Contracts and Rescission

Posted by Admin | Posted in Obligations and Contracts | Posted on 13-09-2010

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What is a contract? What is its nature and effects?

A contract is a meeting of minds between two persons whereby one binds himself with respect to the other, to give something or to render some service. (Article 1305, Civil Code of the Philippines)

There is no contract unless the following requisites concur: (1) consent of the contracting parties, (2) object certain which is the subject matter of the contract, and (3) cause of the obligation which is established. (Article 1318, Civil Code)

Contracts are perfected by mere consent, and from that moment the parties are bound not only to the fulfillment of what has been expressly stipulated but also to the consequences which according to their nature, may be in keeping with good faith, usage and law. (Article 1315, Civil Code)

A contract is an agreement, written or not, between persons whereby they bind themselves to give, to do or not to do something. It may be for free or gratuitous as in donations or it could be for a price like in sales.

The perfection of a contract means that parties are already expected to perform their part of the bargain. Perfection takes place when all the essential elements (stated in Article 1318) are present.  Most contracts are perfected by mere consent, or from the moment there is an agreement as to the subject matter and the consideration for the contract.  For example in a contract of sale, it is perfected from the moment the seller and the buyer agree that the buyer will take a particular item in exchange for a certain price.  Some contracts, however, require delivery of the object of the contract (e.g. property) before it is perfected, like in a contract of deposit or pledge. pinoylegal

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Will you or will you not?

Posted by Admin | Posted in Obligations and Contracts | Posted on 13-09-2010

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This is probably the question that has been bugging Willie Revillame in the past few days.  Will he end his contract with ABS-CBN?  He answered this by issuing a press release of his intention to end his contract with the network. Will he sign another one with GMA or TV-5?  A question he probably asked his lawyer a hundred times.  A matter which people could only speculate about since there has been no formal announcement yet that Revillame has indeed signed in with any of the other competing networks.

In his press release, Revillame claimed that a unilateral rescission of his contract is justified by the following reasons:

1. Suspension without pay

2. Unilateral cancellation of the Wowowee Program due to reasons not attributable to me. The Wowowee program became successful because of me, as the host/creative force. The ratings, in fact, fell because I was taken out as Host

3. Unilateral downgrading of my program from three (3) hours daily (Monday to Saturday) or eighteen (18) hours weekly to one (1) our weekly or seventeen (17) hours less.

4. Being placed on probation to a weekly program without assurance to reinstatement to daily programming.

5. Unilateral downgrading of my appearance from a ‘live’ to a ‘pre-recorded’ program, which constitutes prior restraint and censorship.

6. Due to 2 and 3 above, I was, and will be, deprived of my earning from ‘in-show’ product endorsements which has become part of my compensation package.

7. Deliberate sabotage of my image by the company by airing, or allowing to be aired, destructive pieces against me, instead of promoting me as a talent of the Company.

8. Abuse of right by the Company under a one-sided contract of adhesion, purposely intended to destroy my career and humiliate me, which is not in keeping with good faith, usage and law.

9. Refusing to salvage the Wowowee Program by reinstating me as Host when the rating started to decline with different trial hosts who did not generate the same viewership of 2-33% under my watch.

10. To continue to work under the proposed probation, censorship and prior restraint constitutes involuntary servitude.”

Willie has actually filed a case for Judicial Confirmation of Rescission of Contract with Damages before the Quezon City Regional Trial Court.   ABS CBN briefly stated that Willie has no right to unilaterally rescind the contract because he was the one who breached it.  As the party aggrieved by this breach of contract, it is the network  which has the right to terminate it.

This case is now pending before the court and it may not be proper to discuss its merits in this forum.  What the author would like is simply to state the applicable laws and jurisprudence relating to rescission of contracts for the understanding of the readers.

Update (Sept 18, 2010):

Revillame has signed in with TV-5 (formerly ABC-5).  TV-5 big boss Manny Pangilinan confirmed this with the media.  True to its word, ABS-CBN has filed a 486-million peso damage suit against Revillame.