Delay in the delivery of the Works. Obligation to compensate the buyer by the developer

In a recent case involving the exchange of a plot of land in exchange for building work, the Supreme Court has declared that the delay in the delivery of the work gives rise to the obligation to compensate damages, even if this has not been established in the penalty clause.

The concurrence of faults allows the moderation of liability but not its total elimination when the performance has been fulfilled.

According to a recent ruling of the Supreme Court of 13 April 2016, to which our Law Firm in Madrid has access, the High Court establishes that "those who in the performance of their obligations incur in fraud, negligence or default, and those who in any way contravene the tenor of those obligations, are subject to compensation for the damages caused". Hence, compensation for non-performance or defective performance does not require the prior establishment of a penalty clause - as the Court holds - since the purpose of such a clause is to fix by the parties themselves the amount of damages arising from non-performance, without its lack of incorporation into the contract preventing the application of Article 1101 CC (EDL 1889/1). Nor can it be argued that the determination of the amount of damages for delay in delivery based on the rental price of the homes that the injured parties could have obtained in the event of their delivery within the agreed time means unduly resorting to hypothetical profits, as this is a criterion generally accepted by the case law to determine the "loss of profit" in these cases.

The fact that the delay was caused in part, as the Court affirmed, by the plaintiffs' own actions allowed the assessment of concurrent fault and the moderation of liability, but not its total elimination when the plaintiffs had initially delivered the plot of land in full compliance with their performance, therefore, on this point, the plea must be upheld, although reducing by half the monthly amount due for compensation for the delay, which will thus be set at 300 euros per month from July 2007 when the homes and parking spaces promised should have been delivered, according to the request addressed to the plaintiffs.

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