One of the points where contracts prove to be laws and not mere agreements is upon non performance. Contracts are not mere agreements because upon non-performance they have legal effect- an effect sanctioned and enforced by the law.
We speak of non- performance only when the obligations undertaken by the parties are not executed. Otherwise performance extinguishes obligations. If obligations are not performed in accordance with the spirit and letter of the contract then the non-performing party will be, as the case may be forced to personally perform or to pay damage to neutralize the costs of non-performance. These are not the only consequences of non-performance. Let us consider the effects of non-performance under our law.
2.3.1 Effects of non-performance
Depending on circumstances, a contracting party is entitled to take measures independently or cumulatively. What are the measures under the law? As per Art.1772, requiring the enforcement of the contract or the cancellation of the contract as of self help is authorized. “In addition,” it is also possible to require compensation for damages sustained because of non-performance.
But these rights under Art.1771 should be preceded by one condition of the law and that is giving notice. Let us briefly consider these rights under the law.
Even though the special rules that regulate non- performance of administrative contracts only presume and do not clearly prescribe the necessity of putting a non-performing party in default with notice the general rules that regulate contracts regardless of their genre emphasize on the necessity of giving notice. Before considering basic issues that circumvent notice let us discuss the importance of giving notice.
As a matter of law default notice puts the non-performing party in default. The notice in this sense is an indispensable proof of the intention of the non-performing party. Notice plays this role because it helps the performing party to solicit the real intention of the party to be put in default.
Not less important, notice signifies the right time to determine transfer of risks. Date of notice denotes the date of transfer of risks.
If so, the law prescribes in favor of default notice as a condition to be complied with in case one is going to implicate a non- performing party to this end that he/she is not performing. Art.1772 underlines the issue as:
“A party may only invoke non- performance of the contract by the other party after having placed the other party in default by requiring him by notice to carry out his obligations under the contract”.
This being the rule, Art.1775 excepts the general requirement of notice under Art 1772. On the face of the situations envisaged under Art.1775, the law withdraws the requirement of giving notice Generally, we have four conditions under Art.1775 If the obligation is to refrain from doing something, if the obligations assumed are those to be carried out within a fixed period of time and when they are not carried out within this fixed period, where the debtor clearly shows in writing his/her intention not to perform or when the parties have an agreement not to give notice then the law out rules the importance of giving default notice.
What does the picture look like in the empire of administrative contracts?
Art.3196 for example mentions notice only occasionally while it is prescribing about “interest for delay”. That is why initially we said administrative contract rules presume and only presume but do not legislate on notice issues. This clearly shows that the general rules of notice are applicable by default no matter what form the contract takes. Even in the absence of the inference we made, the master draftsperson’s commentary on the subject matter makes the point clear. As such he held “Articles 3194-3200 present us Articles 1771-1805 by further elaborating and innovating them”. None the less, Art. 1775 inspires us about the contract that will possibly determine the fate of default notice. With the exception of Art.1775(c) the other provisions under Art. 1775 are inspiring of the content factor. Another instance where default notice is mentioned, in the mean time of course, is Art.3198. These two occasions under Articles 3196 & 3198 are indicative of the effectiveness of the general provisions of contract.
But notice that the terms of the contract will however determine the necessity or other wise of notice.
The Ministry of Agriculture has recently entered into a contract with a Chinese construction company to construct a “Millennium Hall” to be operative upon the beginning of the new millennium by entertaining on this first day a big music festival. Unfortunately the company was incapable to do so. Rather if given three months the engineers are pretty sure to finalize the work. They know this standing on 1 Pagume 1999. Should the Ministry give default notice?
As a reminder let us consider some issues in lieu with notice. The first being the form of notice, the consequent will be a discussion about time of notice.
126.96.36.199.1Form of Notice
The law is not that much concerned with the form of notice Rather the motive of the law of notice is assuring the intention of the creditor in unequivocal manner. Thus if we are in every position to meet this desire of the law our notice may take any form. Art.1773. further says:
“Notice shall be by written demand or by any other act denoting the creditor’s intention to obtain performance of the contract.”
Accordingly, we may confidently say:
- Notice may take any form
- Notice should clearly show the intention of the creditor.
- Notice may not be given unless the obligation is due
One question worth asking however is, “Is it “important to prove notice”? Well, as was said, the form of notice and strict adherence to such form is not a question of law. However it could be a good question of fact. Stated otherwise, the law does not force us to follow one or another form. However, issues of proof oblige us to give a notice which later on can be adduced without difficulty .Therefore, for good or for bad it is wise to give default notice whenever important, in the wisest form possible.
