Demand and Consequences of Delay

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What constitutes delay – As a general rule, the debtor is in delay reckoned from the time the creditor/obligee makes a judicial or extrajudicial demand the fulfillment of the obligation from the debtor/obligor.[1] However, in reciprocal obligations, a party does not incur in delay “if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him.”[2] Conversely, a party is in delay from the moment the other party fulfills his obligation.[3]

What constitutes a judicial demand and an extrajudicial demand – A judicial demand happens when the creditor files a suit in court.[4] An extrajudicial demand happens when the creditor demands the performance of an obligation either verbally or by writing a demand letter against the debtor.[5]

Best Legal Practices

  • State and use the term “demand” on the letter – A demand letter should clearly and categorically state therein that the debtor’s obligation is due and demandable. Consequently, the term “demand” should be stated and used in such letter. The demand letter is the best proof to show that a demand was made to put the debtor in default.
  • Service of demand letter – Whenever practicable, the demand letter should be delivered and served to the debtor via personal service and the latter (or person of sufficient discretion living in his home or working at his office) should sign a receiving copy acknowledging receipt thereof. If receipt is refused, the demand letter may be tendered by leaving a copy thereof and have the server execute an affidavit of service. Moreover, the demand letter should also be sent via registered mail and private courier – both with return card. These documents will serve as proof of service of demand letter to the debtor.

Importance of demand and consequences of delay – A demand is necessary in order to make the obligation due and demandable.[6] In addition, a judicial demand and a written demand, as well as a written acknowledgment of a debt by the debtor, will interrupt the running of the prescriptive period,[7] which is the time given within which an obligation may be demanded.[8]

When demand is not necessary – Demand is not required to put the debtor in default in the following:[9]

  • When the obligation or the law expressly so declare;
  • When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
  • When demand would be useless, as when the obligor has rendered it beyond his power to perform.

[1] CIVIL CODE. Paragraph 1, Article 1169.

[2] Ibid. Paragraph 3, Article 1169.

[3] Ibid.

[4] Laurencio C. Ramel, et al., v. Daniel Aquino, et al., G.R. No. 133208, 31 July 2006.

[5] Permanent Savings and Loan Bank v. Mariano Velarde, G.R. No. 140608, 23 September 2004.

[6] Ibid. Paragraph 1, Article 1169.

[7] Ibid. Article 1155.

[8] Permanent Savings and Loan Bank v. Mariano Velarde, G.R. No. 140608, 23 September 2004.

[9] CIVIL CODE. Paragraph 2, Article 1169.

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