A breach of a monetary obligation may occur in various ways, for example if the claim is not paid at all, if too little is paid, if payment is made late, or if payment is made subject to conditions that the creditor is not obliged to accept. In such cases, the creditor generally has two main types of remedies:
- Maintain and enforce the claim
- Claim damages for losses resulting from the breach
Damages may be claimed both when the creditor maintains the contract and when the contract is terminated. Termination, however, is of limited practical importance because delivery will usually have taken place before payment is due. In such cases, termination is generally unavailable unless the seller has retained a security interest, such as a retention-of-title clause or similar reservation, cf. Section 54(4) of the Norwegian Sale of Goods Act.
In certain situations, termination may be available where payment has not been made for a continuing obligation, for example rent payments, the supply of electricity, telecommunications services, or insurance coverage. In such cases, termination operates prospectively, meaning that future performance under the contract is discontinued. As in other cases, termination requires that the breach of contract be material.
