Article 2226
RA 386 · Civil Code of the Philippines
ELI5— what this means for you
Liquidated damages are pre-agreed penalties fixed in the contract itself. If agreed to beforehand and not unconscionable, courts generally enforce them without requiring proof of actual loss.
Official text — RA 386
Liquidated damages are those agreed upon by the parties to a contract, to be paid in case of breach thereof.
Source: lawphil.net (RA 386 as amended)
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