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.
A substantial breach is a serious failure that defeats the object of the parties in entering the contract. Learn how Philippine courts distinguish substantial from slight or casual breach under Article 1191.
When a down payment must be refunded after a contract is cancelled or resolved under Article 1191, when a buyer recovers payments after a cancelled sale, and when a seller may lawfully forfeit a down payment.
Can you cancel a contract when the other party fails to perform? Learn Article 1191 resolution, substantial breach, demand, restitution, damages, attorney’s fees, and filing deadlines in the Philippines.
Quick answer: An action based on a written contract generally must be filed within 10 years from the time the right of action accrues under Article 1144 of the Civil Code. But not every contract-related claim has the same prescriptive period, and the starting date is not necessarily the date the contract was signed. What…
Direct answer: Yes. Under Philippine law, a valid acceleration clause can make the whole unpaid balance of a loan due at once when the borrower defaults, instead of only the missed instalments. The clause is enforced as written because contracts have the force of law between the parties (Civil Code Article 1159). Whether the lender…
Recovering attorney’s fees after a breach of contract in the Philippines: how attorney’s-fee clauses work, when courts reduce them, and why a breach alone is not bad faith.
Quick answer: An injured party must take reasonable steps to reduce avoidable loss after learning of a breach. The mitigation rule in Civil Code Article 2203 does not require extraordinary expense or unreasonable risk, but damages may be reduced when the claimant’s own failure to act aggravated the loss. Governing rule The duty to mitigate…
Quick answer: Both clauses fix financial consequences in advance, but their function and wording matter. Liquidated damages estimate compensation for breach, while a penalty clause principally secures performance. Courts examine substance rather than labels and may reduce an iniquitous or unconscionable amount. G.R. No. 249247 also explains how stipulated forfeiture or liquidated damages may operate…
Quick answer: Temperate or moderate damages may be awarded when the court is satisfied that a pecuniary loss occurred but the exact amount cannot be proved with certainty. They are more than nominal damages but less than fully proved compensatory damages. Governing rule Temperate damages are one of the six kinds of damages listed in…
Quick answer: Actual or compensatory damages require competent proof of a real pecuniary loss caused by the breach. As the Supreme Court reiterates in G.R. No. 200942, courts do not award actual damages based on speculation, unsupported estimates, or the mere fact that a contract was violated. Governing rule Actual damages are one of the…