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Questions and Answers
In an obligation with a penal clause, what does the penalty take the place of?
In an obligation with a penal clause, what does the penalty take the place of?
- Interest payments
- Actual damages
- Indemnity for damages (correct)
- Principal prestation
According to Art. 1226, what is not necessary in order to demand the penalty in an obligation with a penal clause?
According to Art. 1226, what is not necessary in order to demand the penalty in an obligation with a penal clause?
- Satisfaction of the penalty
- Interest payments
- Proof of actual damages (correct)
- Fulfillment of the obligation
When can the creditor demand both the fulfillment of the obligation and the satisfaction of the penalty in an obligation with a penal clause?
When can the creditor demand both the fulfillment of the obligation and the satisfaction of the penalty in an obligation with a penal clause?
- When there are punitive damages involved
- When the penalty is compensatory
- When the right has been clearly granted to him (correct)
- When only the penalty may be demanded
What type of penal clause allows for only the penalty to be demanded in case of breach?
What type of penal clause allows for only the penalty to be demanded in case of breach?
In what situation can both the penalty and the principal obligation be enforced in an obligation with a penal clause?
In what situation can both the penalty and the principal obligation be enforced in an obligation with a penal clause?
Under what circumstance can a creditor not demand both the fulfillment of the obligation and the satisfaction of the penalty?
Under what circumstance can a creditor not demand both the fulfillment of the obligation and the satisfaction of the penalty?
What is subrogation in the context of the text?
What is subrogation in the context of the text?
When is legal subrogation presumed according to the text?
When is legal subrogation presumed according to the text?
What is required for voluntary or conventional subrogation to take place?
What is required for voluntary or conventional subrogation to take place?
Which statement about voluntary or conventional subrogation is true based on the text?
Which statement about voluntary or conventional subrogation is true based on the text?
What cannot compel a creditor to subrogate a payer in his rights, according to the text?
What cannot compel a creditor to subrogate a payer in his rights, according to the text?
In what cases is there a presumption of legal subrogation according to the text?
In what cases is there a presumption of legal subrogation according to the text?
When can a penalty be enforced according to the Civil Code?
When can a penalty be enforced according to the Civil Code?
In which scenario can the penalty be demanded along with damages and interests according to the text?
In which scenario can the penalty be demanded along with damages and interests according to the text?
Under what conditions can a court reduce a penalty imposed by the parties?
Under what conditions can a court reduce a penalty imposed by the parties?
What happens if the penal clause is declared null and void by the courts?
What happens if the penal clause is declared null and void by the courts?
Under what circumstances may damages and interests be demanded aside from the penalty according to Art. 1126?
Under what circumstances may damages and interests be demanded aside from the penalty according to Art. 1126?
In what case can a penalty not be enforced according to Art. 1306?
In what case can a penalty not be enforced according to Art. 1306?
Study Notes
Obligation with a Penal Clause
- In an obligation with a penal clause, the penalty takes the place of damages and interest.
Demanding the Penalty
- According to Art. 1226, it is not necessary to prove the amount of damages to demand the penalty in an obligation with a penal clause.
- The creditor can demand both the fulfillment of the obligation and the satisfaction of the penalty when the obligation is breached.
Types of Penal Clauses
- A penal clause that allows for only the penalty to be demanded in case of breach is called a "penalty exclusive of damages".
- Both the penalty and the principal obligation can be enforced when the breach is not entirely the debtor's fault.
Subrogation
- Subrogation is the act of substituting one creditor for another.
- Legal subrogation is presumed when a third party pays the debt on behalf of the debtor or when a creditor receives payment from a third party.
- Voluntary or conventional subrogation requires the agreement of all parties involved.
- Voluntary or conventional subrogation is a contractual agreement between the parties.
- A creditor cannot be compelled to subrogate a payer in his rights.
Enforcing a Penalty
- A penalty can be enforced according to the Civil Code.
- The penalty can be demanded along with damages and interests when the breach is not entirely the debtor's fault.
Reducing a Penalty
- A court can reduce a penalty imposed by the parties if it is deemed excessive.
Null and Void Penal Clause
- If the penal clause is declared null and void by the courts, the creditor can still demand damages and interests.
Damages and Interests
- Damages and interests can be demanded aside from the penalty when the breach is not entirely the debtor's fault (Art. 1226).
- A penalty cannot be enforced if the debtor is not entirely at fault (Art. 1306).
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Description
Test your knowledge about obligations with a penal clause, which includes an accessory undertaking to pay a stipulated indemnity in case of breach. Learn about the different kinds of penalties based on their origin and purpose.
