Contractual Liability under Syrian Law
When is a contracting party liable for breach of contract?
Contracts are among the most important means of regulating legal relationships between individuals and companies. They not only evidence the parties’ agreement, but also define the obligations each party must perform and the consequences of their breach. Contractual liability becomes practically important when a contracting party refuses performance, delays it, or performs defectively, giving the injured party the right to seek appropriate legal protection under the Syrian Civil Code.
To protect the stability of transactions and achieve justice, the Syrian Civil Code regulates contractual liability as the legal mechanism enabling the creditor to claim compensation from the debtor for damage resulting from the debtor’s breach of contractual obligations.
This article reviews the concept of contractual liability, the conditions for its establishment, its effects, and its principal applications in light of the Syrian Civil Code and judicial precedents.
What is meant by contractual liability?
Contractual liability is the legal obligation imposed on one contracting party to compensate the other for damage suffered as a result of non-performance of the contract, delay in its performance, or performance contrary to what was agreed.
This liability rests on a simple idea: a contract creates not only rights, but also obligations that must be respected; whoever breaches them bears the consequences of that breach.
When does contractual liability arise?
The mere existence of a contract is insufficient for contractual liability to arise; a number of essential conditions must be met.
First: the existence of a valid contract.
Contractual liability arises only where there is a valid and enforceable contract between the parties.
If the contract is void or nonexistent, contractual liability does not arise; tort liability may arise instead if its conditions are met.
Second: breach of an obligation by one contracting party.
A breach may take several forms, including:
Refusal to perform the obligation.
Unjustified delay in performance.
Partial performance.
Defective performance.
Non-compliance with agreed specifications.
Breach of ancillary obligations, such as the duties of care, confidentiality, or good faith.
The breach need not be total; it is sufficient that it affects the other party’s rights.
It is useful to distinguish between an obligation to achieve a result and an obligation to exercise due care. For an obligation to achieve a result, failure to achieve the agreed result is strong evidence of breach unless the debtor proves an external cause. For an obligation to exercise due care, the question is whether the debtor exercised the care that an ordinary person would exercise in the same circumstances.
Third: occurrence of damage.
A mere breach of contract is insufficient; it must cause actual damage to the creditor.
The damage may be:
Material damage:
Such as:
Financial loss.
Additional costs.
Damage to goods.
Project stoppage.
Loss of expected profits if they are a natural consequence of the breach.
Non-material damage:
Non-material damage may be considered in contractual liability where it is connected to the contractual breach and its elements are established. Its compensability remains subject to the provisions of law and the court’s assessment in light of the circumstances of each case.
Fourth: a causal relationship.
The damage must be a direct result of the debtor’s breach of obligation.
If the damage arose from an external cause beyond the debtor’s control, such as force majeure, the creditor’s fault, or the act of a third party, liability is excluded to the extent of that cause.
Forms of breach of contract:
Forms of breach vary according to the nature of the obligation. The most prominent include:
Non-performance:
For example, where a contractor refuses to carry out the project despite the performance date having fallen due.
Delay in performance:
For example, where a supplier delivers goods after the agreed period has expired, disrupting the buyer’s business.
Defective performance:
Such as delivering equipment or work that does not conform to agreed technical specifications.
Breach of secondary obligations:
Such as violating a confidentiality clause, refusing the cooperation necessary to perform the contract, or breaching the obligation of good faith.
Is breach alone sufficient to claim compensation?
As a rule, the injured party may claim compensation if the conditions of liability are met.
However, the courts also consider several factors, including:
The seriousness of the breach.
Whether it can be remedied.
Whether the creditor afforded the debtor a reasonable opportunity to perform.
The extent to which the creditor contributed to the damage.
Formal notice and its effect on contractual liability:
In many cases, the debtor is not deemed in delay, in the sense that gives rise to certain legal effects, until the debtor has received formal notice: an official demand to perform within a reasonable period, unless a legal provision, agreement, or circumstance makes notice unnecessary.
Formal notice aims to:
Enable the debtor to perform the obligation.
Establish the date of delay.
Give effect to the legal consequences of delay in performance.
Nevertheless, there are cases in which formal notice is unnecessary, such as where performance becomes impossible, the parties agree that it is unnecessary, or the law provides otherwise.
Means of protecting the creditor:
When the debtor breaches the contract, the creditor has several legal remedies, including:
Claiming specific performance where possible.
Claiming compensation for damages.
Seeking rescission of the contract if the breach is material.
Claiming the contractual penalty if stipulated.
Combining certain remedies where permitted by law.
The court determines the appropriate remedy in accordance with the circumstances of each action.
Practical examples:
First example:
A company entered into a contract to supply equipment within sixty days, but the supplier delivered it four months later without justification, causing the project to stop.
In this case, the supplier may be required to compensate for damage that was a natural and foreseeable consequence of the delay.
Second example
A person contracted with a contractor to construct a building to specified standards, but the contractor used materials contrary to those agreed.
The employer may seek repair of the defects, compensation, or rescission of the contract, depending on the seriousness of the breach and the circumstances surrounding performance.
When is contractual liability excluded?
Liability may be excluded if the debtor proves that the breach was attributable to an external cause beyond the debtor’s control, such as:
Force majeure.
An unforeseeable event.
The creditor’s fault.
An unforeseeable or unavoidable act of a third party.
The debtor bears the burden of proving that cause.
How can contractual liability be avoided?
To reduce the likelihood of disputes, it is advisable to:
Draft the contract precisely and clearly.
Define obligations and deadlines in unambiguous terms.
Document all amendments and subsequent agreements.
Give prompt notice of any circumstances impeding performance.
Observe the principle of good faith and cooperation during performance of the contract.
Have contracts reviewed by a legal professional before signing them.
Contractual liability is one of the most important safeguards established by the Syrian Civil Code to protect the stability of transactions and safeguard rights arising from contracts. In short, the existence of a contract alone is not sufficient to claim compensation: there must be a valid contract, a breach of a contractual obligation, actual damage, and a causal relationship between the breach and the damage, taking into account the effect of formal notice, external causes, and the circumstances of each case.
Conversely, preventing disputes begins before the contract is signed, through precise legal drafting, a clear definition of rights and obligations, and adherence to good faith throughout every stage of performance. A balanced and clear contract not only protects the interests of its parties, but also reduces the likelihood of resorting to the courts.
References:
Syrian Civil Code, Legislative Decree No. (84) of 1949, particularly the provisions relating to performance of obligations, formal notice, rescission, compensation, and contractual liability.
https://www.wipo.int/wipolex/ar/legislation/details/10917Syrian Legal Encyclopedia – the theory of obligations, effects of contracts, and civil and contractual liability.
https://arab-ency.com.sy/law
It should be noted that this overview is intended to set out the general rules of contractual liability and does not replace specialised legal advice when applying these rules to specific facts. The assessment of breach, damage, and causation varies according to the contract terms, circumstances of performance, and available evidence.