ARTICLE 1229-1230

• What can a judge do if the principal obligation has been partly complied with by the debtor?


  The judge shall equitably reduce the penalty.
• Under what condition can a penalty be reduced even if there has been no performance?


  If the penalty is iniquitous or unconscionable.
• What are the conditions under which a judge can reduce penalties?


  • Principal obligation partly complied with by the debtor
  • Irregular performance of the principal obligation
  • Penalty deemed iniquitous or unconscionable
  • Limited to private contracts
• What does "iniquitous or unconscionable" mean in the context of penalties?


  It refers to penalties that are revolting to the conscience or grossly disproportionate to the damages suffered.
• What are the conditions under which a penalty is not enforceable?


  1. Impossible performance due to fortuitous events
  2. Creditor prevented debtor from fulfilling obligation
  3. Penalty contrary to good morals or customs
  4. Both parties guilty of breach of contract
  5. Breach of contract by the creditor
  6. No willful or culpable violation by either party
• What happens to the penal clause if the principal obligation is nullified?


  The nullity of the principal obligation carries with it that of the penal clause.
• Can a penal clause exist independently of the principal obligation?


  No, the penal clause cannot exist alone as it is an accessory to the principal obligation.
• If a penal clause is void, what happens to the principal obligation?


  The principal obligation remains enforceable.
• In the example given, what is the penalty for non-payment of P10,000?


  P1,000 per day as penalty shall be imposed.
• What is the implication of a void contract regarding the principal obligation?


  A void contract does not excuse the debtor from paying the principal obligation.