Page 542 - Important Provisions of The New Civil Code

LIQUIDATED DAMAGES

Article 2226. Liquidated damages are those

agreed upon by the parties to a contract, to be

paid in case of breach thereof.

Article 2227. Liquidated damages, whether

intended as an indemnity or a penalty, shall be

equitably reduced if they are iniquitous or

unconscionable.

Article 2228. When the breach of the contract

committed by the defendant is not the one

contemplated by the parties in agreeing upon

the liquidated damages, the law shall determine

the measure of damages, and not the

stipulation.