Ending the contract without suing: the six rules

It is Article 1255 of Chapter VI of Title I of Book Five of the Civil Code of 2020. It recognizes that, in every contract with reciprocal performances, the performing party may treat it as rescinded on their own if they follow the procedure the article itself sets.

The performing party of a contract with reciprocal performances, where the other fails to perform a principal obligation and is in delay. The same rules apply, as relevant, to supervening and non-culpable impossibility.

• That the failure be of a principal obligation: the implicit power opens for that, not for any breach.Verified against the official source
• That the breaching party be in delay.Verified against the official source
• Requiring them to perform, under warning of rescinding the contract totally or partially, including the damage for delay.Verified against the official source

• The record of the requirement with the warning to rescind, and of its expiry date: the rescission operates when the requirement expires.
• Evidence that the other party was in delay before the requirement.

1. 1

   Step 1: The power need not be agreed

   Article 1255 opens like this: in contracts with reciprocal performances the power to rescind the contract extrajudicially for failure to perform a principal obligation is implicit. Implicit means it is there even if the contract does not mention it. And extrajudicially means no court is needed to exercise it.

2. 2

   Step 2: First: they must be in delay

   Rule (a) is the doorway: the breaching party must be in delay. When delay begins is decided by another chapter of the Code — as a rule, from when performance is demanded judicially or extrajudicially, with four exceptions — and it has its own guide on this site.

3. 3

   Step 3: Second: the requirement with a warning

   Rule (b) is the one most often missed: the breaching party must be required, under warning of rescinding the contract totally or partially, to perform their obligation, including the damage for delay. Demanding performance is not enough: the warning that the contract will otherwise be rescinded must be there. And the requirement includes the damage for delay, not just the performance.

4. 4

   Step 4: How long to give: the article does not say

   And this guide does not invent it. Article 1255 requires the requirement and fixes that rescission operates when it expires, but sets no duration for it. Any concrete figure you read elsewhere does not come from this article.

5. 5

   Step 5: What is already performed is not undone

   Rule (c) protects what was done: partially performed performances are not rescinded and remain firm. Rescinding does not erase what each side already carried out.

6. 6

   Step 6: When it is rescinded

   Rule (d) fixes the instant: the rescission operates at the moment the requirement expires. No second letter and no judgment are needed; the expiry is what triggers it.

7. 7

   Step 7: What effect it has

   Rule (e) refers out: the rescission produces the effect this Code provides for a fulfilled resolutory condition. That effect is regulated elsewhere in the Code and we did not read it for this guide, so you will not find the detail of restitutions here.

8. 8

   Step 8: Rescinding does not close the door to claiming

   Rule (f) says it in six words: performance and compensation for damages may be claimed. And the article closes by widening its reach: these rules apply, as relevant, even to cases of supervening and non-culpable impossibility of performance.

The requirement is made directly to the other party; rescission needs no judicial authorization. The Court of First Instance comes in if it is disputed that rescission lay, or to claim the performance and damages rule (f) allows joining. The Code names no agency here.

• Treating the contract as rescinded without the other party being in delay.
• Demanding performance without warning that the contract will otherwise be rescinded.
• Forgetting to include the damage for delay in the requirement, which rule (b) asks for.
• Rescinding for a breach that is not of a principal obligation.
• Believing a court is needed: the power is extrajudicial and implicit.
• Trying to undo what was already performed: partially performed performances remain firm.
• Counting the rescission from the letter rather than from the expiry of the requirement.
• Thinking rescinding bars claiming damages: rule (f) allows performance and compensation.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov