Full performance of an obligation in favour of one of the joint and several obligees discharges the obligor towards the other obligees.
1. Each obligee can claim full performance
The main effect of joint and several claims has already been stated in the definition of Article 11.2.1(2). When claims are joint and several each obligee is entitled to claim full performance from the obligor.
1. Co-owners A and B sell their hotel to buyer X for a price of EUR 5,000,000. Their shares of co-ownership are equal. The sales contract provides that the sellers’ claims concerning payment of the price are joint and several. A may claim EUR 5,000,000 from X, subject to further allocation under Article 11.2.4.
2. Obligor’s choice
This Article states two other major effects of joint and several claims.
First, if the obligor takes the initiative to spontaneously perform its obligation, it is entitled to render performance in favour of any of its obligees.
2. The facts are the same as in Illustration 1. X takes the initiative of paying the price before being invited to do so by either of its obligees. X may validly pay to A or to B.
3. Obligor’s discharge
Another main effect of joint and several claims is that the obligor who has rendered full performance in favour of one of the obligees is discharged towards the other obligees.
3. The facts are the same as in Illustration 1. X has paid the whole price of EUR 5,000,000 to A. B, having difficulties to recover its share from A, requests payment of EUR 2,500,000 from X. Under Article 11.2.2(2), the claim will be rejected since full payment to A has discharged X towards the other obligee.
4. Practical aspects
The right given to each of the joint or several obligees to claim full performance may call for some coordination to avoid duplication of initiatives and unnecessary costs. Either the obligees have agreed in advance on which of them will claim performance, or at least the obligee envisaging to take the initiative should consult with its co-obligees.
On the other hand, when the obligor takes the initiative its choice of obligee to which it will perform may be affected by the fact that another obligee is already requesting performance. Some prior consulting may then be appropriate. Furthermore, an obligee who has received payment should immediately inform the others that performance has been rendered.
These solutions could usefully be agreed in advance by all parties involved. Otherwise the requirements of good faith and fair dealing are always applicable (Article 1.7).