground of a lack of power of attorney, the counterpart may:
  • seek to compel the principal's performance on the ground of the ostensible authority under Arts. 125, 126 and 129
  • sue the 'agent' under Art. 135
• the 'agent' may be compelled to perform the contract instead of the principal (in this case, the 'agent' may, while not a party to the contract, avail himself of the contractual rights as if a party to the contract), or
• the 'agent' may be asked to pay damages (performance measure)
• the 'agent' may avoid liabilities by showing
  • that the counterpart should have known that the 'agent' had no power of attorney, or
  • the 'agent' was not of full capacity, or
  • the agent had the power of attorney

1. Action oblique (creditor's derivative action)

• A creditor may exercise debtor's rights, if the debtor does not diligently pursue them and if their exercise is necessary to ensure satisfaction of the creditor's claim. Art 404
• Art. 1166 of French Civil Code: Les créanciers peuvent exercer tous les droits et actions de leur débiteur, à l'exception de ceux qui sont exclusivement attachés à la personne.

When?

• The debtor must be "insolvent", or,
• the creditor's claim must be closely connected to the debtor's right which is to be exercised by the creditor.
• un-assignable rights of the debtor are not to be exercised by the creditor

Features

• The creditor may not exercise rights which the debtor himself cannot exercise
• The creditor may exercise the debtor's rights against the wishes of the debtor.
• If, however, the debtor already exercises his rights, the creditor may not intervene.
• The creditor's right must exist and become due. (however, see Art 404(2))
• 67Da2440(If the chain of real estate transaction collapses, the buyer at the end of the chain may claim damage from the seller at the beginning of the chain, on behalf of intervening parties), 83Gahap4501(Assignee of the claim for key money may bring an eviction suit against the tenant), 79Da1928(Purchaser of unregistered building may bring an eviction suit against squatters on behalf of the building owner)
• Res judicata, 74Da1664 (if debtor knew about the suit between his creditor and his debtor, the debtor shall be bound by the judgment of that suit.)
• Negotiorum gestio, Art 743 ff.

2. Setting aside collusive dispositions

• Transactions entered into by the debtor
  • after the creditor acquired the claim
  • which renders the debtor insolvent
  • (if the debtor is already insolvent) prefers only one or a few of the creditors above the others
  • any transfer or abandonment of rights to property and includes a sale, lease, mortgage, pledge, delivery, payment, release, compromise, donation or any contract therefor, but does not include a disposition in compliance with an order of the court
• debtor's intent to prejudice creditors must be proven; however, the intent will be inferred once the objective nature of the transaction is demonstrated. 97Da57320
• the beneficiary is presumed to have the knowledge of the prejudicial nature of the transaction; but this is rebuttable presumption: the beneficiary of the debtor's disposition may resist the creditor's attempt to have the transaction set aside by demonstrating his good faith.
• if the beneficiary knowingly transfers the goods to a third party in good faith, the beneficiary will be required to disgorge the benefit (the transaction between the debtor and the beneficiary will be set aside).
• The creditor must bring a lawsuit against the beneficiary or the third party who, with the knowledge that it would prejudice creditors, received the goods from the beneficiary.
• The lawsuit must be brought within a year from the date the creditor had the knowledge of the impeachable disposition (or, in any case, within 5 years from the transaction). Art. 406(2)
• 99Da2515(Registering the option will be regarded as impeachable disposition)

1. Art 389 (Compulsory performance, as a default remedy)

• If an obligation is not voluntarily performed, the claimant can ask the court to compel performance unless the nature of the obligation does not permit compulsory performance.
• Compelling the performance is the primary remedy for a breach of contract. (Cf. In tort, monetary damages is the default remedy.)
• Compulsory sale of debtor's assets, delivery of movables or immovables by bailiffs
• Application to have performance done by a substitute (the costs to be reimbursed by the promisor). Art. 389(3)

2. Prohibitory Injunction (restraining order)

• if Defendant has breached a contractual obligation to refrain from engaging in a certain activity and Plaintiff proves that the Defendant is likely to engage in that activity in the future, the court may grant a permanent injunction restraining the Defendant from engaging in the activity in the future.
• 93Da40614 ('milk war' case)
  • Tort remedy.
  • "Apology" cannot be compelled. Such an order is unconstitutional (89헌마160).
  • Where the likehood of repeat occurrence is proven, the court may issue prohibitory injunction together with a penalty in the event the injunction is not complied with.
• No injunction may be sought whether as an interim remedy or as an ultimate remedy with regard to ‘preparation for a breach’ or ‘likelihood of a (first time) breach’.

