Philippine Bar review · Topic

Obligations with a Penal Clause

Explore Obligations with a Penal Clause in Civil Obligations for the Philippine Bar. Browse subtopics and published practice questions, then take a quiz or…

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Practice questions

  1. Absent contrary stipulation and the statutory exceptions, what does the penalty replace upon noncompliance?
  2. Must the creditor prove actual damages before demanding a properly demandable penalty?
  3. Does nullity of a penal clause necessarily invalidate an otherwise valid principal obligation?
  4. A debtor wants to abandon performance and simply pay the stipulated penalty. The contract expressly reserves no such op…
  5. A debtor partly complies with the principal obligation. The creditor demands the full penalty without any equitable adj…
  6. A debtor has performed nothing under the main contract. A penalty is proved iniquitous or unconscionable in the circums…
  7. A contract contains a demandable penalty and no clear grant allowing simultaneous fulfillment and penalty. The creditor…
  8. Explain the substitute function of a penalty and the Article 1226 exceptions concerning damages.
  9. Distinguish the two bases for reduction under Article 1229.
  10. Explain the different effects of an invalid penalty clause and an invalid principal obligation.
  11. Does a written penal clause become enforceable before it is legally demandable merely because it exists in the contract?
  12. If a debtor commits fraud in fulfilling the obligation, does Article 1226 categorically bar damages beyond the penalty?