Introduction
Performance of the contract is defined as the discharge of parties from the obligations they assume during the formation of the contract. Performance of the contract has numerous types. It may be part performance or substantial performance. In Dutch, the law of the contract is contained in the New Civil Code. The Code spells out different obligations under a contract and how they can be discharged. The New Civil Code is derived from the Old Civil Code hence the contract law cases, which were applicable in the old Civil Code, remain relevant and applicable under the New Code (Brunner, 2009).
General
The general rule, as provided under the Civil Code, goes to the extent that the legal effect of a contract is subject to agreement between the parties in the contract. The contract may also be brought about by the operation of law, existence of a custom and the need to exercise reasonableness and fairness. Bearing in mind that courts of law interpret the contract so as to enforce it, the agreement between the parties is important (Whincup, 2006).
Interpretation of contracts
Freedom of contract means that parties under it have the powers to agree on the terms to bind them. The duty of courts of law is to interpret and enforce the contract. In the Dutch Supreme Court case of 1981, the Court held that the interpretation of the court should be not based on the grammar used in the contract as well as on the terms of the contract (Brunner, 2009).
Reasonableness and Fairness
In determining different obligations of the parties in the contract, the principle of good faith is applied. It assists in determining the legal duties of the parties. Reasonableness and fairness mean in this case that an obligation under the contract cannot be interpreted against a party if, by its applicability, it occasions unfairness and unreasonableness. Reasonableness and fairness, in this case, are the limiting points of interpretation. The term in the contract may be set aside if it is contrary to reasonableness and fairness (Whincup, 2006).
Unforeseen Circumstances
In other jurisdictions, the principle of unforeseeable circumstances is also known as impracticability. It means that the frustrating factor is one which is beyond the party’s control. A circumstance which is not foreseeable goes into effect that, during the completion of the contract, the event has not yet occurred. Courts do not amend the contract when such an event happens but allow the rescission as a remedy available to the innocent party. Examples of unforeseen circumstances in contracts include outbreak of disease, war, and floods (Brunner, 2009).
Estoppel and Waiver
In the case of Central London Property V High Trees [1947] K.B. 130, Lord Denning stated the elements of estoppel. Unlike waiver, estoppel is not catered for under the Dutch Civil Code. Estoppel is a common law doctrine which gives a party a certain right. There are rules which govern estoppel. Making the promise is not enough since the other party must rely on it and act without detriment to it. While, in estoppel, the right is created, the right is lost in waiver. Waiver is common in creditor-debtor relationships. The distinction between waiver and estoppel is not an easy one to distinguish. The difficulty presented by the applicability of the two has made them look similar. Estoppel is a doctrine of equity hence it aims at achieving fairness in contracts (Adams, 2006).
Conclusion
The performance of a contract is made either wholly or partly. Courts give the contract meaning through interpretation of the terms agreed by the parties. Parties, during the performance, may decide to waive their rights. Estoppel acts to compel the guilty party to meet its obligations.
References
Adams, A 2006, Law for business students, Pearson/Longman, Harlow.
Brunner, C 2009, Force majeure and hardship under general contract principles: exemption for non-performance in international arbitration, Wolters Kluwer Law & Business, Austin.
Whincup, MH 2006, Contract law and practice the English system with Scottish, Commonwealth, and Continental comparisons, Kluwer Law International, London.