BATANGAS STATE UNIVERSITY

College of Engineering, Architecture and Fine Arts

Gov. Pablo Borbon Campus II,
Alangilan, Batangas City, Philippines 4200
www.batstate-u.edu.ph Telefax: (043) 300-4044 locs. 106-108

CHEMICAL AND FOOD ENGINEERING DEPARTMENT

ChE 425
Chemical Engineering Laws and Ethics

LAW OF OBLIGATIONS AND CONTRACTS

Fusi, Genina Joy A.

Villanueva, Kim Gerard A.

ChE-4201

Engr. Angelica D. De Sagun

Instructor

March 31, 2017

Republic Act No. 386

The Civil Code of the Philippines
AN ACT TO ORDAIN AND INSTITUTE THE CIVIL CODE OF THE PHILIPPINES
Article 1156 to 1430 of the New Civil Code

Law of obligations and contracts

Obligation Latin word obligare meaning to bind. It also means a juridical

necessity to give, to do or not to do.

Essential Requisites of Obligation

1. A passive subject the person who is bound or has the duty to fulfill the
obligation, called the debtor or obligor.
2. An active subject the person who can demand the fulfillment of the object
or presentation, called the creditor or obligee.
3. An object or presentation this is the subject matter of the obligation. It is
either the giving of a thing, or the doing, or not the doing of something.
4. A juridical tie, legal tie or the vinculum it is that which binds the parties to
the obligation. It is otherwise known as the efficient cause.

Sources of Obligations:

Derived from Law determined in the Civil Code or in special laws are
demandable and shall be
regulated by the precepts of the law.

Derived from Contracts the force of law between the contracting parties
and should be complied with in good faith. The contract must be valid and
enforceable and must not be contrary to law, morals, good customs, public order
or public policy.

Derived from quasi-contracts lacks the element of consent, and no formal

contract between the parties. However, the law considers them to have entered
into an agreement purposely to prevent injustice.

2 (two) kinds of quasi-contracts

negotiorum gestio it is the voluntary management of the property or

affairs of another without the knowledge or consent of the latter.
solution indebiti - it is a juridical relation which takes place when
something is received when there is no right to demand it, and it was
unduly delivered through mistake, giving rise to the obligation to return it.

Derived from delicts or crimes person committing a criminal offense is
obliged to pay for the injury thus inflicted.
Crimes or delicts acts or omissions punished by law (felony).

Derived from Quasi-delicts an act or omission by one person which causes

damage to another giving rise to the obligation to pay for the damage done,
there being fault or negligence, and there is no pre-existing contractual relation
between the parties.

Nature and Effect of Obligation

Obligation to be diligent Every person obliged to give something is also

obliged to take care of it with the proper diligence of a good father of the family,
unless the law or the stipulation of the parties requires another standard of care.
 Obligation to give a determinate thing delivering all its accessions ad
accessories even though they may not have been mentioned.

Accession pertains to the fruits of a thing or additions to or improvements

upon a thing such as trees planted on a land, and rents on buildings.

Accessories pertains to things joined to or included with the principal

thing for the latters embellishment such as frame of the picture, keys of the
car, etc.

Obligation to do if a person obliged to do something fails to do it, the same

shall be executed at his cost.

Obligation not to do when the obligation consists in not doing, and the obligor
does what has been forbidden him, it shall be undone at his expense.

Obligation to deliver the obligor may bind himself to deliver either a specific
(determinate) or generic (indeterminate) thing.

Rights to the fruits:

o Natural fruits
o Industrial fruits
o Civil Fruits

MEANING OF CONTRACT

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. - it is a
juridical convention manifested in legal form, by virtue of which one or more
persons bind themselves in favor of another or others, or reciprocally, to the
fulfillment of a presentation to give, to do or not to do.

Difference between contract and obligation

- Contract is one of the sources of obligation, while the latter is the legal relation
itself.
- Contract is the very agreement of the parties; while the obligation is the remedy
which the law affords for its enforcement.

Elements of a Contract:

a. Essential elements are requisites of a contract.

