Great!
Now we’re moving into Article 1234, which introduces an exception to the strict rule
in Article 1233. Let’s carefully unpack this so it’s crystal clear.
🔹 Article 1234 – Substantial Performance in Good Faith
The general rule in Article 1233 is: No complete performance = No payment.
But Article 1234 softens this rule by introducing the doctrine of substantial performance.
✅ What does it mean?
If the debtor (obligor) has substantially performed the obligation in good faith,
He can still recover payment as if he had fully complied,
But the creditor (obligee) may deduct damages for the part not done.
👉 This balances fairness: the creditor still benefits from the work, while the debtor is not
punished too harshly for minor deficiencies.
🔑 Requisites for Article 1234 to Apply
1. Substantial performance → the essential part of the contract has been done; only
minor parts are missing.
2. Good faith → the debtor honestly tried to fulfill everything and did not deliberately
skip or neglect part of the obligation.
📌 Note: Good faith is presumed unless proven otherwise.
🆚 Distinction: Substantial vs. Partial Performance
Partial performance (Art. 1233): Incomplete, essential parts missing → creditor
may refuse.
Substantial performance (Art. 1234): Core/essential obligation is done; only minor
deficiency → debtor can still demand payment (minus damages).
⚖ Example from the text
Obligation: S must deliver 500 bags of cement to B.
Reality: S delivers only 450 bags because of cement shortage (reason beyond his
control).
Legal Effect:
o This is substantial performance in good faith.
o S can recover payment for the 450 bags.
o The value of 50 missing bags will be deducted.
🔹 Additional Real-Life Examples
1. Construction Contract
o A contractor agrees to build a house for ₱2,000,000.
o He completes everything except installing 2 windowpanes (worth ₱10,000).
o This is substantial performance in good faith.
o The owner must pay the contractor ₱1,990,000 (full price minus damages for
the missing windows).
2. Tutoring Services
o A tutor promises 10 sessions of Math review for ₱5,000.
o He successfully gives 9 sessions, but the 10th session was missed due to a
typhoon and could not be rescheduled.
o Since 90% of the contract is fulfilled and the tutor was in good faith, he can
recover payment for 9 sessions (₱4,500).
🔹 Recap
Article 1233: Strict rule – full performance is needed.
Article 1234: Exception – if there is substantial performance in good faith, debtor can
still recover, minus damages.
Protects both sides: creditor gets the value of what’s missing, debtor gets fair pay for
what he actually did.
🔹 Common Pitfalls
Thinking any incomplete work = substantial performance (❌ No, the missing part
must be minor).
Forgetting that good faith is required. If the debtor deliberately fails to complete, he
cannot invoke Article 1234.
Confusing substantial performance with partial performance.
👉 Do you want me to draw a comparison table between Art. 1233 and Art. 1234 (Strict
Performance Rule vs. Substantial Performance Exception) so it’s easier for reviewing?
