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OBLIGATIONS AND CONTRACTS

OBLIGATIONS
Article 1156
An obligation
Is a juridical necessity
o To give (delivery to return to owner)
o To do or (all kinds of work or services)
o Not to do (abstaining from such act)
Juridical necessity
o Because in case of non-compliance, the courts
of justice may be called upon to enforce its
fulfillment or in default thereof, the economic
value it represents (claim damages)
Nature of Obligations
1.

2.

Civil obligations
o Obligations which give to the creditor or
obligee a right of action in courts to enforce
their performance
Natural obligations
o Do not grant a right of action to enforce their
performance although in case of voluntary
fulfillment by the debtor, the latter may not
recover what has been delivered or rendered
by reason thereof

Elements:
1.

2.

3.

4.

An active subject
o Called the obligee or creditor
o The possessor of a right
o Person who is entitled to demand the
fulfillment of the obligation
A passive subject
o Called the obligor or debtor
o Person who is bound to the fulfillment of the
obligation
The object or prestation
o The subject matter of the obligation
o Conduct required to be observed by the
debtor
o Without such, nothing to perform
o Requisites:
It must be possible, physically and
juridically
It must be determinate
It must have possible equivalent in
money
The efficient cause
o The vinculum or juridical tie
o That which binds or connects the parties to

the obligation
o Established by:
Law
Bilateral acts
Unilateral acts
Kinds of obligations according to subject matter
(1) Real obligation
o Obligation to give
o Subject matter is the thing that which the
obligor must deliver to the obligee
(2) Personal obligation
o Obligation to do or not to do
o Subject matter is an act to be done or not to
be done
Elements of cause of action
(1) A legal right in favor of a person by whatever
means and under whatever law it arises or is
created
(2) A correlative legal obligation on the part of
another to respect or not to violate said right
(3) An act or omission in breach or violation of said
right by defendant with damage to the plaintiff
Article 1157
Sources of obligations:
(1) Law
o Not presumed (Article 1158)
Only those expressly determined
Not presumed because considered a
burden to the obligor
o Imposed by the law itself
(2) Contracts
o Arise from the stipulation of the parties
o Have the force of law between the
contracting parties and should be complied
with in good faith (Article 1159)
Contract
Is a meeting of minds between two
persons whereby one binds himself,
with respect to the other, to give
something or to render some service
Formal expression by the parties of
their rights and obligations they have
agreed upon with respect to each
other7
Good faith
Compliance
or performance in

accordance with the stipulations or


terms of the contract or agreement
(3) Quasi-contracts
o Arise from unlawful, voluntary and unilateral
acts and which are enforceable to the end
that no one shall be unjustly enriched or
benefited at the expense of another
o There is no consent but the same is supplied
by law
o Kinds of quasi-contracts
Negotiorum gestio
Voluntary
management of the
property or affairs of another
without the knowledge or consent of
the latter
Does not arise:
When the property or business is
neglected or abandoned
Provisions on unauthorized
contracts shall govern
If, in fact, the manager has been
tacitly authorized by the owner
Rules on agency shall govern
Solutio indebiti
The juridical relation which is created
when something is received when
there is no right to demand it and it
was unduly delivered thru mistake
Applies where:
Payment is made where there
exists no binding relation
between the payor, who has no
duty to pay, and the person who
received the payment
The payment is
made thru
mistake and not thru liberality or
some other cause
o Subject to the provisions of Chapter 1 Title
XVII (Article 1160)
(4) Acts or omissions punished by law
o Arise from civil liability which is the
consequence of a criminal offense
Exceptions:
Injured party reserves his right to
avail himself of it in a distinct civil
action
In cases where an independent civil
action is allowed by the law
o Governed by penal laws (Article 1161)
(5) Quasi-delicts
o Arise from damage caused to another thru

an act or omission, there being fault or


negliegence, but no contractual relation
exists between the parties
o Requisites:
There must be an act or omission by the
defendant
There must be fault or negligence of the
defendant
There must be damage caused to the
plaintiff
There must be a direct relation or
connection of cause and effect between
the act or omission and the damage
There is no pre-existing contractual
relation between the parties
NATURE AND EFFECT OF OBLIGATIONS
Article 1163
Every person obliged to give something
Also obliged to take care with the proper diligence
of a good father of a family
o Exception: the law or the stipulation of the
parties requires another standard of care
o Diligence of a good father of a family
Diligence which a reasonably prudent
person exercises over his own property
Depends upon nature of the obligation and
corresponds with the circumstances of
person, time, and place
GENERAL RULE: Debtor is not liable if his
failure to preserve the thing is not due to
his fault or negligence but to fortuitous
events or force majeure
PURPOSE: To insure that the thing to be
delivered would subsist in the same
condition as it was when the obligation
was contracted
Specific or determinate thing
When it is particularly designated or physically
segregated from all others
Debtor cannot substitute it with another even of
the same kind and quality without the consent of
the creditor
Duties of debtor in obligation to give a determinate thing
To preserve or take care of the thing due
To deliver the fruits of the thing
To deliver its accessions and accessories
o Accessions are the fruits of, or addition to, or

