- Statute
- Civil Code
- Article
- Art. 2227
- Topic
- Other Kinds of Damages
- Status
- In force
- Book
- BOOK IV Obligations and Contracts
- Title
- TITLE XVIII DAMAGES
- Chapter
- CHAPTER 3 Other Kinds of Damages
- Year
- 1949
- Cited by
- Multiple Supreme Court decisions
The provision
Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.
Intellegal Wiki · In plain terms
Courts may fairly cut down liquidated damages that the parties agreed on in advance, whether the sum was meant as compensation or as a penalty, when the amount turns out to be unjust or unconscionable.
An editorially maintained plain-language explanation of this provision — not legal advice.
Intellegal Wiki · How the courts apply it
In Clarita D. Aclado v. Government Service Insurance System, the Supreme Court held: Interest and penalty charges that are unconscionable are void and may be equitably reduced by the courts under Articles 1229 and 2227 of the Civil Code.
One leading Supreme Court case applying this provision.
Cases applying this article
- Clarita D. Aclado v. Government Service Insurance System G.R. No. 260428
- Jose v. Ramirez G.R. No. 237823
- Spouses Florentino T. Mallari v. Mallari G.R. No. 197861
- Urban Consolidated Constructors Philippines v. The Insular Life Assurance Co. G.R. No. 180824
- State Investment House v. Court of Appeals G.R. No. 112590
- Domel Trading Corporation v. Honorable Court of Appeals G.R. No. 84813
- Spouses Jimmy Tan v. Philippine Savings Bank G.R. No. 211306