This case has been cited 2 times or more.
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2014-08-27 |
LEONARDO-DE CASTRO, J. |
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| Moreover, the general rule is that in the absence of a stipulation, a party cannot unilaterally and extrajudicially rescind a contract. A party must invoke the right to rescind a contract judicially.[39] It is also settled that the rescission of a contract based on Article 1191 of the Civil Code requires mutual restitution to bring back the parties to their original situation prior to the inception of the contract. Rescission creates the obligation to return the object of the contract. It can be carried out only when the one who demands rescission can return whatever he may be obliged to restore.[40] | |||||
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2014-06-11 |
PERLAS-BERNABE, J. |
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| As a general rule, the power to rescind an obligation must be invoked judicially and cannot be exercised solely on a party's 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.[28] As elucidated in Froilan v. Pan Oriental Shipping Co.,[29] "there is x x x nothing in the law that prohibits the parties from entering into agreement that violation of the terms of the contract would cause cancellation thereof, even without court intervention."[30] Similarly, in Dela Rama Steamship Co., Inc. v. Tan,[31] it was held that judicial permission to rescind an obligation is not necessary if a contract contains a special provision granting the power of cancellation to a party.[32] | |||||