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Obligations and Contracts (Chapter 3 Sec 6)

The document discusses obligations with a penal clause under Philippine law, stating that a penalty substitutes damages and interest for non-compliance unless otherwise stipulated, and damages can still be claimed if the obligor refuses to pay the penalty or is fraudulent. It also defines principal and accessory obligations and obligations with a penal clause.

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292 views1 page

Obligations and Contracts (Chapter 3 Sec 6)

The document discusses obligations with a penal clause under Philippine law, stating that a penalty substitutes damages and interest for non-compliance unless otherwise stipulated, and damages can still be claimed if the obligor refuses to pay the penalty or is fraudulent. It also defines principal and accessory obligations and obligations with a penal clause.

Uploaded by

Leesh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Law on “Obligations and Contracts”

Section 6: Obligations with a Penal Clause


Art. 1226
In obligations with a penal clause, the penalty shall substitute the indemnity for damages
and the payment of interests in case of non-compliance, if there is no stipulation to the contrary.
Nevertheless, damages shall be paid if the obligor refuses to pay the penalty or is guilty of fraud
in the fulfillment of the obligation.
The penalty may be enforced only when it is demandable in accordance with the
provisions of this code.
Meaning of principal an accessory obligation.
 Principal obligation – one that could stand itself; does not depend for its validity and
existence upon another obligation.
 Accessory obligation – attached to a principal obligation; cannot stand alone.
Meaning o obligation with penal clause.
 Intended to induce fulfillment.
 The one which contains an accessory undertaking to pay a previously stipulated
indemnity in case of breach.
Penal Clause
 Accessory - attached to an obligation to assume greater liability.
 Penalty – making consequences for such breach as onerous as possible.
 Purpose: Reparation and Punishment

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