3. 'Personal' performance

• If the nature of the act does not permit performance by a substitute
• Compulsory performance not available if it is against public policy to compel the act
• The court may order a payment of penalty, calculated usually on daily basis until the act is performed. The court who decides the substantive entitlement is also capable of ordering payment of penalty (i.e., enforcement order) in the event of the non-compliance. 2020Da248124
• 99Ma6107: a corporation was ordered by the court to admit the claimants into its premises during normal office hours for 20 days excluding public holidays and to provide certain documents so that the claimants can inspect and photocopy them. The order came with a daily penalty payable for the period of non-compliance.

1. Breach

• Non-performance of contractual obligation, or a performance which is not in accordance with the contract, would constitute an instance of breach.

Wrongfulness of a breach

• 2000Da47361 (dated 27 December 2002; an agreement to donate concluded under duress was not performed; non-performance was held to be prima facie 'wrongful'): Breach of contract is in itself assessed to be 'wrongful'. Only in exceptional, extraordinary circumstances, it may be possible that the breach can be found to be 'justified'. (re-affirmed in 2011Da85352; land owners challenging the housing re-development project and - erroneously - refused to convey the lands. The refusal was held to be wrongful and the land owners judged to be 'at fault')
• 2011Du2477: A pension fund withheld some portion of pension payments to some of the retired public servants in accordance with a statutory provision which required withholding of a portion of pension payments if the retiree has other incomes (Public Servants Pension Act, Article 47). But the statutory provision was later declared unconstitutional by the Constitutional Court. The retirees brought lawsuits to claim withheld portions together with delay damages. The Supreme Court held that since the relevant provision is retroactively invalidated, the pension fund who withheld the portion of payments must, in principle, be found to be in wrongful breach of the pension contract (even if it only did what the statute required it to do at the relevant time). The Supreme Court, however, ruled that the delay damage (delay interest) need only be paid after the date the statute was declared unconstitutional as the breach was exceptionally "not wrongful" because i) the unconstitutionality of the provision was not self-evident; ii) the pension fund was required by law to abide by the statutory provision while it was not struck down; and iii) the pension fund had no power to influence the legislative process.

Fault

• The party committing a breach is presumed to be at fault. (Art. 390. The party in breach must argue and prove that its act was neither intentional nor negligent.)
• In practice, other than force majeure, the court rarely accepts the defence of no fault.  2001Da1386: (천재지변이나 이에 준하는 경제사정의 급격한 변동 등 불가항력으로 인하여 목적물의 준공이 지연된 경우에는 수급인은 지체상금을 지급할 의무가 없다고 할 것이지만, 이른바 imf 사태 및 그로 인한 자재 수급의 차질 등은 그와 같은 불가항력적인 사정이라고 볼 수 없다.)
• 대법원 2007. 12. 27 선고 2006다9408 판결: 채무불이행으로 인한 손해배상액이 예정되어 있는 경우에는 채권자는 채무불이행 사실만 증명하면 손해의 발생 및 그 액을 증명하지 아니하고 예정배상액을 청구할 수 있고, 채무자는 채권자와 채무불이행에 있어 채무자의 귀책사유를 묻지 아니한다는 약정을 하지 아니한 이상 자신의 귀책사유가 없음을 주장ㆍ입증함으로써 예정배상액의 지급책임을 면할 수 있다. 그리고 채무자의 귀책사유를 묻지 아니한다는 약정의 존재 여부는 근본적으로 당사자 사이의 의사해석의 문제로서, 당사자 사이의 약정 내용과 그 약정이 이루어지게 된 동기 및 경위, 당사자가 그 약정에 의하여 달성하려고 하는 목적과 진정한 의사, 거래의 관행 등을 종합적으로 고찰하여 합리적으로 해석하여야 하지만, 당사자의 통상의 의사는 채무자의 귀책사유로 인한 채무불이행에 대해서만 손해배상액을 예정한 것으로 봄이 상당하므로, 채무자의 귀책사유를 묻지 않기로 하는 약정의 존재는 엄격하게 제한하여 인정하여야 한다.
• Sale, contract for a work, lease: if a breach is committed, the breaching party's fault is almost always recognised.
• Contract to treat a patient: if the physician applied procedures which are within the bounds of acceptable practice, fault is not recognised. It is not even clear whether a 'breach' can be recognised in the first place.
• For the purpose of termination, fault is mostly irrelevant. (하경효, "채무불이행과 계약 해제의 요건", 고려법학, 2003)
  • Fault is relevant only when the breaching party proves that the performance was rendered impossible by causes attributable to the other party or to none of the parties. (Art 546, 537, 538)

