The debtor is not paying. What does the Code of Obligations provide, when does default start, what consequences arise — and when is collection worthwhile, when the step to debt enforcement?
Art. 102 et seq. CO governs debtor default. Default begins in principle with a reminder — or without a reminder if a specific date was agreed (transaction with a fixed date, Art. 102 para. 2 CO). This is a good example of a contractual clause often missing from templates that makes the difference in a dispute.
Three requirements must be met: the claim is due, the debtor has been reminded (or it is a fixed-date transaction), and there are no defences (deferral, notice of defects, set-off). If even one is doubtful, debt enforcement is premature and ends in an objection with an unclear outcome.
First, default interest: 5% on monetary claims absent other agreement (Art. 104 CO), higher interest if contractually agreed. Second, damages for default loss under Art. 103 CO. Third, in bilateral contracts, the creditor's right of choice under Art. 107 CO — performance with default consequences, waiver plus damages, or rescission.