- Tribunal de Apelación en lo Civil y Comercial – Segunda Sala, Circunscripción Judicial de Itapúa
- Eusebio Marín v. Municipalidad de Carmen del Paraná
LEASE CONTRACT - BETWEEN A PARAGUAYAN INDIVIDUAL AND A PARAGUAYAN MUNICIPALITY - REFERENCE TO THE UNIDROIT PRINCIPLE IN ORDER TO CONFIRM THAT THE SOLUTION PROVIDED BY APPLICABLE DOMESTIC LAW WAS IN CONFORMITY WITH INTERNATIONAL STANDARDS
EXCEPTIO NON ADIMPLENTI CONTRACTUS - REFERENCE TO ART. 7.1.3 UNIDROIT PRINCIPLES (2010 EDITION) WHICH REFLECTS A PRINCIPLE VERY SIMILAR TO THE ONE EXPRESSED IN ART. 719 OF THE PARAGUAYAN CIVIL CODE
Claimant, a Paraguayan individual, and Respondent, a Paraguayan municipality, concluded a lease agreement for the use of a backhoe loader. Claimant sued Respondent since the latter failed to pay the last lease installment.
The First Instance Judge granted the claim. The Respondent appealed the decision, arguing that the contract signed by the parties was not merely a lease agreement but a service provision contract that required Claimant to perform works such as weeding and brushwork cleaning, among others, for which Claimant had failed to prove the performance. Therefore, Claimant was not entitled to ask payment of the last lease installment.
The Appellate Tribunal, consisting of three members, reached its final decision via majority and agreed with Respondent that Claimant did not prove the correct performance of his contractual obligations. Therefore, it was not entitled to receive any payment from the Respondent.
In affirming so, the Court noted that contracts' formation, interpretation and execution are governed by the parties’ agreement and by national law, but international instruments, such as the Unidroit Principles, may assist national judges in supplementing domestic law. In this respect, following the principle of exceptio non adimpleti contractus (which is, in its essence, reproduced in Art. 7.1.3 of the Unidroit Principles), the Court affirmed that Claimant must have proven to have complied with his obligation in order to be entitled to claim payment from the Respondent. Accordingly, as the Claimant did not provide such proof, the Appellate Tribunal decided to revoke the First Instance ruling and to reject the claim.