KONCEPT RASKIDA UGOVORA ZBOG (MATERIJALNIH) NEDOSTATAKA ISPUNJENJA
THE CONCEPT OF TERMINATION OF CONTRACTS DUE TO (SUBSTANTIVE) DEFECTS OF PERFORMANCE

Summary/Abstract: In the article, we analyze the concept of termination of contracts due to substantive defects of performance of contractual obligations, as it is regulated in the federal Law on Obligations from 1978. The same concept, with minor or nonexistent adjustments, is accepted in the legislation of the succeeding states of Socialist Yugoslavia. Generally, the Law preconditions the termination of contracts due to substantive defects of performance with the need to allow additional reasonable period for proper performance of the contractual obligation. The contract, on the other hand, is considered terminated ex lege, following the lapse of the additional reasonable period. We note that the scope of the application of unilateral termination of contracts is, under the Law, either unclear either far too constrained. Further, we give a general overview of the concepts of termination of contracts due to defective performance in international contract law instruments. The conclusion that we draw is that the practice and the need for legal certainty require introduction of an explicit distinction between fundamental and non-fundamental non-performance of contracts. Although we regard the unilateral termination as more suitable, we nevertheless consider that it is possible to retain the ex lege termination, with the possibility for the creditor to maintain the contract into existence.

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