improvements upon, a thing


o Accessories are things joined to, or included
with, the principal thing for the latters
embellishment, the better use, or completion
To deliver the thing itself
To answer for damages in case if non-fulfillment or
breach
Generic or indeterminate thing
When it refers only to a class or genus to which it
pertains and cannot be pointed out with
particularity
Debtor can give anything of the same class as long
as it is of the same kind
Duties of debtor in obligation to deliver generic thing
To deliver a thing which of the quality intended by
the parties taking into consideration the purpose
of the obligation and other circumstances
To be liable for damages in case of fraud,
negligence, or delay in the performance of his
obligation, or contravention of the tenor thereof
Article 1164
Right of the creditor
Rights to the fruits of the thing from the time the
obligation to deliver it arises
o Acquires no real right over it until the same has
been delivered to him
o Kinds of fruits
Natural Fruits
o Spontaneous products without the
intervention of man
Industrial Fruits
o Those produced thru cultivation or
labor brought about by human
intervention or labor
Civil Fruits
o Derived by virtue of juridical relation
Article 1165
Delivery of a determinate thing
Creditor may compel the debtor to make the
delivery
o Only the debtor can comply the obligation
Remedies of creditor
o Demand specific performance of the obligation
with a right to indemnity for damages
o Demand rescission or cancellation of the
obligation with a right to recover damages

o Demand the payment of damages only


Obligations include that of delivering all its
accessions and accessories, even though they may
not have been mentioned (Article 1166)
o GENERAL RULE: All accessions and accessories
are considered included in the obligation to
deliver a determinate thing although they may
not have been mentioned
Accessory follows the principal
Indeterminate or generic
May ask that the obligation be complied with at
the expense of the debtor
o Can be performed by a third person
Since the object is expressed only
according to its family or genus
Delivery of the thing promised or delays in the delivery to
two or more persons who do not have the same interest
Obligor shall be responsible for the fortuitous
event until he has effected the delivery
Article 1167
Situations contemplated
The debtor fails to perform an obligation to do
o Creditor has the right to have the obligation
performed by himself or by another at the
debtors expense
o To recover damages
The debtor performs an obligation to do but
contrary to the terms thereof (contravention)
The debtor performs an obligation to do but in a
poor manner
Article 1168
Obligation consists in not doing and the obligor does what
has been forbidden him
Shall also be undone at his expense
Duty of the debtor is to abstain from an act
Article 1169
Delay
From the time the oblige judicially or extrajudicially demands from the obligor the fulfillment
of their obligation
Kinds of delay
Mora solvendi

o The delay on the part of the debtor to fulfill his


obligation by reason of a cause imputable to
him
o Effects:
Debtor is guilty of breach of obligation
Liable for interest or damages
Liable for fortuitous event when the
obligation is to deliver a determinate thing
Mora accipiendi
o The delay on the part of the creditor without
justifiable reason to accept the performance of
the obligation
o Effects:
Creditor is guilty of breach of obligation
Liable for damages suffered by the debtor
Bears the risk of loss of the thing due
Debtor may release himself from the
obligation by the consignation of the thing
or sum due
Compensatio morae
o The delay of the obligors in reciprocal
obligations
o The delay of debtor cancels delay of creditor
Requisites of delay
(1) Failure of the debtor to perform his positive
obligation on the date agreed upon
(2) Demand made by the creditor upon the debtor
to fulfill, perform, comply with his obligation
(3) Failure of the debtor to comply with such
demand
When demand not necessary to put debtor in delay

When the obligation and the law provides


When time is of essence
When demand would be useless
When there is performance by a party in reciprocal
obligations

Article 1170
Who are liable for damages?
Those who are in performance of their obligations
are guilty of fraud, negligence, or delay
o Responsibility arising from fraud (Article 1171)
Demandable in all obligations
Any waiver of an action for the future fraud
is void (against public policy)
Past fraud can be the subject of a valid

waiver, considered as an act of


generosity and magnanimity on the
party victim of fraud
Fraud is the deliberate or intentional
evasion of the normal fulfillment of an
obligation
o Responsibility arising from negligence (Article
1172)
In the performance of every kind of
obligation is demandable
Such liability may be regulated by
courts according to the circumstances
Negligence consists in the omission of that
diligence which is required by the nature of
the obligation and corresponds with the
circumstances of the persons, of the time
and of the place (Article 1173)
Negligence equivalent to fraud
Shows bad faith or is so gross that it
amount to malice or wanton attitude
on the part of the defendant
Test for determining negligence
Reasonable care and caution expected
of an ordinary prudent person
No hard and fast rule for measuring
degree of care
Those who in any manner contravene the tenor
thereof
Article 1174
Fortuitous event
Any extraordinary event which cannot be foreseen,
or which though foreseen, is inevitable
Event which is either impossible to foresee or
impossible to avoid
No person shall be responsible for such events
Requisites
(1) Event must be independent of the human will or at
least of the obligors will
(2) The event could not be foreseen or if it could be
foreseen, impossible to avoid
(3) Events character renders it impossible for the
obligor to comply with his obligation in a normal
manner
(4) The obligor must be free from any participation or
in the aggravation of the injury to the obligee

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