Obligations And Contracts (Oblicon) Practice Exam

If substitution has already been made, the debtor is liable for loss of the substitute in which situations?

Delay, negligence, or fraud Only if the creditor delays Only if the substitute is damaged during transport In all circumstances

Correct Answer:

Delay, negligence, or fraud

Explanation:

When a debtor substitutes a performance with something else, that substitute becomes the subject of the obligation and the debtor must deliver it in the agreed condition and timeframe. The debtor bears the risk of loss of the substitute if the loss occurs due to his fault, specifically in cases of delay, negligence, or fraud. If the substitute is lost or damaged because the debtor delays delivering it, handles it carelessly, or engages in deceitful misrepresentation or the use of a inferior substitute, he is liable for the loss. It isn’t limited to situations where the creditor delays or where the substitute happens to be damaged during transport, and it isn’t automatic in all circumstances, because liability arises from the debtor’s fault in the substitution process.

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