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.
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.
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…
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…
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…