When a commercial counterparty fails to perform its contractual obligations in Jordan, the aggrieved party must act quickly and methodically. The Jordanian Civil Code No. 43 of 1976 and the Code of Civil Procedure No. 24 of 1988 and its amendments set out specific notice requirements, limitation periods, and procedural steps that, if missed, can weaken or extinguish an otherwise valid claim.
Step 1: Confirm and Document the Breach
Before taking any formal action, verify the nature of the breach. Jordanian law distinguishes between a total breach (where performance has been entirely withheld or rendered impossible) and a partial breach (where performance is deficient or delayed). Review the contract to determine whether the breaching party is in default automatically or whether a formal notice of default is required.
Gather all documentary evidence immediately: the signed contract, correspondence (including emails, WhatsApp messages, and letters), delivery receipts, invoices, bank transfer records, and any internal records that demonstrate the performance and the other party's failure. Under Jordanian evidence rules, original documents carry more weight, so secure originals where possible.
Step 2: Send a Formal Notice (Inzar Adli)
Jordanian law generally requires the aggrieved party to place the breaching party in formal default before pursuing judicial remedies. This is done through a notarial notice (inzar adli) served through a notary public. The notice must clearly identify the contractual obligation, describe the breach, and demand performance or compensation within a reasonable period.
A properly drafted and served notice accomplishes several things: it triggers the running of interest on unpaid sums, satisfies the formal notice (i'dhar) requirement the Civil Code attaches to claiming performance, rescission or damages (Articles 246, 360 and 361 of the Civil Code No. 43 of 1976), and creates a formal record that strengthens the position in any subsequent litigation.
Step 3: Preserve Evidence and Mitigate Loss
Jordanian courts expect the aggrieved party to take reasonable steps to mitigate its losses. Failing to mitigate can reduce the damages ultimately awarded. This may mean sourcing alternative suppliers, covering the breached obligation through a replacement contract, or taking steps to prevent further financial harm.
Where evidence is at risk of being lost or destroyed, an urgent application may be made to the judge for urgent matters for an order establishing the state of the facts (an urgent inspection) under Article 32 of the Code of Civil Procedure No. 24 of 1988, which also allows the urgent hearing of a witness whose testimony might otherwise be lost before the matter reaches the court. This is particularly important in construction disputes, technology contracts, and cases involving perishable goods.
Step 4: Understand the Limitation Period
The general limitation period for contractual claims under the Jordanian Civil Code is 15 years from the date the right of action accrues. However, specific types of claims have shorter periods: commercial debts between merchants may be subject to shorter mercantile limitation rules, and certain statutory claims (such as insurance or employment) have their own deadlines. Missing the limitation period is fatal to the claim, as Jordanian courts will dismiss time-barred actions if the defendant raises the defence.
Step 5: Choose the Right Forum
Depending on the contract and the nature of the dispute, the aggrieved party may have several options:
- Jordanian civil courts: The Court of First Instance hears claims above a certain threshold. Cases below that threshold go to the Magistrate Court. The court system provides a structured but sometimes lengthy process.
- Arbitration: Where the contract contains an arbitration clause, the parties are generally bound to resolve the dispute through arbitration rather than litigation. Jordan's Arbitration Law No. 31 of 2001 governs domestic and international arbitration.
- Mediation and settlement: Jordanian law encourages mediation, and the courts, under the Ministry of Justice, have a mediation department. A negotiated settlement can save significant time and cost.
Remedies Available Under Jordanian Law
The Jordanian Civil Code provides several remedies for breach of contract:
- Specific performance: The court may order the breaching party to perform its obligation in kind, provided performance remains possible and is not disproportionately burdensome.
- Compensatory damages: The aggrieved party is entitled to compensation for the loss caused by the breach. Under Article 363 of the Civil Code, where the compensation is not fixed by law or by the contract, the court assesses it in an amount equal to the damage actually sustained at the time it occurs.
- Contractual penalties: If the contract includes a penalty clause, the agreed amount is generally enforceable. However, the court retains discretion under Article 364 to adjust the penalty if it is grossly disproportionate to the actual damage.
- Termination: The aggrieved party may seek judicial termination of the contract and restitution, returning the parties to their pre-contractual positions where possible.
- Interest: Courts may award interest on overdue monetary obligations, typically at the statutory rate.
Interim and Precautionary Measures
Where there is a risk that the debtor will dissipate assets or become insolvent, the creditor may apply for precautionary measures including precautionary attachment of movable and immovable property, travel bans in certain cases, and injunctive relief to preserve the status quo. These applications are heard on an urgent basis and can be critical to ensuring any eventual judgment is enforceable.
When to Speak With a Lawyer
Legal advice should be sought as early as possible, ideally before sending the formal notice. A lawyer can assess the strength of the claim, advise on the most effective forum, draft the notice and pleadings correctly, and help clients avoid procedural missteps that could weaken the position. In Jordan, the quality of the initial legal notice and the strategy adopted in the first weeks of a dispute often determine the outcome.
Where This Work Sits
Breach of contract matters are handled by the firm's litigation and dispute resolution practice, which acts for businesses in contract disputes across commercial sectors in Jordan. Preventive drafting and structuring fall within the corporate and commercial practice. For advice on a specific matter, you may contact the firm.
