Short answer. Damages. Article 1204 gives the creditor a right to indemnity when, through the debtor's fault, all the things alternatively due have been lost or performance has become impossible. The indemnity is measured by the value of the last thing that disappeared, and other damages may be awarded on top.
What the law says
The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the things which are alternatively the object of the obligation have been lost, or the compliance of the obligation has become impossible.
Civil Code, Article 1204 — Loss of All Alternatives Through Debtor's Fault. Read the full provision →
The rule and its measure
Article 1204 provides that The creditor shall have a right to indemnity for damages when, through the fault of the debtor, all the things which are alternatively the object of the obligation have been lost, or the compliance of the obligation has become impossible. The article then fixes the yardstick: the indemnity is based on the value of the last thing which disappeared, or of the service which last became impossible. That is a rule of convenience — it avoids arguing about which of several items the supplier would have chosen — and it removes any advantage in destroying the expensive ones first.
Damages beyond the value
The article's last sentence is the one buyers overlook: damages other than the value of the last thing or service may also be awarded. So the claim is not capped at the price of the goods. Article 1170 makes those guilty of fraud, negligence or delay liable for damages, and Article 2201 sets what is recoverable — in good faith, the natural and probable consequences of the breach which the parties foresaw or could reasonably have foreseen; in bad faith, all damages reasonably attributable to it. Downstream costs you can document, such as replacement at a higher price or a contract you could not fill, belong here.
Fault is what you have to prove
Everything in Article 1204 turns on the loss being through the debtor's fault. Where all the alternatives perished without his fault, the obligation is extinguished and there is no indemnity — only a refund of what you paid for something you will not receive. Article 1173 measures fault as the omission of the diligence required by the nature of the obligation and the circumstances of the persons, time and place, and Article 1163 requires a person obliged to give something to keep it with the diligence of a good father of a family. Storage without cover, ignored warnings and lapsed maintenance are the usual evidence.
What to gather, and in what order
Establish the sequence of the losses first, because the last item to disappear sets the base figure — incident dates, incident reports, insurance notifications and inventory records all speak to that. Then evidence of fault: how the goods were kept, what warnings were given, what the supplier said afterwards. Then your own consequential loss, with documents rather than estimates. Finally, check whether the contract allocated the risk differently or capped liability, since Article 1174's reference to stipulation means the parties may have written their own rule.
Related provisions
- Civil Code, Article 1204 — Loss of All Alternatives Through Debtor's Fault
- Civil Code, Article 1170 — Liability for Fraud, Negligence, Delay
- Civil Code, Article 1173 — What Negligence Is
- Civil Code, Article 2201 — Damages in Contracts and Quasi-Contracts
- Civil Code, Article 1174 — Fortuitous Events