Consent of the contracting parties consent is manifested by the meeting of

the offer and the acceptance upon the thing and the cause which are to
constitute the contract.

Incapacitated to give consent:

a. Unemancipated minors who have not reached the age of majority

(21 years)
b. Insane or demented person denotes the degree of mental illness.
c. Deaf, dumb and cannot write but a deaf, mute who knows how to
write could intelligently give consent.

Vises of Consent:
a. Error or mistake
b. Violence or force
c. Intimidation threat or duress (pressure)
 d. Undue influence
e. Fraud or deceit

Essential Characteristics of Consent:

a. It is intelligent
b. It is free and voluntary
c. It is conscious or spontaneous

Certain object which is the subject matter of the contract.

Requisites of Things as objects of contract:

1. It must not be outside the commerce of men like plazas, streets, rivers.
2. It must not be contrary to law, morals, good customs, public order or
public policy like opium or marijuana.
3. It must no be impossible either physically or legally.
4. It must be determinate as its kind 3.

Cause or consideration of the obligation which is established.

b. Natural elements are those that are presumed to exist in certain contracts
unless the contrary is expressly stipulated by the parties like warranty against
hidden defects in a contract of sale.

c. Accidental elements are the particular clauses, terms or conditions

established by the parties in their contract like interests and penalties.

Stages of a Contract:

a. Preparation, conception, or generation the parties are still in the

negotiation preliminaries.

b. Perfection or birth the parties have already come to a definite agreement

for the meeting of the minds between them exists as to the subject matter and the
cause of the contract.

c. Consummation or termination the parties have already performed their

respective obligations which led to termination of contract.

Instances of Unlawful Contracts:

1. Contract whereby it provides payment of usurious interest is void.

2. Parties cannot enter into contract that will deprive a court of the jurisdiction
conferred it by law, for jurisdiction cannot be the subject-matter of the
contract.
3. A waiver signed by a student-scholar whereby he relinquishes his right to
transfer to another school unless the refunds to the University the equivalent
of his scholarship grants, is void.
4. A contract whereby services will be rendered without remuneration is
contrary to law and morality.
5. A promise of marriage based on illicit relation such as an agreement to
become a common-law wife, is void.

Classification of Contracts:

o According to their designation

 a. Nominate those that can be identified by their individuality and are
regulated by special provisions of law, such as a contract of agency, lease,
sale.
b. Innominate those which lack individuality are regulated by the
stipulation of parties. They are not regulated by special provision of law.

o According to their profession

a. Consensual perfected by mere consent of the parties without need of

other formalities, such as contracts of sale and partnership.
b. Real those which require not only the consent of the parties, but also the
delivery of the object of the contract which is necessary such as deposit,
commodatum, or pledge.

o According to their form

a. Common or informal does not require any formality such as loan or lease.
b. Special or formal prescribes some formalities such as donation or chattel
mortgage. They should be made in a public document.

o According to the nature of the obligation they produce

a. Unilateral an obligation for only one of the parties such as in the case of
gratuitous deposit. b. Bilateral reciprocal obligations such as in the case of
a contract of sale.

o According to their cause or consideration

a. Onerous benefit is derived through something which is given or

promised, such as in a contract of sale.
b. Gratuitous derives benefit without giving any equivalent or
compensation, such as simple donation.

o According to risk involved

a. Commutative what is given by one party is considered an equivalent

given by the other, such as in a contract of lease.
b. Aleatory the cause or consideration is unequal and depend upon the
happening of an uncertain event such as in an insurance contract where the
business is either risk of loss or risk of gain.

o According to relations with other contracts

a. Principal those that exist independently from other contracts such as
contracts of lease and sale.
b. Accessory those which cannot exist without another prior contract, such
as mortgage and pledge.

Characteristics of Contract-Writing:

1. It must be worded in plain language too technical words must be avoided

2. It must be concise it must be brief but comprehensive to pave the way for
certainty and clarity.
3. It must include all the legal requirements inclusion of all the requirements
required by law.