188.8.131.52.2 Time of Notice
In general, creditors have this right of fixing a period in the notice they give. Such period puts the time frame within which the creditor expects performance of the contract. Under such notice the creditor will clearly show his intention not to accept performance after the lapse of the stipulated period. The law does not fix such a period as it does not prescribe a certain form of notice. Never the less, the law does not hesitate to attribute a minimum content to the notice. To this end such a notice is expected to be “reasonable having regard to the nature and circumstances of the case”.
184.108.40.206 Forced Performance
As a concept, forced performance denotes the possibility of physically forcing the debtor to perform the stated obligation, to deliver a property, to pay money or to undo what was done contrary to the terms of the contract. The word ‘forced performance’ implies the compelling of the debtor to discharge his/her obligation. It refers to performance directly imposed on the debtor through the execution process. Thus, it takes place through court order/judgment. However, it is important to note that the court may not order forced performance merely because the creditor has requested so. The court has the power to order forced performance or decline considering the requirements set by the law. Article 1776 provides the conditions for ordering forced performance or otherwise. It reads as follows:
Specific performance of a contract shall not be ordered unless it is of special interest to the party requiring it and the contract can be enforced without affecting the personal liberty of the debtor.
Pursuant to this provision the requirements for the application of forced performance are (1) the creditor’s special interest, and (2) the preservation of the debtor’s personal liberty. These requirements are cumulative not alternative.
The first thing that the court shall determine is whether performance is ‘of special interest to the creditor’. The presence of special interest can be inferred from the importance of the obligation required to be discharged towards the creditor and its possibility of being discharged otherwise. If forced performance has no special advantage to the creditor, then the court may not order it.
Then, the court shall consider whether forced performance affects the personal liberty of the debtor. A person cannot be deprived of his liberty for failure to discharge contractual obligations. Thus, if forced performance affects the personal liberty of the debtor, the court shall not order it.
The two conditions must be fulfilled for the court to order forced performance. Here are some examples. Assume, a monopolistic entity which supplies vital goods (e.g. water or electricity) or services (e.g. postal or telecommunication) to customers cuts of its supplies. In this case the goods or services are so essential, and the customer cannot get them from other sources. Thus, it may be said forced performance is of special interest to the creditor, i.e., customers. At the same time, order the entity to provide these goods or services cannot deprive the entity’s liberty (as only physical persons enjoy liberty). So, in this case the court may order forced performance.
In addition to forced performance, the law provides substituted performance as a remedy for non-performance under articles 1777 and 1778. Substituted performance is made at the expense and cost of the debtor.
Art. 1777. –Obligation to do or not to do.
(1) The creditor may be authorized to do or to cause to be done at the debtor’s expense the acts which the debtor assumed to do.
(2) The creditor may be authorized to destroy or to cause to be destroyed at the debtor’s expense the things done in violation of the debtor’s obligation to refrain from doing such things.
Pursuant to sub-article 1, the court may, upon creditor’s application, authorize the creditor to do or to employ third person to do what the debtor has failed to do at the cost and expense of the debtor. Pursuant to sub-article 2 the creditor may be authorized to destroy or to employ third person to destroy the things done by the debtor in violation of his obligation not to do such things. The cost and expense of such destruction shall be borne by the debtor. Court authorization is, however, indispensable for substituted performance. With out such authorization, the creditor can not recover the costs and expenses from the debtor. Articles 2330 and 2333 on law of sales are in the same line with concepts under Arts.1776 and 1777(1). Under Art. 2330, the buyer may not demand forced performance in conditions where purchase in replacement is possible for the buyer. The same is true for the seller when the buyer refuses to take delivery and pay the price. Here, the seller may not demand forced performance in circumstances a thing in respect of which a compensatory sale is imposed by custom.
Sub article (2) of this provision confirms substitute performance of obligation not to do. The creditor can destroy or get destroy the things made in violation of the obligation to refrain from doing such things with court authorizations at the debtors expense.
Article 1778 also deals with substituted performance in respect of obligation to deliver fungible things. It reads:
Where fungible things are due, the creditor may be authorized by the court to buy at the debtor’s expense the things which the debtor assumed to deliver.
Where the fungible things are due the debtor may have substituted performance be made up on court authorization to buy the thing at the debtors expense.
