Special Forms of Payments. Article 1252-1261.Extinguishment of Obligations. Obligations & Contracts.

Introduction to Special Forms of Payment00:00:41

The video introduces the four special forms of payment under the law: application of payment, payment by cession, dation in payment (discussed previously), and tender of payment with consignation.

Application of Payment (Articles 1252-1254)00:02:07

Application of payment is the designation of which debt is being paid when a debtor has multiple debts to the same creditor. The debtor has the first right to designate the payment. If they fail to do so, the creditor may specify it in the receipt. If neither does, the law dictates it should be applied to the most burdensome debt.

Payment by Cession (Article 1255)00:17:40

Payment by cession is an abandonment of the debtor's properties to creditors, allowing them to sell the assets to satisfy their claims. Unlike dation in payment, this does not transfer ownership but merely gives creditors the authority to sell assets to apply proceeds toward the debt.

Tender of Payment and Consignation (Articles 1256-1261)00:25:21

Tender of payment is the offer to pay, while consignation is the act of depositing the amount with the court when a creditor refuses to accept without just cause. This process extinguishes the debt and prevents the accumulation of interest or damages against the debtor.

Legal Requirements and Effects of Consignation00:35:23

Consignation requires a valid debt, prior notice to interested parties, and strict adherence to payment rules. Once properly made, the debtor can ask the court to cancel the obligation. The video also explains the consequences if the creditor allows the debtor to withdraw the deposit after consignation.