In Giving Warning under Section 204 Paragraph1 of the Civil and Commercial Code, does the Creditor have to give the Debtor a Reasonable Time for Paying the Debt?
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Section 204 paragraph 1 of the Civil and Commercial Code stipulates that if the debtor does not perform after warning given by the creditor after maturity, he is in default through the warning. Apparently, section 204 paragraph 1 does not prescribe that the creditor must provide the debtor a reasonable time to pay the debt in the warning. However, some scholars opine that warning without allowing such reasonable time is against ordinary reasons and causes injustice. Therefore section 204 paragraph 1 should be interpreted that the creditor must give the debtor a reasonable time to pay the debt in the warning; otherwise the debtor will not be in default. This article suggests that such interpretation could be disputed for various reasons. The crucial one is that if in all cases governed by section 204 paragraph 1 the creditor must give the debtor a reasonable time, these cases will then fall under section 204 paragraph 2, which governs the cases where the time is fixed by the calendar or in such a manner that it may be reckoned by the calendar. Consequently, there will be no case left for section 204 paragraph 1 to apply and render the debtor’s default. This is certainly not the spirit of section 204, prescribing two separated cases of default under its two separated paragraphs.
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References
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