The provisions of Articles 1779-83 are also aspects of substituted performance but they apply in different circumstances. When the debtor is ready to perform but unable to discharge his obligation either because the creditor refuse to accept performance or the creditor is unknown or uncertain or where delivery cannot be made for any reason personal to the creditor. In all these situations, the debtor has no fault; ready to perform but prevented from performing. Thus, the law allows him to discharge his obligations by depositing the thing or money at such place as instructed by the court. This will relieve the debtor from his obligations. However, the deposit shall be made upon court order and the debtor shall obtain a court confirmation as to the validity of the deposit.
The issue of forced performance is sensitive because it involves the physical coercion of a personality. The jurisprudence behind it emphasizes that contracts are not servitudes so they should not go to the extent of subjugating the personal liberty of a person. The concern therefore is freedom, the fear being making the debtor the slave of the creditor.
Therefore, forced performance is a situational remedy available if certain conditions are met.
Unless the performance in that way is of special interest to the party requiring specific performance and unless the contract can be enforced without affecting the personal liberty of the debtor, the court cannot order the specific performance of a contract.
Two conditions in a cumulative way should be fulfilled if the court is to order specific performance.
In no case however forced performance can exist as an instance of self help. This one should be taken as a third condition.
When thinking about specific performance, we have to think of a court weighing circumstances on the basis of Art.1776.
Turning to administrative contracts we have Art. 3114. As of rule, Art.3194 (1) says “the court may not order the administrative authorities to perform their obligations.” As of prerogative, Art 3194(2) provides administrative authorities with the choice of paying damages or performing their obligations.
What is wrong with forcing administrative authorities to “institutionally” carry out their obligations? Does it amount to subjugating their liberty? What is their liberty?
Under Art.1776 the nature of the obligation determines the order of the court. If the obligation is to be carried out and if this is to the special interest of the creditor and if carrying out the obligation does not jeopardize the personal liberty of the debtor the court shall order the debtor to personally carry out the obligation.
The “personal liberty” requirement cannot be extended to administrative authorities at least for two reasons. In the first place administrative authorities have “institutional” not “personal” trait and the law speaks of “personal liberty”. In the words of John Salmond, not all the rules that apply to natural persons need be extended to corporations. Secondly, the law under Art.3194 (2) tacitly admits that the performance of an obligation by the administrative authorities does not jeopardize their liberties. The law puts the performance of obligations at the mercy of the administrative authorities.
Is Art 3194(1) amenable to manipulations? For example assume Ethiopian Roads Authority signing an agreement with BXC Construction Company on the terms that ERA will cover the costs and fees of the work while BXC Co. undertakes the obligation of designing the work, supplying construction materials and workman and constructing a bridge. ERA fails to cover the costs and fees. Can BXC Co. apply to the court requiring the same to order forced performance? Why? Why not?
Art. 3194 is operative on the assumption that administrative authorities are debtors. What if the contractor is the debtor? Can we force him to perform the contract personally?
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.
- 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?
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.
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.
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”.
Normally performance includes an act of giving, doing or not doing as the case may be in view of the creditor, the creditor’s agents or anyone who is to benefit from under the contract.
Performance of a contract under normal course of things extinguishes the obligation. Upon performance the respective obligations of the parties to the contract will come to an end.
In principle, a contract is binding upon the parties to it as if it is a law. Art 1731(1) to this end prescribes as:
“The provisions of a contract lawfully formed shall be binding on the parties as though they were law”
Thus the first source of obligation will be the contract duly formed by the parties.
The parties to an administrative contract are the administrative agencies and the contractors. Contracts validly formed by the parties will try to address the who? Whom? And how? questions that are associated with the contract and the consequent performance.
Who should Perform?
The contract can be performed by the debtor, his agent or by a person authorized by court or law (Art. 1740(2). The persons authorized by law are tutors, liquidators, trustees and a person authorized by court is either a curator or an interested creditor who wants to save the rights of the debtor by performing his obligation. However, the law never mentions about performance of a contract by a third party who is not authorized by debtor, court or law.
Never the less, we can easily argue that if the creditor accepts the payment, the debtor has no right to stop a third party from performing the obligation since the creditor has a right to assign his right to a third party without the consent of a debtor (Art. 1962). In such case, if the debtor insists on paying the debt, he can pay it to the person who has already paid the creditor (Art. 1824). The law refrains from including unauthorized third party in the list of Art 1740(2) since assignment of a right is a contract. A creditor is not duty bound to receive payment from a person not authorized by debtor, court or law. He/she is free to accept or reject such payment without any effect on his/her right against the debtor.
