Obligations and Contracts

THE GUARANTOR’S LIABILITY CANNOT EXCEED PRINCIPAL OBLIGATION

THE  GUARANTOR’S  LIABILITY  CANNOT EXCEED PRINCIPAL OBLIGATION

Art. 2054. A guarantor may bind himself for less, but not for more than the principal debtor, both as regards the amount and the onerous nature of the conditions.
 
Should  he  have  bound  himself  for  more,  his  obligations shall be reduced to the limits of that of the debtor. (1826)

1.   Guaranty  is  a  subsidiary  and  accessory  contract—the guarantor  cannot bind himself for more than the principal debtor and even if he does, his liability shall be reduced to the limits of that of the debtor

2.   Interest,  judicial  costs,  attorney’s  fees  as  part  of  the damages may be recovered
a.    The  surety  is  made  to  pay  not  by  reason  of  the contract  but  by  reason  of  his  failure  to  pay  when demanded and for having compelled the creditor to resort to the courts to obtain payment
b.   Interest  doesn’t  run  from  the  time  the  obligation becomes due but from the filing of the complaint

3.   Penalty may be provided


Follow us on streaming platforms

Musikatorni is a musical project by Atty. Ranny Randolf B. Libayan, known for its original song compositions that blend insightful lyrics with captivating melodies.
Show More