Liabilities under a failed contract a two-way street

Persida Acosta

Persida Acosta

Dear PAO,
I had an agreement with my former officemate that I am purchasing her 2009 sedan. We executed the contract of sale last month and I have already given her my full payment but she has not delivered to me the car until now. I have already made several demands, both verbal and in writing, but to no avail. Can I file a case in court? She claims that I was not able to comply with some of our conditions, but I think this is already beside the point because she still accepted all my payments. I hope you can advise me on this matter. Thank you and best regards.

Dear Josephine,
As a rule, parties to a contract may establish such stipulations, clauses, terms and conditions that may be deemed to be convenient for them as long as these are not contrary to law, morals, good customs, public order and public policy (Article 1306, New Civil Code of the Philippines). Once they have come to an agreement, the parties must comply with their respective obligations as these have the force of law between them. (Article 1159, Id.)

In the situation that you have presented, it is safe to say that what exists between you and your former officemate is a contract of sale of a motor vehicle. Considering that, as you have mentioned in your letter, you have already completely settled the payment for the vehicle, it becomes incumbent upon your former officemate to deliver the same. Since she continues to neglect her obligation to deliver, you may file an action for rescission of contract before the court. It is explicitly provided for under Article 1191 of the New Civil Code of the Philippines:

“The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.

“The injured party may choose between the fulfillment and the rescission of the obligation with the payment of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should become impossible. x x x”

Insofar as she claims that you were not able to comply with some of the conditions of your contract, we believe that it is just a matter of defense on her part or a justification that the court may or may not appreciate during the proceedings. If the court determines that she inexcusably neglected her obligation, the contract between the two of you may be rescinded or cancelled and the court may award damages in your favor. Nevertheless, if the court gives credence to her claims that you, yourself, fell short of what was incumbent upon you, the court may temper the award for damages, or rule that each of you bears your own damages. This is in consonance with Article 1192 of the law, which provides that: “In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages.”

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to


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1 Comment

  1. I would have thought that if the person refused to give you the car becuse you say paid late on occasions she has the right to keep the car. But she cant keep the car & your money. So one way or another you wont lose both the car & the money.