Practice question
A debtor has performed nothing under the main contract. A penalty is proved iniquitous or unconscionable in the circumstances. The creditor says courts lack all power to reduce it because there was no partial performance. Which is correct?
- No-performance cases can never be reviewed
- A penalty always equals criminal forfeiture
- Article 1229 permits reduction even without performance if the penalty is iniquitous or unconscionable
- The clause automatically validates every demand
- The debtor may erase the penalty without adjudication
Legal references
- Civil Code, Article 1229: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/53360
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