Part Ⅱ Obligations
Chapter I General Provisions
Section 6 - Extinction Of Obligations
Sub-section 2 Performance
When performance has been made to the creditor or to his qualified representative in conformity with the tenor of the obligation, and has been accepted, the obligation is extinguished.
The bearer of a receipt signed by the creditor is deemed to be the qualified representative of the creditor, except the debtor knew or was negligent of not knowing that the bearer was not qualified to receive the performance.
If the performance is tendered to a third party and has been accepted by him, the following rules shall apply:
(1) Performance effects if the creditor has acknowledged it or if the third party subsequently has acquired the claim of the obligation;
(2) Performance effects, if the performance had been accepted by the quasi possessor of the claim, and the creditor did not know that he is not a creditor;
(3) In cases other than those specified in the preceding two sections, the performance effects only to the extent which the creditor has been benefited thereby.
An obligation may be performed by a third party unless otherwise agreed by the parties or accorded with the nature of the obligation.
If the debtor objects to the obligation being performed by a third party, the creditor may refuse such performance; but if the third party has the interest of conflicts on the performance of the obligation, the creditor shall not refuse.
If a third party who has interest on the performance of the obligation has performed the obligation, the third party is subrogated to the rights of the creditor to the amount of the performance, but such third party shall not exercise them to the detriment of the creditor.
The provisions of Articles 297 and 299 shall apply mutatis mutandis to the subrogation specified in the preceding article.
Unless otherwise provided by the act or by the contract or by the custom, or unless otherwise decided by the nature of the obligation or other situations, the place of performance shall be decided as follows:
(1) If the object of the obligation is to deliver a specific thing, performance shall be tendered at the place where such thing was at the time when the contract was constituted.
(2) The other obligations shall be performed at the place of the creditor's domicile.
Unless otherwise provided by the act or by the contract, or unless otherwise decided by the nature of the obligation or other situations, the creditor may demand the performance at any time and the debtor may also perform at any time.
If there is a deadline for performance, the creditor may not demand the performance before the deadline; but if there is no contrary expression, the debtor may perform before the deadline.
Unless otherwise provided by the act or by the contract, the costs of performance shall be borne by the debtor. But if the creditor has increased the costs of performance by changing his domicile or by any other acts, the additional costs shall be borne by the creditor.
A debtor is not entitled to perform in part. However, the court may, taking the condition of the debtor into consideration, allow him to perform by installment or to delay his performance in such reasonable time as may not greatly prejudice to the interests of the creditor.
When the court allows the debtor to perform by installment, the creditor may claim for the whole prestation if the debtor has delayed any installment.
In case the prestation is indivisible, the court may, subject to the provision of the first paragraph, allow the debtor to delay his performance.
If the creditor has accepted other prestation in lieu of the prestation originally agreed, the obligation is extinguished.
When the debtor, for the purpose of satisfying his creditor, has assumed a new obligation towards him, the original obligation will not be extinguished, if the new obligation is not performed, unless otherwise agreed by a contrary expression of the parties.
If a debtor is bound to the same creditor to perform several obligations of the same kind, and if the prestation performed is insufficient for discharging all the obligations, it is the person tendering the performance to specify the obligation to be discharged at the time of the prestation.
If the person tendering the performance has not made the specification provided in the preceding article, the obligation to be discharged shall be specified as follows:
(1) If a obligation has been due, it shall be discharged first;
(2) If all of the obligations are due or if none is due, the obligation which affords the creditor the least security shall be discharged first; if all the obligations are equally secured, the obligation which will be the most favorable to the debtor if performed shall be discharged first; if all the obligations will be equally favorable the debtor if performed, a obligation which matures first shall be discharged first;
(3) If all the obligations are equally favorable to the debtor and all mature at the same time if performed, the obligations shall be discharged proportionately.
The prestation tendered by the person tendering the performance shall be taken to discharge the expenses first, then the interest and finally the capital. The same rule shall be applied when an obligation is performed according to the provisions of the preceding two articles.
The person tendering the performance may demand from the person accepting the performance the delivery of a written receipt.
In case of payment of interest or other periodical performance, if the creditor gives a receipt for one term without any reservation for the other terms, it is presumed that he has received performance for the previous terms.
If the creditor gives a receipt for the capital, it is presumed that he has received the interest.
If the deed to the obligation has been returned, it is presumed that the obligation has been extinguished.