SECTION 6

OBLIGATIONS WITH A
PENAL CLAUSE
ARTICLE 1226.In obligations with a penal clause, the penalty
shall substitute the indemnity for damage and the payment
of interest in case of non-compliance, if there is no
stipulation to the contrary. Nevertheless, damages shall be
paid is guilty of fraud in the fulfillment of the obligation.

The penalty may be enforce only when it is demandable in

accordance with the provisions of this code ( 1152a)
MEANING OF PRIN CI PAL AN D ACCESS ORY OBLIGATION S

(1) PRINCIPAL OBLIGATIONS is one which can

stand by itsel f and does not depend for i ts vali dit y
and exist ence upon anot her obligat ion.

(2) AC CE SSO RY OBLIGATIONS is one which

is a ttach to a principal obligation and,
the refore, cannot stand alone.
mple (PRINCIPAL and ACCESSORY OBLIGATIONS)

Loan: 300, 000

Principal Obligation to pay P300,000

Obligation : Collateral (real state mortgage)
Accessory
 MEA NING OF O BLIGATIO N
WIT H A P EN AL CLA US E

An obligation with a penal clause is one which contains an accessory undertaking

to pay a previously stipulated indemnity in case of breach of the principal
prestation intended primarily to induse its fulfillment.

MEANING OF PENAL CLAUSE

A penal clause is an accessory undertaking attached to an obligation to assure
greater liability on the part of the obligorin case of breach of the obligation, i. e, the
obligation is not fulfilled, or is partly or irregulary complied with.
PURPOSE OF PENAL
They are:
CLAUSE
(1) to insure their performance by creating an effective
deterrent against breach, making the consequences of such breach as
onerous as it may be possible. This is the general purpose of a penal
clause.
(2) to substitute a penalty for the indemnity for damages and
the payment of interest in case of non-compliance (Art. 1226); or to
punish the debtop for the non fulfillment or violation of his
obligation.
In the first case , the purpose is reparation; in the second,
punishment.
KINDS OF PENAL CLAUSE
(1) As to its origin:
(a) Legal penal clause - When it is provided by the law;and

(b) Conventional penal clause- When it is provided for by

stipulation of the parties .

(2) As it's to purpose :

(a) Compensatory - When the penalty takes places of
penal clause damages; and
(b) Punitive penal - When the penalty is imposed merely as
clause punishment for a breach
KINDS OF PENAL CLAUSE
(3) As to its demandability or effect :

(a) Subsidiary or alternative

penal clause - When the penalty can be
enforced ;and
(b) Joint or cumulative
penal clause - When both the principal obligation and the
penal clause can be enforced .
Example(Subsiddiary or Alternative penal clause)

December 25

100,000

Only the penalty can be enforced

Example ( Joint or Cumulative penal clause)

In addition
P100, 000
ARTICLE 1227

The debtor cannot exempt himself from performhe obligation by

paying the penalty, save in the case where this right has been expressly
reserve for him. Neither can the creditor demand the fulfillment of the
obligation and the satisfaction of the penalty at the same time, unless
this right has been clearly granted him. However, if the creditor has
CUSTOMER
deciuire the fulfillment of the obligation, S
the performance thereof
should become imposible without his fault, the penalty may be enforced.
 01 02 03 04

JAN UA RY FEBRUA RY M ARCH A PRIL

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 NEXT
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PROJECT
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PR OJECT 1
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PR OJEC T 3
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PR OJEC T 2
TESTIMONIAL
S Rufus Stewart
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condimentum. Proin odio odio.

Morgan Maxwell
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condimentum. Proin odio odio.
 STRATEGIES
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STRATEGY
N°1
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STRATEGY
N° 2
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STRATEGY
N° 3
 OUR TEAM

Everest Cantu Drew Remy Marsh

Holloway
Ceo Of Ingoude Ceo Of Ingoude Ceo Of Ingoude
Company Company Company
THANK'S LA R A N A, IN C .

FOR
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WATCHING
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