WHAT HAPPENED? CHOOSE YOUR NEXT STEP
• You need to know if a contract binds — Run the seven-step checklist to identify issues and records to review.
• The other party has not performed — Identify the breach, proof and possible remedy. Start with the breach guide.
• You suspect the agreement is defective — Distinguish the defect and its legal effect. Compare contract defects.
• You want to offer property for a debt — Clarify the proposed credit and release. Prepare the dation worksheet.
Use this hub to determine whether an agreement binds, what happens when a party fails to perform, how an obligation is paid or extinguished, and which remedy fits the dispute.
Start here: Is This Contract Binding? Checklist · Valid Contract · Breach, Proof and Remedies · Void vs Voidable vs Unenforceable · Breach of Contract vs Quasi-Delict
If the other party does not perform: Can I Cancel for Non-Performance? · What Counts as a Substantial Breach? · Article 1191 Resolution · Specific Performance vs Resolution · Can I Cancel Without Going to Court? · Do I Need a Demand Letter? · Mutual Restitution · Can I Recover My Down Payment? · Can I Recover Attorney’s Fees? · How Long Do I Have to File?
Lease and rental disputes: Lease problems are contract disputes with special Civil Code and ejectment rules. Start with Lease Law in the Philippines and the Lease and Rental Disputes hub. For breach and termination, see landlord early termination and tenant early departure. For payment and deposit issues, see nonpayment of rent, security-deposit deductions, and deposit return.
Advanced breach questions: Both Parties Breach — Article 1192 · Seller Forfeiture After Buyer Breach · Delay as Substantial Breach · Contractual Cure Periods · Interest on Refund After Resolution · Use of Property After Resolution · Remedies When Performance Becomes Impossible
Sales and buyer-seller disputes: Start with the Sales and Property Purchases hub. Quick links: Buyer Fails to Pay · Seller Fails to Deliver · Earnest vs Down Payment vs Option Money · Buyer Refund After Cancelled Sale · Late Payment and Cancellation · Force Seller to Deliver · Sale vs Contract to Sell · Cash vs Installment Sale · Contract to Sell Cancellation
Sales special rules: Article 1482 Earnest Money · Missed Installments · Maceda Law · Recto Law · Developer Refunds · Resale After Cancellation · Seller Sells Same Property Twice · Article 1544 Double Sale · Land Area Discrepancies · Risk of Loss Before Delivery
Breach, demand and default: Demand Letter · Delay or Default · Unpaid Debt · Force Majeure
EVIDENCE OF THE DEBT
• No written loan agreement? — Review verbal-loan evidence.
• Have a promissory note? — Check the note’s terms and supporting records.
FACING CREDIT-CARD COLLECTION
• Facing credit-card collection? — Start with the guide to checking the balance, demands, court papers and repayment options.
Payment: Valid Payment · Wrong Recipient · Application of Payments · Third-Party Payment · Tender and Consignation
Other ways obligations change or end: Dation in Payment · Compensation or Setoff · Novation · Remission · Joint vs Solidary
Interest and penalties: Legal Interest · Excessive Interest · Penalty Clauses
Contract remedies and damages: Choose a Remedy · Specific Performance · Article 1191 Resolution · Actual Damages · Temperate Damages · How Damages Are Calculated · Liquidated Damages · Mitigation · Attorney’s Fees · Prescription
Ending or challenging a contract: Rescission vs Resolution · Cancelling After Signing · Oral Agreements
Statutory basis: Civil Code, Book IV (Articles 1156–2141), read with applicable special laws. See Book IV — Obligations and Contracts.Property contracts: For title, ownership and due-diligence questions that sit behind a sale or contract dispute, use the Property and Ownership hub, How to Verify a Land Title, and the Deed of Sale Checklist.
Quick answers: See the Obligations and Contracts FAQ for short, cited answers to the most common questions in this hub.
Quick answer: Article 1484 of the Civil Code, commonly called the Recto Law, governs installment sales of personal property. It gives the seller alternative remedies when the buyer defaults and restricts recovery of a deficiency after foreclosure of a chattel mortgage. The seller’s three alternative remedies Under Article 1484, the seller may generally choose among:…
When the Maceda Law (RA 6552) applies, how grace periods and cash surrender value work, what happens when a buyer misses installments, and when a developer must refund under PD 957.
In a contract of sale the seller agrees to transfer ownership, which passes on delivery. In a contract to sell the seller keeps ownership until full payment. The difference decides remedies, cancellation and Maceda Law protection.
Earnest money, a down payment and option money are three different payments. Earnest money is part of the price and proof of a perfected sale under Article 1482; option money is a separate consideration for an option under Article 1479.
Quick answer: When performance of a contract becomes impossible, specific performance is no longer realistic, so the dispute shifts to three questions: was the obligor excused, can the injured party rescind, and who pays damages? Under the Civil Code, an obligor to do something is released if the act becomes legally or physically impossible without…
Quick answer: If a contract gives the defaulting party a cure period, the injured party may have to follow that procedure before terminating or cancelling the agreement. Whether immediate termination is allowed depends on the exact wording of the contract, the type of breach, any applicable law, and whether the cure requirement has been satisfied…
Quick answer: Delay alone does not automatically justify rescinding (resolving) a contract under Article 1191 of the Civil Code. Rescission is allowed only for a breach so substantial and fundamental that it defeats the object of the contract, and the Supreme Court has held that a short delay, especially one the other party later accepted,…
Quick answer: When both parties to a reciprocal contract breach it, Article 1192 of the Civil Code looks at who broke the contract first. The first infractor stays liable for damages, but the court may equitably reduce that liability. The second infractor is generally not liable for damages at all, because the harm from the…
Philippine law may recognize extrajudicial cancellation or resolution when the contract validly allows it and the agreed conditions are met. Learn when court action may still be necessary.
When a reciprocal contract is resolved under Article 1191, each party must return what it received. How property, payments, compensation for use, legal interest and post-resolution possession are handled in the Philippines.