When several obligors are bound by the same obligation towards an obligee:

 

(a) the obligations are joint and several when each obligor is bound for the whole obligation; 

 

(b) the obligations are separate when each obligor is bound only for its share.

 

COMMENT

 

This Chapter deals with situations where an obligation binds several obligors or gives rights to several obligees. 

 

Section 1 concerns the plurality of obligors.

 

1. Several obligors

 

There are frequent cases when an obligation binds several obligors.

 

Illustrations

 

1. Companies A, B and C decide to join efforts to penetrate a new market abroad. They need financing and they obtain a loan together from bank X. A, B and C are co-obligors of the obligation to reimburse the loan.

 

2. Contractors A and B are awarded a contract for the construction of a bridge based on a submission they have filed together. A and B are co-obligors of the obligation to build the bridge.

 

3. A large industrial plant has to be insured against fire and other hazards. The risk is too large for the capacity of any single insurer. Several insurers co-insure the risk. These insurers are co-obligors of the obligation to cover the risk.

 

4. Bank X grants a loan to company A but requires a guarantee. Parent company B agrees to bind itself together with A for the reimbursement of the loan. A and B are co-obligors of the obligation to reimburse the loan.

 

2. The same obligation

 

This Section only applies if the different obligors are bound by the same obligation. 

 

It also frequently happens that several obligors are involved in the same operation, but with distinct obligations. They are not co-obligors under the Articles of this Section.

 

Illustration

 

5. A new aeroplane is being built. Many sub-contractors are involved in the various elements. For instance, sub-contractor A is in charge of profiling the wings and sub-contractor B of studying the electronic equipment. Their respective obligations are different. They are not “co-obligors”.

 

The “same obligation” usually, but not necessarily, arises from a single contract. In Illustrations 1 and 2, there will normally be a single loan contract, or a single construction contract binding the different obligors. However, in the case of co-insurance (Illustration 3), it is frequent that each insurer, even though undertaking to cover the same risk, has its own distinct contract with the insured. The guarantee offered in Illustration 4 will often be granted in a distinct contract. Other examples of obligations undertaken by a different contract are cases in which obligations are transferred by agreement (see Article 9.2.1 et seq.). 

 

However, the obligations concerned must be contractual, irrespective of whether they arise from a single contract or out of several contracts. Tortious obligations of multiple tortfeasors are not governed by this Chapter, since the Principles govern international commercial contracts. Contractual damage claims may fall under this Chapter.

 

3. Two main types of obligation

 

Article 11.1.1 defines the two main types of obligation which exist in practice when several obligors are bound by the same obligation towards an obligee. 

 

The first is where each obligor is bound for the whole obligation, which means that the obligee may require performance from any one of them (see Article 11.1.3), subject to contributory claims between the obligors at a later stage (see Article 11.1.10). 

 

The second is where each obligor is bound only for its share, which entitles the obligee to claim only that much from each of the obligors. 

 

In the former situation, which is the default rule (see Article 11.1.2), obligations are called “joint and several”. In the latter situation, obligations are called “separate”. 

 

Whether co-obligors are jointly and severally, or separately bound is determined in accordance with Article 11.1.2 (see Illustrations 1 to 4).

 

4. Other possible situations

 

The two main types of obligation illustrated above are the most common, but this Section does not intend to cover all possible arrangements. 

 

Other situations which can occur are those of so-called “joint” or “communal” obligations, in which the obligors are bound to render performance together and the obligee may claim performance only from all of them together. A typical example is that of a group of musicians having undertaken to perform a string quartet. Situations of this type are of less practical importance.

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