A breach of contract occurs when a party fails, without lawful excuse, to perform any promise that forms part or all of an agreement. Under the Civil Code of the Philippines, obligations arising from contracts carry the force of law between the contracting parties and must be complied with in good faith.
When a party fails or refuses to honor their contractual commitments, Philippine law provides clear definitions, evidentiary requirements, and judicial remedies to protect the aggrieved party.
1. What Is a Breach of Contract?
Under Philippine civil law, breach of contract is grounded in the non-performance or improper performance of a valid obligation.
Article 1159, Civil Code of the Philippines:
“Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.”
Article 1170, Civil Code of the Philippines:
“Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.”
Philippine jurisprudence distinguishes between a substantial breach and a slight or casual breach. As held by the Supreme Court in Song Fo & Co. v. Hawaiian-Philippine Co. (G.R. No. L-23769, September 16, 1925):
“Rescission will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so substantial and fundamental as to defeat the object of the parties in making the agreement.”
2. Quantum of Proof Required in Court
To successfully prove a breach of contract in a Philippine court, the plaintiff must establish the claim by a preponderance of evidence.
Section 1, Rule 133, Revised Rules on Evidence:
“In civil cases, the party having the burden of proof must establish his case by a preponderance of evidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of the case…”
The plaintiff must present clear evidence showing:
- The existence of a valid and enforceable contract.
- The plaintiff’s compliance with their obligations under the contract.
- The defendant’s failure or refusal to perform their corresponding obligation.
- The resulting damage or injury suffered by the plaintiff.
3. Legal Remedies for Breach of Contract
When a breach occurs, the aggrieved party has statutory remedies under Article 1191 of the Civil Code, which provides for alternative remedies: specific performance or rescission (resolution), both with damages.
Article 1191, 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.”
Primary Legal Options:
- Action for Specific Performance: Compelling the defaulting party to perform the exact terms of the agreement.
- Action for Rescission (Resolution): Canceling the contract and restoring the parties to their original status prior to the agreement (status quo ante).
- Action for Damages: Recovering actual, moral, nominal, temperate, liquidated, or exemplary damages under Title XVIII of the Civil Code (Articles 2195–2235).
DISCLAIMER: This article is for educational and informational purposes and should not be considered formal legal advice. If you need assistance in any potential conflicts with an employer in Cebu City, Mandaue, and Lapu-Lapu or anywhere in Cebu Province, consult with a legal professional.
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