However, the creditor may sometimes insist that the debtor himself should perform the obligation (Art. 1740(1). This is when the contract or the law expressly provides that the debtor shall perform the contract personally. For example, Ethiopian Labor law provides that the employee should perform the contract personally.
The second case where personal performance becomes necessary is when the creditor proves that personal performance is essential to him. The creditor can prove such only when the obligation is obligation to “do” of a professional nature or art. For example, a lawyer, or a doctor can not authorize a duty which he agreed to do. Moreover, a musicians, painters, Poet, actor, dancer etc cannot authorize someone to perform his obligation.
Generally, the creditor should accept performance either from the debtor, his agent or person authorized by a court of law unless he proves that personal performance of the contract is essential to him by the contract or a the law expressly provides personal performance.
The rule under our law is available under Art.1740 (2). According to this provision “… the obligations under the contract may be carried out by a third party so authorized by the debtor, by the court or by law.”
Thus a contract may be performed by anyone, not only and solely by the debtor but by an gone. We require the debtor and only the debtor to perform the obligations under the contract if “… this is essential to the creditor or has been expressly agreed.” (Art.1740(2)] if the creditor benefits only if the debtor personally performs the obligation then only the debtor personally should perform the obligations under the contract. On the other hand if there is an express agreement to this effect of performing the contract personally by the debtor then even though not essential to the creditor still the obligations should be executed by the debtor.
Does this rule squarely fit to administrative contracts?
Assume ERA (Ethiopian Roads Authority) enters into a contract with XYZ construction company to construct a bridge on river Abbay. Can XYZ Construction Company pass the obligation to CRBC?
- If among other things XYZ was picked by ERA for the artistic genius of the company then the design cannot be performed by any other company. (1740(1))
- If the contract with ERA is to construct a bridge and nothing else, XYZ construction may authorize CRBC. (1740(2)]
Art 3172(1) says “… contracting parties shall perform their obligations in a manner provided in the contract”. Based on this provision contracting parties may agree to the effect of carrying out obligations personally. Even the last sentence which reads “… or has been expressly agreed” authorizes parties to have the said stipulation of imposing an obligation on one of the parties to enable personal performance of the obligation.
What is wrong if a person bus is not authorized by the debtor, the court or the law performs an obligation? In the case of administrative contracts, we have Articles 3201-3206.Let us briefly consider the case together with for who to perform sub-section.
For Who to Perform?
Performance can be made, according to Art. 1741, to the “creditor or a third party authorized by the creditor, by the court or by law to receive it on behalf of the creditor.” Therefore, the debtor should take every caution so as not to pay either for an incapable creditor or to an unqualified person.
With respect to incapacity, the law is referring to one whose cause is interdiction or absence for that matter. This is so in association with physical persons. But administrative contracts involve parties that are juridical persons. Thus at least one of the parties to an administrative contract is a juridical person. Accordingly the incapacity consideration with regard to juridical persons is a different one. Thus it cannot be insanity or senility. That is, the causes of incapacity that we know with respect to phssical persons are not important here. Rather we should look for the causes somewhere else. Can you mention any ground of incapacity for a juridical person? Or rather from where does a juridical person derive its capacity?
A juridical person derives its capacity from the law or the instrument that establishes it. Establishment, registration and license are some of the sources which confer capacity. As the case may, be the law prescribes how juridical persons derive their capacity. Accordingly, they may derive their capacity from a proclamation or a memorandum of association. Proclamations are usually sources of capacity to administrative authorities while a memorandum of association serves to establish enterprises. Therefore a juridical person lacks capacity when it is not constituted in accordance with one of the ways mentioned above. This is not the only way. Administrative authorities may lack capacity after due constitution. This usually results following the revocation of license, dissolution or even amalgamation. Paying to an administrative authority which has undergone through one of the above processes will amount paying to an incapable creditor.
When does one pay to an incapable administrative agency? Can you imagine a situation when an administrative agency enters into an agreement with full capacity but afterwards lacks its capacity?
If this happens, the debtor cannot validly discharge his/her debt by paying to such an entity.
Most of the time the obligations incurred on the part of the debtor involve non-monetary obligations. Non-monetary obligations are susceptible to manipulation because it is difficult to gauge in terms of objective standards such as numbers. So the general contract provisions might not be properly operative under administrative contracts. Let us briefly discuss provisions of the law that govern the manner of performing administrative contracts.
