1.ABC (construction firm) entered into a "Contract" with Francis for the construction of his house for a total contract price of P5 million. The contract stated that the construction will be by five (5) stages as follows:

a.Stage 1 - worth P1 million;

b.Stage 2 - worth P1 million;

c.Stage 3 - worth P1 million;

d.Stage 4 - worth P1 million; and

e.Stage 5 - worth P1 million;

It was also agreed that ABC shall advance the amount needed for the construction and shall only continue to the next "construction stage" upon reimbursement of Francis.

ABC already finished Stage 2 but Francis only paid P1 million leaving a balance of P1 million. As a result, ABC filed a case for specific performance against Francis. During trial, ABC and Francis entered into a Compromise Agreement with the following terms for APPROVAL by the Court:

a.Francis shall pay ABC the balance of P1 million;

b.ABC shall post a performance bond of 20%; and

c.Francis shall make an escrow amount in favor of ABC.

(a) If you were the judge, where will you base the 20% performance bond? On the whole unfinished project or only the next stage of the work to be done, and how much? Why? Support your answer with article.

(b) If you were the judge, how much will be the escrow amount? Why? Support your answer with an applicable article.