The supply contract: periodic deliveries and their rules

They are Articles 1297 to 1302 of the Civil Code of 2020, the part of Chapter III of Title II of Book Five that defines the supply contract and fixes its duration, quantities, period, price and payment term.

Anyone receiving or delivering goods periodically or continuously under a contract governed by the Civil Code, or services rendered by an independent contractor in that same way.

• That the supplier bind itself to deliver goods periodically or continuously, and the supplied party to pay a price for each performance or series of performances.Verified against the official source
• That the agreed term not exceed ten years counted from the first delivery.Verified against the official source
• To end a supply with no agreed term and no agreement on the form: notice effectively served within a reasonable term never less than thirty days.Verified against the official source
• To pay, save agreement to the contrary, within the first ten days of the calendar month following the delivery.Verified against the official source

• The contract recording the term, the form of rescission, the quantities and the price: each of those has a different fallback rule if missing.
• A record of the first delivery, because Article 1298’s ten years run from it.
• The rescission notice, which the article requires to be effectively served.

1. 1

   Step 1: What supply is

   Article 1297: the supplier binds itself to deliver goods periodically or continuously to the supplied party, who binds itself to pay a price for each performance or series of performances. What distinguishes it from a one-off sale is periodicity or continuity.

2. 2

   Step 2: It may also be of services

   The second paragraph of the same article says it plainly: supply may also be of services rendered by an independent contractor.

3. 3

   Step 3: The ceiling: ten years

   Article 1298: supply may be agreed for a maximum term of ten (10) years, counted from the first delivery. The article does not say what happens to anything agreed above that ceiling, and this guide does not fill it in.

4. 4

   Step 4: Getting out of a supply with no term

   Where no term has been agreed, either party may rescind the contract in the form and terms agreed. That is: what the parties agreed about how it ends governs first.

5. 5

   Step 5: And if they did not agree how either

   The statutory floor steps in: absent agreement, the notice must be effectively served within a reasonable term that will never be less than thirty (30) days. Thirty days is the floor, not the ceiling: the article also requires the term to be reasonable.

6. 6

   Step 6: Who decides how much is delivered

   Article 1299: if there is no agreement on quantities, the supplied party determines them according to the needs of their personal or professional activity. And they will notify variations in the form and periods agreed.

7. 7

   Step 7: The delivery period belongs to both

   Article 1300, a single line: the legal or contractual delivery period is presumed to be in the interest of both parties. Neither may treat it as theirs alone.

8. 8

   Step 8: The price, if none was agreed

   Article 1301, two routes: according to the price of similar performances the supplier makes at the time and place of each delivery, or by the current value in the marketplace at the time and place of each delivery. Note that both are measured delivery by delivery.

9. 9

   Step 9: When payment is due

   Article 1302: payment of the price, save agreement to the contrary, must be made within the first ten (10) days of the calendar month following the delivery. It is a fallback rule: if the contract says otherwise, the contract governs.

Supply is agreed and performed between the parties; the Code orders no trip to any agency. If your supply is electricity, water or telecommunications service, those services are governed by their own statutes and regulations, with separate guides on this site, and they do not come from this chapter. Contract disputes are decided by the Court of First Instance.

• Agreeing a supply for more than ten years counted from the first delivery.
• Counting the ten years from signing rather than from the first delivery.
• Ending an open-ended supply with less than thirty days’ notice where there is no agreement on the form.
• Giving the notice without effectively serving it.
• Believing thirty days always suffices: the term must also be reasonable.
• As the supplier, setting the quantities where none were agreed: the supplied party determines them by the needs of their activity.
• As the supplied party, varying quantities without notifying in the form and periods agreed.
• Treating the delivery period as if it were in one party’s interest alone.
• Paying late: absent agreement, the period is the first ten days of the month following delivery.
• Applying this chapter to electricity, water or telecommunications service, which have their own regulation.

These are the government pages this guide is based on.

• Poder Judicial de Puerto Rico

  Poder Judicial

  bvirtualogp.pr.gov