| ||1. Obligee in principle entitled to reject earlier performance
When performance is due at a certain moment (to be determined in accordance with Article 6.1.1), it must take place at that time and in principle the obligee may reject an earlier performance. Usually, the time set for performance is geared to the obligee’s activities, and earlier performance may cause it inconvenience. The obligee has therefore a legitimate interest in refusing it. Earlier performance, in principle, constitutes non-performance of the contract.
The obligee may of course also abstain from rejecting an earlier performance while reserving its rights as to the non-performance. It may also accept such performance without reservation, in which case earlier performance can no longer be treated as non-performance.
1. A agrees to carry out the annual maintenance of all lifts in B’s office building on 15 October. A’s employees arrive on 14 October, a day on which important meetings, with many visitors, are taking place in the building. B is entitled to refuse such earlier performance which would cause it obvious inconvenience.
2. Obligee’s right to reject earlier performance conditional on its legitimate interest in so doing
Situations may arise in which the obligee’s legitimate interest in timely performance is not apparent and when its accepting earlier performance will not cause it any significant harm. If the party offering earlier performance proves this to be the case, the other party cannot reject earlier performance.
2. The facts are the same as in Illustration 1, except that neither 14 nor 15 October has any special significance. A can probably prove that B has no legitimate interest in refusing the earlier performance.
3. Effect of acceptance by obligee on its own performance of earlier performance of the other party’s obligations
If one party accepts earlier performance by the other, the question arises of whether this affects the time for performance of its own obligations. Paragraph (2) deals with cases where obligations are due at a certain time which is not linked to the performance of the other party’s obligations; that time for performance remains unchanged.
This provision does not however deal with the converse case where the performances are linked in time. Several situations may then arise. This circumstance may in itself establish the obligee’s legitimate interest in rejecting earlier performance. If earlier performance is thus rejected, the obligee’s time of performance is unaffected. If earlier performance is accepted with all due reservations as to the non-performance involved, the obligee may also reserve its rights as to its time for performance. If earlier performance is acceptable to the obligee it may at the same time decide whether or not to accept the consequences as regards its own obligations.
3. B undertakes to deliver goods to A on 15 May and A to pay the price on 30 June. B wishes to deliver the goods on 10 May and A has no legitimate interest in refusing such earlier performance. This will however have no effect on the time agreed for payment of the price, which was determined irrespective of the date of delivery.
4. B undertakes to deliver goods to A on 15 May and A to pay the price “on delivery”. If B tenders the goods on 10 May, A, depending on the circumstances, may reject such earlier performance, claiming that it is not in a position to pay at that date, take delivery of the goods subject to observing the original deadline for payment of the price, or decide to accept the goods and pay for them immediately.
4. Additional expenses entailed by earlier performance to be borne by the performing party
If earlier performance is accepted, it may entail additional expenses for the obligee. In all cases, such expenses are to be borne by the other party. If earlier performance amounts to non-performance (the normal case), those expenses will be part of the damages, without prejudice to any other remedy available. If earlier performance does not amount to non-performance (the obligee has been shown not to have any legitimate interest in rejecting the offer of earlier performance, or has found that offer to be acceptable without reservation), the obligee will only be entitled to those expenses.
5. A has no legitimate interest in refusing delivery of goods on 10 May instead of 15 May, but some additional storage fees are payable for those five extra days. Those costs will be borne by B.