Maceda Law (RA 6552): When It Applies, Grace Periods and Refunds
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.
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Contract of Sale vs Contract to Sell: Differences and Cancellation
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.
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Earnest Money vs Down Payment vs Option Money (Article 1482)
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.
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What Happens to Contract Remedies When Performance Becomes Impossible?
Quick answer: When contractual performance becomes impossible, the available remedy depends on why performance became impossible, who caused it, whether the obligation involved a determinate thing or a particular act, and whether the impossibility is legally excusable. Specific performance may no longer be available, but resolution, restitution, or damages may still be relevant depending on…
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When Does a Contractual Cure Period Delay the Right to Terminate?
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…
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Can Delay Alone Be a Substantial Breach Under Article 1191?
Quick answer: Delay can become a substantial breach under Article 1191, but lateness alone does not automatically justify resolution. The key question is whether the delay is serious enough to defeat the purpose of the contract, especially where timing was essential or the delay made performance commercially or practically useless. This page focuses on the…
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What If Both Parties Breach the Contract? Article 1192 Explained
Quick answer: Article 1192 of the Civil Code applies when both parties to a reciprocal obligation commit breaches. If it cannot be determined which party first violated the contract, each party generally bears his or her own damages and the obligation is deemed extinguished. If one party clearly breached first, that party may bear responsibility,…
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Can I Recover My Down Payment if the Contract Is Cancelled?
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.
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Prescription of Contract Actions: How Long Do You Have to File?
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…
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Acceleration Clauses: Can the Entire Loan Become Due Immediately?
Quick answer: A valid acceleration clause may make the remaining loan balance due after the specified default. Enforcement depends on the clause’s wording, the occurrence of the trigger, required notice or demand under Civil Code Articles 1159 and 1169, and waiver through prior conduct, and the lawful computation of principal, interest, penalties, and credits. Governing…
