Article 2088
RA 386 · Civil Code of the PhilippinesKey provision
ELI5— what this means for you
Pactum commissorium is PROHIBITED: a stipulation that the pledgee/mortgagee automatically becomes the owner of the pledged/mortgaged property if the debt is not paid. Such a stipulation is VOID.
Key point
A lender cannot include a clause saying they automatically own your collateral if you default — that is pactum commissorium and void.
Official text — RA 386
Full article text is being added. Read the official text at officialgazette.gov.ph.
Related
RELATED RIGHTS
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