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    Article 1191

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    Kristianly Hazel Esclares
    1) In reciprocal obligations, either party may rescind the contract if the other party substantially breaches their obligations under the contract. 2) The injured party has the option to either require the breaching party to fulfill their obligations or rescind the contract, and may also seek damages. 3) Judicial intervention is generally required to rescind a contract, but not if the contract itself provides that it can be rescinded for violations of its terms, even without court action. However, the rescinding party acts at their own risk without a court judgment validating the rescission.

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    Article 1191

    Uploaded by

    Kristianly Hazel Esclares
    742 views2 pages
    1) In reciprocal obligations, either party may rescind the contract if the other party substantially breaches their obligations under the contract. 2) The injured party has the option to either require the breaching party to fulfill their obligations or rescind the contract, and may also seek damages. 3) Judicial intervention is generally required to rescind a contract, but not if the contract itself provides that it can be rescinded for violations of its terms, even without court action. However, the rescinding party acts at their own risk without a court judgment validating the rescission.

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    1) In reciprocal obligations, either party may rescind the contract if the other party substantially breaches their obligations under the contract. 2) The injured party has the option to either require the breaching party to fulfill their obligations or rescind the contract, and may also seek damages. 3) Judicial intervention is generally required to rescind a contract, but not if the contract itself provides that it can be rescinded for violations of its terms, even without court action. However, the rescinding party acts at their own risk without a court judgment validating the rescission.

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    © All Rights Reserved
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    742 views2 pages

    Article 1191

    Uploaded by

    Kristianly Hazel Esclares
    1) In reciprocal obligations, either party may rescind the contract if the other party substantially breaches their obligations under the contract. 2) The injured party has the option to either require the breaching party to fulfill their obligations or rescind the contract, and may also seek damages. 3) Judicial intervention is generally required to rescind a contract, but not if the contract itself provides that it can be rescinded for violations of its terms, even without court action. However, the rescinding party acts at their own risk without a court judgment validating the rescission.

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    of 2

    G.R. No.

    190080 June 11, 2014

    GOLDEN VALLEY EXPLORATION, INC., Petitioner,


    vs.
    PINKIAN MINING COMPANY and COPPER VALLEY, INC., Respondents.

    In reciprocal obligations, either party may rescind the contract upon the others
    substantial breach of the obligation/s he had assumed thereunder. The basis therefor is
    Article 1191 of the Civil Code which states as follows:

    Art. 1191. The 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.

    The court shall decree the rescission claimed, unless there be just cause authorizing the
    fixing of a period.

    This is understood to be without prejudice to the rights of third persons who have
    acquired the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law.

    As a general rule, the power to rescind an obligation must be invoked judicially and
    cannot be exercised solely on a partys own judgment that the other has committed a
    breach of the obligation.26 This is so because rescission of a contract will not be
    permitted for a slight or casual breach, but only for such substantial and fundamental
    violations as would defeat the very object of the parties in making the agreement.27 As a
    well-established exception, however, an injured party need not resort to court action in
    order to rescind a contract when the contract itself provides that it may be revoked or
    cancelled upon violation of its terms and conditions

    [J]udicial intervention is necessary not for purposes of obtaining a judicial declaration


    rescinding a contract already deemed rescinded by virtue of an agreement providing for
    rescission even without judicial intervention, but in order to determine whether or not
    the rescission was proper.40 (Emphases and underscoring supplied)

    Casio V. Ca, G.R. No. 133803, September 16, 2005.

    As we once said in University of the Philippines v. De los Angeles,[20] involving


    the question of whether the injured party may consider the contract as rescinded even
    before any judicial pronouncement has been made to that effect:

    xxx the party who deems the contract violated may consider it
    resolved or rescinded, and act accordingly, without previous court action,
    but it proceeds at its own risk. For it is only the final judgment of the
    corresponding court that will conclusively and finally settle whether the
    action taken was or was not correct in law. But the law definitely does not
    require that the contracting party who believes itself injured must first file
    suit and wait for a judgment before taking extrajudicial steps to protect its
    interest. Otherwise, the party injured by the others breach will have to
    passively sit and watch its damages accumulate during the pendency of
    the suit until the final judgment of rescission is rendered when the law
    itself requires that he should exercise due diligence to minimize its own
    damages xxx.
    We see no conflict between this ruling and the previous
    jurisprudence of this Court invoked by respondent declaring that judicial
    action is necessary for the resolution of a reciprocal obligation; (Ocejo,
    Perez & Co. v. International Banking Corp., 37 Phil. 631; Republic v.
    Hospital de San Juan de Dios, et al., 84 Phil. 820) since in every case
    where the extrajudicial resolution is contested only the final award of the
    court of competent jurisdiction can conclusively settle whether the
    resolution was proper or not. It is in this sense that judicial action will be
    necessary, as without it, the extrajudicial resolution will remain
    contestable and subject to judicial invalidation, unless attack thereon
    should become barred by acquiescence, estoppel or prescription.

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