Philippine Bar review · Question

Practice question: Obligations with a Penal Clause

Multiple Choice Hard

Practice question

A creditor proves fraudulent fulfillment and compensable additional loss. The debtor invokes the penalty as an absolute ceiling, although no valid contrary legal limitation is established. Which analysis is correct?
  1. Fraud can never affect the substitute rule
  2. Article 1226’s fraud exception prevents treating the penalty as an automatic absolute bar to the applicable damages
  3. A signature immunizes all fraud
  4. No evidence of loss may ever be heard
  5. The penalty clause becomes a criminal acquittal

Legal references

  • Civil Code, Articles 1209-1210,1223-1230,1238-1243,1266-1268 and1423-1430: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html

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