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…
Quick answer: If the other party substantially fails to perform a reciprocal contract, Article 1191 generally allows the injured party to choose between fulfillment or specific performance and resolution, with damages potentially recoverable in either case. Related: Not sure which remedy fits your situation? See remedies for non-payment or non-performance, organised by what was promised…
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…
Quick answer: Under the Personal Property Security Act, a security interest must first attach to collateral and then be perfected by the method the law recognizes. Registration is common, while possession or control applies to particular assets. Priority usually turns on the applicable PPSA priority rule and timing—not simply on which loan agreement was signed…
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…
Quick answer: In an ordinary real estate mortgage, a lender may generally pursue the unpaid balance after applying the foreclosure proceeds, if the debt and deficiency are proven. But the result can change under a special law, the transaction documents, defective foreclosure procedure, prescription, or rules protecting an installment buyer. The basic computation A claimed…
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.