Practice question
A debtor refuses to pay a legally demandable penalty and claims the default substitute rule always prevents any damages. What does Article 1226 state?
- Refusal automatically cancels the obligation
- Only fraud can ever be an exception
- The creditor loses all remedies
- A penalty makes performance optional in every case
- Refusal to pay the penalty is itself among the stated exceptions concerning damages
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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