Diane G. de Leon v. Broadwater Marine Australia

Summary

Diane G. De Leon filed a complaint for rescission of contract and damages against Broadwater Marine Australia, Inc., claiming substantial breach of their verbal agreement. The Regional Trial Court dismissed the complaint, finding no substantial breach warranting rescission. The Court of Appeals affirmed this decision. The Supreme Court denied De Leon's petition for review, emphasizing that under Article 1191 of the Civil Code, rescission of reciprocal obligations requires proof of substantial breach that defeats the parties' contractual purpose, not mere casual breach. The Court found insufficient evidence to establish such substantial breach by the required preponderance of evidence standard, thereby upholding the lower courts' uniform findings and demonstrating the high evidentiary threshold for contract rescission under Philippine civil law.