Q. A lent money to B with a penalty clause providing for 6% per month. In case a suit is filed, what do you think the court will do with the penalty? (Solved)
1. It will declare it void because it is contrary to law;
2. It will declare it void because it is contrary to public policy;
3. It will reduce the penalty. (Art. 1229, NCC);
4. It will declare the penalty void as it is contrary to morals.
- c. It will reduce the penalty. (Art. 1229, NCC);