Practice question
A contract contains a demandable penalty and no clear grant allowing simultaneous fulfillment and penalty. The creditor elects performance and demands both as an automatic entitlement. Performance remains possible. Which is correct?
- Both are always cumulative
- Only the debtor’s preference controls
- The penalty automatically erases every obligation
- Article 1227 generally bars simultaneous demands absent a clear grant; its separate later-impossibility qualification must be assessed only when those facts exist
- All penalty clauses are void
Legal references
- Civil Code, Article 1227: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/53360
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