Bona fide performance
One of the pillars of contractual relationships is good faith .Good faith in turn is something expressed and not legislated-better practiced and inferred and not derived.
Because bad faith or good faith, as the case may be, is a state of mind which hardly can be implied without being expressed, one should seek the same from circumstances.
One outlet of good faith during performance will be carrying out our obligation diligently. Diligence still is susceptible to manipulation unless we have a working standard for the same. Our law provides the requirement of diligence and the nature of the same under Art.3172 (2) and Art.3172 (3). To begin with, Art.3172 (3) prescribes “[The contracting parties] shall perform [their obligations] diligently.”
To this end the obligations shall be performed in a correct manner deemed to be satisfactory according to the rules of art prevailing at the time and in the kind of activity concerned “(Art.3172 (2))
Our law postulates diligence as a standard of good conduct. Unlike other systems our law further goes in trying to stipulate this very standard of diligence.
How should one understand diligence under the Ethiopian civil code? It is synonymous with the rules of the art prevailing at the time and kind of activity. Different trades prescribe as to the how works are done. These prescriptions might have evolved from custom or written and learned rules of conduct i.e. rules of ethics. To see whether one is diligent or not it suffices to see whether he/she is acting in accordance with these rules while carrying out duties. Additionally these rules of conduct are conditional on the type of activities. Rather than dealing with the most volatile and hypothetical concept of diligence our law tries to crystallize it and associate it with the more concrete concept of prevailing art.
Provisions of the law that govern the object of contracts in general require the parties to conclude a contract that has a possible, defined and lawful object. On top of that, Articles 3170 and 3171 deal with lack of object and unlawfulness of object. But within the realms of unlawfulness of object, Art. 3143 prescribes aggravated failures to comply with administrative laws or regulations that dictate about the necessities of authorization. As to Art. 3143 such a contract concluded in the absence of an authorization shall be of no effect as if the object of the contract is unlawful. The assumption here is the agency is acting ultra vires.
Absence of Object
There is no mistake in holding to the effect that when an object (cause) is absent from a contract when the object is an impossible object in the first place. Thus if parties agree to do or to refrain to do a certain act which in reality is impossible the law considers such a contract as a contract without object. Absence manifests itself at least in two ways. An object might be absent from the beginning or the object of a contract may vanish in the course of time. Let us see Art. 3170.
A contract shall be null on the ground of lack of cause where, at the time when it is made, it makes it impossible to attain the result desired by the administrative authorities and known to the other contracting party.
Art.3170 views the object of the contract from the angle of the rationales of administrative contracts. Because administrative contracts are concluded aiming at serving the public, a public that cannot be properly served for reasons mentioned in our introduction if left in the hands of private individuals. Thus the object of administrative contracts should be purposive. And this purpose is all about serving the public via administrative contracts. Accordingly,” … the result desired by the administrative authorities…” thereof is this issue of purposive ness”
Hence if an administrative contract “makes it impossible to attain the result desired...” then the contract will be considered as lacking cause. Now read Art. 3170 again and consider the above discussion.
Unlawfulness of Object
As mentioned earlier an object of any contract should be possible as it should also be lawful. Art. 1716(1) reads “[a] contract shall be of no effect where the obligations of the parties or one of them are unlawful or immoral.”
This being the general rule, the picture changes when we consider administrative contracts as envisaged under Art. 3171. As opposed to Art 1717 which says “the motive for which the parties entered into a contract shall not be taken in to account in determining the unlawful or immoral nature of their obligations”, Art. 3171(1) basically views the nature of the object from the perspective of its motive. Thus, a contract shall be null on the ground of unlawful cause where it is made by the administrative authorities with [an unlawful object in view.] (Art.3171 (1))
One instance of unlawful motive is available under art.3171 (2). If the “ contract is made by the administrative authorities with a view to procuring advantages of a pecuniary nature to the other contracting party and not for a reason of general interest” then such a view is an unlawful view which plays in favor of nullifying the contract. As per the clarifications of view on this matter by Rene David, “these two Articles (i.e. 3170 and 3171) are devised to protect public interest from possible mistakes committed by administrative authorities and the dealings made by authorities and individuals to thwart public interest and promote individual interest”. These two provisions are not sufficient to avoid the potential dealings. This is even conceded by the drafter of the civil code. However, Rene David tries to mitigate the issue by calling upon the liberal economic system that the country was following. As such he argued by saying too much intervention seems impossible.