This page uses so called "cookies" to improve its service (i.e. "tracking"). Learn more and opt out of tracking
I agree
transnational law transnational law (lex mercatoria or international business law) and "Plurality of debtors" 2016-03-01 13:58:16 https://www.trans-lex.org/img/logo_ball.png
Principle

No. IV.6.11 - Plurality of debtors

Two or more parties who are liable for one and the same performance are (a) joint, or (b) partial debtors. Parties are liable as joint or partial debtors when they unite in making one and the same promise under the same contract or when they are liable for the same damage unless the contract or the law provides otherwise.

(a) Joint debtors

(aa) The creditor may claim performance from any one of the joint debtors until full performance has been reached.

(bb) If one joint debtor has performed, in kind or by way of set off, the liability to the creditor of the other joint debtor(s) is discharged to the extent of such performance or set-off. The same applies if one joint debtor concludes a settlement with the creditor.

(cc) As between themselves, joint debtors are liable in equal shares unless the contract or the law provides otherwise. If a joint debtor has performed more than his share, he may claim the excess from any of the other joint debtors to the extent of each debtor's unperformed share.

(dd) A joint debtor may invoke against the creditor any defense which another joint debtor can invoke, other than a defense personal to that other debtor. Invoking the defense has no effect with regard to the other joint debtors.

(b) Partial debtors

(aa) The creditor may claim from any partial debtor only that part of the performance for which he is liable and the partial debtor is bound to perform only to that extent.

(bb) Partial debtors are liable in equal shares unless the contract or the law provides otherwise.

Commentary
1 The Principle deals with two types of plural obligations, those incurred by joint debtors and those incurred by partial debtors. Whether a case of joint or partial debtorship is present depends on the terms regulating the obligation. Absent such terms, the obligation of two or more debtors to perform the same obligation or to pay the same damage is a joint obligation.

2 Subsection (a) stipulates that in case of joint debtors, which are frequently encountered in practice, the creditor may claim whole performance from any of the debtors without having to involve all the debtors. The joint debtor that is approached by the creditor may invoke any defense which another joint debtor can invoke, unless such defense is linked to the person of that other debtor and may therefore not be invoked by another debtor. Performance by one debtor, either in kind or by way of set-off, discharges the other debtors to the extent of such performance or set-off. As to the internal liability among themselves, Subsection (a) (cc) provides a default rule of equal sharing, unless the parties, expressly or by implication, have provided otherwise. A rule of unequal sharing may also be provided for by the law, for example in cases of damage claims in which one debtor carries a greater degree of fault or responsibility as compared to the other debtors. If one debtor has performed more than its internal share, he may recover the excess portion of this performance from any of the other joint debtors, but only to the extent of each debtor's unperformed share.

3 Subsection (b) stipulates that in case of partial debtors, the creditor may claim from each partial debtor only that part of the performance for which the debtor is liable. This means that the partial debtors carry separate liabilities vis-à-vis the creditor for their own shares. Non-performance by one debtor does not affect the obligations of the other partial debtors. The partial debtor may not invoke defenses which are available only to other partial debtors. Absent a contrary indication in the contract or in the law, partial debtors are liable vis-à-vis the creditor in equal shares.

Please cite as: "Commentary to Trans-Lex Principle , "
References
Arbitral Awards
Model Laws
Principles / Restatements
Contract Clauses
1. Joint Liability
Construction & O&M Contract

If the Contractor is a joint venture of two or more persons, all such persons shall be jointly and severally bound to the Purchaser for the fulfillment of the terms of the Contract and shall designate one of such persons to act as a leader with authority to bind the joint venture. The composition or the constitution of the joint venture shall not be altered without prior written consent of the Purchaser.
1997
Loan Contract
Expenses; Indemnification for Litigation
(...) The Parent Guarantor and the Borrower shall be jointly and severally obligated to indemnify each Lender and hold each Lender harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind (including, without limitation, the reasonable fees and disbursements of counsel for any Lender in connection with any investigative, administrative or judicial proceeding, whether or not such Lender shall be designated a party thereto) which may be incurred by any Lender (or by the Administrative Agent in connection with its actions as Administrative Agent hereunder), relating to or arising out of the Financing Documents or any actual or proposed use of the proceeds of the Loans hereunder, provided that no Lender shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction.
2011
Lease Contract
Guarantor jointly and severally liable with Tenant
The Guarantor hereby further covenants with the Landlord that the Guarantor is jointly and severally liable with the Tenant (whether before or after any disclaimer by a liquidator or trustee in bankruptcy) for the fulfilment of all the obligations of the Tenant under this Agreement and agrees that the Landlord in the enforcement of its rights hereunder may proceed against the Guarantor as if the Guarantor was named as the Tenant in this Agreement.
2010
A project of CENTRAL, University of Cologne.