Practice question
A court evaluates a challenged stipulated rate. One party argues that all rates above the legal rate are necessarily unconscionable; the other argues that signed rates can never be reduced. Which approach accords with Lara's Gifts?
- Accept both propositions
- Assess the established context and applicable equitable rules; neither categorical proposition is correct
- Automatically replace every agreement with zero interest
- Ignore the parties' circumstances in every case
- Treat every disputed rate as a criminal conviction
Legal references
- Civil Code Articles 1169, 1956, 1959, 2209 and 2212: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html
- Nacar v. Gallery Frames, GR 189871, August 13, 2013, main decision: https://lawphil.net/judjuris/juri2013/aug2013/gr_189871_2013.html
- Lara's Gifts & Decors v. Midtown Industrial Sales, GR 225433, September 20, 2022, main resolution: https://lawphil.net/judjuris/juri2022/sep2022/gr_225433_2022.html
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