Czechia: Compensation for a breach of contractual obligations under a future agreement

If the obliged party is in default with the execution of the agreement envisioned in the future agreement, then the entitled party may not only demand that the obliged party perform as owed, but may moreover seek compensation for damages on grounds of a breach of contract.

The provision of Sec. 2913 of the Civil Code, which governs the liability for damage caused by a breach of contract, applies also to a breach of contractual obligations from a future agreement. The general provisions of Sec. 2900 and Sec. 2910 of the Civil Code do not apply to the assessment of claims from a breach of contract. If the obliged party is in default with the execution of the agreement, the entitled party may enforce the owed performance from a third party or in court (Sec. 1787 of the Civil Code) and demand compensation for the damage incurred due to the breach of the contractual obligation (Sec. 2913 of the Civil Code). If the future agreement ceases to exist on grounds of the impossibility of performance within the meaning of Sec. 2006 of the Civil Code, for reasons attributable to the defendant (i.e., the future seller), then the claimants (i.e., the future buyers) may no longer be able, for objective reasons, to enforce the conclusion of the purchase agreement by seeking a court ruling which would substitute the defendant’s declaration of the will to contract within the meaning of Sec. 1787 of the Civil Code, but they may still demand that the defendant render compensation for the damage which they suffered because of the breach of its contractual obligation, pursuant to Sec. 2913 of the Civil Code.

In the case at hand, the claimants were supposed, under the future agreement, to pay an amount for an apartment which was below the market value of the apartment on the anticipated date of execution of the purchase agreement proper. The difference between the price which they should have paid and the value which they stood to acquire in return constitutes lost profit. Liability pursuant to Sec. 2913 (1) of the Civil Code is objective liability, i.e., the question of culpability will not be examined and the mental element of the relation between damaging party and the occurrence of damage is of no concern. Given this objective character of the liability pursuant to Sec. 2913 of the Civil Code, the only relevant circumstance is thus the fact that the defendant failed to enter a purchase agreement for a specific apartment unit with the claimant. The defendant may relieve itself from this liability only if it can show that an obstacle within the meaning of Sec. 2913 (2) of the Civil Code was present which prevented it from fulfilling its obligation under the future agreement – which is to say, an extraordinary, unforeseeable, and insurmountable obstacle.

NS 25 Cdo 3788/2019.

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