Specific Performance & Rescission
Actions under Article 1191 to compel the breaching party to perform, or to cancel the contract and restore you to your position — with damages in either case.
Civil Litigation
A contract is the law between the parties. When the other side does not keep its word, we enforce yours — through specific performance, rescission, and damages before Philippine courts and arbitral tribunals.
Overview
Under Article 1159 of the Civil Code, obligations arising from contracts have the force of law between the parties and must be complied with in good faith. When one party breaks that law, the injured party is not left to absorb the loss: Article 1191 gives the choice between compelling performance and rescinding the contract, in either case with damages — actual damages for proven losses, and moral and exemplary damages where the breach was attended by fraud or bad faith. Where the parties agreed on a penal clause or liquidated damages, we enforce it; where the other side invokes one, we test it against the courts' power to temper unconscionable penalties.
Contract disputes are a core strand of our civil litigation practice. We act for buyers, sellers, lessors, lessees, contractors, owners, and suppliers in disputes over sale, lease, services, construction, supply, and distribution agreements — including construction contracts with arbitration clauses, which fall within the jurisdiction of the Construction Industry Arbitration Commission (CIAC). We also mount the defenses the law provides: fortuitous event, the other party's own prior breach, and prescription.
Just as importantly, we draft and review contracts so our clients never have to litigate them — clear terms, enforceable penalty clauses, and payment structures that keep leverage where it belongs. That preventive work runs through our corporate and commercial practice, and pairs naturally with our debt collection work when a breach comes down to money unpaid.
Scope of Work
Actions under Article 1191 to compel the breaching party to perform, or to cancel the contract and restore you to your position — with damages in either case.
Undelivered goods, defective deliveries, unpaid purchase prices, and broken supply and distribution commitments — for both aggrieved buyers and unpaid sellers.
Claims for defective work, delay, abandonment, and unpaid progress billings — before the courts, or before CIAC where the construction contract carries an arbitration clause.
Breach of lease terms, pre-termination disputes, unpaid rentals, and unperformed or badly performed service agreements — for lessors, lessees, clients, and providers.
Defending breach claims on the grounds the law recognizes — fortuitous event, the plaintiff's own prior breach, prescription, and penalties too unconscionable to enforce as written.
Contracts built to prevent disputes — clear obligations, enforceable penal clauses, and remedies that protect you if the other side defaults.
Common Questions
In reciprocal obligations, Article 1191 of the Civil Code gives the injured party a choice: compel the other party to perform (specific performance) or cancel the contract (rescission or resolution) — with damages in either case. You cannot have both performance and cancellation of the same obligation, so the choice is strategic: performance makes sense when you still want the deal completed, while rescission restores the parties to their positions before the contract and suits a relationship you want to exit. Which remedy serves you better depends on the contract, the breach, and what you stand to recover.
The starting point is actual or compensatory damages — the losses you can prove, including unrealized profits in proper cases. Beyond that, moral damages may be awarded where the breach was attended by fraud or bad faith, and exemplary damages where the defendant acted in a wanton, fraudulent, or oppressive manner. Courts may also award attorney's fees in the instances allowed by law, and legal interest on the amounts due. Philippine courts award damages on proof, not sympathy — so documentation of your losses is as important as proof of the breach itself.
As a rule, yes. Contracts are generally binding in whatever form they were made, provided the essential requisites of consent, object, and cause are present. The Statute of Frauds requires certain agreements — such as sales of real property, agreements not to be performed within one year, and guaranties — to be in writing to be enforceable, but even these can be taken out of the statute by partial or full performance. The real challenge with verbal contracts is proof: without a signed document, the case is built from messages, receipts, conduct, and witnesses, which is where careful lawyering matters most.
Under the Civil Code, an action based on a written contract must generally be brought within ten years from the time the right of action accrues, while an action on an oral contract prescribes in six years. Shorter periods apply to particular actions — rescission and some warranty claims, for example — and a written extrajudicial demand or acknowledgment of the debt can interrupt prescription. Because the applicable period turns on how the action is classified, it is worth having counsel assess your specific claim early rather than assuming you have time.
A penal clause fixes in advance what the breaching party must pay, and as a rule it substitutes for the indemnity of damages — meaning the injured party ordinarily need not prove actual loss to collect the penalty. Additional damages may still be recovered where the parties so stipulated, or where the debtor is guilty of fraud in the performance of the obligation. The courts, however, retain the power to reduce a penalty that is iniquitous or unconscionable, or where the obligation has been partly or irregularly complied with — so a penalty clause is powerful, but not absolute.
Work With Us
Reach us via Call, Viber, or WhatsApp at 0917-187-1951, or send us the contract and the facts for an initial assessment of your remedies.
Request a Consultation