2. Effect of a breach

• The aggrieved party may compel the performance in so far as it is possible to do so (Article 389 of KCC);
• Alternatively, the aggrieved party may, if the breach is material, terminate the contract, usually with retroactive effect (Articles 543-553);
• Additionally, the party may seek compensation for any foreseeable loss incurred as a result of the breach (Article 390 of KCC).
• The victim of a breach may choose between a reliance measure of damages and a performance measure of damages. Supreme Court Judgment 2002Da2539, dated 11 June 2002; Supreme Court Judgment 2001Da75295, dated 23 October 2003.

3. Materiality of a breach

• Supreme Court Judgment 2005Da53705, dated 25 November 2005
• In order to terminate a contract, the breach must be about an obligation which is indispensable to achieve the purpose of the contract. A breach of an incidental obligation which has little importance would not be a ‘material breach’. In order to be ‘material’, the breach must be about an obligation which is important enough so that without its proper performance the purpose of the contract cannot be achieved and the parties would not have entered into the contract.
• This is a question of fact which must be assessed in light of the parties’ intention which was expressed or reasonably inferred from objective circumstances existing at the time of entering into the contact.
• While a particular obligation may not, in itself, be of great value, if its discharge is of critical importance to the parties, the breach thereof will be judged to be a material breach.
• The content and the purpose of the contract, the consequences of non-performance of the obligation in question should all be taken into account in this assessment.
  

Further reading:

• 김상호, "부수적 채무의 불이행과 계약의 해제 (1994.12.22 선고, 93다2766 판결)", 대법원 판례 해설, 재판연구관 세미나 자료 1994년 하반기 (통권 제22호) 제176면-  (매도인인 반야암 주지의 계약 해제 시도를 배척)
• 2005Da53705 (painting booth)

1. Simultaneous performance

• Unless the parties agree otherwise, obligations arising from a synallagmatic contract ought to be performed simultaneously
• Obligations to restore the thing sold and money received must also be performed simultaneously. Art. 549
• Where it is fair and equitable to require simultaneous performance:
  • 95Da1521 (construction of a three-storey house, top floor and 1/3 ownership of the land to be conveyed to the builder as a payment in kind for the construction work. Owner refused to convey arguing that the builder owes him money which was advanced by the owner to the builder)
  • 2001Da27784 (payment withheld until attachment is canceled)
  • 98Da13754: If the thing sold is attached (or an injunction banning its disposal is issued), the purchaser is entitled to refuse (=postpone) payment of the purchase price (until the attachment is cancelled or the injunction is discharged).
  • 2010Da11323: 동시이행관계에 있는 채무를 부담하는 쌍방 당사자 중 일방이 먼저 현실의 제공을 하고 상대방을 수령지체에 빠지게 하였다고 하더라도 그 이행의 제공이 계속되지 아니하였다면 과거에 이행제공이 있었다는 사실만으로 상대방이 가지는 동시이행의 항변권이 소멸하지 아니하고( 대법원 1993. 8. 24. 선고 92다56490 판결, 대법원 1995. 3. 14. 선고 94다26646 판결 등 참조), 또한 동시이행의 관계에 있는 쌍방의 채무 중 어느 한 채무가 이행불능이 됨으로 인하여 발생한 손해배상채무도 여전히 다른 채무와 동시이행의 관계에 있다고 할 것이다( 대법원 2000. 2. 25. 선고 97다30066 판결 등 참조).

