Sunday, March 28, 2021

Place of Performance of Contract

Place of performance has an implication on cost of payment, currency for money debts and territorial jurisdiction of court (Girma, 2002, p 124).Therefore determining place of performance has a multifaceted consequences.

The civil code provides three alternatives; agreed place, residence of the debtor and place where the thing situates. Here we can notice that the law tries to determine place of performance by giving much emphasis to the intention of the parties. The law encourages the parties to determine place of performance in their contract. Contractually agreed place should include places that can be determined by reference to usage; equity and good faith (see Art.1713). But if they fail to mention place of performance the law then resorts to search the possible intention of the parties (implied agreement of the parties). 

By so doing it reached at the conclusion that in case of definite thing the parties should be presumed to have agreed to perform the contract at the place where such definite thing situate at the time of conclusion of contract.(time of conclusion of contract is to be determined by reference to Art. 1692). We have to notice here that there may be difference between place of conclusion of contract and place where the definite thing situate at the time of conclusion of contract. Moreover, the place where a thing situate at the time of conclusion of contract and at the time of performance of a contract may be different i.e. the thing might have been shifted from the place where it was at time of formation of contract. 

Although it is presumed that parties had knowledge as to the where about of the definite thing at the time of conclusion of contract concerning such thing (since most probably the creditor/debtor does not agree with out seeing the thing and the place where he saw the thing and the place where it situate at the time of conclusion of a contract, most of the time, overlaps) lack of such knowledge never affect place of performance. 


The last resort of the law is to rule of interpretation in favor of the debtor. Such interpretation leads to the residence of the debtor. By so doing the law exempts the debtor from transportation cost, inconveniences and waste of working hours. So delivery of fungible things should be made at the residence of the debtor (Art.1755 (2).


However; the debtor may have more than one residence (Art 177(2). In such case the place of performance is the principal residence and the adjective normal which is used by Art. .1755 (2) to qualify the noun residence should have the same meaning with the adjective principal which is used by  Art.177(2) to qualify the same noun.


Generally Ethiopian civil code advises the parties to exercise their freedom of contract and determine place of performance. But if they fail to do so the law imports the old maxim, debt is not portable but fetchable i.e. the creditor has to go to either to the place where the definite thing situate or to the residence of the debtor. The claimant has to his claim and his claim never come to him.

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