Maria and João decide to renovate their kitchen, so they hire a company to do it, draw up the project, sign the contract and pay a deposit.
article published in various newspapers and radio stations – 09/07/2025
The contractor turns up on the day and time agreed for the work to begin and the project gets underway, but in the meantime things
start to go wrong: the supply of tiles is delayed without justification, the shelves are made of wood of a lower quality than agreed and in the end the cupboards still need to be finished with the right paint. Maria and João decide to speak directly to the contractor, but he offers no solutions and denies any responsibility. What can Maria and João do?
This could be a real situation and is just one of many in which non-compliance can give rise to a claim for compensation under Portuguese law. But what does this breach of contract mean? And when can compensation be paid?
Article 798 of the Civil Code (hereinafter referred to as the “C.C.”) states that “The debtor who culpably fails to fulfill the obligation becomes liable for the damage he causes to the creditor.” Thus, when one of the parties fails to fulfill the obligation
to which it is bound under the contract, or partially fulfills it, does so incompletely or late –
mente, it can be ordered to compensate the other party for the damage caused.
Non-performance can occur in various ways: total, if nothing is done that was promised; partial, if only part of the obligation is fulfilled; defective, if what is delivered is not of the agreed quality; and late, if it is fulfilled too late
and without justification.
So what kind of damage can compensation cover? The most common are property damages, which are losses with an immediate economic effect, such as repair costs, unexpected expenses and profits that no longer arise. There can also be non-pecuniary damage, such as the creation of emotional distress. These, however, are less common and require clear proof. Article 562 of the Civil Code states that whoever has a duty to compensate must restore the situation that would have existed if the damage had not occurred.
The way to proceed begins by ascertaining whether there has actually been a culpable breach of contract, whether this breach has caused damage to the other party and the value of the damage, whether it is pecuniary or not. At this stage, it is essential to gather all the documentation (emails, messages, photos, contracts, invoices) and witnesses if there are any. If all these elements align with the requirements of contractual liability, as set out in Article 799, the party in breach will have the obligation to compensate. The first step would be to formally contact the debtor to ask them to comply with the obligation, either by registered letter with acknowledgement of receipt or by an out-of-court proposal drawn up by a lawyer or solicitor. Often, this contact allows the dispute to be resolved without resorting to judicial means (courts).
If this is not possible, you should take legal action to demand fulfillment of the contractual obligation and payment of compensation in the competent court, where you will be asked to acknowledge the breach and order the debtor to pay compensation for the damage caused.
If you are facing a situation of breach of contract, know that you are not unprotected; Portuguese law provides for mechanisms to repair the damage caused and holds the debtor responsible. The assistance of a lawyer is essential to ensure that your rights are fully exercised and that the damage is not passed on to you.
Judith Teodoro,
Lawyer
With the collaboration of the collegues,
Catarina Menezes e Filipa Cabral
