Experiencing a breach of contract is a common issue that can arise during the life of any agreement. Despite the best efforts to draft contracts carefully, unforeseen circumstances can sometimes prevent a party from fulfilling their obligations, leading to a contractual breach. It is crucial to understand your rights and the steps you can take in such situations.

When a breach occurs, the first step is often to attempt negotiation and resolution. The parties involved may try to resolve the issue by making amendments or adding addenda to the contract. If the original contract does not accurately reflect the intentions of the parties, it may be reformed under Article 1359 of the Civil Code. In some cases, it might be appropriate to cancel or rescind the contract, as provided under Article 1380. The injured party may also choose to file an action for specific performance, compelling the breaching party to fulfill their contractual obligations, as stated in Article 1233. Alternatively, the injured party can seek damages to compensate for any losses incurred due to the breach, as per Article 1170.

If you find yourself on the other side of a breach of contract claim, several defenses may be available to you. One such defense is the impossibility or impracticability of performance, which can be invoked if unforeseen events have made fulfilling the contract impossible or impracticable, as recognized in Article 1266. Another defense is mutual mistake, where both parties were mistaken about a fundamental aspect of the contract, as covered by Article 1331. Additionally, you might argue duress or undue influence, demonstrating that you were coerced into entering into the contract, as per Article 1335. Fraud is another potential defense, where you can show that the contract was based on fraudulent misrepresentations, as specified in Article 1338.

Understanding these steps and defenses is essential for effectively managing a breach of contract situation. For more information, please contact us at info@gqlaw.com.ph.