2. "Defence"

• If the facts (that the counterpart has not tendered the performance) are presented, the court may not ignore them. The party shall not be held liable for late performance.
• 97Da54604 (Donga Construction): Donga (Construction company) appointed an agent (K) to negotiate land acquisition. K concluded the contract on behalf of Donga but the price was 1.5 times higher than authorised by Donga. Moreover, K received money from Donga and embezzled, rather than deliver it to the seller. Seller sues Donga and demand payment of purchase price plus delay interest on the partial payment. Donga denies liability and argues that the sale contract is not binding upon Donga. The court ruled that the sale contract is valid and binding. But Donga's liability for late payment damage in respect of the partial payment (which must be performed before the closing) shall only be payable until the closing date (when both parties' performances begin to be subject to the defence of simultaneous performance). From the closing date onward, no late payment damage is claimable. (This rule concerns the question of "substantive" entitlement of delay interest. "How much" the buyer is obligated to pay...)
• But where the defendant does not plead the defence of simultaneous performance, the court will order D's performance without mentioning the counter-performance. 90Daka25222

3. No right

• The defence, if successful, would allow the party to delay the performance without incurring liability for late performance.
• It does not create a right to enjoy the thing which is in possession of the party who has to return it. 89Daka4298
• Art 536, Para. 2 (Defence of feared risk of counter-performance)
  • 2011Da93025: The “manifest circumstances which make it difficult for the other party to perform” refer to a situation where there is a change of circumstances after the contract is concluded such as deterioration of the obligee’s creditworthiness, level of wealth or other circumstances which render the obligee’s counter-performance unlikely and, as a result, it is against fairness and against good faith to require the obligor to perform its obligation as originally agreed. Whether or not there are such circumstances must be assessed taking account of all attendant circumstances of the two parties in a comprehensive manner.The circumstances which give rise to the [obligor’s] defence of feared risk of counter-performance need not be limited to the occurrence of an event which has the objective or general nature such as deterioration of the obligee’s creditworthiness or level of wealth. The requisite circumstances need not be interpreted in a restrictive manner.

4. Comparative perspective

Concurrent condition: when the parties undertake to perform simultaneously, neither performance becomes due unless one is ready and willing to perform one's own obligation.
Delivery and payment are concurrent conditions: Sale of Goods Act 1979, s 28

Mutuality of remedy: The court will not compel a defendant to perform his obligations specifically if it cannot at the same time ensure that any unperformed obligations of the plaintiff will be specifically performed. If, however, damages can be adequate remedy for plaintiff's default, plaintiff may seek specific performance while he has not himself performed. Price v Strange [1978] Ch. 337 at 367-368.

1. Time of performance

• Where 'uncertain' time is specified
  • performance is due when the promisor knows that the time has come. Art. 387(1)
• Where the time is not specified at all
  • Performance is due upon demand (on the day the demand is made)
  • a "reasonable time" is allowed when a demand is made for repayment of a loan of money or fungibles. Art. 603(2)
• Where the time of performance is specified
  • If the time is of the essence, delay would lead to impossibility of performance, damage in lieu of performance, termination (in addition to delay damage, if any)
  • If the time is not of the essence, delay would only lead to delay damage, if and to the extent the loss caused by the delay is proven. In order to seek termination, damage in lieu of performance, further and additional demand (providing a reasonable extension) must be made (and no performance is done). While the obligee does not decline to accept the performance, the obligor is entitled to delayed performance (as it must be accepted, with a delay damage).

2. The effect of a delay

• The party in delay shall be held liable for all losses regardless of fault (Art. 392)
• If, however, the loss would have occurred even if timely performance had been made, the party in delay will only need to compensate for the delay.
• What if, while the obligor repudiates and the obligee does not accept the repudiation, the performance becomes impossible for reasons inattributable to the parties (force majeur)?
• Where time is of the essence, delay of performance would result in impossibility of performance (Art 545 is based on such an assumption). The obligee may decline (irrevocably) to accept the performance and seek damage in lieu of performance (Art 395).
• Can the obligee compel the performance where the delayed performance is of no benefit?
• Can the obligor insist that the obligee accept the delayed performance?

