Article 1226

RA 386 · Civil Code of the Philippines

ELI5— what this means for you

A penal clause sets a predetermined penalty in the contract for a breach. The penalty substitutes for actual damages — the creditor cannot claim both the penalty AND additional damages unless the law allows it.

Official text — RA 386

Full article text is being added. Read the official text at officialgazette.gov.ph.

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