Contractual liability
Contractual liability is an insurance, which protects the parties to the contract in the event of loss, resulting from failure to meet the terms of the contract by the other party.The contract concluded between the parties is a kind of bond and is associated with the existence of contractual liability. It is a significant obligation which, under the agreement and the conditions listed there, is accepted by any of the parties involved in the contract. This liability occurs when one of the parties fails to perform its duties or obligations due or when illegal activities take place. Therefore, there is also a need to provide compensation resulting from these negligence, which must be paid by the entity, that caused it[1].
Contractual liability is a liability to pay the amount of damage that results from a breach of contract. There is also a second type of liability, delict liability, which concerns compensation for damage caused by specific actions, not for breach of contract terms. Both types of obligations concern the need to redeem for damages that occur in relation to others, both of them are civil liabilities. Both parties to the contract have rules that can be broadened, excluded or limited. However, if the parties decide to take such a step, then legal limits must be taken[2].
Contractual liability does not include people with disabilities or minors because they can not act as contractual parties under the law. Such persons are represented by their legal guardian or parent. If the damage is caused by a larger number of entities, then it is necessary to check in the contract concluded by the parties what the issue of compensation looks like, because it is not possible to respond together for damage, as it is not included in the contract. As regards contractual liability, the limitation period begins on the day following the day on which one of the parties becomes entitled to demand fulfillment of the obligation [3].
For contractual liability to occur, the following conditions must be met[4]:
- actions outside the law that result in failure to meet contract terms,
- prejudices, which are deleterious non-patrimonial consequences resulting from the debtor's violation of the right to claim compensation by failing to meet the terms of the contract,
- causal link between the action, which is not legal and prejudice,
- the debtor's insolvency.
Footnotes
| Contractual liability — recommended articles |
| Indemnity clause — Assignment clause — Tenancy At Sufferance — Discharge of contract — Exculpatory Clause — Insured contract — Consideration clause — Ex Gratia Payment — Hold over tenant |
References
- Bebchuk L., A., Shavell S., (1999)Reconsidering Contractual Liability and the Incentive to Reveal InformationNational Bureau of Economic Research
- Gojani S., (2015)Contractual and Civil Delict LiabilityHaxhi Zeka University, Kosovo, European Academic Research, Vol. II, Issue 11
- Nitollo L., (2017) Contractual Liability - An Underwriters Perspective AIMU Papers
- Rudareanu M.,(2010) Contractual liability,Faculty of Law and Public Administration, Bucharest
- Yasmin M., (2016) Legal Liability in Standard Form of Contract "International Research Journal of Engineering, IT & Scientific Research", Vol. 2 Issue 9
Author: Justyna Wicek
