The modality of performance is conditioned on the letters and spirits of the contract. This can be gathered from Art.3172 (1). Furthermore, the “unless otherwise agreed” proviso of Art. 3173 stresses on the fact of giving the chance to the parties of an administrative contract in determining the manner of performing the contract. Hence the law itself gives priority to the contract to which parties have the freedom to form and determine its content.

In the absence of a contractual stipulation, however, the law authorizes the contractor to “… choose the suppliers for the purpose of buying materials and things necessary for the performance of his obligations.” This is as to Art.3173 (1). Still in the absence of an agreement Art.3173 (2) empowers the contractor to” …choose the workmen or employees to perform such obligations under his responsibility.”  As you might guess administrative contracts do not end where they begin. There are large projects which require special expertise. Among other things, for efficiency and quality reasons it might be important to invite parties other than the original ones to the contract. These people include the sub-contractor, the architect and the sub-architect.

Time of Performance

Implicit to the freedom of contracts principle, parties to any contract have the freedom to determine the time when they execute their obligations. Thus “Payment shall be made at the agreed time” of Art.1756 (1) is the principle. Art 3174(1) reiterates this very principle when it says “each contracting party shall perform his obligations within the time fixed by the contract.” What if such time is not fixed? Well, Art. 1756(2) says “… payment may be made forthwith.” “When is forthwith”? Does it mean immediately?

It is not “immediately” in our case because Art.3174 (2) says “failing a specific provision in the contract each contracting party shall perform his obligations within a [reasonable time].” We say a “reasonable time” proviso is more reasonable than a “forthwith” one. Why? The law still has the spirit of sensitiveness with regard to time matters when it prohibits administrative authorities from unilaterally imposing a time on the contractor. Art. 3175 reads:

“The administrative authorities may not impose unilaterally on the other contracting party a time which has not been agreed upon for the performance of his obligations unless they may under the contract fix such time by means of requisition orders”.

Accordingly administrative authorities are legally insulated from the practice of taking contractors by surprise. This prohibition is even against the prerogatives of administrative contracts such as one under Art. 3179. Art. 1756(3) invites another instance of requiring performance. As such, “payment shall be made whenever a party requires the other party to perform his obligations.” But should this be dependent on will and whim of the requiring party? No! The law provides standards under Art.1757. Let us see Art. 1757(1)

Only a party who benefits by a time limit having regard to the forms or nature of the contract or [who has performed] or [offered to perform] his obligations [may require] the other party to carry out his obligations under the contract.

Therefore, to require one should perform or at least offer to perform his/her obligations. To require the other to perform his/her obligations, one should either perform his/ her obligations or at least show his/her preparedness to perform the obligations.

This principle is the so called “exceptio non adempleti contractus.”

As a natural consequence of course, one party is entitled to refuse to perform where the other party clearly shows that he will not perform his obligations or where the insolvency of the other party has been established by the court.” [Art. 1757 (2)]

This scenario is excepted however under Art. 1759. (You may refer this same Article)

One other exception of the principle is available under Art.3177. Thus unless the non- performance of the contract is impossible, the contractor may not avail himself of Art 1757(2). Let us read the full text of 3177.

1. The non- performance by administrative authorities of their obligation shall not entitle the other party to fail to perform his obligations unless it makes impossible the performance of such obligations.

In other cases, the other party may not avail himself of the failure by administrative authorities to perform their contractual obligations .Now, please read Art.1757 (2). What do you understand?

Policy Considerations

Under this title we will briefly consider the policy considerations that lie behind administrative contracts. Even though behind each rule and for that matter behind administrative contract law generally we have a policy consideration, taking Articles 3177 and 3178 will basically show what is at stake if we are not going to treat administrative contracts as specialties.

Article 3177:

The essence of this article is that the contractor may not refuse to carry out his/her obligations, simply because the administrative authority has failed to carry out its commitments. Because administrative authorities are into a contractual relationship representing the public, pursuing such an interest solely based on general contract provisions will jeopardize the general interest. Imagine a contractor that is at every liberty to refrain from supplying a service to the public for failures on the part of authorities to effect the necessary payments. In this case the law has opted to oust the contractor from the normal right of withholding once own performance while on the other hand enabling administrative actions against unreasonable authorities.

Article 3178

What is a fiscal debt? Why is fiscal debt not subject to set-off? Is there any possibility of setting off debts under administrative contracts?

Art 3178 talks of the possibility of setting off debts. But it automatically rules out set off in the case of fiscal debts. One example of fiscal debt is the debt that we owe to the state in the form of tax. Art.3178 accordingly bars anyone from setting off such a debt to extinguish a debt. We cannot set off the debt we are owed to against the tax that we owe to the public. Fiscal debts such as tax should be performed without preconditions. What is the concern of Art.3178? Its full text reads as follows:

“Set off may not be invoked by a person contracting with the administrative authorities except in the case of debts other than (fiscal debts)”.

The general spirit of the law with regard to set off is expressed under Art.1833 (b) which reads as “set off shall occur regardless of the cause of either obligation except where the obligation is owing to the state or municipalities”. But Art 3178 further explains the obligations that we owe to the state by saying that they are “fiscal debts”.