Rescission of Contract Philippines Sample: A Comprehensive Guide
In the Philippines, a contract is a legally binding agreement between two parties. However, there may be instances where one or both parties wish to cancel or rescind the contract. This could happen due to various reasons, such as a breach of contract, non-performance, or fraud. In such cases, the parties need to follow a specific legal process to rescind the contract. This article will provide a comprehensive guide on the rescission of contract Philippines sample.
What is Rescission of Contract?
Rescission of contract is the legal process of canceling or terminating a contract. It is a remedy available to both parties to a contract in case of a breach or non-performance. Rescission of contract can be either mutual or one-sided, depending on the situation and the terms of the contract.
In the Philippines, rescission of contract is covered under Article 1191 of the Civil Code. According to this article, “[t]he 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.”
In simple terms, this means that if one party fails to fulfill their obligations under the contract, the other party has the right to rescind the contract and claim damages.
When to Rescind a Contract?
A contract can be rescinded when one or both parties are not able to fulfill their obligations under the contract. This could be due to various reasons, such as:
– Breach of contract: When one party fails to fulfill their obligations under the contract.
– Non-performance: When one party is unable to perform their obligations due to unforeseen circumstances or events beyond their control.
– Fraud: When one party is induced into signing the contract through deceit or misrepresentation.
– Mistake: When one or both parties make a mistake in the contract, such as a wrong price or quantity.
Rescission of Contract Philippines Sample
If you wish to rescind a contract in the Philippines, you need to follow a specific legal process. Here are the steps you need to take:
Step 1: Send a Notice of Rescission
The first step in rescinding a contract is to send a notice of rescission to the other party. This notice should clearly state the reasons for rescission and the date on which the contract will be rescinded. The notice should be sent through registered mail or a courier service that requires a signature upon receipt.
Step 2: Await Response from Other Party
After sending the notice of rescission, you need to wait for a response from the other party. They may choose to accept the rescission or contest it. If they accept the rescission, you can move on to the next step. If they contest it, you may need to engage in negotiations or file a case in court.
Step 3: Return Property or Payment
If the contract involved the exchange of property or payment, you need to return the property or payment to the other party upon rescission. This should be done within a reasonable time frame, as specified in the contract or by law.
Step 4: File a Case in Court (optional)
If the other party contests the rescission or refuses to return the property or payment, you may need to file a case in court. This will involve presenting evidence and arguments to support your claim for rescission.
Conclusion
Rescission of contract is a legal process that allows parties to a contract to cancel or terminate the contract. It is a remedy available to both parties in case of a breach, non-performance, fraud, or mistake. If you wish to rescind a contract in the Philippines, you need to follow a specific legal process, which includes sending a notice of rescission, returning property or payment, and possibly filing a case in court. By following the correct procedures, you can protect your rights and claim damages for any losses incurred.