3. Termination on the ground of delay

• Not allowed in principle, unless time is of the essence (Art. 545).
• Termination is possible when a reasonable extension for the performance is provided and yet no performance is made. (Art. 544)
• If the obligor repudiates in advance (of the due date, or after the due date?), the obligee may terminate forthwith without providing an extension. (Art. 544, proviso seem to be interpreted by the court to refer only to repudiation while the obligor is already in delay.)
• Replacement damage (damage in lieu of performance) is available if (and only if) the delayed performance is pointless or no performance was done after the obligee demanded performance providing a reasonable extension. In order to seek replacement damage, the obligee MUST decline (irrevocably) to accept the performance. Art 395 of the KCC.
• If the obligor repudiates its own obligation while he fails to accept performance of the other party (thus in mora creditoris), the obligee may terminate forthwith. (93Da11821)
• 94Da35930: Even where a reasonable extension was not explicitly granted, the termination is valid when it was done after the lapse of a reasonable period of time after the performance was demanded. A termination notice (invalid because no extension had been given) can still be regarded as a demand for performance. Termination becomes valid after the lapse of a reasonable period from such a notice. 89Daka11685
• 79Da1859: In a sale of real estate, the payment of balance was due on 20 April. Buyer did not pay. On 24 April, seller tendered all necessary documents needed for completion and demanded buyer's payment by 26 April.  Seller terminated the contract on 27 April. Termination valid.

4. Delay interest in a sale contract

• … The purchaser shall pay interest on the purchase price from the date the thing sold was delivered. However, this does not apply if there is a due date for the payment of the purchase price. (Art. 587)

• Purchaser not required to pay interest until the thing sold is actually delivered (Art 587 of KCC; 96Da14190): “even where the purchaser fails to make timely payment of the purchase price, the purchaser need not pay interest on the purchase price until the thing sold is delivered."
• However, if partial payment is delayed, interest is payable only on the partial payment until the closing date. 대법원 1991. 3. 27 선고 90다19930 판결
• Where the parties agreed upon the due date for the simultaneous performance of the delivery and the payment, if neither party performs on the due date, the respective obligations of the parties shall become obligations ‘without a due date’. See Supreme Court Decision 73Ma969, dated 11 December 1974.

5. Where delay is 'exceptionally' not wrongful

• 2011Du2477,2484 dated 27 November 2014 (a provision of the Public Servants Pension Act which stipulated a reduced entitlement for pension payment for those who have additional income was declared unconstitutional with retroactive effect). The Supreme Court held that the delay of payment (to the extent which had been statutorily prohibited to be paid) is "not wrongful" and the delay interest need only be paid after the statute was declared unconstitutional.

5. Mora creditoris in a sale contract

• The party in mora creditoris is normally responsible for the obligor's added costs of safekeep of the object and the added costs of performance. Art 403
• However, in a sale contract, the purchaser is not responsible for the seller's costs of maintenance and preservation of the thing sold until it is delivered (even if the purchaser is in mora creditoris). 80Da211 (Even when the Purchaser is in breach of its own obligation, Seller still has the duty to maintain and preserve the thing sold until delivery anyway. Art 374.)

1. Manner of discharge

86Daka1755
Parties agreed that in lieu of money payment, the debtor shall convey a property. They registered the agreement to convey the property. The debtor subsequently paid money. The registered agreement to convey the property is null and void.

2. Accord executed is satisfaction

• Only when there is an accord that the substitute performance is in lieu of the original obligation, will the substitute performance fully discharge the original obligation.
• If the substitute performance is towards satisfaction of the original obligation, any shortfall after the substitute performance still remains.

3. Accord without satisfaction is

• of no effect to the creditor
• debtor may discharge the debt either by providing the performance as originally agreed (ignoring the according the alter the manner of performance) or by providing the altered performnace as agreed by the accord to provide the alternative performance in lieu of the original performance.

4. Interpretation

• accord
• novation
• Agreement to provide a security

Art 607:

• 91Da25574: If the debt has already fallen due, when the accord was made, then the accord and satisfaction between the debtor and the creditor is not regulated by Art. 607

Act Regarding Registered Option to Secure a Debt

97Da43543
Building contractor had a money claim against the owner. The contractor and the owner agreed that the owner's property shall be transferred to the contractor in lieu of the payment of the money. The contractor's creditor attached the contractor's money claim. The validity of the attachment? (accord or novatio). If the agreement between the owner and the contractor was an accord which was not yet satisfied, the owner may not perform to the contractor (as the debt was attached). The owner has a defence against the contractor's creditor (owner may rely on the validity of the accord) and the owner can insist on handing over the property, rather than the money. If the agreement was novation, the attachment is void (as it is in respect of an claim which no longer existed.)