Extinction of Obligations by Payment
Explanation
Payment [le paiement] is considered the natural way for the extinction of an obligation [l'obligation]. The debtor [le débiteur] must pay the exact thing due. The creditor [le créancier] cannot be forced to accept something else even if it is of higher value. If the thing is specified only by its kind, the debtor is prohibited from offering the lowest quality.
Payment is characterized by being indivisible. The debtor may not force the creditor to accept a partial payment even if the obligation is divisible. There are exceptions to this rule such as set-off [la compensation] and the right of division for guarantors [les cautions]. The judge also has the right to grant a debtor in good faith grace periods for payment and to allow the debt to be paid in installments.
When the debt is a monetary sum, it must be paid in the national currency. However, in normal times when mandatory dealing in paper currency is not imposed, the contracting parties have the freedom to stipulate payment in a foreign currency or in specific metallic coins.
Subrogation [la subrogation] can occur when the debtor borrows money to pay their debt. The new lender replaces the original creditor in their rights. The law does not require the consent of the creditor for the validity of this transaction, but is satisfied with formal conditions relating to the dates of the documents, the clear declaration of the intent to pay, and the subrogation of the lender.
Official legal articles
Think deeper
Why does the law not require the consent of the original creditor when the debtor borrows money to pay the debt and subrogates the lender? How does this relate to the debtor's right to pay?
Flashcards
Can the creditor be forced to accept something different from the thing due if it is of higher value?
No, the exact thing due must be paid and the creditor cannot be forced to accept anything else.
What is the quality level of the thing that must be offered if it is specified only by its kind?
The highest quality does not have to be offered, but the lowest quality may not be offered.
May the debtor force the creditor to accept a partial payment?
This is not permissible even if the obligation is divisible, because payment is indivisible.
What are the exceptions to the rule of indivisibility of payment?
Set-off, the right of division for guarantors, and the judge granting grace periods for payment to a debtor in good faith.
In what currency must a monetary debt be paid as a general rule?
It must be paid in the national currency.
Is the consent of the creditor required for the validity of subrogation when the debtor borrows a sum to pay their debt?
The consent of the creditor is not required for the validity of this transaction.
What are the formal conditions for the loan document and the receipt document in the case of subrogation?
They must have a valid date, and they must declare the intent to pay, the source of the money, and the subrogation of the lender in place of the creditor.
Practice questions
A debtor offered their creditor a luxury car instead of the agreed-upon regular car. Can the creditor be forced to accept?
The creditor cannot be forced to accept other than the thing due even if it is of higher value (Article 299).
A person committed to delivering 100 tons of wheat without specifying the grade. What kind must be delivered?
The highest quality does not have to be offered, but the lowest quality may not be offered (Article 299).
Can the judge force the creditor to accept payment in installments?
The law permits the judge to grant a debtor in good faith grace periods for payment and to make the debt payable in installments (Article 300).
In normal times, is it permissible to stipulate payment of the debt in a foreign currency?
The law allows the contracting parties in normal times to stipulate payment in a foreign currency (Article 301).
A debtor borrowed money to pay their debt and wanted the lender to replace the creditor. Do they need the approval of the original creditor?
The law explicitly states that the consent of the creditor is not required for the validity of this transaction (Article 314).
Which of the following conditions is not required for the validity of subrogation when the debtor borrows a sum for payment?
The law requires the other conditions, and stipulates that the creditor's consent is not required (Article 314).
Case problems
Salim committed to paying the sum of 1000 dollars to a commercial company. Salim offered to pay 500 dollars now and 500 dollars next month. The company refused. Does Salim have the right to force the company to accept the partial payment? And what is the legal solution available to him if he is in good faith?
Model answer
The debtor may not force the creditor to accept a partial payment even if the obligation is divisible (Article 300).
Therefore, Salim does not have the right to force the company to accept only 500 dollars.
However, the law allows the judge to grant a debtor in good faith grace periods, making the payment in installments as appropriate.
Self-grading rubric
Nada borrowed a sum of money from her friend Rima to pay off a debt she owed to a bank. Nada wanted Rima to replace the bank in its rights. The bank refused this subrogation on the pretext that it did not agree to it. What are the conditions that must be met in the documents for this subrogation to be valid, and is the bank's refusal justified?
Model answer
The consent of the creditor is not required for the validity of this transaction, so the bank's refusal is unjustified (Article 314).
For the subrogation to be valid, certain formal conditions must be met.
First, the loan document and the receipt document must have a valid date.
Second, the loan document must declare the intent to pay, and the receipt must declare the payment was from the borrowed money.
Third, it must be declared that the lender replaced the paid creditor in their rights.