Grounds to Rescind a Contract Philippines
When two parties enter into a contract in the Philippines, they expect each other to fulfill their respective obligations as stated. However, there may be instances where either party may want to rescind or cancel the contract due to various reasons. In this article, we will discuss the grounds for rescinding a contract in the Philippines.
1. Mutual agreement of parties
The first and most common ground for rescinding a contract is by mutual agreement of parties. Both parties can agree to terminate the contract, and they can do this by drafting a mutual rescission agreement. This must be in writing and signed by both parties to be legally binding.
2. Breach of contract
A contract breach occurs when one party fails to fulfill their obligations as stated in the contract. This may include non-payment, failure to deliver goods or services, or not meeting deadlines. If a breach of contract occurs, the non-breaching party may seek damages or rescission of the contract.
3. Fraud
Fraud occurs when a party misrepresents or conceals important information that induces the other party to enter into the contract. If fraud is proven, the contract can be rescinded. The party committing fraud may also be held liable for damages.
4. Duress or undue influence
If one party is forced or coerced into signing the contract, it is considered duress. Undue influence happens when one party manipulates the other into entering into the contract. If either of these situations occurs, the contract can be rescinded.
5. Illegality
If a contract is illegal, it cannot be enforced, and any obligations arising from it are void. This may include contracts for illegal activities or those that violate public policy.
6. Impossibility of performance
If a contract becomes impossible to perform due to unforeseen circumstances such as natural disasters, war, or government intervention, the parties may rescind the contract.
In conclusion, there are several grounds for rescinding a contract in the Philippines. It is essential to understand these grounds and seek legal advice if you are considering rescinding a contract. Remember, a contract is a legally binding agreement, and rescinding it may have legal consequences.