Short answer. By who broke it first. Article 1192 provides that where both parties have committed a breach, the liability of the first infractor shall be equitably tempered by the courts — and if it cannot be determined who violated the contract first, the contract is deemed extinguished and each bears his own damages.

What the law says

In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages.

Civil Code, Article 1192 — Both Parties in Breach. Read the full provision →

First infractor, tempered liability

Article 1192 provides: In case both parties have committed a breach of the obligation, the liability of the first infractor shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract, the same shall be deemed extinguished, and each shall bear his own damages. Two rules, in order. Where the sequence is known, the party who broke it first still answers — but for less, because the other's own default aggravated the harm. Where the sequence cannot be established, nobody recovers from anybody and the contract simply ends.

Why the second rule is the dangerous one

Most parties in a mutual-blame dispute assume a court will weigh the merits and split the difference. The second sentence of Article 1192 is harsher than that: an unprovable sequence is not a draw on the merits, it is the end of the claim for both sides. Each keeps his own losses, however large. That is a real risk in disputes conducted by phone calls and site visits, where nobody wrote anything down and each side's account of who stopped performing first is simply asserted. The party with the better documented timeline usually wins a case that looks, from the outside, evenly balanced.

Not every refusal is a breach

Before conceding that you also defaulted, check whether your suspension was justified. In reciprocal obligations neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner — Article 1169 says so in its last paragraph. A buyer who stops paying because nothing was delivered is not necessarily in breach; he is withholding a performance that was not yet due. Article 1191 then gives the injured party the choice between fulfilment and rescission with damages. The label matters: a justified suspension keeps you out of Article 1192 altogether.

Build the timeline first

Whatever the merits feel like, the work here is chronological. Set out every obligation with its due date, then mark against each what was actually done and when, sourced to a document — a delivery receipt, a bank transfer, an email, a site photograph. The first unexcused failure on that chart is the first infraction, and it decides the case more often than any argument about fairness. Where your own default came after the other side's, say so in those terms. Where it came first, expect the equitable tempering to reduce, not erase, what you owe.

Cases citing this provision

These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.

Related provisions

Note. Statute text quoted on this page is reproduced from the official enactment and is linked to the full provision. The explanation around it is general legal information from Vivas & Nobles Law Office, not legal advice. Whether it applies to your situation depends on facts only a lawyer reviewing them can assess.