Understanding Loss of Earnings, Compliance, and Payment Methods
Loss of Earnings (Damages)
According to Article 1106 CC, loss of earnings refers to the profit a creditor has ceased to receive due to the debtor’s responsibility. This loss relates to a patrimonial injury, specifically the loss of a net increase in assets that would have been obtained as a result of a breach, unlawful act, or harm imputed to a third party.
The Court requires a careful and restrictive approach when assessing evidence of the existence of profits, especially regarding the “quantum” (amount). However, it must establish a causal link between the wrongful act and the failure to receive the benefit, profit, and its reality. The injured party (usually the plaintiff) bears the burden of proof. If the case relates to loss of profits received by a company, standard testing methods such as accounting records and tax returns should be used. An expert in the matter can issue a report to prove the likely amount of lost profits.
Quantification often seeks moral damages, consequential damages, and lost profits. Damage is composed of two elements: damages and lost profits, representing the injury and property loss suffered by the creditor, and the benefits they have ceased to obtain.
Compliance Surrogates
Satisfaction of Creditor: This refers to alternative methods, agreed upon or planned, that replace or supplement the performance in a real sense. German doctrine refers to these as “surrogates of compliance.” These methods act as a substitute for payment and play a role in discharging or satisfying the debt (Arts 1177, 1178, 1179).
1) Offering Payment and Appropriation
Within the framework of powers that the law protects the interests of the debtor in the mandatory relationship, is that of exemption from the obligation when the obligor has been busy and preoccupied in satisfying the debt, and payment has not been able to implement the law provides a mechanism for this: appropriation, art 1176 CC
Phases: Offer of payment and deposit (which only operates on the obligations of giving). Within the autonomy of the will, it is not up to the creditor’s decision whether to accept the payment; they are obliged to accept. The consequence of not doing so is standing at the time of the debtor to enter. It must be announced prior to the interested party and be done without conditions or reservations. Whether they can enter property is questionable at the doctrinal level and must be notified to the interested party.
Effects: Art 1180 CC: The debtor may ask the judge to accredit payment of the debt. The expenditure of the appropriation shall count the creditor.
Appropriation not preceded by offering payment: The Act clarifies certain cases: absent creditor, creditor unable to receive payment, existence of a litigation over credit x uncertainty in who is the real creditor.
2) Payment in Kind (Dation in Payment)
In the strict sense, this involves delivering a thing (dati) instead of what was agreed upon. The provision is one that runs on the provision aliud annum pro or different provision. It is one of the causes of failure and consequent inability of the object of buyer dissatisfaction, as the subject unsuitable for the purpose for which it is intended. Solutorio effect is tb
3) Transfer of Property to Creditors
The debtor can settle their debt to the creditor by yielding assets through a transfer agreement (the debtor irrevocably holds its creditors for the sale and administration of assets that have been assigned). Direct transmission of goods Art 1175: free the debtor of its responsibilities x the liquid amount of the assets transferred.
- Giving is a business pro solute, because the debt is extinguished with the transmission.
- Transfer of assets is a pro solvendo business, that is made for payment, since the extinction will occur, in whole or in part, after settlement and destination of the monies received to the satisfaction of their creditors.