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: When the other party to a reciprocal contract fails to perform, Article 1191 of the Civil Code lets the injured party choose between fulfillment (specific performance) and rescission (often called resolution), “with the payment of damages in either case.” Specific performance keeps the contract alive and asks the court to make the other…
Quick answer: Article 1191 of the Civil Code allows the injured party in a reciprocal obligation to choose between fulfillment and resolution, with damages potentially recoverable in either case. Resolution generally requires a substantial breach—not merely a slight, casual, or technical failure. What Article 1191 means Article 1191 of the Civil Code applies to reciprocal…
Quick answer: Yes. A court may order specific performance when a valid and enforceable obligation is due, the claimant has performed or is ready to perform, and the promised act remains legally and practically possible. As illustrated by Universal Food Corp. v. Court of Appeals, the remedy is not automatic, especially when performance has become…
Direct answer: Under the Personal Property Security Act (Republic Act No. 11057), a security interest over movable property is perfected once it has been created by a written security agreement and the secured creditor has registered a notice with the Personal Property Security Registry, taken possession of the collateral, or (for deposit accounts and investment…
Quick answer: Republic Act No. 11057 provides a modern system for using personal property—such as equipment, inventory, receivables, deposit accounts, and other movable assets—as collateral. A security agreement creates the interest between the parties; perfection makes the security interest effective against third parties, commonly through registration, possession, or control. What the PPSA changes Concept Practical…
Direct answer: Yes, in most cases. When a real estate mortgage is foreclosed and the sale price does not cover the debt, the lender may sue the borrower for the deficiency. The Supreme Court has explained that “the mortgage is but a security and not a satisfaction of indebtedness,” and that Act No. 3135, which…
Quick answer: A real estate mortgage secures a principal obligation with immovable property. The mortgagor must own the property and have capacity to dispose of it. The mortgage should be recorded in the Registry of Deeds to bind third persons, and the lender cannot simply appropriate the property after default. Core validity checks Question Why…
Quick answer: A guarantor who lawfully pays the creditor may generally recover from the debtor the amount paid, legal interest from the time the debtor is notified of the payment, qualifying expenses, and damages when proper. Under Civil Code Articles 2066–2067, payment also subrogates the guarantor to the creditor’s rights against the debtor, subject to…
Understand when an ordinary guarantor may require exhaustion of the debtor’s assets and when the creditor can proceed directly.
Learn why an ordinary guarantor is generally secondarily liable while a surety binds itself solidarily with the principal debtor.