The Defense of Non-Performance under Syrian Law
A binding contract creates reciprocal obligations for both parties: each party is simultaneously a creditor of one obligation and a debtor of another. But what happens when one contracting party demands performance of the contract while failing to perform the corresponding obligation?
Syrian civil law addresses this situation through the defense of non-performance, which, subject to specific conditions, allows a contracting party to temporarily withhold performance of its obligation until the other party performs the corresponding obligation.
This right is particularly important in civil and commercial contracts involving reciprocal obligations, such as contracts of sale, contracting agreements, supply agreements, and service contracts.
What Is the Defense of Non-Performance?
Article 162 of the Syrian Civil Code provides:
“In contracts binding upon both parties, where the corresponding obligations are due for performance, either contracting party may refrain from performing its obligation if the other contracting party does not perform what it is obliged to perform.”
Accordingly, as a general rule, a contracting party should not be compelled to perform a due obligation while the other party refuses to perform the corresponding due obligation.
The purpose of this rule is to preserve the contractual balance, rather than to terminate the contract.
When May a Party Invoke the Defense of Non-Performance?
For this right to apply, the contract must primarily be binding upon both parties, the corresponding obligations must be due for performance, and the other party must have refrained from performing its obligation.
There must also be a relationship of reciprocity between the two obligations, meaning that the obligation whose performance is to be withheld must correspond to the obligation that the other party has failed to perform.
If the corresponding obligation is not yet due, or if the contract requires one party to perform first, mere non-performance will not necessarily be sufficient to invoke this defense.
How Does This Appear in Practical Transactions?
The importance of the defense of non-performance appears in several practical situations.
A buyer may refuse to pay the price due if the seller has not delivered the goods in accordance with the contract. The same right may arise with respect to a payment due under a contracting or supply agreement if the other party has not performed the corresponding obligation.
In service contracts, the issue may arise where a service provider demands the agreed financial consideration despite failing to provide the service for which that consideration is due.
However, the legitimacy of withholding performance should not be presumed automatically. The contract, the nature of the obligations, the order in which they become due, and the extent to which each obligation is connected to the other must all be examined.
What Is the Difference Between the Defense of Non-Performance and Rescission of the Contract?
Distinguishing between the two is important.
The defense of non-performance temporarily suspends performance and does not terminate the contract. Its purpose is to allow a party to withhold performance where the other party has failed to perform its corresponding obligation.
Rescission, on the other hand, is a remedy that may result in the dissolution of the contract following a contracting party’s breach of its obligation.
Article 158 of the Syrian Civil Code regulates rescission in contracts binding upon both parties. Following formal notice to the debtor, the other contracting party may seek performance or rescission, with compensation in either case where appropriate.
The court may also refuse rescission where the part of the obligation that has not been performed is of minor importance in relation to the obligation as a whole.
Does Every Breach Justify Withholding Performance?
Not necessarily.
The defense of non-performance is intended to protect the balance between reciprocal obligations; it is not a means of escaping contractual obligations. Accordingly, the relationship between the breach and the corresponding obligation, the nature of the contract, and whether withholding performance is proportionate to the breach should all be assessed.
This assessment becomes particularly important in long-term commercial contracts, where suspending performance may have substantial financial and operational consequences exceeding the value of the obligation in dispute.
Therefore, a decision to withhold performance should not be based merely on the existence of a dispute between the parties. It should instead be based on a careful legal assessment of the reciprocal obligations and the conditions under which they became due.
Conclusion
Syrian civil law provides contracting parties with an important protective mechanism when one party demands performance without performing its corresponding obligation.
However, the defense of non-performance does not mean terminating the contract, nor does it permit a party to refuse to perform any obligation merely because a dispute exists.
When assessing whether withholding performance is legally justified, the fundamental question is:
Has the other party failed to perform a due obligation that corresponds to the obligation whose performance is being demanded?
The answer to this question may determine whether withholding performance constitutes the lawful exercise of a contractual right or an unjustified breach of contract.