Rescission of Contract Philippines Grounds

Rescission of Contract in the Philippines: Understanding the Grounds

A contract is a legally binding agreement between two parties that outlines their rights and responsibilities. However, there are times when one or both parties may want to terminate the contract due to various reasons. This is where the concept of rescission of contract comes into play.

Rescission of contract refers to the cancellation or termination of a contract by one or both parties. In the Philippines, rescission can be done through mutual agreement or through legal means. In this article, we will discuss the grounds for rescission of contract in the Philippines.

1. Mutual mistake – This occurs when both parties made a mistake during the formation of the contract. If the mistake is substantial enough to affect the terms of the contract, then either party can rescind the contract.

2. Fraud or misrepresentation – If one party intentionally lied or concealed important information from the other party to induce them to enter into the contract, then the party who was deceived can rescind the contract.

3. Duress or undue influence – If one party was forced or influenced by the other party to enter into the contract, then the affected party can rescind the contract.

4. Breach of contract – If one party fails to fulfill their obligations under the contract, then the other party can rescind the contract. However, rescission can only happen after the violating party has been given proper notice and opportunity to remedy the breach.

5. Impossibility of performance – If the contract becomes impossible to perform due to unforeseen circumstances, then either party can rescind the contract. This could be due to natural disasters, war, or other events beyond the control of the parties.

6. Illegality – If the contract violated any Philippine law or public policy, then either party can rescind the contract.

It is important to note that rescission of contract should be done in accordance with the provisions of the Civil Code of the Philippines. Proper notice must be given to the other party, and all relevant documents and evidence must be presented to support the grounds for rescission.

In conclusion, rescission of contract is a legal concept that allows parties to terminate a contract for various reasons. Understanding the grounds for rescission in the Philippines is important for anyone who is involved in a contractual agreement. If you are considering rescinding a contract, it is best to seek the advice of a lawyer who can guide you through the process.