What is claimed when someone breaches: loss suffered and gain not made

It is Chapter III of Title III of Book Four of the Civil Code of 2020, Articles 1167 to 1169. It says what can be claimed when someone breaches, how far that claim reaches, and what is paid where the breach was of a money debt.

Any creditor of an obligation breached, partially performed, performed late or performed badly. For the moratory interest of Article 1169, that the obligation be a money one and that the debtor has incurred delay.

• That there be breach, or partial, late or defective performance: the four cases Article 1167 names.Verified against the official source
• To claim from a good-faith debtor, that the damages were foreseen or foreseeable at the time the obligation was constituted.Verified against the official source
• For moratory interest, that the obligation consist in the payment of a sum of money and that the debtor has incurred delay.Verified against the official source

• Evidence of the daño emergente and the lucro cesante claimed: the Code names both heads but does not say how they are proven.
• The document of the obligation, because whether interest was agreed and what was foreseeable when it was constituted follow from it.

1. 1

   Step 1: The two heads that count

   Article 1167 says it in full: the indemnity for damages for the breach of the obligation, or for its partial, late or defective performance, comprises the daño emergente and the lucro cesante. The daño emergente is what left your pocket; the lucro cesante, what never came in.

2. 2

   Step 2: Four ways to breach, not one

   The list in the same article is worth rereading: breach, partial performance, late performance and defective performance. All four open the indemnity; nothing needs to have been left entirely undone.

3. 3

   Step 3: If you breached in good faith

   Article 1168 sets the limit: a good-faith debtor answers for the damages foreseen or foreseeable at the time the obligation was constituted. The moment of measurement is not the breach but the constituting of the obligation. What nobody could anticipate then is left out.

4. 4

   Step 4: If you breached wilfully

   The second paragraph removes the limit: in case of dolo, the debtor answers for all damages arising from their breach. No foreseeability filter. It is the biggest practical difference between being careless and doing it deliberately and in bad faith.

5. 5

   Step 5: When what is owed is money

   Article 1169 replaces proof of damage with a fixed rule: if the obligation consists in the payment of a sum of money and the debtor incurs delay, the indemnity, absent a different agreement, consists in the payment of the agreed interest and, failing agreement, in the legal interest. What was agreed governs first; the legal interest only comes in failing agreement.

6. 6

   Step 6: And here the Code does say what the legal interest is

   This is the fact missing from the interest articles earlier in Book Four and present here: the interest fixed by the Office of the Commissioner of Financial Institutions for the payment of judicial judgments is considered legal. The Code identifies it; the percentage is published by OCIF, and this guide does not reproduce it because the figure lives in the guide on interest over judgments, which is the one that gets updated.

7. 7

   Step 7: Simple interest, not compound

   The last sentence of Article 1169 settles a frequent argument: interest is computed simple and not compound. There is no interest upon interest by this route.

The indemnity is claimed before the Court of First Instance. The interest rate OCIF fixes for the payment of judgments is published by that office, and it has its own guide on this site. The Code names no other agency here.

• Claiming only what left your pocket: the lucro cesante also counts.
• Believing indemnity only arises where nothing was done: partial, late or defective performance counts too.
• Measuring foreseeability at the time of breach: it is measured when the obligation was constituted.
• Applying the foreseeability limit to a wilful debtor: in case of dolo they answer for all damages arising.
• Asking for legal interest where the contract agreed a rate: agreed interest governs.
• Claiming moratory interest without the debtor being in delay.
• Computing the interest as compound: the article says it is computed simple.
• Looking in the Code for the legal-interest percentage: the Code identifies the rate, OCIF publishes the figure.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov