Rescission of Contract to Sell Philippines: What You Need to Know
A contract to sell is a legal agreement between a buyer and a seller for the transfer of ownership of a property in the Philippines. This contract outlines the terms and conditions of the property sale, including the purchase price, payment terms, and other relevant details.
However, there may be instances where a party wants to rescind or cancel the contract due to various reasons. In this article, we will discuss the rescission of a contract to sell in the Philippines, its legal basis, and what you need to know as a property buyer or seller.
What is Rescission of Contract to Sell?
Rescission of contract to sell is an act of canceling or terminating a contract to sell that has already been entered into by the parties involved. This means that the obligations and responsibilities of both the buyer and seller are terminated, and the property will not be sold to the buyer.
Legal Basis of Rescission of Contract to Sell
The rescission of a contract to sell in the Philippines is governed by the Civil Code of the Philippines. According to Article 1191, the party who fails to comply with the obligation of the contract may be compelled to fulfill the obligation or pay damages.
The affected party may also have the right to rescind or cancel the contract, provided that the failure to fulfill the obligation is due to the fault of the other party. This means that if the buyer or seller fails to fulfill their obligations under the contract, the other party may rescind the contract.
Causes of Rescission of Contract to Sell
There are different reasons why a party may want to rescind a contract to sell. Some of the common reasons are:
1. Failure to pay the purchase price: If the buyer fails to pay the agreed purchase price or fails to pay within the agreed timeframe, the seller may rescind the contract.
2. Non-delivery of the property: If the seller fails to deliver the property to the buyer within the agreed timeframe, the buyer may rescind the contract.
3. Breach of contract: If either party fails to fulfill their obligations under the contract, the other party may rescind the contract.
4. Mutual agreement: Both parties may agree to rescind the contract mutually. However, this agreement should also be in writing.
Process of Rescission of Contract to Sell
If you want to rescind a contract to sell in the Philippines, the following steps should be taken:
1. Serve notice to the other party: The party who wants to rescind the contract should serve a written notice to the other party stating the reason for the rescission. This notice should be sent through registered mail or personal delivery.
2. Wait for the response of the other party: The other party may respond by either acknowledging the rescission or by disputing it. If they dispute the rescission, the issue may need to be resolved in court.
3. Return the payment: If there has been payment made, the party who rescinds the contract should return the payment received from the other party.
Rescission of contract to sell in the Philippines is a legal process that can be done by either the buyer or the seller if there has been a breach or default in the contract. It is important to know your rights and obligations as a party to a contract to sell to avoid any legal disputes. If in doubt, seek legal advice to ensure that you are making the right decision.