double breach

what happens if both parties breach a contract - need your advice.

my cousin signed a franchise agreement contract way back 2005 for a 5 year term. part of the contract was that one of the party will not enter into agreement and/or open any outlet within the territorial/jurisdictional boundaries of a particular city.

another part of the contract was that one party is expected to operate (continued operation) for the period of the contact and in the event that it does not comply or cease to operate for a period of 30-45 days that the agreement will be cancelled and guarantee deposits will be forfieted.

- ang nangyari po is nagopen pa din ng isang branch/outlet yun isang party without notice (nafound out na lang sa print advertisement) though nilagay nila as branch intended for another town but the physical office itself operated within the jurisdiction and boundary of the original branch thus affecting the sales and lead to office closure of the original branch.

- the original branch does not file any case back then as a good will because meron pa sila ibang business deals. what the other party did is to wait for the term of contract to end (year 2010) and ask for a refund.

now, ayaw na magrefund nun isang party kasi forfieted na daw due to non-operation.

ano kaya po best option ng cousin ko and hahayaan na lang ba nya kasi meron din sila fault. ayaw din naman nila ng kaso kaso and need lang ng mediation to clear everything and hindi nila hahabulin kung wala talaga. thank you po sa magrereply.

how much is this deposit?

the question is whether the breach was substantial, and this is a question of specific circumstances. it can be argued that encroachment in the exclusive territory is a substantial breach, but the manner of rescinding the agreement should be through a written notarized notice.

as for the non-return of the deposit, that is a contractual stipulation. your cousin will have to prove his claim of breach to be entitled to reduction of this penalty or even recovery of his losses.

attyLLL wrote:how much is this deposit?

the question is whether the breach was substantial, and this is a question of specific circumstances. it can be argued that encroachment in the exclusive territory is a substantial breach, but the manner of rescinding the agreement should be through a written notarized notice.

as for the non-return of the deposit, that is a contractual stipulation. your cousin will have to prove his claim of breach to be entitled to reduction of this penalty or even recovery of his losses.

thank you po for the reply. anyway, i asked my cousin a while ago and nasabi nya na meron sila proof ng breach kaya lang careful lang po ako sa details kasi we're in a public forum and hindi pa ako possible mag send ng private message.

kindly let me know on how can i ask you for your full advice (privately) regarding this matter. thank you very much.

my email address is on my profile.

i asked how much the deposit was because if it is less than 100k, you can just file a small claims case.